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Bill C-34

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2nd Session, 35th Parliament,
45 Elizabeth II, 1996-97

The House of Commons of Canada


An Act to establish programs for the marketing of agricultural products, to repeal the Agricultural Products Board Act, the Agricultural Products Cooperative Marketing Act, the Advance Payments for Crops Act and the Prairie Grain Advance Payments Act and to make consequential amendments to other Acts

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:


Short title

1. This Act may be cited as the Agricultural Marketing Programs Act.



2. (1) The definitions in this subsection apply in this Act.

``administrato r''
« agent d'exécu-

``administrator'' means the Board or any of the following organizations that has the power to sue and be sued in its own name:

      (a) an organization of producers that is involved in marketing a crop; or

      (b) any other organization that the Minis ter considers is supported by producers and designates as an administrator.

« avance »

``advance'' means an advance payment to an eligible producer for a crop.

``advance guarantee agreement''
« accord de garantie d'avance »

``advance guarantee agreement'' means an agreement under section 5.

``agricultural product''
« produit agricole »

``agricultural product'' means

      (a) an animal, a plant or an animal or plant product; or

      (b) a product, including any food or drink, that is wholly or partly derived from an animal or a plant.

« Commission »

``Board'' means The Canadian Wheat Board established by section 3 of the Canadian Wheat Board Act.

« récolte »

``crop'' means

      (a) one or more field crops, or a portion of one or more field crops, grown in Canada, either cultivated or unculti vated, and stored in a non-processed form;

      (b) maple syrup or honey produced in Canada; or

      (c) any other agricultural product desig nated by the Governor in Council under subsection (2).

``crop unit''
« unité de récolte »

``crop unit'' means a unit of a crop, as defined in the advance guarantee agreement relat ing to the crop.

``crop year''
« campagne agricole »

``crop year'' means a period of 12 months or less specified for a crop in the advance guar antee agreement relating to the crop.

``Her Majesty''
« Sa Majesté »

``Her Majesty'' means Her Majesty in right of Canada.

« prêteur »

``lender'' means a financial institution, as de fined in section 2 of the Bank Act, or any other legal entity that the Minister of Fi nance may designate for the purposes of this Act on the application of that entity.

``marketing agency''
« agence de commerciali-

``marketing agency'' means

      (a) an association of producers whose object is the marketing, under a coopera tive plan, of agricultural products pro duced by the producers;

      (b) a person engaged in the processing of agricultural products for marketing un der a cooperative plan;

      (c) a person authorized by one or more associations or persons mentioned in paragraphs (a) and (b) to market agricul tural products under a single cooperative plan; or

      (d) the Board.

« ministre »

``Minister'' means the Minister of Agriculture and Agri-Food.

``permit book''
« carnet de livraison »

``permit book'' means a permit book, as de fined in subsection 2(1) of the Canadian Wheat Board Act.

``price guarantee agreement''
« accord de garantie des prix »

``price guarantee agreement'' means an agree ment under section 28.

« producteur »

``producer'' means a producer of an agricul tural product who is

      (a) a Canadian citizen or a permanent resident;

      (b) a corporation a majority of whose voting shares are held by Canadian citizens or permanent residents;

      (c) a cooperative a majority of whose members are Canadian citizens or per manent residents; or

      (d) a partnership or other association of persons where partners or members who are Canadian citizens or permanent resi dents are entitled to at least 50% of the profits of the partnership or association.

    For the purposes of Parts I and IV, ``produc er'' includes a person or entity mentioned in any of paragraphs (a) to (d) that is entitled to a crop or a share in it as landlord, vendor, mortgagee or hypothecary creditor on a date specified for the purposes of this definition in an advance guarantee agree ment. In this definition, ``permanent resi dent'' has the same meaning as in subsec tion 2(1) of the Immigration Act.

``repayment agreement''
« accord de rembourse-

``repayment agreement'' means an agreement under subsection 10(2).

Designation of crops by Governor in Council

(2) The Governor in Council may, by regulation, designate as a crop for the pur poses of this Act any agricultural product grown or produced in Canada.

Related producers

3. (1) Producers are related for the purposes of this Act if they do not deal with each other at arm's length.


(2) In the absence of proof to the contrary, producers are presumed not to deal with each other at arm's length if they are related as follows:

    (a) individuals who are cohabiting or are connected by

      (i) blood relationship, in the sense that one is the child or other descendant of the other or one is the brother or sister of the other,

      (ii) marriage, in the sense that one is married to the other or to a person who is connected with the other by blood rela tionship, or

      (iii) adoption, in the sense that one has been adopted, either legally or in fact, as the child of the other or as the child of a person who is connected with the other by blood relationship, otherwise than as a brother or sister;

    (b) a corporation and a person who

      (i) holds shares in the corporation,

      (ii) is a member of a group of persons that holds shares in the corporation, or

      (iii) is related, as described elsewhere in this subsection, to a person who holds shares in the corporation or to the mem ber of the group;

    (c) any two corporations if

      (i) one person or group of persons holds shares in both corporations,

      (ii) a person who holds shares in one of the corporations is related, as described elsewhere in this subsection, to a person who holds shares in the other corpora tion,

      (iii) a person who holds shares in one of the corporations is related, as described elsewhere in this subsection, to a member of a group of persons that holds shares in the other corporation, or

      (iv) they are both related, as described in paragraph (b) or subparagraph (i), (ii) or (iii), to a third corporation;

    (d) members of the same group of persons; or

    (e) persons related, as described in para graphs (a) to (c), to members of the same group of persons.

Groups of persons

(3) For the purposes of subsection (2), ``group of persons'' means a producer that is a partnership, cooperative or other association of persons.



Advance Guarantee Agreements


4. The purpose of this Part is to improve marketing opportunities for crops of eligible producers by guaranteeing the repayment of the advances made to them as a means of improving cash-flow at or after harvest.

Agreements to guarantee repayment of advances

5. (1) Subject to the other provisions of this Act, the Minister may make an agreement with an administrator for the purpose of guaranteeing the repayment of advances that the administrator makes to eligible producers from money borrowed for the purpose of making the advances, together with any interest on the advances.

Administrator qualifications

(2) The administrator must demonstrate to the Minister that

    (a) it represents eligible producers in an area who produce in that area a significant portion of the crop for which the advances will be made; and

    (b) the administrator is capable of meeting its obligations under the advance guarantee agreement.

Terms and conditions

(3) In addition to designating the crop and specifying any other terms and conditions governing advances and their repayment, the advance guarantee agreement must provide that the administrator agrees

    (a) to make an agreement with each buyer mentioned in subparagraph 10(2)(a)(i), oth er than the administrator, to withhold amounts as provided in that subparagraph and to remit them immediately to the administrator;

    (b) to withhold amounts as provided in subparagraph 10(2)(a)(i) in cases where the administrator is the buyer;

    (c) to make the advances from money borrowed from a lender;

    (d) to ensure that the interest rate on the money borrowed by the administrator will not exceed the rate specified in the advance guarantee agreement;

    (e) to take steps, in accordance with the terms and conditions of the advance guar antee agreement, to ensure that before an advance is made the crop is harvested, of marketable quality and adequately stored by the producer so as to remain of market able quality until disposed of in accordance with the repayment agreement;

    (f) to repay the money it borrows from the lender, together with the interest, by paying to the lender, within the period specified in the advance guarantee agreement, the amounts the administrator receives as re payment of advances;

    (g) if a producer defaults, to pay

      (i) to the lender, within the period specified in the advance guarantee agree ment, the administrator's percentage, as determined under the regulations, of the amount of the producer's liability under paragraph 22(a), and

      (ii) to the Minister within the same period the same percentage of the amount of interest paid by the Minister under sub section 9(1);

    (h) to pay to the Minister any additional interest resulting from its failure to make payments required by paragraphs (f) and (g); and

    (i) to pay to the Minister, within the period specified in the advance guarantee agree ment, the Minister's percentage, as deter mined under the regulations, of an amount repaid to the administrator under a repay ment agreement by a defaulting producer if the Minister has previously made a pay ment for the producer under subsection 23(1).

tion fees

(4) The administrator may charge fees to producers for administrative services, includ ing fees for receiving and dealing with applications for advances and for administer ing advances. The fees may be charged only for the purpose of recovering administrative costs under this Part and are subject to any terms and conditions of the advance guarantee agreement.

Maximum contingent liability

(5) The aggregate contingent liability of Her Majesty in relation to principal outstand ing under guarantees made under advance guarantee agreements must not at any time exceed $1.9 billion, or any greater amount that the Governor in Council may prescribe by regulation.

Obligations of administra-

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

Emergency advance

7. (1) Despite paragraph 5(3)(e), the ad vance guarantee agreement may authorize the administrator to pay a portion of an advance as an emergency advance to an eligible producer if the producer has difficulty harvesting a crop because of unusual weather conditions and it is reasonable to expect the crop to be har vested in a marketable condition. Payment of the emergency advance is subject to any terms and conditions set out in the advance guaran tee agreement.

Maximum amount

(2) The maximum amount of the emergen cy advance is the lesser of $25,000 and 50% of the advance that the administrator expects to make to the producer on the basis of the amount of the crop that will be harvested.

Lender guarantee

8. A guarantee under the advance guarantee agreement may, with the approval of the Minister of Finance, be made to the lender instead of to the administrator if the Minister is satisfied that doing so will reduce the interest payable to the lender.

Payment of interest

9. (1) The Minister must, in relation to each producer, pay to the lender specified in the advance guarantee agreement the interest accruing during a crop year on the amounts borrowed by the administrator to pay the first $50,000 of the total of the following amounts advanced during the crop year, or any shorter period specified in the advance guarantee agreement:

    (a) amounts advanced to the producer for all their crops; and

    (b) the percentage of the amounts advanced to all related producers for all their crops that is attributable to the producer under subsection (2).


(2) The amounts advanced to related pro ducers are attributable to the producer as follows:

    (a) if the related producer is an individual, the attributable percentage is 100%;

    (b) if the related producer is a corporation, the attributable percentage is the percent age of the voting shares that the producer holds in the related producer;