Vol. 147, No. 13 — June 19, 2013
SOR/2013-123 June 7, 2013
CANADA GRAIN ACT
Regulations Amending the Regulations Respecting Research, Market Development and Technical Assistance (Wheat and Barley)
P.C. 2013-649 June 6, 2013
His Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and Agri-Food, pursuant to section 83.2 (see footnote a) of the Canada Grain Act (see footnote b), makes the annexed Regulations Amending the Regulations Respecting Research, Market Development and Technical Assistance (Wheat and Barley).
REGULATIONS AMENDING THE REGULATIONS RESPECTING RESEARCH, MARKET DEVELOPMENT AND TECHNICAL ASSISTANCE (WHEAT AND BARLEY)
1. The title of the Regulations Respecting Research, Market Development and Technical Assistance (Wheat and Barley) (see footnote 1) is replaced by the following:
Wheat and Barley Research, Market Development and Technical Assistance Regulations
2. Subsection 5(4) of the Regulations is replaced by the following:
(4) The Commission must remit the refund not later than 90 days after the end of the crop year.
3. The portion of section 6 of the Regulations before paragraph (a) is replaced by the following:
6. The Commission must provide an annual report to the Minister of Agriculture and Agri-Food not later than 120 days after the end of the crop year that contains the following information in respect of wheat and of barley:
COMING INTO FORCE
4. These Regulations come into force on August 1, 2013.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
The Regulations Respecting Research, Market Development and Technical Assistance (Wheat and Barley) which came into force on August 1, 2012, implemented a refundable point-of-sale deduction (check-off) for wheat and barley delivered to Canadian Grain Commission licensees in the Western division, as a five-year transitional measure. This check-off replaced funding previously provided by the Canadian Wheat Board (CWB) to the Western Grains Research Foundation (WGRF), the Canadian International Grains Institute (CIGI) and the Canadian Malting Barley Technical Centre (CMBTC) for wheat and barley research, market development and technical assistance. The Regulations were published in the Canada Gazette, Part II, on August 15, 2012, and coincided with the implementation of marketing freedom for Western wheat and barley producers.
Issues and objectives
The amendments address the time constraint concerns around refund processing deadlines and annual report submission deadlines.
Numerous comments were received from stakeholders following prepublication of the proposed Regulations in the Canada Gazette, Part I, on May 26, 2012, and since the implementation of the Regulations. For example, the prescribed agency (the Alberta Barley Commission) identified concerns around its ability to meet the stipulated deadlines.
The desire for a smooth transition and implementation of the existing Regulations required that the Regulations be in place for August 1, 2012. In order to achieve this, it was not possible to incorporate all the comments without missing this deadline and causing a gap in wheat and barley research, market development and technical assistance funding.
The objectives of the amendments are to
- provide more realistic and attainable deadlines without impacting functional requirements of the Regulations; and
- implement the amendments in a timely manner.
Based on the feedback received, these amendments to the Regulations extend the refund processing deadline and the annual report submission deadline. It provides the prescribed agency with a more attainable timeframe for these deadlines, thus improving its ability to meet its regulatory obligations.
The title of the existing Regulations was changed to modernize it and remain consistent with current regulation naming conventions. Therefore, the title was amended from Regulations Respecting Research, Market Development and Technical Assistance (Wheat and Barley) to Wheat and Barley Research, Market Development and Technical Assistance Regulations.
The existing Regulations implemented a five-year mandatory, refundable point-of-sale check-off for Western wheat and barley delivered to Canadian Grain Commission (CGC) licensees. CGC licensees required to issue cash purchase tickets must make the necessary deductions from the producer payments and remit the deducted funds to the prescribed agency along with a report, no later than 30 days from the end of the month in which they were collected.
The prescribed agency is responsible for collecting the deducted funds, reviewing the associated reports, recording all necessary information and ensuring the check-offs are being collected. The prescribed agency allocates the funds to the WGRF, CIGI and CMBTC based on mutually agreed upon terms. The prescribed agency is also responsible for documenting any producer requests for refunds and processing those refunds no later than 60 days after the end of the crop year. The prescribed agency provides an annual report detailing all check-off transactions (funds received, funds paid out, administration costs, refunds processed, etc.) to the Minister of Agriculture and Agri-Food no later than 90 days after the end of the crop year.
The time required for the prescribed agency to remit producer refunds has been amended. Previously, the Regulations required the prescribed agency to remit refunds no later than 60 days after the end of the crop year. The prescribed agency, along with their service provider, requested the refund deadline be extended to allow for efficient and accurate processing. The Regulations state that producers can request a refund up to the end of the crop year (i.e. July 31). Additionally, licensed grain companies are allowed 30 days after the end of the month in which the check-off is collected to remit the funds to the prescribed agency. As the prescribed agency may not receive all of the collected funds until 30 days after the end of the crop year, it only had 30 days remaining to total all check-off contributions, process, verify, record and pay out producer refunds. In effect, this limited the prescribed agency’s ability to fulfill the current regulatory requirements as they needed to wait for all licensed grain companies’ remittances before processing the refunds. The timeline was operationally difficult for the prescribed agency. The original deadline of 60 days after the end of the crop year appeared sufficient based on initial estimates; however, the detailed verification and compilation process needed to accurately process the producer refunds required more time to administer. The amendments will extend the deadline for the prescribed agency to process producer refunds from 60 days to 90 days after the end of the crop year.
The second amendment implemented was to extend the deadline for the prescribed agency to provide the annual report to the Minister, which is required to ensure consistency with the extended refund processing timelines. The extended 90-day timeline for processing refunds will delay the prescribed agency from having all the required and necessary final numbers to prepare and submit the producer refund section of its annual report to the Minister. The annual report submission deadline was 90 days after the end of the crop year. The amendment will increase this deadline to 120 days after the end of the crop year to allow for the refund processing to be completed and all data and figures to be available for the annual report. Extending the report submission deadline by 30 days to 120 days after the end of the crop year mirrors the extension in the refund processing while providing sufficient time for completion of year-end requirements.
Amending the deadline to remit refunds to producers and extending the deadline for the prescribed agency to provide an annual report to the Minister were both requested by a number of stakeholders and interested parties when the Regulations were originally published in the Canada Gazette,Part I, in May 2012. The prescribed agency provided a written request expressing concern over the refund processing deadline. Representatives also expressed the prescribed agency’s position during follow-up conversations and requested extensions for both the refund processing deadline and the annual report submission deadline.
The original refund deadline of 60 days after the end of the crop year was inadequate to process and remit the refund requests. Since the Canadian Grain Commission licensees provide check-off deductions up to 30 days after the end of the crop year and producers are able to submit their refund request until the end of the crop year, the prescribed agency and its service provider have identified that the original deadline stipulated in the Regulations created a difficult burden. The collection, tracking and documentation process requires more time than originally anticipated to ensure an accurate outcome. Additionally, the annual report would not be finalized until after all the refunds were processed, thus the request to extend the annual report deadline is as a result of the extended refund processing deadline.
In addition to the written request provided by the prescribed agency, written support for these amendments was received from the Agriculture Council of Saskatchewan (Levy Central), the Western Grains Research Foundation, the Canadian International Grains Institute, the Canadian Malting Barley Technical Centre and the Grain Growers of Canada. These organizations supported the prescribed agency and echoed its concern and suggestions for both deadline extensions.
Extending the refund processing deadline may be opposed by some producers; however, the amendment of extending the annual report submission deadline should not cause any opposition. Extending the refund processing deadline will increase the amount of time for the prescribed agency to process producer refunds by 30 days. The deadline increase from 60 days after the end of the crop year to 90 days after the end of the crop year creates an incremental delay of up to 30 days for producers to receive their refund. This delay represents an opportunity cost to the producers who request a refund. The historical opt-out rate for the previous CWB research check-off was approximately 5% of the wheat and/or barley producers. It is estimated that the refund rate for the transitional wheat and barley check-off will increase by approximately 3%–5%. Therefore, the refund rate for the existing Regulations is estimated to be approximately 10% of wheat and/or barley producers. This amendment could impact approximately 10% of producers.
The proposal for this amendment was published in the Canada Gazette, Part I, on April 6, 2013, followed by a 30-day comment period. Following the Part I publication, no comments were received.
The Regulations will allow the prescribed agency to better meet its regulatory obligations by extending the deadlines for processing producer refunds and for submitting the annual report. However, the work requirements and obligations remain the same with these deadline extensions.
Producers who request a refund will be impacted based on the opportunity cost of foregoing their refund money for up to an additional 30 days. This opportunity cost does not fall under administration cost or compliance costs.
The Regulations do not increase or decrease the administrative or compliance burdens. Therefore, the “One-for-One” Rule does not apply to these amendments.
Small business lens
The small business lens does not apply to these changes, as there are no administrative or compliance costs to small business.
The regulatory amendments will assist the prescribed agency to meet the stipulated regulatory obligations in a more efficient and accurate manner. With the extension of the refund processing deadline, the prescribed agency will have more time to verify the collection and reporting of all check-off funds prior to processing the refund. The amendments do not change the functionality of the transitional check-off and keep the main objectives of the original Regulations intact. Stakeholder impact from the regulatory amendments will be minimal.
Implementation, enforcement and service standards
These Regulations will come into force on August 1, 2013.
Crop Sector Policy Division
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