2024–2025 Livestock Financial Protection Board annual report

Message from the chair

On behalf of the Livestock Financial Protection Board (LFPB or board), I am pleased to present to you the board’s 2024–25 annual report describing the work for the year that ended March 31, 2025.

As a board, we continue to focus on administering the Fund for Livestock Producers (fund); investigating claims; granting or refusing the payment of all claims and recovering any money to which the board is entitled. As the fund administrator, one of our goals is to ensure long-term sustainability of the fund. Once again, the fund’s investment strategy helped maintain a healthy and stable funding ratio.

The following are some highlights for the 2024–25 fiscal year:

• The fund remained actuarially sound with a balance of $10,281,489 which is an increase of $587,646 from the previous year’s fund balance.
• Investment income of $524,005 primarily due to the increase in investment rates in fiscal 2024–25.
• Rate of return on investment of 5.83%.
• Continued to work with the Ontario Ministry of Agriculture, Food and Agribusiness (OMAFA) to support the financial protection programs review and to identify opportunities to ensure that livestock producers and licensed dealers have access to stable risk management tools.

In 2024–25, the board received one claim application from a producer which was then shortly withdrawn as payment was received. This required no investigation and no discussion or adjudication from the board. There were no claim payments from the fund in 2024–25. See Appendix 1 for more details.

Since 2019, the ministry has led a review of Ontario’s legislation governing the financial protection programs (Grain Financial Protection Program and the Ontario Beef Cattle Financial Protection Program). As a result of consultations with industry stakeholders, new legislation, the Protecting Farmers from Non-Payment Act (Regulating Agricultural Product Dealers and Storage Operators), 2023 was passed in Spring 2023, but not proclaimed during the 2024–25 fiscal year. Subject to the minister’s direction, the ministry is targeting fall 2025 effective date for proclamation of the new statute and the new regulations under the Act to come into effect. In summer and Fall 2023, the ministry consulted with stakeholders (including the board) on the proposed regulatory changes to support implementation of the Act. During 2024–25 fiscal year, the ministry continued consultations to support regulatory development, including posting two discussion papers on the regulatory registry for a 60-day comment period (February 27 to April 29, 2024). Once changes are finalized and approved, the ministry will discuss with the board any changes that may impact it which may then in turn be incorporated into the board’s 2025–26 annual report and its 2026–29 business plan. Following the appointment of the Minister of Agriculture, Food and Agribusiness in March 2025, the board sent a letter to respectfully ask that priority be given to advance work in 2025 to create and implement a new livestock regulation, which is required for proclamation of the new legislation. Throughout 2024–25, the board continued to operate under the Farm Products Payments Act, R.S.O. 1990, c. F.10 (FPPA) and will continue to do so until the new Act is proclaimed and the new regulations are operationalized. Any required updates to board operations or reporting will be addressed when the new Act and its associated regulations are in force.

The board will continue to submit recommendations to the minister for consideration for any upcoming vacancies and will work actively to fill any in a timely manner. By continuing to work collaboratively with the ministry, the board will remain effective in its operations and ensure that appropriate governance is in place to fulfill its mandate.

The board will also continue to focus on ensuring the sustainability of the fund and integrity of the program.

Respectfully submitted,

Paul Sharpe
Chair, Livestock Financial Protection Board

Governance and mandate of board

The LFPB is classified as a board-governed provincial agency (Trust) under the Agencies and Appointments Directive (AAD).

The board operates at arm’s-length from the Government but is accountable to the Government in exercising its mandate. The board members are accountable to the Minister of Agriculture, Food and Agribusiness (the minister), through the chair, for setting goals, objectives, and the strategic direction. Throughout 2024–25, the board continued to operate under the Farm Products Payments Act, R.S.O. 1990, c. F.10 (FPPA), Ontario Regulation 560/93: Fund for Livestock Producers, Ontario Regulation 321/11: Fees Payable to Boards and Ontario Regulation 467/19: Boards’ Payment of Expenses and in accordance with the Memorandum of Understanding (MOU) between the minister and the chair.

The board is the administrator of the fund and is ultimately responsible for its management and administration including investigating and adjudicating claims under the program, collecting fees for the program and recovering any money it is entitled under the Act. 

Memorandum of Understanding (MOU)

The MOU reflects the relationship between the board and OMAFA and establishes the accountability framework between the minister and the chair. The MOU outlines the responsibilities between the minister, the chair, the deputy minister and the board as well the administrative, financial, and auditing arrangements with OMAFA.

Per the updates of the AAD in October 2024, all Ministries were required to update the MOU with their respective agencies based on a provided template and to have a new MOU in place and signed by February 1, 2025. Due to the election “writ” period, when the legislature was dissolved, and the government was functioning in a custodial manner, the timeline could not be met. However, with the minister of Agriculture, Food and Agribusiness appointed March 19, 2025, this is on track to be signed early in 2025–26 fiscal year and will continue to reflect the current FPPA and its current regulations. Once the new Act and regulation is proclaimed, the ministry will work with the board to update the MOU and any related agreements.

Mandate of the board

The board is responsible to the minister and is constituted under the authority of the FPPA and its regulations:

• Ontario Regulation 560/93 (Fund for Livestock Producers).
• Ontario Regulation 321/11 (Fees Payable to Boards).
• Ontario Regulation 467/19 (Boards’ Payment of Expenses).

The board’s mandate is set out in subsection 4(1) of the FPPA as follows:

It is the function of a board and it has power,

1. to administer its fund
2. to investigate all claims made to it under the FPPA and to determine the extent of their validity
3. to grant or refuse the payment of all claims or any part thereof and determine the amounts and manner of payment
4. to recover any money to which it is entitled under the FPPA by suit in a court of competent jurisdiction or otherwise
5. to carry out the functions, and exercise the powers, prescribed by regulation

Minister’s letter of direction

In December 2023, the Minister of Agriculture, Food and Rural Affairs sent the 2024–25 letter of direction to the chair setting out the Ontario government’s and the minister’s expectations of the board. The Ontario government’s wide expectations are addressed in the annual attestation memo sent to the minister. The board’s 2024–2027 business plan addresses the minister’s expectations of the LFPB for 2024–2025 and are also reported on below.

The board has aligned its priorities and strategic approach to support the minister’s letter of direction and achieved the following in the 2024–25 fiscal:

• Reviewed the performance of the fund against established targets and communicated the board’s audited financials and annual report to stakeholders following minister’s approval of the annual report.
• Effective oversight, risk management and expenditure management of the fund (for example, used tactics such as an actuarial review; annual agency attestation).
• Worked with OMAFA to support the review of the financial protection programs and to identify opportunities to ensure that livestock producers and dealers have access to stable risk management tools.
• Met all AAD provisions and requirements (i.e., agency attestation).

About the board

Board structure

The board’s primary focus is on the prudent management of the fund and preparing for claims when they occur.

Per regulation, the board shall be comprised of at least five members as appointed by the minister:

• one member representing the Beef Farmers of Ontario (BFO)
• one member representing the operators of community sales under the Livestock Community Sales Act
• other members as the minister considers advisable

By convention, there has also been one member from each of the following:

• Ontario Livestock Dealers Association (OLDA).
• Meat & Poultry Ontario (formerly Ontario Independent Meat Processors).
• Dairy Farmers of Ontario (DFO).
• Veal Farmers of Ontario (VFO).
• An additional BFO representative.

These individuals, in addition to administering the fund, draw upon their expertise in the livestock industry in hearing and adjudicating cases before them. The board may also call upon technical experts and professionals to provide assistance.

The board is made up of representatives from a wide range of the livestock industry sectors. This broad industry knowledge is important in understanding the clientele and the claim files.

Appointees receive remuneration (i.e., a per diem) based on their role, as outlined in the AAD. These are paid by OMAFA and not from the fund. A summary of each member’s 2024–25 remuneration (not including travel expenses), as provided by OMAFA is noted below and is based on when members submitted and ministry processed.

The board continues to monitor its members’ terms and to act proactively to make recommendations to the minister to fill vacancies, to ensure it has the appropriate governance in place to fulfill its mandate.

In 2024-25 fiscal year, there were three members who fulfilled their terms, one of which was reappointed. The chair and vice-chair are seeking reappointment as their terms are set to expire on March 31, 2025 and April 7, 2025, respectively.

The table below shows the members from April 1, 2024 to March 31, 2025.

Board staff/support

The board does not have its own staff. Effective April 1, 2023, the board entered into a delivery agreement with Agricorp and OMAFA which is in effect until March 31, 2028. This agreement includes governance, secretariat and financial services for the board.

• Governance and secretariat services includes coordination, attendance and secretary services at board meetings, prepare draft documents and claim adjudication support. Other services include assist the board in drafting its annual report, business plan and other documentation required for compliance with the MOU and the AAD.
• As part of the financial services support to the board, Agricorp serves as the investment manager for the fund. As the investment manager of the fund, Agricorp finance staff investigate investment options and prepare formal proposals and recommendations for the board’s consideration. Proposals are made considering the board’s current investment policy and the direction as outlined in the MOU. The LFPB directs Agricorp finance staff to execute investment decisions.

Agricorp staff that provide these services to the board are not involved in the review and licensing of livestock dealers or the inspection components of the program. These functions are separate to avoid any perception of a possible conflict of interest when supporting the board in its adjudicating of claims that arise, while protecting the integrity of the program.

Legal and inspection services

The minister’s regulation (O. Reg. 467/19: Boards’ Payment of Expenses) made under the FPPA required the board to pay investigative and most of the legal expenses (except costs related to any judicial reviews by the Divisional Court of the board’s decisions on claims and any appeals beyond) from the fund (these previously had been covered by the ministry).

Legal services are provided to the board by the Ministry of the Attorney General, Civil Law Division, OMAFA Legal Services Branch. Counsel provides the board with privileged and confidential advice regarding agreements, claims, any judicial reviews of board decisions, and regarding the recovery of monies owed to the board. Counsel also contributes to the continued education of board members on claims adjudication.

OMAFA’s Compliance, Enforcement and Intelligence Unit (CEIU) provides the board with Compliance and Advisory Officers (inspection staff) for the board upon request.

Operational performance and activities

The LFPB’s fiscal year is April 1 to March 31. The board’s activities are geared towards fulfilling its mandate. The board held two meetings in the 2024–25 fiscal year (compared to four the previous fiscal); both online via Teams conference call) that focused on:

• reviewed and approved quarterly financial statements
• annual report, business plan and risk assessment
• reviewed and made investment decisions

The Office of the Auditor General of Ontario (OAGO) conducts an annual audit of the accounts and financial transactions of the board. The results from the board’s 2024–25 fiscal year audit will be presented by the OAGO for the board’s approval in March 2026 and is anticipated to be an unqualified opinion. The Fund for Livestock Producers continues to meet the minimum target balance as outlined in the 2015–16 actuarial report. 

Administer the Fund for Livestock Producers

A key activity of the board is governance and administration of the fund as established under the FPPA, including oversight and management of the fund’s investments to ensure financial compensation is available for livestock producers and licensed dealers when required.

All income in the fund comes from check-off fees, investment income and monies recovered after the payment of claims. Contribution of check-off fees to the fund is mandatory and is based on a fixed rate per head of livestock in a transaction. Under O. Reg. 321/ 11: Fees Payable to Boards, a fee of $0.10 per head of cattle sold is payable to the board, unless the sale is on consignment, in which case the $0.10 fee is owed by each of the consignee and consignor.

Fees are self-reported and remitted by the buying dealer on behalf of the producer when the sale is made directly by a producer, by the selling dealer when the sale is by a dealer, and by the consignee on behalf of the consignor and on their own behalf, where the sale is on consignment. Fees are payable on or before the 15^th day of the month following the month of sale unless less than 1,000 head are sold or purchased annually, in which case the fee is payable annually.

The fund is used to:

• Provide compensation to qualified sellers in the event that certain buyers default on their payment obligation (i.e., pay approved claims under O. Reg. 560/93).
• Pay all expenses related to the administration costs of the licensing of dealers under the Livestock and Livestock Products Act (LLPA) with respect to the delivery of the program effective January 1, 2020 (except expenses related to appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal; judicial reviews or expenses related to any subsequent appeals under the LLPA; and expenses incurred by the ministry to administer the LLPA).
• Pay for investigation and most legal fees associated with the adjudication of claims.
• Pay for professional, technical or other assistance to or on behalf of the board (for example, actuarial review).

The fund is not used for board member remuneration as this is provided by the ministry as board members are considered public servants employed under Part III of the Public Service of Ontario Act, 2006.

Actuarial review

The results from the actuarial review conducted by a third party independent vendor in 2021–22 fiscal year indicated that the fund surplus position would decrease if the check-off fee remained at $0.10 per head. It was recommended that in order to maintain a stable fund surplus position an increase in check-off fee would be required. The board presented and discussed the actuarial review results to stakeholders in December 2022 and with stakeholder support, sent a letter to the minister recommending a change in the check-off fee to $0.30 per head.

Check-off fees are required pursuant to a minister’s regulation under the FPPA and therefore any changes to the check-off fee requires minister approval. The recommendation to increase the check-off fee is being addressed as part of the financial protection program review.

The next actuarial review is planned for the 2026–27 fiscal year.

Review of the board’s Statement of Investment Policy (SIP)

In 2024, the board completed a review of their SIP but made no changes. The content was unchanged from the previous SIP for the LFPB. The SIP meets the principles and requirements per the MOU including the Trustees Act provisions incorporated in the MOU. The board will continue to review this policy annually.

A review of the financial protection programs

Since 2019, the ministry has led a review of Ontario’s legislation that governs the financial protection programs (Grain Financial Protection Program and the Ontario Beef Cattle Financial Protection Program). As a result of consultations with industry stakeholders, new legislation, the Protecting Farmers from Non-Payment Act (Regulating Agricultural Product Dealers and Storage Operators), 2023 was passed in Spring 2023, but not proclaimed during the 2024–25 fiscal year. Subject to the minister’s direction, the ministry is targeting fall 2025 effective date for proclamation of the new statute and the new regulations under the Act to come into effect. In summer and Fall 2023, the ministry consulted with stakeholders (including the board) on the proposed regulatory changes to support implementation of the Act. During 2024–25 fiscal year, the ministry continued consultations to support regulatory development, including posting two discussion papers on the Regulatory Registry for a 60-day comment period (February 27 to April 29, 2024). Once changes are finalized and approved, the ministry will discuss with the board any changes that may impact it which may then in turn be incorporated into the board’s 2025–26 annual report and its 2026–29 business plan. Following the appointment of the Minister of Agriculture, Food and Agribusiness in March 2025, the board sent a letter respectfully asking that priority be given to advance work in 2025 to create and implement a new livestock regulation, which is required for proclamation of the new legislation. Throughout 2024–25, the board continued to operate under the FPPA and will continue to do so until the new Act is proclaimed and the new regulations are operationalized. Any required updates to board operations or reporting will be addressed when the new Act and its associated regulations are in force.

Claim investigation and adjudication

The process begins when the seller files a claim application with the board or indicates an intention to file a claim.

Upon receiving a claim application, the board may choose to seek investigation services from OMAFA’s Compliance, Enforcement and Intelligence Unit (CEIU) to complete an investigation into the claim and collect the pertinent information and documents relating to the claim from the claimant, the purchaser or other parties. This is then used so the board can make an informed and impartial decision.

When the investigation is completed, a report is made and presented to the board to review and make a decision regarding payment, if any, from the fund. The board may offer an opportunity for the parties to make submissions or attend a hearing before making its final decision.

The board follows the regulation when payment of claim from the fund is approved:

• If the board approved a claim from a producer, they shall pay 95 per cent of the portion of the claim that is determined to be valid.
• Where an approved claim relates to a licensed dealer selling to a producer or feeder cattle finance co-operative who defaults on payment, compensation is 85 per cent of the portion of the claim that the board recognizes as valid, up to a maximum of $125,000. In these cases, there is no compensation for claims of less than $5,000. Where an approved claim relates to a licensed dealer who sold to another licensed dealer, the board pays 95 per cent of the portion of the claim that it recognizes as valid.

The board works to adjudicate cases within 60 days upon receiving the file from the investigator. Where a hearing is held, it may take longer to make a decision. After the claims adjudication process is completed, the board sends a decision letter to the claimant and buyer. Claim decisions are based on the board reviewing the claim application, the inspection report, any further submissions or testimony and in consideration of the FPPA and O. Reg. 560/93: Fund for Livestock Producers.

In 2024–25, the board received one claim application from a producer which was then shortly withdrawn as payment was received. This required no investigation and no discussion or adjudication from the board. This compares to the previous fiscal year (2023–24) where the board received no claim applications regarding non-payment from licensed dealers. Details on the board’s history of claims can be found in Appendix 1: History of claims.

Recovery of money owed

The FPPA enables the board to attempt to recover any money to which the board is entitled through a court action or otherwise. The board, through legal counsel and the LLPA director, works to recover money owed to the fund. (See Appendix 2 for claim recovery history). The board has a recovery policy to make every reasonable attempt to recover monies that are owed to the fund. Its objectives are to recover as much outstanding debt as is reasonably achievable using a variety of tools and options.

The board continues to work with legal counsel to ensure that debt owed to the fund based on claims paid from the fund in previous years is collected, however, no monies were recovered in 2024–25. The board will continue to make every reasonable attempt to recover monies that are owed to the fund.

Analysis of financial performance

Since January 1, 2020, the board have been responsible to pay for all expenses relating to the administration of the program under the LLPA (licensing and compliance and enforcement) and the FPPA (fund management, claims adjudication and payment of claims) from the fund. These expenses are reflected in this annual report. Although the board is required to pay all program expenses from the fund, they have no authority for licencing of livestock dealers. Prior to the coming into force of the amended regulation, the ministry and the board each paid a portion of the expenses.

As well, since April 1, 2020, the board began to pay investigative and most legal expenses under the FPPA associated with the adjudication of claims (except costs related to any judicial reviews in the Divisional Court of the board’s decisions on claims and any appeals beyond). These expenses have been reflected in the board’s financials since the 2020–21 fiscal year.

Overall, the revenue generated in 2024–25 covered the expenses and there were no claims in the 2024–25 fiscal year. The balance of the fund at the beginning of the fiscal year was $9,693,843 and at the end of fiscal year 2024–25 it was $10,281,489. This is an increase of $587,646 from the previous year due to a higher rate of return received from the board’s investments in 2024–25 fiscal. The fund continues to maintain the minimum target balance as per the 2015–16 actuarial review. The board will continue to monitor the growth of the fund to ensure it continues to meet the target. (See Appendix 3: Audited financial statements).

Revenue and fund investment performance

The board receives revenue for the fund from three sources:

• from producer check-off fees
• interest income earned from investments
• recovery of money owed

Total revenue for the fund for fiscal 2024–25 was $754,952 (excluding any claim recovery), compared to $681,567 in 2023–24 (excluding any claim recovery). The increase from the previous year is due to higher rate of return received from the board’s investments.

The amount of money earned by the fund from check-off fees was $230,947 for 2024–25 fiscal year compared to $202,586 for the 2023–24 fiscal year; a slight increase year over year.

Interest income on investments totaled $524,005 for the 2024–25 fiscal year, compared to $478,981 in 2023–24. The increase from last year is attributed to higher interest rates on cash amounts as well as the mortgage investment that was renewed at a higher rate providing more revenue in return.

Investment income is one important source of revenue for the fund. The board is responsible for the prudent management of the fund’s investments and is required to invest the fund in accordance with the principles in sections 26, 27, 27.1 and 27.2 of the Trustee Act.

The board has an investment policy that outlines general investment goals and objectives of the board and describes the strategies for investment of the fund. The policy aligns with the guidelines set out in the MOU, which incorporates sections of the Trustee Act. The investment policy was reviewed by a third party actuary as part of the actuarial review completed in 2021–22 to ensure it remains relevant to the prevailing and forecasted nature of the fund’s liabilities. The actuary confirmed that the investments held by the fund, as well as the transactions conducted, are consistent with the board’s investment policy.

The board’s asset mix includes investments that guarantee face value at redemption; generally, this includes Guaranteed Investment Certificates (GICs) issued by financial institution or similar financial instruments.

Currently, the board’s investments include GICs and a $4 million first mortgage on development land in the Regional Municipality of Waterloo owned by Activa Holdings Inc. The mortgage agreement for $4 million was renewed in December 2022 for a 4-year term with prepayment option after year 2 or 30-months, earning 6% interest (an increase of 1% from the previous agreement) paid semi-annually.

Overall, the impact of these interest rate increases (for the mortgage and GIC investments) has provided a higher rate of return for the fund with the average return on investment of 5.83% (which is 0.17% higher than the rate of return in 2024–25 fiscal year).

Expenses

The following expenses are paid by the board to related parties:

• Governance, secretariat and financial services; and financial responsibility review & licensing are paid to Agricorp.
• Legal and investigation services are paid to OMAFA.

The board continues to effectively manage expenses over the past several years. The total operating expenses for 2024–25 fiscal year were $167,306 compared to $194,793 in 2023–24.

The board’s legal and investigative services expenses in 2024–25 were $1,019, compared to $6,006 in 2023–24. These expenses were related primarily due to debt recovery efforts from claims paid prior to 2022.

The expenses in 2024–25 for financial responsibility review and licensing were slightly lower at $133,752. This is compared to $157,297 in 2023–24.

The expenses for governance, secretariat and financial services were consistent in 2024–25 compared to the previous fiscal year.

There was no payout of claims in 2024–25 fiscal from the fund and no monies were recovered.

Financial position

The table below shows the budget to actual and the variance between the 2023–24 and 2024–25: fiscal years.

Notes:

Note 1: Financial responsibility review, licensing and enforcement activities (program administration) includes: the financial review of each application (validate, calculate ratios and scores, and assess financial responsibility); preparing licensing file financial recommendations; the program director’s decision on licences (issue, renew, cancel, add terms and conditions, suspend); corresponding with applicants; manage financial security (if required); responding to complaints and discuss with the program director to determine next steps; and program reporting.

Performance measures and targets

Below is a brief summary of key indicators and accomplishments regarding each goal in the 2024–25 fiscal year showing the targets achieved/not achieved and actions to be taken.

Appendix 1: History of claims up to March 31, 2025

Appendix 2: History of claims recovered up to March 31, 2025

Appendix 3: Audited financial statements for year ending March 31, 2025

Management’s responsibility for financial reporting

The accompanying financial statements have been prepared by management, in accordance with Canadian Public Sector Accounting Standards. Management is responsible for the accuracy, integrity and objectivity of the information contained in the financial statements. The financial statements include some amounts that are necessarily based on management’s best estimates and have been made using careful judgment.

In discharging its responsibility for the integrity and fairness of the financial statements, management maintains financial and management control systems and practices designed to provide reasonable assurance that transactions are authorized, assets are safeguarded, and proper records are maintained. The systems include formal policies and procedures and an organizational structure that provides for appropriate delegation of authority and segregation of responsibilities.

The board of directors is responsible for ensuring management fulfills its responsibilities for financial reporting and internal control. The board meets regularly to oversee the financial activities and annually reviews the financial statements.

These financial statements have been audited by the Office of the Auditor General of Ontario. The Office of the Auditor General’s responsibility is to express an opinion on whether the financial statements are fairly presented in accordance with Canadian Public Sector Accounting Standards. The Independent Auditor’s Report, which appears on the following page, outlines the scope of the auditor’s examination and opinion.

Becky Philpott
Chief Financial Officer, Agricorp

Aron Nonkes
Controller, Agricorp

March 23, 2026

Independent auditor’s report

To the Livestock Financial Protection Board and to the Minister of Agriculture, Food and Agribusiness

Opinion

I have audited the financial statements of the Livestock Financial Protection Board (Fund for Livestock Producers) (the board), which comprise the statement of financial position as at March 31, 2025, and the statements of operations and fund balance and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In my opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the board as at March 31, 2025, the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for opinion

I conducted my audit in accordance with Canadian generally accepted auditing standards. My responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of my report. I am independent of the board in accordance with the ethical requirements that are relevant to my audit of the financial statements in Canada, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Other information

Management is responsible for the other information. The other information comprises the information, other than the financial statements and my auditor’s report thereon, in the board’s 2024–25 annual report.

My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon.

In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

I obtained the board’s 2024–25 annual report prior to the date of this auditor’s report. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Responsibilities of management and those charged with governance for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with Canadian public sector accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the board’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board either intends to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the board’s financial reporting process.

Auditor’s responsibilities for the audit of the financial statements

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the board’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the board’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the board to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. 

Jeremy Blair, CPA, CA, LPA 
Assistant Auditor General

Toronto, Ontario
March 23, 2026

Livestock Financial Protection Board (Fund for Livestock Producers)

Statement of financial position — year ended March 31, 2025

See accompanying notes to financial statements.

Approved on behalf of the board,

Paul Sharpe
Board chair

Jennifer Haley
Board vice-chair

Livestock Financial Protection Board (Fund for Livestock Producers)

Statement of operations and fund balance — year ended March 31, 2025

See accompanying notes to financial statements.

Livestock Financial Protection Board (Fund for Livestock Producers)

Statement of cash flows — year ended March 31, 2025

See accompanying notes to financial statements.

Livestock Financial Protection Board (Fund for Livestock Producers)

Notes to the financial statements — year ended March 31, 2025

1. Establishment of the board (fund)

The Farm Products Payments Act (FPPA) designated the Livestock Financial Protection Board (board) as the board to administer the Fund for Livestock Producers (the fund). The fund was established effective June 12, 1982, by regulation made under the FPPA.

The purpose of the fund is to protect livestock sellers against loss through default in payments by a buyer. For defaults in payments by dealers, claimants are reimbursed 95% of an approved claim. For defaults in payments by producers, claims over $5,000 are paid the lesser of 85% of an approved claim and $125,000. The board seeks recovery of any claims paid from the defaulter.

Under Ontario Regulation 321/11, producers, licensed dealers, consignors and consignees are required to pay the board a fee of ten cents per head of livestock. 

Under Ontario Regulation 467/19, the board is responsible for all expenses relating to the administration of the FPPA and the Livestock and Livestock Products Act (LLPA).

As a board-governed provincial agency, the fund is exempt from income taxes.

2. Significant accounting policies

a) Basis of accounting

The financial statements are prepared by management in accordance with Canadian Public Sector Accounting Standards (PSAS), including the 4200 series standards for government not-for-profit organizations. 

b) Financial instruments

Financial instruments consist of cash, investments, mortgage receivable and accounts payable. Investments are entirely comprised of Guaranteed Income Certificates (GICs).

Financial assets and financial liabilities are recognized on the statement of financial position when the board becomes a party to the contractual provisions of the instrument. All financial instruments are assigned to one of two measurement categories at initial recognition – either fair value or cost/amortized cost. Financial assets and liabilities measured at cost/amortized cost are initially recognized at acquisition cost, including transaction costs that are directly attributable to the acquisition or issuance. Cash, fees receivable and accounts payable are all measured at amortized cost and short- and long-term investments are all measured at fair value. The mortgage receivable is measured at cost. 

A statement of remeasurement gains and losses has not been presented as there is nothing to report therein.

All financial assets are assessed for impairment on an annual basis. When a decline is determined to be other than temporary, the amount of the loss is reported in the statement of operations and fund balances. Any unrealized gains and losses previously recognized in the statement of remeasurement gains and losses are reversed and recognized in the statement of operations and fund balances when realized.

The board is required to classify fair value measurements using a fair value hierarchy, which includes three levels of information that may be used to measure fair value:

• Level 1 — unadjusted quoted market prices in active markets for identical assets or liabilities.
• Level 2 — observable or corroborated inputs, other than level 1, such as quoted prices for similar assets or liabilities in inactive markets or market data for substantially the full term of the assets or liabilities.
• Level 3 — unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.

c) Revenue recognition

The fund’s revenue is comprised of fees paid under the FPPA, investment income, including mortgage interest, and claim recoveries.

Per regulation under the Act, fees are remitted to the board directly by producers, licensed dealers and consignors. Fees from producers are earned and recognized once the sale of livestock has occurred and give rise to the related fee under the Act.

Investment income on GICs and interest revenue from the mortgage receivable is recognized when earned and is recorded in interest income on the statement of operations and fund balance.

Claim recoveries are recorded at their realizable value when the associated claim is approved for payment, unless management determines collecting the claim recovery is significantly doubtful, in which case it is recognized when payment is received. Realizable value is the amount of cash expected to be received. In determining realizable value of claim recoveries, management considers the amount of financial security, if any, provided by the defaulter under the requirements of the LLPA.

d) Expenses

Expenses are recorded on an accrual basis, net of recoverable sales tax.

e) Measurement uncertainty

The preparation of financial statements in conformity with PSAS requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses. There are no amounts recognized or disclosed in the financial statements where the effect of measurement uncertainty is material to the financial statements.

3. Investments

The fund’s portfolio has interest rates ranging from 3.55% to 5.30% (2024 — 4.60% to 5.54%) with maturities ranging from October 2025 to March 2029 (2024 — March 2025 to March 2027).

4. Mortgage receivable

The mortgage receivable is on development lands in the City of Kitchener, Ontario bearing interest at 6% (2024 — 6%) per annum. The mortgage is secured by a first charge on the development lands. The board renewed the mortgage agreement on December 8, 2022 for an additional term of 4 years with the principal due on December 10, 2026, and interest paid semi-annually. Interest receivable at March 31, 2025 amounts to $73,187 (2024 — $73,187) and is included in mortgage receivable — current portion. 

In the event of the sale or any other conveyance of all or part of the lands, at the option of the board, the principal and accrued interest shall be immediately due and payable to the board. At any time, the mortgagor can pay all or any part of the principal without notice or penalty.

5. Claims

There were no claims paid or claim recoveries in 2025 (2024 — $nil).

6. Financial instruments risk management

a) Credit risk

Credit risk is the risk that other parties fail to perform as contracted. Credit risk on investment securities arises from the funds’ position in GICs. Board investment policy restricts the types of investments which reduces credit risk.

b) Liquidity risk

Liquidity risk is the risk that the fund may not be able to meet all cash flow obligations as they come due. The board seeks to limit its liquidity risk by actively monitoring and managing its available cash reserves to ensure that it is able to satisfy financial liabilities as they come due. Cash that is surplus to working capital requirements is managed by the board and invested in accordance with its investment policy.

c) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market price. Market risk comprises three types of risk: currency risk, interest rate risk and equity risk. Currently, the fund is exposed only to interest rate risk.

d) Interest rate risk

Interest rate risk refers to the adverse consequences of interest rate changes on the funds’ financial position, operations and cash flow. Fluctuations in interest rates have a direct impact on the market valuation of the funds’ fixed income securities portfolio.

Although investments are generally held to maturity, realized gains or losses could result if liquidation of investments is required to meet obligations. There have been no significant changes from the previous year in the exposure to risk or to the policies, procedures and methods used to measure the risk.

Mortgage receivable is a fixed rate debt instrument, which is not subject to interest rate fluctuations.

7. Related party transactions

The board is responsible for expenses related to financial responsibility review, licensing and enforcement; and financial, governance and secretariat services. The board entered into an agreement with Agricorp, a provincial agency under common control by the Province of Ontario, to provide financial responsibility review, licensing and enforcement services as well as financial, governance and secretariat services, which amounted to $165,385 (2024 — $188,245) and are included in expenses on the statement of operations and fund balance.

The board is responsible for expenses related to legal and investigation services provided by OMAFA. In the current year, legal and investigation services amounted to $1,019 (2024 — $6,006) and are included in expenses on the statement of operations and fund balance.