Farm Debt Mediation Act (S.C. 1997, c. 21)

Act current to 2016-05-12 and last amended on 2015-02-27. Previous Versions

Farm Debt Mediation Act

S.C. 1997, c. 21

Assented to 1997-04-25

An Act to provide for mediation between insolvent farmers and their creditors, to amend the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Farm Debt Review Act

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

Short Title

Marginal note:Short title

 This Act may be cited as the Farm Debt Mediation Act.

Interpretation

Marginal note:Definitions

 The definitions in this section apply in this Act.

farmer

farmer means any person, cooperative, partnership or other association of persons that is engaged in farming for commercial purposes and that meets any prescribed criteria. (agriculteur)

farming

farming means

  • (a) the production of field-grown crops, cultivated and uncultivated, and horticultural crops;

  • (b) the raising of livestock, poultry and fur-bearing animals;

  • (c) the production of eggs, milk, honey, maple syrup, tobacco, fibre, wood from woodlots and fodder crops; and

  • (d) the production or raising of any other prescribed thing or animal. (exploitation d’une entreprise agricole)

Minister

Minister means the Minister of Agriculture and Agri-Food. (ministre)

prescribed

prescribed means prescribed by regulation.

secured creditor

secured creditor means

  • (a) any creditor holding a mortgage, hypothec, pledge, charge, lien, privilege, priority claim or other security interest on or against the property of a farmer or any part thereof as security for a debt due or accruing due from the farmer;

  • (b) any person, cooperative, partnership or other association of persons

    • (i) with which a farmer has entered into an agreement for sale, a lease with an option to purchase or a conditional sales contract relating to any property used or possessed by the farmer, or

    • (ii) to which such an agreement or contract has been assigned; and

  • (c) any bank, or authorized foreign bank within the meaning of section 2 of the Bank Act to which security on the property of a farmer or any part of the property has been given under section 427 of that Act or under section 427 as incorporated by section 555 of that Act, as the case may be. (créancier garanti)

  • 1997, c. 21, s. 2;
  • 1999, c. 28, s. 161;
  • 2015, c. 2, s. 141.

Her Majesty

Marginal note:Binding on Her Majesty

 This Act is binding on Her Majesty in right of Canada or a province.

Administrators

Marginal note:Appointment
  •  (1) Subject to subsection (2), administrators shall be appointed for the purposes of this Act in accordance with the Public Service Employment Act.

  • Marginal note:Designation

    (2) The Minister may, in accordance with the regulations, if any, and on such terms and conditions as the Minister may specify, designate any person, other than an employee within the meaning of the Public Service Employment Act, as an administrator for the purposes of this Act.

  • Marginal note:Agreements

    (3) For the purposes of this Act, the Minister may enter into an agreement with any individual or body in relation to the remuneration and travel and living expenses of administrators designated under subsection (2).

  • Marginal note:Mediators, experts

    (4) An administrator may enter into agreements

    • (a) for the services of mediators, subject to the regulations, and

    • (b) for the services of experts

    relating to applications made under section 5, and such agreements may include provision for remuneration and travel and living expenses.

Applications

Marginal note:Application to administrator
  •  (1) Subject to section 6, a farmer may apply to an administrator for either

    • (a) a stay of proceedings against the farmer by all the farmer’s creditors, a review of the farmer’s financial affairs, and mediation between the farmer and all the farmer’s creditors for the purpose of assisting them to reach a mutually acceptable arrangement; or

    • (b) a review of the farmer’s financial affairs, and mediation between the farmer and all the farmer’s secured creditors for the purpose of assisting them to reach a mutually acceptable arrangement.

  • Marginal note:Names of creditors

    (2) An application under subsection (1) must include the names and addresses of all the farmer’s creditors.

Marginal note:Farmer must be insolvent

 Only farmers

  • (a) who are for any reason unable to meet their obligations as they generally become due,

  • (b) who have ceased paying their current obligations in the ordinary course of business as they generally become due, or

  • (c) the aggregate of whose property is not, at a fair valuation, sufficient, or if disposed of at a fairly conducted sale under legal process would not be sufficient, to enable payment of all their obligations, due and accruing due

are eligible to apply under section 5.

Marginal note:Administrator’s duties on receiving application
  •  (1) On receipt of a duly completed application under section 5, the administrator shall forthwith

    • (a) give notice of the application to

      • (i) each creditor listed in the application, in the case of an application made under paragraph 5(1)(a),

      • (ii) each secured creditor listed in the application, in the case of an application made under paragraph 5(1)(b), and

      • (iii) the Minister, if the Minister is the guarantor of a farmer’s debt that is owed to a creditor or secured creditor listed in the application;

    • (b) in the case of an application made under paragraph 5(1)(a), issue a stay of proceedings for a period of 30 days, beginning at the time when the stay is issued, against the farmer by all of the farmer’s creditors and give notice of the stay to each creditor listed in the application; and

    • (c) determine whether the farmer is eligible under this Act to make that application, which determination may be based on, among other things, a preliminary review of the farmer’s financial affairs.

  • Marginal note:Certain decisions final

    (2) In the case of an application under paragraph 5(1)(b), a determination by the administrator under paragraph (1)(c) is final and is not subject to appeal.

  • 1997, c. 21, s. 7;
  • 2015, c. 2, s. 142.
Marginal note:Amendment of application
  •  (1) A farmer who has made an application under paragraph 5(1)(a) or (b) may, at any time before the termination of the mediation, request permission from the administrator to amend the application to be an application under paragraph 5(1)(b) or (a), as the case may be, and the administrator may grant that permission if satisfied that the farmer is eligible to apply under paragraph 5(1)(b) or (a), as the case may be.

  • Marginal note:Two year period

    (2) For the purposes of section 20, an application that has been amended pursuant to subsection (1) is deemed to have been made as an application under paragraph 5(1)(b) or (a), as the case may be, on the day when the original application was made.

Financial Review

Marginal note:Financial review
  •  (1) Where the administrator determines that the farmer is eligible to make the application, the administrator shall as soon as possible undertake, or cause an expert referred to in subsection 4(4) to undertake, a detailed review of the farmer’s financial affairs.

  • Marginal note:Nature of review

    (2) The review mentioned in subsection (1)

    • (a) must include the preparation of

      • (i) an inventory of all the assets of the farmer, and

      • (ii) financial statements of the farmer’s farming operation;

    • (b) may, in the case of an application made under paragraph 5(1)(b), include a recommendation that one or more creditors who are not secured creditors, and the Minister, if the Minister is the guarantor of a farmer’s debt that is owed to one of those creditors, participate in the mediation; and

    • (c) may include the preparation of recovery plans for the purpose of reaching financial arrangements with creditors and the Minister.

  • Marginal note:Preparation of recovery plans

    (3) Where a farmer requests the administrator that the recovery plans referred to in paragraph (2)(c) be prepared by a person of the farmer’s choice, the administrator may, in accordance with the regulations, if any, enter into an agreement for that purpose.

  • Marginal note:Report

    (4) The results of a review under this section must take the form of a report prepared by or on behalf of the administrator.

  • 1997, c. 21, s. 9;
  • 2015, c. 2, s. 143.
 
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