Source: http://www.agr.gc.ca/eng/?id=1398198173518
Timestamp: 2016-10-22 23:32:10
Document Index: 222299467

Matched Legal Cases: ['art 1', 'art 2', 'art 3', 'art 4', 'art 5', 'art 6', 'art 7']

AgriStability Program Guidelines Consolidated Version - AgriStability - Agriculture and Agri-Food Canada (AAFC)
AgriStability Program Guidelines Consolidated Version
Growing Forward 2 - AgriStability Program Guidelines Consolidated Version
Guidelines amended as of February 06, 2014
Note to reader: Minor modifications to the presentation of the original text of the AgriStability Program Guidelines have been made in preparing this consolidated version. This document is not a substitute for the original signed Agreement and Amending Agreements. This consolidated version of the Guidelines reflects Amendments Number 1. Amended selections are referenced by amending agreement number, in bold. Where discrepancies exist between these guidelines and the text in The Federal / Provincial / Territorial Agreement with respect to AgriStability and AgriInvest, the text in The Federal / Provincial / Territorial Agreement with respect to AgriStability and AgriInvest shall be deemed to be correct.
Part 1 - Eligibility 1.1 General Eligibility Requirements
Part 2 – Program Accounts 2.1 Closing Program Accounts
Part 3 – Application Process 3.1 New Participants
3.4 Participant Contribution 3.4.1 Amount Of Participant Contribution
3.4.5 Set-Off
3.5 Determining Program Benefits 3.5.1 Calculation Of Program Benefits
3.7 Payments For Positive Margins
3.8 Payments For Negative Margins 3.8.1 Deemed Agriinsurance Benefits
3.8.2 Exceptions To Deemed Agriinsurance Benefits
3.9 Interim Payment 3.9.1 Regular Interim Payments
3.13 Adjustments To Financial Information 3.13.1 Participant-Initiated Adjustments to Financial Information
3.13.2 Administrator-Initiated Adjustments of Financial Inforamtion
Part 4 – Program Parameters 4.1 Participation Requirements
4.3 Allowable And Non-Allowable Income And Expenses 4.3.1 Program Payments
4.4 Program Year Margin 4.4.1 Hybrid Inventory Adjustment
4.5 Reference Margin 4.5.1 Accrual Adjustments To The Reference Margin
4.7 Structural Change 4.7.1 Changes In Productive Units
4.8 Combining Participants 4.8.1 Assessing The Independence Of Operations
Part 5 - Program Management 5.1 Audits, Verification And Accuracy Of Information
5.3 Producer Appeals 5.3.1 Submitting An Appeal
Part 6 – Financial Provisions And Administrative Cost-Share 6.1 Budgets And Invoicing 6.1.1 Invoicing Of Government Contributions To Fund 2
6.4 Overpayment Collection Principles 6.4.1 Collection Of Overpayments
Part 7 – Management Of Guidelines 7.1 Coming Into Effect
Annex A: Common Terms Of Reference For Agristability Appeals Committees 1. General Provisions For Appeals
AdministratorProvincial or Federal body or agency that administers the Program for a specific province or territory.Administrative Cost Share (ACS)The annual charge for a Program participant to cover a portion of the Program administrative costs.AgreementThe Federal / Provincial / Territorial Agreement with respect to AgriStability and AgriInvest.Arm’s Length SalariesSalaries paid to employees except those salaries paid to Related Persons.Benchmark Per Unit Margin (BPU)The average Production Margin associated with producing a particular commodity or commodity group, based on industry standards.Calculation of Program BenefitsA notice issued by the Administrator detailing the calculation of a participant’s Program benefits for the Program Year.CRACanada Revenue Agency.ClaimantThe party that is making a claim for reimbursement of eligible administrative costs, as defined in the Agreement.Contribution Reference MarginThe Reference Margin used to calculate the participant contribution for a Program Year, as set out in clause 3.2 Enrolment Notice.Current Program YearThe Program Year for which Program Forms are submitted.Enrolment NoticeA notice sent by the Administrator containing the participant’s Contribution Reference Margin, as set out in clause 3.2, and participant contribution.EntityA participant, other than an individual, recognized by law as having rights and duties such as a corporation, cooperative, communal organization, or limited partnership.Farming IncomeIncome derived from farming activities, as defined by CRA.Fund 1The account into which amounts paid by the participant, as set out in clause 3.4, are credited.Fund 2The account into which government contributions are credited.Hybrid Inventory AdjustmentThe adjustment set out in clause 4.4.1 of these Guidelines.Interim PaymentAn advance payment made to a participant based on an estimate of a participant’s margin decline in the Current Program Year, relative to the participant’s estimated Reference Margin.InventoryThe tangible property of a farming business related to the Production Margin, which may include: held for sale (example: harvested grain)
Minimum AgriInsurance Coverage LevelCoverage on each insurable commodity at the 70% coverage level; or at the lowest level offered where it exceeds 70%, subject to provincial exemptions.Olympic AverageThe average of the Production Margins for three of the five years immediately prior to the Program Year, where the highest and the lowest margins are excluded.Perishable CropsEdible crops that spoil or decay easily and cannot normally be held in fresh storage for periods longer than ten months.Production CycleIncludes one or more of the following activities: the growing and harvesting of a crop;
Production MarginThe difference between allowable income and allowable expenses, as defined by Program Guidelines and subject to the adjustments set out in Program Guidelines.ProgramAgriStability as defined in the Agreement.Program FormsThe forms prescribed by each Administrator for the reporting of required Program Year information.Program YearThe period for which the participant files a return under the Income Tax Act, or for participants who are not required to file returns under the Income Tax Act, the calendar year.Program Year MarginThe Production Margin for the Current Program Year.Province or Territory of the Main FarmsteadProvince or territory where all or the majority of the gross Farming Income was earned over the reference period subject to any adjustments including consideration of Program Year production units and location.Reference MarginThe amount determined under clause 4.5.Related PersonsAs defined under the Income Tax Act, the following are considered to be related persons: individuals connected by blood relationship, marriage or common-law partnership, or adoption;
a corporation and an individual, group of persons, or Entity that controls the corporation;
two or more corporations if: they are controlled by the same individual, group of persons, or Entity;
Sound Management PracticesThe same management practices that would be followed by any conscientious participant under the same circumstances as determined by the Administrator.Status IndianA person entitled to be registered within the meaning of section 6 of the Indian Act.Structural ChangeA change in ownership, business structure, size of operation, farming practices, type of farming activity, method of accounting, or any other practice that a participant might undertake that may alter Production Margins or a farming operation’s potential for profit or allowable expenses.Stub PeriodA fiscal period of less than 12 months.Whole FarmFarming Income derived from all sources, regardless of the physical location of the farming operation(s).
The eligibility requirements of six consecutive months of farming activity and a completed Production Cycle in that Program Year may be waived if the Administrator determines they could not be completed due to circumstances beyond a participant’s control.
Status Indians who carried on the business of farming on a reserve in Canada, and did not file returns for income tax purposes, are eligible to participate provided they submit information that would have otherwise been reported for tax purposes for that Program Year and reference years based on the requirements of the Income Tax Act, and meet all other Program requirements. For Program purposes, Status Indians will be deemed to have a December 31 fiscal year-end.
Partners are eligible to participate in the Program as individuals. Each partner's share of the Production Margin of the partnership shall be attributed to that partner for the purpose of calculating that partner's AgriStability entitlements. However, a partnership is eligible to participate as an Entity, provided the partners have reported Farming Income (or loss) for income tax purposes for the Program Year, and the partnership is recognized as: a legal Entity under Article 2188 of the Quebec Civil Code and if so, the Program will apply the same treatment to the partnership as a corporation with the appropriate adjustments; or
In the province of Quebec, in addition to meeting the specific requirements relating to account management and the prescribed forms for presenting financial data using the accrual accounting method, participants must also meet the following provincial requirements: register farm businesses and market farm products in accordance with the Regulation respecting the registration of agricultural operations and the payment of property taxes and compensations, enacted pursuant to An Act respecting the Ministère de l'Agriculture, des Pêcheries et de l'Alimentation (L.R.Q., c. M-14), with the exception of participants affected by section 1.4 of these Guidelines and not eligible for registration;
A beneficiary whose farming operation consists of all or most of the deceased participant’s farming operation may be considered as continuing to operate the same farming operation as the deceased. If there is more than one beneficiary, a common business arrangement must be created to carry on the same farming operation as the deceased participant in order to retain the reference history.
The province or territory of participation for participants who live and farm in different provinces or territories is the province or territory of the Main Farmstead. Participants may not participate in the Program in more than one province or territory. If there is Farming Income (or loss) reported for income tax purposes in more than one province or territory, Program Forms must be submitted to the Administrator for the province or territory of the Main Farmstead. Reconciliation of billing between provinces and territories may occur after the Program Year through the Government of Canada.
The Administrator shall close a participant’s account on request, on the dissolution of the Program, where the participant has become ineligible, or where the participant fails to confirm participation in the Program for a Program Year under clause 3.3.
Where a participant’s account is closed, the participant’s remaining balance in Fund 1 shall be applied to the amount owing under clause 3.20 of the Agreement, and will not be returned to the participant.
Where a participant’s account would be closed but the processing of a previous Program Year’s Program benefit is pending, the Administrator may leave the account open until the processing of the previous Program Year is completed, or close the account and re-open it, if necessary, to make a payment in relation to a previous year.
Participants shall pay an annual Administrative Cost Share (ACS) for each account. The amount of the ACS will be $55 per participant, or an amount established by the Administrator whereby the average ACS per participant is equal to $55 per participant. The ACS amount may be included on the Enrolment Notice for that year. ACS amounts owing by a participant may be set off against any payments made to the participant for the Program Year or any subsequent Program Years.
The Administrator shall charge the ACS to a participant for a Program Year if the participant has confirmed participation for that Program Year under clause 3.3.
Participants who did not participate in the Program for the previous Program Year must follow the enrolment procedures established by the Administrator by the deadline specified by the Administrator. If such a participant does not follow the enrolment procedure by the deadline specified by the Administrator, the participant shall not be eligible to participate in that Program Year. The Administrator shall specify a deadline that can be expected to permit the Administrator to issue Enrolment Notices to new participants on time.
New participants must supply the information required by the Administrator to determine their Contribution Reference Margin and issue an Enrolment Notice. If the new participant had previously participated in the Program, the Administrator may use the participant’s previous information to calculate the Contribution Reference Margin and require the participant to supply any missing information only.
The Administrator shall issue an Enrolment Notice to:
new participants who have followed the procedures required by the Administrator under clause 3.1.
The Administrator may also send an Enrolment Notice to a person who has previously participated in the Program if the Administrator has sufficient information to calculate the Contribution Reference Margin. Alternatively, the Administrator may require the previous participant to indicate that they wish to receive an Enrolment Notice before issuing one.
The Enrolment Notice shall include the Administrator’s determination of the participant’s Contribution Reference Margin.
The Contribution Reference Margin for a Program Year shall be the Reference Margin for the previous Program Year, calculated according to the first of the following procedures which applies (without applying the Reference Margin Limit provided for in clause 4.5.3):
In cases where the participant has been provided with a Calculation of Program Benefits for the Program Year prior to the previous Program Year, the Reference Margin for the previous Program Year shall be calculated using the Production Margin indicated on that Calculation of Program Benefits for each relevant year, without further adjustment except for adjustments previously determined for the participant in relation to that Calculation of Program Benefits, and the removal of program payments from the Production Margin calculation.
In cases where the participant has not been provided with a Calculation of Program Benefits for the Program Year prior to the previous Program Year, and the Administrator has sufficient information to calculate the previous year’s Reference Margin, the Administrator shall calculate the Reference Margin for the previous Program Year using that information.
In cases where the Administrator does not have sufficient information to calculate the previous year’s Reference Margin, the Administrator shall require the participant to supply any information that it deems necessary to calculate the previous year’s Reference Margin, by the deadline specified by the Administrator. The Administrator may permit a participant to supply information relating to the three years immediately preceding the previous Program Year and calculate the Contribution Reference Margin using only those three years. If the participant has not participated in the Program for any of the years included in the previous year’s Reference Margin, the Administrator may calculate the Contribution Reference Margin using only the three years immediately preceding the previous Program Year by creating margins for those years based on the farm’s productive capacity of the Current Program Year. Participants who fail to meet the deadline specified by the Administrator shall not be eligible to participate in that Program Year.
3.4 Participant Contribution
3.4.1 Amount of Participant Contribution
If a participant provides the required documentation after the deadline, but within three months of the deadline, then the Administrator shall reduce any amount payable to the participant for that Program Year by $500 for each month (or part thereof) which has passed since the deadline. If the reduction is greater than the amount otherwise payable, the amount payable shall be reduced to zero, and the remainder of the reduction shall not be applied to any other Program Year.
Participants who are required to file returns for income tax purposes must report Program Year farming income (or loss) for income tax purposes to CRA no later than 3 months after the deadline for submitting Program Forms for that Program Year. Where the participant fails to do so, the participant shall not be eligible for a payment for that Program Year.
3.5.1 Calculation of Program Benefits
After their Forms have been processed, the Administrator shall send a Calculation of Program Benefits to participants detailing their Program Year Margin and Reference Margin. Subject to Program criteria and eligibility, if the participant’s Program Year Margin has declined relative to the Reference Margin, the Calculation of Program Benefits will indicate the amounts payable to the participant, according to the rules set out in the Agreement.
The maximum total payment to a participant is three million dollars. The Administrator may establish an amount below which a payment will not be issued.
If the participant’s Reference Margin for a Program Year is greater than zero, and the participant’s Program Year Margin has declined by more than 30% compared to the participant’s Reference Margin, the amount payable to the participant will be 70% of the portion of the margin decline that is greater than 30% but less than or equal to 100% of the Reference Margin.
3.8 Payments for Negative Margins
In addition to any amount payable under clause 3.7, if a participant’s Program Year Margin is less than zero (negative margin), the participant will be eligible to receive payments for that part of the margin decline that falls within the negative margin providing that, in that Program Year the participant has:
incurred a negative margin resulting from any peril beyond the participant’s control;
a Reference Margin greater than zero, or had a Production Margin (as determined for the purposes of calculating the Reference Margin) greater than zero in at least two of the three Program Years used in calculating the Reference Margin, including Program Years for which Production Margins were estimated under clause 3.13.2 of the Agreement, but excluding Program Years which were excluded under clause 3.13.1 of the Agreement.
Payments will be calculated based on 70% of that part of the Program Year Margin decline that falls within the negative margin, less any amounts adjusted under clause 3.8.1.
3.8.1 Deemed AgriInsurance Benefits
AgriInsurance agencies will calculate the deemed benefit based on information provided by the Administrator, following the standard rules used to set coverage, premium and loss within AgriInsurance programs as they existed at the time that coverage would have been obtained. AgriInsurance agencies may contact the participant in order to obtain additional information needed to calculate the deemed benefit. The Administrator will determine the applicable crop year for each crop to be imputed that corresponds to the participant’s fiscal year.
If a participant has no AgriInsurance history, coverage, premium and losses (if any) will be determined as for a new entry into the AgriInsurance program. This may require the use of "regional or provincial average" information rather than the usual individual underwriting process.
If crop production can be insured under an "acreage value option", and revenue for this crop is reported to the Administrator at less than the coverage provided under the AgriInsurance program, the "insured acreage value" will be used to calculate the deemed benefit.
If crop production can be insured either as an "acreage value option" or a "production loss option" under the AgriInsurance program, the deemed benefit is calculated using the "production loss option". A participant that has purchased the "acreage value option" with a lower coverage value than the coverage that could have been provided under the "production loss option" at the Minimum AgriInsurance Coverage Level will have coverage, premium, loss and benefit deemed at the Minimum AgriInsurance Coverage Level net of the coverage actually taken.
3.8.2 Exceptions to Deemed AgriInsurance BenefitsIn calculating the deemed AgriInsurance benefit, the Administrator may exclude the following:
Losses on commodities where the aggregate insured coverage of the exempted AgriInsurance programs in a province or territory does not exceed 5% of the total insured coverage for that province or territory.
the participant’s projected Program Year Margin has declined by more than 30% of their Reference Margin;
if the enrolment deadline has passed, the participant has confirmed participation in the Program for that Program Year.
Interim Payments will be made based on the participant’s projected margin decline in that Program Year, relative to their Reference Margin, as calculated at the time of the Interim Payment. Interim Payments will be issued at a rate established by the Administrator, which shall not be greater than 50% of the total estimated payment. Canada and an individual province or territory may agree on a higher maximum payment rate, not greater than 75%, for Interim Payments to some or all of the participants in that province or territory for a Program Year. The Administrator may establish a schedule of rates which vary according to the timing of the request.
When a Targeted Advance Payment has been established for a Program Year, eligible participants may request a Targeted Advance Payment for that Program Year before the deadline established by the Administrator, which shall be not later than three months after the end of that Program Year. The Administrator will allow a Targeted Advance Payment if the following criteria are met:
For the purposes of the Targeted Advance Payment, participants will be considered part of a designated sector if a significant portion of their farm sales are with respect to that sector in the most recent Program Year for which information is available; for the purposes of this clause, "significant portion" may be defined as 50% or more of farm sales.
Targeted Advance Payments will be made based on the participant’s projected margin decline in that Program Year, relative to their Reference Margin, as calculated at the time of the advance. The participant’s projected margin decline will be determined as follows:
1. The industry average margin decline on the participant’s farm is calculated for the Current Program Year by: i) Determining the number of the participant’s productive units for each commodity (or commodity group) in the most recent Program Year for which information is available.
ii) For the Current Program Year and each of the reference years, multiplying the productive units determined in (i) by the respective BPU for each year;
iii) The resulting values for each commodity (or commodity group) are added together for the Current Program Year and each of the reference years.
iv) An Olympic Average Reference Margin is calculated using the total values for each of the reference years.
v) The difference between the Olympic Average calculated in (iv) and the Program Year Margin calculated in (iii) expressed as a percentage of the Olympic Average is the industry average margin decline.
2. The industry average margin decline calculated in (1) is applied to the Reference Margin for the most recent Program Year for which information is available to determine the participant’s projected margin decline.
The Targeted Advance Payments will be issued at a rate established by the Administrator, which shall not be greater than 75% of the total estimated payment. No participant shall receive a Targeted Advance Payment greater than one and one-half (1.5) million dollars.
Participants who request both a Targeted Advance Payment and an Interim Payment, as provided for in clause 3.9.1, for a Program Year will be eligible to receive an amount equal to the greater of these two payments.
If an individual participant incorporates the participant’s farming operation, the participant can transfer the individual account to the corporation. To do this, a participant must provide the Administrator with notification in writing of the intention to transfer, including the corporation’s Business Number (if available) and the last year for which an individual application will be filed. If available, the Administrator may also request:
documentation confirming the transfer has legally taken place in accordance with the Income Tax Act or a signed declaration from the participant that the participant has filed an election under s.85 of the Income Tax Act;
3.13.1 Participant-Initiated Adjustments to Financial Information
If the Administrator accepts the adjustment and provides an adjusted Calculation of Program Benefits, adjustments related to changes made in that Calculation of Program Benefits may be made within 90 days after notification of that adjusted Calculation of Program Benefits, or within 18 months of notification of the original Calculation of Program Benefits, whichever is later. All adjustments require supporting documentation and are subject to verification, audit and/or inspection by the Administrator. Where adjustments affect taxable income, the Administrator may require that the adjustment be accepted by CRA before it is accepted for Program purposes. Where a participant submits an adjustment to AgriInvest for a Program Year, and the AgriInvest Administrator accepts that adjustment, then the AgriStability Administrator may accept the same adjustment for the purposes of AgriStability (to the extent that it is relevant to AgriStability calculations), even if the prescribed period for AgriStability adjustments has passed. Where the AgriStability Administrator accepts the adjustment and as a result the participant’s Program Year benefit changes, additional benefits may be paid and overpayments may be collected pursuant to clause 5.2. (1)
3.13.2 Administrator-Initiated Adjustments to Financial Information The Administrator may initiate adjustments to information used in calculating Program benefits for a Program Year (including information used in calculating the Reference Margin for that Program Year) for up to six years after notification of the original Calculation of Program Benefits for that Program Year. Any Administrator-initiated adjustment that is completed after the end of this six year period will not result in a change to program benefits for that Program Year unless:
Where the Administrator completes the adjustment and provides an adjusted Calculation of Program Benefits, Participant-initiated adjustments related to changes made in that Calculation of Program Benefits may be made within 90 days after notification of that adjusted Calculation of Program Benefits. If the Program Guidelines applicable to the Program Year provide for an 18 month Participant-initiated adjustment period after the notification of the original Calculation of Program Benefits, that adjustment period will apply if later than 90 days after notification of the adjusted Calculation of Program Benefits. (1)
This amendment will come into effect for the 2013 Program Year. Notwithstanding this, clause 3.13.2, as set out in this amending agreement, will apply to all Canadian Agricultural Income Stabilization (CAIS) and AgriStability Program Years, beginning with the 2003 Program Year. (1)
Sole proprietors, partners in a partnership (with the exception of limited partners and partnerships in Quebec), and estates participate in the Program as individuals. Individual participants must each hold a Program account and must provide their Social Insurance Number (SIN), as well as any other relevant information as required by the Administrator. For partnerships, the Administrator will calculate each partner’s share of payments based on each partner’s percentage share of the operation in the Program Year.
An Entity must provide the Business Numbers and/or Taxation Numbers used by the Entity for income tax purposes, as well as any other relevant information as required by the Administrator. Corporations and co-operatives may also be required to provide the SIN’s of each shareholder or co-operative member. Any payments will be made directly to the Entity.
(iv) Canadian Food Inspection Agency (CFIA) payments that are reportable as farm income for income tax purposes and which were calculated on the basis of the replacement value in respect of allowable income or expense items;
(v) Government program payments that meet the following conditions: The payments were calculated on the basis of the replacement value in respect of allowable income or expense items, and
Landlord or lessor income, whether cash rent or payments-in-kind, earned through a crop or livestock share or lease arrangement must be reported as rental income for income tax purposes, and therefore is considered non-allowable under the Program. However, where the arrangement constitutes a joint venture, such that the landlord or lessor’s share in the allowable expenses reasonably approximates their share in the allowable related income, those income and expenses may be considered allowable.
All contract work/machine rental income and expenses are considered non-allowable, except to the extent that (a) expenses are itemized separately on the participant’s financial statements submitted with their income tax return (or other documentation if accepted by the Administrator under clause 3.5); and (b) the items represent allowable expenses.
Income generated from non-allowable services is excluded from Production Margin calculations. In addition, an amount equal to 30% of reported contract work income will be deducted from allowable expenses. Where the 30% ratio is inappropriate for the operation, the Administrator may use a different expense ratio, and where required, request supporting documentation from the participant.
For cattle, an amount equal to 5% of reported custom feeding income will be deducted to account for yardage fees. Where the 5% is inappropriate for the operation, the Administrator may use a different percentage, and where required, request supporting documentation from the participant.
"Processing" is defined as a changing the state of the commodity (e.g., milk to cheese, strawberries to jam, beeswax to candles, beef to beef jerky, grain to flour).
A purchased commodity may be considered purchased for resale if the Administrator determines that the participant has not made an appreciable contribution to the commodity’s growth or its increase in value. For example, in the case of cattle an appreciable contribution will have been made if the animals are fed for at least 60 days or gain an average of at least 90 kilograms.
Where a participant did not have farming activity and did not report Farming Income (or loss) in each of the three years immediately prior to the Current Program Year, the Administrator will create margins for these missing years based on the farm’s productive capacity of the Current Program Year. Margins will not be created for any reference year in which the participant reported or should have reported Farming Income (or loss) for income tax purposes, based on the requirements of the Income Tax Act. However, where a reference year was the participant’s first year of farming and they did not complete a Production Cycle and/or 12 months of farming activity, the Administrator may create a margin for the year even where Farming Income (or loss) was reported for income tax purposes.
The Administrator may establish a deadline by which participants must report Farming Income (or loss) for income tax purposes for any reference year for which the participant should have reported Farming Income (or loss) for income tax purposes.
The Administrator will apply any Structural Change adjustment under clause 4.7 to the participant’s Production Margins in the reference period prior to determining which years will be used to calculate the Olympic Average.
A participant’s Reference Margin with respect to a Program Year shall not exceed the average allowable expenses of the three years used to calculate the Reference Margin for the Program Year. However, the Administrator shall not apply this limit when calculating the Contribution Reference Margin, and may elect not to apply this limit when calculating the Reference Margin for the purpose of Interim Payments or Targeted Advance Payments.
Participant’s fiscal periods ending within the same calendar year may be combined by the Administrator. If they represent a period greater than 12 months (long year), the combined income and expenses will be prorated to reflect a 12 month period and neither of those periods will be considered a Stub Period.
If a participant’s fiscal period represents less than 12 months (a Stub Period) or if the combined fiscal periods ending within the same calendar year jointly represent less than 12 months, the income statement for this Stub Period will be combined with the information from preceding statements until a minimum period of 12 months is available. The combined income and expenses will be prorated to reflect a 12 month period.
As a result of a change in a participant’s year end, the participant may have a reference year in which no fiscal year end occurred and the Farming Income (or loss) for the farming activity during that time was reported for income tax purposes in the subsequent tax year. The Administrator may create a margin for that reference year based on the farm’s productive capacity of the Current Program Year.
If the Administrator determines that there has been a significant change in a farming operation’s potential for profit as a result of a Structural Change, adjustments will be made to the reference year and/or Program Year Margins to reflect the change.
the difference between the Reference Margin before and after applying the Structural Change adjustment is at least 10% and $5,000; or
the difference between the Reference Margin before and after applying the Structural Change adjustment is at least 50% and the Administrator considers that applying the Structural Change adjustment would avoid an anomalous result i.e. where the unadjusted Reference Margin does not reflect the farming operation’s Program Year productive capacity.
The Structural Change adjustment may be waived if, in the opinion of the Administrator, a Structural Change was as a result of disaster circumstances. These situations will be dealt with on a case-by- case basis to ensure that all relevant factors affecting production in the Program Year are considered. Moreover, the Structural Change adjustment may be waived until such time that is reasonable to restore or replace productive capacity.
Disaster circumstances include only those occurring for reasons outside of a participant’s control. Common examples are flooded land and depopulation of livestock due to disease.
Where the nature of the disaster is such that the participant’s productive capacity can be restored, the Structural Change adjustment will be waived for such time as is reasonable for restoration to take place.
Where the nature of the disaster is such that the participant’s productive capacity cannot be restored, or restoration would be economically unfeasible, the Structural Change adjustment will be waived for such time as is reasonable for the participant to develop alternative capacity. Generally speaking, a reasonable time period would not exceed one year.
In determining whether farming operations are part of the same Whole Farm, the relevant factors are each operation’s respective degree of legal, financial, and operational independence, considering the following criteria:
Transactions (Arm’s length, Special considerations)
Transactions between all parties (whether they are Related Persons or otherwise) must be at FMV to be considered allowable for inclusion in the calculation of margins. Transactions above or below FMV may be adjusted by the Administrator to reflect FMV. Where these transactions cannot be clearly defined, the Administrator may combine the income and expenses of the parties involved in these transactions.
For the Current Program Year, the allowable income and expenses (including all adjustments for Inventories, prepaid expenses, payables, and receivables) for all operations is combined to arrive at a combined Program Year Margin.
Each participant is allocated a percentage of the combined Reference and Program Year Margins based on each participant’s share of the combined operation’s benchmark margin. The benchmark margin for the combined operation is calculated by multiplying the combined operation’s production units in the Current Program Year by the average BPU of each unit over the previous five years.
Each participant contribution and payment is calculated based on the participant’s share of the combined operation’s Reference Margin, Contribution Reference Margin and Program Year Margin. Each participant is responsible to meet the participant contribution requirements and other Program requirements.
If a participant has provided false information, or has breached a condition of eligibility, the Administrator may deem the participant to be ineligible to participate in the Program for up to two additional years under clause 10.7 of the Agreement. The Administrator must provide notice to the participant and an opportunity to respond before doing so.
Appeals shall be conducted according to the Common Terms of Reference for Appeals Committees attached to these Guidelines as Annex A.
The Administrator shall invoice the other party for its estimated share of Fund 2 payments based upon an agreed-to period, net of the other party’s share of any revenue from participant contributions due to opt-out or dissolution under clause 3.20 of the Agreement (except where those participant contributions have already been credited to the invoiced party). The invoice shall contain actual Fund 2 payments to date, a forecast of estimated Fund 2 payments for the requested advance period, interest amounts on advance balances and total amounts advanced to date. The invoiced party shall pay the invoiced amount within thirty (30) days of receipt of invoice. The advances shall be accounted for by the Administrator on a basis consistent with the invoicing period through a reconciliation of the amount advanced with actual payments made to the participants. Any amount owing by one party on account of advances made shall be repaid within thirty (30) days of the receipt by both parties of the final audited reconciliation of payments made. Upon termination of the Program by one of the parties, any outstanding amount identified on the final reconciliation shall be paid or reimbursed to the appropriate party.
If agreed to between the invoicing party and the invoiced party, the invoicing party may credit the invoiced party for the invoiced party’s share of participant contributions made under clause 3.1.3 of the Agreement and debit the invoiced party for the invoiced party’s share of participant contributions paid out under clause 3.5 of the Agreement. Where the invoiced party has been credited for a participant contribution, any revenue relating to that participant contribution under clause 3.20 of the Agreement (on opt-out or dissolution) will be retained by the invoicing party, and will not be credited to the invoiced party a second time.
If a Claimant administers the delivery of another Claimant’s AgriStability program initiative, and does not charge the latter for its services, then the former shall be allowed to claim the eligible administrative costs it incurred on behalf of both itself and the other Claimant for whom it is delivering the Program. The Claimant benefiting from this method of service delivery shall not be allowed to claim these costs. If the Claimant contracted to deliver the Program on behalf of another charges the latter for doing so, then all monies recovered by it for doing so must be netted against its previously incurred, eligible operating costs. In such a case, the Claimant paying for this service shall be allowed to report the amount it paid for this service delivery process as its own operating costs.
Where a participant is indebted to the Crown under an agricultural program, the Administrator may, upon request from a program administrator, have such amounts deducted from any monies otherwise payable by the Administrator into or out of a participant’s account subject to the following set-off principles, unless otherwise agreed to by the cost-sharing partners:
Setoffs of debts owing under AgriInvest, AgriStability and AgriInsurance against subsequent payments delivered by the Administrator will be processed first in accordance with the following priorities: Setoff against same program; and
Debt write-off shall only occur against criteria approved by the Federal/Provincial/Territorial cost-sharing partner(s). Minimum criteria would include: a structured notification and follow-up process – minimum three notifications with the participant;
all reasonable collection actions have been taken, including consultations with legal services to identify any steps that may be taken to recover the amount, which may include, but is not limited to, court proceedings; garnishment proceedings; and use of collection agencies.
These Guidelines shall come into effect for the 2013 Program Year.
The Guidelines in effect for the 2012 Program Year shall not apply to the 2013 Program Year or later Program Years.
2.1 An Appeals Committee will review requests in writing from producers or their authorized representative who have appealed the Administrator’s interpretation or implementation of Program policies and deadlines.
2.3 An Appeals Committee cannot create exceptions to the eligibility criteria or any other provisions included in the AgriStability Program Guidelines, the Agreement, or the Farm Income Protection Act.
2.4 Where a deadline appeal is referred to an Appeals Committee, the Committee may recommend exceptions to deadlines in cases of "Force Majeure" involving exceptional circumstances, where the failure to meet the requirements of the AgriStability program could not be avoided by the exercise of due care by the producer or a third party acting on behalf of the producer. Examples of "Force Majeure" include Acts of God such as flash floods, unscheduled surgery, or the death or serious illness of the producer or an immediate member of the producer’s family. When reviewing cases involving "Force Majeure" the length of time prior to the deadline when the events occurred must be taken into consideration.
2.6 An Appeals Committee will provide for producers to attend meetings of the Committee when their case is being reviewed (in person or by telephone), and answer questions. Producers who attend meetings may bring their form preparer to the meeting to assist them in answering questions from members of the Committee. Attendance of other representation is not permitted. Where a producer attends an Appeals Committee meeting, a representative of the Administrator may also attend. 2.6.1 Producers must give the Secretariat 14 days notice of their intention to attend a meeting, and are responsible for any costs incurred for attending meetings.
3.2 Members of an Appeals Committee are responsible for the following: 3.2.1 attending Program training offered by the Administrator;
3.3 One of the voting members of the Appeals Committee will be selected as the Chairperson, based on the process established by the Administrator. In addition to other duties that may be assigned in these Terms of Reference, the Chairperson will be responsible for ensuring that: 3.3.1 Committee business is completed in an impartial and efficient manner;
3.4 For any given meeting of an Appeals Committee, there will be a minimum of three and a maximum of five voting members in attendance. In addition, one non-voting provincial representative and one non-voting federal representative, as nominated by the respective governments, may also attend.
4.1 The Secretariat to an Appeals Committee will be provided by the Administrator that has appointed the Committee. The Secretariat is responsible for: 4.1.1 providing the Appeals Committees with the information necessary to ensure the implementation of these Terms of Reference;
4.1.7 notifying the appellant of both the Appeal Committee’s recommendation and the Administrator’s final decision once the case has been reviewed.
One way in which a conflict can arise is where the member has a relationship with the appellant. This could be a financial interest (in the case of a company or business associate) or a personal relationship (in the case or a family member or close friend). Generally speaking, cases affecting the member’s immediate or extended family would be considered to raise conflicts of interest (i.e. spouses, parents, children, brothers and sisters as well as their children and spouses). However, the member will need to consider in each case the nature of the relationship (if any) and whether it could be expected to influence the member’s judgment.
A conflict would arise where the member is the appellant, since members cannot consider their own appeals. It would be difficult to avoid the appearance of special treatment even when only the remaining members of an Appeals Committee consider a fellow member’s appeal. For this reason, the chairperson should refer appeals brought by a committee member to a different appeals committee for determination.
1. Production or Market Disruption A situation where production, input costs, or markets are negatively impacted by circumstance beyond the control of the producer. The disruption may include, but is not limited to, changes in production, price, or market accessibility resulting from the impacts of abnormal weather, disease, or market cycles.
2. Significant Negative Impact It is estimated that at least 25% of the producers in a regional municipality, county or larger geographical area are affected,OR
It is estimated that at least 25% of the producers of a commodity are expected to suffer a drop in margin in excess of 30% with respect to that commodity.
When using this method selection process, the Administrator performs the following calculation:
(Ratio Adjusted Margin − Additive Adjusted Margin) / Additive Adjusted Margin
If (a) the result of this calculation is between −1 and +1; or (b) the absolute difference between the adjusted margins is less than $20,000, then the Administrator may use the ratio method without further review.
Amendment No.: (1) February 6, 2014. Amendment to Adjustments to Financial Information (3.13) to limit the timeframe that Administrators can go back and adjust AgriStability benefits that were processed in previous years. Clauses 3.13.1 and 3.13.2 were added to segregate Participant initiated adjustments from Administrator initiated adjustments. This amendment will come into effect for the 2013 Program Year. Notwithstanding this, clause 3.13.2, as set out in this amending agreement, will apply to all Canadian Agricultural Income Stabilization (CAIS) and AgriStability Program Years, beginning with the 2003 Program Year.
Growing Forward 2 - AgriStability Program Guidelines Consolidated Version (PDF Version, 500 KB)
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