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24-03 - Advance Payments Program (APP) Loan Limits
The Board fully supports the resolution that the Advanced Payments Program (APP) interest-free portion be maintained at $350,000 for the 2024-2025 program year. Over the past number of years, the interest-free portion has been at different levels: 2021 - $100,000; 2022 - $250,000; 2023 - $350,000. All signs from federal officials were pointing towards reverting back to the $100,000 interest-free level.
In February, BFO signed on to the attached letter with Canadian Cattle Association (CCA) and numerous federal and provincial agriculture organizations to the Honourable Chrystia Freeland, Minister of Finance, to maintain the interest-free portion of the loans under APP at $350,000. By doing so the federal government would demonstrate it recognizes the needs of producers who have been facing escalating input costs including the cost of raising capital to invest into the next crop or purchase livestock. A copy of this letter can be found in the PDF version of this response below.
On March 25, 2024, the Honourable Lawrence MacAulay, Minister of Agriculture and Agri-Food, announced ahead of the federal budget being tabled that the interest-free limit of the APP would be set at $250,000 for the 2024-25 program year. This was as a result of producers facing significant challenges, including elevated input prices and interest rates, which have impacted cash flow.
On April 9, 2024, BFO had its annual federal fly-in meetings in Ottawa where Ontario’s CCA directors held meetings with Members of Parliament (MP) and Senators, including MP Francis Drouin, the Parliamentary Secretary to the Minister of Agriculture and Agri-Food. During these meetings, we discussed the importance of the APP program to our members and thanked the government for its recent announcement.
The federal budget was officially announced on April 16, 2024, and it confirmed the interest-free portion of APP for the 2024-25 program year will be $250,000. While we were disappointed the interest-free portion was not maintained at the $350,000 level, we were pleased it did not revert back to $100,000.
Ontario has seen strong demand for APP through the Feeder Finance Program and BFO will be sending a letter to Minister MacAulay thanking him setting the interest free portion of APP at $250,000 and will take the opportunity to further explain the importance of the program and why the interest-free portion needs to be maintained or increased in future years.
Ensuring the industry has access to predictable, timely, and effective BRM programs continues to be a critical pillar of BFO's government relations priorities. Even though the program guidelines have been set with respect to the APP for the upcoming year, BFO will continue to press this issue with CCA and the federal government as we know the importance of this program to Ontario producers.