Question Period Note: BUSINESS RISK MANAGEMENT (BRM) PROGRAMS

Q1 - How is the government responding to requests for fundamental business risk management (BRM) program improvements?
Q2 – How is AAFC helping farmers with increased costs and the impacts of U.S. and Chinese tariffs under BRM programs?
Q3 – How do BRM programs address extreme weather events and climate change?

R1 - 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.
R2 - To support producers navigating significant pressure and uncertainty, 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 13,300 producers for a total savings of up to $52 million this program year.

Additionally, it was announced on September 5, 2025, that the Government of Canada was temporarily increasing the interest-free portion for canola advances to $500,000 for the 2025 and the 2026 program years. It is expected that this 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.

Furthermore, on April 1, 2026, it was announced that the interest-free limit was being temporarily increased to $250,000 for non-canola advance for the 2026 program year. This change will represent estimated savings of up to $37.4 million in additional interest savings for approximately 8,618 producers.

Also, under Sustainable CAP, starting in 2023, the AgriStability rate was increased from 70 to 80% to provide more support to farmers in times of need. Moreover, in July 2025, federal, provincial and territorial (FPT) governments agreed to additional support 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.
R3 - The suite of BRM programs is in place to help producers manage risks that threaten the viability of their farms. Producers are encouraged to proactively manage their risks by participating in BRM programs.

AgriStability provides support to producers who experience large income drops due to
production loss, increased costs, and/or market conditions. AgriInsurance
minimizes the economic effects of production losses caused by uncontrollable natural hazards such as drought, flood, wind, extreme weather, disease, and insect infestations.

AgriInvest allows producers to save a portion of their farms’ proceeds, with
a matching government contribution, to help manage smaller income declines.
Producers may withdraw from the AgriInvest accounts at any time and for any reason.

When producers experience extraordinary costs beyond their capacity to manage
following a disaster event, AgriRecovery can support producers with additional financial assistance.

In addition, 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.

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 FPT as outlined in the 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. On average, FPT governments pay producers $441 million through AgriStability each year.

In July of 2025, FPT ministers of agriculture announced several enhancements to AgriStability for the 2025 program year, including increasing the payment limit and compensation rate.

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.

Finally, beginning in the 2026 program year, jurisdictions will have the option of adopting a new valuation methodology for significant commodities grown and used on farm (e.g. feed). This is expected to better align program payments with disaster years.

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 $279 million annually to AgriInvest accounts. As of 2025, the largest producers need to have a valid agri-environmental risk assessment to receive the government contribution in AgriInvest.

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, as of 2025, producers with allowable net sales (ANS) of at least $1 million are required to have a valid agri-environmental risk assessment in order to receive an AgriInvest government contribution.
The AgriInsurance program helps stabilize producer income by minimizing the economic effects of production losses caused by severe but uncontrollable natural hazards. It provides premium subsidy support, both federal and provincial, largely to crop producers, averaging over $1.3 billion per year since 2018, which represents approximately two-thirds of all BRM contributions.

AgriRecovery is a FPT initiative designed to assist agricultural producers with the extraordinary costs required to recover from a natural disaster. It operates as a collaborative framework, bringing together governments to assess impacts and deliver targeted assistance when producers experience extraordinary costs beyond their capacity to manage. While AgriRecovery plays an important role in addressing recovery needs, it is not meant to replace available coverage under other programs such as AgriInsurance, AgriStability, and AgriInvest.

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.

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 and 2025, representing a total savings of $226.9 million for producers over the four-year period (2022 to 2025).

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 $52 million for over 13,300 producers.

Additionally, it was announced on September 5, 2025, that the interest-free limit will be temporarily increased to $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.

Furthermore, on April 1, 2026, it was announced that the interest-free limit was temporarily increased to $250,000 for non-canola advances for the 2026 program year. This change will represent estimated savings of up to $37.4 million in additional interest savings for approximately 8,618 producers.

• Producers have access to the full suite of federal-provincial-territorial business risk management programs to help them manage production losses, severe market volatility, extreme weather events and disasters.

• Under the Sustainable Canadian Agricultural Partnership (CAP), Agriculture and Agri-Food Canada continues to work with provinces and territories to make business risk management programs more effective for producers and to support greater resiliency within the sector.