Ontario Bill 40 could ‘widen production insurance coverage,’ Miller Thomson author writes

A bill currently before the Ontario legislature has “the potential to add to Ontario farmers’ options to manage risk and losses due to weather, pests, and disease,” an articling student for Miller Thomson LLP wrote this week in an article on the Lexology website. 

On March 11, Ontario MPPs voted to send Bill 40, the Agriculture Insurance Act (Amending the Crop Insurance Act, 1996), to the Standing Committee on Finance and Economic Affairs. 

That bill, if passed into law, would give the Ontario minister of agriculture, food and rural affairs the power to designate, by regulation, additional products eligible for coverage under Agricorp, a Guelph-based crown corporation. Agricorp covers production losses and yield reductions, caused by insured losses, for vegetables, fruit and honey, forage, tobacco and perennial plants.

The changes to the Agriculture Insurance Act proposed in Bill 40 “have the potential to widen production insurance coverage to allow livestock, dairy, poultry, and other producers to benefit from coverage in the event of unexpected loss due to weather, pests and disease,” wrote Andrew Hentz, a London, Ont.-based Miller Thomson articling student, in an article posted April 7 to Lexology.

“This amendment would add to the suite of programs already available through Agricorp which help producers manage risks such as fluctuating costs and market prices,” Hentz wrote in the article, titled Proposed changes to Ontario’s production insurance regime.

In addition to production insurance, Agricorp also provides coverage for margin declines caused by any combination of production losses, adverse market conditions or increased costs. Agricorp’s risk management program is available for the cattle, edible horticulture, grains and oilseeds, hog, sheep and veal sectors and is intended to help producers manage risks such as fluctuating costs and market prices.

Every province except Ontario “has the authority to offer production insurance plans for agricultural products beyond crops and perennial plants, so expanding production insurance in Ontario would bring us in line with the rest of the provinces,” said Arthur Potts, parliamentary assistant to Jeff Leal, Ontario’s Liberal Minister of Agriculture, Food and Rural Affairs, during debate on Bill 40 last December.

Potts said at the time that production insurance first became available in Ontario in the 1960s, after the federal Crop Insurance Act was passed.

“It includes voluntary production, as farmers must choose whether or not to enrol in the program,” Potts told the legislature. “They can choose the parameters of the plan that make the most sense for their individual business needs. Production insurance is administered by the province, not the federal government.”

MPPs from the Progressive Conservative and New Democratic parties have spoken largely in favour of Bill 40.

“There are some concerns that this legislation will address – the fact that this season alone there was what they refer to in that industry as a short crop because there was the long winter last year,” Todd Smith, PC MPP for Prince Edward-Hastings, said in February in the legislature. “I know we’re all saying this winter is going on way too long, as well, although it was a shorter start, of course. There was severe damage to the wine crop, which would be, of course, the grapes. That makes an insurance product like this an absolute necessity.”

Bill 40 “will allow for insurance to be offered to more producers in this province,” said Wayne Gates, NDP MPP for Niagara Falls, during debate on Bill 40 March 3. “This is an integral step to giving our agriculture sector the backing they need to be able to grow their businesses. With this kind of insurance, we can make sure that our farmers here in Ontario know that if something out of their control occurs, the government will be there to support them.”