The federal government is increasing the interest-free portion of its Advance Payments Program (APP) from $100,000 to $250,000 for 2022 and 2023.
Agriculture Minister Marie-Claude Bibeau announced the change to the cash advance program on Thursday, June 23.
Agriculture and Agri-Food Canada says eligible producers will save an average of $5,500 in interest costs over the two-year period — a total of $61 million for approximately 11 thousand farms.
The cash advance program provides producers with short-term loans of up to $1 million based on the expected value of their agricultural production, of which the first portion in each crop year is interest-free.
“This year, agricultural producers are facing significant increases in input prices. By suspending interest on the first $250,000 of their Advance Payments Program loans, we are providing relief to those women and men who work so hard to feed us and the world in these uncertain times,” noted Bibeau.
The change is not retroactive, so it will apply to existing advances as of June 20, 2022.
Bibeau previously said the government was considering taking measures to reduce the impact of the Canadian government’s 35 per cent tariffs on fertilizer from Russia and Belarus, but the cash advance announcement did not refer to the sanctions, instead framing the change as helping Canadian farmers with cash flow to contribute to global food security.
The government also announced a change to the cash advance program in April that allows producers to receive 100 per cent of their advance up front, rather than receiving the funds in two instalments before and after seeding.
Last year, the federal government disbursed $2.39 billion in advances to 17,430 producers across Canada through 30 industry-led associations that administer the program.
Related: 100% of federal cash advances available up front for 2022
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