Act

Proposed changes to combine the Grains Act, the Livestock and Livestock Products Act and the Farm Products Payments Act, which govern Ontario's Financial Protection Programs. The new Act will be updated to make it more flexible, modern and reflective of current industry and board governance best practices.

Regulation Number(s):
N/A
Instrument Type:
Act
Bill or Act:
N/A
Summary of Proposal:
The Beef Cattle Financial Protection Program and the Grain Financial Protection Program are key tools to help Ontario's 19,000 beef cattle producers and 28,000 grain producers manage their business risks. Despite dramatic changes in the agri-food industry and financial risk mitigation approaches since the programs' establishment in the 1980s, the programs have remained largely unchanged.

Ontario's 2019 budget committed the government to review the programs to ensure grain and beef cattle producers have access to stable risk management tools that provide them with the confidence to grow their businesses.

The review was a three-stage collaborative process, including the preparation of two discussion papers, that provided stakeholders with several opportunities to identify issues and work together to make recommendations to update and modernize the programs. There was consensus that the programs work well, and no major changes were needed to the structure or delivery and governance of those programs for the two sectors. However, changes were identified to strengthen producer protection and level the playing field for dealers by: (1) providing more clarity, flexibility, and transparency; (2) updating Board powers; and (3) promoting compliance with the program requirements by enhancing enforcement tools. It was also recommended that the legislative framework be updated to allow for the addition of other sectors.

The ministry has taken a phased approach to introducing changes. The first phase (completed April 2020) focused on the sustainability of the programs and laying the groundwork for future enhancements, including amending the Farm Products Payments Act (became effective January 1, 2020). These amendments: (1) provided for the Livestock and the Grain Financial Protection Boards (the Boards) to take on a greater role in supporting risk management for the sectors; and (2) broadened the types of expenses that may be paid out of a fund. Additionally, a new related regulation became effective April 1, 2020 (Ontario Regulation 467/19 - Boards Payment Of Expenses).

The Phase 2 proposal builds on the changes and also considers more substantive changes that reflect changes in industry business practices and approaches to the operation of financial protection schemes and agency governance since the programs were created.

The second phase of changes is focused on the following key areas:
-Improving and clarifying the rules and requirements to obtain and renew a licence
-Expanding the suite of enforcement tools to encourage compliance
-Updating appeal provisions
-Updating Board powers
-Making it easier to expand the programs to other sectors
-Allowing for greater flexibility in program delivery and administration

It is important to note that the proposed changes are enabling in nature. They would require the development of a Minister's regulation to become effective. Any regulations developed would be in consultation with industry and posted on the Regulatory Registry.
Analysis of Regulatory Impact:
The proposed amendments are enabling only. There would be no new administrative costs as a result of the legislation itself. The ministry will undertake a Regulatory Impact Analysis of the supporting regulations as they are developed and will include the results in a future Regulatory Registry posting.

Further Information:
Proposal Number:
21-OMAFRA012
Posting Date:
July 30, 2021
Comments Due Date:
August 30, 2021
Contact Address:
Branch: Farm Finance
Address: 1 Stone Road West, Guelph