Livestock Financial Protection Board business plan for the fiscal years 2025–2028

Executive summary

The Livestock Financial Protection Board (“LFPB or board”) is pleased to present its 2025–2028 business plan. As a board, we continue to focus on administering the Fund for Livestock Producers (“fund”); adjudicating claims; granting or refusing the payment of claims; and trying to recover any money to which the board is entitled. As of March 31, 2024, the fund balance was $9.694 million.

Our goal is to ensure the long-term sustainability of the fund. We are pleased that our investment strategies have helped with the sustainability of the fund, considering the unprecedented low interest rates from March 2020 to March 2022. While interest rates are rising in the short term, there is an inverted investment curve at present indicating lower rates for longer terms (i.e. 3–5 year terms). The board will continue to assess the potential impact of different financial market scenarios and make adjustments to its investment strategy as required.

Investment income is one important source of revenue for the fund. The board has an investment policy that is reviewed annually, which outlines general investment goals and objectives of the board and describes the strategies for investment of the fund.

Overall, based on the board’s projections for 2025–2028, we anticipate generating enough revenue to cover the expenses (administrative program delivery and board support service expenses only) provided there are no claims. However, claims are the unknown factor relevant to the board’s operating expenses. Revenue is also very dependent on the interest rates and check-off fees. See page 17 for a summary.

Since 2019, the ministry has been leading 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 is not yet proclaimed. Subject to the minister’s direction, the Ministry is targeting a 2025 effective date for proclamation of the new statute and the new regulations under the Act coming into effect. A new regulation is needed to proclaim the Act. Once regulatory changes are finalized and approved, the ministry will work with the board to incorporate changes that may have a direct impact on the board into the board’s business plan and annual report. The board is currently operating under the Farm Products Payments Act, R.S.O. 1990, c. F.10 (FPPA) until the new Act is proclaimed and the new regulations are approved and operationalized per the minister.

As with all boards, succession planning and continuity of membership is a very important part of mitigating risks and ensuring the board is able to meet its mandate. The board continues to work collaboratively with the ministry on appointing members to the board. The vice-chair was appointed as chair to the board and a member was appointed as vice-chair to the board upon the recommendation of the board to the minister for appointment for a 3-year term. This will ensure continuity within the board in the event of member turnover as it is important to have members on the board with the history and background to meet our mandate.

Mandate

The LFPB is classified as a board-governed provincial agency (trust) under the Treasury Board Secretariat’s Agencies and Appointments Directive (AAD). It’s legislated mandate is set out in subsection 4 (1) of the FPPA as:

4 (1) 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 this Act and to determine the extent of their validity.
3. To grant or refuse the payment of claims or any part thereof and determine the amounts and manner of payment.
4. To recover any money to which it is entitled under this Act by suit in a court of competent jurisdiction or otherwise.
5. to carry out the functions, and exercise the powers, prescribed by regulation.

The board’s vision is to protect the financial interests of licensed dealers and producers who have sold livestock to licensed dealers. This vision supports OMAFA priorities of a thriving agri-food sector and rural communities seizing economic opportunities.

The board contributes to these priorities by ensuring that the fund is effectively managed and able to meet its financial obligations to livestock sellers. The fund is an important component of a seller's overall business risk management strategy as it mitigates risks beyond their control (for example, a default by a licensed dealer). 

The mission of the board is to ensure the long-term sustainability of the fund by promoting sound investment practices and good governance for the benefit of livestock sellers who sell to licensed dealers. 

The board’s guiding principle is accountability in its management, administration and operation.  As an agency of the government, the board conducts itself according to the management principles of the government.  These principles include ethical behavior; prudent, efficient and lawful use of public resources; fairness; high quality service to the public; and openness and transparency to the extent allowed under law.

Governance

The board operates at arm’s-length from the provincial government but is accountable to the Minister of Agriculture, Food and Agribusiness (the minister) in exercising its mandate.  It is accountable to the minister, through the chair, for its internal governance; and for setting its goals, objectives and strategic direction. The board operates in accordance with the Memorandum of Understanding (MOU) between the minister and the chair, and under the authority of the FPPA and these 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 must comply with provincial government directives that guide agencies in the delivery of services to the public. The AAD is a Management Board of Cabinet Directive and sets out the requirements for the board as a provincial agency.

Memorandum of Understanding (MOU)

The MOU defines the relationship between OMAFA and the board, including the roles and responsibilities of the minister, the deputy minister, the board chair and the board members. The MOU sets out the operational and reporting relationship between the board and the minister, and also outlines the administrative, financial and auditing arrangements with OMAFA.

In October 2024, all Ministries were asked to update the MOU with their respective agencies and to have a new MOU in place and signed by February 1, 2025. During the election “writ” period when the legislature is dissolved, compliance timelines cannot always be achieved because the government is functioning in a custodial manner. Treasury Board Secretariat (TBS) will inform agencies through ministries of their compliance obligations during the writ period.

This new MOU will reflect the current FPPA and current regulations. Updates may be required to the MOU as a result of the legislative and proposed regulatory changes. Once the new Act is proclaimed and the new regulations under the Act come into effect, the Ministry will work with the board to update the MOU and any related agreements.

Board structure

The board is comprised of members appointed by the minister for terms of up to three years. Members are eligible for reappointment. The minister also has the authority to appoint a member of the board as chair and another as vice-chair.

Per O. Reg. 560/93 — Fund for Livestock Producers, the regulation requires that the board shall be composed of at least five (5) members consisting of one member representing each of the Beef Farmers of Ontario (BFO) and the operators of community sales under the Livestock Community Sales Act; and such other members as the minister considers advisable. By convention, there has been one member from the Ontario Livestock Dealers Association (OLDA), one member from the Meat & Poultry Ontario (formerly the Ontario Independent Meat Processors), one member from the Veal Farmers of Ontario (VFO), one member from the Dairy Farmers of Ontario (DFO) and an additional member from the BFO. There are currently 7 board members including the chair. Appendix 1 includes a list of the board members.

The board typically meets quarterly, or as required by business demands (for example, to review and adjudicate claims). Currently the board has seven members, including the chair and vice-chair.

Minister’s letter of direction

As part of the AAD, the minister issues the agency a letter of direction to the chairs of all board-governed agencies on an annual basis to inform their business plan. The board chair received the letter of direction for 2025–26 fiscal year from the minister in November 2024 which outlines high-level, achievable expectations for the 2025–26 fiscal year (see Appendix 3 for a copy of the letter). The board has aligned its strategic approach and priorities to support these as follows:

Overview of current and future financial protection programs and activities

The following describes the Ontario Beef Cattle Financial Protection Program (OBCFPP), the fund and the role of the LFPB within the OBCFPP:

Ontario Beef Cattle Financial Protection Program

The OBCFPP was established in 1982 to provide compensation to sellers if a licensed dealer (buyer), including packing plant operators, abattoir operators, auction market operators, country dealers and cooperatives, defaulted on a payment. Under the Livestock and Livestock Products Act (LLPA), all dealers must have an active licence in order to conduct business as a livestock or livestock products dealer.

The OBCFPP has two components:

1. The annual licensing of dealers under the LLPA.
2. The administration of the compensation fund established under the FPPA.

Beef Inc. was under contract with the Ministry to assist in administering the licensing support services component of the OBCFP. It was also under contract with the board to provide governance, secretariat and fund management services for the board. However, at the rest of industry and with ministerial approval, effective January 1, 2019, the OBCFPP has been delivered by Agricorp.

There were certain aspects of the OBCFPP that needed to be transitioned from OMAFA’s AHWB to Agricorp. Implementation of the transition occurred from 2021 to 2023 and was completed in April 2023.

Effective April 1, 2022, Agricorp’s Senior Director, Program Delivery was appointed by the minister as the director under the LLPA with authority for licensing of the OBCFPP. Prior to this, OMAFA’s director in AHWB was appointed the director under the LLPA.

As part of the OBCFPP, beef cattle producers selling their cattle to a licensed dealer must pay a check-off fee per head of cattle sold. The required check-off fee is self-remitted and remitted to the LFPB and deposited into the fund. The check-off fee is a fixed rate as per O. Reg. 321/11— Fees Payable to Boards.

The fund

There is one Fund for Livestock Producers. The purpose of the fund is to provide cattle buyers with financial compensation if a licensed dealer (buyer) defaults on a payment.

All revenue income for the fund comes from check-off fees and investments generated from those fees.

Investment income is one important source of revenue for the fund.  As such, the fund is managed to provide a maximum rate of investment return while assuming a low risk tolerance. The board has a Statement of Investment Policy (SIP) reviewed annually, that guides investments prior to any board decision.

Per Ontario Regulation 467/19, the board is responsible to pay all expenses relating to the administration of the following:

The Farm Products Payments Act (FPPA):

• the administration of the Fund for Livestock Producers, including actuarial studies of the fund
• the adjudication of claims for payments from the fund
• the recovery of money the board may be entitled to receive
• communications and educational activities related to the Act
• the investigation of claims for payment from the fund
• legal fees associated with the FPPA

The Livestock and Livestock Products Act (LLPA):

• the determination of whether a person is financially responsible for the purposes of the Act
• the determination of the amount of security a person is required to pay to the Chief Inspector under the Act
• licensing under the Act (issue, refusal, renew, suspend, revocation, impose terms and conditions)
• the issuance or refusal to issue a shortfall permit
• requests for a hearing by the director in connection with licensing under the Act
• Inspections under the Act
• the exercise of the chief inspector’s powers
• communications and education activities in relation to the Act
• actions taken to determine whether a person should be referred to the ministry for potential prosecution for an offense

The fund is not used for:

• Board remuneration (i.e. board member per diems, or travel and meal expenditures) as this is provided by the Ministry as board members are employees who are public servants employed under Part III of the Public Service of Ontario Act, 2006.
• Expenses related to appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal; judicial reviews; prosecutions of offences; and legal fees associated with respect to the Act.

Livestock Financial Protection Board

The LFPB is the administrator and responsible for the overall governance and administration of the fund under FPPA and O. Reg. 560/93. The board’s main duties are to manage the fund effectively and investigate and adjudicate claims when they occur.

The board adjudicates claims made under the FPPA and determines the payment, if any, to be made from the fund. A claim for potential compensation will be considered by the board if it involves a producer selling to a dealer, a licensed dealer selling to a producer or a licensed dealer selling to another licensed dealer. 

A claim application may be submitted to the LFPB to cover a portion of their losses if there is default and does not meet their payment obligations in the regulations.

The LFPB may choose to seek investigation services from OMAFA’s Regulatory Compliance Unit (RCU) to complete an investigation into the claim. When the investigation is complete, a report is made and presented to the board.

The board conducts an in-depth analysis, which may involve OMAFA Legal Services’ advice, and either makes a final decision or offers an opportunity for the parties to make submissions or attend a hearing before making its final decision.  The board works to adjudicate cases within 60 days of receiving the report from the investigators. Claims that involve a hearing may require more time to resolve because additional meetings are required and, in some cases, the cases tend to be more complex.

The board determines the payment, if any, to be made from the fund. The rules governing the amount of payment from the fund are set out in sections 20 and 21 of O. Reg. 560/93. 

• If the board decides that a claim from a producer made in respect of a dealer is valid, the board pays 95% of the portion of the claim that it recognizes as 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 selling to another licensed dealer, the board pays 95% of the portion of the claim that it recognizes as valid.

The board has discretion to refuse payment from the fund to dealers and producers based on grounds set out in sections 18 and 19 respectively of O. Reg. 560/93 — Fund for Livestock Producers.  Examples of grounds for refusing payment include the claimant extending credit to the buyer; the director under the LLPA not being notified promptly where payment was not received on time; and the claim not being submitted on time.

The board does not administer any other FPP and no new programs are being considered for the 2025–2028 timeframe.

Strategic direction

The table below identifies the objectives and key strategies that the board will use to achieve the following goals:

Resources needed to meet objectives of mandate and strategic directions

Human resources and staff numbers

The board does not have its own staff. All resources are provided through a service agreement or as agreed to in an MOU between the board and the minister. 

Services and support provided to the board

Since 2019, Agricorp has provided governance, secretariat and financial services to the board based on a service agreement. While Agricorp provides the day-to-day administrative functions, the board is ultimately responsible for the oversight and management of the fund. Key aspects of Agricorp’s role are to receive and deposit fees; prepare monthly, quarterly and annual financial statements; prepare documentation for annual audits; and prepare annual reports and annual business plans for board approval, as well as investment of the fund as outlined in the board’s Investment policy. 

In April 2023, there was a new delivery agreement signed for the delivery of the OBCFPP between Agricorp, OMAFA and the LPFB. The agreement is effective to March 31, 2028 and includes deliverables and services to the LFPB for the FPPA (secretariat, governance and administrative support, claim adjudication, fund management/investment), as well includes the delivery of the OBCFPP.

Staff that provide support to the LFPB have no role in the licensing and inspection components of the program. These functions are separate to avoid any perception of a possible conflict of interest in adjudicating the claims that arise from a dealer’s default in payment, while protecting the integrity of the program.

Additional services and support to the board

The board has additional support available for legal counsel and the investigation of claims.

• Investigative services are provided by the Regulatory Compliance Unit (RCU) within OMAFA’s Food Safety Systems Development Branch.
• Legal services are are provided by OMAFA through the Ministry of the Attorney General through the Legal Services Branch.

Effective April 1, 2020 as part of the new minister’s regulation (O. Reg. 467/19) under the FPPA, these costs are paid for by the board (previously they were covered by the ministry).

At this time the board is not considering other service providers for these services and will engage the ministry if a change is contemplated so that consideration can be given to the broader implications for the program and the ministry from a risk management perspective.

Environmental scan

The environmental scan seeks to provide a picture of the environment in which the board is operating and the key factors that could impact the board and/or the health of the fund through the upcoming planning cycle. The challenges and risks faced by the board have remained similar over the past few years.

The board is cognizant of its broader responsibilities in ensuring that key risks are identified and that effective processes are in place and implemented to manage these risks. The following are the main issues that emerged from the environmental scan:

External drivers

Interest rate risk on investments

Investment income is an important source of revenue for the board to cover projected expenses and claims. Investing has inherent risks. Although long-term return expectations and trends are generally predictable, there can be considerable volatility in short-and medium-term results. Investment risk is a challenge that could adversely affect the achievements of one of the board’s goals, which is to ensure long-term sustainability of the fund. Appropriate mechanisms are therefore required for controlling investment risk. The board’s key mechanism for identifying and managing the investment risk is to ensure that the fund is invested in high quality investments that are consistent with the Trustee Act provisions referenced in the MOU and the board’s investment policy. 

Commodity prices/livestock values

Canadian cattle prices were at record highs. These high commodity prices for cattle may impact the fund if claims are approved to be paid out at these high commodity prices as it is a larger payout.

Commodity prices have experienced great volatility that may increase cash flow challenges and increase the amount of risk to dealers and, in turn, to the fund. This fluctuations and volatility has made it harder to predict the future of commodity prices. The commodity price volatility increases risk to the fund.

Policy/legislative change by the Ontario government

The minister has responsibility for the legislation governing the program.

In October 2024, there were changes to the Agencies and Appointments Directive (AAD). The chair attended a training session where an overview of the changes was provided. The board is working to incorporate these changes into processes and reporting in the 2025–26 annual report.

Since 2019, the ministry has lead a review of Ontario’s legislation governing the Financial Protection Programs (Ontario Beef Cattle Financial Protection Program and the Grain Financial Protection Program). New legislation “Protecting Farmers from Non-Payment Act” passed in Spring 2023 as a result of the consultation with industry stakeholders is not yet operational. A new regulatory framework is required before the new Act can be proclaimed. Subject to the minister’s direction, the ministry is targeting a 2025 effective date for proclamation of the new statute and the new regulations under the Act. Once changes are finalized and approved, the Ministry will work with the board to incorporate changes that have a direct impact on the board into the board’s business plan and annual report. The board continues to operate under the FPPA and will do so until the new legislation and regulations are approved and operationalized by the minister.

Fund balance and unpredictability of claims

The fund dropping below the actuarially sound level or becoming depleted because of an unusually large claim(s) is another external driver identified by the board. This risk could negatively impact the board’s ability to deliver financial protection to livestock sellers. 

An on-going challenge for the board is the unpredictability of claims. That is the number of claims to the board from year to year is difficult to predict and can fluctuate greatly. Because claims paid are variable, any estimate of future claims in the upcoming 2025–2028 planning horizon can be unreliable.

The results from the actuarial review conducted in 2021–22 fiscal year indicated that the fund surplus position is decreasing if the check-off fee remains at 10 cents per head. It was recommended that in order to maintain a stable fund surplus position an increase in check-off fees would be required. The board presented and discussed the actuarial review results to stakeholders in December 2022 and recommended an increase in the check-off fee to the minister to 30 cents per head. A change to the check-off fee requires minister approval as the check-off fee is in regulation. The board will continue to monitor the fund, in particular if there are claims paid and make appropriate recommendations for changes as needed.

Internal drivers

Board knowledge management and succession planning

Succession planning and creating continuity on the board are given consideration when the expiry date of members’ terms are approaching to help minimize the loss of experience and knowledge during transition periods. When providing potential appointment to the minister for consideration, and to minimize the loss of experience and knowledge, the board asks that consideration be given to stagger member’s appointments.

Governance and accountability requirements

There is an increasing focus and scrutiny of both private and public sector organizations which has resulted in increasing demands for accountability as it relates to board governance and accountability.  Good governance is an integral component of effective fund management and board performance. Expectations concerning accountability and the fiduciary duties of boards, if any, continue to evolve.

Financial budget

The estimated revenues and expenses for the next three years are provided in Table 1 (below). The board is subject to an annual audit by the Office of the Auditor General of Ontario. A financial audit of the 2023–24 fiscal year is on track to be completed in March 2025 with an unqualified opinion.

Total revenue for the 2023–24 fiscal year was $681,567 and total expenses were $194,793. The fund balance as of March 31, 2024 is $9.694 million.

Projected revenue for the fund (2025–28)

Total revenue for this planning horizon is anticipated to decrease year over year primarily due to the decrease in the investment income as interest rates decline from previous years.

The following are the two sources of revenue into the fund:

• Check-off fees that are owed on a per head of livestock sold basis. Contributions to the fund are mandatory and are based on a fixed rate per head of livestock in a transaction. Currently a 10 cents per head which is payable to the board and deposited into the fund that the board then manages.
• Investment interest earned on the balance of the fund. Investment income is currently the greater of the two sources of revenue and therefore an important source of revenue for the fund.

Check-off (remittance) fees

The 2021–22 actuarial review recommends the check-off fee increase in the near future. The board discussed this recommendation with stakeholders on December 8, 2022 and respectfully recommended an increase to the minister who has the authority to set these check-off fees under the LLPA.

For out-year planning purposes, the board is not assuming an increase in the check-off fees at this time from 10 cents per head currently, as a potential increase is being considered and consulted on as part of the work to develop new regulations. In the meantime, the board will continue to monitor the fund to ensure it is growing or maintained at an appropriate level.

Investment interest

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

As well, the fund has issued a $4 million first mortgage (which is approximately 45% of the total fund balance) on development land in the Regional Municipality of Waterloo with Activa Holdings Inc. In December 2022, this investment was renewed at a rate of 6% (previously 5%) for up to a 4 year term and set to mature December 10, 2026. In the event of the sale or any other conveyance of all or part of the secured lands, the principal and accrued interest on the mortgage shall, at the board’s option, be immediately due and payable. In the unlikely event that a default on the mortgage occurs, as a secured, priority lender, the board has first right on the property to recover the outstanding principal and interest, and any other costs incurred during the process. The board is currently anticipating the mortgage investment will be held to maturity and may not be renewed beyond December 2026. Therefore, for outyear projections, it is assumed that this is invested at 3.5% laddering from 2026 to 2028 fiscal years.

In 2024, the Bank of Canada has decreased the policy rate steadily from 5% in January 2024 to 3.25% as of December 11, 2024 decreasing interest income on cash balances, as well as decreasing returns on investments made during fiscal 2025. As a result, maturities are renewing at rates lower than the prior year, effectively reducing investment income on cash balances and investment income for future years.

Overall, interest returns for fiscal 2025 are forecasted to be 5.26%. Returns are anticipated to decrease in the outyear fiscal years with projected future return on investment of 4.3% in fiscal 2025–26, 3.7% in fiscal 2026–27 and 3.5% in fiscal 2027–28.  While interest rates are dropping in the current fiscal year, there is an inverted investment curve at present indicating lower rates for longer terms (i.e. 3 to 5 years). 

Through the board’s strategy of laddering investments over 1 to 5 years to reduce the influence of interest changes to maximize returns, the overall returns for the next three years are anticipated to decrease significantly over current year returns.

The board will continue to assess the potential impact of different financial market scenarios and make adjustments to its investment strategy as required. The board’s strategy with investments considers a laddering approach when possible, to reduce the influence of interest changes and to maximize returns.

The board also has an investment policy that outlines general investment goals and objectives of the board and describes the strategies for investments of the fund.

Monies recovered after payment of claims

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 makes every reasonable attempt to recover monies that are owed to the fund.

Projected expenses from the fund (2025–28)

Per Ontario Regulation 467/19, the board is responsible to pay all expenses relating to the administration of FPPA and the LLPA.

Expenses related to the FPPA

Professional, technical or other assistance to the board (i.e. actuarial review)

It’s a good governance practice to complete a review approximately every five years. In 2021–22 fiscal, the board conducted an actuarial review (previously conducted in 2015–16 fiscal). This initiative involved a third-party independent vendor to determine how potential claim payments and/or expenditures may impact the fund. Given the changes in the cost-share model that occurred in 2020 and the increased program delivery costs coming out of the fund, 2021–22 fiscal was a good time for an actuarial review to examine any impact to the fund.

The board will continue to monitor the fund against the target level to ensure it is growing or maintained at an appropriate level. Once the new regulation is proclaimed, the board will determine next steps regarding timing of an actuarial review. Currently, the next actuarial review is planned for the 2026–27 fiscal year.

Governance, secretariat and financial support services

The board currently has a contract with Agricorp for these administrative services to the board. The board’s budget is set for potential contingency that may occur (for example, claims, new directives, investment changes, policy updates).

Board legal services and investigation

Effective April 1, 2020, the board pays the costs for most legal services associated with the administration of the FPPA and investigative costs. Legal Services also reviews any board agreements, governance documents and provides any other legal advice as requested. This is an expense reflected in the Board’s financials for 2020–21 onward. The Board budgets for legal and investigative services with the assumption that there are claims to adjudicate that would require legal and investigative services. The budget is set to allow for this potential contingency that may occur. The Board is not required to pay expenses related to judicial reviews of its decisions or expenses related to any subsequent appeals under the FPPA.

Claim payments

All claims as approved by the board are paid from the fund. The total cost depends on the number and complexity of the claims received by the board and the amount of payments on approved claims. While claims have been infrequent the last couple of years, the board still sets this assumption for budget purposes that claims are paid from the fund annually based on their mandate to ensure the fund is actuarial sound to pay claims.  From 2020 to 2023 for budgeting purposes an average of the last 10 year history paid from the fund was the assumption used for the budget. The 2021–22 actuarial review determined a claim severity of $377,000 which is higher than the previous claim payment expense used for budgeting purposes. This is a result of the increased commodity prices and that potential claim payments to be paid out would be larger than the average from 10 years ago. For 2024 to 2027 fiscal years out -year projections, the board is using the assumption that claims paid out of the fund is $377,000 per fiscal which is included annually for budgeting purposes.

Expenses related to the LLPA

Determining financial responsibility/licensing and enforcement

Effective January 1, 2020 the board is responsible to pay for all expenses relating to the administration costs of the licensing of dealers under the LLPA (except as specified in O. Reg. 467/19). The budget for 2025–28 reflects this.

Prior to this regulation being made effective, the board paid a portion of the costs of determining the financial responsibility of dealers (part of licensing). The board is not required to pay expenses related to appeals, judicial reviews, prosecutions and legal fees with respect to the LLPA. Although the board is required to pay all administrative program expenses with respect to the LLPA, they have no authority for licencing and enforcement of individual dealers under the LLPA.

Proposed capital expenditures

The board does not have any capital expenditures planned for 2025–2028.

Table 1. Financial table — expenditure and revenue

The table below shows the budget, actual revenue and expenditures for 2023–24 and 2024–25 fiscal year as well out-year planning budgets from 2025–2028.

Initiatives involving third parties

Approximately every 5 years, the board conducts an actuarial review, an initiative that involves engaging an independent third-party vendor, to determine how potential claim payments and other factors may impact the fund. An actuarial review was last conducted in 2021–22 fiscal (previously review completed in 2015–16 fiscal). Once consultation on the proposed regulatory amendments is complete and changes (if any) are finalized, the board will determine next steps regarding timing of an actuarial review. Currently, the next actuarial review is planned for the 2026–27 fiscal year.

As an agency of the government, the board adheres to the OPS Procurement Directive when making any purchases for goods or services from a third-party vendor.

Information Technology (IT)/Electronic Services Delivery (ESD) plan

The board currently has no IT and ESD plan for the coming year through to 2028. All Information Technology support is provided by Agricorp through the maintenance of ready access and secure storage of documents developed and received on behalf of the board. The mandate of the board does not require Electronic Service Delivery.

Performance measures and targets

Performance measures and targets for each objective are developed below.  As part of its continuous improvement process, the board has developed the following indicators and outcomes the board is committed to achieving. The board will also track progress against these measures and prepare an annual report.

Risk assessment and risk management plan

The Government of Ontario uses a risk-based approach to manage provincial agencies. Consequently, provincial agencies are required to employ a risk framework when making operational decisions. Provincial agencies are responsible for ensuring that funds are spent effectively and efficiently and are used for the intended purpose.  Risk management helps the board identify risks, assess exposures, and develop appropriate action plans to help ensure business objectives are met. A risk management plan was developed by the board in 2010 and is updated as part of the board’s strategic planning process. 

Agencies are expected to report on the status of the evaluation of their risks on a quarterly basis, except for high risks, which must be reported immediately. This reporting requirement requires the board to review the risk management plan and identify quarterly whether there are changes needed.

Communication plan

The MOU between the board and the ministry outlines the communication plan that the board will follow.  

The board’s target audiences are the stakeholders, producers and licensed dealers. 

Key messages for directed communications

• Clearly outlines section or sections of the FPPA and O. Reg. 560/93 relied on in arriving at a claim decision.
• States that a decision is normally not made without granting a hearing or providing an opportunity for further submissions in the event that the board sees potential grounds for refusal.

Key messages for broad-based communication

• Importance of dealing with licensed dealers.
• Importance of following the rules and regulations when selling livestock.
• There is risk of having a claim denied if rules and regulations are not followed.

Tools used to communicate key messages

• Annually, inform stakeholders of the status and performance of the fund by providing them with a copy of the board’s audited financial statements and annual report when available.
• In the event of a claim, the board will advise each claimant and the dealer and/or elevator operator via letter on the outcome of their claim.
• Share the board’s established investment policy with stakeholders following the board’s annual review.
• The minister will consult with the chair, as appropriate, when significant new directions for the board are contemplated. The deputy minister will meet with the chair, as necessary, to discuss matters of mutual importance to the board and OMAFA. The chair will keep the minister advised, in a timely manner, of all planned events and issues that concern or can be reasonably expected to concern the minister in the exercise of his/her responsibilities.
• Program information and a list of all licensed cattle dealers are available on the licence registry on Agricorp’s website which is updated as quickly as possible once the director approves a decision on a license. This is a function of the licensing side of the OBCFPP but also supports the board’s communication strategy as livestock producers are highly dependent on what is on the website.

Actuarial review report from 2021–22

• In November 2022, the board provided stakeholders with a copy of the full actuarial review report as prepared by an independent third-party vendor. Also a meeting was held December 2022 where analysis from the actuarial review including the revenue received through the check-off fee and recommendation for change was presented and discussed.
• The LFPB sought letters of support from stakeholders for the proposed increase to the check-off fee. The board has respectfully recommended to the minister to consider a change in the check-off fee in the near future (increase in the fee from the current $0.10 fee). Any changes to the check-off fee requires ministerial approval as the check-off fee is a requirement under the LLPA. This is being consulted on as part of the work to develop new regulations.
• The board will continue to keep open lines of communication with stakeholders and continue to monitor the fund to ensure it is growing or maintained at an appropriate level and report this to the stakeholders as part of the annual report.

New legislation and new regulation

• The Ministry is targeting 2025 effective date for the new regulation coming into effect and the proclamation of the new legislation. Once changes are finalized and approved, the ministry, Agricorp and the board will determine how best to communicate changes to producers and licensed dealers.

Inventory of artificial intelligence (AI) use cases

The board does not have any AI use cases.

Appendix 1. Board appointees (as of February 28, 2025)

Appendix 2. History of claims (as of February 28, 2025)

(Some of the numbers below may be rounded to the nearest dollar).

Appendix 3. Ministers letter of direction for 2025–26 fiscal year

The following pages include the Livestock Financial Protection Board’s letter of direction from the Ontario Minister of Agriculture, Food and Agribusiness. The letter outlines the Ontario government’s priorities for the board for 2025–26 fiscal year.

Paul Sharpe
Chair, Livestock Financial Protection Board
1 Stone Road West
Guelph, ON N1H 8M4

Dear Mr. Sharpe,

I am writing to share our government’s 2025–26 priorities for the Livestock Financial Protection Board (LFPB). As Minister Flack has an identified conflict of interest with this board, I am pleased to share this letter with you on behalf of the Ontario Ministry of Agriculture, Food and Agribusiness.

Agencies are a part of government and are expected to act in the best interests of the people of Ontario and ensure that they provide value for money to taxpayers. Agencies are also required to adhere to government policies and directives.

Per the requirements of the Agencies and Appointments Directive, agencies are required to align goals, objectives and strategic direction with our government’s priorities and direction. As chair, you must ensure that LFPB’s business plan demonstrates the agency’s plans in fulfilling the expectations and government priorities below and that progress and achievements are reported through your annual report. Compliance with these requirements is reported to Treasury Board/Management Board of Cabinet annually.

This letter sets out my expectations for 2025–26 that LFPB is innovative, sustainable and accountable through the following direction:

Innovative

1. Simplify client/customer interactions
2. Expand and optimize digital service offerings
3. Improve Client/customer satisfaction
4. Share data with Supply Ontario, when requested, regarding procurement spending and planning, contract arrangements and vendor relations to support data-driven decision-making

Sustainable

5. Strengthen public service delivery by directing existing resources to priority areas, and
6. Use Public Resources efficiently

Accountable

7. Develop and report on outcome-focused performance measures to effectively monitor and measure performance
8. Protect individual, business or organization data by actively managing data and cybersecurity and reporting Artificial Intelligence uses
9. Report all high risks including effective mitigation plans
10. Develop and encourage diversity and inclusion initiatives by promoting an equitable, inclusive, accessible, anti-racist and diverse workplace

These are the government-wide commitments for board-governed provincial agencies. Please see the attached guide for further details of each priority and the accompanying performance measures that can be utilised if measurements are not currently in place.

I am also sharing several priorities specific to LFPB:

1. Providing effective oversight of: (1) Agricorp's delivery of program licensing; and (2) Agricorp’s investment and management of the funds (i.e. Monies generated via the check-off fee) that the board is accountable for. This includes effective oversight of program expenses and activities to ensure efficiency, transparency, financial accountability, and future sustainability.
2. Maintaining open communication, providing superior client service, and stakeholder relations with key stakeholder groups, including:
   1. measuring and reporting on the performance of the funds against quantifiable targets
   2. working cooperatively with stakeholder groups with a view to building awareness of rights and responsibilities under the program (including the benefits of selling to licensed buyers) and strengthening compliance
   3. having an established investment policy that is reviewed annually and is shared with stakeholders
   4. ensuring stakeholders have clarity on administrative and operational expenses paid from the funds
   5. ensuring key stakeholder groups understand the rationale for any changes recommended to the producer checkoff fee
3. Continuing to investigate and adjudicate all claims in a fair, equitable and timely manner with a focus on reducing burden and improving the customer service experience. The board is expected to make decisions on claims based on prudent and consistent adherence to established operational procedures, as well as effective customer service.
4. Continuing to engage with the ministry, as needed, on upcoming work to operationalize the Protecting Farmers from Non-Payment Act and implement its regulations.
5. Supporting government priorities to modernize program delivery and drive agrifood sector innovation and resilience by using these lenses to inform the board’s operational decisions and supporting ministry policy-development, as required, by leveraging the industry knowledge/expertise of its members.

As I will be meeting with you on behalf of Minister Flack, I look forward to discussing these priorities at our first quarterly meeting, and hearing how they will be reflected in the agency’s upcoming business plan and in ongoing agency operations.

Thank you and your fellow board members for your continued commitment to the LFPB. Your work and ongoing support is invaluable to our government and the people of Ontario.

Should you have any questions, please feel free to contact Minister Flack’s staff or David Hagarty, Assistant Deputy Minister, Policy Division in OMAFA.

Sincerely,

Hon. Graydon Smith   
Minister of Natural Resources

Attachment:

• Government priorities for agency sector chart