ARCHIVED — Vol. 146, No. 9 — April 25, 2012

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Registration

SOR/2012-82 April 10, 2012

CANADIAN WHEAT BOARD ACT

Regulations Amending the Canadian Wheat Board Regulations

P.C. 2012-434 April 5, 2012

His Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and Agri-Food, pursuant to subparagraph 32(1)(b)(i) (see footnote a) and section 61 of the Canadian Wheat Board Act (see footnote b), hereby makes the annexed Regulations Amending the Canadian Wheat Board Regulations.

REGULATIONS AMENDING THE CANADIAN
WHEAT BOARD REGULATIONS

AMENDMENT

1. Subsection 26(1) of the Canadian Wheat Board Regulations (see footnote 1) is replaced by the following:

26. (1) The sum certain that the Corporation is required to pay producers on a per tonne basis under paragraph 32(1)(b) of the Act in respect of the base grade of wheat sold and delivered to the Corporation during the pool period beginning on August 1, 2011 and ending on July 31, 2012 and known as No. 1 Canada Western Red Spring (12.5% protein content) is

  1. (a) $224.35 for straight wheat;

  2. (b) $216.35 for tough wheat; and

  3. (c) $208.85 for damp wheat.

COMING INTO FORCE

2. These Regulations come into force on the seventh day after the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

1. Background

Pursuant to the Canadian Wheat Board Act (the Act), grain producers receive an initial payment upon delivery of grain to the Canadian Wheat Board (CWB) pool accounts. Revenues from the sale of grain are pooled by the CWB and any surplus over the initial payment minus marketing costs is distributed to producers after the end of the pool period as a final payment. The initial payment is guaranteed by the federal government and any pool account deficits are paid by the federal government. The CWB operates a pool account for each of four classes of grain for which it has responsibility. These are wheat, amber durum wheat, barley and designated barley.

In accordance with the Act, the Governor in Council, by regulation, establishes the initial payment for a base grade for each of the four pool accounts following a review of recommendations made by the CWB and approves the initial payment for other grades established in relationship to the base grade as recommended by the CWB. The initial payments are set at the beginning of the pool period and are adjusted throughout the pool period as the CWB makes additional sales and as market prices dictate. The CWB’s recommendations are based on relative market returns expected for each grade during the current pool period.

Section 26 of the Canadian Wheat Board Regulations establishes the initial payments, in respect of the base grade, to be paid upon delivery for grain delivered to the CWB. The initial payments for the other grades of wheat are then adjusted, in relationship to the base grade, by a separate order in council.

2. Issue

The CWB has recommended that an increase be made to the initial payments for wheat, as the CWB has made sufficient sales since the initial payments were last reviewed.

3. Objective

The objective of this regulatory action is to set new initial payments, by amending section 26 of the Canadian Wheat Board Regulations, for the base grade of wheat, which is No. 1 Canada Western Red Spring with 12.5% protein content.

4. Description

This regulatory amendment sets a new 2011–12 initial payment for the base grade in the 2011–12 wheat pool account. The CWB has made sufficient sales to recommend an increase of $16.35 per tonne to the base grade. The higher initial payment will represent increased revenues to wheat producers for their deliveries to the CWB.

This increase in the initial payments should not create the risk of a deficit in the pool account. A minimum 35% safety factor for unpriced grain has been used to account for market uncertainties. The safety factor is set jointly by the Department of Finance Canada and Agriculture and Agri-Food Canada on the gross value of the unpriced portion of each pool and ensures that, even if pooled returns are significantly lower than expected, a deficit would be unlikely to occur in any of the pools. Although the increase in the initial payment increases the risk of a deficit compared to no increase, the actual risk to the federal government is minimal given the amount of wheat that has been priced and hedged by the CWB and the current world market conditions for wheat.

The initial payments established by this regulatory action relate to the returns anticipated from the market and thus transmit market signals to producers.

5. Consultation

Initial payment levels have been recommended by the CWB. The Department of Finance Canada has been consulted and concurs with the recommendations.

6. Implementation, enforcement and service standards

These Regulations come into force on the seventh day after the day on which they are registered.

These Regulations govern payments made to grain producers for deliveries made under the Canadian Wheat Board Act and the Canadian Wheat Board Regulations.

Wheat producers will receive these additional receipts in one of two ways. For grain deliveries on the day that the increase becomes effective and thereafter until the end of the pool period, producers will receive the higher initial payment. For grain deliveries during the pool period, but prior to this amendment’s coming into force, producers will receive an adjustment payment per tonne equivalent to the difference between the initial payment prior to the increase and the new initial payment.

7. Contacts

Jeffrey Smith / Ashley Kearns
Crop Sector Policy Division
Agriculture and Agri-Food Canada
1341 Baseline Road
Ottawa, Ontario
K1A 0C5
Telephone: 613-773-2425 / 613-773-2344

Footnote a
S.C. 1995, c. 31, s. 2(1)

Footnote b
R.S., c. C-24

Footnote 1
C.R.C., c. 397