Advance Payments for Crops Act (R.S.C., 1985, c. C-49)

Act current to 2014-03-16 and last amended on 2012-08-01. Previous Versions

Advance Payments for Crops Act

R.S.C., 1985, c. C-49

An Act to facilitate the making of advance payments for crops

SHORT TITLE

Marginal note:Short title

 This Act may be cited as the Advance Payments for Crops Act.

  • 1976-77, c. 12, s. 1.

INTERPRETATION

Marginal note:Definitions
  •  (1) In this Act,

    “advance”

    « avance »

    “advance” means an advance payment to a producer in respect of a crop that the producer has actually produced;

    “buyer”

    « acheteur »

    “buyer” means an individual, corporation, cooperative or partnership, including a producer organization and a broker, that buys a crop in respect of which an advance is made;

    “crop”

    « récolte »

    “crop” means

    • (a) such field grown crops, either cultivated or uncultivated, as are designated by the Minister, and

    • (b) maple syrup and honey;

    “crop year”

    « campagne agricole »

    “crop year”, in relation to any crop, means the period, not exceeding one year, fixed by the Minister;

    “interest guaranteed”

    « intérêt garanti »

    “interest guaranteed”, in relation to an advance, means the interest guaranteed by Her Majesty under subsection 4(1) in respect of that advance;

    “lender”

    « prêteur »

    “lender” means

    • (a) a bank,

    • (b) a credit union, caisse populaire or other cooperative credit society that is designated by the Minister of Finance on the application of that society as a lender for the purposes of this Act,

    • (c) a company within the meaning of the Trust and Loan Companies Act, or a company, society or provincial company within the meaning of the Insurance Companies Act, that is designated by the Minister of Finance on the application of that company, society or provincial company as a lender for the purposes of this Act, or

    • (d) a Province of Alberta Treasury Branch established pursuant to The Treasury Branches Act of the Province of Alberta;

    “Minister”

    « ministre »

    “Minister” means the Minister of Agriculture and Agri-Food;

    “producer”

    « producteur »

    “producer” means an individual, corporation, cooperative or partnership that has produced a crop in respect of which an advance is to be made;

    “producer organization”

    « association de producteurs »

    “producer organization” means an organization of producers that is engaged in marketing a crop in respect of which advances are to be made.

  • Marginal note:Meaning of "default"

    (2) For the purposes of this Act and subject to subsection (3), a producer is in default under his agreement mentioned in paragraph 5(1)(b) with the producer organization that made the advance if

    • (a) any of the producer’s obligations under the agreement has not been discharged within twenty days after the day on which the producer organization mails or delivers a notice to the producer stating that the producer has had, in the opinion of the producer organization, adequate opportunity to discharge that obligation, and requesting the producer to discharge that obligation;

    • (b) any of the producer’s obligations under the agreement has not been discharged at the end of the crop year during which the advance was made;

    • (c) any of the producer’s obligations under the agreement has not been discharged on the day on which the producer files an assignment under the Bankruptcy and Insolvency Act or a bankruptcy order under that Act is made against the producer; or

    • (d) the producer breaches, at any time, any of the producer’s obligations under the agreement.

  • Marginal note:Stay of default

    (3) The Minister may, on such terms as are agreed to between a producer and the producer organization and are accepted by the Minister, stay a default for a specified period.

  • Marginal note:When default ceases

    (4) For the purpose of paragraph 5(1)(h), a producer ceases to be in default on the full discharge of his liability to the producer organization under section 8.

  • R.S., 1985, c. C-49, s. 2;
  • R.S., 1985, c. 38 (1st Supp.), s. 1, c. 1 (4th Supp.), s. 19;
  • 1989, c. 26, s. 1;
  • 1991, c. 47, s. 725;
  • 1992, c. 27, s. 90;
  • 1994, c. 38, s. 25;
  • 2004, c. 25, s. 182.

APPLICATION OF ACT

Marginal note:Application of Act

 This Act applies in respect of crops grown in Canada.

  • R.S., 1985, c. C-49, s. 3;
  • 1989, c. 26, s. 2;
  • 2011, c. 25, s. 15.

GOVERNMENT GUARANTEES

Marginal note:Minister may guarantee repayment of advances
  •  (1) Where a producer organization proposes to make an advance to a producer out of money borrowed from a lender for that purpose, the Minister may, on behalf of Her Majesty, on such terms and conditions as are fixed by the Minister and subject to this Act, guarantee to the producer organization the repayment of that advance, and the interest on that money that is attributable to that advance.

  • Marginal note:Maximum contingent liability

    (2) Her Majesty’s aggregate contingent liability under subsection 12(1), in relation to principal, may not at any time exceed $400,000,000 or such greater amount as Parliament may appropriate for that purpose by an appropriation Act.

  • Marginal note:No advance until previous advance discharged

    (3) Where a producer has received an advance guaranteed under this Act or an advance payment under the Prairie Grain Advance Payments Act and is in default in respect thereof, the Minister may not, until the undertaking of that producer in respect thereof has been fully discharged, guarantee to the producer organization the repayment of any new advance or interest on money borrowed that is attributable to any new advance made to that producer.

  • R.S., 1985, c. C-49, s. 4;
  • R.S., 1985, c. 38 (1st Supp.), s. 2;
  • 1989, c. 26, s. 3.
Marginal note:Conditions for effectiveness of guarantee
  •  (1) In order for a guarantee from the Minister under this Act to be effective, a producer organization

    • (a) must ensure that the producers to whom it proposes to make advances have produced a significant portion of the crop in question in the area represented by that producer organization, and that the making of those advances will facilitate the orderly marketing of that crop in that area;

    • (a.1) must ensure that where the producer is an individual, the individual has attained the age of majority in the province where the producer’s farming operation is carried on and is principally occupied in that operation;

    • (a.2) must ensure that where the producer is a corporation with only one shareholder, the shareholder has attained the age of majority in the province where the producer’s farming operation is carried on, is principally occupied in that operation and undertakes to be personally liable to the producer organization for any liability of the producer under section 8;

    • (a.3) must ensure that where the producer is a corporation with two or more shareholders, a cooperative or a partnership

      • (i) at least one of the shareholders, members or partners, as the case may be, has attained the age of majority in the province where the producer’s farming operation is carried on and is principally occupied in that operation, and

      • (ii) each of the shareholders, members or partners, as the case may be, undertakes to be jointly and severally liable to the producer organization for any liability of the producer under section 8;

    • (b) must sign a written agreement with the producer under which the producer agrees to repay the advance

      • (i) by selling that portion of the crop in respect of which the advance is to be made to a buyer or buyers named by the producer organization, and authorizing each buyer to withhold from the amount paid to the producer by that buyer, in respect of each unit of crop, an amount determined in accordance with a repayment schedule approved by the Minister that provides for the repayment on a per unit basis of all the advances made to the producer and the interest guaranteed on those advances,

      • (ii) by selling or otherwise disposing of that portion of the crop in respect of which the advance is to be made and paying directly to the producer organization, for each unit of crop, in accordance with the conditions established by the Minister, an amount determined in accordance with a repayment schedule approved by the Minister that provides for the repayment on a per unit basis of all the advances made to the producer and the interest guaranteed on those advances, or

      • (iii) by a combination of the methods described in subparagraphs (i) and (ii);

      • (iv) [Repealed, 1989, c. 26, s. 4]

    • (c) must ensure, if applicable, that the producer gives a written authorization to the buyer to withhold amounts as provided in subparagraph (b)(i);

    • (d) must ensure, except where it itself is the buyer, that the buyer signs an agreement with the producer organization regarding the withholding of amounts as provided in subparagraph (b)(i);

    • (e) must ensure that the interest rate on the money borrowed from the lender by the producer organization does not exceed a rate approved from time to time by the Minister;

    • (f) must have the capacity to sue and be sued in its own name;

    • (g) must ensure that the portion of the crop in respect of which the producer organization proposes to make the advance is of good quality and is adequately stored by the producer so as to remain of good quality until disposed of in accordance with the agreement described in paragraph (b);

    • (h) must ensure that the producer to whom the advance is to be made

      • (i) is not in arrears or in default under another advance in respect of which a guarantee is given under this Act, and

      • (ii) has not given as security ranking in priority to the lien created by section 6 the portion of the crop in respect of which the advance is to be made; and

    • (i) must sign a written agreement with the Minister under which the producer organization agrees

      • (i) that it will repay the money borrowed by it from the lender out of which advances are made by it, together with any interest thereon, on the next working day following the day on which the producer organization receives repayment, in whole or in part, of those advances,

      • (ii) that it will, in the event that a producer defaults and subject to section 9, repay to the lender, in the five working days following the day on which the producer organization learns of the default, an amount equal to 2% of the producer’s liability under paragraphs 8(a) and (b),

      • (iii) that it will pay to the Minister any additional interest resulting from its failure to do any of the things mentioned in subparagraphs (i) and (ii), and

      • (iv) that, where the Minister makes a payment under subsection 12(1) or (2) and subsequently the producer in respect of whose default the payment was made makes a payment to the producer organization in respect of all or part of the producer’s liability to the producer organization under section 8, the producer organization will, within the following five working days, pay over to the Minister that portion of the amount so received by it from the producer that corresponds to the Minister’s payment under subsection 12(1) or (2), as the case may be.

      • (v) [Repealed, 1993, c. 34, s. 60]

  • Marginal note:Where crop is damaged

    (2) Where a crop in respect of which an advance has been made is damaged, in whole or in part, the producer thereupon becomes liable to pay forthwith, directly to the producer organization that made the advance to the producer, that portion of the advance and of the interest guaranteed on the advance that is attributable to the damaged portion of the crop.

  • R.S., 1985, c. C-49, s. 5;
  • R.S., 1985, c. 38 (1st Supp.), s. 2, c. 1 (4th Supp.), s. 20;
  • 1989, c. 26, s. 4;
  • 1993, c. 34, s. 60.
Marginal note:Lien on crop

 Where the Minister has given a guarantee under this Act, the producer organization to which the guarantee has been given has a lien on the crop in respect of which the advance was made, for the amount of the advance in respect of which the guarantee was given together with the interest guaranteed on that advance.

  • R.S., 1985, c. C-49, s. 6;
  • R.S., 1985, c. 38 (1st Supp.), s. 2;
  • 1989, c. 26, s. 5.

 [Repealed, R.S., 1985, c. 38 (1st Supp.), s. 3]

Marginal note:Liability of defaulting producer

 On default by a producer, the producer becomes liable to the producer organization that made the advance to the producer for

  • (a) the amount of the advance outstanding;

  • (b) the interest guaranteed on that advance; and

  • (c) costs incurred by the producer organization to recover the amounts mentioned in paragraphs (a) and (b), including legal costs that are taxed or authorized by the Deputy Minister of Justice.

  • R.S., 1985, c. C-49, s. 8;
  • R.S., 1985, c. 38 (1st Supp.), s. 4;
  • 1989, c. 26, s. 6.
Marginal note:Limitation of total liability of producer organization

 Where, in respect of a particular crop in a particular crop year, the total amount to be repaid by a producer organization to a lender under subparagraph 5(1)(i)(ii) exceeds 2% of the total amount of money borrowed by the producer organization from the lender for the purpose of making the advances, the producer organization is, notwithstanding subparagraph 5(1)(i)(ii), relieved of its obligation to repay that excess.

  • R.S., 1985, c. C-49, s. 9;
  • R.S., 1985, c. 38 (1st Supp.), s. 4.

AMOUNT OF ADVANCES

Marginal note:Amount of advance
  •  (1) The amount of an advance eligible for a guarantee under this Act shall be calculated by multiplying

    • (a) the number of units of the crop in respect of which the advance is to be made

    by

    • (b) the rate per unit fixed under subsection (2) for that crop in the crop year in which the advance is made.

  • Marginal note:Rate per unit

    (2) For the purpose of paragraph (1)(b), the Minister may fix, for any crop, in a crop year, a rate per unit of crop that does not exceed one-half of the average price that, in the Minister’s opinion, will be payable to producers of that crop in that crop year.

  • R.S., 1985, c. C-49, s. 10;
  • R.S., 1985, c. 38 (1st Supp.), s. 5.
Marginal note:Maximum per year
  •  (1) Subject to subsection (2), the maximum amount of advances in any crop year that are eligible for a guarantee under this Act, in respect of a particular crop actually produced by one producer, is an amount that is determined by the Minister for that crop year in respect of that crop, but the maximum amount of advances in any crop year that are eligible for a guarantee, in respect of all crops actually produced by that producer, shall not exceed the lesser of $250,000 and such amount as the Minister may determine.

  • Marginal note:Reduction for other advances

    (2) The maximum amount of advances in any crop year that are eligible for a guarantee under this Act, in respect of all crops actually produced by one producer, as determined by the Minister under subsection (1), shall be reduced by the total amount outstanding in respect of

  • R.S., 1985, c. C-49, s. 11;
  • R.S., 1985, c. 38 (1st Supp.), s. 5;
  • 1989, c. 26, s. 7.
Marginal note:Payments to be made by Minister
  •  (1) Where the Minister has given a guarantee in respect of an advance under section 4, the Minister shall, as soon as practicable after receiving a request therefor from the producer organization to which the guarantee was given, cause to be paid to the lender or the producer organization, as the case may be, out of the Consolidated Revenue Fund, subject to any regulations made under paragraph 14(b), on any default by the producer to whom the advance was made, an amount equal to the producer’s liability to the producer organization under section 8 in respect of the advance, less the aggregate of

    • (a) the amount for which the producer organization is responsible under subparagraphs 5(1)(i)(ii) and (iii), and

    • (b) any amount paid to the producer organization by the producer after the producer’s default.

  • Marginal note:Legal costs

    (2) The Minister shall, out of the Consolidated Revenue Fund, reimburse a producer organization for legal costs described in paragraph 8(c) to the extent that the producer organization has not recovered them, but the producer organization shall pay over to the Minister any such costs subsequently recovered by it.

  • Marginal note:Subrogation

    (3) Where the Minister causes a payment to be made under subsection (1) or (2), the Minister is, to the extent of that payment, subrogated to the producer organization’s rights against the producer in default and against persons who are personally liable under paragraphs 5(1)(a.2) and (a.3).

  • R.S., 1985, c. C-49, s. 12;
  • R.S., 1985, c. 38 (1st Supp.), s. 5;
  • 1989, c. 26, s. 8.

OFFENCES AND PUNISHMENT

Marginal note:Offences by producers
  •  (1) Every person or partnership that, for the purpose of obtaining an advance in respect of which a guarantee is sought from the Minister under this Act or evading compliance with the undertaking to repay it,

    • (a) gives false or misleading information to an organization or to the Minister, or

    • (b) fails to disclose any relevant information to an organization or to the Minister

    is guilty of an offence and liable on summary conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding six months or to both.

  • Marginal note:Offences by organizations

    (2) Every person or partnership that, for the purpose of obtaining a guarantee from the Minister under this Act or evading compliance with any obligation relating to such a guarantee,

    • (a) gives false or misleading information to the Minister, or

    • (b) fails to disclose any relevant information to the Minister

    is guilty of an offence and liable on summary conviction to a fine not exceeding three thousand dollars or to imprisonment for a term not exceeding six months or to both.

  • Marginal note:Prosecution of partnership

    (3) A prosecution for an offence under subsection (1) or (2) may be brought against a partnership and in the name of the partnership, and for the purpose of that prosecution a partnership shall be deemed to be a person, and any act or thing done or omitted by a partner or agent of a partnership within the scope of the authority of that partner or agent to act on behalf of the partnership shall be deemed to be an act or thing done or omitted by the partnership.

  • Marginal note:Officers, etc., of corporations or partnerships

    (4) Where a corporation or partnership commits an offence under subsection (1) or (2), whether or not it has been prosecuted or convicted, any officer, director, partner or agent of the corporation or partnership who directed, authorized, assented to, acquiesced in or participated in the commission of the offence is a party to and guilty of the offence and is liable on summary conviction to the punishment provided for the offence.

  • Marginal note:Limitation period

    (5) A prosecution under this section may be instituted within but not after two years from the time when the act or omission giving rise to the prosecution occurred.

  • 1976-77, c. 12, s. 13.

REGULATIONS

Marginal note:Regulations

 The Governor in Council may make regulations

  • (a) for determining, in relation to any crop, what is a significant portion of the crop in any area represented by a producer organization;

  • (b) respecting collection attempts to be made by a producer organization in respect of a producer’s liability under section 8 before and after the producer organization requests payment from the Minister under subsection 12(1); and

  • (c) generally, for carrying out the purposes and provisions of this Act.

  • R.S., 1985, c. C-49, s. 14;
  • R.S., 1985, c. 38 (1st Supp.), s. 6;
  • 1989, c. 26, s. 9.

RELATED PROVISIONS

  • — R.S., 1985, c. 38 (1st Supp.), s. 7

    • Application of amendments

      7. This Act applies in respect of guarantees given by the Minister on or after August 1, 1985.

  • — 1989, c. 26, s. 10

    • Application of amendments

      10. This Part applies in respect of guarantees given by the Minister of Agriculture on or after the day on which this Act comes into force.

  • — 1997, c. 20, ss. 51, 51.1

    • No guarantees of advances after March 31, 1997

      51. The Minister may not guarantee under section 4 of the Advance Payments for Crops Act any advances made after March 31, 1997 or any interest attributable to those advances.

  • — 1997, c. 20, ss. 51, 51.1

    • Defaults

      51.1 For the purpose of applying paragraph 10(1)(f), a default under a repayment agreement includes a default in repaying an advance under the Advance Payments for Crops Act.

AMENDMENTS NOT IN FORCE

  • — 1997, c. 20, s. 45

    • Repeal of R.S., c. C-49

      45. The Advance Payments for Crops Act is repealed.