Bill C-34

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	(c) if the related producer is a cooperative, the attributable percentage is the percent age prescribed by the regulations; and
	(d) if the producer and the related producer are partners or members of the same partnership or other association of persons, the attributable percentage is the percent age of the profits of the partnership or association to which the producer is en titled.
Interest on emergency advances	(3) The Minister is not required to pay the interest for an emergency advance, unless the advance guarantee agreement provides for its payment.
Reduction of principal	(4) When an amount is repaid on account of a guaranteed advance, the amount on which the Minister must pay interest is reduced by the amount of the repayment.
	Eligibility and Repayment
Eligibility requirements for producers	10. (1) For a producer to be eligible for a guaranteed advance during a crop year,
	(a) the producer must, in accordance with any regulations, own the crop continuously and be responsible for marketing it;
	(b) if the producer is an individual, the producer must have attained the age of majority in the province where his or her farming operation is carried on and must be principally occupied in that operation or be entitled to the crop or a share in it as landlord, vendor, mortgagee or hypotheca ry creditor;
	(c) if the producer is a corporation with only one shareholder, the shareholder must
	(i) have attained the age of majority in the province where the producer's farming operation is carried on,
	(ii) be principally occupied in that opera tion or be entitled to the crop or a share in it as landlord, vendor, mortgagee or hypothecary creditor, and
	(iii) agree in writing to be personally liable to the administrator for any liabil ity of the producer under section 22 and to provide any security for the repayment of the advance that the administrator may require;
	(d) if the producer is a corporation with two or more shareholders, a partnership, a cooperative or another association of per sons,
	(i) at least one of the shareholders, partners or members, as the case may be, must have attained the age of majority in the province where the producer's farm ing operation is carried on and must be principally occupied in that operation or be entitled to the crop or a share in it as landlord, vendor, mortgagee or hypothe cary creditor, and
	(ii) each of the shareholders, partners or members, as the case may be, must agree in writing to be jointly and severally liable to the administrator for any liabil ity of the producer under section 22 and must provide any security for the repay ment of the advance that the administra tor may require;
	(e) the producer and, to the extent provided in the advance guarantee agreement, any related producers must have repaid all guaranteed advances received during the previous crop year for a crop of the same designation, unless the Minister otherwise directs when staying a default under subsec tion 21(2) by the producer or any of the related producers;
	(f) the producer and, to the extent provided in the advance guarantee agreement, any related producers must not be in default under a repayment agreement;
	(g) the producer must not be ineligible under subsection 21(4); and
	(h) the producer must not have given the crop as security ranking in priority to the security interest created by section 12.
Sharing security	(1.1) For the purposes of paragraph (1)(h), the producer's eligibility is not affected by the administrator sharing its security interest with another lender in accordance with terms and conditions specified in the advance guarantee agreement.
Eligible producers must make repayment agreements	(2) An eligible producer must make a repayment agreement with the administrator under which the producer agrees
	(a) to repay the advance
	(i) by selling the crop for which the advance is to be made to a buyer or buyers named by the administrator, and authorizing in writing each buyer to withhold from any amount they pay to the producer for each crop unit an amount determined in accordance with the repay ment schedule specified in the agree ment,
	(ii) by selling or otherwise disposing of the crop for which the advance is to be made and paying directly to the adminis trator, for each crop unit in accordance with the terms and conditions specified in the agreement, an amount determined in accordance with the repayment schedule specified in the agreement,
	(iii) without proof that the crop has been sold, up to an amount prescribed by the regulations, or
	(iv) by a combination of the methods described in subparagraphs (i) to (iii);
	(b) to keep the crop adequately stored so as to remain of marketable quality until dis posed of under the agreement; and
	(c) to comply with any other terms and conditions set out in the agreement, includ ing terms and conditions governing the delivery of the crop and the payment of interest, both before and after any default.
Terms and conditions governing emergency advances	(3) Terms and conditions in the advance guarantee agreement relating to emergency advances must also be included in the repay ment agreements of producers who receive those advances.
Required information	(4) The producer must provide to the administrator any information that it requests for the purpose of applying this Act.
Unmarketable crop	11. If a crop for which a guaranteed advance is made ceases to be in marketable condition, in whole or in part, the producer becomes liable to repay immediately to the administra tor that portion of the guaranteed advance, together with the interest on it from the date of the advance, that is attributable to the unmar ketable portion of the crop.
Security interest in crop	12. An administrator that makes a guaran teed advance to a producer has a security interest in the crop for which the advance was made, and in any crop subsequently grown by the producer, for the amount of the producer's liability under sections 22 and 23.
	Canadian Wheat Board
Powers to make arrangements and agreements	13. (1) For the purpose of making guaran teed advances under this Act, the Board may make any arrangements, contracts or agree ments that it considers necessary or advisable for the administration of this Part, including borrowing money by any means, for example, by issuing, reissuing, selling and pledging bonds, debentures, notes and other evidences of indebtedness of the Board.
Borrowing guarantee	(2) The Minister of Finance may, subject to any terms and conditions approved by the Governor in Council, guarantee the repay ment of money borrowed under subsection (1) together with the interest on it.
Cash purchase tickets	14. Despite the Canada Grain Act, the manager or operator of an elevator or other person authorized by the Board to make guaranteed advances on its behalf may make advances by means of cash purchase tickets.
Non- application of certain provisions	15. (1) Paragraphs 5(3)(c) and (f), subpara graph 5(3)(g)(i) and paragraph 5(3)(h) do not apply to the Board.
Payment of interest by Minister	(2) Interest payable by the Minister under subsection 9(1) in relation to amounts bor rowed by the Board is payable to the Board.
Delivery of permit book	16. (1) At any time after a producer applies to the Board for an advance, the Board may require the producer to deliver to it any permit book issued to the producer or to any related producer.
Endorsement	(2) The Board may require an endorsement to be made in the permit book in a form specified by the Board, indicating that amounts for all crops delivered under the permit book must be deducted and paid to the Board in accordance with the repayment agreement with the producer.
Deductions on delivery	17. (1) If a delivery of a crop is made under a permit book that bears an endorsement, the person receiving the delivery shall
	(a) deduct and pay to the Board, in priority to all other persons, the portion of the payment for the crop that the repayment agreement with the producer authorizes to be deducted from each payment until the advance has been repaid; and
	(b) make an appropriate entry of the deduction in the permit book and in any other permit book that has the same en dorsement and is presented to the person receiving the delivery.
Cancellation of endorsement	(2) When the guaranteed advance has been repaid, the Board must cancel the endorse ment.
Endorsements in permit books	18. A producer whose permit book has been endorsed under subsection 16(2) is not en titled to receive and shall not use any other permit book, including a permit book of any related producer, in substitution for the en dorsed permit book for the same or any subsequent crop year, unless the guaranteed advance is repaid or the endorsement is also made in the other permit book.
	Amount of Advances
Amount of advance	19. (1) The amount of an advance eligible for a guarantee under this Part is calculated by multiplying
	(a) the number of crop units for which the advance is to be made
	by
	(b) the rate per crop unit specified in the advance guarantee agreement for that crop in the crop year in which the advance is made.
Rate per crop unit	(2) The rate per crop unit may be specified for a particular crop in a particular area, but it must not exceed one half of the average price that, in the Minister's opinion, will be payable to producers of the crop in that area.
Annual maximum guarantee for each producer	20. (1) The maximum amount of advances in any crop year that are eligible for a guarantee under this Act
	(a) for a particular crop produced by an eligible producer, is an amount specified in the advance guarantee agreement for that crop; and
	(b) for all crops produced by the producer or by any related producers, to the extent that advances for the crops are attributable to the producer under subsection (2), is the lesser of $250,000 and an amount determined by the Minister .
Attribution	(2) Amounts advanced to related producers 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;
	(c) if the related producer is a cooperative, the attributable percentage is the percent age prescribed by the regulations; and
	(d) if the producer and the related producer are partners or members of the same partnership or other association of persons, the attributable percentage is the percent age of the profits of the partnership or association to which the producer is en titled.
	Default
Circumstances constituting default	21. (1) For the purposes of this Part, a producer is in default under a repayment agreement if the producer
	(a) has not met any of their obligations under the agreement within 20 days after the day on which the administrator mails or delivers a notice to the producer stating that the producer has had, in the opinion of the administrator, adequate opportunity to meet the obligation, and requesting the producer to meet it;
	(b) has not met all of their obligations under the agreement at the end of the crop year in which the advance was made;
	(c) has not met all of their obligations under the agreement when the producer files an assignment under the Bankruptcy and In solvency Act or a receiving order is made under that Act against the producer;
	(d) at any time breaches an obligation under the agreement; or
	(e) provides false or misleading informa tion to the administrator for the purpose of obtaining a guaranteed advance, or evading compliance with an undertaking to repay it.
Stay of default	(2) If a default is impending, the Minister may, at the request of the administrator, order the default to be stayed for a specified period on any terms that the Minister may establish.
When default ceases	(3) A producer ceases to be in default on the full discharge of the producer's liability under sections 22 and 23.
Ineligibility period	(4) An advance guarantee agreement may provide that a producer continues to be ineligible for a guaranteed advance for any period specified in the agreement, even though the producer has ceased to be in default.
Liability of defaulting producer to administrator	22. A producer who is in default under a repayment agreement is liable to the adminis trator for
	(a) the outstanding amount of the guaran teed advance;
	(b) the interest at the rate specified in the repayment agreement on the outstanding amount of the advance, calculated from the date of the advance; and
	(c) costs incurred by the administrator to recover the outstanding amount and inter est, including legal costs approved by the Minister.
Payments to be made by Minister	23. (1) If a producer is in default under a repayment agreement and the Minister re ceives a request for payment from the admin istrator, the Minister must, subject to any regulations made under paragraph 40(g), pay to the lender or the administrator, as specified in the advance guarantee agreement, an amount equal to the Minister's percentage of
	(a) the amounts mentioned in paragraphs 22(a) and (c); and
	(b) the interest at the rate specified in the advance guarantee agreement on the out standing amount of the advance, calculated from the date of the advance.
Subrogation	(2) The Minister is, to the extent of any payment under subsection (1), subrogated to the administrator's rights against the producer in default and against persons who are person ally liable under paragraphs 10(1)(c) and (d).
Recovery of interest and costs	(3) The producer is liable to the Minister for interest on the subrogated amount, calculated in accordance with the repayment agreement, and the costs incurred by the Minister to recover that amount, including legal costs.
Board deductions	24. (1) If a producer is in default under a repayment agreement with the Board or any other administrator, the Board may, for the purpose of repaying the producer's liability under sections 22 and 23, make deductions from any amounts owing under section 33 of the Canadian Wheat Board Act to the produc er or to another producer whose permit book the producer uses.
Liability extinguished	(2) On making the deduction, the Board's liability to the producer is extinguished to the extent of the deduction.
Payments out of the C.R.F.	25. Payments that the Minister or the Minister of Finance is liable to make under this Part are to be made out of the Consoli dated Revenue Fund.

Bill C-34

Eligibility and Repayment

Canadian Wheat Board

Amount of Advances

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