Proposed changes to the Ministry of Agriculture Food and Rural Affairs Act and Innkeepers Act to exempt cattle in the Feeder Cattle Loan Guarantee Program from the custom feeding provisions in the Innkeepers Act.

Regulation Number(s):
Instrument Type:
Bill or Act:
Ministry of Agriculture, Food and Rural Affairs Act
Summary of Decision:
Bill 46, Less Red Tape, Stronger Ontario Act, 2022, received Royal Assent on March 22, 2023. The proposed legislative amendments to the Ministry of Agriculture, Food and Rural Affairs Act and the Innkeepers Act were approved.

The ministry will continue working with other ministry partners to implement the changes, as well as with stakeholders to ensure all the right parameters are in place for the program's expanded scope to include custom feeding between co-op members.
Analysis of Regulatory Impact:
There will be no new administrative costs or compliance costs to industry as a result of the amendment. The change will provide more feeding/management options to co-op members. This will provide co-op members with more flexibility and improve the competitiveness and profitability of their businesses. It is also expected to help build regional production capacity in remote parts of the province, and increase sector resilience in the event of extreme weather events (e.g. drought) that may impact feed supplies. FCLGP members entering into custom feeding arrangements would need to use program-approved forms that ensure that everyone understands their rights and obligations.

The proposed amendment is not expected to create any new costs to government and is expected to reduce financial exposure for government and lenders under the FCLGP by ensuring that co-op cattle are not seized and sold to pay an outstanding debt to a custom feeder. Custom feeders will continue to have access to the courts to pursue payment for their services.
Further Information:
Proposal Number:
Posting Date:
November 23, 2022
Summary of Proposal:
The FCLGP supports Ontario beef cattle farmers by facilitating access to low-interest loans to purchase cattle through their local feeder cattle co-operative. Co-ops are able to secure lower interest rates because the province guarantees 25% of the co-op's loan with its lender.

In spring 2021, OMAFRA launched a review of the FCLGP with an emphasis on reducing burden and improving program responsiveness. During the consultation process, several recommendations were received from stakeholders. The Beef Farmers of Ontario (BFO) asked that co-op members be allowed to feed other members' cattle. The FCLGP currently does not allow this because the Innkeepers Act prioritizes payments to custom feeders through liens, which may result in co-op cattle being sold to pay the custom feeder and the co-op being unable to repay its debt (triggering a government guarantee payment). Not being able to custom other member's cattle has been a long-standing irritant for the Co-op members. The anticipated stakeholder reaction to this change is expected to be positive.

OMAFRA is proposing to amend the MAFRAA to exempt cattle enrolled in the FCLGP from section 3 of the Act (i.e. liens and lien sold property). This will prevent custom feeders from having a lien on the cattle as well as being able to seize and sell cattle for unpaid services. Custom feeders will still be able to use normal legal means to pursue payment for their services.

Removing the constraint on custom feeding between co-op members reduces this burden on producers, strengthens Ontario's supply chain through improved efficiency and improves the beef industry's competitiveness. It will maximize flexibility for co-op members to make decisions on custom feeding to help them expand their herds under the FCLGP to improve their competitiveness and profitability. This will help ensure a steady supply of Ontario-raised beef for Ontario processors or export. Additionally, beef producers in remote or drought-stricken areas with limited feeding options will have the ability to enter into custom feeding arrangements with other co-op members whose production practices they are familiar with. This will also help build regional production capacity for the beef sector.
Contact Address:
Branch: Farm Finance Branch
Address: 1 Stone Road West, Guelph
Royal Assent Date:
March 22, 2023