The following information includes amendments to the Farm Debt Mediation Act (FDMA), which were brought into force in 2015.
Farm Debt Mediation Service applications where there are outstanding Advance Payments Program advances
Should your request for mediation and a stay of proceedings under either Section 5(1)(a) or 5(1)(b) of the FDMA be approved, all outstanding balances on Advance Payments Program (APP) advances granted to you will no longer automatically be declared in default. However, no additional advances can be granted to you until the Farm Debt Mediation Service (FDMS) process has been completed. This is under the terms and conditions of the Repayment Agreement(s) which you signed with your APP administrator(s) when you applied for your advance(s).
FDMS and conditions for APP default
You'll only go into default if you register for FDMS and you have not met all of your obligations under your APP Repayment Agreement(s).
Through the FDMS process, you'll only be declared in default for your APP advance(s) if your Financials and Recovery Plan proposes one the following options:
- Repaying less than 100% of your APP advance(s)
- Putting the security on your APP advance(s) in jeopardy
- Offering 100% repayment of your APP advance(s), but not until after the end of the production period(s) for which you received your advance(s)
As long as you continue to meet the terms of your APP Repayment Agreement(s) and your FDMS Financials and Recovery Plan does not propose one or a combination of the above options, you won't be placed in default for all of your outstanding APP advance(s).
If you do go into default for your APP advance(s), the penalty interest will be payable as per your APP Repayment Agreement.
APP creditors and the FDMS process
The creditor(s) for your outstanding APP advance(s) should:
- participate in the FDMS mediation process
- analyze any proposal made as part of the process and its potential impact on your outstanding APP advance(s)
- attend the mediation meeting
About your outstanding APP advance(s), the creditor(s) participating in the FDMS mediation process will be either:
- the APP administrator(s) with which you have the outstanding advance(s)
- Agriculture and Agri-Food Canada's (AAFC) Collection Unit for APP advances which have been paid under the APP guarantee
APP administrators can only approve Financials and Recovery Plans offering full repayment of all outstanding APP advance(s). Any Financials and Recovery Plan which doesn't offer a full repayment of all outstanding APP advance(s) must be referred to AAFC's Collection Unit for approval. As such, you should determine early on whether or not you'll be able to fully repay your outstanding APP advance(s) to accelerate the mediation process.
AAFC can be notified of your acceptance under FDMS where you have an outstanding APP advance(s), as the Minister is the guarantor for the advance(s). This means that you don't have to sign a consent form to allow:
- AAFC to be notified of your acceptance under FDMS
- your APP file and documentation prepared as part of the mediation process to be shared, including your FDMS Financials and Recovery Plan, with AAFC and your APP administrator(s)
The amendments help to ensure that:
- FDMS and your current creditor(s) are aware of your outstanding APP advances(s), whether or not you are in APP default
- your APP administrator(s) and AAFC's Collection Unit are able to analyze any proposal made as part of the mediation process and its potential impact on your outstanding APP advance(s)
- your APP administrator and AAFC's Collection Unit are able to determine who will attend the FDMS mediation meeting, and ensure that they have time to prepare for the meeting
Should you decide to withdraw from the FDMS process or if no agreement is reached through the FDMS process, you may negotiate repayment of your outstanding APP advance(s) with your creditor(s) (that is, your APP administrator(s) or AAFC's Collection Unit). Where your FDMS application included a stay of proceedings, you must wait for the FDMS to lift the stay.