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 second expansion of the interest-free portion in the last year. It was increased from $100,000 to $250,000 for the 2022 and 2023 program years in June of 2022.
Minister of Agriculture and Agri-Food, Marie-Claude Bibeau confirmed the change on May 10, following up on the commitment to boost the interest-free portion announced in the federal budget in March.
Under the Advance Payments Program, producers have access to cash advances of up to $1 million, based on the expected value of their agricultural product. The Government of Canada pays the interest on behalf of producers on the interest-free portion of the cash advance.
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 is projected to represent total savings for producers of up to $12.4 million.
“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,” says Marie-Claude Bibeau, Minister of Agriculture and Agri-Food.
The amendment to the Agricultural Marketing Programs Regulations, which increases the interest-free portion, 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 government says.