The federal government and some provincial governments have committed funds and implemented measures to help agribusinesses weather the COVID-19 crisis. This bulletin provides a brief overview of funding and other assistance available to producers, agribusinesses, and food producers.
Increased Lending from Farm Credit Canada
Farm Credit Canada (“FCC”) is a federal Crown corporation that, among other things, lends money and provides other services to primary producers, food operations, and businesses in the agriculture sector. FCC is actively responding to the COVID-19 crisis, and is supported by the Federal Government which has committed an additional $5 billion in lending capacity to help agribusinesses manage through this challenging time.
Highlights of FCC’s initiatives are as follows:
● FCC is offering relief for those with existing loans and accepting applications for new credit lines as follows:
○ those with existing loans are offered either: (a) a deferral of principal and interest payments up to six months; or (b) a deferral of principal payments up to 12 months;
○ FCC is accepting applications for additional 24-month credit lines up to $500,000, at a rate of Prime +1% and no fees; and
○ FCC is offering access to an additional term loan up to $2.5 million.
● The purpose of the credit line option is to ensure that producers, agribusinesses, and food producers have access to the cash flow they need to get through the COVID-19 crisis. It is not intended to pay out other debts.
● Applications are evaluated on a case-by-case basis. Businesses applying for FCC lending products are subject to normal lending due diligence, which considers business viability, credit history, and management integrity and experience.
● To apply, the applicant must meet the following minimum requirements:
○ be a Canadian citizen or a permanent resident of Canada;
○ be of legal age of majority in the applicant’s province/territory of residence; and
○ have a significant portion of the applicant’s be revenue from activities involving agriculture or a business related to agriculture.
● For more information, please contact one of FCC’s local offices or FCC’s Customer Service Centre at 1-888-332-3301.
Loans from Agriculture and Agri-Food Canada
The Advance Payments Program (“APP”) is a federal loan guarantee program that provides farmers with access to low-interest cash advances. Under the APP, farmers can access up to $1 Million per program year in advances based on the value of their agricultural product. The federal government paying the interest on the first $100,000 advanced, and farmers repay the advances as they sell their agricultural product, with up to 18 months to fully repay the advance for most commodities (up to 24 months for cattle and bison). However, with the COVID-19 crisis interfering with farmers’ ability to sell their product, the federal government has announced relief for eligible farmers.
Eligible farmers who have an outstanding APP loan due on or before April 30, 2020 will receive a Stay of Default, allowing them an additional six months to repay the loan. The new deadlines for outstanding Advance Payments Program loans are:
● September 30, 2020 for 2018 cash advances for grains, oilseeds, and pulses;
● September 30, 2020 for 2018 cash advances for cattle and bison; and
● October 31, 2020 for 2019 cash advances on flowers and potted plants.
Farmers are directed to contact their APP administrator to enquire about their eligibility for the Stay of Default.
Online Portal: Agriculture Job Connector
Although not new, the Government of Alberta maintains the Agriculture Job Connector, an online portal for agriculture employers and workers to find jobs, skilled workers, financial help and other supports.
Canada-Alberta Job Grant
The Canada-Alberta Job Grant provides eligible employers with government funding to help employees access training opportunities. The government will contribute up to 2/3 (or a maximum of $10,000) of the cost per trainee per fiscal year.
In response to COVID-19, the deadlines for current approved grants have been extended by 3 months.
Applications to the Canada-Alberta Job Grant program can be made through the Labour’s Workforce Grants Portal. For further information about applying, the Canada-Alberta Job Grant Applicant Guide is available online.
WCB Premium Relief
The Alberta government has announced new measures concerning workers’ compensation (“WCB”) premiums.
Private sector employers in Alberta can defer WCB premium payments until 2021, and for small- and medium-sized businesses, the government will cover 50% of the 2020 premium when it becomes due in 2021. Employers who have already paid WCB premiums in 2020 are eligible for a rebate or credit.
Additional information can be sought directly from WCB by email at firstname.lastname@example.org or by phone at 1-866-922-9221 (within Alberta) or 1-800-661-9608 (outside Alberta).
Deferral of Electricity and Natural Gas Bill Payments
Residential, farm, and small commercial customers are also eligible to defer electricity and natural gas bill payments until June 19, 2020. This program is available to Albertans who are experiencing financial hardship as a direct result of COVID-19. Eligibility requirements are broad, and include the following examples:
● diagnosis with COVID-19;
● directions by health authorities to self-isolate;
● job loss; and
● taking care of a family member.
Arrangements for a deferral and repayment plan must be arranged directly with natural gas or electricity providers.
Place to Grow: Agri-Food Innovation Initiative
On April 17, 2020, the federal government and the Government of Ontario announced plans to invest $1 million in new funding to connect workers with “in-demand jobs” in the agri-food sector in an effort to ensure that the country’s supply chains are preserved. The funding is being provided by the Canadian Agricultural Partnership (the “Partnership”) under the “Place to Grow: Agri-Food Innovation Initiative – Addressing Labour Supply and Training Challenges” project category. It will be cost-shared by the Province of Ontario and the federal Government.
The Partnership is a five-year, $3-billion commitment by Canada's federal, provincial, and territorial governments that supports Canada's agri-food and agri-products sectors.
Key features of the Place to Grow: Agri-Food Innovation Initiative are as follows:
● Eligible Projects: This funding is designated for projects that will implement new, enhanced, or expanded attraction, training, and retention approaches that address labour supply and training challenges. The purpose of the program is to identify projects that will connect workers with “in-demand jobs” in the agri-food sector. Examples could include technology solutions such as web-based applications that match workers with jobs. However, at the moment, the parameters of the program have been left intentionally broad to encourage a range of innovative solutions to be developed.
● Eligible Businesses: The funding will be made available to businesses that operate anywhere throughout the agri-food and agri-product value chain. Notably, the funding will also be extended to non-agricultural businesses that enter into partnerships with eligible agribusinesses for the purpose of introducing new programs to address the labour shortage within the agricultural industry. This opens the door to partnerships between technology companies and traditional agribusinesses.
● Application Period Is Open: Applications are already being accepted (as of April 17, 2020). Eligible applications will be received and assessed on a continuous basis, as long as funding is available.
● Funding Potentially Available: If accepted, funding is available for up to 90% of eligible costs. The Partnership prefers that funding request be made for less than 90% of eligible costs.
● For more information about this targeted application intake, to obtain a program guidebook, or to be directed to an agriculture development advisor for any related questions, email email@example.com or call 1-877-424-1300.
● Visit the Addressing Labour Supply and Training Challenges page for more information about eligibility and assessment criteria.
Contact Fasken if you have any questions about how the Canadian government’s aid package could help your agribusiness.