Question Period Note: BUSINESS RISK MANAGEMENT (BRM) AND NON-BRM PROGRAMS

Q1 - How is the government responding to requests for fundamental BRM program improvements? Q2 – How is AAFC helping farmers with increased costs and U.S. tariffs under business risk management? Q3 – How do Sustainable CAP and BRM programs address the environment and climate change? Q4 – How is Sustainable CAP Cost-Shared Programming supporting the Canadian agriculture sector?

R.1 AAFC and its provincial and territorial counterparts recognize that BRM programs are the first line of defence for producers and that it is critical that they are working for the entire sector. They have agreed to continue to prioritize work to ensure BRM programs are timely, responsive, and predictable to help producers manage business risks. R.2 - As there are uncertainties heading into this crop year, the interest-free limit for the Advance Payments Program was once again increased from $100,000 to $250,000 for the 2025 program year. This change is expected to provide an additional $5,000 in interest savings to 13,000 producers for a total savings of up to $65 million this program year.

Also, under BRM programming, starting in 2023, the compensation rate under AgriStability was increased from 70 to 80% to provide more support to farmers in times of need. Moreover, on March 22, 2025, the Government of Canada announced additional proposed supports through AgriStability including increasing the compensation rate from 80% to 90% and doubling the current payment cap to $6 million for the 2025 program year. R.3 - The Sustainable CAP plays an important role in supporting the agriculture and agri-food sector by contributing to reductions in greenhouse gas (GHG) emissions, adapting to climate change and continuing to ensure a sustainable path for economic growth.

Central to having a more significant focus on climate change is the establishment of the Resilient Agricultural Landscape Program, a $250 million investment by FPT governments which will support on-farm adoption of environmental beneficial management practices that reduce GHG emissions and increase carbon sequestration. Additionally, under Sustainable CAP, all provinces have agreed to spend at least 12.5% of their total spending on activities that specifically support GHG emissions-reducing and carbon sequestration activities.

With regard to BRM programs, AAFC officials are conducting a BRM Climate Review that is looking at how climate change could impact future BRM payments, AgriInsurance premiums, and how BRM programs could encourage climate action.
FPT officials are also working to pilot AgriInsurance premium rebates for producers who adopt practices that have environmental benefits and also reduce production risks. And starting in 2025, the largest producers will need to have an agri-environmental risk assessment to receive the government contribution in AgriInvest. R.4 - Under Sustainable CAP, $2.5 billion will be cost-shared 60% federally and 40% provincially/territorially for programs that are designed and delivered by provinces and territories who have flexibility to implement programs to advance priority areas. These priority areas include tackling climate change, expanding markets for Canadian producers, supporting sustainable agriculture and economic growth, and enhancing sector resilience.

As part of the increase of $500 million in funding compared to the previous FPT framework, governments agreed to introduce the Resilient Agricultural Landscape Program (RALP), a new $250 million cost-shared program, $150 million federal and $100 million provincial/territorial funds, that uses an ecological goods and services payment approach to support on-farm adoption of environmental beneficial management practices that reduce GHG emissions and increase carbon sequestration.

SUSTAINABLE CAP PROGRAMMING

• The Sustainable CAP is a $3.5-billion, 5-year agreement (April 1, 2023, to March 31, 2028), between the federal, provincial and territorial governments to strengthen the competitiveness, innovation, and resiliency of the agriculture, agri‐food and agri‐based products sector.
• The agreement includes $1 billion in federal programs and activities and $2.5 billion in cost-shared programs and activities funded by federal, provincial and territorial governments.
• This 5-year agreement will inject $500 million, representing a 25% increase in the cost-shared portion of the partnership.
• Under the cost-shared envelope, FPT governments agreed to a $250 million Resilient Agricultural Landscape Program to support ecological goods and services provided by the agriculture sector.

Federal Programs and Activities under Sustainable CAP
• Federal programs and activities are national in scope and represent a $1 billion investment over 5 years.
• Federally delivered programs include: AgriScience, AgriInnovate, AgriDiversity, AgriCompetitiveness, AgriAssurance, AgriMarketing.
• Sustainable CAP federal programs and activities include a greater focus on priority areas such as:
• Science, research and development of innovative technologies and practices that address sector and government research priorities;
• Supporting science, research and development of transformative solutions that can contribute to the Government of Canada’s 2030 and 2050 emissions targets; and,
• Market diversification, including activities in the Indo-Pacific region; marketing green products; and supporting inclusive trade.
• Key changes to the programs since the last framework include:
• Greater focus on environmental priorities;
• Better cost-share and/or stacking ratio for underrepresented groups;
• Design changes to help incentivize small enterprises, start-ups and emerging innovators;
• Greater emphasis on impacts and performance measurement; and,
• The launch of the Grants and Contributions Digital Platform solution for end-to-end online program administration.

Cost-Shared Strategic Initiatives under Sustainable CAP
• Cost-shared Strategic Initiatives are a joint undertaking whereby both federal and provincial/territorial (PT) governments provide funding for programming that is designed and delivered by PTs.
• These initiatives represent a $2.5 billion investment over 5 years: 60% federally funded ($1.5 billion) and 40% PT funded ($1 billion).
• The main objective is to provide the PT governments with flexibility to meet regional priorities and resolve issues while contributing to broader national outcomes that are developed collaboratively among federal, provincial and territorial governments.
• Funding will be allocated among the five Priority Areas identified in the Guelph Statement:
• Climate Change and Environment;
• Science, Research, and Innovation;
• Market Development and Trade;
• Building Sector Capacity, Growth, and Competitiveness; and,
• Resiliency and Public Trust.

• Key changes to the programs since the last framework include:
• Introduction of the $250 million Resilient Agricultural Landscape Program;
• PT governments agreed to a level of proportionate spending of at least 12.5% of cost-shared funds to support GHG emissions-reducing and carbon sequestration activities; and,
• Increased emphasis on understanding programming impact through improved data sharing, results reporting, and a commitment to contribute to measurable outcomes.

BUSINESS RISK MANAGEMENT PROGRAMS

Business risk management (BRM) programs are joint Federal-Provincial-Territorial (FPT) programs that are in place to help producers manage risks that threaten the viability of their farms and provide protection against different types of income and production losses. Producers take responsibility for managing normal risks, while government support is in place to help manage events that exceed producers’ capacity to manage.

The programs are cost-shared 60:40 (Federal:Provincial-Territorial) as outlined in the Sustainable Canadian Agricultural Partnership (Sustainable CAP).

The AgriStability program is a whole-farm program designed to support producers who have experienced a margin decline of more than 30% for reasons such as production loss, increased costs and market conditions. In March of 2025, the previous Minister of Agriculture announced several proposed enhancements to AgriStability for the 2025 program year, including increasing the payment limit and compensation rate. To implement these changes, Provincial and Territorial agreement is required with 2/3 of PTs agreeing and 2/3 of program participation.

As part of the Sustainable CAP, Ministers also agreed to implement a new model for AgriStability that is simpler, timely, and more predictable. Working with provinces and territories, a more streamlined approach was developed that allows reference margins to be calculated based on how producers file their taxes (cash or accrual accounting), offer a new coverage notice, and more timely payments to producers. This new model is being offered as an option for producers and has been implemented in the jurisdictions where AAFC administers the program (i.e. Manitoba, New Brunswick, Nova Scotia, Newfoundland and Labrador, Yukon Territory, and the Northwest Territories) in the 2024 program year. AAFC officials are working with the remaining provinces to support their efforts to offer some or all of these elements on an optional basis during the Sustainable CAP.

The AgriInvest program allows producers to save a portion of the proceeds from their annual net sales, with a matching government contribution up to a maximum of $10,000 annually, to help manage smaller income declines. FPT governments contribute approximately $269 million annually to AgriInvest accounts.

Since Sustainable CAP came into effect in April 2023, several changes in the BRM Suite are being implemented. The AgriStability compensation rate increased from 70 to 80% beginning in the 2023 program year, increasing support to farmers up to $72 million per year. In addition, starting in 2025, producers with allowable net sales (ANS) of at least $1 million will require an agri-environmental risk assessment in order to receive an AgriInvest government contribution.

The AgriInsurance program helps to stabilize producer income by minimizing the economic effects of production losses caused by severe but uncontrollable natural hazards. It provides affordable premium subsidy support largely to crop producers, averaging over $1 billion per year since 2013, which represents approximately two-thirds of all BRM contributions.

Climate change continues to pose a threat to future program costs with the likelihood of more frequent and acute weather events. In 2024, provinces in Western Canada experienced another summer of drought conditions. Additionally, fruit growers in British Columbia faced significant yield losses due to a sudden cold polar vortex in January.

AgriRecovery is a framework which forms the basis by which federal-provincial-territorial governments can work together when natural disasters occur to assess the impacts and determine whether there is need for further assistance over and above the existing BRM programs. When the need is demonstrated, an initiative is put in place to provide targeted assistance to help with the extraordinary costs producers incur to recover.

Parts of Quebec and New Brunswick experienced significant excess rainfall during the 2023 growing season. On September 13, 2024, an initiative was announced to provide up to $25 million in total support (federal $15 million and province $10 million) to assist affected New Brunswick potato producers. On October 31, 2024, an initiative in Quebec was announced, which provided up to $22.22 million in total support (federal $13.33 million and province $8.89 million) to assist affected producers of strawberries, raspberries, market vegetables, and potatoes.

The Advance Payments Program (APP) is a federal loan guarantee program which provides agricultural producers with easy access to low-interest cash advances. Under the program, producers can obtain cash advances of up to $1 million based on the expected market value of their commodities, thus helping them meet their financial needs, including input costs, over their production and marketing cycle.

On June 23, 2022, the interest-free portion of APP advances was temporarily increased from $100,000 to $250,000 for the 2022 and 2023 program years. Budget 2023 proposed to further increase the interest-free limit from $250,000 to $350,000 for the 2023 program year. As a result, recent estimates, which take into consideration interest rate increases, suggest participating producers saved an average of about $20,000 in total interest costs, including over $10,000 related to the increased interest-free limits, over the two years. The change represented an additional estimated savings of up to $122 million over the two years for the approximately 12,800 producers who took advantage of advances above $100,000.

On March 25, 2024, the interest-free limit was again temporarily increased to $250,000 for the 2024 program year. About 12,700 producers were expected to save an additional $4,125 in interest due to the change. This represents a total interest savings of up to $52 million for the program year 2024, and total savings of close to $175 million for producers over the three-year period.

On March 7, 2025, it was announced that the interest-free limit was also temporarily increased to $250,000 for the 2025 program year. Participating producers could save up to $5,000 in interest costs. This change will represent estimated savings of up to $65 million for over 13,000 producers.  

• The Sustainable Canadian Agricultural Partnership (Sustainable CAP) is a 5-year, $3.5 billion investment by federal, provincial and territorial governments to support and grow Canada’s agriculture and agri-food sector.

• This includes a commitment to expand market opportunities for producers, strengthen the resiliency of the food system, encourage diversity and inclusion in the sector, and reduce Greenhouse Gas (GHG) emissions by 3 to 5 megatonnes.

• Under the Sustainable CAP, Agriculture and Agri-Food Canada also continues to work with provinces and territories to make business risk management programs more agile, timely, and effective for producers, and to support greater resiliency within the sector, including to climate change.

• Producers have access to the full suite of federal-provincial-territorial business risk management programs that help producers suffering from production losses, severe market volatility, extreme weather events and disasters that are beyond their capacity to manage.