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Bill C-26

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SUMMARY

This enactment establishes a licensing system and an insurance plan for the special crops industry in Western Canada. It provides for the licensing of all buyers of special crops and for the voluntary participation of producers in the insurance plan which protects them against default of payment for special crops by licensees. Outstanding payments for standard crops will continue to be protected by security given by standard crops dealers to the Canadian Grain Commission (CGC).

The major elements of the enactment are as follows:

    (a) all elevators and grain dealers that deal in special crops will be required to be licensed by the CGC but will not be required to give security to the CGC to cover special crops payables to producers;

    (b) an insurance plan will be established which will allow producers to choose to secure outstanding payments for special crops;

    (c) all producers will pay a levy upon delivery of special crops to a licensee, but may apply for a refund if not participating in the insurance plan;

    (d) a Special Crops Advisory Committee will be established, with a majority of its members being special crops producers;

    (e) the Canada Grain Act will be linked to the Agriculture and Agri-food Administrative Monetary Penalties Act for enforcement purposes; and

    (f) the Grain Futures Act will be repealed.

EXPLANATORY NOTES

Canada Grain Act

Clause 1: (1) and (2) The definitions ``cash purchase ticket'', ``grain'', ``grain product'', ``grain receipt'', ``licence'' and ``licensee'' in section 2 read as follows:

``cash purchase ticket'' means a document in prescribed form issued in respect of grain delivered to a primary elevator, process elevator or grain dealer as evidence of the purchase of the grain by the operator of the elevator or the grain dealer and entitling the holder of the document to payment, by the operator or grain dealer, of the purchase price stated in the document;

``grain'' means any seed designated by regulation as a grain for the purposes of this Act;

``grain product'' means any product that is produced by processing or manufacturing any grain alone or with any other grain or substance and that may be presented for storage or handling at an elevator;

``grain receipt'' means a document in prescribed form issued in respect of grain delivered to a process elevator or grain dealer acknowledging receipt of the grain and entitling the holder of the document to payment by the operator of the elevator or the grain dealer for the grain;

``licence'' means a licence to operate an elevator or to carry on business as a grain dealer issued by the Commission;

``licensee'' means a person who holds a licence to operate an elevator or to carry on business as a grain dealer;

(3) New.

Clause 2: New. The relevant portion of section 42 reads as follows:

42. The following classes of licences are hereby established for the purposes of this Act:

Clause 3: (1) and (2) The relevant portion of section 44 reads as follows:

44. No person shall

    (a) operate an elevator of a type referred to in section 42 unless

      (i) that person is the holder of a licence issued in respect of the elevator, or

      . . .

    (b) carry on business as a grain dealer unless

      (i) that person is the holder of a grain dealer's licence,

Clause 4: Subsection 45(1) reads as follows:

45. (1) Where a person who proposes to operate a primary or process elevator or to carry on business as a grain dealer applies in writing to the Commission for a licence and the Commission is satisfied that the applicant and the elevator, if any, meet the requirements of this Act, the Commission may

    (a) issue to the applicant a licence of a class or subclass determined by the Commission to be appropriate to the type of operation of that elevator or the business of that grain dealer; and

    (b) subject to the regulations, fix the security to be given by the applicant, by way of bond, insurance or otherwise, having regard to the applicant's potential obligations for the payment of money or the delivery of grain to producers of grain who are holders of cash purchase tickets, elevator receipts or grain receipts issued pursuant to this Act in relation to grain produced by the holders.

Clause 5: Subsection 46(2.1) is new. Subsections 46(1) to (3) read as follows:

46. (1) The Commission may refuse to issue an elevator licence if the applicant has not given the security fixed pursuant to section 45 or fails to establish to the satisfaction of the Commission that

    (a) the premises that the applicant proposes to use are appropriate for the storage and handling of grain; or

    (b) the elevator is or will be of such a type and in such condition and the equipment of the elevator is or will be of such a type and size and in such condition as to enable the applicant to provide, at the location where the applicant proposes to operate the elevator, the services required by or pursuant to this Act to be provided at that location by a licensee holding a licence of the class for which the applicant has applied.

(2) The Commission may refuse to issue a grain dealer's licence if the applicant has not given the security fixed pursuant to section 45.

(3) The Commission may refuse to issue a licence if the applicant has been convicted of an offence under this Act within the twelve months immediately preceding the application for the licence and the Commission is satisfied that it would not be in the public interest to issue a licence to the applicant.

Clause 6: (1) Subsection 49(2) reads as follows:

(2) Any security given by a licensee as a condition of a licence may only be realized or enforced by

    (a) the Commission; or

    (b) any holder referred to in section 45 who has suffered loss or damage by reason of the refusal or failure of the licensee to

      (i) comply with this Act or any regulation or order made thereunder, or

      (ii) meet any of the licensee's payment or delivery obligations to that holder on the surrender of any cash purchase ticket, elevator receipt or grain receipt issued by the licensee pursuant to this Act.

(2) The relevant portion of subsection 49(3) reads as follows:

(3) Notwithstanding subsection (2), a security given by a licensee as a condition of a licence to operate a primary or process elevator or to carry on business as a grain dealer may be realized or enforced in relation to a cash purchase ticket, an elevator receipt or a grain receipt only if

    (a) the licensee fails or refuses to meet any of their payment or delivery obligations to the producer of the grain to which the ticket or receipt relates within such period as may be prescribed after the day on which the grain was delivered to the licensee; and

(3) Subsections 49(6) and (7) read as follows:

(6) Where the failure on the part of a licensee to meet the licensee's payment obligations is a result of their giving to the producer a cheque or other bill of exchange that the bank or other financial institution on which it is drawn subsequently refuses to honour, that failure occurs when the cheque or other bill of exchange is given to the producer.

(7) For the purposes of this section, delivery to a licensed grain dealer occurs on the earliest of

    (a) the day the licensed grain dealer issues a cash purchase ticket or a grain receipt to the producer,

    (b) the day the grain is unloaded from a railway car, where a producer loaded the grain directly onto the railway car, and

    (c) the day the licensed grain dealer receives the grain or receives documents entitling the licensed grain dealer to the grain.

Clause 7: New.

Clause 8: Subsection 49.1(2) reads as follows:

(2) The Commission is not liable if a licensee fails to provide sufficient security to ensure that the licensee meets their obligations to pay money or to deliver grain to a holder of a cash purchase ticket, elevator receipt or grain receipt.

Clause 9: Subsections 51(3) to (5) read as follows:

(3) Notwithstanding subsection (1), the Commission, on receiving a written complaint from an interested person with respect to the charge for a service provided by the operator of a licensed elevator, may, by order, after giving all interested persons an opportunity to be heard, fix the maximum charge or a manner for determining the maximum charge for that service.

(4) An order made under subsection (3) becomes effective on the day specified in the order, which day shall not be earlier than the day the Commission determines that the facts giving rise to the complaint occurred, and ceases to be effective at the end of the crop year in which the order is made or on such earlier day as is set out in the order for its expiration.

(5) Subsections (3) and (4) cease to be in force on July 31, 1996.

Clause 11: (1) and (2) Section 56 reads as follows:

56. (1) The operator of a licensed elevator of any type shall install therein such equipment, provide such facilities and maintain the equipment and structure of the elevator in such condition as may be prescribed in respect of elevators of that type or required by order of the Commission in respect of that elevator to ensure, as may be applicable, the efficient and accurate weighing, sampling, inspection, grading, drying, cleaning and accommodation of all grain, grain products and screenings received into or discharged from the elevator.

(2) Notwithstanding subsection (1), no operator of a primary elevator shall be required pursuant to that subsection to install cleaning or drying equipment.

Clause 12: The relevant portion of section 57 reads as follows:

57. Except as may be authorized by regulation or by order of the Commission, no operator of any licensed elevator shall receive into the elevator

Clause 13: Sections 58 and 59 read as follows:

58. Except as required by order of the Commission, no operator of a licensed elevator is required to receive into the elevator any grain that has gone or is likely to go out of condition.

59. The operator of a licensed elevator shall exercise reasonable care and diligence to prevent any grain in the elevator from suffering damage or from deteriorating or going out of condition.

Clause 14: Section 64 reads as follows:

64. The operator of a primary elevator shall afford to any person who delivers grain to the elevator full facilities to verify the correct weight of the grain while the grain is being weighed.

Clause 15: New.

Clause 16: The heading before section 81 and sections 81 and 82 read as follows:

Grain Dealers

81. (1) With respect to the purchase of western grain from a producer of that grain, every licensed grain dealer shall, at the prescribed time and in the prescribed manner, issue a grain receipt or cash purchase ticket stating the grade name, grade and dockage of the grain, and immediately provide it to the producer.

(3) No licensed grain dealer who acts for any person on a commission basis in relation to the purchase or sale of western grain by a grade name shall, except with the consent of that person, buy, sell or have any interest directly or indirectly beyond the dealer's agreed commission in the purchase or sale of the grain.

(4) No licensed grain dealer shall

    (a) except with the permission of the Commission, enter into a contract relating to western grain that the dealer has reason to believe is infested or contaminated; or

    (b) enter into a contract that provides for the delivery of western grain to an elevator or a consignee if the grain is not lawfully receivable by the operator of the elevator or other consignee.

82. Every licensed grain dealer shall maintain such records of his business as a grain dealer and make such reports to the Commission in respect of that business as may be prescribed.

Clause 17: Subsection 88(1) reads as follows:

88. (1) Subject to subsection (1.1), an inspector may, at any reasonable time, enter

    (a) any elevator, any premises of the licensee of an elevator or any premises of a licensed grain dealer in which the inspector believes on reasonable grounds there is any grain, grain product or screenings owned or possessed by the licensee or any books, records or other documents relating to the operation of the elevator or the business of the grain dealer, or

    (b) any premises referred to in an end-use certificate submitted in respect of grain imported into Canada pursuant to paragraph 46(b.1) of the Canadian Wheat Board Act as being premises to which the grain is consigned or any premises in which the inspector believes on reasonable grounds that grain to which such a certificate relates has been delivered,

and may

    (c) examine the premises and any equipment, grain, grain products and screenings found therein, and

    (d) examine any books, records, bills of lading and other documents that, on reasonable grounds, the inspector believes contain any information relevant to the enforcement of this Act and make copies thereof or extracts therefrom.

Clause 18: Section 90 reads as follows:

90. (1) An inspector who believes on reasonable grounds that

    (a) any offence under this Act has been committed,

    (b) any grain, grain product or screenings in an elevator is infested or contaminated,

    (c) any equipment in an elevator is in such condition that grain, grain products or screenings cannot safely or accurately be weighed or handled in the elevator,

    (d) an elevator is in such condition as to cause danger to persons or loss or deterioration of grain, grain products or screenings stored therein, or

    (e) an overage at a primary elevator is in excess of a prescribed maximum amount,

may seize any documents or records that the inspector believes, on reasonable grounds, contain or are evidence that an offence under this Act has been committed and, in any event, shall forthwith report to the Commission the facts ascertained by the inspector.

(2) Documents or records seized pursuant to subsection (1) shall not be detained after the expiration of thirty days from the seizure unless before that time proceedings in respect of an offence under this Act, in respect of which the documents or records contain or are evidence, have been instituted, in which event the documents or records may be detained until the proceedings are finally concluded.

Clause 19: Subsection 93(1) reads as follows:

93. (1) Where, on receiving the report of an inspector pursuant to section 90 or on making an investigation pursuant to section 91, the Commission believes on reasonable grounds that an offence under this Act has been committed by a licensee of an elevator or by a licensed grain dealer or that a condition referred to in paragraph 90(1)(b), (c), (d) or (e) exists in a licensed elevator, the Commission may, by order,

    (a) require a weigh-over of any grain, grain products or screenings in the elevator by the licensee or a person authorized for the purpose by the Commission and, for that purpose, prohibit, for such period not exceeding thirty days as is specified in the order, the receipt into or removal from the premises of the elevator, or both, of any grain, grain products or screenings;

    (b) in the case of a condition referred to in paragraph 90(1)(b), (c) or (d),

      (i) require that the condition be remedied in such manner and within such time as is specified in the order,

      (ii) require that such grain, grain products and screenings in the elevator as are specified in the order be stored or disposed of in such manner as the Commission considers equitable, and

      (iii) prohibit, for such period not exceeding thirty days as is specified in the order, any particular use of the elevator or its equipment; and

    (c) whether or not the Commission exercises any of the powers conferred by paragraphs (a) and (b), in its discretion, suspend the licence to operate the elevator or the licence to carry on business as a grain dealer for such period not exceeding thirty days as is specified in the order.

Clause 20: The relevant portion of subsection 94(3) reads as follows:

(3) A period of prohibition or suspension ordered pursuant to subsection 93(1) shall not be extended for any period that would result in the aggregate period of the prohibition or suspension being longer than thirty days unless

    (a) before the expiration of thirty days from the commencement of the period of prohibition or suspension, proceedings have been instituted against the licensee or against the manager of the elevator in respect of an offence under this Act, in which event the period of prohibition or suspension is deemed to be extended, unless otherwise ordered by the Commission, until fourteen days after the proceedings are finally concluded; or

Clause 21: Subsection 95(1) reads as follows:

95. (1) Where

    (a) a licensee has failed or refused to comply with any requirement of an order made under subsection 93(1), in relation to the operation of an elevator, before the expiration of any period of prohibition or suspension specified in that order or any order made under paragraph 94(3)(b),

    (b) a licensee or the manager of a licensed elevator is convicted of an offence under this Act, or

    (c) a licensee has failed to give additional security as required by any order made under subsection 49(1),

the Commission may, by order, revoke the licence to operate the elevator to which the order or conviction relates or the licence to carry on business as a grain dealer, as the case may be.

Clause 22: The relevant portion of section 97 reads as follows:

97. The Commission may, after any investigation instituted under section 91 and after affording all persons having an interest in the matter under investigation a full and ample opportunity to be heard, make an order

    (a) for the payment, by any complainant, licensee or other person to whom the jurisdiction of the Commission extends, of compensation to any person for loss or damage sustained by that person resulting from a contravention of or failure to comply with any provision of this Act or any regulation, order or licence made or issued pursuant to this Act;

Clause 23: Sections 107 to 109 read as follows:

107. (1) Every operator of an elevator who contravenes or fails to comply with section 72 is guilty of an offence and

    (a) if an individual, is liable

      (i) on summary conviction, to a fine not exceeding nine thousand dollars or to imprisonment for a term not exceeding two years, or to both, or

      (ii) on conviction on indictment, to a fine not exceeding eighteen thousand dollars or to imprisonment for a term not exceeding four years, or to both; or

    (b) if a corporation, is liable

      (i) on summary conviction, to a fine not exceeding thirty thousand dollars, or

      (ii) on conviction on indictment, to a fine not exceeding sixty thousand dollars.

(1.1) Every person who contravenes section 105.1 is guilty of an offence and is liable

    (a) on summary conviction

      (i) if an individual, to a fine not exceeding nine thousand dollars, or to imprisonment for a term not exceeding two years, or to both, or

      (ii) if a corporation, to a fine not exceeding thirty thousand dollars; or

    (b) on conviction on indictment

      (i) if an individual, to a fine the amount of which is at the discretion of the court, or to imprisonment for a term not exceeding four years, or to both, or

      (ii) if a corporation, to a fine the amount of which is at the discretion of the court.

(2) Every person who contravenes any provision of this Act, other than section 72 or 105.1, or of the regulations or any order of the Commission, other than an order for the payment of any money or apportionment of any loss, is guilty of an offence and

    (a) if an individual, is liable

      (i) on summary conviction, to a fine not exceeding six thousand dollars or to imprisonment for a term not exceeding one year, or to both, or

      (ii) on conviction on indictment, to a fine not exceeding twelve thousand dollars or to imprisonment for a term not exceeding two years, or to both; or

    (b) if a corporation, is liable

      (i) on summary conviction, to a fine not exceeding nine thousand dollars, or

      (ii) on conviction on indictment, to a fine not exceeding eighteen thousand dollars.

108. (1) Any manager of an elevator, or any other employee or agent of the operator or licensee of an elevator, who does any act or thing directed to the commission of an offence under this Act by the operator or licensee of the elevator is a party to and guilty of the offence.

(2) Any employee or agent of a licensed grain dealer who does any act or thing directed to the commission of an offence under this Act by the licensed grain dealer is a party to and guilty of the offence.

109. In any prosecution for an offence under this Act, a document purporting to have been signed by a commissioner or any officer or employee of the Commission in the course of the performance of his duties is evidence of the facts stated in the document without proof of the signature or of the official character of the person appearing to have signed the document.

Clause 24: (1) to (3) Paragraphs 116(1)(a.1) and (k.2) are new. The relevant portion of subsection 116(1) reads as follows:

116. (1) The Commission may, with the approval of the Governor in Council, make regulations

    (a) designating any seed as a grain for the purposes of this Act;

Agriculture and Agri-Food Administrative Monetary Penalties Act

Clause 26: The long title reads as follows:

An Act to establish a system of administrative monetary penalties for the enforcement of the Canada Agricultural Products Act, the Feeds Act, the Fertilizers Act, the Health of Animals Act, the Meat Inspection Act, the Pest Control Products Act, the Plant Protection Act and the Seeds Act

Clause 27: The definition ``agri-food Act'' in section 2 reads as follows:

``agri-food Act'' means the Canada Agricultural Products Act, the Feeds Act, the Fertilizers Act, the Health of Animals Act, the Meat Inspection Act, the Pest Control Products Act, the Plant Protection Act or the Seeds Act;

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