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OFA applauds move by Ottawa on loan interest relief

Ontario Federation of Agriculture welcomes increase to interest-free portion of Advanced Payments Program
Increase in interest-free loans pivotal in helping farmers manage cash flow for purchasing critical inputs such as feed, seed and fertilizer, association says

GUELPH – The Ontario Federation of Agriculture (OFA) is pleased to see that the announcement by Minister MacAulay (Minister of Agriculture and Agri-Food) via news release included an increase to the interest-free limit under the Advanced Payments Program (APP). Today’s announcement is welcome relief to farm businesses across Ontario and Canada.

This marks a significant victory for Canadian agriculture and showcases the effectiveness of persistent advocacy efforts by OFA, our provincial agricultural commodity partners and the Canadian Federation of Agriculture. 

“The Advanced Payments Program is an important tool in the toolbox for farmers across the country to access short-term financing for their farm business,” says Drew Spoelstra, OFA President. “We are at a critical point in time with high costs of production, inflation, elevated interest rates and falling commodity prices, and we’re grateful for the Government of Canada’s response by increasing the interest-free portion of the APP to $250,000 annually.”

The federal government temporarily increased the interest-free limit of the Advanced Payments Program from $100,000 to $250,000 in 2022 and then to $350,000 in 2023. This increase in interest-free loans was pivotal in helping farmers manage cash flow for purchasing critical inputs such as feed, seed and fertilizer. Despite the temporary relief provided, the interest-free limit was set to revert back to $100,000 for the 2024 production year. 

As a result of today’s increase to the interest-free portion of the APP from $100,000 to $250,000 annually, participating producers who borrow the full interest-free portion will save on average $4,916 in interest costs in 2024 and will be able to borrow up to $1 million. 

“As farmers head into the spring of 2024, increased financial support in the APP is a vital resource they can utilize to better support their farm businesses throughout the growing season,” explains Spoelstra.

OFA has been at the forefront, advocating to make the temporary increases to the interest-free portion become permanent fixtures of the APP. We have written to the Hon. Chrystia Freeland, Minister of Finance of Canada on multiple occasions and as recently as February 9, 2024, and for the past two years, one of our top asks in the pre-budget submissions was to permanently increase the interest-free portion of APP loans. OFA also submitted a resolution to the Canadian Federation of Agriculture in 2023 to lobby to make these temporary increases permanent and OFA board members spoke to the issue again at CFA’s 2024 Annual Meeting.

The APP has played a crucial role in helping farmers navigate cash flow challenges, inflation, rising interest rates, and geopolitical pressures over the past several years—issues which remain challenges in 2024. In our first ever farm business confidence survey, OFA members overwhelmingly told us that farm input costs are the number one issue they are worried about in 2024, this speaks to how important the announcement is to increase the interest free portion of the APP to $250,000. 

The Ontario Federation of Agriculture (OFA) represents 38,000 farm families across the province and serves as the leading advocate and strongest voice of Ontario’s farmers. As a dynamic farmer-led organization, the OFA represents and champions the interests of Ontario farmers through government relations, farm policy recommendations, research, lobby efforts, community representation, media relations and more.


Editor's note: This is a corrected version of an earlier release.