Guide for the Monthly Report of Licensee’s Liabilities to Producers
Why do I have to complete a Monthly Report of Licensee’s Liabilities to Producers?
Monthly Report of Licensee’s Liabilities to Producers (the “monthly liability report”)
forms must be completed by all elevators and grain dealers that have been issued a grain
dealer’s licence, a process elevator licence, or a primary elevator licence by the Canadian
Grain Commission (CGC). The monthly liability report tells the CGC what your
outstanding payments and other obligations for grain to producers are on the last day of
each month. Other obligations include grain received for storage, but not purchased, that
must be redelivered to producers on request. The CGC uses this information to establish
the amount of security you must provide in order to protect producers, as required by the
Canada Grain Act.
What is a reportable liability?
Only grain transactions governed by the Canada Grain Act and Canada Grain
Regulations are reportable. This includes:
• Designated grain under the Canada Grain Act: wheat, oats, barley, rye, canola,
rapeseed, flaxseed, corn, peas, chick peas, lentils, mixed grain, sunflower
seed, domestic mustard seed, soybeans, beans, fababeans, triticale, safflower and
buckwheat
• Imported grain (e.g., U.S. grain)
• Grain intended for seed
• Grain intended for feed
• Grain loaded into producer cars unless the bill of lading shows clearly “For the
account of (producer name)”. In that case, the grain becomes a liability upon
unload at its final destination.
•
Grain loaded into grain dealer railcars or trucks
• Advances and levies, if they are still outstanding as at the reporting date
• Grain delivered by producers who are company shareholders
Note: All liabilities must be reported in Canadian dollars.
What is not a reportable liability?
• Crops that are not designated as “grain” under the Canada Grain Act, e.g., canary
seed, millet, spices, grasses and vegetables
Note: Licensees may not receive these products into facilities unless they have received
prior authorization from the CGC.
• Grain held in condominium storage
Note: Elevator receipts should not be issued to producers for grain delivered to
condominium storage. Security coverage does not begin until the grain is transferred
from condominium storage into general storage.
• Grain delivered by or purchased from persons or companies who are not producers How do I calculate the quantity and value of the Total Grain Purchased, Paid and
Cleared during the Licensing Period in Section A?
Quantity
The quantity of grain you need to calculate is the cumulative total weight of all grain
purchases, for which payment has cleared your bank account, from your annual CGC
licence renewal date to the Period Ended date of your monthly liability report.
Value
The value of your grain is also a cumulative total calculated in the same way as quantity;
based on the value of all grain purchased, for which payment has cleared your bank
account, from your annual CGC licence renewal date to the Period Ended date of your
liability report.
Example:
If your CGC licence renewal date is January 1 and your Period Ended date is
October 31, then your calculation should include the cumulative total weight and
total value of all grain purchases, for which payment has cleared your bank
account, during this period (January 1 to October 31).
Note: You must include the quantity and value of grain deliveries paid for by certified
cheque and wire transfers.
Licensing period
The licensing period normally covers the 12 months following your annual renewal date,
e.g., January 1 to December 31.
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Why do I need to provide information on the quantity and value of the total grain
purchased, paid and cleared during the licensing period?
The CGC uses this information to monitor ongoing activity during your licensing period,
in order to fix the appropriate amount of security for operations. Please note that payment
for all grain purchases must have cleared your bank account.
How do I calculate Outstanding Grain Receipts, Outstanding Primary Elevator
Receipts and Outstanding Cleaning and Drying Receipts in Section B?
This is the recorded weight of grain delivered and values listed on all receipts, issued to
producers in the 90 days prior to the Period Ended date of your monthly liability report,
that have not been paid for by cheque or cash purchase ticket. .
Example:
If a cash purchase ticket or cheque is issued after 20 days, the receipt issued for
this delivery should only be reported for 20 days, not 90 days.
The way in which you establish values assigned to your outstanding receipts may vary in
certain situations. If you and another party have agreed to a fixed price, then that price
should be used. Canadian Wheat Board (CWB) grain values are the initial prices less
applicable deductions such as elevation, cleaning and freight. Non-Board and off-Board
grain values are the posted Winnipeg Commodity Exchange prices basis Thunder Bay or
Vancouver, less applicable deductions. For other grain that has no formal pricing
mechanism, such as buckwheat, you should use competitive market prices at month-end.
During a CGC field audit, prices paid by competitors will be examined to make sure that
prices you have used to calculate values are reasonable. (In the case of grain received for
purchase, the values should be based on the grade and price shown on the grain receipt or
cash purchase ticket. For grain received for storage, a value must be approximated as
above.)
How do I calculate Outstanding Cash Purchase Tickets/Cheques (including deferred
payments) in Section B?
This is the net total of all cash purchase tickets or cheques issued to producers, for
deliveries of grain, that have not cleared your bank account. If you have issued a cash
purchase ticket or cheque to partially cover the full purchase price, the outstanding
portion of the final price must be reported as a liability.
Note: A certified cheque or wire transfer is not a reportable liability, but must be
included in Total Grain Purchased, Paid and Cleared during the Licensing Period in
Section A.
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The reportable period for Outstanding Cash Purchase Tickets/Cheques is the lesser of
either:
• The period that ends 90 days after grain delivery, or
• The period that ends 30 days after the day on which you issued to a producer a
cash purchase ticket or cheque that has not cleared your bank account.
Examples:
If a cash p urchase tick et or ch eque is issued 80 days after a producer
delivered gr ain, it is o nly conside red to be an outstanding reportable
liability for 11 days - from day 80 to day 90 following delivery (the
balance of the 90-day period is the lesser).
If a cash purchase ticket or cheque is issued 15 days after grain delivery, it
is only considered to be an outstandi ng reportable liability for 30 days (30
days is the lesser).
Note: The value of your outstanding cash purchase tickets/cheques can be obtained by
reviewing your month-end bank reconciliation.
What do I list as Security in Section C?
You should list the value of any bonds, irrevocable standby letters of credit / guarantee,
payables insurance or cash deposits that you have provided, and that are being held by the
CGC, as security to cover your liabilities to producers, as at the Period Ended date of
your report.
If you are a CWB agent, and have paym ent for deferred cash purchase tickets on deposit
with the C WB, you should list the value as Deferred Cash Purchase Ticket Deposit
with the Canadian Wheat Board as at the Period Ended date of your report. Please
note that only the value of funds on depos it representing cash purchase tickets issued
within the previous 30 days can be included as security.
The total of your Deferred Cash Purchase Ticket Deposit should not exceed the sum of
all Outstanding Cash Purchase Tickets/Cheques that you report in Liabilities in
Section B.
The total of the figure you report as Value of Grain held on Outstanding Primary
Elevator Receipts sho uld not exc eed the tota l of all Outstanding Primary Elevator
Receipts that you report in Liabilities in Section B.
You should list as Other Security any other form of security, such as payables insurance
or cash deposits, as at the Period Ended date of your report.
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When do I have to send in the monthly liability report?
Your monthly liability report must be forwarded to the CGC no later than the 15th day of
the month following the reporting month. Even if you have no liabilities to report, you
must send in a report with nil liabilities stated. Interim reports are required to be provided
in certain circumstances.
What are the consequences of not providing a monthly liability report?
Monthly liability reports have an important bearing on the work of the CGC and should
not be treated casually. Section 107 of the Canada Grain Act provides a significant
penalty if monthly liability reports are not provided as required. Please note that it's a
serious offence to make a false report.
How does the CGC verify the monthly liability report?
All submitted monthly liability reports are checked by CGC staff and are subject to CGC
audits. Staff will contact you if they have a question about your report. It is important
that you retain all working papers for each monthly liability report for verification
and/or inspection by CGC staff.
If an audit or inspection is conducted and it is found that reportable transactions have not
been acknowledged by grain receipts or elevator receipts or cash purchase
tickets/cheques, they will be considered a liability and the licensee will be accountable
for the transactions for security purposes. For example, even if an elevator operator has
not issued receipts in compliance with the Canada Grain Act, the value of the grain
delivered will, nonetheless, be taken into consideration when deciding whether the
security provided is adequate.
Where can I find the form?
Monthly Report of Licensee’s Liabilities to Producers forms are available at
www.grainscanada.gc.ca under Forms/Reporting forms for licensees.
Please fax the Monthly Report of Licensee’s Liabilities to Producers to
(204) 983-4654 and mail the original to:
Canadian Grain Commission
Corporate Services
Licensing & Security Unit
601-303 Main Street
Winnipeg, Manitoba
R3C 3G8
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For more information on the Monthly Report of Licensee’s Liabilities to Producers,
please call the CGC Licensing & Security Unit toll-free at 1-800-853-6705.
Note: This document is meant as a guide only and may be modified from time to time.
Issued August 2006
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