B.C. Reg. 277/81
O.C. 1515/81

Filed July 10, 1981

This archived regulation consolidation is current to April 4, 2003 and includes changes enacted and in force by that date. For the most current information, click here.

Agricultural Credit Act

AGRICULTURAL CREDIT ACT REGULATION

[includes amendments up to B.C. Reg. 95/90]

Contents

1 

Interpretation

2 

Applications for agricultural credit

3 

Agricultural credit

4 

Limits of guarantee

5 

Security for guarantee

6 

Claims on the guarantee

7 

Time limit on guarantee

8 

Limit on guarantees of loans made by one bank

9 

Bank acting for guarantor

10 

Register of guarantees

11 

Power of audit

12 

Terms and conditions respecting agricultural credit

13 

Peace River Special Financial Assistance Program

14 

1986 Peace River Program

Interpretation

1 (1) In this regulation:

"Act" means the Agricultural Credit Act;

"bank" means a bank to which the Bank Act (Canada), S.C. 1980-81-82-83, c. 40, applies or a credit union to which the Credit Union Act, R.S.B.C. 1979, c. 79, applies;

"corporation" means a corporation other than a public corporation

(a) that is registered in British Columbia,

(b) in which 66 2/3% of the voting shares are owned by Canadian citizens or persons who have qualified for permanent residence in Canada, and

(c) in which 51% of voting shares are owned by British Columbia residents;

"designated loan period" means a fiscal year;

"farm operator" means a person who operates or intends to operate a farm

(a) on which, for the purpose of producing food or horticultural products,

(i) the soil or land is cultivated,

(ii) crops grown on land or in or under water are cultured and harvested, or

(iii) livestock and other animals are reared or kept, including cattle, sheep, pigs, goats, horses, poultry, bees, fur bearing animals raised in captivity, fish, crustaceans, shellfish and other marine life, and

(b) that is

(i) classed as a farm under the Assessment Act, or

(ii) the subject matter of a lease, licence, permit or sale given or made under an enactment of the Province or Canada, for the purpose of producing food,

and includes a corporation, partnership and co-operative;

"guarantee" means a guarantee given under section 3 (1) and (2) of the Act;

"guaranteed loan" means a loan guaranteed under section 3 (1) and (2) of the Act;

"lender" means, for the purpose of section 2 (f), banks, credit unions, the Farm Credit Corporation, the Director, Veterans' Land Act, R.S.B.C. 1979, c. 222, the Federal Business Development Bank and the Western Indian Agricultural Corporation Limited;

"minister" means the Minister of Agriculture, Fisheries and Food;

"partnership" means a partnership in which

(a) 66 2/3% of the interest in the partnership is owned by Canadian citizens or persons who have qualified for permanent residence in Canada, and

(b) 51% of the interest in the partnership is owned by British Columbia residents;

"person" means a Canadian citizen or landed immigrant.

(2) Designated loan periods shall be numbered chronologically commencing with the fiscal year 1989 as designated loan period (15).

[am. B.C. Regs. 88/88, ss. (a), (b); 95/90, s. 1.]

Applications for agricultural credit

2 An application for a guarantee under section 3 of the Act or for a loan under section 4 of the Act may only be considered where

(a) the applicant shows that he or she is a farm operator,

(b) the application in the case of a corporation is made by a person who is

(i) a major shareholder in the corporation, and

(ii) an active participant in the daily management and operation of the farm owned by the corporation,

(c) the applicant is not less than 19 years of age at the time of the application, and

(d) the applicant, in the case of an application for a loan from a bank, is not eligible for the loan unless the loan is guaranteed.

[en. B.C. Reg. 95/90, s. 2.]

Agricultural credit

3 The other purposes authorized by regulation to which section 2 (2) of the Act refers are

(a) the construction and development of a road or driveway on the farm,

(b) the installation of farm electrification, including the purchase of necessary related materials, but not including the bringing of a power source to the farm,

(c) purposes ancillary to ecological protection or sustainable agriculture initiatives,

(d) purposes ancillary to crop protection, and

(e) purposes ancillary to land-based aquaculture operations.

[en. B.C. Reg. 95/90, s. 2.]

Limits of guarantee

4 (1) A guarantee shall not, in any one case, be given for a principal sum that exceeds $300 000.

(2) A guarantee shall not be given for any principal sum in respect of which the interest rate exceeds

(a) the prime interest rate of the bank making the loan plus 1% in the case of a principal sum advanced on a floating rate of interest, or

(b) the fixed rate base rate or equivalent for the respective term of the loan plus 1% in the case of a principal sum advanced on a fixed rate of interest.

[am. B.C. Reg. 88/88, s. (c).]

Security for guarantee

5 The minister or the Minister of Finance may determine the form of security for a guarantee and the security may consist of

(a) a land or chattel mortgage,

(b) an assignment of production proceeds, insurance proceeds or the equity on the sale or lease of the farm, or

(c) a security under section 178 of the Bank Act (Canada), S.C. 1980-81-82-83, c. 40.

Claims on the guarantee

6 (1) A claim for loss by a bank in respect of a guaranteed loan shall

(a) be made to the Minister of Finance on the form prescribed by him not sooner than 3 months after the entire amount of the loan becomes due and payable,

(b) be limited to

(i) the unpaid principal amount of the loan,

(ii) the uncollected earned interest, at the rate prevailing at the time of the claim, until the claim is approved for payment, and

(iii) legal fees and disbursements, whether taxable or not, actually incurred by the bank in collecting or endeavoring to collect the balance of the guaranteed loan, including litigation costs and other disbursements approved by the Minister of Finance, and

(c) be approved for payment by the Minister of Finance within 30 days after receipt.

(2) On payment of the loss under the guarantee, the bank shall

(a) mail to the Minister of Finance an executed receipt in a form prescribed by him, and

(b) assign the promissory notes of the farm operator in question to the Minister of Finance and forward them to him with the receipt.

Time limit on guarantee

7 A guarantee shall not be given with respect to a loan repayable over a period exceeding 30 years.

Limit on guarantees of loans
made by one bank

8 (1) The total amount of loss claimed by a bank respecting a particular guaranteed loan shall not exceed 25% of the aggregate of all guaranteed loans made by that bank during the designated loan period in which that guaranteed loan was processed.

(2) In this section "bank" includes all of its branches.

Bank acting for guarantor

9 (1) At any time, the bank shall deal with any security determined or approved under section 5 as the minister or the Minister of Finance directs.

(2) Whether or not its claim for loss on a guaranteed loan has been settled or paid in full, a bank shall take whatever action the minister or Minister of Finance considers necessary

(a) to collect payments of principal and interest due from the farm operator who is in default, and

(b) to realize upon any security in respect of the unpaid loan.

(3) Where a claim has been settled or paid in full, any amounts that are collected or realized under subsection (2) shall be remitted to the Minister of Finance every 6 months.

(4) Expenses incurred by the bank under this section shall be reimbursed by the Minister of Finance.

Register of guarantees

10 The minister shall establish and maintain a registry for the purpose of recording guaranteed loans.

Power of audit

11 The minister and the Minister of Finance, and their lawful representatives, have the power and duty to audit the records of any farm operator who is in receipt of agricultural credit under section 3 or 4 of the Act and for the purposes of auditing may

(a) at any reasonable time have access to and enter all land and premises occupied by the farm operator, and

(b) inspect and make copies of documents respecting the farm operations in the possession of the farm operator, his solicitors and accountants, the bank and the lender.

Terms and conditions respecting
agricultural credit

12 (1) The minister and the Minister of Finance have the power to impose any one or more of the following terms and conditions when giving agricultural credit under section 3 or 4 of the Act, and those that are imposed shall be observed and complied with by the farm operator receiving the credit:

(a) on the request of the minister, to submit within a reasonable time an annual management plan for the operation of the farm;

(b) to use the farm accounting procedures prescribed by the minister;

(c) to participate or cause his employees to participate in training courses as may be directed by the minister from time to time;

(d) to participate in any crop insurance or farm income insurance programs as directed by the minister or the bank and to assign the proceeds of any claim made under those programs to the bank when so directed by the minister;

(e) to borrow no further money with respect to the lands and premises occupied by him as a farm operator without the consent of the minister;

(f) to use the proceeds resulting from the agricultural credit exclusively for the purposes for which the agricultural credit was given;

(g) to make loan repayments on a monthly, quarterly, semi-annual, annual or amortization basis as the minister or the Minister of Finance may direct.

(2) Where a farm operator fails to comply with a term or condition imposed under subsection (1), the minister or the Minister of Finance may cancel or suspend the agricultural credit of that operator and may proceed, or direct the bank to proceed in the case of a guarantee, to recover any outstanding amounts and to realize any security in the same manner as where the operator defaults on loan repayments.

(3) Where the minister or the Minister of Finance proceeds or directs a bank to proceed under subsection (2), the procedures set out in sections 6 and 9 shall be followed insofar as they may be relevant.

(4) Where the minister or the Minister of Finance is satisfied that the farm operator is no longer in breach of the term or condition that gave rise to a suspension under subsection (2), and subject to such undertakings or further security as he may require of the farm operator, the minister or the Minister of Finance may remove the suspension and reinstate the agricultural credit.

Peace River Special Financial
Assistance Program

13 (1) In this section:

"eligible farm" means a farm in the South Peace River Electoral District, or the North Peace River Electoral District, on which at least 120 seeded acres are in production as evidenced by the 1984 Canadian Wheat Board Permit Book for that farm;

"eligible farmer" means a farm operator who

(a) operates an eligible farm,

(b) is the holder of a 1984 Canadian Wheat Board Permit Book in respect of that farm,

(c) is enrolled in good standing in the Federal/Provincial Crop Insurance Program and maintains insurance under that program at the 70% or a higher level of coverage, with price options at level 1 or level 2 of that plan on all crops seeded in 1985 on the eligible farm operated by him, and

(d) is qualified under sections 1 and 2 of this regulation to apply for agricultural credit under sections 3 or 4 of the Act;

"Peace River program" means the program administered by the minister and known as the Peace River Special Assistance Program.

(2) The terms and conditions for an application for agricultural credit under the Peace River program shall include those set out in subsection (3).

(3) An application for agricultural credit under the Peace River Plan shall be received by the ministry only if it is

(a) made by an eligible farmer,

(b) received by the ministry on or before July 1, 1985,

(c) made only in respect of a new loan made in 1985 by a bank solely for the purpose of providing new operating capital to the eligible farmer in order to assist him in continuing operations on his eligible farm in 1985.

(4) The limitations on agricultural credit under the Peace River program shall include the following:

(a) the guarantee under section 3 of the Act shall not exceed the lesser of

(i) $30 000, or

(ii) $30 multiplied by the number of seeded acres on the eligible farm according to the eligible farmer's 1984 Canadian Wheat Board Permit Book;

(b) an eligible farmer's loan interest costs discounted or reimbursed to him shall be those loan interest costs he actually incurs during the period April 1, 1985 to March 31, 1986, on guaranteed loans contracted under the Peace River program to a maximum of the amount of interest yielded on the loans at the prime annual lending rate of the bank making the loan, plus 1/2%;

(c) part of an eligible farmer's principal payments actually made by him under a guaranteed loan contracted under the program may be discounted or reimbursed to him under the Peace River program up to an amount which shall not exceed

(i) 10% of the loan principal amounts paid by the eligible farmer on the loan during the period April 1, 1985 to March 31, 1986, and

(ii) on repayment of the loan in full, but not before then, 5% of the loan principal amounts paid by the farmer on the loan during the period April 1, 1986 to March 31, 1987.

(5) Notwithstanding section 4 (1), where a guarantee given in any one case includes a guarantee under the Peace River program, then, in that one case the guarantee may be given for a principal sum that exceeds $300 000 but does not exceed $330 000.

(6) Notwithstanding section 8 (1), the total amount of loss claimed by a bank respecting a particular guaranteed loan may, in the case of a guaranteed loan under the Peace River program, exceed 25%, but shall not exceed 50%, of the aggregate of all guaranteed loans made by that bank, including all of its branches, under the Peace River program.

(7) Notwithstanding section 6 (1) (a), a claim for loss by a bank in respect of a guaranteed loan under the Peace River program may be made after the loan becomes due and payable on a default.

[en. B.C. Reg. 68/85; am. B.C. Reg. 94/85.]

1986 Peace River Program

14 (1) There is constituted an agricultural credit program styled "1986 Peace River Program" containing the same provisions for the Peace River Program set out in section 13 with the following modifications:

(a) references to "1984", "1985", "$330 000" and "Peace River Program" in section 13 are references to "1985", "1986", "$360 000" and "1986 Peace River Program" respectively;

(b) in the definition of "eligible farmer" the requirement in paragraph (c) to maintain the described insurance on all crops seeded is a requirement to maintain insurance of the same description only on the major crop seeded in 1986;

(c) the following provision applies for the 1986 Peace River Program in place of section 13 (4):

A guarantee under the 1986 Peace River Program shall not exceed the amount that is arrived at by deducting any liability of the farmer remaining due under the program set out in section 13 from the lesser of

(i) $60 000, and

(ii) $30 multiplied by the seeded acreage recorded on the farmer's 1985 Canadian Wheat Board Permit Book;

(d) no guarantee shall be given under the 1986 Peace River Program for a loan which is repayable after July 31, 1987;

(e) it is a material condition of a guarantee given under the 1986 Peace River Program that a claim for loss by a bank under it is made to the Minister of Finance before January 1, 1988.

(2) Except insofar as modified by this section, the provisions of this regulation apply to the 1986 Peace River Program.

[en. B.C. Reg. 122/86.]

 

[Provisions of the Agricultural Credit Act, R.S.B.C. 1996, c. 9, relevant to the enactment of this regulation: sections 1 and 10]


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