In recognition of the significant financial challenges facing Canadian producers, the federal agriculture minister, Hon. Marie-Claude Bibeau, has confirmed that the interest-free limit of the Advance Payments Program has been increased from $250,000 to $350,000 for the 2023 program year, effective May 8, 2023. This is the portion of advances on which the Government of Canada pays the interest on behalf of producers.

Under the Advance Payments Program, producers have easy access to favourable cash advances of up to $1 million, based on the expected value of their agricultural product. The program can also provide some flexibility by allowing producers to sell their agricultural products based on market conditions rather than the need for cash.

Last year, the Government of Canada increased the interest-free limit from $100,000 to $250,000 for the 2022 and 2023 program years, saving producers an average of $8,600 over the two years. The further increase means producers have access to additional cash flow and more interest savings to help cover costs until they can sell their products.

By increasing the interest-free limit to $350,000 for 2023, eligible participating producers could save an additional $3,600 in interest costs on average for the year. This change will represent total savings of up to $12.4 million.

The amendment to the Agricultural Marketing Programs Regulations is not retroactive, meaning the new limit will be applied to existing advances under the 2023 Advance Payments Program as of May 8, 2023, when the regulatory amendment came into force.

The Advance Payments Program cash advances are calculated based on up to 50 per cent of the anticipated market value of the eligible agricultural products that will be produced or are in storage. The program is delivered through 30 industry-led associations.

Source:  Agriculture and Agri-Food Canada May 10, 2023 news release