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Farm Products Payments Act

ONTARIO REGULATION 390/04

FUND FOR PRODUCERS OF WHEAT

Historical version for the period May 4, 2012 to June 30, 2012.

Note: This Regulation is revoked on July 1, 2012. See: O. Reg. 70/12, ss. 16, 17.

Last amendment: O. Reg. 70/12.

This is the English version of a bilingual regulation.

Definitions

Definitions

1. In this Regulation,

“Board” means the Grain Financial Protection Board; (“Commission”)

“chief inspector” means the chief inspector appointed under the Grains Act; (“inspecteur en chef”)

“dealer” means a person engaged in the business of buying wheat from producers or in selling wheat on behalf of producers; (“marchand”)

“Fund” means the Fund for Wheat Producers; (“Fonds”)

“licence”,

(a) in respect of a licence held by a dealer, means a licence to engage in business as a dealer under the Grains Act, and

(b) in respect of a licence held by an operator, means a licence to engage in business as an operator under the Grains Act,

and “licensed” has a corresponding meaning; (“permis”)

“local board” means the Grain Farmers of Ontario; (“commission locale”)

“operator” means a grain elevator operator within the meaning of the Grains Act; (“exploitant”)

“producer” means a person engaged in the production of wheat. (“producteur”) O. Reg. 390/04, s. 1; O. Reg. 487/09, s. 1.

Fund Established

Designated farm product

2. Wheat is designated as a farm product. O. Reg. 390/04, s. 2.

Fund established

3. There is hereby established a fund for producers of wheat to be known as the Fund for Wheat Producers. O. Reg. 390/04, s. 3.

Board

4. (1) The board known as the Grain Financial Protection Board is continued to administer the Fund. O. Reg. 390/04, s. 4 (1).

(2) The Minister may designate one of the members of the Board as chair and one as vice-chair. O. Reg. 390/04, s. 4 (2).

5. Revoked: O. Reg. 325/11, s. 1.

Time for payment of sale price

6. (1) If a producer sells wheat to a dealer on a basis or delayed price contract, the dealer shall pay the sale price to the producer,

(a) for the percentage of the market price payable on account,

(i) no later than 2 p.m. on the next trading day after the day of sale, if the wheat is stored under the Grains Act, and

(ii) within 10 trading days after the day on which the wheat is delivered to the purchaser, if the wheat is not stored under the Grains Act; and

(b) for the balance of the amount unpaid after payment on account, on the day on which the producer prices the wheat to close out the contract. O. Reg. 390/04, s. 6 (1).

(2) If a producer sells wheat to a dealer, but not on a basis or delayed price contract, the dealer shall pay the sale price to the producer,

(a) no later than 2 p.m. on the next trading day after the day of sale, if the wheat is stored under the Grains Act; and

(b) within 10 trading days after the day on which the wheat is delivered to the purchaser, if the wheat is not stored under the Grains Act. O. Reg. 390/04, s. 6 (2).

(3) If a producer has not priced wheat to close out a basis or delayed price contract on or before the day on which the grounds for the producer to make a claim for payment from the Fund under section 3 of the Act arose, the contract is considered closed out on that day. O. Reg. 390/04, s. 6 (3).

Duty to notify inspector

7. (1) A producer shall notify the chief inspector forthwith if,

(a) the producer has not received payment from the dealer to whom the producer has sold wheat;

(b) the producer has reason to believe that the dealer to whom the producer has sold wheat has ceased to carry on business; or

(c) any of the assets of a dealer who has purchased wheat from the producer have been placed in the hands of a trustee for distribution under the Bankruptcy and Insolvency Act (Canada) or the Bulk Sales Act or in the hands of a receiver pursuant to a debenture or like instrument. O. Reg. 390/04, s. 7 (1).

(2) An owner shall notify the chief inspector forthwith if,

(a) an operator who is storing wheat on the owner’s behalf fails to deliver any of the wheat on demand;

(b) the owner has reason to believe that an operator who is storing wheat on the owner’s behalf has ceased to carry on business; or

(c) any of the assets of an operator who is storing wheat on the owner’s behalf have been placed in the hands of a trustee for distribution under the Bankruptcy and Insolvency Act (Canada) or the Bulk Sales Act or in the hands of a receiver pursuant to a debenture or like instrument. O. Reg. 390/04, s. 7 (2).

Claims for Payments from Fund

Additional grounds for claims

8. In addition to the grounds described in subsection 3 (1) of the Act, a producer may apply to the Board for payment from the Fund if,

(a) the dealer to whom the producer has sold wheat has ceased to carry on business; or

(b) the whole or any part of the assets of a dealer who has purchased wheat from the producer have been placed in the hands of a receiver pursuant to a debenture or like instrument. O. Reg. 390/04, s. 8.

Form of application

9. (1) An application to the Board for payment from the Fund shall be in a form satisfactory to the Board. O. Reg. 390/04, s. 9 (1).

(2) A producer who makes a claim to the Board for payment from the Fund shall make a separate application in respect of each dealer against whom the producer has a claim. O. Reg. 390/04, s. 9 (2).

(3) An owner who makes a claim to the Board for payment from the Fund shall make a separate application in respect of each operator against whom the owner has a claim. O. Reg. 390/04, s. 9 (3).

(4) No person shall make a claim to the Board for payment from the Fund later than 30 days next following the date on which the grounds for making the claim arise. O. Reg. 390/04, s. 9 (4).

Notice of application

10. On receiving an application under section 9 for a claim, the Board shall give notice of the claim by registered mail, courier or facsimile transmission to the dealer or operator in respect of whom the claim is made and shall notify the chief inspector. O. Reg. 390/04, s. 10.

Grounds for refusing to pay claim

11. (1) The Board may refuse to pay the claim of an applicant for payment from the Fund if,

(a) subject to subsection (2), the applicant makes the claim in respect of a dealer who is not a licensed dealer or an operator who is not a licensed operator;

(b) subject to subsection (3), the applicant did not make an application to the Board within the time period specified in subsection 9 (4);

(c) the applicant is a producer, but not the producer of the wheat in respect of which the claim is made;

(d) the applicant is a producer who receives a cheque from a dealer that is dishonoured by non-acceptance or non-payment but the applicant did not present the cheque for payment within five banking days of the date of receiving it;

(e) the applicant is a producer who has made an arrangement with the dealer to extend the time for payment of the sale price under section 6;

(f) the applicant is a producer who sells wheat to a dealer on a basis or delayed price contract but the contract is not in writing and signed by the applicant and the dealer;

(g) the applicant has failed to notify the chief inspector in accordance with section 7; or

(h) the following conditions are met:

(i) the applicant is associated in any way with the dealer or operator in respect of whom the applicant makes the claim,

(ii) the conduct of the applicant or, if the applicant is a corporation, the conduct of an officer or director of the applicant or a person having power to direct the management of the applicant, caused,

(A) the dealer to default in paying the sale price, if the claim is in respect of a dealer, or

(B) the operator to fail to deliver the wheat, if the claim is in respect of an operator, and

(iii) in the circumstances, it would be inequitable to make a payment from the Fund. O. Reg. 390/04, s. 11 (1).

(2) The Board may pay the claim of an applicant for payment from the Fund if,

(a) the claim is made in respect of wheat sold to a dealer or stored by an operator;

(b) the licence of the dealer or operator, as the case may be, was suspended, revoked or had expired at the time of the sale or storage; and

(c) the applicant was unaware of the suspension, revocation or expiry of the licence. O. Reg. 390/04, s. 11 (2).

(3) The Board, having regard to the circumstances of a case, may pay the claim of an applicant for payment from the Fund if the applicant makes the claim for payment as soon as practicable after the expiry of the 30-day period mentioned in subsection 9 (4). O. Reg. 390/04, s. 11 (3).

Limits on payments from Fund

12. (1) The amount that the Board may pay out of the Fund to an applicant on any one application is,

(a) in the case of a claim made by an owner under subsection 3 (2) of the Act, 95 per cent of the market value of the wheat in respect of which the claim is made on the day on which the grounds arose for making the claim;

(b) in the case of a claim made by a producer for wheat sold on a basis or delayed price contract, 95 per cent of the market price payable on the day the contract is closed out or considered to be closed out, less the greater of,

(i) 75 per cent of the market price of the wheat on the day payment on the account was made, and

(ii) 75 per cent of the market price of the wheat on the day the contract is closed out or considered to be closed out;

(c) in the case of a claim made by an applicant mentioned in subsection (2), 95 per cent of the amount determined in accordance with subsections (2) and (3); and

(d) in all cases not covered by clause (a), (b) or (c), 95 per cent of the amount of the claim. O. Reg. 390/04, s. 12 (1).

(2) If the applicant is a producer who holds a licence as a dealer and has purchased wheat before the day on which the claim arose or if the applicant is an owner who holds a licence as an operator and has stored wheat for other owners before the day on which the claim arose, the amount of wheat in respect of which the Board may pay the applicant’s claim out of the Fund shall not exceed the percentage calculated under subsection (3) of the amount of wheat in respect of which the claim is made. O. Reg. 390/04, s. 12 (2).

(3) The percentage mentioned in subsection (2) shall be calculated by dividing the amount of wheat produced by the applicant by the combined amount of all wheat produced by the applicant, purchased by the applicant in the capacity as a dealer or stored by the applicant in the capacity as an operator. O. Reg. 390/04, s. 12 (3).

(4) In addition to the amount that the Board pays out of the Fund to an applicant under subsection (1) on a claim in respect of wheat, the Board may pay out of the Fund to the applicant the amount that the applicant was not able to pay in respect of the wheat to a producer organization under the Agricultural Products Marketing Act (Canada) as a result of,

(a) the default of a dealer to make payment to the applicant, in the case of a claim made by a producer under subsection 3 (1) of the Act; or

(b) the default of an operator to deliver the wheat to the owner, in the case of a claim made by an owner under subsection 3 (2) of the Act. O. Reg. 390/04, s. 12 (4).

Notice of determination

13. (1) The Board shall pay a claim for payment from the Fund if it determines that the claim is valid and it shall notify the dealer or operator in respect of whom the claim is made and the chief inspector of the payment. O. Reg. 390/04, s. 13 (1).

(2) The Board shall refuse to pay a claim for payment from the Fund if it determines that the claim is invalid and it shall,

(a) give notice of the refusal, by registered mail, courier or facsimile transmission, to the applicant and to the dealer or operator in respect of whom the claim is made; and

(b) notify the chief inspector of the refusal. O. Reg. 390/04, s. 13 (2).