Act

Amendments to Ontario Regulation 260/97 under the Grains Act

Regulation Number(s):
Ontario Regulation 260/97
Instrument Type:
Act
Bill or Act:
Grains Act
Summary of Decision:
On December 15, 2010, Ontario Regulation 260/97 under the Grains Act was amended to allow for the short-term use of deferred payment agreements. The regulation has been filed as Ontario Regulation 513/10 and was posted in the Ontario Gazette on January 1, 2011 and e-laws on December 20, 2010.

The amendment allows producers and dealers who mutually agree to enter into payment timelines outside those specified in the regulation. All agreements must be in writing and must clearly define when the grain dealer or elevator operator will pay the producer (all producers must be paid by July 1, 2012). In addition, elevator operators do not require a “shortfall permit” for inventory shortfalls that occur directly as a result of a deferred payment.
Further Information:
Proposal Number:
11-AFRA006
Posting Date:
February 11, 2011
Summary of Proposal:
The Minister directed Agricorp to amend Ontario Regulation 260/97 under the Grains Act to legitimize the short-term use of deferred payment agreements between producers and dealers. Agricorp is the Agency designated to administer the Grains Act on behalf of OMAFRA. The direction arose as a result of industry concerns about the actions being undertaken by Agricorp and OMAFRA regarding a review of the use of deferred payments. The review determined that these arrangements were not in compliance with the Grains Act.

The proposed amendments to O. Reg. 260/97 will:
o Allow dealers/elevator operators and producers/owners to enter into Deferred Payment arrangements, provided the following conditions have been met:
- The agreement must be voluntarily entered into between all parties,
- The agreement must be in writing and clearly set out when the dealer/elevator operator must pay the producer/owner,
- The agreement cannot allow a dealer/elevator operator to extend payments to a producer/owner beyond July 1, 2012,
o Not require a shortfall permit for grain elevator operators in relation to shortfalls that result from Deferred Payment contracts; and,
o Provide a “sunset clause” of July 1, 2012 in which the amendments shall cease to be in force.

Agricorp will continue to respond to complaints from producers related to payments outside of the required timelines if the producer did not get paid or enter into a deferred payment arrangement. In addition, Agricorp will continue to enforce all other aspects of the Grains Act.
The amendment will recognize a current practice that is being used extensively in the grain industry and allow time for consultations with stakeholder groups to develop long term options.
Contact Address:
Barry Sinclair
Manager
Farm Finance
1 Stone Road West,
Guelph, ON N1G 4Y2
Email: Barry.Sinclair@ontario.ca
Phone: 519-826-4016
Fax: 519-826-3170
Effective Date:
December 15, 2010
Decision:
Approved