Regulatory Stock Review Plan for Agriculture And Agri-Food Canada

The legislative review of the Canadian Agricultural Loans Act was tabled to Parliament in May 2021.

• a shift in focus of the program to higher risk but underserviced segments such as beginner/niche, Indigenous, and women farmers;
• as well as addressing the limitations to the design and delivery of the program, including loan limits, amortization periods, program outreach and awareness and other parameters that negatively impact uptake; and
• updating the performance information profile.

The 2021 AMPA Review was tabled in June 2023. The review examined the three programs governed by the Act, including the Advance Payments Program (APP), the Price Pooling Program (PPP), and the Government Purchase Program and covered the period of February 2016 to February 2021. The primary focus was on the APP and built on the findings from the evaluation of the programs under the Agricultural Marketing Programs Act (2014 to 2019), conducted by AAFC’s Office of Audit and Evaluation (OAE).

The Review found that: the APP was widely used; aligned with Government priorities; aligned with its objective, as stated in the AMPA, of improving marketing opportunities for producers through the provision of cash advances; and complemented the current Business Risk Management programs by providing a proactive risk management tool. The Review concluded that the current advance limits ($100,000 interest free and $1 million overall) are sufficient for the majority of producers. The Review also found that while the current third-party delivery model for the APP is favoured by producers, program administrators, and lenders, it has resulted in a number of risks, including differences in administrator revenue generation from the program (needed to offset administration costs) and the gradual consolidation of APP advances under fewer and fewer administrators.

The Review listed several areas for potential improvement to the APP, including:

• improving data collection in support of improving access to underrepresented groups;
• strengthening security requirements by reducing the use of priority agreements in favour of upfront lien registration;
• reducing administrative burden by shifting to risk-based credit worthiness assessment requirements, removing the Administrator’s Percentage mechanism, and audit-based proof of sale requirements;
• reporting APP Crown debt to credit bureaus;
• further exploring the potential for alternative delivery models, such as Farm Credit Canada; and
• looking for ways to make temporary increases to the interest-free limit in a more timely fashion in times of crisis.

Finally, the Review also determined that the Price Pooling Program is useful for smaller, less established markets and that the Government Purchase Program could be used in the future for humanitarian or global food security purposes. A number of the potential improvements to the APP listed above would require amendments to the AMPA and/or its Regulations.

The 2012 AMPA Review resulted in a number of amendments to the act and its regulations aimed at improving access and flexibility under the APP and reducing administrative burden. The majority of the legislative amendments were implemented in 2015, with the regulatory amendments and associated legislative amendments being made in 2016 (see SOR/ 2016-7 January 29, 2016).

Subsequent amendments have been made to the Agricultural Marketing Programs Regulations:

• on May 29, 2019, to increase the limit on advances from $400,000 to $1 million on an ongoing basis and temporarily increase the interest-free limit from $100,000 to $500,000 for 2019 advances on canola. The amendments are intended to address increases in farm operating expenses of more than 50% since 2007, and to help farmers impacted by market-related challenges in 2019 (see SOR/2019-157 May 29, 2019);
• on June 21, 2022, to increase the limit on interest-free advances from $100,000 to $250,000 for the 2022 and 2023 program years. The amendments are intended to assist producers with rising costs of production (for example, fertilizer, fuel, etc.) resulting from factors such as inflation, increasing interest rates and the Russia-Ukraine conflict. (see SOR/2022-152 June 21, 2022).
• on May 4, 2023, to increase the limit on interest-free advances from $250,000 to $350,000 for the 2023 program year (see SOR/2023-80 May 4, 2023). The amendment is intended to help producers as they weather the continuing financial pressures from the previous growing seasons and support their continued efforts to produce agricultural commodities for Canada and the world.

Review of Certificates of Age and Origin for Distilled Spirits Produced or Packaged in Canada Order. This order facilitates the export of Canadian distilled spirits, which amounts to approximately $780 million annually.

This order fulfills Canada’s international trade commitments as certain trading partners require, as a condition to the importation of distilled spirits from Canada, that the distilled spirits be accompanied by a certificate issued by a duly authorized official of the Government of Canada attesting to the age and origin of the distilled spirits.

These regulations pre-date the replacement of the former Live Stock Pedigree Act in 1988 with the Animal Pedigree Act.

The Animal Pedigree Act includes provisions for termination of the corporate powers of an association and its dissolution in accordance with regulations respecting the dissolution of associations under this Act. The planned approach to the review includes an assessment of the effectiveness of the regulation through discussion with stakeholders. The results of the review will inform potential regulatory and/or legislative changes.

In accordance with the Farm Debt Mediation Act, a review covering the fiscal years 2016–17 through 2020–21 was conducted, and a report to Parliament tabled in December 2021.

Overall, the review revealed that the Act, Regulation and ultimately the Farm Debt Mediation Service they enable is a valuable, unique and necessary service. Moreover, the majority of farmers and creditors reported positive experiences and outcomes arising from their participation.