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GOC raises interest-free limit for 2023 Advance Payments Program
May 10, 2023 By Top Crop Manager
In recognition of the significant financial challenges facing Canadian producers, Marie-Claude Bibeau, federal minister of agriculture and agri-food, confirmed on May 10 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. This is the portion of advances on which the Government of Canada pays the interest on behalf of producers.
“Agricultural producers continue to face significant financial challenges including high input costs and rising interest rates,” said Bibeau in an official statement. “This new increase in the interest-free portion of Advance Payments Program loans will generate savings for our farmers so they can maintain production to sustain their livelihoods.”
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 Government of Canada remains committed to ensuring producers have the resources they need to sustain their livelihoods through challenging times. The government will also consult with provincial and territorial counterparts to explore ways to extend help to smaller agricultural producers who demonstrate urgent financial need.
