Grain Financial Protection Board business plan for the fiscal years 2015–2018
Executive Summary
The Grain Financial Protection Board (Board or GFPB) was established in 1985 and is classified as a Board-Governed Provincial Agency under the Agencies and Appointments Directive (AAD). The Board, "administers funds or other assets for beneficiaries named under statute." The Board's mandate, strategies and activities have always been focused on prudent management of the Funds to ensure financial compensation is available to grain corn, soybean, wheat, and canola producers/owners when required. The Board's mandate of administrating the Funds, investigating, granting and refusing claims, and recovering money is directly linked to one of the Ministry's 2014/2015 goals of ensuring the sustainability of agriculture in Ontario.
Commitments for 2015-2018
The Board continues to administer the Funds in a sound manner and this provides producers/owners with an effective risk management tool that allows them to remain competitive. The Board has outlined four strategic priorities for 2015-2018:
- To ensure long-term sustainability of the Funds administered by the Board;
- To ensure appropriate agreements are reviewed, understood and in place to fulfill its mandate:
- To continue to investigate and adjudicate claims in a fair and equitable manner; and
- To grant, refuse and recover claim payments under the Farm Products Payments Act (FPPA).
Revenue and Expenditures and Expectations for 2015-2018
The Board receives revenue for the Funds from two sources. The first is in the form of producer check-off fees that are received when a producer sells one of the four commodities, grain corn, soybean, canola or wheat. Each commodity has its own check-off fee which is expressed in $/tonne. The Minister adjusted check-off fees in 2013 to assist the Funds in meeting the targeted Fund balances. No further adjustments are anticipated for 2015-18.
To project the future check-off fees, the Board consulted with the Grain Farmers of Ontario and the Ontario Canola Growers Association to determine how much of each commodity would be marketed. The Board has assumed that the projected sale of the four commodities would be similar to previous years. Using the new check-off fee structure introduced in July 2013, check-off fees are estimated at $375,000 annually.
The second source of revenue is from interest earned on the balance of the Funds held. A decline in financial markets has resulted in the Funds generating lower interest revenue annually. Interest revenue is estimated by reviewing the current investment portfolio and has been projected 1.75% annually.
The Board has been able to effectively manage expenses over the past several years. For 2015-16, both the workload and corresponding expenses are estimated at a similar amount to previous years. For 2016-17, an estimated expense for an actuarial review has been included. It has been a best business practice of the Board to complete an actuarial review every five years and the last review was completed in 2011. Governance/secretariat and finance expenses have also been increased in 2016-17 to reflect the additional workload of completing an actuarial review. The Board has budgeted an additional increase in expenses of two per cent per annum to capture the effect of inflation.
Beginning in 2014/15, the Board included a projected amount for claims. Although no claims have been paid from the Funds in the past few years, for budgeting purposes, an amount of $263,000 annually has been included for each year (estimated claim amount from the 2011 actuarial study).
With the addition of an expense for an actuarial review, the annual net revenue greatly decreases in 2016-17. This generally is a once in five year expense, and the overall soundness of the Funds will be minimally impacted by the actuarial review expense. Also included in the expenses is an amount for claims, and looking at the previous claims history for the Board, it is realistic to assume that the likelihood of having to pay claims each year is low. The Board anticipates it will generate enough revenue to cover all expenses in 2016-17.
The Board will continue to review the soundness of the Funds on an annual basis, and will continue to make recommendations to the Minister regarding the check-off fees as required.
The Board conducted its annual review of the Funds in April 2014 and compared the Funds' performance to the recommendations from the 2011 Actuarial Review. With the adjusted check-off fees in July 2013, the Soybean Fund achieved a growth rate of seven per cent in 2013-14. The Board anticipates the Soybean Fund will continue to grow, and should achieve its targeted balance in the next few years. Net revenue for 2013-14 was $707,135 and net expenses were $229,220.
Key achievements from 2014/2015
- Review and management of Fund performance specifically the soybean fund
- Review and revision of the Expense Allocation Policy
- Business planning and risk assessment
- Re-appointment of Board members
- Annual review of all Board by-laws and policies
The Board worked collaboratively with the Ministry to fill vacant member positions. The Board continues to focus on the effective management of the Funds. All policies and guidelines are reviewed annually to both ensure that the material continues to be relevant, and that the members remain informed. The Board is focused on ensuring that appropriate agreements and directives are up to date and understood by the members so that they continue their commitment of agency transparency and accountability. Legal counsel is available to the Board, and is regularly consulted to interpret agreements.
Mandate
The Board is responsible to the Minister of Agriculture Food and Rural Affairs (Minister) and is constituted under the authority of the FPPA and the regulations made thereunder:
- O. Reg. 70/12 Payments From Funds For Grain Producers
- O. Reg. 321/11 Fees Payable to Boards
The Board's legislative mandate is outlined in section 4 of the FPPA as:
It is the function of a board and it has power,
- to administer its fund;
- to investigate all claims made to it under this Act and to determine the extent of their validity;
- to grant or refuse the payment of claims or any part thereof and determine the amounts and manner of payment;
- to recover any money to which it is entitled under this Act by suit in a court of competent jurisdiction or otherwise.
Governance
The Board members are accountable to the Minister, through the Chair, for setting goals, objectives and the strategic direction for the Board. The Board operates under authority as outlined by the FPPA and in accordance with the Memorandum of Understanding (MOU) between the Minister and the Chair. A revised MOU was approved by the Board and Minister in March 2011 for a term of five years. The MOU sets out the operational and reporting relationship between the Board and the Minister, and also outlines the administrative, financial and auditing arrangements with the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA).
The vision of the Board is to protect the financial interests of Ontario producers who have sold grain corn, soybeans, wheat and canola as well as owners who stored grain with elevator operators. The Board's vision supports OMAFRA's goal of ensuring the sustainability of agriculture in Ontario.
How the Program, the Funds and the Board work together
Grain Financial Protection Program
The Grain Financial Protection Program (the Program) was introduced in the mid-1980s, following a series of grain elevator bankruptcies. The following are the components of the program:
- Determining the financial responsibility of grain dealers and elevator operators;
- Inspection of storage sites; and
- Licensing of grain dealers and elevator operators.
Grain Financial Protection Board Funds
- The Board administers four Funds: grain corn, soybean, canola and wheat.
- All income held in the Funds comes from producer check-off fees and the investment income generated from those fees.
- The purpose of the Funds is to provide producers/owners with financial compensation in the event that a dealer or elevator defaults on their obligation or if there is a storage shortfall.
Grain Financial Protection Board
- The Board will make a decision on a claim based on the evidence and the law.
- Payment to producers and owners is made after the Board has determined that their claim is valid and the Board has approved the claim for payment.
- Claims are infrequent and therefore the Board's main activities are to manage the Funds effectively and prepare for claims when they occur.
Strategic Direction
The Board has set out four broad priorities which are essential in keeping with the Board's mandate and responsibilities:
- To ensure long-term sustainability of the Funds administered by the Board;
- To continue to investigate and adjudicate claims in a fair and equitable manner;
- To grant, refuse and recover claim payments under the FPPA; and
- To ensure appropriate agreements are reviewed, understood and in place to fulfill the mandate.
To support the four priorities outlined above, the Board has established five goals with corresponding objectives and activities that are used to assist with fulfilling their mandate.
The five goals which the Board focuses on are:
- Long-term sustainability of the Funds - The Board has hired Agricorp for the day-to-day administration functions of the Funds; however, the Board is ultimately responsible for the oversight and management of the Funds. The Board annually measures the performance of the Funds against established targets. The Board will request Actuarial Reviews on the Funds as required and they will only invest the Funds in instruments that are approved in the MOU. The Board has an established investment policy that is reviewed annually.
- Maintaining an adjudication process that is simple, fair and accessible with minimal delays - The Board has approved claim adjudication guidelines and has established operational procedures to assist with the processing of claims. These activities will assist the Board to ensure that the adjudication process is fair and has minimal delays.
- Ensuring agreements and directives are understood and documentation required under the MOU is in place - The Board reviews the documentation required under the MOU to ensure that it is both understood and that the appropriate documentation is on file. Legal counsel assists the Board with the review of the agreements.
- Ensuring a high preforming Board - The Board works with OMAFRA and stakeholder groups to seek recommendations and approvals for appointments to the Board. The Board also maintains an orientation manual and provides new members with training.
- Consultation with industry stakeholders - The Board participates in a minimum of one stakeholder meeting per year
Overview of Current and Future Programs and Activities
The Board administers the Funds and, as such, the Board's focus is on the growth of the Funds and on prudent management of expenditures. The Board does not administer a program, and no new programs are being considered for the 2015-2018 time frame.
| Goal | Objectives | Activities |
|---|---|---|
| Long-term sustainability of the Funds | To maintain actuarially sound Funds that are managed in the interest of producers and owners |
|
| Long-term sustainability of the Funds | To be self-sustaining, paying all legitimate Board expenses from the Funds |
|
| Long-term sustainability of the Funds | To ensure the Soybean Fund achieves the proposed minimum targeted balances |
|
| Maintain an adjudication process that is simple, fair, and accessible, with minimal delays | To conduct adjudicatory Board meetings and hearings and to issue decisions in a timely and fair manner |
|
| Ensure action is taken to recover any money to which to Board is entitled under the FPPA | Board compliance with the FPPA |
|
| Ensure that appropriate agreements and directives are understood and that documentation required under the MOU is in place | Board compliance |
|
| Ensure a high performing Board | To mitigate loss of Board member experience and knowledge as members' terms expire |
|
| Consultation with industry stakeholders | To be transparent on decisions of the Board |
|
Board Structure
The Board is comprised of a minimum of five members as appointed by the Minister. Historically, the membership of the Board is comprised of nominees from the, the Grain Farmers of Ontario (GFO), the Ontario Agri Business Association (OABA), and the Ontario Canola Growers Association (OCGA). The Minister also has the authority to designate a member of the Board as Chair and another as Vice-Chair. There are currently ten Board members including the Chair and Vice Chair. Appendix 1 includes a list of the Board members.
Environmental Scan
The Board is responsible through its mandate to manage the Funds and to adjudicate claims presented by producers and owners of canola, grain corn, soybeans, or wheat. Producers or owners may submit a claim to the Board to cover a portion of their losses.
The factors that could impact the Board and/or the health of the Funds are outlined below.
External Drivers
Interest Rates
Interest rates play a significant role in the overall health of the Funds. The 2011 Actuarial Review indicated that the Funds are highly dependent upon investment income to cover projected expenses and claims. The review revealed that the current investment holdings are of high quality, and have experienced very little variation in realizations of yield annually. To maintain the solvency of the Funds, the Board will need to continue to ensure that the Funds are invested in high quality investments as outlined in the Trustee Act provisions referenced in the MOU.
Dealer Consolidation
The consolidation of operations into larger dealers and elevators has raised a concern that the solvency of the Funds may be impacted. There is the potential for larger claims becoming more prevalent, as producers will be dealing with fewer dealers and elevators. However, consolidation may also bring a healthier grain industry as more resources would be available to larger operations. They also tend to have more rigorous controls over financial processes and shifts in the economy may have fewer impacts. Agricorp completes midterm licence reviews to ensure existing dealers continue to show financial responsibility when an additional facility is added.
Unlicensed Operators
If a dealer or elevator is not licensed, a review of the organization's financial responsibility is not completed. This may increase the probability that the organization will default on a producer or owner. As reported to the Board by the Chief Inspector, Agricorp continues to see producers increasing their on-farm storage capacity and using their surplus storage capacity to store grain for other producers. An increased awareness campaign by stakeholders has resulted in an increased knowledge of the need to deal with a licensed facility. Agricorp addresses unlicensed facilities and dealers as soon as they are apparent with sanctions under the Grains Act. The number of complaints that Agricorp has received about unlicensed operations has increased. In the majority of the cases, the complaint has resulted in the operator completing an application and the issuance of a license for the grain elevator, as a dealer or operator may not purchase or store crop until a license is approved.
Out of Province Dealers
In the past year there has been a few dealers purchasing from Quebec or the US that require a license. Producers are free to sell and transport crop to other jurisdictions but if operations are actively purchasing from Ontario producers a license is required. There are several out of province dealers that are currently licensed.
Increased Demand for Government Accountability and Transparency
Increased scrutiny of both private and public sector organizations has resulted in increasing demands for accountability. Government, including agencies, need to perform their functions effectively and efficiently in a transparent and responsible manner. They must show that government directives are being complied with and outcomes are achieved through clear and regular reporting. The AAD issued by Management Board of Cabinet, requires greater Board accountability, transparency, reporting and standardized risk identification and management. In response to the need for greater transparency, the Board completes and submits to the Ministry a quarterly risk assessment report and quarterly financial statements.
Legislative, Strategic and Policy Changes
The Board was established under the FPPA, which is administered by OMAFRA. Changes to the FPPA will have a direct impact on the Board and its activities. Through the MOU, the Minister and the Chair have agreed to work closely together when the Ontario Government is considering regulatory or legislative changes for the agency. The Chair and the Minister meet as required to discuss any legislative changes that may impact the Board.
Financial Responsibility Review Committee (FRRC)
An important part of grain dealer and operator licensing involves determining the financial responsibility of dealers and elevator operators. The FRRC was established to support the determination of the financial strength of applicants. The FRRC includes an Agricorp staff member and two Chartered Accountants that review files and provide recommendations to the Chief Inspector. The Program helps to ensure that financially viable operations are licensed to purchase from producers.
Commodity Prices
Commodity prices have experienced great volatility that may increase cash flow challenges and increase the amount of risk to the dealer/elevator and ultimately to the Funds. This volatility has made it harder to predict the future of commodity prices.
Internal Drivers
Funds
The 2011 Actuarial Review revealed that the Funds are highly dependent on investment income. The review recommended that the Board continue to monitor all the Funds against targets recommended by the actuary. It was further recommended that the soybean Fund grow by a minimum amount of two per cent annually. In July 2013, to assist the Fund in meeting it's targeted balance, the check-off fee for soybeans was increased from $0.02/tonne to $0.10/tonne. In 2013-14, the soybean Fund's growth rate was seven per cent which met the recommendation in the review. The Board will continue to monitor all of the Funds to ensure they are growing or maintained at an appropriate level.
Board Expertise and Development
The Funds have a low frequency of claims. This makes it difficult for Board members to acquire "hands-on" claims adjudication experience. The Board approved the Claim Adjudication Guidelines which assists Board members without previous claims experience to adjudicate claims. Board members bring a variety of skills and experience and an annual review of these guidelines ensures a consistent approach to adjudicating claims.
Board Knowledge Management and Succession Planning
Deliberate planning and consideration is given to the expiry date of members' terms to minimize the loss of experience and knowledge during member transition periods. A continued review of existing Board members' terms is conducted and staggering of expiring terms is planned.
Resources Needed to Meet Objectives of Mandate and Strategic Directions
Human Resources and Staff Numbers
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/Supports Provided to the GFPB
- Contracted Services - Agricorp
Both Governance/Secretariat and Financial Support Services are provided to the Board by Agricorp. These services are provided as agreed to in the Service Agreement between the Board and Agricorp. The Board may enter into a contract for actuarial services in 2016 and an amount for this has been included in the budget below. - Support Services
Through the MOU, OMAFRA is committed to providing the GFPB with:- Investigative services; and
- Legal services through the Ministry of the Attorney General, OMAFRA Legal Services Branch.
Financial Budget - Proposed Operating Expenditures and Projected Revenues
| Budget 2013/14 | Actual 2013/14 | Budget 2014/15 | Budget 2015/16 | Budget 2016/17 | Budget 2017/18 | |
|---|---|---|---|---|---|---|
| Fees | 250,000 | 413,584 | 375,000 | 375,000 | 375,000 | 375,000 |
| Interest | 271,748 | 293,551 | 236,275 | 246,246 | 248,027 | 248,480 |
| Recoveries | - | - | - | - | - | - |
| Total Revenue | 521,748 | 707,135 | 611,275 | 621,246 | 623,027 | 623,480 |
| Budget 2013/14 | Actual 2013/14 | Budget 2014/15 | Budget 2015/16 | Budget 2016/17 | Budget 2017/18 | |
|---|---|---|---|---|---|---|
| Claims | - | - | 263,000 | 263,000 | 263,000 | 263,000 |
| Other administration | 200 | 200 | 200 | 200 | 200 | |
| Professional Fees (i.e. Actuarial) | 0 | 0 | 0 | 0 | 60,000 | 0 |
| Governance/Secretariat Services | 61,200 | 34,485 | 45,000 | 45,000 | 60,000 | 47,000 |
| Financial Services | 47,940 | 15,408 | 30,000 | 30,000 | 45,000 | 33,000 |
| Costs of Determining Financial Responsibility | 156, 240 | 156,241 | 156,240 | 156,240 | 156,240 | 156,240 |
| FRRC | 25,970 | 23,086 | 25,000 | 25,000 | 12,500 | 12,500 |
| Total Expense | 291,550 | 229,220 | 519,440 | 519,440 | 597,140 | 513,940 |
| Budget 2013/14 | Actual 2013/14 | Budget 2014/15 | Budget 2015/16 | Budget 2016/17 | Budget 2017/18 | |
|---|---|---|---|---|---|---|
| Net Balance (Total Revenue - Expenses) | 230,198 | 477,915 | 91,835 | 101,806 | 25,887 | 109,540 |
| Fund Balance Beginning of Year | 13,587,387 | 13,501,425 | 13,979,340 | 14,071,175 | 14,172,981 | 14,198,868 |
| Fund Balance End of Year | 13,817,585 | 13,979,340 | 14,071,175 | 14,172,981 | 14,198,868 | 14,308,408 |
Projected Board Expenditures
- Governance/Secretariat and Financial Support Services - The FPPA requires the Board to meet all its expenses from the Funds except for the remuneration of those of its employees who are public servants employed under Part III of the Public Service of Ontario Act, 2006. The Board has entered into a contract with Agricorp, which expires on April 1, 2015, to provide these services. To be renewed after negotiation
- 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 Funds. This change came into effect in November of 2010.
- Costs of Determining Financial Responsibility - Since November of 2010, the Board has had the legal authority to pay for the cost of determining financial responsibility of dealer applicants. The Board has signed a letter of understanding that expires on April 1, 2015 with Agricorp regarding the costs of determining financial responsibility. To be renewed after negotiation.
- Professional, Technical or Other Assistance to the Agency - An example of this type of cost would be an Actuarial Review.
- Claim Payments - All claim payments and associated costs are paid by the Funds. 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.
- FRRC - This is the cost of a chartered accountant who reviews all grain dealer files annually to determine if they are financially responsible prior to recommending issuance of a license. The present contract expires in September of 2015.
Projected Board Revenues
The Board manages four separate Funds for grain corn, soybeans, canola and wheat. Revenue is received from producer check-off fees and interest earned on the balance of the Funds held. Producers contribute to the Funds by paying check-offs on crop that is sold.
The Minister adjusted the fees effective July 1, 2013. They are based on the volume of crop sold and are outlined for the four commodities below:
- Corn: 1/10 of 1 cent/tonne
- Wheat: 5 cents/tonne
- Soybeans: 10 cents/tonne
- Canola: 20 cents/tonne
The Minister has the authority to set these fees as authorized under the FPPA. The FPPA authorizes the Board to withdraw amounts from the Funds for specific purposes, such as to compensate producers for valid claims when a dealer has defaulted on a payment or to compensate owners when an elevator has defaulted on a storage responsibility.
The Board is subject to an annual audit by the Office of the Auditor General of Ontario.
Proposed Capital Expenditures
The Board does not have any capital expenditures planned for 2015-2018.
The estimated revenues and expenses for the next three years are provided in Table One. The Board has delegated the investment of the Funds to Agricorp, and the Funds are invested in instruments authorized under the MOU. An inflation rate of 2% was also built into the service costs.
Information Technology
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.
Implementation Plan
Performance measures and targets for each objective are identified below. As part of its continuous improvement process, the Board has set goals to ensure that objectives are achieved. The Board also tracks progress against these measures and prepares an annual report.
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.
| Performance Measure | Baseline | Target 13/14 | Actual 13/14 | Target 14/15 | Target 15/16 | Target 16/17 | Target 17/18 |
|---|---|---|---|---|---|---|---|
| Unqualified audit opinion received | Unqualified | Unqualified | Unqualified | Unqualified | Unqualified | Unqualified | Unqualified |
| Grain Corn target Fund balance | Fund balance of $4,600,000 maintained | Fund balance of $4,600,000 maintained | Achieved - Fund Balance $5,897,014 | Fund balance of $4,600,000 maintained | Fund balance of $4,600,000 maintained | Fund balance of $4,600,000 maintained | Fund balance of $4,600,000 maintained |
| Wheat target Fund balance | Fund balance of $2,200,000 maintained | Fund balance of $2,200,000 maintained | Achieved - Fund Balance $3,285,508 | Fund balance of $2,200,000 maintained | Fund balance of $2,200,000 maintained | Fund balance of $2,200,000 maintained | Fund balance of $2,200,000 maintained |
| Soybean target Fund balance | Fund balance of $4,400,000 maintained | Fund balance of $4,400,000 maintained | Not Achieved - Actual Fund Balance $3,826,793 The minister approved an increase in check off fees from 0.02/tonne to 0.10/tonne effective July 2013 | Fund balance of $4,400,000 maintained | Fund balance of $4,400,000 maintained | Fund balance of $4,400,000 maintained | Fund balance of $4,400,000 maintained |
| Canola target Fund balance | Fund balance of $900,000 maintained | Fund balance of $900,000 maintained | Achieved - Fund Balance $970,025 | Fund balance of $900,000 maintained | Fund balance of $900,000 maintained | Fund balance of $900,000 maintained | Fund balance of $900,000 maintained |
| Targeted annual growth in Soybean Fund achieved | 2% annual growth rate | 2% annual growth rate | Achieved - | 2% annual growth rate | 2% annual growth rate | 2% annual growth rate | 2% annual growth rate |
| Receive and review Fund financial statements from Agricorp | Quarterly | Quarterly | Achieved | Quarterly | Quarterly | Quarterly | Quarterly |
Target Fund balances are maintained as per the Actuarial Review.
| Performance Measure | Baseline | Target 13/14 | Actual 13/14 | Target 14/15 | Target 15/16 | Target 16/17 | Target 17/18 |
|---|---|---|---|---|---|---|---|
| Claims processed with minimal delays | Claimants notified within 2 days, dealers and elevators within 4 days of receipt of claim | Claimants notified within 2 days, dealers and elevators within 4 days of receipt of claim | N/A – no claims received | Claimants notified within 2 days, dealers and elevators within 4 days of receipt of claim. | Claimants notified within 2 days, dealers and elevators within 4 days of receipt of claim | Claimants notified within 2 days, dealers and elevators within 4 days of receipt of claim. | Claimants notified within 2 days, dealers and elevators within 4 days of receipt of claim. |
| Claims are adjudicated fairly | Claims are reviewed individually, and follow established adjudication guidelines | Claims are reviewed individually and follow adjudication guidelines established | N/A – no claims received | Claims are reviewed individually and follow adjudication guidelines established | Claims are reviewed individually and follow adjudication guidelines established | Claims are reviewed individually and follow adjudication guidelines established | Claims are reviewed individually and follow adjudication guidelines established |
| Claimants receive notification of Board decision | Within 10 days of Board decision | Within 10 days of Board decision | N/A – no claims received | Within 10 days of Board decision | Within 10 days of Board decision | Within 10 days of Board decision | Within 10 days of Board decision |
| Performance Measure | Baseline | Target 13/14 | Actual 13/14 | Target 14/15 | Target 15/16 | Target 16/17 | Target 17/18 |
|---|---|---|---|---|---|---|---|
| Claims are reviewed to determine their validity | Board refers to Act and regulations to determine validity of claims and the appropriate exercise of discretion, where permitted. | Board refers to act and uses legal counsel as required to determine validity of claims | N/A – no claims received | Board refers to act and uses legal counsel as required to determine validity of claims | Board refers to act and uses legal counsel as required to determine validity of claims | Board refers to act and uses legal counsel as required to determine validity of claims | Board refers to act and uses legal counsel as required to determine validity of claims |
| Recover any money to which to Board is entitled to under the FPPA | Legal counsel is consulted when proceeding with any recovery action | Legal counsel is consulted when proceeding with any recovery action | N/A | 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 | Legal counsel is consulted when proceeding with any recovery action |
| Performance Measure | Baseline | Target 13/14 | Actual 13/14 | Target 14/15 | Target 15/16 | Target 16/17 | Target 17/18 |
|---|---|---|---|---|---|---|---|
| Updated MOU in place | Signed MOU to be in place | Not applicable - MOU expires March 2016 | Not applicable | Not applicable | March 31, 2016 | Not Applicable | Not Applicable |
| Submit Annual Report | Annually | July 31, 2014 | Achieved | July 31, 2015* | July 31, 2016* | July 31, 2017* | July 31, 2018* |
| Submit Business Plan | Annually | March 2014 | Achieved | March 2015 | March 2016 | March 2017 | March 2018 |
| Submit Quarterly AAD Report | Quarterly | Quarterly | Achieved | Quarterly | Quarterly | Quarterly | Quarterly |
| Submit Quarterly Risk Assessment Report | Quarterly | Quarterly | Achieved | Quarterly | Quarterly | Quarterly | Quarterly |
*Note: The Annual Report contains audited financial statements which are completed by the Office of the Auditor General. The Annual Report cannot be submitted to the Minister until the Audited Financial Statements are completed.
| Performance Measure | Baseline | Target 13/14 | Actual 13/14 | Target 14/15 | Target 15/16 | Target 16/17 | Target 17/18 |
|---|---|---|---|---|---|---|---|
| Work with OMAFRA to ensure that the Board is at quorum. Ensure information regarding to appointments is submitted to the ministry. | As required | As required | Achieved | As required | As required | As required | As required |
| Provide new Board members with the Orientation Manual | Within three months of being appointed | Provided to new members within three months of appointment | Achieved | As required | As required | As required | As required |
| Stakeholders updated and informed of Board activities | 1 update | 1 update | Achieved | 1 update | 1 update | 1 update | 1 update |
Risk Assessment and Management
The AAD requires a risk-based approach to be used to focus Ministry and central agency resources on higher risk agencies and to ensure compliance with directive requirements. The table below provides a description of the risks identified and the plans to mitigate these risks. Aside from the actions detailed below, risk management is also supported by a strong commitment by the Board and its service provider to meet or exceed the performance measures outlined in this plan.
| Risk | Mitigation Strategy | Responsibility | Likelihood (i) | Impact (ii) | Time Horizon Frequency(iii) Timing(iv) | Risk Tolerance(v) | Prioritization |
|---|---|---|---|---|---|---|---|
| Changes to interest rates, dealer consolidation or, commodity prices can negatively impact the Fund. | The Board ensures that the Actuarial Review remains current to assess the soundness of all the Funds. The 2011 Actuarial Review recommended a target balance for each of the four Funds. Amendments to adjust the soybean and wheat check off fees were filed under O. Reg 205/13 on June 28, 2013. These amendments support the appropriate targeted balances for each Fund. | GFPB/OMAFRA | 2 | 2 | Frequency = 2 Timing = 1 | 2 | Medium Priority 9 |
| Inability of the Board to fulfil their role due to delays in appointments. | Board member transition is monitored and appointment recommendations are sought and forwarded to the Ministry several months prior to the vacancies. This is to reduce the impact to the Board as experienced members leave and new members are appointed. | GFPB, Agricorp Support Services, OMAFRA | 1 | 2 | Frequency=1 Timing= 1 | 2 | 7 |
| Board members require adequate financial management and risk mitigation skills to fulfill their role | Training for Board appointees is on-going and a Board Orientation manual has been developed. The Board will recommend to the Minister, the appointment of members with the adequate skills to fulfill the role. | GFPB/Agricorp Support Services/ OMAFRA | 1 | 2 | Frequency=1 Timing = 1 | 2 | 7 |
| Lack of Board Members with Claim experience | The Board has a Claim Adjudication Guideline to assist members with adjudicating claims. Legal expertise and investigative services are available to the Board (as outlined in the MOU) to support in the claims process. | GFPB, Legal Counsel, OMAFRA and Agricorp Support Services | 1 | 2 | Frequency=1 Timing = 1 | 1 | 6 |
| Lack of Funds available to pay large claim | The MOU and the Investment Policy outline strategies for investing Funds. The Board is taking action on recommendations of the Actuarial Review to generate the required revenue to meet the Fund targets. | GFPB, Agricorp Support Services | 1 | 3 | Frequency=1 Timing =1 | 1 | 7 |
| Security breaches of information | All Board policies and procedures are maintained electronically. Security breach possibilities are reviewed annually to reduce risks. | GFPB, Agricorp Support Services | 1 | 1 | Frequency=1 Timing =1 | 1 | 5 |
i) High=3, Medium=2, Low =1
ii) Significant = 3, Moderate = 2, Minor =1, No Impact = 0
iii) Recurring =2, One Time=1, Never = 0
iv) Immediate = 2, In the Future = 1, Never = 0
v) Low = 3, Moderate = 2, High =1
Communication Plan
Annually, the Board will inform the stakeholders of the status of the Funds by providing them with a copy of the Board's audited financial statements.
Schedule C of the MOU between the Board and the Ministry outlines the communication plan that the Board will follow. The MOU is in effect until March 31, 2016.
Key messages for communication
- Clearly outlines the process and regulations that are followed in making a decision.
- Identifies section(s) of the applicable Act(s) and regulations used to arrive at a decision.
Key messages for broad based communications
- All Funds are maintained on an actuarially sound basis.
- The Board adjudicates claims made under the FPPA and determines the payment, if any, to be made from the Fund.
- The FPPA protects the financial interests of producers who sell grain corn, soybeans, wheat and canola to licensed dealers. It also protects the financial interests of owners who store grain corn, soybeans, canola or wheat with licensed elevator operators.
- Agricorp is responsible under contract with OMAFRA to determine financial responsibility and administer the licensing and inspection components of the Grain Financial Protection Program.
Vehicle used to communicate key messages
- In the event of a claim, the Board will advise each claimant via letter on the disposition 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.
Appendix 1. Current Board Appointees
| Position | Member Name | Tenure |
|---|---|---|
| Chair (Part Time) | Campbell, Jim | 12-Apr-2005 - 03-Apr-2017 |
| Vice-Chair (Part-Time) | Wagner, Fred | 06-Mar-2007 - 12-Dec-2015 |
| Member (Part-Time) | Buttenham, David | 22-Mar-2011 - 21-Mar-2017 |
| Member (Part-Time) | Senft, Barry | 22-Apr-2011 - 21-Apr-2017 |
| Member (Part-Time) | Oliphant, Darcy | 30-Jul-2011 - 29-Jul-2017 |
| Member (Part-Time) | Van Ankum, Henry | 19-Apr-2012 - 18-Apr-2015 |
| Member (Part-Time) | Brock, Mark | 22-Aug-2012 - 21-Aug-2015 |
| Member (Part-Time) | Cohoe, Lynne | 22-Apr-2008 - 21-Aug-2015 |
| Member (Part-Time) | Kobe, Jeff | 19-Jul-2007 - 19-Jul-2016 |
| Member (Part-Time) | Vacant | - |
Footnotes
- footnote[1] Back to paragraph Budgeted numbers from 2014-17 Business Plan AEAD Quarterly Report
- footnote[2] Back to paragraph Forecasted Interest rate of 1.75%
- footnote[3] Back to paragraph Amout for claims are included for budgeting purposes only and are based on the information used in the 2011 actuarial study. The last claims were paid in 2009
- footnote[4] Back to paragraph Actuarial Reviews completed approximately every 5 years. Amount estimated based on cost of 2011 review.