Backgrounder - Producer compensation for deliveries to ILTA Grain Inc.

Licensed elevators and grain dealers must provide security to the Canadian Grain Commission. This security is used to compensate producers in the event they are not paid for the grain they deliver to the licensed company.

ILTA Grain Inc. was previously licensed by the Canadian Grain Commission to operate primary elevators in Belle Plaine, Saskatchewan and Saskatoon, Saskatchewan and as a grain dealer. On July 8, 2019 the British Columbia Supreme Court placed ILTA Grain Inc. under creditor protection under the Companies Creditors Arrangement Act. This resulted in ILTA Grain Inc. defaulting on amounts owed to producers for grain deliveries and triggered the company’s security under the Canadian Grain Commission’s Safeguards for Grain Farmers Program.

Timeline of events

July 11, 2019

The Canadian Grain Commission issued an order suspending ILTA Grain Inc.’s licences and began the process to determine liabilities to producers.

The Canadian Grain Commission also posted notices in the farm press across the Prairies notifying producers of the ILTA Grain Inc. licence suspension and the timeline for submitting a claim.

August 6, 2019

The Canadian Grain Commission issued a second order which allowed ILTA Grain Inc. to operate its primary elevators and to carry on business as a grain dealer under specific conditions. Under this order, ILTA Grain Inc. was not allowed to purchase or receive grain from producers but was able to ship its remaining stocks in store as part of its court-supervised restructuring.

In the interest of producers with unpaid deliveries in the stocks in store, the Canadian Grain Commission also negotiated the creation of an escrow account with a value of approximately $3 million. This fund was above and beyond the payables insurance policy already held by ILTA Grain Inc.

September 30, 2019

ILTA Grain Inc.’s primary elevator and grain dealer licences expired.

October 18, 2019

The Canadian Grain Commission sent preliminary assessments of eligibility to 271 affected producers. Producers then had 30 days to make a claim or dispute the preliminary assessment.

November 17, 2019

The Canadian Grain Commission received all producer claims packages back for processing and finalization.

December 2, 2019

After reviewing the claims and determining the extent of the liabilities, the Canadian Grain Commission determined that there were 222 eligible claims for a total of $11,146,349.91. The claim submission was forwarded to the private insurer that held ILTA Grain Inc.’s insurance policy.

December 27, 2019

After reviewing the claim submission, the insurer provided the funds for the Canadian Grain Commission to distribute to eligible producers. 100% of the total eligible claims were covered because ILTA Grain Inc. was secured up to $12 million under the Safeguards for Grain Farmers Program.

January 6, 2019

The Canadian Grain Commission issues cheques to compensate producers for 100% of eligible claims.

The ILTA Grain Inc. default represents the largest total security pay out in Canadian Grain Commission history.  However, not all producers who made a claim were eligible for payment. Some farmers were owed money for canary seed deliveries, which are not regulated under the Canada Grain Act. Others had amounts outstanding for deliveries made outside the program eligibility period.

The Canadian Grain Commission recommends that producers limit their risk of financial loss by requesting payment for each load at time of delivery. Producers who are experiencing delays in being paid should contact the Canadian Grain Commission immediately.