Check-off Deduction and Remittance
The article explains how the ABP National Levy and Service Charge and the National Agency’s Federal Levy is collected by ABP and provides an overview of the collection system in place in Alberta. All funds collected by ABP are used either by ABP to promote and develop the cattle industry in Alberta or by the National Agency for national beef cattle marketing, promotion and research.
ABP’s Plan Regulation
ABP is a marketing commission established under the Marketing of Agricultural Products Act and is governed by The Alberta Beef Producers Plan Regulation.
The operations of ABP and the National Agency are financed by the charging and collection of a $1.00 non-refundable national levy and a $2.00 refundable service charge.
ABP Commission Order
The collection of the ABP levy and service charge is authorized by the Alberta Beef Producers Commission Regulation and the details for the collection of the levy and service charge are set out in that Regulation. Producers who sell cattle or who feed and slaughter their own cattle are required to pay a $1.00 levy and a $2.00 service charge on every head of cattle sold in Alberta or fed and slaughtered in Alberta.
When cattle are sold, the purchaser or dealer is required to deduct the levy and service charge from the money payable to the producer and forward the amount deducted to ABP. If the purchaser or dealer does not deduct the levy and service charge from the sale proceeds, the purchaser or dealer, as the case may be, and the producer are liable to ABP for the amount of the levy and service charge.
The levy and service charge are required to be remitted to ABP by the 25 day of the month following the month they were deducted from the sale proceeds, if paid by a purchaser or dealer, or from the date of the sale or slaughter, if paid by the producer.
The National Agency
The Canadian Beef Cattle Research, Market Development and Promotion Agency (the National Agency) is a promotion-research agency established under the federal Farm Products Agencies Act. The National Agency is authorized by Proclamation to promote the marketing and production of beef cattle, beef and beef products for the purposes of inter-provincial and import trade and to conduct and promote research activities related to those farm products. ABP appoints two producers and the Alberta Cattle Feeders’ Association appoints one producer to represent the Alberta producers on the National Agency.
The operations of the National Agency are financed by the charging and collection of a non-refundable federal levy imposed by the Beef Cattle Research, Market Development and Promotion Levies Order and by contributions from each of the provincial cattle associations. The $1.00 national levy is Alberta’s contribution to the National Agency for national beef cattle promotion, marketing and research.
Agency and Services Agreements
ABP has entered into two agreements with the National Agency.
Under the Agency Agreement, ABP collects the federal levy in Alberta on behalf of the National Agency and, in exchange, ABP receives an administration fee of 2 cents per head of cattle sold by non-residents sellers in Alberta and a portion of every federal levy collected on the sale of cattle by Alberta producers in other provinces. For cattle sold by Alberta producers in BC and Manitoba, ABP receives $1.93 and for cattle sold in Saskatchewan, ABP receives 93 cents.
Under the Services Agreement, ABP retains the National Agency to provide national beef cattle marketing, promotion and research services to the cattle industry on behalf of Alberta producers. In exchange for these services ABP pays a $1.00 national levy to the National Agency.
The $1.00 retained by the National Agency out of every federal levy collected on cattle sold in interprovincial trade by Alberta producers and the $1.00 levy paid to the National Agency by ABP is known as the National Check-Off. Under the terms of the Services Agreement, ABP allocates Alberta’s National Check-Off dollars to national and US marketing and promotion, to international marketing and promotion, other than US, or to beef cattle research.
Similar agreements have been entered into between the National Agency and all of the other provincial cattle associations in Canada.
Federal Levies Order
Under the Beef Cattle Research, Market Development and Promotion Levies Order (the Federal Levies Order) every person who sells beef cattle in inter-provincial trade is required to pay to the Agency, for each head of beef cattle sold, a federal levy in the amount prescribed by the Order. The amount of the federal levy payable on the sale of beef cattle sold in inter-provincial trade in Alberta is $3.00 per head. Inter-provincial trade occurs when beef cattle are sold outside the seller’s province of residence.
Under the Federal Levies Order there are three ways in which the federal levy is remitted to ABP when cattle are sold:
Purchaser remits the federal levy
When cattle are sold without a dealer being involved, the purchaser is required to deduct the federal levy from the money payable to the producer and forward the amount deducted to the provincial cattle association in the province in which the purchaser resides.
Dealer remits the federal levy
When a dealer is involved in the sale of cattle the dealer is required to deduct the federal levy from the money payable to the producer and forward the amount deducted to the provincial cattle association in the province where the dealer resides. If the livestock dealer resides and is licensed in both Alberta and Saskatchewan, that livestock dealer would remit the federal levy collected on the sale of cattle sold in inter-provincial trade in any province to ABP as the provincial cattle association in the province where he resides.
Producer remits the federal levy
If the federal levy is not deducted by either the purchaser or dealer, the seller is required to pay the federal levy to ABP.
In addition to remitting the federal levy to ABP, the person deducting and remitting the federal levy must report the number of cattle for which the federal levy has been deducted by province of origin. The province of origin is the province of residence of the seller of the cattle.
Only one check-off is paid
When cattle are sold in Alberta, either the ABP Levy and Service Charge or the National Agency’s Federal Levy is collected, not both. The ABP Levy and Service Charge of $3.00 is collected on cattle sold in intra-provincial trade in Alberta. The Federal Levy of $3.00 is collected on cattle sold in inter-provincial trade in Alberta.
When a purchaser or dealer deducts the ABP Service Charge or the Federal Levy, as the case may be, the purchaser or dealer is required to provide the producer with a document that clearly shows
- the number of head of cattle sold
- the amount of the service charge or federal levy deducted, as the case may be;
- the name, address and phone number of the purchaser or dealer, as the case may be;
- the date of the transaction in respect of which the deduction was made.
Livestock dealers selling cattle owned for not more than 7 days
The requirement to pay the ABP Levy and Service Charge does not apply to dealers who, in the ordinary course of business as a dealer, feed or own cattle for a period of not more than 7 days.
Refund of the Service Charge
The ABP Service Charge is refundable at the request of the producer. Details of the refund requirements can be found in the ABP Commission Regulation. Producers can request a refund of the service charge paid to ABP in July and January of each year for the preceding six months. ABP processes refund requests based on the information shown the documentation provided to the producer by the purchaser or dealer.
Remittance of the ABP Service Charge or Federal Levy
The Alberta resident purchaser or livestock dealer who is responsible for deducting and remitting the ABP Service Charge or the Federal Levy is required to remit the amount deducted to ABP by the 25th day of the month next following the month in which the cattle were sold or slaughtered in Alberta.
ABP has developed a Statement of Levy Deductions for the first remittance. This form is used to remit both the ABP Levy and Service Charge and the Federal Levy to ABP. The remitter simply fills out the form and mails or delivers the form along with his or her cheque for the total amount of the levy and service charge and federal levy to ABP.
After the first remittance is made
When ABP receives a Statement of Levy Deductions for the first time, that person’s name and contact information will be entered into ABP’s database. A new Statement of Levy Deductions will be generated by the system which will acknowledge receipt of the remittance and provide the buyer (producer, purchaser, livestock dealer, livestock agent or abattoir) with another form to remit the service charge and federal levy deducted the following month.
Province of origin
Remitters do not have to determine whether the cattle are sold in intra-provincial or inter-provincial trade or whether it is the service charge or the federal levy that is being deducted. Remitters only have to provide a breakdown of the number of head of cattle for which a service charge or federal levy has been deducted and remitted by province of origin. On the Statement of Levy Deductions, the province of origin and head count is determined by the residence of the seller. It has been agreed between the provincial cattle associations and the National Agency that the province of residence is determined by the address of the producer selling the cattle. For example, if a livestock dealer is making a cheque out to a producer from Alberta, that dealer will report those cattle as being from Alberta.
Purchasers and livestock dealers are required to identify the province of origin of producers selling cattle in interprovincial trade to enable the National Agency to pay the fee to each of the respective provincial cattle associations under the Agency Agreement.
Livestock dealers and purchasers are authorized to deduct a collection fee of 5 cents per head for each levy deducted and remitted to ABP.
Ensuring the collection process meets the regulatory requirements is a responsibility of ABP. As such, ABP conducts random audits to ensure that all purchasers and dealers are properly collecting and remitting the levy and service charge and the federal levy to ABP.
Alberta producers selling in another province
When an Alberta producer delivers cattle for sale to another province in Canada, the purchaser or livestock dealer in that province will be deducting and remitting the federal levy payable in that province. If an Alberta producer sells cattle in BC, the federal levy is $3.00 and if the producer sells cattle in Saskatchewan, the federal levy is $2.00. The federal levy matches the dollar amount of the levy collected under provincial regulation in each province.
Under the Federal Levies Order the purchaser or dealer is required to remit the federal levy to the provincial cattle association where the purchaser or livestock dealer resides. As a livestock dealer licensed in two provinces could, depending on the transaction, be carrying on business in one province or the other province, the federal levy is to be remitted to the provincial cattle association where the purchaser or dealer resides.
If you have any questions with respect to the ABP Service Charge or the Federal Levy, please contact the ABP office at (403) 275-4400.
Click here for the Statement of Check-off Deductions for first time remitters form.