Question Period Note: ADVANCE PAYMENTS PROGRAM INCREASES TO INTEREST-FREE LIMITS TO SUPPORT PRODUCERS

Q1 – How many producers have benefited from the increased interest-free limit?

For the 2024 program year, of the over 22,300 producers who received advances, nearly 13,300 producers benefited from the increased interest-free limit above $100,000, and of these, nearly 7,000 producers were able to maximize the interest-free benefit of $250,000.

The Advance Payments Program (APP) is a federal loan guarantee program that provides Canadian farmers with low-interest cash advances to increase marketing flexibility. The objective of the APP is to provide farmers with temporary cash flow in the form of APP advances so that they can meet their immediate financial obligations until they are able to sell the products they grow. APP cash advances are calculated based on up to 50% of the anticipated market value of the eligible agricultural products that a producer will produce or has in storage, up to $1,000,000 in total. The Government of Canada pays the interest on a portion of each advance.

The Agricultural Marketing Programs Act (AMPA) governs the APP. The standard interest-free limit of $100,000 is stipulated in both the Act and the Regulations.

To ensure that Canadian farmers have access to the cash flow needed to continue producing food and supporting national food security, the Government increased the $100,000 interest-free limit on loans temporarily under the APP to $250,000 in 2022, to $350,000 in 2023 and to $250,000 in 2024, representing a total savings of $175.1 million for producers over the three-year period (2022 to 2024).

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

Furthermore, on September 5, 2025 it was announced that the interest-free limit will be temporarily set at $500,000 for canola advances in the 2025 and 2026 program years. It is expected that this program change would provide approximately 1,745 canola producers in program year 2025 and 6,000 canola producers in program year 2026 with a combined $36.3 million ($5.1 million in 2025 and $31.2 million in 2026) in additional interest savings for the 2025 and 2026 program years.

In 2022, the Advance Payments Program provided $3.5 billion in total advances to 18,940 producers across Canada. A total of 9,634 producers were able to benefit from the increase, and of these, 5,122 were able to maximize the $250,000 interest-free benefit.

For the 2023 program year, a total of 21,467 producers (value of $4.5 billion) received advances. A total of 7,504 producers received interest-free advances above $250,000, and of these, 4,950 received the maximum interest-free benefit of $350,000.

The 2024 program year started on April 1, 2024, and 22,324 producers (value of $4 billion) have received advances to date. A total of 13,286 producers have received interest-free advances above $100,000, and of these, 6,969 have been able to maximize the $250,000 interest-free benefit.

• Producers have access to the Advance Payments Program (APP), a federal loan guarantee program which provides easy access to low-interest cash advances, helping producers meet their financial needs.

• In light of high input costs and increased interest rates, the Government of Canada increased the interest-free portion of the APP advances in the 2022, 2023 and 2024 program years.

• To support producers navigating significant pressure and uncertainty, the interest-free limit was increased from $100,000 to $250,000 for the 2025 program year. This change is expected to provide additional interest savings of $65 million to approximately 13,000 producers.

• Additionally, it was announced on September 5, 2025 that the Government of Canada is temporarily increasing the interest-free portion for canola advances. For the remainder of the 2025 program year and the 2026 program year, the interest-free limit will rise to $500,000.