Dave Gallant, vice-president of finance and APP operations at the Canadian Canola Growers Association, said the program has moved beyond what it was originally intended to be. The legislation says it is supposed to improve marketing opportunities for farmers by advancing them working capital, yet most farmers are using it in the spring for cash flow.

“Over 65 per cent of the dollars we do, and we do about $2.5 billion a year, use the program from April 1 to the end of July,” he told the Canadian Federation of Agriculture policy summit here.

“A full third of the farmers are using it for its really true basic intended purpose, which is cash flow in the fall so they can pay their bills, so that they can actually develop a marketing plan to maximize the revenue from the products that they produce.”

Few livestock producers use program

Scott Clark, vice-president of marketing and communications at Agricultural Credit Corp., said farmers tell him it allows them to save money on borrowing when other costs keep going up.

ACC is a not-for-profit formed by a coalition of farm organizations to administer the APP and other financing.

The summit heard that very few livestock producers use the program, perhaps one in 10, and that supply managed farms are ineligible even though they may also be producing crops.

Gallant also said the federal government has to stop treating farmers who use the program as if they will all default. It requires the administrators to assess the credit worthiness of all applicants, even if they’ve used it for years without problems.

Other discussions during the day focused on innovation and regulation, competitiveness, trade and succession planning.

Canadian Pork Council re-joins CFA

Meanwhile, a former CFA member is back in the fold.

The Canadian Pork Council, representing nine provinces and 7,000 farms, has rejoined the country’s largest farm organization after leaving it in 2013 over trade policy.

At the time, the council said trade protectionists dominated the organization, but Steven Heckbert said times have changed.

The executive director of the CPC said it was time to join forces with other commodities given the trade uncertainties.

“There’s all sorts of trade pressures on us but also on agriculture as a whole,” he said.

Heckbert said the board wants a common voice for the entire industry, particularly as it deals with the United States.

More to come.

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The announcement came late Saturday afternoon, ahead of Sunday’s election call.

Agriculture minister Kody Blois said the agriculture sector is experiencing multiple challenges, including the 100-percent tariff on canola oil, meal and peas and 25-percent tariffs on some pork, fish and seafood products. There is also continuing uncertainty regarding what the United States might do.

What support is promised?

The support is coming through AgriStability, by increasing the compensation rate from 80 percent to 90 percent and doubling the $3-million payment cap for the 2025 year.

“To get money to producers faster the Government of Canada has also provided provincial and territorial governments with the option to proactively enter into an agreement to issue interim payments at a higher payment rate and initiate targeted advance payments in the event of tariffs, or for the hog sector in the event of African Swine Fever,” the news release said.

In provinces that adopt the changes producers who participate in AgriStability would be eligible for an interim payment of up to 75 percent of their estimated final payment.

The government said an administrator will be able to establish the targeted advance payments “where analysis shows that market disruptions have resulted in a sufficient loss to trigger AgriStability payments for a particular sector or region.”

Blois said China’s decision will have a devastating impact on farm families. He said the announcement is a direct result of advocacy from producers.

“I will continue to stand shoulder-to-shoulder with our producers and will defend the sector every step of the way,” he said.

APAS calls for swift action

On Monday morning, the Agricultural Producers Association of Saskatchewan (APAS) called for the Saskatchewan government to swiftly implement the changes to AgriStability and suggested further avenues for support.

While AgriStability offers whole farm protection, payments are often received long after significant financial losses have occurred. Saskatchewan farmers will potentially have to borrow a lot of money in the interim to manage critical cash flow due to these market disruptions,” said APAS president Bill Prybylski in a news release.

APAS said it has had discussion with the federal agriculture minister asking him to increase the Advance Payments Program interest free portion to $350,000 from $250,000. They also asked Blois to assess if AgriInvest can be used to give farmers access to capital.

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“CCA has been advocating for the limit to be kept at $350,000, but increasing it to $250,000 is positive for producers across Canada and will help keep the beef cattle sector economically competitive in an unsteady economic environment,” the organization said in a news release on Tuesday.

On Friday, the federal government announced a slate of funding geared toward protecting Canadian farms and businesses in the face of U.S. tariffs and trade disruptions.

At the same time, it announced it would set the interest-free portion of the Advance Payments Program to $250,000, rather than the previously announced $100,000.

The $100,000 limit would not have accounted for inflation and rising input costs, CCA said.

“Keeping the interest-free portion higher than $100,000 is a helpful tool in keeping our sector competitive and sustainable in the long term,” said CCA president Nathan Phinney in the release.

“CCA will continue to engage with the federal government on this file regarding next steps to ensure that the increase is made before the growing season starts,” he added.

Tyler McCann, managing director of the Canadian Agri-Food Policy Institute, said he was glad to see the government taking some action.

“Now, when there is heightened uncertainty and when farmers are looking at potentially more expensive inputs going into this growing season, giving them that access to the higher APP amount is a good, easy thing to do,” he said.

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On Friday, the Department of Finance announced several investments meant to protect Canadian businesses, including $1 billion in financing through Farm Credit Canada (FCC).

Through its Trade Disruption Customer Support program, FCC said it will “provide relief for viable customers and non-customers… this includes access to an additional credit line of up to $500,000 and new loan terms.”

Current FCC customers will also have the option to defer principal payments for up to 12 months on existing loans, FCC said in a news release.

The federal government also announced a $5 billion program to help Canadian exporters reach new markets.

U.S. President Donald Trump went ahead with a long-threatened 25 per cent tariff on most Canadian imports earlier this week before announcing a temporary suspension on goods covered by the Canada-U.S.-Mexico Agreement (CUSMA).

With Trump now threatening more reciprocal tariffs on Canadian commodities like dairy and lumber, however, the situation is still unstable.

Advance payments program changes

The government also announced it will return to the $250,000 interest-free loan limit of the Advanced Payments Program (APP) through the 2025-26 program year. It was previously announced at $100,000.

Tyler McCann, managing director of the Canadian Agri-Food Policy Institute, said he was glad to see the government taking some action.

“Now, when there is heightened uncertainty and when farmers are looking at potentially more expensive inputs going into this growing season, giving them that access to the higher APP amount is a good, easy thing to do.”

Announcements fall short

However, McCann said many of Friday’s investment announcements fall short.

Today’s announcements included the $5 billion Trade Impact Program, meant to help exporters reach new markets, something experts have been recommending. CAPI’s February Ag Policy Brief included the short-term recommendation for the government to “Double down on market access” and “prioritize political and technical resources to resolve market access barriers.”

McCann said the Trade Impact Program was not what he had in mind.

“I think that there’s a really big difference between extending more credits to Canadian businesses, which is largely what today’s announcement was, and the government investing in things like the agri-marketing program,” he said.

“The government could be saying today to food processors that are exporting, or the Canola Council or the Canadian beef exporters, ‘we are going to match any extra dollar you invest in market development in a new market through additional ag or marketing dollars. But see that as an investment, don’t see it as financing, like what the government has done.”

Access to credit not the issue

Likewise, he said the $1 billion investment into Farm Credit Canada may not see drastic results.

“My understanding is that access to credit has not been a challenge at FCC, and if you’re a farmer that’s needed credit, FCC has been able to work with you,” McCann said. “So, I’m not sure at the end of the day what impact this will actually have.”

“I think it would be very different if the government had announced an accelerated capital cost allowance, or a tax credit, or faster depreciation rules for investments that businesses make.”

Overall, McCann said he was disappointed the government did not do more with the time it was given between Trump’s initial threats and this week’s implementation of the tariffs.

“What I think is unfortunate is that we have not put time and energy, in the Canadian context, into getting our own house in order domestically,” he said. “And again, this is a little bit of that addressing financing issues. But there’s a lot of other things governments could and should be doing.”

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Finance Minister Chrystia Freeland made little mention of agriculture in her speech following the tabling of the budget this afternoon, though she touched on issues like carbon pricing and green technology.

However, chapter three of the budget, titled “lowering everyday costs” features three sections on reducing costs for farmers.

The first, “Lower Costs and Fairer Treatment for Farmers” announces that the government will be launching consultations on interoperability in June.

“This is part of broader work the government is undertaking to support the right to repair and interoperability,” the section reads.

The section “Interest Relief for Farmers” proposes $64 million in funding to Agriculture and Agri-Food Canada “to support a $250,000 interest-free limit on Advance Payments Program loans for the 2024 program year.”

Finally, “Protecting Farmers from the Costs of Climate Change” reads that “the federal government is committed to working with industry partners, such as the Canadian Cattle Association, to explore avenues to ensure farmers get support quicker and more efficiently in times of need.”

In her speech, Freeland highlighted the Canadian carbon rebate, which she said in French will be “delivering hundreds of dollars to Canadians every three months.”

“Eight out of 10 Canadians get back more than they pay in the provinces where the federal price on pollution applies,” she continued.

“We are delivering on our promise to return carbon pricing proceeds to small and medium-sized businesses.”

She said that the Canada Carbon Rebate for small businesses will “soon return over $2.5 billion directly.”

The budget’s primary focus is housing, though it also involves the launch of a new national school food program and the first phase of a national pharmacare plan.

On housing, Freeland said the government would be focusing on “making life cost less.” with a plan to build nearly four million news homes by 2031.

“It begins with building more homes at a pace and scale not seen since after the Second World War,” Freeland said.

The budget also includes an outlined electric vehicle supply chain investment tax credit, which will “introduce a new 10 per cent … tax credit on the cost of buildings used in key segments of the electric vehicle supply chain.”

Freeland said this is “to attract companies investing across the electric vehicle supply chain.”

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The amount had been set to drop back to $100,000 at the end of this month after sitting at $350,000 for 2023.

Federal agriculture minister Lawrence MacAulay announced the change March 25.

“In the face of so many challenges, our hardworking producers continue to show their resilience and produce top-quality products for Canadians and the world,” he said in a statement.

“Increasing the interest-free portion of the Advance Payments Program means improved cash flow and savings for farmers as we head into the 2024 planting season.”

Producers had asked for the amount to be raised after learning in late February it would change.

The Agricultural Producers Association of Saskatchewan said it was happy with the decision.

“It’s what we had asked for, so we’re happy,” said president Ian Boxall.

He said program data supported $250,000 as the right number.

The APP offers $1 million to producers of 500 crop and livestock products who can borrow against expected production or produce in storage. The advances are based on up to 50 per cent of anticipated market value of those products.

In 2022, the government raised the interest-free portion to $250,000 and then again to $350,000 last year to deal with high interest rates and volatility.

The federal government said farm operating costs remain uncertain, and raising the interest-free portion would save 11,950 producers an extra $4,916 in interest costs, on average.

The total savings for producers is estimated at $58.7 million.

Support at the beginning of the production cycle allows farmers to buy inputs for the growing season. It also provides some marketing flexibility as producers can sell when it’s best rather than because they need cash.

At the Canadian Federation of Agriculture annual meeting earlier this year, MacAulay had told producers he couldn’t grant their wish for a higher limit but the finance minister might be able to.

The Canadian Cattle Association had asked for the limit to remain at $350,000 but said $250,000 was a good step.

President Nathan Phinney said the APP is a useful tool, and a higher interest-free portion is a relief.

“This sustained increase comes at a time when producers need all economic levers at their disposal to increase food security and economic competitiveness,” he said.

CCA had said the lower limit was “untenable as it does not account for farmers’ current realities.”

“By maintaining the increase to interest-free portion of loans under APP, the federal government can demonstrate it recognizes the needs of producers — across commodities and across the country — who have been facing escalating input costs,” the association said in February.

Grain Growers of Canada also applauded the decision. Chair Andre Harpe said it would support thousands of grain farmers across the country.

“With the rising cost of inputs and low grain prices at harvest, a higher interest free portion of the APP is needed,” he said.

The GGC said announcing this decision early provides farmers with predictability and stability so they can plan their year ahead.

—Karen Briere writes for the Western Producer

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However, he did suggest farmers talk to the finance minister about it.

Speaking to delegates at the Canadian Federation of Agriculture annual meeting, the minister referenced the APP while talking about available programs. He said farmers had been through a lot in the last few years with pandemic supply chain issues, global unrest and extreme weather.

“We have programs that will assist, (like) the advance payment program,” he said, adding farmers can access up to $1 million.

He said the interest-free portion had risen from $100,000 to $250,000 to $350,000 last year.

“That helps. I used that when I was a farmer myself,” he said.

However, Ontario Federation of Agriculture delegate Ethan Wallace noted that the $350,000 no longer applied.

“It is currently back to $100,000. Can you or your government commit to putting that limit back to the $350,000?” he asked.

MacAulay replied: “Perhaps the government can. I can’t.”

He said he would push for that every chance he gets.

Bloc Quebecois agriculture critic Yves Perron said he didn’t know the $100,000 limit was back in place.

“It has to be $350,000,” he said during his speech. “It has to be kept at that level.

Conservative agriculture critic John Barlow said he also didn’t know until farm organizations began contacting him.

He said he wouldn’t bet the farm on the decision being reversed.

Meanwhile, delegates also raised Bill C-234 and asked speakers if they support the amended version of the bill, which leaves farm buildings and greenhouses out of any possible carbon tax exemption.

Perron said his party supports passing the amended version because at least grain drying will be covered.

The Conservatives and NDP prefer the original bill.

“We intend to reject the Senate amendments to it,” said NDP critic Alistair MacGregor to applause.

However, with the BQ support, the Liberal government can pass the amended bill whenever the matter comes to a vote.

—Karen Briere writes for the Western Producer from Saskatchewan.

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“We’re launching our early application window for the 2024 Advance Payments Program (APP), giving farmers more time to apply,” said Dave Gallant, CCGA’s vice-president of finance and APP operations in a news release today.

Farmers are eligible for up to $1 million in financing, with the interest‑free component at $100,000. The rest is subject to CCGA’s interest‑bearing rate of prime less 0.25 per cent, CCGA said.

“The interest cost savings that a cash advance offers can be significant,” Gallant said.

He encouraged farmers to consider the blended impact of the interest‑free and interest‑bearing components when comparing various financing options.

Farmers can apply on over 50 commodities including field crops, livestock, honey and organic crops.

The Advance Payments Program is a federal loan program administered by CCGA

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Agriculture Minister Marie-Claude Bibeau confirmed Wednesday that the interest-free limit under the Advance Payments Program (APP) for the 2023 program year is now $350,000, effective Monday (May 8).

The regulatory amendments allowing this increase are not retroactive, the government noted. The new limit will be applied to existing APP advances as of Monday, when the amendments came into force, and producers still must pay any interest that accrued on an existing advance before that date.

Bibeau said Wednesday the decision comes as farmers “continue to face significant financial challenges including high input costs and rising interest rates.”

The APP gives eligible farmers access to up to $1 million, calculated based on up to 50 per cent of the “anticipated market value” of production, whether it’s in storage or still to be produced — with “preferential” interest rates on the portion above the interest-free limit.

The operating credit from a cash advance thus can help improve a farm’s cash flow or offer the flexibility to sell commodities into more favourable market conditions, the government said.

Following the budget announcement in March, at least one farm consultant suggested other farmers might consider investing interest-free APP cash to benefit from the current interest rate environment.

APP advances, on most eligible commodities, must be repaid in full over the following 18 months. On cattle and bison production, that repayment period is 24 months.

The single-year interest-free limit increase to $350,000 is on top of last June’s temporary increase to $250,000 for the 2022 and 2023 program years — up from the usual limit of $100,000.

That earlier increase is estimated to save farmers an average of $8,600 over the two years, the government said Wednesday. This week’s increase, meanwhile, is expected to translate to total savings of up to $12.4 million, or an additional $3,600 in interest costs per applicant on average.

The government estimated the total federal investment for these increases for 2022 and 2023 could run up to about $94.9 million.

APP cash advances are delivered in Canada through 30 industry-led associations. One such program administrator, the Canadian Canola Growers Association, said last month it was waiting for the updated interest-free limit to be made available and “will notify customers as soon as we are able to issue advances under these new parameters.”

The CCGA also noted last month that some of the APP advance rates for 2023 have risen or fallen while others remain flat. For example, it said, the 2023 advance rate per tonne for wheat is up 20 per cent, and for canola up nine per cent, over 2022.

The feds, in Wednesday’s release, said they also plan to consult further with the provinces and territories “to explore ways to extend help to smaller agricultural producers who demonstrate urgent financial need.” — Glacier FarmMedia Network

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Freeland’s 2023 federal budget, released Tuesday, includes $13 million in 2023-24 for Agriculture and Agri-Food Canada to temporarily increase the interest-free limit for loans under its Advance Payments Program (APP) to $350,000 for the 2023 program year.

The interest-free portion of an APP loan was previously capped at $100,000 but that level was temporarily raised last summer to $250,000 for the 2022 and 2023 program years.

The APP provides farmers with cash advances of up to $1 million, based on up to 50 per cent of the anticipated market value of a farm’s eligible production, whether it’s still to be produced or is already stored.

“Farm production costs have increased in Canada and around the world, including as a result Russia’s illegal invasion of Ukraine and global supply chain disruptions,” Tuesday’s budget documents said. “It is important that Canada’s agricultural producers have access to the cash flow they need to cover these costs until they sell their products.”

On that note, the budget also committed the feds to “consult with provincial and territorial counterparts to explore ways to extend help to small agricultural producers who demonstrate urgent financial need.”

Fertilizer funding

On the matter of input costs, the budget also notes Russia’s invasion of Ukraine “has resulted in higher prices for nitrogen fertilizers, which has had a notable impact on eastern Canadian farmers who rely heavily on imported fertilizer.”

To that end, the budget proposes a $34.1 million addition to the federal On-Farm Climate Action Fund over three years, specifically “to support adoption of nitrogen management practices by eastern Canadian farmers, that will help optimize the use and reduce the need for fertilizer.”

That $34.1 million figure roughly coincides with a recent estimate of the tariffs collected so far on imports of Russian fertilizer into Eastern Canada. Several grower groups in that region have called for an end to that tariff and for farmers to be directly reimbursed for tariffs already paid.

Dairy development

Among other longer-term investments, the budget proposes $333 million over 10 years to set up what it calls the Dairy Innovation and Investment Fund, starting in 2023-24, to back development of new dairy products based on solids non-fat (SNF), a dairy processing byproduct.

The dairy sector is up against “a growing surplus” of SNF, for which the limited processing capacity in Canada “results in lost opportunities for dairy processors and farmers,” the budget said.

The new fund would support “investments in research and development of new products based on SNF, market development for these products, and processing capacity for SNF-based products more broadly.”

Inoculation inventory

The budget also pledges $57.5 million over five years starting in 2023-24, and $5.6 million ongoing, for the Canadian Food Inspection Agency to set up a foot-and-mouth disease (FMD) vaccine bank for Canada and develop FMD response plans.

Recent outbreaks of FMD in livestock in Asia and Africa “have increased the risk of global spread,” the budget said, and if an FMD outbreak were to occur in Canada it “would cut off exports for all livestock sectors, with major economic implications.”

The impact of a potential FMD outbreak “would be significantly reduced with the early vaccination of livestock,” the budget said. For the vaccine bank, the feds plan to “seek a cost-sharing arrangement with provinces and territories.”

The Canadian Cattle Association on Tuesday hailed the vaccine bank announcement, describing a vaccine bank as a “critical” investment which “helps provide necessary insurance to protect Canada’s export markets.” Several livestock groups have called for such an investment in recent years.

“While we hope this vaccine bank is never needed, we are grateful for today’s investment and its establishment,” CCA president Nathan Phinney said in a separate release. “We appreciate the government listening to our concerns and understanding the critical need to put in place emergency preparedness plans to control the spread of the disease and protect our export markets for Canadian beef.”

Risk management

CCA also hailed a separate budget line item pledging $184 million over three years to boost the Species At Risk Act. That funding goes to the federal environment, parks, fisheries and natural resources departments “to continue monitoring, protecting and promoting the recovery of species at risk to help restore their populations.”

“We will be engaging with the government of Canada to ensure beef producers are at the table as key stewards of lands where species at risk live,” the CCA said.

On that matter, noting cattle producers’ stewardship work on endangered native grasslands, Phinney said the CCA calls on Ottawa “to include support for protecting Canada’s grasslands in the future.”

Liquor and cannabis

Among federal sin taxes, the feds propose to temporarily cap the inflation adjustment for excise duties on beer, spirits and wine at two per cent, for one year only, as of April 1. Alcohol excise duties are usually automatically indexed to total Consumer Price Index (CPI) inflation at the beginning of each fiscal year.

The feds also announced plans to allow all licensed Canadian cannabis producers to remit excise duties on a quarterly basis rather than a monthly basis, also starting April 1. That move expands on a measure put in place for “certain smaller” cannabis producers in the 2022 budget.

On that note, the budget said, “while significant progress has been made in eliminating criminal activity in the cannabis market, licensed cannabis producers are currently experiencing financial difficulties as they help to build a stable, legal cannabis industry in Canada.” — Glacier FarmMedia Network

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