Payment protection

Safeguards for Grain Farmers Program

Licensed grain companies must provide security to the Canadian Grain Commission to cover money owed to producers for grain deliveries. When a licensed company fails to pay, the Safeguards for Grain Farmers Program uses the company’s security to pay you if your claim is eligible. Failure to pay could involve any of the following problems:

• the company asks you to delay cashing its cheque
• the company refuses to give you a cheque
• the company’s cheque bounces

If you have any questions about your eligibility for compensation or are experiencing a situation not described here, contact the Canadian Grain Commission immediately.

Eligibility for payment protection

To be protected under the Safeguards for Grain Farmers Program:

• deliver to a licensed grain company
• deliver regulated grain
• get the proper documents
• demand payment during eligibility periods
• report non-payment to the Canadian Grain Commission immediately

The Safeguards for Grain Farmers Program applies these rules to determine if your claim is eligible. These rules apply to each grain delivery you make. Your payment claim must meet all of these rules to be eligible.

Producers may be eligible for priority payment from the licensed company under the Bankruptcy and Insolvency Act.

Eligibility periods

You are eligible for compensation paid from the licensed company’s security for a maximum of 90 days from the date of your grain delivery. If you wait longer than 90 days to exchange your primary elevator receipt or grain receipt for a cash purchase ticket or cheque, you are not eligible for compensation.

Once you receive a cash purchase ticket or cheque, you are eligible for compensation paid from the licensed company’s security for 30 days from the date it was issued, or until 90 days from the date of grain delivery. The lesser of these two time periods applies.

If a licensed company gives you a post-dated cheque, you are eligible for compensation paid from the company’s security for 30 days from the date it was issued, regardless of the date on the cheque. If you receive a post-dated cheque on October 1 dated November 15, you are eligible from compensation paid from the company’s security until October 31.

Examples

Example 1

Example 2

Claims process

When a producer makes a payment complaint, the Canadian Grain Commission will:

1. determine if the company has failed or refused to pay the producer
2. determine if the company’s licence should be revoked
3. realize on the security by executing the letter of credit or bond, or making a claim against the insurance policy
4. use ads in newspapers, a website notice, and social media to tell producers to contact the Canadian Grain Commission if they are owed money
5. determine the amount of money owed to producers whose claims are eligible for payment out of the licensee’s tendered security
6. pay producers whose claims are eligible

Payment for eligible claims

The Safeguards for Grain Farmers Program does not guarantee 100% payment from the company’s security. Payments to producers whose claims are eligible are based on the amount of security posted by a company compared to the total monetary amount of eligible claims received. If the company’s posted security is less than the total of eligible claims, payment is pro-rated.

Contact us

• For more information about payment protection, contact us.

Related links

• Security provisions in the Canada Grain Act, 45 (1) (b) and 45 (2) (b)
• Security provisions in the Canada Grain Regulations, section 17
• Licensed grain companies
• History of payments to producers
• Claims, licensee receiverships and conditional licences