Agricultural Marketing Programs Act

Marginal note: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 or with an administrator and a lender for the purposes of

  • (a) guaranteeing to the administrator or, if the agreement is made with an administrator and a lender, to the lender, 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; and

  • (b) setting out the obligations of the administrator in relation to the advances and their repayment.

• Marginal note:Restriction

  (1.1) An advance guarantee agreement may be made with an administrator and a lender, or with an administrator that is a lender, only if the Minister is satisfied that doing so will reduce the interest payable to the lender and the agreement is made subject to terms and conditions approved by the Minister of Finance.

• Marginal note:Conditions concerning the guarantee

  (1.2) If a guarantee under the advance guarantee agreement is made to a lender, or to an administrator that is a lender, the agreement must provide, in addition to any other terms and conditions, that the interest rate on the money provided by the lender, or by the administrator, as the case may be, will not exceed the rate specified in the agreement.

• Marginal note:Administrator to demonstrate ability

  (2) An administrator must demonstrate to the Minister that it is capable of meeting its obligations under the advance guarantee agreement.

• Marginal note:Terms and conditions

  (3) In addition to identifying the agricultural products and specifying the terms and conditions governing advances and their repayment, an advance guarantee agreement must provide that the administrator agrees

  • (a) to make an agreement with each buyer mentioned in subparagraph 10(2)(a)(i), other 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 advance guarantee agreement, to ensure that, before an advance is made

    • (i) in the case of an agricultural product that is storable,

      • (A) it is of marketable quality and stored so as to remain of marketable quality until disposed of in accordance with the repayment agreement, or

      • (B) if it is in the course of being produced or is not yet produced, either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12,

    • (ii) in the case of an agricultural product that is not storable,

      • (A) it is of marketable quality and maintained so as to remain of marketable quality until disposed of in accordance with the repayment agreement and either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12, or

      • (B) if it is in the course of being produced or is not yet produced, either the amount of the advance is covered by a program listed in the schedule and the amounts that may be received under that program are assignable or the amount of the advance is covered by the security referred to in section 12, and

    • (iii) despite subparagraphs (i) and (ii), in the case of an agricultural product that is livestock, it is of marketable quality and maintained so as to remain of marketable 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 repayment of advances;

  • (g) [Repealed, 2015, c. 2, s. 124]

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

  • (h.1) after the administrator receives the payment of interest referred to in subparagraph 10(2)(a)(v), to pay to the Minister, within the period specified in the advance guarantee agreement, any interest paid by the Minister under subsection 9(1) on the amount of an advance that is repaid by a producer to the administrator without proof that the agricultural product has been sold;

  • (i) to pay to the Minister, within the period specified in the advance guarantee agreement, the amount repaid to the administrator under a repayment agreement by a defaulting producer if the Minister has previously made a payment for the producer under subsection 23(1) or (1.1); and

  • (j) to assign, on the Minister’s request and within any period that the Minister specifies, its rights and obligations under the advance guarantee agreement to any entity that the Minister specifies, if the administrator has not met all of its obligations under the agreement and the Minister has sent a notice to the administrator stating that the administrator has had, in the Minister’s opinion, adequate opportunity to meet the obligations, and requesting the administrator to meet them.

• Marginal note:Specific terms and conditions

  (3.01) An advance guarantee agreement may include any of the following terms and conditions governing advances and their repayment:

  • (a) the administrator must agree to make advances to producers solely in the areas specified in the agreement;

  • (b) the administrator must agree to make advances to producers solely in relation to the agricultural product specified in the agreement;

  • (c) the producer must agree to inform the administrator of the producer’s participation in any program listed in the schedule; and

  • (d) the producer must agree to assign, if in default, any amounts payable to the producer under a program listed in the schedule to

    • (i) the administrator, to the extent of the producer’s liability under section 22, and

    • (ii) the Minister, to the extent of the producer’s liability under section 23.

• Marginal note:Designation by Minister

  (3.02) The Minister may designate, in the advance guarantee agreement with the administrator, agricultural products or classes of agricultural products with respect to which an amount of an advance may be repaid, without proof that the agricultural product has been sold, before the expiry of the production period for which the advance was made.

• Marginal note:Exception

  (3.1) The terms described in paragraphs (3)(c) and (f) — and in paragraph (3)(h) in relation to payments required by paragraph (3)(f) — are not required if the Minister and an administrator are the only parties to the agreement.

• Marginal note:Schedule

  (3.2) The Governor in Council may, by regulation, on the recommendation of the Minister, amend the schedule by adding to it, or deleting from it, the name of a program.

• Marginal note:Restriction

  (3.3) An amendment to an advance guarantee agreement may not be made during the period specified in it that constitutes the production period if doing so would extend that period beyond 18 months, or the longer period fixed by the Minister, if one was so fixed before the advance guarantee agreement was entered into.

• Marginal note:Recovery of costs

  (4) The administrator may, subject to any terms and conditions of the advance guarantee agreement, charge fees to producers for the purpose of recovering any costs under this Part, including costs related to the recovery of outstanding amounts from producers who are in default under a repayment agreement and costs of receiving and dealing with applications for advances, administering advances and any other administrative services.

• Marginal note:Maximum contingent liability

  (5) The aggregate contingent liability of Her Majesty in relation to the principal outstanding under guarantees made under advance guarantee agreements must not at any time exceed $5 billion or the amount fixed by regulation.

• Marginal note:Amounts withheld from advance

  (6) The administrator may, with the Minister’s approval, withhold amounts from an advance made to a producer for a purpose authorized under the advance guarantee agreement.