Changes to enable the Minister of Agriculture, Food and Rural Affairs, as opposed to the Lieutenant Governor in Council, to set the check-off fees which dealers and producers must pay to the Livestock and Grain Financial Protection Boards
O. Reg. 560/93 (Fund for Livestock Producers)
Regulation 447 – Fund for Producers of Canola
Regulation 448 – Fund for Producers of Corn
Regulation 450 – Fund for Producers of Soybeans
O. Reg. 390/04 – Fund for Producers of Wheat
O.Reg. 321/11 (Fees Payable to Boards)
Regulation - Minister
Bill or Act:
Farm Products Payment Act
Summary of Decision:
O. Reg. 322/11; O. Reg. 323/11; O. Reg. 234/11; O. Reg. 325/11; and O. Reg. 326/11were filed on June 28 2011 with the Registrar of Regulations.
These regulations revoke certain portions of the existing Lieutenant Governor in Council (LGIC) Regulations under the Farm Products Payment Act around setting fees.
O. Reg. 321/11 was filed on June 28, 2011, this regulation sets out the amount, time and manner of payment of fees which dealers and producers must pay to a Board.
August 8, 2011
Summary of Proposal:
Approval to have the Minister prescribe the amount, time and manner of payment of fees which dealers and producers must pay to a Board was sought and received under the Open for Business Act, 2010 (OBA).
Subsections 3(3) and 3(4) of the OBA will be proclaimed and in effect on July 1, 2011.
- Subsection 3(3) of the OBA repeals clause 8(j) of the Farm Products Payment Act (FPPA), which provided the authority to the LGIC to make regulations requiring dealers or producers to pay fees to a board, prescribe the amounts and times and manner of payment of the fees and provide for the collection of fees.
- Subsection 3(4) of the OBA adds subsection 8(2) to the FPPA, which provides authority to the Minister to make regulations requiring dealers or producers to pay fees to a board, prescribe the amounts and times and manner of payment of the fees and provide for the collection of fees.
A Minister's regulation that mirrors the various sections of the regulations being revoked has been approved by the Minister. The Minister's regulations will come into effect when the OIC proclaiming the amendments to the FPPA come into force.
This means that as of July 1, 2011, the Minister of Agriculture, Food and Rural Affairs has the authority to require dealers or producers to pay fees to a board, prescribe the amounts and times and manner of payment of the fees and provide for the collection of fees under the FPPA.
OMAFRA is responsible for two financial protection programs for the grain/oil seeds (grain corn, soybeans, canola and wheat) and beef cattle sectors. The purpose of these financial protection programs is to provide financial protection for producers should a licensed dealer default on making a payment to producers.
The financial protection programs can essentially be broken down into two parts. They are:
- The annual licencing of grain dealers and grain elevator operators under the Grains Act, and the annual licencing of livestock dealers under the Livestock and Livestock Products Act.
- Administration of compensation funds (for grain corn, soybean, canola, wheat and beef cattle) which are supported by mandatory "check-off fee" authorized under the FPPA. The fee ensures that the funds have money to pay any valid claim(s) against the fund. Administration of the compensation funds are undertaken by the Livestock and Grain Financial Protection Boards. The boards are also responsible for adjudicating the validity of any claim(s) as well as determining how much a producer is eligible to receive. Should a claim be deemed valid, the boards will pay the claim to the producer. The boards are also responsible for trying to recover any payments it makes to a producer from the defaulting dealer.
Moving the authority to set the fees to a Minister's regulation will allow for a quicker response should the fund balance becomes less than what is deemed acceptable by an actuarial review. The changes do not create any additional cost to the government or to the fund for livestock and/or grain/oilseed producers.
Farm Finance Branch
1 Stone Road, West, 2nd Floor,
Guelph, Ontario N1G 4Y2
July 1, 2011