Question Period Note: BUDGET 2025

Q1 – How is the Government addressing the significant financial challenges facing Canadian producers? Q2 – How will making pasture-related feed costs as an allowable expense for AgriStability, support producers? Q3 – How does Budget 2025 support youth employment in the agricultural sector? Q4 – What is the Government doing to ensure that Temporary Foreign Workers remain available to the agriculture and agri-food employers who need them? Q5 – How is Budget 2025 going to help diversify agricultural exports, including fish and seafood exports? Q6 – How do the changes made to Canada’s tax system benefit the agricultural sector? Q7 – How does Budget 2025 support food and beverage processors? Q8 – What prompted the Government to propose a regular review of Farm Credit Canada (FCC)?

R.1 - Due to the uncertain trade environment and unfavourable climate conditions in parts of the country, federal, provincial and territorial agriculture ministers agreed to take the necessary steps to implement a package of enhancements to the AgriStability program. For the 2025 program year only, the compensation rate will be increased from 80% to 90%, and the maximum payment limit will be increased from $3 million to $6 million providing a total of $109.2 million in support to producers.
In addition, the interest-free limit for cash advances under the Advance Payments Program was temporarily set at $250,000 for the 2025 program year instead of returning to $100,000. This change is expected to provide an additional interest savings of up to $65 million to over 13,000 producers.
On September 5, 2025, the Government of Canada announced that it is temporarily doubling the interest-free portion for canola advances. For the remainder of the 2025 and 2026 program years, the interest-free limit for canola will be $500,000. It is expected that these program changes will 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.

Domestic biofuels can provide an alternative market opportunity for canola and other agricultural feedstocks, which will help to reduce export related risks. To support this market, also on September 5, 2025, the Government of Canada announced a new Biofuel Production Incentive, led by Natural Resources Canada, with over $370 million for domestic producers to address immediate competitiveness challenges.

The Government also intends to make targeted amendments to the Clean Fuel Regulations to strengthen the resiliency and support the development of Canada’s low-carbon fuel sector, while maintaining the Regulations’ primary focus on lowering carbon emissions. R.2 - AgriStability is a program that is available to producers and provides whole-farm protection against significant margin declines. The proposed change will add pasture-related feed costs as an allowable expense, pending agreement from provinces and territories. Adding this expense ensures that the cost of feeding livestock is covered by the program, and therefore producers could be more appropriately compensated during disasters such as drought.
In July 2025, federal, provincial and territorial agriculture ministers agreed to seek the necessary approvals to include feed costs associated with rented pasture as an allowable expense in advance of the 2026 program year. The change is forecast to provide an additional $8 million of federal funds to farmers per year. As AgriStability is an FPT cost-shared program, agreement with provinces and territories on changes to the program guidelines will need to be secured. R.3 - Increasing the participation of youth in the Canadian agricultural sector is critical for its continued success and long-term prosperity. In this regard, Budget 2025 announced an additional $307.9 million for the Youth Employment and Skills Strategy (YESS) in 2026-27 and 2027-28 to provide employment, training, and wraparound supports, such as mentorship, transportation, and mental health counselling, to around 20,000 youth.
The YESS invests in young people through its wide range of programs, including Agriculture and Agri-Food Canada’s Youth Employment and Skills Program, which helps Canadian youth gain valuable experience and develop skills to support career opportunities in the agricultural sector. R.4 - Budget 2025 announces that the 2026-2028 Immigration Levels Plan will stabilise permanent resident admission targets at 380,000 per year for three years, down from 395,000 in 2025, while increasing the share of economic migrants from 59 per cent to 64 per cent. The new plan will also reduce the target for new temporary resident admissions from 673,650 in 2025 to 385,000 in 2026, and 370,000 in 2027 and 2028.
The Government recognises the role that temporary foreign workers play in some sectors of the economy and in some parts of the country. To that end, the 2026-2028 Immigration Levels Plan will consider industries and sectors impacted by tariffs and the unique needs of rural and remote communities.
Programs available to agri-food workers include federal high-skilled programs managed by Express Entry and regional economic immigration programs such as the Provincial Nominee Program, and the Atlantic Immigration Program. In addition, the Rural and Francophone Community Immigration Pilots will help rural and Francophone minority communities attract and retain newcomers with the right skills to help their regions.
The Government remains committed to implementing a new foreign labour program for agriculture and fish processing, tailored to the unique needs of these employers and workers. The Temporary Foreign Worker (TFW) Program’s main goal is to assist employers in filling their temporary skills and labour requirements when qualified Canadians and permanent residents are not available. R.5 - The Government is investing an additional $75 million over five years (2026-27 to 2030-31) in the AgriMarketing Program, launching in early 2026.

This investment will permit the program to better assist the sector to diversify its markets by exploring new opportunities around the world, particularly in high-growth regions such as the Indo-Pacific. R.6 - The Government of Canada recognizes the need to ensure our tax policy remains competitive as the United States continues to introduce aggressive tax measures to draw capital and production. The Government is committed to ensuring Canada remains an attractive destination for investment, and that businesses continue to grow and innovate.
As such, Budget 2025 introduces tax incentives to boost productivity and attract investment. They cover all new capital investments, allowing businesses to write off a larger share of the cost of these investments right away.
These tax incentives aim to encourage investments by improving cash flow, reducing risk and lowering the average cost of capital to encourage investment. This approach empowers businesses along the entire food value chain to make investment decisions that best suit their individual needs. R.7 - Fiscal measures announced in Budget 2025 reflect our strong support for the food and beverage processing industry during this period of uncertainty, such as immediate changes to Canada’s tax system to enhance business confidence in Canada and support Canada’s competitiveness. R.8 - FCC is Canada’s leading agriculture lender. Unlike other federal financial Crown corporations like the Business Development Bank of Canada (BDC) and Export Development Canada (EDC), which already undergo periodic legislative reviews, FCC’s governing legislation does not include the requirement for a legislative review. This measure aims to align the requirement for review of FCC with other financial Crown corporations to ensure it continues to deliver value to Canadians while remaining responsive to the changing needs of farmers and businesses in the agriculture and agri-food sectors.
 

AgriStability
AgriStability offers affordable, whole farm protection to support producers when challenges are beyond their capacity to manage. It is cost-shared between Federal, Provincial and Territorial (FPT) governments with the federal government contributing 60% and the provincial/territorial government contributing 40% of the costs.
On July 17, 2025, FPT ministers announced increased support for the agricultural sector through AgriStability: increasing the compensation rate from 80% to 90% and doubling the current payment cap to $6 million for the 2025 program year. Increasing the compensation rate will provide additional support to all producers who trigger a payment. Temporarily doubling the current AgriStability payment cap, which has not been updated in over 20 years, will ensure that more producers receive support at a level appropriate to their farm size.
To get money to producers faster, provincial and territorial governments have the option to proactively increase interim payment rates and initiate Targeted Advance Payments. In provinces and territories that implement these options, producers enrolled in AgriStability will be eligible to apply for an interim payment of up to 75% of their estimated final payment for the 2025 program year. Additionally, an administrator will be able to establish a Targeted Advance Payment for the 2025 program year, for example, where analysis shows that market disruptions have resulted in a sufficient loss to trigger AgriStability payments for a particular sector or region.
FPT governments also agreed to extend the AgriStability enrolment deadline from April 30, 2025, to July 31, 2025, for the 2025 program year, which allowed producers more time to make their decisions on whether to participate in the program.
In Budget 2025, the Government committed funding for amendments to the FPT cost-shared AgriStability program to make pasture-related feed costs eligible under the program. This measure will directly benefit livestock producers who have pasture-related feed charges, such as cow/calf, sheep, and goat producers.
Advanced Payments Program
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.
Furthermore, on September 5, 2025, it was announced that the interest-free limit would be temporarily set at $500,000 for canola advances in the 2025 and 2026 program years.
It is expected that this program change will 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.
Youth Employment and Skills Strategy
The Youth Employment and Skills Strategy (YESS) is the Government of Canada's commitment to help young people, particularly those facing barriers to employment, get the information and gain the skills and experience needed to access quality employment. It is a horizontal initiative, led by ESDC, involving twelve federal departments and agencies, including Agriculture and Agri-Food Canada (AAFC). Through the YESS, AAFC receives funding for its Youth Employment and Skills Program (YESP). The YESP provides contributions to employers for salaries and benefits to incentivize them to hire youth between 15 and 30 years of age, offering a higher contribution rate for projects employing youth facing barriers to employment. Employers provide the youth with career-related work experience and skill development opportunities in the agricultural sector.
As part of the Government’s commitment to support youth employment, and its ongoing efforts to address labour shortages by helping to provide employment, training, and wraparound supports (e.g., mentorship, transportation, mental health counselling) to around 20,000 youth, Budget 2025 proposed $307.9 million for 2026-27 and 2027-28, for the extension of the YESS. While a detailed breakdown is not yet available, AAFC anticipates that this incremental funding will support the department in continuing to deliver the YESP.
Immigration Levels Plan

The Immigration Levels Plan’s objective is to project immigration admissions for the next year with a hard target for 2026, and a notional target for the following two years after that. The year 2024 was the first year that Temporary Resident (TR) targets were introduced. The 2026-2028 Levels Plan aims to manage the real and perceived impacts on unemployment, housing, infrastructure and social services, while supporting short-term labour market benefits and long-term impacts on economic growth. It also aims to advance the commitment to sustainable immigration.
TR targets (i.e., Temporary Foreign Worker (TFW) Program + international students + International Mobility Program) are reduced from 673,650 in 2025 to 385,000 in 2026 and 370.000 in 2027 and 2028. PR targets remain constant over the entire 2026-2028 period at 380,000 down from 395,000 in 2025 while increasing the share of economic migrants from 59% to 64%. There is a recognition that some sectors (e.g., healthcare, construction and agrifood) face chronic labour shortages that cannot be fully filled with Canada’s existing domestic workforce. To that end, the Levels Plan will consider industries and sectors impacted by tariffs and the unique needs of rural and remote communities. Budget 2025 also proposes to undertake a one-time measure to accelerate the transition of up to 33,000 work permit holders to permanent residency in 2026 and 2027. It is unclear if there is going to be a special consideration for agricultural workers.
Agricultural employers are the highest volume users of the program. Most TFWs in the sector are hired in low-wage occupations such as general farm workers, industrial butchers and fish plant workers. There are different streams under the TFW Program which have different requirements and rules, but primary agriculture broadly uses the Seasonal Agricultural Worker Program (SAWP) stream, while food and beverage processing uses the low-wage stream.

AgriMarketing Program
The Budget re-announced the Prime Minister’s September 5, 2025, announcement of a $75 million investment over five years (2026-27 to 2030-31) in the AgriMarketing Program, launching in early 2026.
This investment will permit the program to better assist industry to explore new opportunities and manage risk by diversifying their exports, particularly to high-growth areas such as Africa, the Middle East, and the Indo-Pacific. It will also support sectors most affected by trade barriers, like canola (but also sectors such as beef, pork, pulses, horticulture and fish and seafood), and aligns with Canada’s Indo-Pacific Strategy, shifting focus beyond traditional trade partners like the U.S. and China.
This investment builds on the strength of the existing AgriMarketing Program, helping participants across the agriculture, agri-food, fish, and seafood supply chains address the emerging market disruptions and to diversify their markets.

Under the enhanced program, national industry associations in the agriculture, fish and seafood sectors, seeking to build on Canada’s existing strategy to increase and diversify markets, will be eligible for funding. The Government is also exploring the opportunity to include small and medium-sized enterprises as eligible recipients. In the coming weeks, the Government will have targeted discussions with key industry stakeholders on how best to support them during this challenging time.

Tax Policy Changes
Budget 2025 introduces a Productivity Super-Deduction, a set of enhanced tax incentives covering all new capital investment that allows businesses to write off a larger share of the cost of these investments right away.
Accelerated Investment Incentive and Immediate Expensing - This includes allowing businesses to immediately write-off the cost of machinery and equipment used for the manufacturing or processing of goods and reinstating the Accelerated Investment Incentive, an accelerated capital cost allowance which provides an enhanced first-year write-off for most capital assets. Measures also include immediate expensing of clean energy generation and energy conservation equipment, zero-emission vehicles, productivity-enhancing assets, and capital expenditures for scientific research and experimental development.
Immediate Expensing for Manufacturing and Processing Buildings - Building on these measures, the Government is also making further strategic investments in tax incentives by proposing to introduce immediate expensing for manufacturing or processing buildings that are acquired on or after Budget Day and that are used for manufacturing or processing before 2030. This measure would be phased out over a four-year period between 2030 and 2033.
As part of the Governments goal to increase competitiveness, these tax incentives aim to encourage investments by improving cash flow, reducing risk and lowering the average cost of capital to encourage investment. The new government is taking action to make Canada’s investment environment more competitive than the U.S.

Farm Credit Canada Legislative Amendments
The Government of Canada announced its intention to amend the Farm Credit Canada (FCC) Act, to introduce a requirement for regular legislative reviews of FCC’s operations and mandate to ensure alignment with the needs of the agriculture and agri-food sector. The amendment aims to ensure that FCC continues to effectively support the evolving needs of Canada’s agriculture and agri-food sector.
FCC plays a key role in providing financial services, advice, and support to farmers and agribusinesses across the country. As the sector faces new challenges such as climate change, market volatility, and shifting demographics, the Government wants to ensure that FCC remains responsive to producers’ needs and aligned with government priorities.

• Budget 2025 reiterated support for the agriculture sector through enhancements to the AgriStability, Advance Payments and AgriMarketing programs, and focused support for the canola and domestic biofuels sectors.

• Budget 2025 includes key business investments and tax incentives to help ensure a competitive and sustainable agriculture and agri-food sector, including through improved supply chain infrastructure, support for innovation, measures to address labour challenges, and enhanced trade diversification and market access for food export.

• At a time when the Canadian agriculture and agri-food sector is navigating significant pressures and uncertainty, the Government is committed to ensuring that the sector is able to remain resilient and continue to feed the country and the world.