Grain Delivery Declarations: What Farmers Should Know

In March of 2020, the passing of the Canada-United States-Mexico Agreement Implementation Act – also known as CUSMA or the new NAFTA - resulted in new, mandatory, annual producer variety declarations for farmers in accordance with the Canada Grain Act. While farmers were already familiar with commercial declarations from grain handling companies, this change was the first statutory requirement for farmers and came into effect on August 1, 2020.

The Canadian Grain Commission, following consultation with grain companies, authorized the use of a combined declaration by grain buyers, with both the statutory and commercial declarations being agreed to with one signature from the farmer. This is the format being used by most major grain handling companies today.

Farmers in Alberta Grains, and across partner organizations, expressed concerns that the private industry grain declarations have the potential to expose farmers to liability for issues that occur after the grain has left the farmer’s control.

Further questions arose regarding the combination of the commercial and statutory declarations under one signature with their differing legal status and potentially differing obligations - creating further uncertainty regarding their liabilities.

Alberta Grains board of directors directed staff to look into this issue – partnering with like-minded organizations. Together with SaskWheat, SaskBarley and the Agricultural Producer Association of Saskatchewan (APAS) we launched a request for proposals process to seek a legal review to answer the questions at hand: 

With the expansion of statutory requirements to be included in a singular grain declaration, has the liability for farmers increased? Has farmers ability to negotiate on the commercial portion of the declaration decreased? And what recourse or advice may be available for producers? 

Within that context, D’arcy & Deacon LLP out of Manitoba was selected to conduct a legal review and seek to determine the legal differences and overlap, validity, and additional liabilities poised by the combination of the CGC’s statutory declaration and the company specific commercial declaration.  

Coming out of the review the general legal opinion determined was that there are no additional liabilities created for producers by signing a combined document containing both the commercial and the statutory declaration. It is the view that the liability crated by the statutory declaration is distinct from any contractual liability created by the commercial declaration. 

Presenting both the statutory deceleration and a commercial deceleration as a combined document to be signed once by a grain producer is valid and legally binding and no legal requirement for both documents to be presented as separate documents to producers. Further, there is no obligation for a producers to sign anything other than a statutory deceleration, unless the producer has agreed to terms in the grain companies contract and those terms require a deceleration to seize a delivery opportunity.

According to the Canada Grain Act (s. 83. 3) any addition requirements included by the buyer in the single delivery deceleration contract cannot be enforced at a statutory level and would be dealt with separately under ‘contract law’. ‘When a producer signs a delivery declaration, they are stating that all specifications and conditions in the declaration are true and correct. This is a legal promised evidenced by signing the document, which then forms part of the delivery contract.

If grain received does not meet the requirements on the delivery declaration the buyer can use this as a legally binding tool to pursue ‘breach of contract’ and damages, even if the breach is unintentional or inadvertent. If a producer believes that they have unknowingly made a false declaration, they can contact the CGC who will review on a case-by-case basis.

Ideally, the two types of declarations would not be presented as one document; producers would only be required to sign what is required by the CGC separately. The timing of contracting grain can be months in advance of the production and harvesting of the grain, and the delivery and signing of the declarations, creating misalignment between contractual terms and producer declarations. Additional representation to which a producer has agreed to under a delivery contract would require a separate declaration which outlines the representation (obligations) in accordance with the contract.

 Farmers need to know that the CGC allows for them to request separate declarations. Companies should have both available. While the two types of declarations can be combined, there should be a clear indication that there is both a statutory declaration and a commercial declaration which is specific in its contract terms.

For more information on statutory declarations producers can view the Declaration of Eligibility for Delivery of Grain as linked on the Canada Grain Commission website along with more general information here.

To view a webinar hosted by Alberta Grains, SaskWheat, SaskBarley and APAS with legal insights from D’arcy & Deacon LLP please visit: Grain Delivery Webinar.