Livestock Financial Protection Board Business Plan for the Fiscal Years 2022-2025

Table of Contents

  1. Executive summary
  2. Mandate
  3. Governance
  4. Overview of current and future programs and activities
  5. Strategic direction
  6. Resources, services, and support provided to the Board
  7. Environmental scan
  8. Financial budget
  9. Proposed capital expenditures
  10. Initiatives involving third parties
  11. Performance measures and targets
  12. Risk identification, assessment and management
  13. Communication plan
  14. Appendix 1: Board appointees (as of February 28, 2022)
  15. Appendix 2: History of claims (as of February 28, 2022)
  16. Appendix 3: Ministers mandate letter for 2022-23 fiscal

Executive summary

The Livestock Financial Protection Board ("Board") is pleased to present its business plan for fiscal years 2022-2025. As a Board, we continue to focus on administering the Fund for Livestock Producers ("Fund"); adjudicating claims; granting or refusing the payment of all claims and recovering any money to which the Board is entitled.

The Board's key commitments for 2022-2025

The following are the main areas of focus for the Board in the 2022 to 2025 planning horizon:

  • Timely adjudication of claims. The Board's goal is to continue to fulfill its mandate and contribute directly to its strategic outcome to investigate and adjudicate claims in a fair and equitable manner and to grant, refuse and recover claim payments under the under the Farm Products Payments Act (FPPA) as appropriate;
  • Actuarially sound Fund balance. The Board will continue to administer the Fund in a sound manner to ensure the long-term sustainability of the Fund. In 2020-21 the Fund balance was $8.65M. This was $2.55M above the fund minimum balance target of $6.10M (target based on the 2015/16 actuarial review);
  • Continue to strengthen Board governance and accountability;
  • Continue to work with Ministry and Agricorp to complete the transition of the delivery of the Ontario Beef Cattle Financial Protection Program (OBCFPP/ Program) to Agricorp which was delayed due to COVID-19; and
  • Continue to support the ministry's review of the Beef Cattle Financial Protection Program to ensure it is aligned with current agricultural risk management landscape and sector trends.

Our goal is to ensure the long-term sustainability of the Fund. We are pleased that our investment strategies have helped the Fund, considering the unprecedented low interest rates. There continues to be uncertainty in the financial markets with risk of a continued low interest rate environment. The Board will continue to assess the potential impact of different financial market scenarios and make adjustments to its investment strategy as required.

Ontario's 2019 budget committed the government to a review of the Financial Protection Programs to ensure that beef cattle (and grain) producers have access to stable risk management tools that provide the confidence to invest and grow their businesses. The ministry is currently leading this program review of the Financial Protection Programs and has engaged the Board and industry stakeholders in these discussions. Input and feedback from the consultations continues to be an important part of the review process. These discussions began in 2019 and were put on-hold for most of 2020 due to COVID-19. They resumed in the early 2021 and the ministry is working on a comprehensive package of legislative changes based on feedback received from the Board and stakeholders. OMAFRA's Farm Finance Branch (FFB) is the lead and is keeping the Board and stakeholders informed on the status. The Board continues to support the ministry's review of the Financial Protection Programs by participating in consultations which are used to inform the development of potential changes and how these potential changes may impact to the Fund.

Revenue and expenditures for 2022-2025

Revenue

Total revenue for this planning horizon is expected to remain relatively the same as in previous years.

Expenses

Since January 1, 2020, as part of the new Minister's regulation (O. Reg 467/19) made under the Farm Products Payments Act (FPPA), the Board is responsible to pay for all expenses relating to the administration of both the FPPA (expenses related to fund management and claims adjudication) and the Livestock and Livestock Products Act (expenses relating to licencing and enforcement). As well under that regulation, effective April 1, 2020, the Board also began to pay investigative and some legal costs under the FPPA. This change resulted in an increase in Board expenses as of January 1st (2019-20 fiscal year and onward) in the budget. Prior to the regulation being made effective, the Board paid the costs related to: administering the financial protection Fund; adjudication and payment of claims; and recoveries; and paid a portion of the costs of determining the financial responsibility of dealers (part of licensing).

As well, under the new regulation, effective on April 1, 2020, the Board is required to pay investigative and some legal costs under the FPPA. These are included in the Board's 2020-21 budget. Prior to this, the Ministry paid a proportion of the costs.

The Board will continue to review and monitor the soundness of the Fund on an annual basis and will make recommendations to the Minister regarding the appropriate changes such as the level of check-off fees, as required.

There are some Program activities that have not transitioned from the Ministry to AgriCorp to date. Activities includes administrative tasks for licensing (e.g. development, distribution and capture of renewals), key communications channels (e.g. web site and list of licensed dealers), compliance/enforcement, inspection and Program oversight (e.g. LLPA Director). Costs for these activities have not been included in the program administration costs from 2019-20 to 2021-22 and are being covered by OMAFRA. The work to transition all these activities to Agricorp was scheduled to be completed by December 2020, however this work was delayed due to COVID-19. Planning for the transition resumed in July 2021 and AgriCorp and the Ministry are working on a phased approach with a target of implementation of all activities for the start of next fiscal which is reflected in the budget for 2022-23 onward.

In 2021-22 fiscal, the Board conducted an actuarial review. It is a good governance practice to complete a review approximately every five years. This initiative involved a third-party vendor, to determine how potential claim payments and/or expenditures may impact the Fund. Given the changes in the cost-share model that occurred in 2020 and the increased program delivery costs coming out of the Fund, 2021-22 fiscal was a good time for an actuarial review to examine any impact to the Fund. The last review occurred in 2015-16 fiscal. The Board will be reviewing the results from this actuarial review in March 2022, discussing with stakeholders and making recommendations to the Minister if needed on the overall soundness of the Fund. This cost was included as an expense in the budget. It is assumed that the next actuarial review would be planned for the 2026-27 fiscal.

Table 1 outlines total revenues and expenditures for the previous year as well as expectations for the planning horizon.

Mandate

The Board's legislative mandate is set out in subsection 4 (1) of the FPPA as:

It is the function of a board and it has power,

  1. To administer its fund;
  2. To investigate all claims made to it under this Act and to determine the extent of their validity;
  3. To grant or refuse the payment of claims or any part thereof and determine the amounts and manner of payment;
  4. To recover any money to which it is entitled under this Act by suit in a court of competent jurisdiction or otherwise; and
  5. to carry out the functions, and exercise the powers, prescribed by regulation.

The Board's vision is to protect the financial interests of licensed dealers and producers who have sold livestock to licensed dealers. The Board's vision supports OMAFRA priorities of a thriving agri-food sector and rural communities seizing economic opportunities.

The Board contributes to these priorities by ensuring that the Fund is effectively managed and able to meet its financial obligations to livestock sellers. The Fund is an important component of a seller's overall business risk management strategy as it helps livestock sellers to manage risks beyond their control (i.e. default by a licensed dealer).

The mission of the Board is to ensure the long-term sustainability of the Fund by promoting sound investment practices and good governance for the benefit of Ontario's livestock sellers who sell to licensed dealers.

The Board's guiding principle is accountability in its management, administration and operation. As an agency of the government, the Board conducts itself according to the management principles of the government. These principles include ethical behavior; prudent, efficient and lawful use of public resources; fairness; high quality service to the public and openness and transparency to the extent allowed under law.

Governance

The Livestock Financial Protection Board is classified as a Board-Governed Provincial Agency (Trust) under the Agencies & Appointments Directive (AAD).

The Board operates at arm's-length from the Government but is accountable to the Minister of Agriculture, Food and Rural Affairs (the Minister) in exercising its mandate. The Agency is accountable to the Minister, through the Chair, for its internal governance; and for setting its goals, objectives and strategic direction. The Board operates under the authority of the FPPA, in accordance with the Memorandum of Understanding (MOU) between the Minister and the Chair and under the regulations made thereunder:

  • Ontario Regulations 560/93 – Fund for Livestock Producers;
  • Ontario Regulation 321/11 – Fees Payable to Boards; and
  • Ontario Regulation 467/19 – Boards' Payment of Expenses.

Memorandum of Understanding (MOU)

A memorandum of understanding (MOU) reflects the relationship between the Board and OMAFRA and establishes the accountability framework between the Minister and the Chair. The MOU outlines the responsibilities between the Minister, the Chair, the Deputy Minister and the Board members as well the administrative, financial, and auditing arrangements with OMAFRA.

Effective December 2, 2021, the Board Chair and Minister affirmed the continued use of the existing MOU (that was effective June 5, 2017). The MOU is effective until it is revoked or the Parties sign a new MOU.

Board structure

The Board is comprised of members as appointed by the Minister for terms of up to three years. Members are eligible for reappointment. The Minister also has the authority to appoint a member of the Board as Chair and another as Vice-Chair.

Amendments to O. Reg. 560/93 - Fund for Livestock Producers became effective January 1, 2020. These removed quorum requirements from the regulation and ensured the Board composition better reflects the needs of the sector. As well, the requirement that the Canadian Meat Council (CMC) be represented by a member was removed. The regulation outlines that the Board shall be composed of at least five (5) members consisting of, one member representing each of the Beef Farmers of Ontario (BFO) and the operators of community sales under the Livestock Community Sales Act; and such other members as the Minister considers advisable. By convention, there has also been one member from the Ontario Livestock Dealers Association (OLDA), one member from the Meat & Poultry Ontario (formerly the Ontario Independent Meat Processors), one member from the Veal Farmers of Ontario (VFO), one member from the Dairy Farmers of Ontario (DFO) and an additional member from the BFO.

As with all boards, succession planning and continuity of membership is a very important part of mitigating risks and ensuring the Board is able to meet its mandate. Currently the Board has seven members, however, the Chair and Vice-Chair, as well as another member's terms set to expire by the end of March 2022. They bring extensive knowledge and institutional memory to the Board. The Chair has informed the Minister that he will complete his term as Chair and will not be seeking reappointment and his term will end March 31, 2022. He previously planned to end his tenure as Chair in 2019 but after discussions with the Ministry, served for another three-year period to support the transition of the Ontario Beef Cattle Financial Protection Program from the previous vendor (Beef Inc.) to Agricorp in early 2019. The Chair has recommended to the Minister that the existing Vice Chair be considered for appointment as Chair to the Board, in part to ensure continuity within the Board (see Appendix 1 for a list of Board members and terms). The ministry posted an advertisement for the Chair position on the Public Appointment Secretariat (PAS) website for two-weeks in January 2022 as an opportunity for individuals to apply. The ministry continues to keep the Chair and Vice-Chair informed on the status of board appointments.

Mandate letter from Minister

As part of the AAD, the Minister issues an agency mandate letter to the Chairs of all board-governed agencies on an annual basis to inform their business plan. The Board Chair received the 2022-23 mandate letter from the Minister which outlines high-level expectations for 2022-23 fiscal year (see Appendix 3). The Board has aligned its priorities and strategic approach to support the Minister's mandate as follows:

  • Ensure long-term sustainability and effective oversight, risk management and expenditure management of the Fund.
  • Ensure the maintenance of an effective system of internal controls and compliance with applicable requirements to promote transparency and accountability (i.e.: oversight of controls to ensure efficiency and sustainability).
  • Continue to measure the performance of the Fund for Livestock Producers against established targets and have an established investment policy that is reviewed annually to ensure long-term sustainability of the Fund, and communicate with and report to stakeholders.
  • Continue to investigate and adjudicate claims in a fair and equitable manner.
  • Continue to engage with the Ministry's review of the Financial Protection Programs and the implementation of actions recommended through the review.
  • Continue to support the Ministry and Agricorp to complete the transition of the delivery of the Program to Agricorp.

These will be measured and addressed as follows:

  • Ensure the processing of claims is completed fairly and with minimal delays.
  • Annually review the performance of the Fund against established targets and communicate the Board's annual audited financials and annual report to stakeholders following Minister's approval.
  • Effective oversight, risk management and expenditure management of the Fund (e.g. use tactics such as an actuarial review; annual agency attestation).
  • Work with OMAFRA to support the review of the Financial Protection Programs and to identify opportunities to ensure that livestock producers and dealers have access to stable risk management tools.
  • Meet all AAD provisions and requirements (i.e. agency attestation).
  • Continue to support the Ministry and Agricorp with the transition of the delivery of the Program to Agricorp.

Overview of current and future programs and activities

The following describes the Program, the Fund and the role of the Board within the Program:

Ontario Beef Cattle Financial Protection Program

The Program was established in 1982 to provide compensation to sellers in the event that a buyer (including packing plant operators, abattoir operators, auction market operators, country dealers and cooperatives) defaults on a payment.

The Program has two components:

  1. The annual licensing of dealers under the Livestock and Livestock Products Act, and
  2. The administration of the compensation Fund established under the Farm Products Payments Act.

Since January 1, 2019, most aspects of the Program have been delivered by AgriCorp. Previously, Ontario Beef Cattle Financial Protection Program Inc. ("Beef Inc.") was under contract with the Ministry to assist in administering the licensing support services component of the program. Beef Inc. was also under contract with the Board to provide governance and secretariat and fund management services for the Board (previously referred to as strategic policy, administration and fund administration for the Board and adjudication support).

Although AgriCorp is delivering most aspects of the Program, there are some components that have not transitioned from the Ministry to AgriCorp to date. Such activities includes administrative tasks for licensing (e.g. development, distribution and capture of renewals), key communications channels (e.g. web site and list of licensed dealers) and compliance/enforcement. The work to transition all the Program activities to Agricorp was scheduled to be completed by December 2020, however this work was delayed due to COVID-19. Planning for the transition resumed in July 2021 and AgriCorp and the Ministry are working on a phased approach with a target of implementation of all activities for the start of 2022-23 fiscal.

OMAFRA's Director in Animal Health and Welfare Branch currently remains the LLPA Director with authority for licensing. AgriCorp is assisting the Director by conducting financial assessments for determining the financial responsibility of dealers. Both parties are collaborating on processes during this interim phase and to plan the transition. As part of the transition planning it is targeted that the Director role will transition to AgriCorp for April 2022.

Fund administration

The Board is responsible for the overall governance and administration of the Fund. The Fund is used to:

  1. Provide compensation to qualified sellers in the event that certain buyers default on their payment obligation (i.e. pay approved claims, under O. Reg. 560/93);
  2. Pay all expenses relating to the administration costs of the licensing of dealers under the LLPA effective January 1, 2020 (except expenses related to appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal; judicial reviews or expenses related to any subsequent appeals under the LLPA; and expenses incurred by the ministry to administer the LLPA);
  3. Pay for investigation and legal fees associated with the adjudication of claims;
  4. Pay for professional, technical or other assistance to or on behalf of the Board (e.g. actuarial review).

The Fund is not used for Board remuneration as this is provided by the Ministry as board members are employees who are public servants employed under Part III of the Public Service of Ontario Act, 2006.

All money to which the Board is entitled is paid into the Fund. Contribution to the Fund is mandatory and is based on a fixed rate per head of livestock in a transaction. O. Reg. 321/11- Fees Payable to Boards was amended in December 2015. The amendment increased the fee payable to the Board from five to ten cents per head. The fee increase was effective February 1, 2016, and is payable to the Board as follows:

  • In the case of a direct sale by a producer to a licensed dealer, the fee is payable by the producer.
  • In the case of a private treaty sale, the fee is payable by the licensed dealer who sells the livestock.
  • In the case of a sale by consignment, the consignor and the consignee each pay a separate fee.
  • Fees are due on or before the fifteenth day of each month along with a statement of the livestock sold, unless the total yearly sales are less than 1,000 head, in which case the fee is to be submitted annually.

The Board is the administrator of the Fund and is ultimately responsible for its management and administration. The Board's main activities are to manage the Fund effectively and prepare for claims when they occur.

Since January 2019, the Board has a service agreement with AgriCorp to provide governance, secretariat and financial services to the Board. AgriCorp provides the day-to-day administrative functions of the Fund; however, the Board is ultimately responsible for the oversight and management of the Fund. Key aspects of AgriCorp's role are to receive and deposit fees; prepare monthly, quarterly and annual financial statements; prepare documentation for annual audits; and prepare annual reports and annual business plans for Board approval, as well as investment of the Fund as outlined in the Board's Investment policy.

Staff that provide support to the Board have no role in the licensing and inspection components of the program. These functions are separate to avoid any perception of a possible conflict of interest in adjudicating the claims that arise from a dealer's default in payment, while protecting the integrity of the Program.

The Board does not administer any other program and no new programs are being considered for the 2022-2025 time frame.

Fund investment strategy

Investment income is one important source of revenue for the Fund. As such, the Fund is structured and managed to provide a maximum rate of investment return while assuming a low risk tolerance. The Board continues to ensure that the Fund is invested in financial instruments that are consistent with the Trustee Act provisions referenced in the MOU and the Board's investment policy.

The Board's asset mix currently includes investments that guarantee face value at redemption; generally this includes Guaranteed Investment Certificates (GIC) issued by financial institutions or similar financial instruments. When possible, the Board staggers the terms and maturity dates of GICs and uses this laddering strategy to reduce the influence of interest changes and to maximize returns.

The Fund has issued a $4 million first mortgage on development land in the Regional Municipality of Waterloo. The current agreement has $4 million principal at 5% interest paid semi-annually, maturing December 10, 2022. In the event of the sale or any other conveyance of all or part of the secured lands, the principal and accrued interest on the mortgage shall, at the Board's option, be immediately due and payable. In the unlikely event that a default on the mortgage occurs, as a secured, priority lender, the Board has first right on the property to recover the outstanding principal and interest costs, and any other costs incurred during the process. In 2022-23 fiscal, the Board will discuss renewal options (i.e.: renew the mortgage or to place investments elsewhere).

Claims investigation and adjudication

The Board adjudicates claims made under the FPPA and determines the payment, if any, to be made from the Fund. A claim for potential compensation will be considered by the Board if it involves a producer selling to a dealer, a licensed dealer selling to a producer or a licensed dealer selling to another licensed dealer.

A claim application can be made if a seller has not been paid according to the timelines in the regulations.

The claim adjudication process begins when the seller files a claim application with the Board. Once the claim application is received the Board may choose to seek investigation services from OMAFRA's Regulatory Compliance Unit (RCU) to complete an investigation into the claim. When the investigation is complete, a report is made and presented to the Board.

The Board conducts an in-depth analysis, which may involve OMAFRA Legal Services' advice, and either makes a final decision or offers an opportunity for the parties to make submissions or attend a hearing before making its final decision. If the Board offers an opportunity for a hearing, and a hearing is requested by one of the parties, a Notice of Hearing is mailed to the parties stating the time, date and location of the hearing. The Board works to adjudicate cases within 60 days of receiving the report from the investigators. Claims that involve a hearing require more time to resolve because additional meetings are required and, in some cases, the cases tend to be more complex.

The Board determines the payment, if any, to be made from the Fund.

  • If the Board decides that a claim from a producer made in respect of a dealer is valid, the Board pays 95 percent of the portion of the claim that it recognizes as valid.
  • Where an approved claim relates to a licensed dealer selling to a producer or feeder cattle finance co-operative who defaults on payment, compensation is 85 per cent of the portion of the claim that the Board recognizes as valid, up to a maximum of $125,000. In these cases, there is no compensation for claims of less than $5,000. Where an approved claim relates to a licensed dealer selling to another licensed dealer, the Board pays 95 percent of the portion of the claim that it recognizes as valid.

The Board has discretion to refuse payment from the Fund to dealers and producers based on grounds set out in sections 18 and 19 respectively of O. Reg. 560/93 – Fund for Livestock Producers. Examples of grounds for refusing payment include the claimant extending credit to the buyer; the Director under the LLPA not being notified promptly where payment was not received on time; and the claim not being submitted on time. The rules governing the amount of payment from the Fund are set out in sections 20 and 21 of O. Reg. 560/93.

In 2021-22 there was one claim application that the Board sent for investigation. The Board will review and discuss this claim in March 2022. If decision is made, all parties will be informed and this will be reflected in the Board's 2021-22 annual report.

Recovery of money owed

The FPPA enables the Board to attempt to recover any money to which the Board is entitled. The Board, through legal counsel, work to recover money owed to the Board. Recovery of debt owed to the Board is an important part of ensuring that the Fund remains viable.

Strategic direction

The table below identifies the key strategies that the Board will be used to achieve these goals.

Goal/Priorities Objectives Strategies
Long term viability/ sustainability of the Fund To maintain a solvent Fund that will be able to pay eligible claims as they may come due while keeping check-off rates stable over the long term
  • Ensure check-off is collected and deposited into the Fund.
  • To conduct an actuarial review.
Long term viability/ sustainability of the Fund Identify, assess and manage the Fund's financial risks
  • Engage a third-party actuary to conduct an actuarial study as required.
  • Ensure the Board's accounts and financial transactions are audited annually by the Office of the Auditor General. A report of the audit is available to the Board and to the Minister, as per the FPPA.
  • Review/approve investment policy/strategy annually.
  • Ensure payment from the Fund is compliant with the FPPA.
Long term viability/ sustainability of the Fund Timely and efficient collection of debt owed
  • Tracking debt owed to the Board.
  • Work with legal counsel to ensure that every reasonable attempt is made to collect debt owed to the Board as soon as is reasonably possible using procedures outlined in the debt recovery policy.
Governance and Accountability Board compliance with government documents such as the AAD
  • All governance and accountability documents required under the MOU developed and in place.
  • Review, discuss and approve compliance documents submitted to the Minister to ensure they are on time and meet directive requirements.
Governance and Accountability Improve Board members' and stakeholders' knowledge of the function of the Board and their roles and responsibilities
  • Enhancement of training and orientation program for Board members.
  • Keep stakeholders informed of the Board's finances and activities.
Maintain an adjudication process that is simple, fair, and accessible, which minimizes delays To conduct adjudicatory Board meetings and issue decisions in a timely, procedurally fair and legally supportable manner
  • Claims adjudication policy followed.
  • Work with the OMAFRA to ensure that claims are investigated in a timely manner while taking human and financial resources into consideration.
  • Adjudicate claims in a timely manner while ensuring a fair process for all parties.
  • Established timelines for adjudicating claims adhered to.
Maintain an adjudication process that is simple, fair, and accessible, which minimizes delays Experienced individuals appointed to the board
  • Members appointed as authorized in the regulation.
  • Work with OMAFRA on the appointment process and succession planning to mitigate loss of board member experience.
Support the ministry's review of the financial protection programs Ensure that livestock producers have access to stable risk management tools
  • Attend and participate in any meetings and/or discussions with the ministry on the programs review.
  • Identify opportunities as part of the review to ensure that livestock producers have access to stable risk management tools.
Support the transition of the Program to Agricorp Continue to support the Ministry and Agricorp to complete the transition of the Program to Agricorp
  • Updates are provided to the Board to keep informed on the transition.

Resources needed to meet objectives of mandate and strategic directions

The Board does not have staff. All resources are provided through a Service Agreement or as agreed to in the MOU between the Board and the Minister.

Resources, services, and support provided to the Board

Since January 1, 2019, AgriCorp has been providing the Board with governance, secretariat and financial services in addition to adjudication support, including drafting correspondence of the Board as directed. The Board currently has a service agreement with AgriCorp that outlines the deliverables and expectations between the two parties. A service agreement for these services was signed in 2019-20 fiscal year for a three-year term, set to expire March 31, 2022. The Board and Agricorp have agreed to extend this service agreement for another year (for 2022-23 fiscal) to expire March 31, 2023.

Additional support services to the Board

The Board has additional support available for legal counsel and the investigation of claims.

  • Investigative services are provided by the Regulatory Compliance Unit (RCU) within OMAFRA's Food Safety Systems Development Branch; and
  • Legal services are are provided by OMAFRA through the Ministry of the Attorney General through the Legal Services Branch.

Effective April 1, 2020 as part of the new Minister's regulation (O. Reg. 467/19) under the FPPA, most of these costs will be paid for by the Board (previously they were covered by the Ministry).

At this time the Board is not considering other service providers for these services and will engage the ministry if a change is contemplated so that consideration can be given to the broader implications for the Program and the ministry from a risk management perspective.

Environmental scan

The environmental scan seeks to provide a picture of the environment in which the Board is operating and the key factors that could impact the Board and/or the health of the Fund through the upcoming planning and cycles. The challenges and risks faced by the Board have remained similar over the past few years.

The Board is cognizant of its broader responsibilities in ensuring that key risks are identified and that effective processes are in place and implemented to manage these risks. The following are the main issues that emerged from the environmental scan:

External drivers

Investment and interest risks: Investment income is an important source of revenue for the Board to cover projected expenses and claims. Investing has inherent risks. Although long-term return expectations and trends are generally predictable, there can be considerable volatility in short-and medium-term results. Investment risk is a challenge that could adversely affect the achievements of one of the Board's goals, which is to ensure long-term sustainability of the Fund. Appropriate mechanisms are therefore required for controlling investment risk. The Board's key mechanism for identifying and managing the investment risk is to ensure that the Fund is invested in high quality investments that are consistent with the Trustee Act provisions referenced in the MOU and the Board's investment policy.

Packers rationalization/exit: There are a number of factors that could potentially lead to increased meat packer rationalization and exit from the marketplace. The primary factors affecting packers in Ontario is excess plant capacity. The volume of cattle available has dropped and plant capacity has decreased somewhat with the exit of several small packers from the industry over the last several years. Despite this, excess capacity is still a negative factor. If exit from the marketplace is due to insolvency, claims for payment from the Fund could potentially result. Because the Fund is actuarially sound, this will not likely impact the Board's ability to conduct business in the upcoming planning horizon.

Policy/legislative change by the Ontario government: The Minister has responsibility for the legislation governing the Program. The Board established under the FPPA is subject to the risk of a legislation change by the government.

As part of the April 2019 provincial budget announcement there was commitment from the government to a review of the financial protection programs to ensure that beef cattle (and grain) producers have access to stable risk management tools that provide the confidence to invest in and grow their businesses. The ministry is currently leading this program review and will engage the Board and grain industry/ stakeholders in these discussions. These discussions began in 2019 and were put on hold in 2020 due to COVID-19. They resumed in the early 2021 and there may be legislative changes that impact the Board.

Fund balance and unpredictability of claims: The Fund dropping below the actuarially sound level or becoming depleted because of an unusually large claim(s) is another external driver identified by the Board. This risk could negatively impact the Board's ability to deliver financial protection to livestock sellers in Ontario making timely claims against the Fund.

An on-going challenge for the Board is the unpredictability of claims, i.e. the number of claims to the Board from year to year is difficult to predict and can fluctuate greatly. Because claims paid are variable, any estimate of future claims in the upcoming 2022-2025 planning horizon can be unreliable. An actuarial review was planned for 2020-21 however was completed in 2021-22 fiscal. The Board will be reviewing the results, discussing with stakeholders and making recommendations to the Minister if needed on the overall soundness of the Fund. The next actuarial review is planned for the 2026-27 fiscal year.

COVID-19 global pandemic: Beef cattle farmers in Ontario have been impacted by the economic conditions of the COVID-19 global pandemic. Impacts include the potential of beef dealers closing their business or impacts from the temporary closure of large beef processing plants due to COVID-19. For the Board, this could result in less revenue to the Fund from check-off fees being lower over the next couple of years and from investment income being lower due to the interest rates falling to a historic low and adds to the unpredictability of claims due to the potential impacts on dealers and their financial positions. The Board will continue to monitor for impacts.

Livestock values: Canadian cattle prices were at record highs due to lower cattle inventories; however they have dropped significantly and are currently at a more stable level. These lower values have reduced risk to the Fund considerably. However, these reduced values have had a negative impact on the feedlot sector as some in this sector are also licensed dealers there could be a negative impact on the Fund.

Internal drivers

Board knowledge management and succession planning: Succession planning and creating continuity on the Board are given consideration when the expiry date of members' terms are approaching to help minimize the loss of experience and knowledge during transition periods. To minimize the loss of experience and knowledge, the Board has asked that appointments be staggered. The Chair and the Vice-Chair will also be discussing and planning for transition in board appointments with the Chair's term ending March 31, 2022.

Governance and accountability requirements: There is an increasing focus and scrutiny of both private and public sector organizations which has resulted in increasing demands for accountability as it relates to Board governance and accountability. Good governance is an integral component of effective Fund management and Board performance. Expectations concerning accountability and the fiduciary duties of boards, if any, continue to evolve.

Financial budget

The estimated revenues and expenses for the next three years are provided in Table 1 (below). The Board is subject to an annual audit by the Office of the Auditor General of Ontario.

Projected Board revenue

The following are the three sources of revenue into the Fund:

  • Check-off (remittance) fees;
  • Income from investments; and
  • Monies recovered after payment of claims.

Projected Board expenses

The FPPA provides that the Board is responsible for all its expenses except for those of persons employed under Part III of the Public Service of Ontario Act, 2006.

In addition to paying approved claims, under O. Reg. 467/19 the Board is also authorized to use the Fund to pay for all expenses to administer the FPPA, including governance, secretariat and financial support services; any professional, technical or other assistance to or on behalf of the Board (e.g.: actuarial review); and investigation and legal fees associated with the adjudication of claims. The Board is not required to pay expenses related to judicial reviews of its decision.

Additionally, the Board is required to pay all expenses relating to the administration costs of the licensing of dealers under the LLPA effective January 1, 2020 (except expenses related to appeals to the Agriculture, Food and Rural Affairs Appeal Tribunal; judicial reviews or expenses related to any subsequent appeals under the LLPA; and expenses incurred by the ministry to administer the LLPA).

Governance, Secretariat and Financial Support ServicesGovernance, secretariat and financial support services are provided to the Board by AgriCorp as agreed to in the Service Agreement between the two parties. The contract with AgriCorp is set to expire March 31, 2022. The Board and Agricorp have agreed to extend this service agreement for another year (for 2022-23 fiscal) to expire March 31, 2023.

Professional, Technical or Other Assistance to the Agency – An example of this type of cost would be an actuarial review. In 2021-22 fiscal, the Board conducted an actuarial review. It's a good governance practice to complete a review approximately every five years (the last review occurred in 2015-16 fiscal). This cost is included in the expenses. The next actuarial review is planned for the 2026-27 fiscal year.

Board Legal Services and Investigation – Under the new Minister's regulation, effective April 1, 2020, the Board will pay for most legal services and investigative costs. Legal counsel also reviews agreements and governance documents and provides any other legal advice as requested. This is an expense that is reflected in the Board's financials for 2020/21 onward.

Board member Per Diems, Travel and Meal Expenditures – A financial review determined that Board remuneration (per diem and incidental costs, including travel) should be paid by OMAFRA and not from the Fund. This change came into effect in November of 2010.

Costs of Determining Financial Responsibility – Effective January 1, 2020 the Board is responsible for all licensing costs except those incurred by the ministry, to administer licensing under the LLPA.

Currently costs incurred by Animal Health and Welfare Branch for their administrative activities for licensing (e.g. development, distribution and capture of renewals), key communications channels (e.g. web site and list of licensed dealers), compliance/enforcement, inspection and Program oversight (e.g. LLPA Director) are not included in the 2019-20 to 2021-22 program administration costs and are being covered by OMAFRA. Once these activities transition to AgriCorp, the Board will be covering these costs. The implementation of the Program transition began November 2021, targeting implementation of activities beginning April 1, 2022 (2022-23 fiscal year). The estimated one-time costs to transition the remaining Program activities to Agricorp is included in the 2021-22 actuals.

Claim Payments – All claim payments and associated costs are paid by the Fund. The total cost depends on the number and complexity of the claims received by the Board and the amount of payments on approved claims. To date, claims have been infrequent the past couple of years.

Proposed capital expenditures

The Board does not have any capital expenditures planned for 2022-2025.

Table 1. Financial table – expenditure and revenue

The table below shows the budget, actual revenue and expenditures for 2020-21 and 2021-22 fiscal year as well out-year planning budgets from 2022-2025.

Opening Fund Balance

  Budget 2020-21 Actual 2020-21 Budget 2021-22 Actual6 2021-22 Budget 2022-23 Budget 2023-24 Budget 2024-25
Opening Fund Balance - $8,259,229 $8,657,262 $8,657,262 $8,966,262 $8,838,262 $8,712,262

Revenue

  Budget 2020-21 Actual 2020-21 Budget 2021-22 Actual6 2021-22 Budget 2022-23 Budget 2023-24 Budget 2024-25
Fees 205,0001 191,930 202,0001 204,000 205,0001 205,0001 205,0001
Interest 290,0002 277,077 264,0002 271,000 297,0002 299,0002 301,0002
Recoveries (i.e.: from claims) 40,000 - - 80,000 - - -
Total Revenue $535,000 469,007 $466,000 $555,0006 $502,000 $504,000 $506,000

Expenses

  Budget 2020-21 Actual 2020-21 Budget 2021-22 Actual6 2021-22 Budget 2022-23 Budget 2023-24 Budget 2024-25
Professional fees (i.e.: actuarial review) 60,0003 - 60,0003 16,000 - - -
Governance and Secretariat services 56,000 8,479 61,000 15,000 56,000 56,000 56,000
Financial services 37,000 14,983 37,000 16,000 37,000 37,000 37,000
Board Legal and Investigative services4 20,0004 10,704 20,000 14,000 20,000 20,000 20,000
Determining Financial Responsibility/ Licensing & Enforcement 279,000 36,808 279,000 185,0005 279,000 279,000 279,000
Claims paid 265,000 - 269,000 - 238,000 238,000 238,000
Total Expenses $717,000 70,974 $726,000 $246,0006 $630,000 $630,000 $630,000

Excess of Revenue over Expenses

  Budget 2020-21 Actual 2020-21 Budget 2021-22 Actual6 2021-22 Budget 2022-23 Budget 2023-24 Budget 2024-25
Excess of Revenue over Expenses (182,000) 398,033 (260,000) 309,0006 (128,000) (126,000) (124,000)

Closing Fund Balance

  Budget 2020-21 Actual 2020-21 Budget 2021-22 Actual6 2021-22 Budget 2022-23 Budget 2023-24 Budget 2024-25
Closing Fund balance - $8,657,262 $8,397,262 8,966,262 $8,838,262 $8,712,262 $8,588,262

Financial Assumptions/ notes:

1 Amount for fees is based on a 10-year average of fees received.

2 2020-21 forecasted interest rate at 2.0%; 2021-25 forecasted interest rate of 1.5%

3 Actuarial review was planned for 2020-21 but deferred to 2021-22 fiscal. The actuarial review was completed in 2021-22 (previously occurred in 2015-16 fiscal). The review is completed approx. every 5 years and the next review will be planned for approx. the 2026-27 fiscal year.

4 Effective April 1, 2020 the Board is responsible to pay for most legal services and for investigative services.

5 The determining financial responsibility/ licencing & enforcement actual for 2021-22 includes a one-time implementation cost to transition costs the remaining Program activities to Agricorp from OMAFRA.

6 The 2021-22 actuals represent the actuals from the first three quarters and a forecast for quarter four.

Initiatives involving third parties

Approximately every 5 years, the Board conducts an actuarial review, an initiative that involves a third-party vendor, to determine how potential claim payments and other factors may impact the Fund. An actuarial review was conducted in 2021-22 fiscal (previously review completed in 2015-16 fiscal). The next review will be approximately the 2026-27 fiscal year. As an agency of the government, the Board adheres to the OPS Procurement Directive when making any purchases for goods or services from a third-party vendor.

Information Technology (IT)/ Electronic Services Delivery (ESD) Plan

The Board currently has no IT and ESD plan for the coming year through to 2025. All Information Technology support is provided by AgriCorp through the maintenance of ready access and secure storage of documents developed and received on behalf of the Board. The mandate of the Board does not require Electronic Service Delivery.

Performance measures and targets

The following indicators define the outcomes the Board is committed to achieving. These indicators are the basis for measuring and evaluating impact.

Implementation Plan

Performance measures and targets for each objective are developed below. As part of its continuous improvement process, the Board will develop the oversight responsibility required to ensure that objectives are achieved. The Board will also track progress against these measures and prepare an annual report.

Goal: Protecting the long-term viability of the Fund for Livestock Producers

Performance Measure/ Indicator Baseline Target 2020-21 Actual 2020-21 Target 2021-22 Target 2022-23 Target 2023-24 Target 2024-25
Unqualified audit opinion from the annual audit. Achieved Achieved Achieved. March 1, 2022. Ongoing Ongoing Ongoing Ongoing
The Fund remains actuarially sound $5.8 M $6.1 M (based on 2015-16 actuarial review) Achieved. $8.65 M $6.1 M $6.1 M $6.1 M $6.1 M
Actuarial study completed approximately every five years to assess the long-term financial sustainability of the Fund considering the contribution and payout rates. July 2010 Actuarial Study Completed in 2020-21 Actuarial review was planned for 2020-21 but deferred to 2021-22 fiscal. Actuarial study occurred in 2021-22 fiscal. Results will be presented to the Board in March 2022. Next study planned for approx. 2026-27 Next study planned for approx. 2026-27 Next study planned for approx. 2026-27
Review investment policy annually to ensure that investment targets are met (e.g. return on investment) and take actions as necessary. ROI of 3.97% ROI of 3.5% Achieved – rate of return on investment of 3.95%.

Note the review of the investment policy will be part of the scope of the Program transition plan that Agricorp is preparing.
ROI of 3.5% ROI of 3.5% ROI of 3.5% ROI of 3.5%
Stakeholders informed of Boards finances and operations January/ February (annually) or on request. Ongoing or upon request. Provided unaudited information to the BFO January 2021. Ongoing or upon request. Ongoing or upon request. Ongoing or upon request. Ongoing or upon request.

Goal: Ensuring that there is an adjudication process in place that is simple, fair, and accessible, with minimal delays

Performance Measure/ Indicator Baseline Target 2020-21 Actual 2020-21 Target 2021-22
Number of days from receipt of investigation report completed until the Board makes and issues its decision (except where a hearing is held). 60 Days 60 Days Achieved. No claims in 2020-21 fiscal. 60 days
Decisions issued on average in 10 business days of Boards decision. Within 10 days of a Board decision Within 10 days of a Board decision Achieved – there were no claims in 2020-21. Within 10 days of a Board decision
Claims are reviewed to determine their validity in compliance with the FPPA. Board refers to FPPA and uses legal counsel as required to determine validity of claims Board refers to FPPA and uses legal counsel as required to determine validity of claims. Achieved – there were no claims in 2020-21. Board refers to FPPA and uses legal counsel as required to determine validity of claims.
Claims are adjudicated fairly E.g.: parties are provided an opportunity to provide input and parties are notified of potential grounds for non-payment in advance of a decision being made in most cases. Claims are reviewed individually Claims are reviewed individually. Achieved – no claims in 2020-21. Claims are reviewed individually.
Recover any money to which the Board is entitled to under the FFPA Legal counsel is consulted when proceeding with any recovery action. Legal counsel is consulted when proceeding with any recovery action. Achieved. Debt recovery efforts in progress to recover monies paid out from the Fund in 2019-20 (with legal counsel). Legal counsel is consulted when proceeding with any recovery action.

Performance Measure/ Indicator Target 2022-23 Target 2023-24 Target 2024-25
Number of days from receipt of investigation report completed until the Board makes and issues its decision (except where a hearing is held). 60 days 60 days 60 days
Decisions issued on average in 10 business days of Boards decision. Within 10 days of a Board decision Within 10 days of a Board decision Within 10 days of a Board decision
Claims are reviewed to determine their validity in compliance with the FPPA. Board refers to FPPA and uses legal counsel as required to determine validity of claims. Board refers to FPPA and uses legal counsel as required to determine validity of claims. Board refers to FPPA and uses legal counsel as required to determine validity of claims.
Claims are adjudicated fairly E.g.: parties are provided an opportunity to provide input and parties are notified of potential grounds for non-payment in advance of a decision being made in most cases. Claims are reviewed individually. Claims are reviewed individually. Claims are reviewed individually.
Recover any money to which the Board is entitled to under the FFPA Legal counsel is consulted when proceeding with any recovery action. Legal counsel is consulted when proceeding with any recovery action. Legal counsel is consulted when proceeding with any recovery action.

Goal: Strengthening Board governance and accountability

Performance Measure/ Indicator Baseline Target 2020-21 Actual 2020-21 Target 2021-22
Submit Annual Report to the Ministry Within 90 days of the agency's receipt of the audited financial statement. Within 90 days of the agency's receipt of the audited financial statement meeting AAD. requirement Completed February 2021. Within 90 days of the agency's receipt of the audited financial statement meeting AAD requirement
Submit Business Plan submitted to the Ministry Annually March 2020 Achieved. Submitted Feb. 28, 2020. March 2021
Submit Quarterly Risk Assessment Report Quarterly Quarterly Achieved. Submitted to Ministry liaison. Quarterly
Submit Agency Attestation (New requirement as of 2015/16) Annually Annually Achieved. Submitted the 2020-21 to Agency liaison on March 24, 2021. Annually

Performance Measure/ Indicator Target 2022-23 Target 2023-24 Target 2024-25
Submit Annual Report to the Ministry Within 90 days of the agency's receipt of the audited financial statement meeting AAD requirement Within 90 days of the agency's receipt of the audited financial statement meeting AAD requirement Within 90 days of the agency's receipt of the audited financial statement meeting AAD requirement
Submit Business Plan submitted to the Ministry March 2022 March 2023 March 2024
Submit Quarterly Risk Assessment Report Quarterly Quarterly Quarterly
Submit Agency Attestation (New requirement as of 2015/16) Annually Annually Annually

Risk identification, assessment and management

The Government of Ontario uses a risk-based approach to manage provincial agencies. Consequently, provincial agencies are required to employ a risk framework when making operational decisions. Provincial agencies are responsible for ensuring that funds are spent effectively and efficiently and are used for the intended purpose. Risk management helps the Board identify risks, assess exposures, and develop appropriate action plans to help ensure business objectives are met. A risk management plan was developed by the Board in 2010 and is updated as part of the Board's strategic planning process.

Agencies are expected to report on the status of the evaluation of their risks on a quarterly basis, except for high risks, which must be reported immediately. This reporting requirement requires the Board to review the risk management plan and identify quarterly whether there are changes needed.

Risk Category Risk Name Risk Level Assessment (low, medium, high) Risk Action Plan (mitigation strategy)
Operational Investment Risk(s):  Low
  • The Board uses the following basic procedures to address and manage investment risk: 1) Actuarial review: Reviews periodically performed by an actuary; and 2) Asset allocation and diversification among asset classes to provide the best opportunity for producing sufficient returns to meet the expected liabilities.
Operational Packers Rationalization/Exit Medium
  • Continue with the current investment policy which balances return, security and liquidity.
  • Actuarial study to ensure that the Fund is adequate for the current conditions in the industry.
Strategic Policy/Legislative Change by the Ontario Government Low
  • Accept
  • This is outside of the Board's control. The government is responsible for the legislation that establishes the Board.
Operational Fund Balance and Unpredictability of Claims Low
  • Accept/Reduce – An actuarial review was completed in 2015-16 fiscal. The review determined that the Fund was actuarially sound. Effective July 1, 2011, the Minister instead of the Lieutenant Governor in Council was given authority to set the check-off fee. A fee increase has doubled the fee revenue annually and is assisting in increasing the Fund balance. This change will also make it easier to implement future changes to the check-off if necessary to rebuild the Fund.
Accountability/Governance Increasing governance and accountability requirements Low
  • New member orientation sessions to ensure roles and responsibilities are clearly understood are ongoing. Ensure that Board members fully understand their roles and responsibilities.
Accountability/Governance Institutional continuity and succession planning Medium
  • The Board works with external partners and OMAFRA to ensure that new candidates for the Board are brought forward for approval well in advance of Board retirements.
Operational Board unable to meet quorum Low
  • Continue to work with Ministry staff to seek re-appointment/ new appointments to reduce this risk.

Communication plan

Annually, the Board will inform the stakeholders of the status of the Fund by providing them with a copy of the Board's audited financial statements and annual report when available.

Schedule C of the MOU between the Board and the ministry outlines the communication plan that the Board will follow.

The Board's target audiences are the stakeholders, producers and licensed dealers. The main interface the Board has with their target audience occurs when they come before the Board regarding a claim. The outcome of that process will dictate the response by the Board and the stakeholder.

Board communications occur at two levels:

  • Communications to parties to a claim against the Fund directed by Board-approved protocol.
  • Broad-based communications to all stakeholders as an education piece.

Key messages for directed communications

  • Clearly outlines the regulations that were followed in making a decision
  • Identifies section or sections of the FPPA and O. Reg. 560/93 relied on in arriving at a decision
  • States that a decision is normally not made without granting a hearing or providing an opportunity for further submissions in the event that the Board sees potential grounds for refusal

Key messages for broad-based communication

  • Importance of dealing with licensed dealers
  • Importance of following the rules and regulations when selling livestock
  • The risk of having a claim denied if rules are not followed

Vehicles to communicate key messages

  • In the event of a claim, the Board will advise each claimant and the buyer via letter on the outcome of their claim.
  • The Minister will consult with the Chair, as appropriate, when significant new directions for the Board are contemplated. The Deputy Minister will meet with the Chair, as necessary, to discuss matters of mutual importance to the Board and OMAFRA.
  • Program information and a list of all licensed cattle dealers are available on the Ministry website which is updated daily. This is a function of the licensing side of the Program but also supports the Board's communication strategy.

The Minister will consult with the Chair as appropriate when significant new directions for the Board are contemplated. The Deputy Minister will meet with Chair, as necessary, to discuss matters of mutual importance to the Board and OMAFRA. The Chair will keep the Minister advised, in a timely manner, of all planned events and issues that concern or can be reasonably expected to concern the Minister in the exercise of his/her responsibilities.

Actuarial review report from 2021-22

The Board will inform stakeholders of the results from the 2021-22 actuarial review and will consider the results and recommendations of this review during their business planning period. If there are any recommendations that involve industry (i.e.: remittance fees), the Board will engage OMAFRA and stakeholders for further discussion.

Appendix 1: Board appointees (as of February 28, 2022)

Position Member Name Organization Tenure
Chair (Part Time) Larry Witzel Ontario Livestock Auction Markets Association 17-Apr-2015 – 31-Mar-2022
Vice-Chair (Part-Time) Paul Sharpe Beef Farmers of Ontario 30-Nov-2007 – 28-Feb-2025
Reappointed March 1, 2022.
Member (Part-Time) Howard Greig Ontario Livestock Dealer's Association 6-Mar-2019 – 5-Mar-2025
Reappointed March 6, 2022.
Member (Part-Time) Blair Williamson Beef Farmers of Ontario 28-Feb-2020 – 27-Feb-2023
Member (Part-Time) Don Gordon Dairy Farmers of Ontario 17-Jun-2021 – 16-Jun-2024New member in 2021-22 fiscal.
Member (Part-Time) Jennifer Haley Veal Farmers of Ontario (Veal industry representative) 6-Oct-2008 – 5-Oct-2024
Reappointed 5-Oct-2021.
Member (Part-Time) Daphne Nuys-Hall Meat & Poultry Ontario 13-Dec-2021 – 12-Dec-2024
New member in 2021-22 fiscal.

Appendix 2: History of claims (as of February 28, 2022)

(Some of the numbers below may be rounded to the nearest dollar and does not include 2021-22 fiscal).

Fiscal year ending # of Defaulters # of claim applications received # of claims Paid Amount being claimed Amount Paid
1982 1 11 4 $172,039.47 $175,039.22
1983 7 11 5 $405,867.73 $193,476.04
1984 3 4 1 $2,593.59 $581.31
1985 5 23 11 $368,195.48 $381,176.39
1986 2 3 0 $9,475.30 -
1987 1 139 15 $1,813,633.49 $1,297,033.08
1988 3 125 77 $836,970.80 $371,334.78
1989 3 8 5 $66,882.62 $46,715.50
1990 6 31 23 $1,352,067.61 $1,183,260.56
1991 1 2 0 $9,810.80 -
1992 1 1 0 $7,500.00 -
1993 1 1 0 $3,189.12 -
1994 3 28 20 $980,618.91 $742,852.71
1995 1 2 1 $16,697.88 $10,899.59
1996 2 34 34 $193,869.76 $193,869.76
1997 2 2 0 $17,852.50 -
1998 4 7 6 $165,370.64 $138,723.51
1999 1 1 1 $11,384.58 $7,969.21
2000 3 48 47 $2,203,876.13 $1,977,548.03
2001 4 142 125 $995,275.55 $807,618.79
2002 0 0 0 - -
2003 2 17 8 $3,782,026.71 $210,318.84
2004 2 52 19 $337,875.45 $296,894.42
2005 1 10 6 $211,152.40 $70,842.94
2006 0 0 0 - -
2007 0 0 0 - -
2008 1 1 0 $27,631.10 -
2009 3 17 1 $ 673,469.83 $18,727.94
2010 4 22 0 $1,357,206.42 -
2011 1 38 n/a $694,785.26 $567,980.00
2012 2 264 172 $1,535,925.68 $285,911.94
2013 2 61 61 $1,225,030.94 $1,218,609.00
2014 1 1 1 $883.62 $883.62
2015 1 3 2 $313,853.02 $164,482.52
2016 4 13 2 $1,232,333.84 $409,006.26
2017 0 0 9 - -
2018 0 0 0 - -
2019 2 2 0 $174,954.96 -
2020 2 2 1 $166,391.34 $64,695.00
2021 0 0 0 - -
Total 82 1,126 657 $21,366,692.53 $10,836,450.96
Recovered  - - - - $3,619,120.00
Net Paid Out  - - - - $7,217,330.96

Appendix 3: Ministers mandate letter for 2022-23 fiscal

September 30, 2021

Larry Witzel
Chair, Livestock Financial Protection Board
985920 Oxford Perth Road
Tavistock, ON N0B 2R0

As you begin planning for 2022-23, I am pleased to write to you in your capacity as Chair of the Livestock Financial Protection Board (LFPB). Pursuant to the requirements of the Agencies and Appointments Directive, this letter sets out my expectations for LFPB for the 2022-23 fiscal year.

Ontario's board-governed agencies are vital partners in ensuring the delivery of high­ quality services to Ontarians. The work that you and your fellow board members undertake to establish the goals, objectives, and strategic direction for LFPB ensures that you continue to protect beef cattle producers in the event of defaults on payment by licensed buyers. It is important that this direction is consistent with government priorities, your agency mandate, key policies and directives and my directions, where appropriate. I thank you for your willingness to serve.

As part of the government of Ontario, agencies are expected to act in the best interests of Ontarians by being efficient, effective, and providing value-for-money to taxpayers. Our government's primary focus is to protect every life and every job we possibly can. Without healthy people, we cannot have a healthy economy.

This includes:

  1. Competitiveness, Sustainability and Expenditure Management
    • operating within your agency's financial allocations
    • identifying and pursuing opportunities for innovative practices, and/or improved program sustainability
    • working with the Ministry, where appropriate, to advance the Ontario Onwards Action Plan
  2. Transparency and Accountability
    • abiding by applicable government directives and policies and ensuring transparency and accountability in reporting
    • adhering to requirements of the Agencies and Appointments Directive, accounting standards and practices, and the Public Service of Ontario Act ethical framework, and responding to audit findings, where applicable
    • identifying appropriate skills, knowledge and experience needed to effectively support the board's role in agency governance and accountability
  3. Risk Management
    • developing and implementing an effective process for the identification, assessment and mitigation of risks, including planning for and responding to health and other emergency situations, including but not limited to COVID- 19
    • developing a continuity of operations plan that identifies time critical/essential services and personnel
  4. Data Collection
    • improving how the agency uses data in decision-making, information-sharing and reporting to inform reporting and improve service delivery
    • supporting transparency and privacy requirements of data work and data sharing with the ministry, as appropriate
  5. Digital Delivery and Customer Service
    • exploring and implementing digitization or digital modernization strategies for online service delivery and continuing to meet and exceed customer service standards through transition
  6. Diversity and Inclusion
    • promoting an equitable, inclusive, accessible, anti-racist and diverse work environment
    • demonstrating leadership of an inclusive environment free of harassment
    • adopting an inclusion engagement process to ensure all voices are heard to inform policies and decision-making
  7. COVID-19 Recovery
    • identifying and pursuing service delivery methods (digital or other) that have evolved since the start of COVID-19
    • supporting the recovery efforts from COVID-19

In addition to these government-wide priorities, I expect LFPB to focus on:

  1. Ensuring that a strategic focus on the financial soundness of the Fund for Livestock Producers is prioritized. Provide ongoing oversight of AgriCorp as it pertains to its role in managing assets LFPB is accountable for.
  2. Ensuring the maintenance of an effective system of internal controls and compliance with applicable requirements to promote transparency and accountability. This includes effective oversight of expense management and controls to ensure efficiency and sustainability.
  3. Measuring and communicating to stakeholders the performance of the Fund for Livestock Producers against established targets and have an established investment policy that is reviewed annually to ensure the long-term sustainability of the Fund.
  4. Continuing to investigate and adjudicate all claims in a fair, equitable and timely manner. I expect the Board to make decisions on claims based on prudent and consistent adherence to established operational procedures, as well as effective customer service in supporting Ontario farmers with the processing of claims and ensuring that the adjudication process is fair and has minimal delays.
  5. Continuing to engage with the ministry on supporting the implementation of actions recommended through the review of the Financial Protection Programs.
  6. Continuing to work with the ministry and AgriCorp to complete the transition of the delivery of the Livestock Financial Protection Program to AgriCorp

Through these measures, we can continue to ensure that LFPB is continuing to fulfill its mandate of collecting check-off fees, administering the compensation fund and approving claims made against the Fund. We are confident that the people of Ontario are going to unleash the economic growth that is necessary for job creation, prosperity, and a stronger province.

I thank you and your fellow board members for your continued support, and for your valuable contributions. Should you have any questions/concerns, please feel free to contact Heather Cassidy, Director of the Farm Finance Branch.

Sincerely,

Lisa Tompson
Minister of Agriculture, Food and Rural Affairs

cc: Heather Cassidy, Director, Farm Finance Branch


For more information:
Toll Free: 1-877-424-1300
E-mail: ag.info.omafra@ontario.ca