Government of Canada further increases interest relief to help producers manage financial challenges

OTTAWA, ON, May 10, 2023 /CNW/ - In recognition of the significant financial challenges facing Canadian producers, the Minister of Agriculture and Agri-Food, the Honourable Marie-Claude Bibeau, today confirmed that the interest-free limit of the Advance Payments Program has been increased from $250,000 to $350,000 for the 2023 program year, effective May 8, 2023. This is the portion of advances on which the Government of Canada pays the interest on behalf of producers.

Under the Advance Payments Program, producers have easy access to favorable cash advances of up to $1 million, based on the expected value of their agricultural product. The program can also provide some flexibility by allowing producers to sell their agricultural products based on market conditions rather than the need for cash.

Last year, the Government of Canada increased the interest-free limit from $100,000 to $250,000 for the 2022 and 2023 program years, saving producers an average of $8,600 over the two years. The further increase means producers have access to additional cash flow and more interest savings to help cover costs until they can sell their products.

By increasing the interest-free limit to $350,000 for 2023, eligible participating producers could save an additional $3,600 in interest costs on average for the year. This change will represent total savings of up to $12.4 million.

The Government of Canada remains committed to ensuring producers have the resources they need to sustain their livelihoods through challenging times. The government will also consult with provincial and territorial counterparts to explore ways to extend help to smaller agricultural producers who demonstrate urgent financial need.

Quote

"Agricultural producers continue to face significant financial challenges including high input costs and rising interest rates. This new increase in the interest-free portion of Advance Payments Program loans will generate savings for our farmers so they can maintain production to sustain their livelihoods."
-  The Honourable Marie-Claude Bibeau, Minister of Agriculture and Agri-Food 

Quick Facts

• On June 23, 2022, Minister Bibeau announced an increase to the interest-free portion of the Advance Payments Program from $100,000 to $250,000 for the 2022 and 2023 program years.
• Budget 2023 proposed $13 million in 2023-24 to Agriculture and Agri-Food Canada to increase the interest-free limit for loans under the Advance Payments Program from $250,000 to $350,000 for the 2023 program year.
• It is estimated that the total government investment resulting from these program changes for both 2022 and 2023 could be around $94.9 million.
• The amendment to the Agricultural Marketing Programs Regulations is not retroactive, meaning the new limit will be applied to existing advances under the 2023 Advance Payments Program as of May 8, 2023, when the regulatory amendment came into force.
• The Advance Payments Program cash advances are calculated based on up to 50% of the anticipated market value of the eligible agricultural products that will be produced or are in storage. The program is delivered through 30 industry-led associations.

Associated Links

Advance Payments Program
Government of Canada announces interest relief for agriculture producers
Budget 2023

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SOURCE Agriculture and Agri-Food Canada

For media: Simon Lafortune, Press Secretary, Office of the Minister of Agriculture and Agri-Food, [email protected], 343-549-0778; Media Relations, Agriculture and Agri-Food Canada, Ottawa, Ontario, 613-773-7972, 1-866-345-7972, [email protected]