Prime Minister Trudeau recently announced new measures to assist agribusinesses, $252 million in federal funding and an increase of $200 million in borrowing capacity to support agribusinesses. These measures include:
- $77.5 million for an Emergency Processing Fund. This fund will assist agribusinesses with accessing personal protective equipment, adapting to health protocols, modifying facilities, processes, and operations, and responding to ever-evolving risks and requirements flowing from COVID-19.
- Up to $125 million for national AgriRecovery initiatives. These initiatives will assist agribusinesses with increased costs resulting from COVID-19, including set-asides for cattle and hog management programs for livestock backed up on farms as a result of temporary food processing plant closures. This funding will assist farmers and ranchers in keeping their livestock for longer before marketing.
- Proposed $200 million increase to the Canadian Dairy Commission’s borrowing limit. This proposal is designed to support the cost of storing cheese and butter to prevent food waste.
- New Surplus Food Purchase Program. This new program is designed to redistribute existing and unsold inventories to vulnerable Canadians through local food organizations through an initial fund of $50 million.
- Increased AgriStability interim payments. AgriStability is a federal, provincial, and territorial program that supports producers facing significant revenue declines with interim payments. The interim payments available through the program will increase from 50% to 75%. Alberta, British Columbia, Prince Edward Island, Quebec, and Saskatchewan have already implemented this increase.
- Working to add labour shortages as eligible risk under the AgriInsurance program. The federal government intends to work with provinces and territories to explore adding labour shortages as an eligible risk for the horticulture sector under the AgriInsurance program. Such an expansion would insure against lost production resulting from labour shortages.
The announcement also noted that programs such as AgriInsurance, AgriStability, AgriInvest, and AgriRecovery are designed to help producers remain viable under challenging circumstances. The 2020 AgriStability program enrollment deadline was extended to July 3, 2020, while the AgriRecovery program will become more flexible to allow the federal government to provide funding directly to producers, regardless of their respective province’s ability to contribute.
Further, the announcement recognized previous federal government measures aimed at assisting agribusinesses, including:
- $50 million to offset the cost of accommodations for temporary foreign workers (TFWs) during the 14-day isolation period;
- New measures to the TFW Program, such as extending the permits for TFWs from one to two years;
- $20 million supplemental funding for the Canadian Food Inspection Agency;
- $5 billion in additional lending capacity for Farm Credit Canada. So far, this has resulted in loan deferrals of more than $3 billion; and
- $173 million in deferred Advanced Payment Program loans for grain, cattle, and flower producers.
Agribusinesses will need to carefully monitor the details of these funding initiatives, as the eligibility criteria and the application process are still to be released. It will be important as details are released to ascertain how these funds will intersect with the programs already in place for agribusinesses at the federal and provincial levels and to act quickly to receive the full benefit of these programs.
While the prime minister did not disclose many details in making his announcement, it is reasonable to expect that the same trust-based principles that apply to other federal government funding and subsidy programs will apply and the government will be relying on the good faith of agribusinesses in reporting their eligibility and completing the application process. In the case of other funding programs, the government has indicated that businesses found to have fraudulent claims may be subject to penalties, including fines or imprisonment.
For information about other available government relief programs, refer to our guide.
The authors wish to thank Preston Brasch, articling student, for his assistance in preparing this legal update.