Question Period Note: ELIGIBILITY OF PRACTICES FOR ON-FARM CLIMATE ACTION FUND (OFCAF)

Q1 – What factors are considered when selecting eligible beneficial management practices (BMPs) in the On-Farm Climate Action Fund (OFCAF)?
Q2 – Has the OFCAF program been responsive to the sector when considering new BMPs for inclusion?
Q3 – Does AAFC have a process in place for considering new BMP addition to the OFCAF?

R1 - AAFC applies key principles to scientific assessments to ensure selected practices offer the greatest potential to reduce GHG emissions or sequester carbon to reach the 2030 greenhouse gas reduction goals. AAFC also considers the potential for co-benefits to soil health, water and/or air quality and biodiversity; that there is no negative impact on yields, etc.; as well as the potential for impact across a variety of regions and landscapes.
R2 - The program has been open to sector requests for inclusion of additional BMPs since it began. AAFC has reviewed multiple suggestions and conducted scientific assessments where published, peer-reviewed material was available. For example, in Summer 2022, through sector engagement and a scientific analysis, Polymer Coated Urea was added to the list of eligible beneficial management practices.

Sector outreach was also conducted in late 2022 to solicit feedback on the current list of eligible practices and suggestions for new practices to be considered.
R3 - AAFC has developed a transparent BMP review process for the OFCAF program. The evaluation criteria for new BMPs will remain grounded in science-based evidence and allow for input and feedback from the stakeholder community. Applications for new BMP additions are reviewed twice a year. The sector will receive direct feedback from AAFC on the eligibility of submitted BMPs, furthering transparency and communication.

Agricultural stakeholders were presented with this BMP review process in July 2023, with generally positive feedback provided, and it was officially launched in late December 2023.

In addition to the process described above, for expansion phase of OFCAF (2025 to 2028), AAFC introduced an optional activity that allows projects to support the adoption of practices with promising greenhouse gas mitigation or carbon sequestration potential, but that lack sufficient Canadian based scientific evidence necessary to submit it for the regular BMP semi-annual review process. This optional activity was developed in response to stakeholder feedback and allows for on farm implementation while Canadian evidence base is still being developed.

The science around different beneficial management practices continues to evolve. As we learn more, we will continue to review and update the practices that are eligible under the OFCAF program.

OFCAF was launched in 2021 as a three-year initiative. In Budget 2022, additional funding was committed to expand the program from 2025 to 2028, bringing the total investment over six years to $704.1 million. This funding supports farmers in adopting beneficial management practices (BMPs) such as nitrogen management, cover cropping, and rotational grazing, which have positive environmental and economic benefits. OFCAF also provides essential training and knowledge-sharing activities to help farmers adopt these BMPs, addressing a key gap identified by stakeholders.

OFCAF is one of a few programs that contributes to a broader Government of Canada strategy on climate action towards emission reduction goals set for 2030 and 2050. It is one of three programs that forms the Natural Climate Solutions Fund, an over $5 billion fund led by Natural Resources Canada, supported by Environment and Climate Change Canada, and Agriculture and Agri-Food Canada.

On January 28, 2025, the Government of Canada announced the expansion of OFCAF, which will provide an additional $300 million to 13 initial recipients in continuation of their efforts to help farmers become more climate resilient over the next 3 years, until 2028.

• The Government announced $704.1 million for the Agricultural Climate Solutions - On-Farm Climate Action Fund stream that aims to incentivize practices that increase carbon sequestration and reduce greenhouse gas emissions, increasing environmental and economic sustainability.
• The On-Farm Climate Action Fund supports producers with the immediate implementation of beneficial management practices related to nitrogen management, cover cropping, and rotational grazing.
• Eligible practices under the Fund were identified based on published, peer-reviewed Canadian studies demonstrating strong potential to reduce greenhouse gas emissions or increase carbon sequestration in support of the 2030 greenhouse gas reduction goals.