Agricultural Marketing Programs Act (S.C. 1997, c. 20)

Marginal note:Agreement where guarantee already exists

• 5.1 (1) The Minister may enter into an advance guarantee agreement with an administrator without making the guarantee referred to in paragraph 5(1)(a) if the Minister is satisfied that the repayment of the advances to be made under the agreement will be guaranteed by another person or entity.

• Marginal note:Provisions do not apply

  (2) Paragraph 5(3)(i), section 23 and, unless the agreement specifies otherwise, the following provisions do not apply to an advance guarantee agreement that the Minister enters into without making the guarantee referred to in paragraph 5(1)(a):

  • (a) paragraphs 5(3)(c), (e), (f) and (h);

  • (b) paragraphs 10(1)(g) and (h);

  • (c) paragraphs 10(2)(b) and (c); and

  • (d) paragraph 19(1)(c).

Marginal note:Obligations of administrators

6 A guarantee given to an administrator is not effective unless the administrator complies with this Act and the advance guarantee agreement.

Marginal note:Emergency advance

• 7 (1) The advance guarantee agreement may authorize the administrator to pay, subject to any terms and conditions set out in the advance guarantee agreement, a portion of an advance as an emergency advance to an eligible producer who

  • (a) has difficulty producing the producer’s agricultural product because of unusual production conditions that are attributable to weather or natural disaster, if it is reasonable to expect that the agricultural product will be marketable; or

  • (b) experiences severe economic hardship, if the Governor in Council, on the recommendation of the Minister and the Minister of Finance, has declared — taking into account any criteria prescribed by regulation — that severe economic hardship affects a class of eligible producers to which that producer belongs and that the severe economic hardship would likely be substantially mitigated by emergency advances.

• Marginal note:Time limit for payment

  (2) When acting under paragraph (1)(b), the Governor in Council must specify the time limit — not later than the day on which the production period ends — within which the emergency advances under that paragraph must be paid.

• Marginal note:Maximum amount

  (3) The maximum amount of the emergency advance is

  • (a) in the case of an emergency advance under paragraph (1)(a), the lesser of $25,000, or the amount fixed by regulation, and 50%, or the percentage fixed by regulation, of the advance that the administrator expects to make to the producer in respect of the agricultural product on the basis of the amount of that product that is expected to be produced; or

  • (b) in the case of an emergency advance under paragraph (1)(b), the lesser of $400,000, or the amount fixed by regulation, and 100%, or the percentage fixed by regulation, of the advance referred to in paragraph (a).

• Marginal note:Provisions do not apply

  (4) Paragraph 5(3)(e) does not apply to emergency advances under paragraph (1)(a) and, unless the advance guarantee agreement specifies otherwise, the following provisions do not apply to emergency advances under paragraph (1)(b):

  • (a) paragraph 5(3)(e);

  • (b) subsection 5(3.01);

  • (c) paragraphs 10(1)(g) and (h);

  • (d) paragraphs 10(2)(b) to (c); and

  • (e) paragraph 19(1)(c) and subsection 19(3).

• (5) [Repealed, 2015, c. 2, s. 126]

• Marginal note:Security

  (6) The advance guarantee agreement may specify, in the place of or in addition to the security required by regulations made for the purpose of section 12, the security that the administrator is required to take for an emergency advance under paragraph (1)(b).

8 [Repealed, 1999, c. 26, s. 44]

Marginal note:Payment of interest

• 9 (1) The Minister must, in relation to each producer, pay to the lender specified in an advance guarantee agreement — or, if the agreement was made only with an administrator, to the administrator — the interest accruing on the amounts borrowed by the administrator to pay the first $100,000 — or the amount fixed by regulation — of the total of the following amounts:

  • (a) the amounts of advances received by the producer during the program year for all of their agricultural products, including amounts under any other advance guarantee agreements, and

  • (b) the amounts of advances that are received by or attributed to all related producers during the program year for all of their agricultural products, including amounts under any other advance guarantee agreements, and that are attributable to the producer under subsection (2).

• Marginal note:Attribution

  (2) If a producer is related to another producer, the amounts received by, or attributed to, the other producer are attributable to the producer in accordance with the percentage or method of calculation set out in the regulations.

• Marginal note:Interest on emergency advances

  (3) The Minister is not required to pay the interest for an emergency advance, unless the advance guarantee agreement provides for its payment.

• Marginal note:Reduction of principal

  (4) When an amount is repaid on account of a guaranteed advance, the amount on which the Minister must pay interest is reduced by the amount of the repayment.

Eligibility and Repayment

Marginal note:Eligibility requirements for producers

• 10 (1) For a producer to be eligible for a guaranteed advance during a program year,

  • (a) the Minister must determine, taking into account any criteria prescribed by regulation, that the producer continuously owns the agricultural product, is responsible for marketing it and either is or was producing it;

  • (b) if the producer is an individual, the producer must have attained the age of majority in the province where the producer’s farming operation is carried on;

  • (c) if the producer is a corporation with only one shareholder,

    • (i) the individual who makes the application for an advance on the producer’s behalf must have attained the age of majority in the province where the producer’s farming operation is carried on, and

    • (ii) the shareholder must agree in writing to be personally liable — or a guarantor prescribed by the regulations must agree in writing to be liable — to the administrator for any of the producer’s liability under section 22 and to provide any security for the repayment of the advance that the administrator requires;

  • (d) if the producer is a corporation with two or more shareholders, a partnership, a cooperative or another association of persons,

    • (i) the individual who makes the application for an advance on behalf of the corporation, partnership, cooperative or association must have attained the age of majority in the province where the producer’s farming operation is carried on, and

    • (ii) each of the shareholders, partners or members, as the case may be, must agree in writing to be jointly and severally, or solidarily, liable — or a guarantor prescribed by the regulations must agree in writing to be liable — to the administrator for the producer’s liability under section 22 and to provide any security for the repayment of the advance that the administrator requires;

  • (e) the producer and, to the extent provided in the advance guarantee agreement, any related producers must not be in default under a repayment agreement;

  • (f) the producer must not be ineligible under subsection 21(4);

  • (f.1) the producer must demonstrate to the administrator that they are capable of meeting their obligations under the repayment agreement and that they are meeting all of their obligations under any other repayment agreement;

  • (g) the producer must not have given the agricultural product, or any amount to be received under a program listed in the schedule, as security ranking in priority to the security created by section 12;

  • (h) the producer must demonstrate that

    • (i) in the case of an agricultural product that is storable,

      • (A) it is of marketable quality and stored so as to remain of marketable quality until disposed of in accordance with the repayment agreement, or

      • (B) if it is in the course of being produced or is not yet produced, either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12,

    • (ii) in the case of an agricultural product that is not storable,

      • (A) it is of marketable quality and maintained so as to remain of marketable quality until disposed of in accordance with the repayment agreement and either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12, or

      • (B) if it is in the course of being produced or is not yet produced, either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12, and

    • (iii) despite subparagraphs (i) and (ii), in the case of an agricultural product that is livestock, it is of marketable quality and maintained so as to remain of marketable quality until disposed of in accordance with the repayment agreement; and

  • (i) the producer must meet any additional requirements prescribed by regulation.

• Marginal note:Sharing security

  (1.1) For the purpose of paragraph (1)(g), the producer’s eligibility is not affected by the administrator sharing the security referred to in section 12 with another creditor in accordance with the terms and conditions specified in the advance guarantee agreement.

• Marginal note:Eligible producers must make repayment agreements

  (2) An eligible producer must make a repayment agreement with the administrator under which the producer agrees

  • (a) to repay the advance

    • (i) by selling the agricultural product for which the advance is to be made to a buyer or buyers named by the administrator, and authorizing in writing each buyer to withhold from any amount they pay to the producer for each production unit an amount determined in accordance with the repayment schedule specified in the agreement,

    • (ii) by selling, in accordance with the terms and conditions specified in the agreement, the agricultural product for which the advance is to be made and paying directly to the administrator, for each production unit, an amount determined in accordance with the repayment schedule specified in the agreement,

    • (iii) by paying directly to the administrator any amount received under a program listed in the schedule in accordance with the terms and conditions specified in the agreement,

    • (iv) by assigning to the administrator amounts payable to the producer under a program listed in the schedule in accordance with the terms and conditions specified in the agreement,

    • (v) if the producer repays to the administrator an amount of the advance without proof that the agricultural product has been sold and that amount is greater than the amount prescribed by the regulations, by paying to the administrator, in accordance with the terms and conditions specified in the repayment agreement, the amount of interest owed under that agreement on the difference obtained by subtracting that prescribed amount from that repaid amount,

    • (vi) by any other means prescribed by the regulations, or

    • (vii) by paying the administrator using a combination of the means described in subparagraphs (i) to (vi);

  • (a.1) if the repayment agreement is in respect of an agricultural product designated by the Minister in the advance guarantee agreement, or an agricultural product in a class of agricultural products that is so designated, to repay the amount of the advance with respect to that agricultural product, with or without proof that it has been sold, before the expiry of the production period for which the advance was made;

  • (b) to ensure that

    • (i) in the case of an agricultural product that is storable,

      • (A) it is of marketable quality and will be stored so as to remain of marketable quality until disposed of in accordance with the repayment agreement, or

      • (B) if it is in the course of being produced or is not yet produced, either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12,

    • (ii) in the case of an agricultural product that is not storable,

      • (A) it is of marketable quality and will be maintained so as to remain of marketable quality until disposed of in accordance with the repayment agreement and either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12, or

      • (B) if it is in the course of being produced or is not yet produced, either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12, and

    • (iii) despite subparagraphs (i) and (ii), in the case of an agricultural product that is livestock, it is of marketable quality and will be maintained so as to remain of marketable quality until disposed of in accordance with the repayment agreement;

  • (b.1) if required by the advance guarantee agreement, to inform the administrator of the producer’s participation in any program listed in the schedule;

  • (b.2) if required by the advance guarantee agreement, to assign, if the producer is in default, any amounts payable to the producer under a program listed in the schedule to

    • (i) the administrator, to the extent of the producer’s liability under section 22, and

    • (ii) the Minister, to the extent of the producer’s liability under section 23;

  • (c) to repay the amount of the overpayment, if any, of the advance within the period that begins on the earlier of the day on which the producer becomes aware of the overpayment and the day on which the administrator mails or delivers a notice to the producer stating that there has been an overpayment of the advance and ends on the expiry of the number of days set out in the agreement; and

  • (d) to comply with any other terms and conditions set out in the agreement, including terms and conditions governing the delivery of the agricultural product and the payment of interest, both before and after any default.

• Marginal note:Waiver

  (2.1) The administrator may, with the Minister’s approval and subject to any conditions specified by the Minister, waive those requirements of a repayment agreement that are referred to in paragraph 2(a) in order to permit a producer to repay an advance under the agreement if the administrator is satisfied that the agricultural product in respect of which the advance has been made has not been disposed of by the producer.

• Marginal note:Terms and conditions governing emergency advances

  (3) Terms and conditions in the advance guarantee agreement relating to emergency advances must also be included in the repayment agreements of producers who receive those advances.

• Marginal note:Required information

  (4) The producer must provide to the administrator any information that it requests for the purpose of applying this Act.

Marginal note:Unmarketable agricultural product

11 Subject to section 22, if an agricultural product for which a guaranteed advance is made ceases, in whole or in part, to be in marketable condition, through no fault of the producer, the producer becomes liable to repay to the administrator that made the advance, within the period specified in the advance guarantee agreement, the portion of the guaranteed advance that is attributable to the unmarketable portion of the agricultural product, together with the interest — other than the interest paid by the Minister under subsection 9(1) — accruing on that portion calculated from the date of the advance.