Vol. 135, No. 33 — August 18, 2001

Proclamation establishing the Canadian Beef Cattle Research, Market Development and Promotion Agency

Statutory Authority

Farm Products Agencies Act

Sponsoring Department

Department of Agriculture and Agri-Food

REGULATORY IMPACT ANALYSIS STATEMENT

Description

A Proclamation establishing the Canadian Beef Cattle Research, Market Development and Promotion Agency pursuant to Part III of the Farm Products Agencies Act.

The Farm Products Agencies Act provides, in Part III, for the establishment of promotion research agencies with powers relating to one or more farm products, where the Governor in Council is satisfied that the majority of the aggregate of producers and importers is in favour of the establishment of such an agency. The Canadian Cattlemen's Association (CCA), on behalf of all provincial cattle producer associations in Canada, submitted a proposal for this Agency to the National Farm Products Council (NFPC), which conducted an enquiry into the proposal and made a report and recommendations to the Minister of Agriculture and Agri-Food. The Council recommended that this Agency be established.

The Proclamation will specify that the Agency consists of 16 members representing producers from all provinces, and importers. The Proclamation will also designate the farm products in relation to which the Agency can exercise its powers as beef cattle, beef and beef products. The Proclamation includes the terms of the promotion research plan that the Agency is authorized to implement.

The Agency will finance promotion, market development and research programs for the benefit of the beef cattle industry. These activities will be funded by a mandatory non-refundable levy (check-off) of $1 per head and applied to Canadian beef cattle marketed domestically, to imported beef cattle and to the carcass equivalent of imported beef and beef products. The Agency will have no powers to regulate quantities or prices of cattle or to license producers.

The goals of the Agency are to increase sales of beef and find better and more efficient methods of producing beef and beef cattle.

The funds collected by the Agency from the national check-off would primarily be directed to the Beef Information Centre (BIC), the Canada Beef Export Federation (CBEF) and the Beef Cattle Research Council (BCRC) to carry out programs on behalf of all producers and importers.

Alternatives

Individually, through their provincial associations, Canadian beef producers currently fund market promotion, market development and research activities. The increasing complexity of issues impacting the sector, their interwoven nature and the escalating cost of addressing these concerns means that a more strategic, coordinated approach is needed. This Agency will serve to coordinate the efforts of its members and realize the advantages of economies of scale. The creation of this Agency will also ensure the implementation of effective, common-sense solutions that focus on the needs of producers and their customers.

No alternatives were considered. The Farm Products Agencies Act is the only Act that provides for the establishment of these national agencies, with the power to levy on product marketed both domestically within Canada and on product imported into Canada.

This is the first promotion research agency to be established since the enabling legislation was put in place in 1993.

Benefits and Costs

Benefits

Producers will benefit from an expanded market and increased sales as a result of national promotion programs. Establishment of this Agency will ensure equitable and consistent long-term financial support required to fund research market development and promotion activities. Producers across Canada will directly benefit from increased research aimed at improving the competitive position of the production sector and its understanding of the needs of its customers.

Importers of beef into Canada will benefit from the opportunity to sell into an expanding market as the concerns relating to declining beef demand are addressed. This group will also have immediate access to the results of research sponsored by the Agency. Importers will have representation on the Board of Directors of the Agency and thus, will have the opportunity to take part in the planning and implementation of projects funded by the Agency.

Consumers benefit from an increased awareness of the improved nutritional profile of beef products and the quality of beef offered to them. Consumers will have improved access to products that meet their needs. As well, a national agency can afford consumers a credible source of reliable, accurate information.

The Agency expects to raise approximately $8 to $8.5 million in revenues annually, through levies on domestic marketings and on imports.

Costs

The cost to producers of beef cattle and importers of beef cattle and beef products is a levy of $1 per head or carcass equivalent. The Agency will be self-funding with no financial assistance from the Government of Canada. It is not anticipated that consumer prices will be affected by the implementation of this levy.

The establishment of a national check-off system will not be significantly different from the current situation for Canadian cattle producers. All provinces, with the exception of Newfoundland, collect a type of check-off on provincial cattle sales. Although the level of check-off varies between some provinces, a nationally uniform check-off will be more equitable and stable. It will also permit an equivalent check-off to be applied to imported cattle, beef and beef products. Some provinces will have to increase their check-off to meet the commitment of $1 per head; however, in Alberta, Saskatchewan and Ontario, which together represent 74 percent of the Canadian cattle herd, the provincial check-off already includes a mandatory $1 per head portion that is being directed to an interim national agency. This interim agency is a non-profit corporation established by the CCA as a repository for check-off funds that are already being collected. Quebec and New Brunswick also have non-refundable levies on cattle.

Use of Funds

Each provincial cattle agency will target its share of funding by providing, at least one year in advance of the fiscal year in which the funds would be distributed, the percentage allocation to be directed to the BIC, the CBEF and the BCRC of check-off funds raised from cattle originating in that province. The importer representatives will also identify which of the recipient organizations will receive the funds from levies collected on imports.

Provincial agencies could receive a percentage of check-offs collected to finance similar activities at the provincial level and would be accountable to the national agency for the disposition of such funds.

Consultation

Consultation on this proposal by the CCA has been ongoing for many years. Since 1995, determination of producer support for the national check-off has been conducted in a variety of ways in each province. Some provinces have held producer votes, others passed resolutions of support for the check-off at annual meetings of producers, where all sectors of the industry are represented. The written proposal for the Agency included a description of the consultative process undertaken in each province.

The NFPC conducted public hearings on the proposal to establish this Agency in the spring and summer of 2000. Notices of public hearings were published in major farm newspapers and journals in March, calling for comments on the proposal to be submitted to the Council by March 31, 2000. A total of 12 submissions and 18 letters of opinion were received.

Another notice was published announcing the dates and locations of hearings. Three hearings were held in May and June 2000 in Calgary, Toronto and Pointe-Claire, Quebec. The hearings were open to the public and any person wishing to be heard on the proposal had an opportunity to make his or her views known. Transcripts of the hearings were produced and made available for public viewing and all submissions and letters were kept on a public examination file at each hearing. A presentation of the proposal was made at each hearing and the Council heard from producers, meat packers, importers, foreign governments, and other sectors of the cattle industry.

The Council submitted a detailed report to the Minister of Agriculture and Agri-Food in December 2000, recommending that the Agency be established, and included in the report the terms of the draft Proclamation and Promotion Research Plan for the Agency. This report was circulated widely throughout the industry. Since then the Council has met frequently with representatives of the CCA, the Canadian Association of Importers and Exporters Inc., and the Canadian Meat Council, the three major stakeholders in the Agency. This Proclamation, which includes the Promotion and Research Plan of the new Agency, has been agreed to by all three organizations.

Compliance and Enforcement

The Agency will operate its levy collection system through the use of regulation. The Agency's levy regulation must be approved by the NFPC (the federal government supervisory body), before it can be enacted. Submission of a levy regulation for the approval of the Council must be supported by a business plan from the Agency which shows how the levy revenue is to be spent in the following year. The Council is responsible for monitoring the Agency's operations and advising the Minister of Agriculture and Agri-Food.

For producers and importers who are to pay the levy, the compliance mechanism is provided for in section 45 of the Farm Products Agencies Act. Any person who contravenes any provision of the Promotion Research Plan of the Agency is guilty of an offence punishable on summary conviction and liable to a fine not exceeding $5 000.

For further information please contact: Carola McWade, Director, Regulatory Affairs and Operations, National Farm Products Council, 344 Slater Street, 10th Floor, Canada Building, Ottawa, Ontario K1R 7Y3, (613) 995-9697 (Telephone), mcwadec@em.agr.ca (Electronic mail).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 39(1) (see footnote a) and section 40 (see footnote b) of the Farm Products Agencies Act (see footnote c), proposes to make the annexed proclamation establishing the Canadian Beef Cattle Research, Market Development and Promotion Agency.

Interested persons may make representation with respect to the proposed proclamation within 15 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Carola McWade, Director, Regulatory Affairs and Operations, National Farm Products Council, 10th Floor, Canada Building, 344 Slater Street, Ottawa, Ontario K1R 7Y3. Telephone: (613) 995-9697; Facsimile: (613) 995-2097; Electronic Mail: mcwadec@em.agr.ca

Ottawa, August 1, 2001

RENNIE M. MARCOUX
Acting Assistant Clerk of the Privy Council

A PROCLAMATION

WHEREAS subsection 39(1) of the Farm Products Agencies Act provides that the Governor in Council may, by proclamation, establish a promotion-research agency with powers relating to one or more farm products, where the Governor in Council is satisfied that the majority of the aggregate of the producers or, where the import trade in one or more farm products is to be included, the majority of the aggregate of the producers and importers, of all of those farm products, in Canada or in the region to which the proclamation relates, is in favour of the establishment of such an agency;

AND WHEREAS the Governor in Council is satisfied that a majority of the aggregate of the producers and importers of beef cattle, beef and beef products in Canada is in favour of the establishment of a promotion-research agency;

NOW KNOW YOU that We, by and with the advice of our Privy Council for Canada, do by this Our Proclamation

(a) establish a promotion-research agency, to be known as the Canadian Beef Cattle Research, Market Development and Promotion Agency, consisting of 16 members appointed in the manner and for the terms as set out in the annexed schedule,

(b) specify that the manner of designation of the chairman and vice-chairman of the Canadian Beef Cattle Research, Market Development and Promotion Agency, the manner of appointment and term of temporary substitute members of the Agency and the place within Canada where the head office of the Agency is to be situated are as set out in the annexed schedule,

(c) designate that the farm products in relation to which the Canadian Beef Cattle Research, Market Development and Promotion Agency may exercise its powers are beef cattle, beef and beef products as defined in the annexed schedule, and

(d) specify that the terms of the promotion-research plan that the Canadian Beef Cattle Research, Market Development and Promotion Agency is empowered to implement are as set out in the annexed schedule;

AND KNOW YOU further that this Proclamation and the annexed schedule may be cited as the Canadian Beef Cattle Research, Market Development and Promotion Agency Proclamation.

SCHEDULE

INTERPRETATION

1. The following definitions apply in this schedule.

"Act" means the Farm Products Agencies Act. (Loi)

"Agency" means the Canadian Beef Cattle Research, Market Development and Promotion Agency established by this Proclamation. (Office)

"beef" means flesh of beef cattle. (bœuf)

"beef cattle" means live domesticated bulls, cows, steers, heifers and calves of the bovine species that are marketed for the production of beef or beef products. The expression includes beef breeding stock, veal calves, cull cows and dairy cattle marketed for slaughter, and excludes dairy breeding stock and other cattle marketed for dairy purposes. (bovins de boucherie)

"beef products" means edible products produced in whole or in part from beef. (produits du bœuf)

"marketing", in relation to beef cattle, beef and beef products, means selling and offering for sale and buying, pricing, assembling, packing, processing, transporting, storing and any other act necessary to prepare the farm product in a form or to make it available at a place and time for purchase for consumption or use. (commercialisation)

"Plan" means the promotion and research plan the terms of which are set out in Part 2. (Plan)

"province" means a province referred to in the definition "provincial cattle association". (province)

"provincial cattle association" means, in respect of the Province of

(a) Ontario, the Ontario Cattlemen's Association;

(b) Quebec, the Fédération des producteurs de bovins du Québec;

(c) Nova Scotia, the Nova Scotia Cattlemen's Association;

(d) New Brunswick, the New Brunswick Cattle Producers;

(e) Manitoba, the Manitoba Cattle Producers Association;

(f) British Columbia, the British Columbia Cattlemen's Association;

(g) Prince Edward Island, the Prince Edward Island Cattlemen's Association Inc.;

(h) Saskatchewan, the Saskatchewan Stock Growers' Association;

(i) Alberta, the Alberta Cattle Commission; and

(j) Newfoundland, the Beef Producers Association of Newfoundland and Labrador. (association provinciale de producteurs de bovins)

PART 1

AGENCY

2. (1) The 16 members of the Agency are appointed as follows:

(a) the Canadian Cattlemen's Association shall appoint 14 members to the Agency to represent primary producers in Canada and of those 14 at least one active primary producer in Canada must be appointed from each province from a list of nominees submitted by each provincial cattle association; and

(b) the Canadian Meat Council and the Canadian Association of Importers and Exporters Inc. shall each appoint one member to the Agency to represent importers.

(2) The members of the Agency must be appointed before its first meeting and, after that, before the first meeting after each annual meeting of the Agency.

(3) Despite subsection (2), if a member dies or resigns, the association or council that appointed the member shall appoint a new member, and if the member who died or resigned was a primary producer in Canada appointed from a list of nominees from a provincial cattle association, the new member must be an active primary producer in Canada appointed from a list of nominees from that association.

3. The term of a member of the Agency expires at the end of the annual meeting of the Agency following the member's appointment.

4. If a member is absent or unable to act, the association or council that appointed the member may appoint a temporary substitute member to act during the period that the member is absent or unable to act, and if the member who is absent or unable to act is a primary producer in Canada appointed from a list of nominees from a provincial cattle association, the temporary substitute member must be an active primary producer in Canada appointed from a list of nominees from that association.

5. Each member and temporary substitute member of the Agency must be a resident of Canada.

6. (1) The members of the Agency shall, at their first meeting and, after that, at the first meeting after each annual meeting of the Agency, elect from among themselves a chairman and a vice-chairman.

(2) If the chairman and vice-chairman resign their office or cease to be members of the Agency, or if one resigns and the other ceases to be a member, the members of the Agency shall, at their next meeting, elect from among themselves a new chairman and vice-chairman.

(3) The chairman must be a primary producer in Canada.

7. The head office of the Agency is to be situated in the City of Calgary, in the Province of Alberta.

PART 2

TERMS OF THE PLAN

Promotion and Research

8. The Agency is authorized to

(a) promote the marketing and production of beef cattle, beef and beef products for the purposes of interprovincial, export and import trade; and

(b) conduct and promote research activities related to those farm products.

Annual Business Program

9. The Agency shall annually submit to the Council a business program that sets out a detailed description of all the proposed business and activities of the Agency for a 12 month period, including all relevant information to enable the Council to determine if

(a) the proposed business and activities of the Agency are consistent with section 8 and the object of the Agency described in section 41 of the Act; and

(b) any existing or proposed orders or regulations referred to in subsection 10(1) are necessary for the implementation or administration of the Plan.

Levies and Charges

10. (1) The Agency may, for the purpose of implementation or administration of the Plan,

(a) by order or regulation, impose levies or charges on persons engaged in the marketing of beef cattle in interprovincial or export trade; and

(b) by order or regulation, impose levies or charges on persons engaged in the importation of beef cattle, beef or beef products into Canada.

(2) An order or regulation may classify persons into groups, specify the levies or charges, if any, payable by members of each such group and provide for the manner of collection of the levies or charges.

(3) The Agency shall retain moneys received from the levies or charges on persons engaged in the importation of beef cattle, beef or beef products into Canada in a separate account.

(4) Levies or charges imposed by orders or regulations of the Agency that are unpaid 30 days after they were due become a debt payable to the Agency.

(5) The Agency may, with the concurrence of a provincial cattle association or other provincial cattle agency, appoint that association or agency to collect on its behalf the levies or charges imposed by any order or regulation.

Expenditures by the Agency

11. (1) Subject to subsection (2), the Agency may expend moneys received from the levies or charges for the purposes of section 8 and the object of the Agency described in section 41 of the Act and in accordance with its annual business program.

(2) Expenditures from the separate account referred to in subsection 10(3) may only be made with the approval of

(a) the members of the Agency appointed by the Canadian Meat Council and the Canadian Association of Importers and Exporters Inc.; or

(b) if the members referred to in paragraph (a) are unable to agree, one of those members and a majority of all the members of the Agency.

Cooperation

12. The Agency shall take all reasonable steps to promote a high degree of cooperation among itself, the Canadian Cattlemen's Association, each provincial cattle association, the Canadian Meat Council, the Canadian Association of Importers and Exporters Inc., and importers of beef cattle, beef and beef products into Canada.

Review of the Plan

13. (1) The Agency shall hold a meeting within five years after the coming into force of this Proclamation, and every five years after that, for the purpose of reviewing the terms and effectiveness of the Plan and determining whether or not any modifications are required to facilitate the carrying out by the Agency of its object described in section 41 of the Act.

(2) Within three months after the date of the meeting referred to in subsection (1), the Agency shall file a written report of its review and any recommendations for modifications with the Council, the Canadian Cattlemen's Association, the provincial cattle associations, the Canadian Meat Council and the Canadian Association of Importers and Exporters Inc.

Section 42 Powers

14. Nothing in this Part affects the vesting of powers set out in section 42 of the Act in the Agency.

[33-1-o]

Footnote a

S.C. 1993, c. 3, s. 12

Footnote b

S.C. 1993, c. 3, s. 2

Footnote c

S.C. 1993, c. 3, s. 2

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