The federal government’s bill to broaden access to farm improvement loans has received royal assent, putting up an additional $1 billion in Crown-backed credit for use by new farmers, young farmers and farmer co-operatives.
The Canadian Agricultural Loans Act (CALA), formerly the Farm Improvement and Marketing Co-operatives Loans Act, is now “greatly expanded” to allow beginning farmers and more agricultural co-operatives greater access to loans over the next five years, the government said Friday.
“With more farmers retiring and financing becoming more difficult, the (Act’s) amendments give timely access to loans for beginning farmers,” Quebec MP Jean-Pierre Blackburn, the federal minister of state for agriculture, said in a release.
As per the amendments, farmers now have access to greater amounts of credit. Farmers are eligible now for expanded loan guarantee limits of up to $500,000 which doubles the previous limit of $250,000.
New farmers, meanwhile, are now eligible for loans that they were previously ineligible to receive.
And agricultural co-operatives with a majority (50 per cent plus one) farmer membership are eligible for loans of up to $3 million toward processing, marketing or distribution of farm products. Loans were previously limited to co-operatives owned 100 per cent by farm members.
The amendments also make loans of up to $500,000 available to help “intergenerational farmers” taking over their family farm. These loans were not available under the previous legislation, the government said Friday.
The government also pledged that a new online system will be developed “to improve the delivery of the program.”