Livestock Financial Protection Board business plan for the fiscal years 2026–2029

Executive summary

The Livestock Financial Protection Board (“LFPB or board”) is pleased to present its 2026–2029 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, 2025, the fund balance was $10.281 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. In fiscal 2025 and fiscal 2026, the Bank of Canada decreased its policy rate in a series of cuts from 5% in April 2024, to the present rate of 2.25% as of January 28, 2026. This has resulted in a decrease in interest rates throughout the fiscal year impacting interest income on cash accounts and investment income. Currently, investments maturing in the 2026 fiscal are being renewed at lower rates than the previous fiscal. The board is also assuming the mortgage investment will be held to maturity in December 2026 and then invested in Guaranteed Investment Certificates (GICs), resulting in a decrease in investment income returns for fiscal years 2026 to 2029. The board’s investment strategy utilizes a laddering approach, when possible, to reduce the influence of interest changes and to maximize revenue. The board continues to review investments on a quarterly basis and make adjustments as needed. The board will continue to assess the potential impact of different financial market scenarios and make adjustments to its investment strategy as required as investment income is one important source of revenue for the fund.

Overall, based on the board’s projections for 2026–2029, 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 investment income and check-off fees. See page 19 for a summary.

Effective January 1, 2026, the Ontario government has brought into force the Protecting Farmers from Non-Payment Act (Regulating Agricultural Product Dealers and Storage Operators), 2023 (“PFFNPA or the Act”), along with the associated regulation, Ontario Regulation 378/25: Beef Cattle. Previous to this new Act, the board was operating under the Farm Products Payments Act, R.S.O. 1990, c. F.10 (FPPA). The Act and regulations will govern Ontario’s financial protection programs (Grain Financial Protection Program and the Beef Cattle Financial Protection Program) and benefits grain and beef cattle sellers (including veal) by providing greater access to stable and responsive risk management tools for their businesses. The Act and regulation are a result of consultations and discussions the ministry led with stakeholders since 2019. While key components of the financial protection programs will remain unchanged, the new legislation does include some updates to strengthen and modernize the framework. See page 10–11 for a summary of the impacts of the changes to the board.

It is a good governance practice to complete an actuarial review approximately every five years to examine the fund. The board is planning to conduct an actuarial review in 2026–27 fiscal year. The last review occurred in 2021–22 fiscal year. This initiative involves a third-party independent vendor to determine how potential claim payments and/or expenditures may impact the fund. Given the changes from the Act and regulations effective January 1, 2026 and continued market prices rising, the board feels 2026–27 fiscal year may be a good time for an actuarial review to examine any impact to the fund.

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 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 Section 29 of the Act as:

29. A board has the following functions and the powers to carry out those functions:
    1. To manage and administer its fund or funds.
    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, under this Act or 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 agribusiness sector through innovation and investment.

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 (e.g., 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 effective January 1, 2026 under the authority of the PFFNPA and O. Reg. 378/25: Beef Cattle.

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.

Per updates to the Agency and Appointments Directive (AAD) in October 2024, all ministries were required to update the MOU with their respective agencies based on a template provided. The Minister of Agriculture, Food and Agribusiness and the board chair signed this MOU effective July 28, 2025 which reflects the previous Farm Products Payments Act (FPPA) and the regulations under that. Updates are required to this MOU as a result of the new Act (PFFNPA) and regulation that came into effect January 1, 2026. OMAFA are working with the board in 2026 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.

Effective January 1, 2026 under the Act and Beef Cattle Regulation, it requires that the board shall be comprised of a minimum of three (3) members and maximum of nine (9) members to be appointed by the minister. The board will be represented by at least one member representing each of the following:

• Beef Farmers of Ontario (BFO)
• Dairy Farmers of Ontario (DFO)
• Veal Farmers of Ontario (VFO)
• Ontario Independent Meat Processors Association (OIMPA)
• Ontario Cattle Feeders’ Association (OCFA)
• Ontario Livestock Auction Markets Association (OLAMA)
• Ontario Livestock Dealers Association (OLDA)

There are currently 6 board members including the chair and vice-chair. Appendix 1 includes a list of the board members.

The board typically meets quarterly, or as required by business demands (e.g., to review and adjudicate claims).

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 2026–27 fiscal year from the minister in October 24, 2025 which outlines high-level, achievable expectations for the 2026–27 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 Beef Cattle Financial Protection Program (BCFPP or program), the fund and the role of the LFPB within the OBCFPP:

Beef Cattle Financial Protection Program

The BCFPP 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 PFFNPA, all dealers must have an active licence in order to conduct business as a livestock or livestock products dealer. The following are the licensing components of the BCFPP:

• annually determining the financial responsibility of dealers (to be licensed dealers must prove they are financially viable or provide security)
• issuing, suspending, and revoking licenses; holding hearings; compliance and enforcement

Under the PFFNPA, Agricorp (a provincial Crown Corporation), has been prescribed as the delegated authority to administer the delegated provisions of the Act and the regulation.

As part of the BCFPP, the seller 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. 378/25: Beef Cattle.

Effective 2026, there are updates to the BCFPP as a result of the proclamation of the PFFNPA and regulations. These changes have been made following consultation with stakeholders that help to strengthen protection for beef cattle seller. The regulatory changes are being implemented in two phases with most changes effective January 1, 2026. The ministry are targeting a regulatory amendment as of April 1, 2026 (items marked with an asterisk (*) are subject to approval of this regulatory amendment). The following is a summary of the program changes:

• Written agreements are required to purchase or for selling beef cattle and must meet the requirements based on content per regulation.
• Authorize a small dealer exemption that allows dealers with weekly purchases of $5,000 or less*.
• Use of a licence by third party (i.e., agent of a licensed dealer to buy or sell on their behalf) must be approved consented to by the director*.
• The annual licence fee is increasing and a fee is being introduced for each agent working under a licensed dealer*.
• Dealers have to inform the director of changes in banking, ownership structure or control of the business*.
• The regulation will clearly set out the process to determine if security is required and define financial security to mean letters of credit and/or bond, should this be required by a licensed dealer*.
• The licence registry, which is publicly posted on Agricorp’s website under the BCFPP program content, will be expanded to include items listed per regulation.
• There will be new compliance orders and administrative penalties available for the director to issue to licensed dealers, including dealers convicted of an offence (e.g., dealing without a licence or not paying on time) will be subject to a fine (maximum $10,000) based on offence (administrative penalties will not be implemented until after July 1, 2026 to allow time to set-up the process, tools and training).
• Defaulters may be required to cover board costs to conduct a claim through ‘cost orders’. Claimants may also be required to cover board costs if the board found the claim to be frivolous, vexatious or made in bad faith.
• The licensing appeals process has been updated which will limit the Tribunal’s power to reviewing a director’s decision.
• The claim payout for dealers has increased. The cap has been removed for dealers selling to co-ops and increased to $320K (from $125K) when selling to producers who are not co-ops.
• Standardize payment timelines for producers that buy from licensed dealers should ensure payment is received within 6 or 9 business days of the price determination day (this will be consistent with the timelines for licensed dealer to pay a producer or to pay other licensed dealers).

Late December 2025, the ministry communicated these program changes to industry stakeholders using an information sheet that summarizes the impacts of these changes. As well the program content on Agricorp’s website has been updated and is current for BCFPP producers and licensed dealers.

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 an investment policy that is reviewed annually, which outlines general investment goals and objectives of the board and guides investments prior to any board decision.

Per O. Reg. 378/25, the board is responsible to pay all expenses relating to the administration of the following:

Expenses incurred related to the fund:

• The administration of the Fund for Livestock Producers, including actuarial studies of the fund.
• The investigation of claims for payment from the fund.
• The adjudication of claims for payments from the fund.
• The recovery of money the board may be entitled to receive under the Act.
• Communications and educational activities.
• Legal fees associated with the above listed bullets.

Expenses incurred related to regulatory matters with respect to the licensing of beef cattle dealers:

• Licensing under the Act (issue, refusal, renew, suspend, revocation, impose terms and conditions).
• The determination of the amount of security a person is required to provide to the director, if any.
• Hearing before the director in connection with licensing under the Act.
• The issuance of any orders under the Act.
• Inspections under the Act.
• Actions taken to determine whether a person should be referred for potential prosecution for an offense under the Act.
• Communications and education activities.

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 these appeals, judicial reviews and prosecutions.

Livestock Financial Protection Board

The LFPB is the administrator and responsible for the overall governance and administration of the fund under PFFNPA and O. Reg. 378/28. 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 Act 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 (including a feeder or breeder co-operative effective January 1, 2026) 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 Compliance, Enforcement and Intelligence Unit (CEIU) 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 25, 26 and 27 of O. Reg. 378/25.

• A claim from a producer made in respect of a dealer, the board pays 95% of the portion of the claim it determines to be valid.
• A claim from a licensed dealer selling to another licensed dealer, the board pays 95% of the portion of the claim it determines to be valid.
• A claim from a licensed dealer selling to a producer, feeder or breeder co-operative who defaults on payment, would be eligible to receive 95% of the portion of the claim it determines to be valid (no compensation of claims of less than $5,000) (previous to January 1, 2026, the payout was 85%).
• A licensed dealer making a claim in respect of a producer (that is not a feeder or breeder cooperative) will be eligible to receive 95% of the valid claim (no compensation of claims of less than $5,000 or maximum of $320,000) (previous to January 1, 2026 the payout was 85% and the maximum was up to $125,000).

The board has discretion to refuse payment from the fund to dealers and producers based on grounds set out in sections 22 and 23 respectively of O. Reg. 378/25: Beef Cattle. 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; selling to a unlicensed dealer; and the claim not being submitted on time. The board shall refuse claims unless the conditions in section 24 of O. Reg. 378/25 are met.

The board does not administer any other FPP and no new programs are being considered for the 2026–2029 timeframe.

As part of the new PFFNPA and regulatory changes that are being implemented in 2026, the following is a summary of the changes to the board, primarily to give the board new powers to help carry out its role more effectively:

• The Act sets out the minimum and maximum members, as well regulation specifies that the board must include representatives from the industry (see page 4 for list of industry representatives). The board will continue to work with ministry staff to seek re-appointment/new appointments to reduce this risk of not meeting this regulation.
• The board will be permitted to delegate any of its powers to a committee (e.g., subcommittee of the board such as financial and/or claim adjudication committee). At this time the board is not planning to use this power but will discuss annually if a committee of the board needs to be established.
• Standardize timelines to apply to the fund within 30 calendar days after the first day on which the ground for making a claim arose.
• The claim payout for dealers has increased. A licensed dealer making a claim in respect of a producer (that is not a feeder or breeder cooperative) will be eligible to receive 95% of the valid claim (no compensation of claims of less than $5,000 or maximum of $320,000) (previous to January 1, 2026 the payout was 85% and the maximum was up to $125,000).
• The board will have new powers to recovery money owed including to charge for costs incurred to conduct the claims proceedings and streamline the process to collect on debts owing to the board/fund. The board will work to update their claims process in 2026 should this power be used in the future.
• The board is now empowered to deal with frivolous, vexatious claims or claims made in bath faith without holding a full hearing. In addition, there are additional grounds available to the board to reject a claim (e.g., not paying check-off fees, not having a written agreement in place).
• The board needs to create a financial bylaw which must be approved by the Ministry of Finance.
• If the fund lacks sufficient credit to pay a claim, it may now obtain loans from banks and loan guarantees from the province.

In 2026, the board will work to incorporate changes that may have a direct impact on the board into the board’s established processes and/or to establish new processes if needed.

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 to the board 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 BCFPP between Agricorp, OMAFA and the LFPB. 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 BCFPP. Updates are required to this agreement as a result of the new Act (PFFNPA) and regulation that came into effect January 1, 2026. The ministry has a deliverable as part of the new Act to work with the board and Agricorp in 2026 to update any related agreements.

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 Compliance, Enforcement and Intelligence Unit (CEIU) within OMAFA’s Agri-Food Protection Branch.
• Legal services are are provided by OMAFA through the Ministry of the Attorney General through the Legal Services Branch.

Since April 1, 2020, these costs are paid for by the board (previously they were covered by the ministry) as per regulation under the Act.

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 principles in sections of the Trustee Act referenced in the MOU and the board’s investment policy. 

Commodity prices/livestock values

Canadian cattle prices continue to be 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 board is working to incorporate these changes into processes and reporting in the 2025–26 annual report such as participating in a chair-minister quarterly meeting.

Effective January 1, 2026, the Ontario government has brought into force the PFFNPA along with O. Reg. 378/25: Beef Cattle. The Act and regulations will govern Ontario’s financial protection programs (Grain Financial Protection Program and the Beef Cattle Financial Protection Program) and benefits grain and beef cattle sellers by providing greater access to stable and responsive risk management tools for their businesses. The Act and regulation are a result of consultations and discussions the ministry led with stakeholders since 2019. While key components of the financial protection programs will remain unchanged, the new legislation does include some updates to strengthen and modernize the framework. As a result, the board is updating and creating any new processes and documents to incorporate any changes that have a direct impact on the board.

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 2021–22 actuarial review indicated that in order to maintain a stable fund surplus position an increase in check-off fees from 10 cents per head to 30 cents per head would be required. These results were presented to stakeholders in December 2022 and the board recommended an increase in the check-off fee to the minister to 30 cents per head as part of the new beef cattle regulations being implemented under the Act. Due to the timing when the new regulation is being implemented and timing of the next actuarial review, it was discussed to hold off on a possible change to the check-off fee in regulation and wait to see the results from the next review. The board will engage stakeholders at such time when discussions begin on the next actuarial review. 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 2024–25 fiscal year is on track to be completed in March 2026 with an unqualified opinion.

Total revenue for the 2024–25 fiscal year was $754,952 and total expenses were $167,306. The fund balance as of March 31, 2025 is $10.281 million.

Projected revenue for the fund (2026–2029)

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 and the mortgage investment matures December 2026.

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

For out-year planning purposes, the board is assuming no change in the check-off fee at this time from 10 cents per head currently. The scope of the board’s 2026–27 actuarial review will consider if a change in the check-off fee is needed and bring forward, if any, recommendations from the review to stakeholders and the minister at such time. 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 3.0% laddering from 2026 to 2029 fiscal years.

As a result of the decrease in interest rates throughout the 2025–26 fiscal year, 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 2026 are forecasted to be 5.1%. Returns are anticipated to decrease with expected future return on investments being 4.1% in fiscal 2027, 3.0% in fiscal 2028 and 3.0% in fiscal 2029.

The board will continue to assess the potential impact of different financial market scenarios and make adjustments to its investment strategy as required.

Monies recovered after payment of claims

The Act and regulation 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 (2026–2029)

Per O. Reg. 378/25, the board is responsible to pay all expenses relating to the administration of the Act.

Expenses related to the fund

Professional, technical or other assistance to the board (i.e., actuarial review): In 2026–27 fiscal year, the board is budgeting to conduct an actuarial review (previously conducted in 2021–22 fiscal). This initiative involves procuring a third-party independent vendor to determine how potential claim payments and/or expenditures may impact the fund. Given the program and board changes that are effective January 1, 2026, the board feels 2026–27 is 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.

Governance, secretariat and financial support services

The board currently has a contract with Agricorp for these administrative services. The board’s budget is set for potential contingency that may occur (e.g., claims, new directives, investment changes, policy updates). The secretariat budget includes the assumption that there are claims to adjudicate that would require secretariat services and is set to allow for this potential contingency that may occur.

Board legal services and investigation

Since April 1, 2020, the board pays the costs for most legal services associated with the administration of the PFFNPA and investigative costs. Legal Services also reviews any board agreements, governance documents and provides any other legal advice as requested. The board budgets for legal and investigative services with the assumption that there are claims to adjudicate that would require these services and 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 PFFNPA.

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 2025 to 2028 fiscal years outyear 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 regulatory matters with respect to beef cattle under the program

Determining financial responsibility, licensing and enforcement (program administration)

Since January 1, 2020 the board has been responsible to pay for all expenses relating to the administration costs of the licensing of dealers under the Act (except as specified in O. Reg. 378/25).

The board is not required to pay expenses related to appeals, judicial reviews, prosecutions and legal fees with respect to the PFFNPA. Although the board is required to pay all administrative program expenses with respect to the PFFNPA, they have no authority for licencing and enforcement of individual dealers under the PFFNPA.

The annual licence fee collected from livestock dealers is deducted from the program administration costs for the BCFPP net balance. Based on an amendment to O. Reg. 378/25 to take effect April 1, 2026, the annual license fees are increasing which will result in additional revenue received (licence fee revenue prior to March 31, 2026: approximately $3,700 per fiscal; effective April 1, 2026 it is forecasted to be approximately $7,500 per fiscal). This revenue is reported on the quarterly invoice from Agricorp to the board.

Proposed capital expenditures

The board does not have any capital expenditures planned for 2026–2029.

Table 1. Financial table — expenditure and revenue

The table below shows the budget, actual revenue and expenditures for 2024–25 and 2025–26 fiscal year as well out-year planning budgets from 2026–2029.

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. In 2026–27 fiscal year, the board is planning to conduct an actuarial review (previously conducted in 2021–22 fiscal). Given the program and board changes from the new Act and regulation that are effective January 1, 2026, the board feels 2026–27 is a good time for an actuarial review to examine any impact to the fund.

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 2029. 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 PFFNPA and O. Reg. 378/25 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 BCFPP but also supports the board’s communication strategy as livestock producers are highly dependent on what is on the website.

Actuarial review

• The board will continue to keep open lines of communication with stakeholders as discussions occur related to a new actuarial review.

New legislation and new regulation

• Late December 2025, the ministry communicated the program changes to industry stakeholders using an information sheet that summarizes the impacts of these changes. As well the program content on Agricorp’s website has been updated and is current for BCFPP producers and licensed dealers.
• Throughout 2026, the board will check-in with the ministry, stakeholders and with the director to gauge if further communication may be needed on the 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, 2026)

Appendix 2. History of claims (as of February 28, 2026)

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

Appendix 3. Ministers letter of direction for 2026–27 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 2026-27 fiscal year.

Ministry of Agriculture, Food and Agribusiness
Office of the Minister
77 Grenville Street, 11th Floor
Toronto, Ontario M7A 1B3
Telephone: 416-326-3074

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

Dear Mr. Sharpe,

I am pleased to share our government’s 2026–27 priorities for the Livestock Financial Protection Board (LFPB).

Agencies are a part of government and are expected to act in the best interests of the people of Ontario. In a time of economic uncertainty, agencies play a critical role in supporting our commitment to Protect Ontario by improving service delivery, driving innovation, and ensuring responsible stewardship of public resources – all while adhering to government policies and directives.

In accordance with the Agencies and Appointments Directive, agencies are required to align their goals, objectives and strategic direction with our government’s priorities. As chair, you are responsible for ensuring that the LFPB’s business plan clearly demonstrates how the agency will fulfill these expectations. Progress and achievements must be reported through your annual report, and compliance with these requirements will be monitored and reported to Treasury Board/Management Board of Cabinet annually.

This letter sets out my expectations for 2026–27, with a focus on how the LFPB will contribute to protecting Ontario by delivering better services and driving innovation and value for money.

Protect Ontario

1. Expand domestic partnerships within Canada, to promote the development of supply chains and economic opportunities across Canada and support economic resilience, particularly in light of ongoing U.S. tariff threats and economic uncertainty.
2. Procure from Ontario and Canadian businesses whenever feasible.
3. Provide economic relief for Ontario families, consumers and businesses by freezing government fees and fares, unless approved by my office.

Deliver better services

4. Focus on a user-centered client/customer experience by simplifying interactions, improving satisfaction, and expanding and optimizing digital service offerings.
5. Identify opportunities to enhance efficiency, improve services, drive innovation, and achieve cost savings for the people of Ontario, including through the use of AI and other advanced technologies.
6. Eliminate unnecessary bureaucracy and red tape by applying lean methodologies or other modalities to achieve operational efficiency.

Drive innovation and value for money

7. Find innovative solutions to use public resources efficiently and to effectively deliver on the agency’s mandate while operating within agency’s financial allocation, supported by accurate financial reporting, effective internal controls, and proactive fraud management practices.
8. Manage agency workforce with careful responsibility to stabilize expenditures and preserve long-term financial viability by:
   • strictly adhering to the hiring control parameters, including ceasing hiring for non-business critical and non-public-facing positions, including the use of consultants
   • operating within a defined maximum workforce size (including consultants)
   • ensuring compliance with the Broader Public Sector Executive Compensation Act (BPSECA)
   • enhancing productivity and efficiency by using technology wherever possible
9. Create a span of control policy that recognizes different streams of work within the organization and sets minimum span of control benchmarks, and provide it to my office for approval by March 31st, 2026.
10. Provide to me and Deputy Minister John Kelly by October 1, 2025, the amended human resource policy, guideline or directive that adheres to the OPS in-office standard of four (4) days per week effective October 20, 2025, and five (5) days per week effective January 5, 2026, and work with your oversight ministry to address any office space constraints.

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 outcomes and performance measures that can be utilised if measurements are not currently in place.

I am also sharing the following priorities specific to the LFPB:

1. Providing effective oversight of: (1) Agricorp's delivery of program licensing; and (2) Agricorp’s investment and management of the fund (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. Continue to undertake necessary due diligence to ensure appropriate producer checkoff fees that support long-term sustainability of the fund.
3. 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 and the ministry
   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
4. Continuing to investigate and adjudicate all claims in a fair, equitable and timely manner with a focus on reducing burden, simplifying interactions 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.
5. Exploring opportunities for digitalization of services and information to enhance program delivery and compliance.
6. Continuing to engage with the ministry, as needed, on upcoming work to operationalize the Protecting Farmers from Non-Payment Act and implement its regulations. Work with stakeholders to support communication, understanding and implementation of key changes.
7. Supporting government priorities to modernize program delivery and drive agri-food 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.

At our next meeting, I would be pleased to discuss these priorities, and I look forward to 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 my office or David Hagarty, Assistant Deputy Minister, Policy Division.

Sincerely,

Hon. Trevor Jones
Minister of Agriculture, Food and Agribusiness

Attachment: Government Priorities for Agency Sector Chart