Form and guide for the monthly report of licensee's liabilities to producers

Form for the Monthly Report of Licensee's Liabilities to Producers

The Monthly Report of Licensee's Liabilities to Producers (PDF, 40 kb) form is available in a PDF format. Refer to our PDF help page for information on how to view, print and download PDF documents.

Please fax the Monthly Report of Licensee's Liabilities to Producers form to (204) 983-4654 and mail the original to:

Canadian Grain Commission
Licensing and Security Unit
601-303 Main Street
Winnipeg MB R3C 3G8

For more information on the Monthly Report of Licensee's Liabilities to Producers, please call the CGC Licensing and Security Unit toll-free at 1-800-853-6705.

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
• Imported grain (example, 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, example, 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, example, January 1 to December 31.

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.

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 purchase ticket or cheque is issued 80 days after a producer delivered grain, it is only considered 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 outstanding 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 payment for deferred cash purchase tickets on deposit with the CWB, 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 deposit 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 should not exceed the total 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.

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.