Agricultural Marketing Programs Regulations (SOR/99-295)

Regulations are current to 2017-11-20 and last amended on 2016-02-05. Previous Versions

Agricultural Marketing Programs Regulations

SOR/99-295

AGRICULTURAL MARKETING PROGRAMS ACT

Registration 1999-06-23

Agricultural Marketing Programs Regulations

P.C. 1999-1186  1999-06-23

His Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and Agri-Food and the Treasury Board, pursuant to subsection 40(1) of the Agricultural Marketing Programs ActFootnote a, hereby makes the annexed Agricultural Marketing Programs Regulations.

Interpretation

 The following definitions apply in these Regulations.

Act

Act means the Agricultural Marketing Programs Act. (Loi)

financial institution

financial institution has the same meaning as in section 2 of the Bank Act. (institution financière)

  • SOR/2016-7, s. 1.

Presumption — Related Producers

  •  (1) For the purposes of paragraph 3(2)(e) of the Act, a producer is presumed to be related to another producer in any of the following circumstances:

    • (a) one of the producers is the spouse or common-law partner of the other producer;

    • (b) one of the producers owns at least 25% of the voting shares of the other producer;

    • (c) one of the producers owns at least 25% of the voting shares of a corporation that directly or through any other corporation owns 25% of the voting shares of the other producer; and

    • (d) one of the producers is entitled to 25% or more of the profits or revenues of the other producer.

  • (2) For the purposes of paragraph (1)(a), common-law partner means an individual who has been cohabiting with a producer in a conjugal relationship for a period of at least one year.

  • SOR/2016-7, s. 1.

Prescribed Criteria

 The following are prescribed criteria for the purposes of paragraph 4.1(1)(b) of the Act:

  • (a) historical farm gate values;

  • (b) wholesale prices for the agricultural product;

  • (c) trade data in respect of the agricultural product, including average import and export prices;

  • (d) in the case of crops, industry expectations of crop size and quality, planted acreage and the extent of any crop holdings in storage;

  • (e) exchange rates;

  • (f) regional market conditions; and

  • (g) the expected retail price for the agricultural product as demonstrated by data supplied to the Minister.

  • SOR/2006-293, s. 1.

 For the purposes of paragraph 4.1(1)(c) of the Act, the following are prescribed criteria for determining whether an agricultural product is not processed or not processed beyond what is necessary to store it and prevent spoilage:

  • (a) in the case of an animal referred to in subparagraph 4.1(1)(a)(i) of the Act, it is alive;

  • (b) in the case of a plant referred to in subparagraph 4.1(1)(a)(ii) of the Act, it is in the state in which it grew except for any alteration that may have occurred through harvesting or, if perishable, through storage and prevention of spoilage – with or without the addition of a preserving agent – in a controlled atmosphere or by refrigeration or freezing; and

  • (c) in the case of a product of a plant referred to in subparagraph 4.1(1)(a)(ii) of the Act, it is a part of a plant that is in its harvested state otherwise unaltered except, if perishable, through storage and prevention of spoilage – with or without the addition of a preserving agent – in a controlled atmosphere or by refrigeration or freezing.

  • SOR/2006-293, s. 1.

Designations

 For the purposes of the definition livestock in subsection 2(1) of the Act, rabbit, red deer, boar, goat and elk are designated as livestock.

  • SOR/2016-7, s. 2.

 Cervid antler velvet and bees are designated as agricultural products that are subject to Part I of the Act.

  • SOR/2016-7, s. 2.

 The following classes of breeding animals are designated as being subject to Part I of the Act:

  • (a) cattle, goats and sheep, if they are intended to be sold during the production period for which the advance is made; and

  • (b) hogs that are

    • (i) less than 12 months old, if they are intended to be sold for breeding purposes during the production period for which the advance is made, or

    • (ii) more than 10 months old, if they are intended to be sold for purposes other than for breeding during the production period for which the advance is made.

  • SOR/2016-7, s. 2.

Ownership and Responsibility for Marketing

 For the purposes of paragraph 10(1)(a) of the Act, the following are prescribed criteria for determining whether a producer ceases to own an agricultural product or ceases to be responsible for marketing an agricultural product:

  • (a) the agricultural product has been sold or processed; and

  • (b) the agricultural product – other than a horticultural crop, maple syrup or honey – has been placed in a pool.

  • SOR/2006-293, s. 2.

Administrator’s Percentage

  •  (1) For the purposes of paragraph 19(1)(c) of the Act, the administrator’s percentage is 3% if they have not completed at least one program year.

  • (2) For the purposes of paragraph 19(1)(c) of the Act, the administrator’s percentage shall be calculated using the five most recently completed program years, or if an administrator has completed at least one program year but less than five program years, using all of the completed program years, in accordance with the following formula:

    (A / B) × 100

    where

    A
    is the sum of the total of the outstanding principal balances of producers who are in default in each of those program years calculated 10 months after the completion of each program year; and
    B
    is the sum of the total principal amount advanced in each of those program years.
  • (3) For the purposes of element A, calculation of the outstanding principal balances shall exclude amounts owed by a deceased producer who is in default or by a producer who is in default and who has been deemed legally incapable of making decisions.

  • SOR/2006-293, s. 3;
  • SOR/2016-7, s. 3.

 [Repealed, SOR/2016-7, s. 3]

Attributable Percentages for Related Producers

  •  (1) For the purposes of subsections 9(2) and 20(2) of the Act, the amounts received by, or attributed to, related producers are attributable in the following manner:

    • (a) if both producers are individuals, each producer is attributed 100%;

    • (b) if one producer is an individual and the other producer is a partnership, the individual is attributed the percentage of their direct or indirect entitlement to the profits of the partnership;

    • (c) if one producer is an individual and the other producer is a corporation, the individual is attributed the percentage of the voting shares that the individual owns, holds or controls directly or indirectly in the corporation;

    • (d) if one producer is an individual and the other is a cooperative, the individual is attributed the percentage of their direct or indirect entitlement to the revenue or profits of the cooperative;

    • (e) in the case of two producers that are not individuals and that are related under paragraph 3(2)(d) of the Act, each producer is attributed 100%;

    • (f) in the case of two producers that are related due to circumstances other than those set out in paragraph 3(2)(d) of the Act, if one producer is a corporation and the other producer is not an individual, the other producer is attributed the percentage of voting shares that it owns, holds or controls directly or indirectly in the corporation; and

    • (g) in the case of two producers that are related due to circumstances other than those set out in paragraph 3(2)(d) of the Act, if one producer is a cooperative or partnership and the other producer is not an individual, the other producer is attributed the percentage of their direct or indirect entitlement to the profits or revenues of the cooperative or partnership.

  • (2) For the purposes of this section, a producer is not to be attributed the same advance more than once either directly or indirectly.

  • (3) If a producer is a partnership, corporation or cooperative, that producer is not to be attributed any amount received by a related producer that is an individual.

  • SOR/2016-7, s. 4.

Limitation for Cash Repayments Without Proof of Sale of the Agricultural Product

 For the purposes of subparagraph 10(2)(a)(v) of the Act, the amount prescribed is the amount that is the greater of

  • (a) 10% of the advance, and

  • (b) $10,000.

  • SOR/2006-293, s. 4;
  • SOR/2016-7, s. 5.

Definition of Overpayment

  •  (1) For the purposes of paragraph 10(2)(c) of the Act, overpayment means

    • (a) in the case where an advance is covered by a program listed in the schedule to the Act, where the coverage amount payable to the producer under the program is reduced through no fault of the producer and where section 11 of the Act does not apply, that part of the outstanding amount of the advance that exceeds the reduced coverage amount by more than the limit determined in accordance with subsection (2); and

    • (b) in the case where an advance is in respect of an agricultural product that, at the time of the advance, was in the course of being produced or was not yet produced, where the value of the produced agricultural product – and the value of the security on the produced agricultural product – is reduced through no fault of the producer and where section 11 of the Act does not apply, that part of the outstanding amount of the advance that exceeds the reduced value of the security by more than the limit determined in accordance with subsection (2).

  • (2) The limit is the amount that is the greater of

    • (a) 10% of the advance, and

    • (b) $10,000.

  • (3) In any case where both paragraphs (1)(a) and (b) apply to an advance, overpayment means the amount calculated in accordance with paragraph (1)(b).

  • SOR/2006-293, s. 4;
  • SOR/2016-7, s. 6.

Security

  •  (1) For the purposes of section 12 of the Act, until the advance is repaid in full, the required security on the agricultural product for which the advance was made and on any agricultural product produced in a subsequent production period by the producer is one or both of the following:

    • (a) security on the agricultural product under applicable provincial law; and

    • (b) security referred to in section 427 of the Bank Act on the agricultural product.

  • (2) For the purposes of section 12 of the Act, until the advance is repaid in full, the required security in the case of an agricultural product that is not yet produced or in the case of livestock is, in addition to the security set out in subsection (1), one or a combination of the following:

    • (a) a full or partial assignment of any amount that may be received by the producer under a program listed in the schedule to the Act;

    • (b) insurance or other financial programs or products that, in the opinion of the Minister, protect against one or more risks that are associated with the issuance of an advance;

    • (c) financial collateral that is assignable by the producer; and

    • (d) a letter of guarantee from the producer’s financial institution guaranteeing the advance.

  • SOR/2006-293, s. 4;
  • SOR/2016-7, s. 7.

Guarantor

 For the purposes of subparagraphs 10(1)(c)(ii) and (d)(ii) of the Act, a guarantor is

  • (a) an individual or group of individuals that has the financial collateral to issue a letter that guarantees an advance until it is fully reimbursed; or

  • (b) a financial institution that issues a letter that guarantees an advance until it is fully reimbursed.

  • SOR/2016-7, s. 7.

Conditions for Payment

  •  (1) No payment under subsection 23(1) of the Act may be made to a lender or administrator unless

    • (a) the Minister receives a request in writing from the administrator for payment that includes documentation that supports the amount claimed and any documentation needed by the Minister to support an action under subsection 23(2) of the Act;

    • (b) the administrator,

      • (i) if the advance guarantee agreement sets out the procedures to be followed in the event of default on the repayment agreement or the death of the producer, or in the event that the administrator has reasonable grounds to believe that an offence under the Act has been committed by the producer, demonstrates that it followed those procedures,

      • (ii) after receiving notice that the producer is seeking a stay of proceedings, or other form of protection from their creditors, or that the producer is subject to a receiving order, files with the appropriate authority a notice of their claim against the assets of the producer and provides a copy of that notice to the Minister,

      • (iii) after being informed that the producer has died, files with the executor or administrator of the producer’s estate a notice of the debt and provides a copy of that notice to the Minister,

      • (iv) if the administrator has reasonable grounds to believe that an offence under this Act has been committed, reports the particulars to the appropriate police authority and provides a copy of that report to the Minister, or

      • (v) in any other case, provides

        • (A) a copy of one letter of request for payment that has been sent to the producer,

        • (B) a declaration that the administrator made or attempted to make a personal visit or telephone call to the producer, and

        • (C) a detailed description of any attempts at mediation or other methods used to negotiate the terms for repayment; and

    • (c) the administrator provides to the Minister an undertaking in writing to advise the Minister of all opportunities for collection as they arise.

    • (d) [Repealed, SOR/2006-293, s. 5]

  • (1.1) [Repealed, SOR/2016-7, s. 8]

  • (2) Despite paragraph (1)(a), payment under subsection 23(1) of the Act may be made to a lender if

    • (a) the administrator has not made a request in writing to the Minister for payment within 10 months after the end of the program year;

    • (b) after the 10 month-period referred to in paragraph (a), the lender has submitted a letter to the administrator asking that the administrator request in writing payment from the Minister as specified in the advance guarantee agreement;

    • (c) the administrator has failed to comply with the request referred to in paragraph (b) within 10 days after the date on which the letter was sent; and

    • (d) the lender submits a request in writing to the Minister for payment

      • (i) stating that the lender has written to the administrator asking that the administrator request in writing payment from the Minister and that the administrator has failed to comply within 10 days after the date on which the letter was sent,

      • (ii) providing the Minister with a copy of the letter to the administrator,

      • (iii) specifying the name and address of all of the producers that are in default in the program year,

      • (iv) providing the principal and interest owed by the administrator to the lender at the time the request was sent with respect to the producers that are in default, and

      • (v) providing a detailed calculation of how the lender determined the principal and interest owing.

  • SOR/2001-343, s. 1;
  • SOR/2006-293, s. 5;
  • SOR/2016-7, s. 8.

Repayment

  •  (1) If a producer that is an individual dies, no penalty for failing to provide a proof of sale for an agricultural product will be imposed under the repayment agreement if a repayment of an advance is made on behalf of that producer.

  • (2) If a producer that is an individual is declared legally incapable of making decisions, no penalty for failing to provide a proof of sale for an agricultural product will be imposed under the repayment agreement if a repayment of an advance is made on behalf of that producer.

  • (3) A producer may make a repayment of an advance with the proceeds from the security that they provided to secure the repayment of the advance and will not be penalized under the repayment agreement for failing to provide proof of sale for an agricultural product.

  • (4) With respect to an advance received for agricultural products under a repayment agreement, a producer may use a proof of sale for any of those agricultural products when making a repayment.

  • SOR/2016-7, s. 9.

Stays of Default

 For the purposes of subsection 21(2) of the Act, the Minister may order a default to be stayed within a period of four months before a default is impending.

  • SOR/2016-7, s. 9.
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