British Columbia Order in Council — Order under Farm Income Insurance Canada-British Columbia Agreement Establishing the Negative Margin Insurance Program (O.C. 337/2001)

O.C. 337/2001

British Columbia — Orders in Council

PROVINCE OF BRITISH COLUMBIA ORDER OF THE LIEUTENANT GOVERNOR IN COUNCIL Order in CoUnairNo. 337 , Approved and Ordered MAR 3 0 2001 Lieutenant Governor Executive Council Chambers, Victoria On the recommendation of the undersigned, the Lieutenant Governor, 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 Canada-British Columbia Agreement Establishing the Negative Margin Insurance Program, substantially in the form attached.

Minister of Agriculture, Food and Fisheries and pow Minister Responsible for Rural Development Pre i ing Member of the Executive Council (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) Other (specify): 305I 1 \\ d

CANADA-BRITISH COLUMBIA AGREEMENT ESTABLISHING THE NEGATIVE MARGIN INSURANCE PILOT PROGRAM THIS AGREEMENT made this day of. , 2001. BETWEEN THE GOVERNMENTS OF: CANADA (referred to as "Canada"), as represented by the Minister of Agriculture and Agri-Food, OF THE FIRST PART; - and - BRITISH COLUMBIA (referred to as "the Province"), as represented by the Minister of Agriculture, Food and Fisheries, OF THE SECOND PART; Canada and the Province together are referred to as the "parties".

WHEREAS the parties desire to enhance the income disaster assistance provided through the Canadian Farm Income Program (CFIP),

WHEREAS the parties agree to include negative claim year margins in the calculation of applicants' CFIP payments for producers of certain commodities,

WHEREAS the parties agree to lest the effectiveness of an insurance program in assisting farmers with negative margins, and

WHEREAS both parties have the required authorities to enter into this Agreement, Canada-British Columbia Agreement establishing the .../1 Negative Margin Insurance Pilot Program

- 2 - THEREFORE, THE PARTIES agree as follows: 1.0

DEFINITIONS 1.1 "Agreement" means the Canada-British Columbia Agreement Establishing the Negative Margin Insurance Pilot Program and includes any appendices and annexes approved pursuant to this Agreement. 1.2 "CFIP Agreement" means the Federal- Provincial Agreement Establishing the Canadian Farm Income Program including the Appendices and Provincial Annexes. 1.3 "Claim Year" means the tax year for which an indemnity may be paid under the Program. 1.4 "Contingency Funds" means government funds set aside in a reserve account to finance any deficit in the Program account. 1.5 "Counted Programs" means programs funded solely by the Province that, as agreed by the Province and Canada through an exchange of letters, are counted towards the Province's cost-sharing commitments under the Canada- British Columbia Framework Agreement on Agricultural Risk Management. 1.6 "Eligible Administrative Expenses" means administrative expenses as defined in Annex B, related to the Program and incremental to the eligible administrative Canada-British Columbia Agreement establishing the .../2 Negative Margin Insurance Pilot Program

- 3 - expenses incurred under the CFIP Agreement. 1.7 "Eligible Producers" means Producers of Eligible Commodities who meet the requirements of subsection 3.1 of this Agreement. 1.8 "Federal Contribution" means the share of Total Premiums, plus the share of Contingency Funds, plus the share of Eligible Administrative Expenses that are payable by Canada. 1.9 "Fiscal Period" means the period for which the accounts of the business of a taxpayer have been accepted for assessment purposes under the Income Tax Act for the tax year that parallels the Claim Year. 1.10 "Fiscal Year" means the twelve-month period beginning April 1 of any year and ending March 31 of the following year.

"Negative Margin" means that portion of an Eligible Producer's Claim Year margin which is less than zero. 1.12 "Producers of Eligible Commodities" means producers who meet one of the following conditions: (

a) fifty-one (51) percent or more of their revenue in the Reference Period comes from the commodities identified in Part A of Annex A of Canada-British Columbia Agreement establishing the ...13 Negative Margin Insurance Pilot Program

4 this Agreement. (

b) fifty-one (51) percent or more of their revenue in the Reference Period comes from the commodities identified in Part B of Annex A of this Agreement. (

c) in the Reference Period, the average of their annual sales of the commodities identified in Part B of Annex A of this Agreement is no less than $100,000. 1.13 "Program" means the Negative Margin Insurance Pilot Program established under this Agreement. 1.14 "Provincial Contribution" means the share of Total Premiums, plus the share of Contingency Funds, plus the share of Eligible Administrative Expenses that are payable by the Province. 1.15 "Reference Period", for the purposes of this Program, means the three years immediately preceding the year before the Claim Year. 1.16 "Resident of the Province" means an individual who has resided in the Province for at least six months of each of the years of the Reference Period and who intends to reside in the Province for the duration of the Program. 1.17 "Total Coverage Limit" means the limit to the Canada-British Columbia Agreement establishing the ...14 Negative Margin Insurance Pilot Program

- 5 - sum of the coverage purchased by all producers under the Program. This amount shall be agreed to by the parties through an exchange of letters and may be amended from time to time. 1.18 "Total Premiums" means the sum of the premiums paid by Canada, the Province and producers. 1.19 "WFIP" means the Province's Whole Farm Insurance Program. 2.0 PURPOSE Purpose 2.1 The purpose of this Agreement is: (

a) to establish a pilot insurance program to indemnify farmers in the Province for Negative Margins in the 2001, 2002 and 2003 Claim Years due to circumstances beyond their control, and (

b) to test the effectiveness of an insurance program in assisting farmers with Negative Margins. 3.0 ELIGIBILITY Eligible Producers 3.1 Producers of Eligible Commodities may enrol in the Program if they: (

a) are Residents of the Province; Canada-British Columbia Agreement establishing the .../5 Negative Margin Insurance Pilot Program

- 6 - (

b) have a positive margin in at least one year of the Reference Period; (

c) have been actively farming for at least four consecutive years immediately prior to enrolment; (

d) have reported farming income on their tax returns for each of the three years immediately preceding the year before their enrolment; and (

e) meet the eligibility requirements set out in Appendix A, Common Disaster Program Conditions, of the CFIP Agreement and in the Province's Provincial Annex to that same agreement. Enrolment deadline for 3.2 For the 2001 Claim Year, Eligible Producers the 2001 Claim Year may enrol in the Program by April 30, 2001, providing at least eight months remain in their 2001 Fiscal Periods. Enrolment for subsequent Claim Years 3.3 (

a) Eligible Producers who wish to enrol in the Program for Claim Years after 2001, must enrol before the end of the Fiscal Period preceding the Claim Year for which they wish to enrol. (

b) Eligible Producers who enrol in theProgram after April 30, 2001 shall pay premiums for the Claim Years Canada-British Columbia Agreement establishing the Negative Margin Insurance Pilot Program

7 preceding their enrolment, at the coverage level chosen for their first year of enrolment, without receiving any payments for those Claim Years. (

c) Notwithstanding paragraph (b), Eligible Producers, who, pursuant to subsection 3.2, were unable to enrol before April 30, 2001 because less than eight months remained in their 2001 Fiscal Periods, shall not be required to pay premiums for the 2001 Claim Year. Enrolment limit 3.4 Notwithstanding subsections 3.1, 3.2 and 3.3, no applicants shall be enrolled in the Program once the Total Coverage Limit has been reached.

Applications from otherwise eligible applicants shall be held until such time that the Total Coverage Limit is amended to permit new enrolment. 4.0 BASIS OF PAYMENT TO PARTICIPANTS Calculation of payment 4.1 Subject to subsections 4.2 and 4.3, the payment amount that may be issued to an Eligible Producer under this Agreement shall be the amount by which the Eligible Producer's Claim Year margin falls below zero, up to the maximum coverage level purchased by the producer.

Co-insurance 4.2 Payments calculated pursuant to subsection 4.1 shall be reduced by a Canada-British Columbia Agreement establishing the .../7 Negative Margin Insurance Pilot Program

- 8 - co-insurance percentage agreed to by the parties. Payment limits Payment Assignment 4.3 The payment to an Eligible Producer calculated pursuant to subsection 4.1 shall not exceed the producer's average annual eligible farming expenses in the Reference Period. 4.4 Payments to be made pursuant to this Agreement may be assigned. 5.0 FUNDING AND COST-SHARING Appropriation of 5.1 Both the Federal and the Provincial funding Contributions are subject to appropriations of funding by Parliament and the provincial legislature for each Fiscal Year.

If, at any time during the duration of this Agreement, Parliament or the provincial legislature changes its funding, the parties agree to renegotiate this Agreement. Share of premiums 5.2 The share of Total Premiums to be paid by producers shall be fifty (50) percent. Canada and the Province's share of the remaining fifty (50) percent of Total Premiums shall be calculated pursuant to subsection 5.5. Determination of 5.3 The method of determining and adjusting the premiums level of premiums shall be based on a methodology mutually agreed to by Canada and the Province.

Canada-British Columbia Agreement establishing the ...18 Negative Margin Insurance Pilot Program

- 9 - Federal Contribution 5.4 The Federal Contribution under this Agreement shall not exceed the following amount in a Fiscal Year: (

a) Canada's funding for General Risk Management Programming allocated to the Province as set out in the Canada-British Columbia Framework Agreement on Agricultural Risk Management; plus (

b) Canada's funding for General Risk Management Programming rolled over from previous years, if applicable; less (

c) Canada's funding for the NISA, Crop Insurance, and Fall Cash Advance Programs and other province-based programs pursuant to the following agreements: (

i) Canada-British Columbia Peace River Agriculture Development Program Companion Agreement, (ii) Canada-British Columbia Companion Agreement to provide for Provincial Contributions to the NISA and Crop Insurance Programs, (iii) Canada-British Columbia Wildlife Damage Canada-British Columbia Agreement establishing the ...19 Negative Margin Insurance Pilot Program

- 10- Compensation Companion Agreement, and (iv) Canada-British Columbia Agreement to "Zero Out" Negative Margins in the CFIP Reference Period. Federal-provincial 5.5 (

a) Subject to paragraph (b), subsections cost-sharing 5.4 and 6.11 and receipt of the financial estimates set out in subsection 6.10, Canada shall contribute up to 100% of Contingency Funds and Eligible Administrative Expenditures and up to fifty (50) percent of Total Premiums. (

b) Federal-provincial cost-sharing for the Program shall be calculated to respect the terms of subsection 6.1 of the Canada-British Columbia Framework Agreement on Agricultural Risk Management. (

c) Any part of Total Premiums, Contingency Funds or Eligible Administrative Expenses not paid by Canada or producers shall be paid by the Province. Canada-British Columbia Agreement establishing the .../10 Negative Margin Insurance Pilot Program

6.0 FINANCIAL MANAGEMENT Program account 6.1 The Province shall establish a Program account into which Total Premiums shall be deposited and any interest income therefrom. Use of the Program 6.2 The Program account shall be used only for: account (

a) the payment of indemnities under the Program; and (

b) the repayment to Canada, the Province or producers of any amounts paid by Canada, the Province or producers. Deficit financing 6.3 The Province shall establish a reserve account into which Contingency Funds shall be deposited and any interest income therefrom. (

a) The reserve account shall be used for the payment of indemnities under the Program when the indemnities payable exceed the balance of the Program account. (

b) In the event the indemnities payable exceed the balance of both the Program and reserve accounts, Canada and the Province shall deposit additional Contingency Funds in the reserve account to cover the deficit. Canada's and the Province's respective shares of these additional Contingency Funds is set Canada-British Columbia Agreement establishing the Negative Margin Insurance Pilot Program

- 12 - out in subsection 5.5. Canada's share of these additional Contingency Funds shall come from Canada's funding for General Risk Management Programming allocated to the Province, subject to subsection 5.4. (

c) The Province shall fund one hundred (100) percent of any amount still payable once the maximum limit of the Federal Contribution is reached. Balance of the reserve 6.4 The balance of the reserve account shall be account maintained at a level, to be agreed to by the parties, to be sufficient to cover any deficit in the Program account. Invoices 6.5 Prior to the end of the 2000-01 Fiscal Year, the Province shall provide Canada with an estimate of Canada's share of Total Premiums and Contingency Funds for the 2001 Claim Year. The same process shall be followed for each year for the duration of this Agreement.

The Province's share of Total Premiums and Contingency Funds shall be paid at the same time as Canada's. Account for 6.6 Canada's share of Eligible Administrative administrative expenses Expenses shall be deposited into the Whole Farm Insurance Program Trust Fund. Canada-British Columbia Agreement establishing the .../12 Negative Margin Insurance Pilot Program

-13- Administrative expenses 6.7 Canada shall pay its share of Eligible for 2000 -01 Administrative Expenses incurred in the 2000-01 Fiscal Year but attributable to the 2001 Claim Year. Administrative expenses 6.8 Starting in 2001, Canada and the Province incurred after shall agree by March 1 whether Canada's March 31, 2001 share of Eligible Administrative Expenses for the following Fiscal Year will be: (

a) in the form of reimbursement to the Province on a quarterly basis for Canada's share of actual expenditures claimed as Eligible Administrative Expenses; or (

b) in the form of quarterly advances to the Province based on quarterly cash flow projections of Eligible Administrative Expenses. Advances for administrative expenses 6.9 (

a) Advances for Eligible Administrative Expenses shall be based on projections contained in quarterly cashflow statements certified by a senior officer of the Province. These statements shall be provided by the Province to Canada by the 15 th day of the month following the end of each quarter and shall contain details of the Eligible Administrative Expenses related specifically to the Program, by category. Canada-British Columbia Agreement establishing the .../13 Negative Margin Insurance Pilot Program

-14- (

b) Accounting for advances shall be done on the basis of the quarterly cashflow statements. In these statements, prior quarters shall be updated using actual Eligible Administrative Expenses paid by category and upcoming quarters shall be updated using more recent estimates. At no time shall more than one quarter's advance be outstanding and unaccounted for. Any advances for a given Fiscal Year which cannot be accounted for by Provincial expenditures related to the same Fiscal Year shall be returned to Canada. (

c) In addition to the quarterly cash flow statements, the Province shall deliver to Canada, no later than March 1 prior to each Fiscal Year of the Program, a projection of Administrative Expenses by quarter for the following Fiscal Year. Cost-sharing forecasts 6.10 In order to calculate the federal-provincial cost-sharing pursuant to paragraph 5.5(b), the Province shall provide Canada with an estimate of the Province's contribution to each Counted Program at the beginning of each quarter for the current Fiscal Year.

For the first quarter of each Fiscal Year, only an estimate for the Fiscal Year is required, but for subsequent quarters the actual amount contributed by the Province for the current Canada-British Columbia Agreement establishing the .../14 Negative Margin Insurance Pilot Program

- 15- Fiscal Year and the balance remaining to be paid in the current Fiscal Year shall be identified for each Counted Program. Contribution forecast 6.11 The projected amount of the Federal Contribution shall be established and limited on the basis of a forecast at November 30 of the previous Fiscal Year. Canada shall review and amend that limit throughout the Fiscal Year based on updated forecasts of safety net expenditures as they become available. However, the Federal Contribution shall not exceed 90 percent of the estimated amount available for the Program until:

a) The Province's safety net allocation for the current Fiscal Year has been reconciled on the basis of all Counted Programs and all programs funded under the federal safety net envelope, and

b) all revenue and expenditures for this Program have been reconciled to the audited financial statements referred to subsections 7.3 and 7.4. Reconciliation 6.12 Within 60 days of the receipt of the audited financial statements, referred to in subsections 7.3 and 7.4, Canada shall pay to The Province the balance owing by Canada, if any, for the difference between actual and forecasted expenditures. If an amount is repayable by The Province with respect to any Fiscal Year, Canada shall deduct the said amount from the Canada-British Columbia Agreement establishing the ./15 Negative Margin Insurance Pilot Program

-16- first contribution payment following receipt of the audited financial statements. Upon termination of the Program by one of the parties, any outstanding amount identified on the final reconciliation shall be paid or reimbursed to the appropriate party within 60 days of the receipt of the final audited financial statements. 7.0 EVALUATION AND AUDIT Program evaluation Compliance audit 7.1 An independent evaluation shall be conducted to assess the effectiveness of the Program at its termination as well as on an ongoing basis.

Canada and the Province shall agree to the terms of reference for the ongoing evaluation by no later than March 31, 2002. Methods for evaluating this Program shall include, but not be limited to, the establishment of a focus group comprising representatives from the Province's agricultural sector and from the federal and provincial governments. 7.2 Canada shall be responsible, at its expense, to ensure an independent audit is conducted to determine that the Program has been administered in accordance with the terms and conditions set out in this Agreement.

Where practical and to avoid any duplication, Canada will coordinate this audit with any similar audit undertaken by the Province with respect to the Province's share of the Program. This audit shall be performed in the 2002-03 Fiscal Year for the 2001 Claim Year. Canada may Canada-British Columbia Agreement establishing the .../16 Negative Margin Insurance Pilot Program

-17- perform an audit on subsequent Claim Years. Financial Audit 7.3 The Province shall be responsible for conducting an annual financial audit of the Program, which shall be carried out by the provincial auditor or by a recognized independent accredited auditor, approved by the province. Financial information relating to this Program shall be presented separately in the audited financial statements. The audit report and an accompanying management letter shall be forwarded to Canada no later than November 30 following the end of the Fiscal Year.

Audit of Counted 7.4 For each Counted Program, The Province Programs shall forward an annual financial audit report or an excerpt from The Province's Public Accounts setting out expenditures under these Counted Programs, no later than November 30 following the end of the Fiscal Year. 8.0 TERMINATION OF ENROLMENT Termination by 8.1 Producers may terminate their participation in producer the Program at any time after enrolment by providing written notice to the Province. The termination shall be effective for the year following the Claim Year in which notice was provided.

Surplus distribution 8.2 Producers who terminate their participation in the Program prior to the Program's termination are not entitled to any surplus distribution provided for in subsection 9.1. Canad 1-British Columbia Agreement establishing the .../17 Negative Margin Insurance Pilot Program

- 18 - Re-enrolment Additional requirements Forfeiture of rights 8.3 Producers who terminate their participation in the Program prior to its termination are not entitled to re-enrol in the Program. 8.4 Producers who terminate their participation in the Program prior to its termination shall forfeit any premiums paid and shall repay to the Program account, for each year an indemnity was paid to that producer, the amount by which the indemnities paid exceed the producer's share of premiums. 8.5 Any producer who wilfully provides false information or is in breach of any conditions of the Agreement, the contract or the enrolment form shall be deemed to have terminated participation in the Program and shall be required to repay any monies received from the Program. 9.0 PROGRAM TERMINATION Distribution of Program 9.1 Upon termination of the Program, any surplus account surplus in the Program account not used for Program payments shall be distributed in the following order and manner: (

a) the amount of any payment from the reserve account used to finance a deficit in the Program account shall be returned to the reserve account; (

b) fifty (50) percent of the remaining Canada-British Columbia Agreement establishing the .../18 Negative Margin Insurance Pilot Program

-19- Program account surplus shall be returned to Canada and the Province in proportion to Canada and the Province's contributions to Total Premiums pursuant to subsection 5.5; (

c) the remaining Program account surplus shall be returned to participants who have been enrolled for the entire duration of the Program and who have paid premiums in excess of indemnities received. Returns from the Program account shall be prorated according to the proportion of the participant's net premiums to the sum of all participants' net premiums and shall not exceed the participant's premiums paid less indemnities received. Distribution of reserve 9.2 Upon termination of the Program, any surplus account surplus in the reserve account shall be distributed in the following order and manner: (

a) the amount of any Provincial funds paid pursuant to paragraph 6.3(

c) shall be returned to the Province; (

b) the remaining reserve account surplus shall be returned to Canada and the Province in proportion to Canada and the Province's contributions to Contingency Funds pursuant to subsection 5.5. Canada-British Columbia Agreement establishing the .../19 Negative Margin Insurance Pilot Program

-20- 10.0 COMMUNICATIONS Public information and communications 10.1 All public information in connection with this Agreement distributed by either or both parties shall clearly make reference to this Agreement and fairly reflect the contribution of each party to the Agreement. Language of 10.2 Press releases, announcements and other communications information related to this Agreement shall be available in both official languages upon request.

The availability of this information in the other official language shall be clearly stated in that official language. 11.0 GENERAL PROVISIONS Link to WFIP Amendments 11.1 This Program is a component of the WFIP and, except as otherwise provided, is subject to the terms of WFIP that were in effect for 2000. For greater clarity, this includes, but is not limited to, provisions relating to administration, the calculation of margins, structural change, and reviews and appeals. 11.2 This Agreement may be amended only by further written agreement executed by Canada and the Province.

Coming into force 11.3 This Agreement comes into force on the date of signing. Canada-British Columbia Agreement establishing the .../20 Negative Margin Insurance Pilot Program

-21- Duration 11.4 This Agreement covers the 2001, 2002 and 2003 Claim Years. Termination Indemnification of the Crown 11.5 This Agreement shall terminate after all payments for the 2001, 2002 and 2003 Claim Years have been made and the obligations of Canada and the Province under this Agreement have been fulfilled.

In the event that the Program is continued in a new agreement, all account balances outstanding under this Agreement shall be continued. 11.6 The Province shall indemnify and save harmless Canada, its Minister, his or her officers, servants and agents against all claims, demands, losses, damages, actions and other proceedings made by any third party arising out of the administration of this Agreement.

Representation by a 11.7 Nothing in this Agreement is to be construed party as authorizing one party to contract or incur any obligation on behalf of the other party, unless specifically authorized by this Agreement. Eligibility of Members of 11.8 No Member of the House of Commons shall the House of Commons be allowed to derive any financial advantage resulting from Federal Compensation under this Agreement.

Canada shall be fully responsible for paying any incremental costs related to the administration of this provision and for recovering any overpayments made as Canada-British Columbia Agreement establishing the .../21 Negative Margin Insurance Pilot Program

-22- a result of its contravention by an applicant. Canada shall provide the Province with assistance to administer this provision. Eligibility of current or former federal public office holders or public servants Registration of lobbyists 11.9 Participants who are not in compliance with the federal Conflict of Interest and Post- Employment Code for Public Office Holders or the federal Conflict of Interest and Post- Employment Code for the Public Service shall not derive a direct benefit from Federal Compensation under this Agreement.

Canada shall be fully responsible for paying any incremental costs related to the administration of this provision and for recovering any overpayments made as a result of its contravention by an participant. Canada shall provide the Province with assistance to administer this provision. 11.10 The Province shall ensure that a person lobbying, as defined in the federal Lobbyists Registration Act, on behalf of a participant in that Province is registered pursuant to the Act.

For greater clarity, this Act excludes from registration, among others, members of the legislature of a province or territory or their staffs and employees of provincial and territorial governments. Canada-British Columbia Agreement establishing the _122 Negative Margin Insurance Pilot Program

- 23 - IN WITNESS THEREOF this Agreement is duly executed by the authorized representatives of the parties. Signed in counterpart with the two counterparts taken together to constitute the whole Agreement. WITNESS SIGNATURE DATE Minister of Agriculture and Agri-Food Canada Minister of Agriculture, Food and Fisheries British Columbia Canada-British Columbia Agreement establishing the Negative Margin Insurance Pilot Program

Document details

Collection	British Columbia — Orders in Council
Citation	O.C. 337/2001
Type	order_in_council
Volume / chapter	arc oic 0337 2001
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	e54c51e664c5b1d221c14fc4f0efee739f125b48

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