The Ontario Federation of Agriculture (OFA) is pleased to see that the 2024 federal budget 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, participating producers who borrow the full interest-free portion will save on average $18,000 in interest costs in 2024 and will be able to borrow up to $1 million.
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