This operational document is effective as of April 1, 2023.

Operational document related to the Sustainable Canadian Agricultural Partnership: Federal-Provincial AgriInsurance Agreement

between the governments of

Canada (referred to as "Canada"), as represented by the Minister of Agriculture and Agri-Food;

of the first part;

and

Ontario (referred to as the "Province"), as represented by the Minister of Agriculture, Food and Rural Affairs;

of the second part;

and

Agricorp (referred to as "Agricorp");

of the third part;

(collectively the "Parties")

The Parties agree as follows:

The Federal-Provincial AgriInsurance Agreement which is appended to the Sustainable Canadian Agricultural Partnership: A Federal-Provincial-Territorial Framework Agreement on Agriculture, Agri-Food and Agri-Based Products Policy effective April 1, 2023 makes reference to the items to be provided for by this Operational Document.

Canada's Contributions to the Canada-Ontario Insurance Program including Wildlife Compensation shall be made on the basis of the AgriInsurance Agreement and this Operational Document.

1.0 Interpretation

  • 1.1 This Operational Document shall be interpreted in a manner consistent with the Act, Regulations and AgriInsurance Agreement.
  • 1.2 The Parties shall apply the terms and definitions set out in the AgriInsurance Agreement and, in the event of a conflict between this Operational Document and the AgriInsurance Agreement, the latter shall prevail.
  • 1.3 In this Operational Document:
    • "AgriInsurance Agreement" means The Federal-Provincial AgriInsurance Agreement which is appended to the Sustainable Canadian Agricultural Partnership: A Federal-Provincial-Territorial Framework Agreement on Agriculture, Agri-Food and Agri-Based Products Policy as Annex B;
    • "Crop Year" or "Production Year" means a period of twelve consecutive months beginning on April 1 and ending on March 31, except where stipulated otherwise by the Province for specified Agricultural Products, in Annex C, Details of Insurance Plans;
    • "Exposure Unit" means a unit of measurement of an Agricultural Product that is used to determine the amount of insurance coverage and related premiums under a Contract of Insurance;
    • "Operational Document" means this Operational Document related to the AgriInsurance Agreement
    • "Production Insurance Procedure Manuals" means the manuals prepared and maintained by Agricorp that contain procedures (for example, applications, assignments, systems applications, etc.) required to administer the Insurance Program in the Province.
    • "Provincial Act" means the Agricultural Products Insurance Act,1996.
    • "Provincial Regulations" means the regulations made pursuant to the Provincial Act.
    • "Standard Field Procedures Manuals" means the manual or manuals prepared and maintained by Agricorp that contains policies and procedures (for example, underwriting, adjusting and yield evaluation) used by AgriCorp staff to administer the Insurance Program in Ontario.
    • Any capitalized term in this Operational Document not defined above shall have the same meaning as set out in the AgriInsurance Agreement.

2.0 Eligibility

  • 2.1 As required under section 2.1 of the AgriInsurance Agreement, any conditions implemented for participation in the AgriInsurance program shall be set out in Annex L of this Operational Document - Conditions for Participant Eligibility.
  • 2.2 The Agricultural Products eligible for insurance, referred to in section 2.2 of the AgriInsurance Agreement, are referenced in Annex A of this Operational Document - Insurable Agricultural Products.
  • 2.3 As required under section 2.3 of the AgriInsurance Agreement, the introduction of an Insurance Plan for a new Agricultural Product, a change to an existing Insurance Plan (including but not limited to changes to deadlines with respect to enrolment, seeding and harvesting), and proposals for Producer-Paid Production Loss Coverage benefits, shall be addressed by Canada once the information set out in Annex I.5 of this Operational Document is provided – Information Required For Changes to Enrolment, Seeding and Harvesting Deadlines; For Modifications to Existing Plans; For Proposals on New Plans; and For Introducing Producer-Paid Production Loss Coverage Benefits.
  • 2.4 The areas to which the Insurance Plan extends as required under section 2.4 of the AgriInsurance Agreement, are referenced in Annex B of this Operational Document - Risk Area Identification.
  • 2.5 A Contract of Insurance will be issued for all Exposure Units of the Agricultural Products designated by an Insured Producer, prior to the final enrolment date for the Crop Year. When the Contract of Insurance is continuous, the Insured Producer shall in each Crop Year thereafter insure all designated Exposure Units of the Agricultural Product(s) unless the Contract of Insurance is amended, cancelled or terminated.

3.0 Insurance Deadlines

  • 3.1 All enrolment, seeding and harvesting deadlines, as required under section 3.1 of the AgriInsurance Agreement, are referenced in Annex C of this Operational Document - Details of Insurance Plans.
  • 3.2 As required under section 3.2 of the AgriInsurance Agreement, any increase to premium rates as a result of the cost of assuming additional risk associated with changes to enrolment, seeding or harvesting deadlines are determined by the province in collaboration with Canada and referenced in Annex G of this Operational Document - Premium Rate Determination and Self-Sustainability Assessment For Yield-based and Non-yield-based Coverage Plans.
  • 3.3 Also as required under section 3.2 of the AgriInsurance Agreement, any changes to enrolment, seeding or harvesting deadlines shall be reported to Canada with the determination of any additional risk involved prior to changing a deadline, in order to determine any necessary adjustments to the Insurance Plan. The manner in which any changes are to be reported to Canada is set out in Annex I.5 of this Operational Document - Information Required For Changes to Enrolment, Seeding and Harvesting Deadlines; For Modifications to Existing Plans; For Proposals on New Plans; and For Introducing Producer-Paid Production Loss Coverage Benefits.

4.0 Probable Yield Determination and Probable Yield Tests

  • 4.1 As required under section 4.1, 4.2 and 4.3 of the AgriInsurance Agreement, the description of each probable yield methodology, the certification dates and the submission of the probable yield tests is referenced in Annex F of this Operational Document - Probable Yield Determination and Probable Yield Tests.
  • 4.2 The procedures to account for quality losses in the calculation of probable yield are referenced in Annex F of this Operational Document - Probable Yield Determination and Probable Yield Tests.

5.0 Coverage

  • 5.1 The Coverage Levels provided by the AgriInsurance Program, as required under section 5.1 of the AgriInsurance Agreement, are referenced in Annex D of this Operational Document - Coverage Level and Deductible. The terms and conditions related to the Insurance Plans and related options are referenced in Annex C of this Operational Document - Details of Insurance Plans.
  • 5.2 For Non-yield-based Coverage, the method used to determine the maximum Coverage Level, as required under section 5.4 of the AgriInsurance Agreement, is referenced in Annex D of this Operational Document - Coverage Level and Deductible.
  • 5.3 For Catastrophic Production Loss Coverage, the program details and specific features as required under the sections 5.7 and 5.8 of the AgriInsurance Agreement are referenced in Annex H of this Operational Document – Catastrophic, High-Cost and Producer-Paid Production Loss Coverage.
  • 5.4 For High-Cost Production Loss Coverage, the program details as required under section 5.23 of the AgriInsurance Agreement is referenced in Annex H of this Operational Document – Catastrophic, High-Cost and Producer-Paid Production Loss Coverage.
  • 5.5 For Producer-Paid Production Loss Coverage, the program details as required under section 5.30 of the AgriInsurance Agreement is referenced in Annex H of this Operational Document – Catastrophic, High-Cost and Producer-Paid Production Loss Coverage.
  • 5.6 Whole Farm Coverage, referred to in section 5.31 of the AgriInsurance Agreement, is not available in this province at this time.

6.0 Production Value Determination

  • 6.1 A detailed description of the Yield Production Value and the Non-Yield Production Value methodology for each Agricultural Product, as required under section 6.1 of the AgriInsurance Agreement, are referenced in Annex E of this Operational Document - Production Value Determination Methodologies.
  • 6.2 The methodology to be used to complete the Yield Production Value and Non-Yield Production Value tests, as required under section 2 of the AgriInsurance Agreement, is referenced in Annex E of this Operational Document - Production Value Determination Methodologies.

7.0 Loss Determination

  • 7.1 The perils which are eligible to be covered under an Insurance Plan, as required under section 7.1 of the AgriInsurance Agreement, are referenced in Annex C of this Operational Document - Details of Insurance Plans.
  • 7.2 The standards and procedures to be used to determine the loss to an Insured Producer's Agricultural Product, as required under sections 7.3 and 7.4 of the AgriInsurance Agreement, are set out in the Standard Field Procedures Manuals. Such procedures shall include the method for determining losses for Risk-splitting Benefits.
  • 7.3 Where quality protection is provided for Yield-based Coverage, the procedures to be used to adjust the Production Value, Insurable Value, or unit value of an Agricultural Product for claim purposes when the grade of the Agricultural Product produced falls below the designated grade, as required under section 7.5 of the AgriInsurance Agreement, are referenced in Annex C of this Operational Document - Details of Insurance Plans.

8.0 Premium Rate Determination

  • 8.1 The methodology to be used for determining premium rates and premiums, as required under section 8.1 of the AgriInsurance Agreement, is referenced in Annex G of this Operational Document - Premium Rate Determination and Self-Sustainability Assessment for Yield-based Coverage and Non-yield-based Coverage Plans.

9.0 New Agricultural Products

  • 9.1 Agricultural Products that are considered to be New Agricultural Products and subject to a review in accordance to section 9.1 of the AgriInsurance Agreement, are referenced in Annex A of this Operational Document - Insurable Agricultural Products.

10.0 Wildlife Compensation

  • 10.1 The details of Wildlife Compensation as required to be contained in this Operational Document pursuant to sections 10.1 through 10.9 of the AgriInsurance Agreement are set out in Annex J of this Operational Document - Wildlife Compensation.

11.0 Payments by Canada

  • 11.1 As required under section 11.1 of the AgriInsurance Agreement, Canada shall pay its Contributions for Premiums for an Insurance Plan to Agricorp when it submits a claim in the format set out in Annex I.1 of this Operational Document - PINSS - Financial Reporting Template - PI Claim Detail, for not less than $250, and for which cumulative premiums do not exceed cumulative Premiums submitted in the provincial statistics for the crop year for that Plan.
  • 11.2 As required under section 11.5 of the AgriInsurance Agreement, Canada shall pay its Contributions for Wildlife Compensation to the Province, for not less than $250, and for which cumulative compensation paid to producers does not exceed cumulative compensation submitted in the provincial statistics for the crop year for that Plan.

12.0 Responsibilities of the Province

  • 12.1 Pursuant to section 2.4 of Schedule 1 of the AgriInsurance Agreement, prior to March 31, Canada shall issue a minimum administrative expense budget approval for the upcoming Fiscal Year to the Province for both AgriInsurance and Wildlife Compensation Programs (where such compensation exists). Prior to June 1, an administrative expense budget for the Fiscal Year, approved by the responsible officer of the Province, shall be submitted to Canada along with any significant assumptions used (i.e. estimated administrative revenue from participants, capital expenditure plan for the Fiscal Year, including specific details of expected capital expenditures greater than $400,000, business cases for projects as outlined by Canada, etc.). Pursuant to section 3.1 of Schedule 1 of the AgriInsurance Agreement, for each three-month period ending on the last day of June, September, December, and March of each year, the Responsible Officer of the Province shall provide Canada with a cash flow statement by the last day of the month following each quarter. The Province shall provide administration budgets and cash flow statements within the Production Insurance National Statistical System (PINSS). For additional information or general questions related to PINSS, the Province is encouraged to forward their inquiry to aafc.pinss-ssnap.aac@agr.gc.ca or contact their Departmental representative. The information entered within PINSS will contain the following:
    • 12.1.1 for budgets, the projection of administrative expenses to be incurred by category and administrative revenue to be received for the Fiscal Year, along with an attached submission signed by the Responsible Officer of the Province;
    • 12.1.2 for prior quarters, the actual administrative expenses incurred by category and the administrative revenue received by the Province, along with an attached submission signed by the Responsible Officer of the Province; and
    • 12.1.3 for subsequent quarters, the projection of administrative expenses to be incurred by category and administrative revenue to be received, cumulatively for the Fiscal Year, along with an attached submission signed by the Responsible Officer of the Province.
    • 12.1.4 for final cash flow submission, these will be created and uploaded in PINSS by Canada. An accompanying signed consent form will be obtained by the Responsible Officer of the Province. This final cash flow will be based on the financial information presented in the audited financial statements and other reconciling information required in accordance with section 16 of the AgriInsurance Agreement, and further described under section 12.3 of the Operational Document.
  • 12.2 Pursuant to section 2.3 of Schedule 1 of the AgriInsurance Agreement, the Province shall be responsible for submitting, in writing, for Canada's approval, a description of the methodology to be used to apportion administrative expenses and revenues between the various programs to be administered by the Province during the period of delivery of the initiative or during the Fiscal Year, as applicable.
  • 12.3 No later than November 30 following the end of each Fiscal Year, or other mutually acceptable due date at the request of the Province before November 30, the Province will provide audited financial statements, a management letter with responses, and reconciliation statements to the audited financial statements. The reconciliation statements shall contain the following information:
    • 12.3.1 the total Federal AgriInsurance Premiums and total Federal Wildlife Compensations as reported on the audited financial statements. The information shall also include a listing and summation of all AgriInsurance and Wildlife Compensations claims identified by the Federal PINSS identification number and the crop year that supports the reported Federal Premiums and Wildlife Compensations;
    • 12.3.2 the Eligible Administrative Expenses as identified in Schedule 1 of the AgriInsurance Agreement by functional category and the administrative revenue received by the Province in the administration of the AgriInsurance Program, and of the Wildlife Compensation program where such compensation exists;
    • 12.3.3 the actual Contributions remitted by Insured Producers, the Province and Canada during the Fiscal Year, by Crop Year or by Production Year; and
    • 12.3.4 the total amount owed by Canada by program and by Production or Crop year.
  • 12.4 Where the reconciliation statement shows that Canada has made an administration expense overpayment, the amount of the overpayment shall be deducted from the next administrative payment to be made to the Province. Where the reconciliation statement shows that Canada has made a federal premium or federal Wildlife Compensation overpayment, the Province shall submit a correcting invoice to Canada.
  • 12.5 Where the reconciliation statement shows that Canada has underpaid its Contributions for administrative expenses, the amount of the undisputed underpayment shall be included in the final administrative expenses payment for the fiscal year. Where the reconciliation statement shows that Canada has underpaid its contribution for Premiums or Wildlife Compensation, the Province shall invoice Canada for the underpayment.

13.0 Provincial Initiatives

  • 13.1 The determination of Premium and indemnity costs of the Province's initiatives not meeting the criteria required for federal Contributions are referenced in Annex K of this Operational Document - Provincial Initiatives.

14.0 Records and Information

  • 14.1 As required pursuant to section 15.3 of the AgriInsurance Agreement, where applicable, the Province shall provide or cause to be provided, not less often than quarterly, the following data:
    • 14.1.1 within 30 days of June 30, September 30, December 31 and March 31, provincial-level data,
      • 14.1.1.1 for Yield-based Coverage, identifying the Insurance Plan name, the Insurance Plan sub-type, Coverage Level, number of contracts, Exposure Units insured, total coverage dollars, Premiums broken down by Comprehensive Production Loss Coverage, High-Cost Production Loss Coverage and Catastrophic Production Loss Coverage and by Federal, Provincial and Insured Producer share, and in total, total indemnities paid to date, number of claims paid to date, the provincial weighted average probable and actual yields and the provincial weighted average insured unit values in the format set out in Annex I.2 of this Operational Document - PINSS - Data Sharing Template - PI Statistics;
      • 14.1.1.2 for Non-yield-based Coverage, identifying the Insurance Plan name, the Insurance Plan sub-type, Coverage Level, number of contracts, Exposure Units insured, total coverage dollars, Premiums broken down by Comprehensive Production Loss Coverage, High-Cost Production Loss Coverage and Catastrophic Production Loss Coverage and by federal, provincial and Insured Producer share, and in total, total indemnities paid to date, number of claims paid to date, and the provincial weighted average Non-yield Production Value in the format set out in Annex I.2 of this Operational Document - PINSS - Data Sharing Template - PI Statistics;
      • 14.1.1.3 identifying the number of Insured Producers; and
      • 14.1.1.4 for Wildlife Compensation (where Wildlife Compensation is applicable), identifying the Agricultural Product, the number of acres damaged or the number of livestock affected, the number of claims and the total indemnities in the format set out in Annex I.3 of this Operational Document - PINSS - Data Sharing Template - Wildlife Statistics.
    • 14.1.2 by January 31, following the Crop Year, an estimate of the provincial weighted average harvested yield for each Agricultural Product.
  • 14.2 Annually, pursuant to section 23.1 of the AgriInsurance Agreement, performance information shall include the selection criteria and risk tolerance details, the assessment process, the reinsurance model, the Premiums amount to be ceded (actuals or estimated) to reinsurers and other material factors established by the Province. For greater clarity, the following information is expected, as shared with the private reinsurer, the series of restated total liabilities privately reinsured, the series of total restated premiums associated with total liabilities privately reinsured, private reinsurance layers, coinsurance for each layer of reinsurance, actual or estimated premiums ceded to the reinsurer and private reinsurance claims, and Liabilities or Premiums associated with the reinsurance purchased.
  • 14.3 Annually, pursuant to the Premium Rate Guidelines, the Province shall provide or cause to be provided, a one page summary of the premium rate calculation for Agricultural Products insured, that represent 80% of total liability, including the following details: agricultural product, Coverage Level, average historical indemnity rate, Coverage Level conversion factors, basic smoothed Indemnity rate, excess smoothed Indemnity rate, uncertainty margins, self-sustainability load, cushioning loads, balance back factor, other loads, final selected rates, and long term average loss (for Non-yield-based Coverage plans).
  • 14.4 As required under paragraph 4 (5)(c) of the Regulations, the Province shall submit or cause to be submitted, the details of the administrative costs associated with the Risk-splitting Benefit as set out in Annex I.6 of this Operational Document - Administrative Costs Associated with the Risk-splitting Benefit.

15.0 Program Audit

  • 15.1 Any action plan outlining the procedures to be followed by the Province regarding any non-compliance with the Regulations or the AgriInsurance Agreement, as required under section 16.1.3 of the AgriInsurance Agreement, shall be:
    • 15.1.1 agreed to, in writing, by the signatories of this Operational Document on a case-by-case basis and become part of this Operational Document,
    • 15.1.2 developed in relation to the nature and significance of the issues involved, and
    • 15.1.3 evaluated by the signatories of this Operational Document to ensure that all corrective measures were implemented as intended.
  • 15.2 As part of the compliance audit, Canada may appoint a federal Actuary to review the applications of actuarially certified methodologies, in accordance with the terms and conditions set out in the AgriInsurance Agreement and this Operational Document.

16.0 Environmental Assessment

  • 16.1 Upon Canada's completion of the environmental assessment, as required under section 17 of the AgriInsurance Agreement, the circumstances and conditions under which insurance shall be withheld, restricted or enhanced for the purpose of protecting the environment shall be reflected in future Crop Year's Operational Document.

17.0 Duration

  • 17.1 This Operational Document shall become effective on April 1, 2023 and shall terminate at the same time as the AgriInsurance Agreement, except where otherwise provided.

18.0 Amendments

  • 18.1 Provincial proposals for New Agricultural Products, new Insurance Plans or changes to an existing Insurance Plan or Wildlife Compensation that have a financial impact shall be submitted to Canada, in writing, with complete operational details and an estimate of the financial impact at least 60 calendar days in advance of the proposed date of implementation, unless otherwise agreed to by Canada and the Province. See Annex I.5 of this Operational Document – Information Required for Changes to Enrolment, Seeding and Harvesting Deadlines; for Modifications to Existing Plans; for Proposals on New Plans; and for Introducing Producer-Paid Production Loss Coverage Benefits for the details.
  • 18.2 Canada shall inform the Province in writing, within 30 calendar days of receipt of complete documentation, whether the proposed change(s) is/are eligible for Contributions under the AgriInsurance Agreement. Canada shall outline those elements of the proposed change(s) that are not in compliance with the Act and Regulations.
  • 18.3 Changes shall only be eligible for Contributions where both Canada and the Province have specifically agreed.
  • 18.4 This Operational Document may be amended only by further written agreement executed by Canada and the Province. If changes are made to the Act, Provincial Act, Regulations, Provincial Regulations or AgriInsurance Agreement, this Operational Document shall be amended to reflect such changes.
     

In witness thereof this Operational Document is duly executed by the authorized representatives of the Parties.

Director
Production Insurance and Risk Management Division
Agriculture and Agri-Food Canada

David Hagarty
Assistant Deputy Minister
Ontario Ministry of Agriculture, Food and Rural Affairs

Doug LaRose
Chief Executive Officer
Agricorp