British Columbia Order in Council — Order under Farm Income Insurance The Minister to sign the Federal/Provincial Framework Agreement on Agricultural Risk Management (O.C. 918/2000)

O.C. 918/2000

British Columbia — Orders in Council

Presiding Member of the Executive Council PROVINCE OF BRITISH COLUMBIA ORDER OF THE LIEUTENANT GOVERNOR IN COUNCIL Order in dourTeil No. 918 , Approved and Ordered JUN 2 9 2000 Lieligniatmg A dmintatraioli Executive Council Chambers, Victoria Administrator On the recommendation of the undersigned, the hiBlitelEIEHEOUNTragf , by and with the advice and consent of the Executive Council, orders that approval is given to the Minister of Agriculture, Food and Fisheries and Minister Responsible for Rural Development, on behalf of the Province, to sign the Federal/Provincial Framework Agreement on Agricultural Risk Management, substantially in the form attached.

Minister of Agriculture, Food and Fisheries and Minister Responsible for Rural Development (This

part is for administrative purposes only and is not part of the Order.) Authority under which Order is made: Act and section: Farm Income Insurance Act (RSBC 1996, c. 130, s. 5) fit hor 4: nnoi fv1•

DRAFT No. 6.4 June 6, 2000 CANADA-PROVINCE FRAMEWORK AGREEMENT ON AGRICULTURAL RISK MANAGEMENT THIS AGREEMENT made this day of , 2000 BETWEEN THE GOVERNMENTS OF: CANADA (referred to as "Canada"), as represented by the Minister of Agriculture and Agri-Food, OF THE FIRST PART; - and - THE PROVINCE (referred to as "the Province"), as represented by the appropriate Minister(s), OF THE SECOND PART.

WHEREAS each of the parties desires to collaborate in establishing a framework for the negotiation and management of agricultural risk management programs for farmers;

WHEREAS both parties have the necessary legislative authorities to enter into this Agreement:

WHEREAS separate agreements which will be the same as this Agreement in all material aspects shall be concluded between Canada and other Provinces; THEREFORE the parties agree as follows: 1.0

DEFINITIONS 1.1 "Agreement" means the Canada-Province Framework Agreement on Agricultural Risk Management. 1.2 "Supplemental Disaster Program Conditions" means the program eligibility and Canada-Province Framework Agreement on Agricultural Risk Management

-2- payment calculation provisions for Income Disaster Assistance Programming which are funded by either Canada, the Province, or both parties and are not part of the Common Disaster Program Conditions. 1.3 "Common Disaster Program Conditions" means the program eligibility and payment calculation provisions for Income Disaster Assistance Programming which are jointly agreed to by Canada and the Province, cost-shared on a federal- provincial basis and implemented nationally. 1.4 "Fall Cash Advance Program" means the Advance Payments Program as provided for under the Agricultural Marketing Programs Act. 1.5 "Federal Disaster Program Conditions" means the Common Disaster Program Conditions and any Supplemental Disaster Program Conditions for Income Disaster Assistance Programming which are funded by Canada. 1.6 "General Risk Management Programming" means the NISA Program, the Fall Cash Advance Program, and other nationally-based programs or province-based programs, including crop production risk management programs and industry development programs, which are eligible for or counted for federal-provincial cost-sharing and for which federal funding would be provided from funds allocated to Signatory Provinces. 1.7 "Income Disaster Assistance Programming" means programming which targets payments to farmers incurring significant reductions in farm income in any one year for reasons beyond their control. 1.8 "NISA Program" means the Net Income Stabilization Account (NISA) Program established under the Federal-Provincial Agreement establishing the Net Income Stabilization Account Program. 1.9 "Provinces" means the provinces of Canada and includes the Yukon Territory, the Northwest Territories, and Nunavut Territory.

Canada-Province Framework Agreement on Agricultural Risk Management

- 3 - 1.10 "Provincial Disaster Program Conditions" means the Common Disaster Program Conditions and any Supplemental Disaster Program Conditions for Income Disaster Assistance Programming which are funded by the Province. 1.11 "Signatory Provinces" means all provinces who have concluded parallel Framework Agreements on Agricultural Risk Management with Canada. 1.12 "Spring Cash Advance Program" means the program funded by Canada which provides short-term loans to farmers for the 2000 and 2001 crop years. 2.0 PURPOSE This Agreement provides a framework for federal-provincial negotiation and management of agricultural risk management programs which are eligible or counted for federal-provincial cost-sharing, including, but not limited to, the Net Income Stabilization Account (NISA) Program, income disaster programming, and other province-based risk management programs (including crop production risk management programs).

This Agreement sets out the objectives and principles to inform and guide the development of these programs; parameters and disciplines on the design of programs; and responsibilities for funding, coordination, periodic reform, monitoring and management. 3.0 OBJECTIVE The policy objective of this Agreement is to promote the management of risk and reduce its impact, including, but not limited to, income stabilization.

In pursuing this objective, the parties intend: to share with farmers the management of normal business risk through funding of programs, and promotion of private sector risk management tools and best management practices; and to target Income Disaster Assistance Programming to those farmers facing the most severe income variation, where variation is seen as up to a 3-5 year period. 4.0 PRINCIPLES 4.1 Program principles Canada-Province Framework Agreement on Agricultural Risk Management

- 4 - Production, Market Neutrality Trade Neutrality Environmental Sustainability Adaptation and Adjustment Minimal Overlap and Duplication Minimal Moral Hazard 4.2 Funding Principles Non-Distorting Distribution of Government Funds Cost-Sharing Capping Programs should not influence farmers' production and marketing decisions and should not distort regional comparative advantage. Programs should minimize countervail risk. Programs should not be adverse to environmental stewardship. Programs should not be adverse to market- oriented adjustments. Programs should not duplicate purpose and payments.

Programs should minimize moral hazard. Allocation of funding should not be distorting to regional/commodity comparative advantage. Producers and both orders of government should share program costs, including any premiums, deficits, and administration. There shall be limits on the level of assistance provided to individual producers. Canada-Province Framework Agreement on Agricultural Risk Management

5 Equity 5.0 FUNDING The financial resources of the Government of Canada should be allocated to provide, over time, the same level of protection for farmers in similar circumstances. 5.1 Federal funding for risk management programming Canada's commitment under this Agreement is to provide funding for risk management programming across all Signatory Provinces as follows: $600 million plus $65 million for General Risk Management Programming as allocated to Signatory Provinces in each of the fiscal years 2000-01, 2001-02, and 2002-03 including an additional amount in annual funding committed by Canada to maintain the allocations to Saskatchewan and Manitoba at not less than $195.2 million and $75.6 million, respectively; $435 million for Income Disaster Assistance Programming for each of the 2000, 2001, and 2002 stabilization (tax) years. 5.2 Federal-provincial cost-sharing for risk management programming Over the period the Agreement is in place, cumulative funding by the Province for jointly agreed to General Risk Management Programming and Income Disaster Assistance Programming will be a minimum of two-thirds of Canada's funding in the Province and as further outlined in subsections 6.1 and 7.3. [For greater clarity, it is understood that the funding commitments of Canada and the Province under this Agreement are subject to the parties obtaining any necessary legislative approvals required to meet these commitments.

In the event that such approvals are not forthcoming,] Canada's or the Province's funding may be adjusted, in agreement with the other party, to maintain the overall cumulative cost-sharing formula for General Risk Management Programming and Income Disaster Assistance Programming over the life of this Agreement in the Province. The parties commit to work together to ensure the cost-sharing commitments are maintained. Canada-Province Framework Agreement on Agricultural Risk Management ../5

-6 - 6.0 GENERAL RISK MANAGEMENT PROGRAMMING 6.1 Federal-provincial cost-sharing for General Risk Management Programming Over the period the Agreement is in place, cumulative funding by the Province for jointly agreed to General Risk Management Programming will be a minimum of two-thirds of Canada's funding in the Province or at a level that satisfies the overall cost-sharing commitment under subsection 5.2.

Canada's and the Province's funding includes expenditures for premium contributions, direct payments to farmers, administrative costs, program deficits, and any other fiscal requirements relating to General Risk Management Programming, subject to this Agreement. [For greater clarity, it is understood that the funding commitments of Canada and the Province under this Agreement for General Risk Management Programming are subject to the parties obtaining any necessary legislative approvals required to meet these commitments.] 6.2 Allocation of federal funding for General Risk Management Programming (

a) The funds available for General Risk Management Programming as set out in subsection 5.1 shall be used to fund the federal cost of the NISA Program, the federal cost of the Fall Cash Advance Program, other nationally-based programs or province-based programs, including crop production risk management programs and industry development programs, as they apply in Signatory Provinces. (

b) Over the period the Agreement is in place, the allocation for Newfoundland and Labrador for General Risk Management Programming shall be $2.35 million for each fiscal year. (

c) After deducting the allocation for Newfoundland and Labrador stipulated in paragraph (

b) from the $665 million, the remaining $662.65 million shall be allocated for each fiscal year among all Signatory Provinces. Canada-Province Framework Agreement on Agricultural Risk Management

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d) With the exception of Newfoundland and Labrador, each Signatory Province's share of allocated federal funding shall be calculated annually as: its proportionate share of one-half of the remaining $662.65 million, on the basis of its share of the moving average of market receipts, excluding receipts from dairy products, poultry and eggs, over the preceding five years (starting with the period 1994 through 1998) as published by Statistics Canada for all Signatory Provinces exclusive of Newfoundland and Labrador; plus its proportionate share of one-half of the remaining $662.65 million, on the basis of its share of the moving average of farm cash receipts, excluding receipts from dairy products, poultry and eggs, over the preceding five years (starting with the period 1994 through 1998) as published by Statistics Canada for all Signatory Provinces exclusive of Newfoundland and Labrador. [Ontario and Quebec to resolve.] (

c) Over the period the Agreement is in place, the allocations to Saskatchewan and Manitoba for General Risk Management Programming resulting from the methodology set out in paragraph (

d) shall be augmented for each fiscal year by whatever amount is required to bring their respective total allocations to not less than: Saskatchewan $195.2 million Manitoba $ 75.6 million. Canada-Province Framework Agreement on Agricultural Risk Management .../7

- 8 - 6.3 Federal funding for the NISA and Fall Cash Advance Programs The federal cost of the NISA Program and the federal cost of the Fall Cash Advance Program in the Province shall be funded out of the Province's allocated share of federal funding. The arrangements for funding the NISA Program in the Province shall remain as set out in the Canada-Province Framework Agreement on Agricultural Safety Nets dated , 199_; these arrangements are subject to change by mutual agreement of the two parties.

These arrangements shall apply to the funding of the NISA Program as it was in place in the Province at the time of signing of this Agreement.

Both the NISA Program and the Fall Cash Advance Program are consistent with the program and funding principles set out in subsections 4.1 and 4.2 and shall be funded on a demand-driven basis. 6.4 Federal funding for province-based programming The remaining federal funds allocated to the Province may be used to fund other jointly agreed to nationally-based programs or jointly agreed to province-based programs, including crop production risk management programs and industry development programs, where such programs are consistent with the program and funding principles set out in subsections 4.1 and 4.2.

If Canada agrees that a province-based program is eligible for federal cost-sharing or eligible to be counted towards the Province's cost-sharing commitments, then the same or similar program proposal made by another Signatory Province shall also be so considered for acceptance by Canada, provided that the program is consistent with the program and funding principles set out in subsections 4.1 and 4.2.

Conversely. if Canada decides that a province-based program is neither eligible for federal cost-sharing nor eligible to be counted towards the Province's cost-sharing commitments, then the same or similar program proposal that is not consistent with the program and funding principles set out in subsections 4.1 and 4.2 as made by another Signatory Province shall also be so viewed by Canada. Canada and the Province shall collaborate on an ongoing basis in establishing the priorities to be addressed and the province-based or nationally-based programs that best meet those priorities.

Canada-Province Framework Agreement on Agricultural Risk Management

9 6.5 Provincial funding Funding required for General Risk Management Programming which is above the federal funding allocated to the Province shall be the responsibility of the Province.

Additional provincial funding of General Risk Management Programming shall be counted towards the Province's cost-sharing commitments under this Agreement if the programs are consistent with the program and funding principles set out in subsections 4.1 and 4.2. 6.6 Management and decision-making All further details on the design and operation of nationally and province-based cost-shared programs shall be addressed in separate multilateral or bilateral federal-provincial agreements, as the case may be.

Canada shall only enter into such agreements subject to the allocation of federal funding for programs in the Province as outlined in subsection 6.2. 7.0 INCOME DISASTER ASSISTANCE PROGRAMMING 7.1 Federal funding for the Spring Cash Advance Program The annual cost of the Spring Cash Advance Program shall be deducted from the $435 million in federal funding available for Income Disaster Assistance Programming for each of the 2000 and 2001 stabilization (tax) years. 7.2 Federal funding for Income Disaster Assistance Programming The funds remaining following the deduction required by subsection 7.1 shall be used to fund the federal share of Income Disaster Assistance Programming costs for the 2000, 2001, and 2002 stabilization (tax) years.

Federal funding for Income Disaster Assistance Programming shall be paid directly to farmers or to the Province if it is delivering the assistance provided under the Federal Disaster Program Conditions. Income Disaster Assistance Programming shall be funded on a demand-driven basis, subject to any proration required in subsection 7.5. Canada-Province Framework Agreement on Agricultural Risk Management ...19

- 10- 7.3 Federal-provincial cost-sharing of Common Disaster Program Conditions Canada and the Province shall fund Income Disaster Assistance Programming on the basis of Common Disaster Program Conditions that apply nationally. Changes to the Common Disaster Program Conditions may only be made on agreement of Canada and the Signatory Provinces. The Province shall fund this Program at two-thirds of Canada's funding in the Province (i.e., a 60:40 federal. provincial cost-sharing ratio).

The provincial funding commitment shall be established as sixty-six and two-thirds percent of the forecasted federal costs of the Common Disaster Program Conditions in the Province for the upcoming stabilization (tax) year.

Canada and the Province shall agree, in writing, to this committed funding level by September I of the year to which the funding applies. [For greater clarity, it is understood that the funding commitments of Canada and the Province under this Agreement for Income Disaster Assistance Programming are subject to the parties obtaining any necessary legislative approvals required to meet these commitments.] 7.4 Federal-provincial funding of Supplemental Disaster Program Conditions Canada, the Province or both parties may offer Supplemental Disaster Program Conditions if they are consistent with the program and funding principles set out in subsections 4.1 and 4.2.

Canada shall manage its funding for Supplemental Disaster Program Conditions as follows: (

a) Canada commits to consult with all Signatory Provinces prior to funding payments under Supplemental Disaster Program Conditions which are implemented nationally from its funding for Income Disaster Assistance Programming pursuant to subsection 7.2. (

b) Canada and a Province may agree to offer Supplemental Disaster Program Conditions that are not implemented nationally. Canada's funding shall come from the allocation of federal funding for General Risk Management Programming in the Province. Canada-Province Framework Agreement on Agricultural Risk Management .../10

7.5 Proration of payments Federal payments for Income Disaster Assistance Programming shall be prorated on the same basis across all Provinces if, on an aggregated basis, the tctal amount of federal payments for a stabilization (tax) year to which farmers are eligible on the basis of the Federal Disaster Program Conditions exceeds the total amount of federal funding committed for Income Disaster Assistance Programming for the stabilization (tax) year.

The Province may prorate its share of payments for Income Disaster Assistance Programming for a stabilization (tax) year if: (1) the total amount of provincial payments for a stabilization (tax) year to which farmers are eligible on the basis of the Provincial Disaster Program Conditions exceeds the total amount of provincial funding, or (ii) on the same basis as federal payments are prorated for a given stabilization (tax) year if the Province has agreed to fund sixty-six and two-thirds percent of the actual federal cost of payments under the Common Disaster Program Conditions in the Province.

The first draw on available federal and provincial funding for Income Disaster Assistance Programming shall be to fund payments under the Common Disaster Program Conditions, as agreed. 7.6 Management and decision-making All details on the design and operation of cost-shared Income Disaster Assistance Programming, including the establishment of Common Disaster Program Conditions across all Signatory Provinces for both the federal and provincial portion of the programs, shall be addressed in separate multilateral or bilateral federal-provincial agreements, as the case may be.

These details shall be established pursuant to a methodology that is transparent to all Signatory Provinces and consistent with the program and funding principles set out in subsections 4.1 and 4.2. Canada shall enter into such agreements subject to the federal funding available for Income Disaster Assistance Programming set out in subsection 7.2 and subject to proration of federal payments if required. Canada-Province Framework Agreement on Agricultural Risk Management

- 12 8.0 MANAGEMENT OF THE AGREEMENT 8.1 Financial and program management Canada shall notify all Signatory Provinces as to their respective shares of allocated federal funding under this Agreement. This notification shall be provided by no later than November 30 for the upcoming fiscal year.

For the 2000-01 fiscal year, Canada shall provide such notification to each Signatory Province within thirty (30) days of the signing of this Agreement. 8.2 Evaluation of the Agreement The operation of this Agreement shall be evaluated by Canada and all Signatory Provinces pursuant to the terms provided in Annex A to this Agreement - Terms of Evaluation.

This evaluation shall be completed by March 31, 2002. 8.3 Review of NISA As a national program under this Agreement, NISA shall he reviewed on the basis of terms as agreed to by Canada and all Signatory Provinces, with a view to ensuring its effectiveness and to strengthening its integration with Income Disaster Assistance Programming. This review shall be completed by December 1, 2000. 8.4 Transparency Transparency between Canada and all Signatory Provinces is requited to ensure that the terms of this Agreement are respected.

Canada and the Province agree to share with all Signatory Provinces program proposals brought forward for federal funding or to be counted towards the Province's cost-sharing commitments under this Agreement, providing an opportunity for comment by other Signatory Provinces. For greater clarity, the requirement to so notify all Signatory Provinces applies to the consideration of programming under subsections 6.4, 6.5 and 7.4. Canada shall maintain a record of all multilateral or bilateral agreements concluded under the terms of this Agreement.

Canada shall provide copies of these documents to all Signatory Provinces on a timely basis. Canada-Province Framework Agreement on Agricultural Risk Management .../12

- 13 9.0 GENERAL PROVISIONS 9.1 Coming into force This Agreement shall come into force on the date that it is signed by the latter of the authorized representatives of Canada or the Province. 9.2 Duration This Agreement shall be in place over the fiscal years 2000-01 to 2002-03 to fund General Risk Management Programming and to fund the Income Disaster Assistance Programming for the 2000, 2001, and 2002 stabilization (tax) years. 9.3 Amendment Canada or the Province may propose, in writing, an amendment to this Agreement.

All amendments shall include an effective date or period for the coming into force of the amendment. The party proposing the amendment shall notify, in writing, all Signatory Provinces of any proposed amendment, providing an opportunity for comment by other Signatory Provinces.

Following these notifications, this Agreement may be amended, in writing, by Canada and the Province. 9.4 Termination This Agreement may be terminated, in writing, by Canada or the Province giving notice to the other party prior to the beginning of the last fiscal or stabilization (tax) year for which that party will continue under the Agreement. In the event that this Agreement is so terminated by either party, that party agrees to consult with the other party on measures necessary to maintain the continuity of existing programming on an interim basis.

Canada-Province Framework Agreement on Agricultural Risk Management .../13

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IN WITNESS WHEREOF this Agreement is duly executed by the authorized representatives of the parties. WITNESS SIGNATURE DATE Minister of Agriculture and Agri-Food Canada Provincial Minister responsible for agriculture other provincial ministers as necessary Prepared by: Mitch Davies Program Management and Development Division Policy Branch 759-7299 (o) 797-6600 (c) 0:\FIPP\ID\pcharet\WORK\Framework\Template\frame6-4.wpd Canada-Province Framework Agreement on Agricultural Risk Management

ANNEX A TERMS OF EVALUATION The evaluation of this Agreement shall provide an assessment of, at a minimum, the following three main areas: Funding Whether the allocation of federal funding to Signatory Provinces provides a level playing field in offering General Risk Management Programming to farmers. The impact or potential impact on the relative level of federal and provincial funding for Income Disaster Assistance Programming for farmers in all Signatory Provinces.

Programs The extent to which the objectives and principles of the Agreement are met by the General Risk Management Programming and Income Disaster Assistance Programming offered under the Agreement, both at the individual program level and as a set of programs. This evaluation will also assess how efficient and effective each program and the set of programs is in achieving specific program objectives such as reducing income variability, improving liquidity, reducing bankruptcy, and reducing the impact of risk on farms.

Management of the Agreement The extent to which transparency has been achieved under the Agreement. This includes an assessment of how federal and provincial policy decisions have respected the objectives and principles of the Agreement. The extent to which the programming offered by Canada and all Signatory Provinces has met the program and funding principles under subsections 4.1 and 4.2. Canada-Province Fru' t work Agreement on Agricultural Risk Management Annex A

- 2 - The impact of adjustment programs and other related programs on the need for General Risk Management Programming. This includes the extent of integration of these programs with General Risk Management Programming, including an assessment of any program gaps and duplication. The relative level of federal and provincial direct and indirect support across commodities and regions. Canada-Province Framework Agreement on Agricultural Risk Management Annex A

Document details

Collection	British Columbia — Orders in Council
Citation	O.C. 918/2000
Type	order_in_council
Volume / chapter	arc oic 0918 2000
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	38efc039c4948e9c24694340bc4063b9d8887c81

Source file is stored in the law ingest library (pdf).