Act
Proposed Legislative and Regulatory Amendments to the Farm Implements Act, Regulation 369: General and Regulation 123/06: Dealership Agreements
Regulation Number(s):
O. Reg 123/06
Reg. 369
Reg. 369
Instrument Type:
Act
Bill or Act:
Farm Implements Act
Summary of Decision:
Bill 227, Cutting Red Tape, Building Ontario Act, 2024 (Fall 2024 RTR Bill), which includes the amendments to the Farm Implements Act, received Royal Assent on Dec. 4, 2024.
The Ontario Ministry of Agriculture, Food and Agribusiness (OMAFA) has amended the Farm Implements Act, O. Reg 123/06-Dealership Agreements and Regulation 369-General
The legislative amendments:
o Added a provision that prohibits dealership agreements from containing clauses that restrict the ability of a party to initiate a claim in an Ontario court where that claim would otherwise be enforceable in Ontario under the FIA.
o Made the Agriculture, Food and Rural Affairs Appeal Tribunal (AFRAAT) the final decision-maker in the statue's dispute resolution process. The statutory appeal on questions of law to Divisional Court would be repealed.
o Amended the FIA to require that when a distributor or dealer terminates a dealership agreement, or when a distributor refuses to renew a dealership agreement, the dealership agreement would remain in place until AFRAAT has decided that the termination or non-renewal was authorized under the statutory scheme.
o Revoked the following powers of the Director appointed under the FIA:
Conduct research related to farm implement design, construction, performance and safety.
Develop and co-ordinate or approve educational programs respecting farm implement safety
and may promote participation in such programs.
o Removed the requirement for the annual renewals of registrations.
The O. Reg 123/06 regulatory amendments:
o Removed the use of the term "any dealership agreements" and replacing it with the term "all dealership agreements" to ensure that requirements in all dealership agreements are captured.
The Regulation 369: General regulatory amendments:
o Allowed for a one-time registration and remove the registration fees: $200 for dealers and $300 for distributors.
The legislative amendments received Royal Assent on December 4th, 2024.
The O. Reg 123/06 amendments came into force on December 18th, 2024.
The Regulation 369 amendments will come into force on April 1, 2025.
The Ontario Ministry of Agriculture, Food and Agribusiness (OMAFA) has amended the Farm Implements Act, O. Reg 123/06-Dealership Agreements and Regulation 369-General
The legislative amendments:
o Added a provision that prohibits dealership agreements from containing clauses that restrict the ability of a party to initiate a claim in an Ontario court where that claim would otherwise be enforceable in Ontario under the FIA.
o Made the Agriculture, Food and Rural Affairs Appeal Tribunal (AFRAAT) the final decision-maker in the statue's dispute resolution process. The statutory appeal on questions of law to Divisional Court would be repealed.
o Amended the FIA to require that when a distributor or dealer terminates a dealership agreement, or when a distributor refuses to renew a dealership agreement, the dealership agreement would remain in place until AFRAAT has decided that the termination or non-renewal was authorized under the statutory scheme.
o Revoked the following powers of the Director appointed under the FIA:
Conduct research related to farm implement design, construction, performance and safety.
Develop and co-ordinate or approve educational programs respecting farm implement safety
and may promote participation in such programs.
o Removed the requirement for the annual renewals of registrations.
The O. Reg 123/06 regulatory amendments:
o Removed the use of the term "any dealership agreements" and replacing it with the term "all dealership agreements" to ensure that requirements in all dealership agreements are captured.
The Regulation 369: General regulatory amendments:
o Allowed for a one-time registration and remove the registration fees: $200 for dealers and $300 for distributors.
The legislative amendments received Royal Assent on December 4th, 2024.
The O. Reg 123/06 amendments came into force on December 18th, 2024.
The Regulation 369 amendments will come into force on April 1, 2025.
Analysis of Regulatory Impact:
Currently, Regulation 369 under the Act requires dealers and distributors to renew their registration annually at a cost of $200 per dealer and $300 per distributor. In 2023, there were 286 registered dealers, 78 that were registered dealer/distributors and 91 registered distributors.
The estimated annual cost savings from removing annual renewals, associated fees and filling out the registration form amounts to approximately $100, 535 per year. When factoring in the net present value with the social discount rate of 2.5%, the total amount of cost savings over a 10-year period of $1,005,048.
The amendment will also result in time savings of 228 hours per year and 2,275 hours over a 10-year period.
The estimated annual cost savings from removing annual renewals, associated fees and filling out the registration form amounts to approximately $100, 535 per year. When factoring in the net present value with the social discount rate of 2.5%, the total amount of cost savings over a 10-year period of $1,005,048.
The amendment will also result in time savings of 228 hours per year and 2,275 hours over a 10-year period.
Further Information:
Farm Implements Act
Proposal Number:
24-OMAFRA018
Posting Date:
November 20, 2024
Summary of Proposal:
The Farm Implements Act (FIA) provides protection for dealers from unjustified terminations of dealership agreements and buy-back requirements when a dealership agreements end.
The Act also improves farm implement safety through supporting the development of farm implement safety standards.
The FIA and regulations contain sections that could be updated or repealed to protect the viability of rural dealerships and reduce burden on dealerships and distributors.
As such, OMAFA is proposing the following legislative amendments:
Add a provision to the FIA that prohibits dealership agreements from containing clauses that restrict the ability of a party to initiate a claim in an Ontario court where that claim would otherwise be enforceable in Ontario under the FIA.
Amend the FIA to make the Agriculture, Food and Rural Affairs Appeal Tribunal (AFRAAT) the final decision-maker in the statue's dispute resolution process. The statutory appeal on questions of law to Divisional Court would be repealed.
Amend the FIA to require that when a distributor or dealer terminates a dealership agreement, or when a distributor refuses to renew a dealership agreement, the dealership agreement would remain in place until AFRAAT has decided that the termination or non-renewal was authorized under the statutory scheme.
Revoke the following powers of the Director appointed under the FIA:
• Conduct research related to farm implement design, construction, performance and safety.
• Develop and co-ordinate or approve educational programs respecting farm implement safety and may promote participation in such programs.
The Ministry is also proposing an amendment to Regulation 369: General to replace the requirement for annual registration with a one-time registration and remove the registration fees: $200 for dealers and $300 for distributors. The FIA would also be amended to remove the annual requirement for the renewal of registrations.
The Ministry is also proposing an amendment to O. Reg. 123/06: Dealership Agreements to remove the use of the term "any dealership agreements" and replacing it with the term "all dealership agreements" to ensure that requirements in all dealership agreements are captured.
These proposed changes will:
• Prohibit dealership agreements from containing provisions restricting the application of Ontario law or Ontario jurisdiction over disputes.
• Eliminate statutory appeals to Divisional Court and streamline the dispute resolution process.
• Provide cost savings and reduce administrative burden for dealers and distributors.
• Protect rural Ontario dealers from unauthorized termination of dealership agreements.
• Update language in O. Reg. 123/06.
The Act also improves farm implement safety through supporting the development of farm implement safety standards.
The FIA and regulations contain sections that could be updated or repealed to protect the viability of rural dealerships and reduce burden on dealerships and distributors.
As such, OMAFA is proposing the following legislative amendments:
Add a provision to the FIA that prohibits dealership agreements from containing clauses that restrict the ability of a party to initiate a claim in an Ontario court where that claim would otherwise be enforceable in Ontario under the FIA.
Amend the FIA to make the Agriculture, Food and Rural Affairs Appeal Tribunal (AFRAAT) the final decision-maker in the statue's dispute resolution process. The statutory appeal on questions of law to Divisional Court would be repealed.
Amend the FIA to require that when a distributor or dealer terminates a dealership agreement, or when a distributor refuses to renew a dealership agreement, the dealership agreement would remain in place until AFRAAT has decided that the termination or non-renewal was authorized under the statutory scheme.
Revoke the following powers of the Director appointed under the FIA:
• Conduct research related to farm implement design, construction, performance and safety.
• Develop and co-ordinate or approve educational programs respecting farm implement safety and may promote participation in such programs.
The Ministry is also proposing an amendment to Regulation 369: General to replace the requirement for annual registration with a one-time registration and remove the registration fees: $200 for dealers and $300 for distributors. The FIA would also be amended to remove the annual requirement for the renewal of registrations.
The Ministry is also proposing an amendment to O. Reg. 123/06: Dealership Agreements to remove the use of the term "any dealership agreements" and replacing it with the term "all dealership agreements" to ensure that requirements in all dealership agreements are captured.
These proposed changes will:
• Prohibit dealership agreements from containing provisions restricting the application of Ontario law or Ontario jurisdiction over disputes.
• Eliminate statutory appeals to Divisional Court and streamline the dispute resolution process.
• Provide cost savings and reduce administrative burden for dealers and distributors.
• Protect rural Ontario dealers from unauthorized termination of dealership agreements.
• Update language in O. Reg. 123/06.
Contact Address:
Economic Development Policy Branch
1 Stone Road West Guelph
1 Stone Road West Guelph
Royal Assent Date:
December 4, 2024
Decision:
Approved