For immediate release: 25 April 2006

ONTARIO GOVERNMENT STRENGTHENS RURAL COMMUNITIES BY
BACKING SMALLER FARM EQUIPMENT DEALERS
New Regulation Supports Small Rural Businesses

TORONTO - The Ontario government is strengthening rural communities by supporting smaller farm equipment businesses, Minister of Agriculture, Food and Rural Affairs Leona Dombrowsky announced today after filing a new regulation under the Farm Implements Act.

"The new regulation promotes a mutually beneficial relationship between dealers and distributors of farm equipment," said Dombrowsky. "It will ensure that the rural businesses on which farmers rely on are strong and competitive."

In June 2005, amendments to the act were passed that allowed for:

• Elimination of dealer exclusivity
  
• Small distributors to share warranty, parts and inventory responsibilities with manufacturers
  
• Clarification of guidelines for parts returns from dealers to distributors.

This new regulation increases security for farmers by helping their equipment dealers thrive and continue to supply them with machines, parts and service. Dealerships will be more secure, as will other farm businesses that do business with them. Rural communities will be less likely to lose the dealerships which support their prosperity.

"The Farm Implements Act now allows farm businesses to better serve the needs of their customers," noted Dombrowsky. "This is good news for farmers, equipment dealers and rural Ontario."

The new regulation comes into effect on April 25, 2006.

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Contacts:
Chris Flavelle
Minister's Office
(519) 326-3072

Charles Lalonde
Environmental Policy and Programs Branch
(519) 826-3577

NEW FARM IMPLEMENT REGULATION SETS OUT GUIDELINES
FOR DEALERS AND DISTRIBUTORS

A new regulation under the Farm Implements Act (O.Reg. 123/06) promotes a mutually beneficial relationship between dealers and distributors of farm equipment. It will increase security for farmers by making it more likely that their farm equipment dealers will be able to supply them with the equipment, parts and service needed in their community. The amendment came into effect on April 25, 2006.

The new regulation sets out terms to be contained in dealership agreements. It also describes circumstances under which distributors and dealers have the right to terminate dealership agreements. As a result, rural communities will be less likely to lose the dealerships which support their prosperity.

Key changes

In general, the new regulation promotes the equitable treatment of dealers by distributors.
Prior to the new regulation, a distributor could terminate a dealer without giving any reason, or for reasons which would not be acceptable in other jurisdictions.

Distributors' interests are also protected. Dealers must purchase tools, equipment and training which the distributors consider necessary for proper service and repair of their products. Dealers must also meet all requirements established by the distributors in their dealership agreements, provided these requirements do not contravene the regulation. Also, dealers must give distributors advance warning of changes to a dealership's ownership or management.

This new regulation completes the process of revision to the Farm Implements Act. In June 2005 the Legislature passed amendments to the Farm Implements Act to:

• Allow dealers to sell farm machinery from any manufacturer, so that they are not restricted to one make of equipment
  
• Enable small distributors to share warranty, parts and inventory responsibilities with the manufacturers of the machinery
  
• Clarify guidelines for parts returns from dealers to distributors
  
• Provide for the prescribing of terms to be contained in dealership agreements.

The last item established the authority for the development of the new regulation. This involved a thorough consultative process which included a meeting of all stakeholder groups to discuss issues, the conclusions of that meeting, and subsequent comments received from stakeholders.

Further information

The full text of the Farm Implements Act, including this regulatory amendment, can be found at: http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/90f04_e.htm.

For more information, please contact the Agricultural Information Contact Centre toll-free at
1-877-424-1300.

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Contacts:
Christopher Flavelle
Minister's Office
(416) 326-3072

Charles Lalonde
Environmental Policy and Programs Branch
(519) 826-3577