Farm Debt Mediation Act

A farm seller or buyer may meet this Act where debts are secured against the farm. The Act defines a farmer as a person, cooperative, partnership or other association engaged in farming for commercial purposes that meets any prescribed criteria. Agriculture and Agri-Food Canada runs the related service, which it calls voluntary, private and confidential.

Notice and stay

Section 21 requires a secured creditor who intends to enforce any remedy against a farmer’s property, or start proceedings to recover a debt or realize security, to give the farmer written notice advising of the right to apply under section 5. Section 21 requires the notice to be given to the farmer and to an administrator at least 15 business days before the act. Under section 12, while a stay is in effect and despite any other law, no creditor of the farmer may enforce a remedy against the farmer’s property or start or continue such proceedings. Section 22 treats acts in contravention of sections 12 or 21 as null and void, subject to subsection 22(2), which protects the title of a person who bought the property in good faith from the creditor and was not related to the creditor.

What to ask

• Has any secured creditor given notice under section 21, or has an application been made?
• Is a stay in effect, and for how long?

See what happens if you default on an acquisition loan and, for the insolvency version, stay of proceedings.