Canadian Agricultural Loans Act Program

Overview of the Canadian Agricultural Loans Act Program program:

The Canadian Agricultural Loans Act (CALA) Program is a loan guarantee program designed to increase the availability of loans to farmers and agricultural co-operatives. Farmers can use these loans to establish, improve, and develop farms, while agricultural co-operatives may also access loans to process, distribute, or market the products of farming. Under the CALA, the federal government guarantees, to the lender, repayment of 95% of a net loss on an eligible loan issued. The maximum aggregate loan limit for any one farm operation is $500,000. The maximum aggregate loan limit for agricultural co-operatives is $3 million, with the Minister's approval.

Benefits of the Canadian Agricultural Loans Act Program program:

• Loans are limited to a maximum of:
• $500,000 for the purchase of land and the construction or improvement of buildings
• $350,000 for all other loan purposes, including consolidation/refinancing
• Eligible purposes:
• Real property purposes:
• Purchase of land
• Construction, repair, or alteration of, or additions to, any building or structure on a farm
• Purchase, movement to and installation on a farm of complete or partially complete structures and, where necessary, the completion of the installed structures
• Other loan purposes:
• Purchase, installation, alteration, major overhaul, or major repair to/of:
• Tools, implements, apparatus, and machines of any kind not usually affixed to real or immovable property
• Machinery and apparatus for the generation or distribution of electricity, whether or not affixed to real or immovable property
• Purchase of breeding livestock that will provide a long-term improvement to a farm operation including:
• Horses and other equines
• Cattle, sheep, goats, and other ruminants
• Swine, poultry, bees, and fur-bearing animals
• Any other prescribed animal
• Erection or construction of fencing or works for drainage
• Clearing, breaking, irrigating, and reclaiming land
• Conservation of soil, prevention of soil erosion by the planting of trees and shelter belts
• Repair or overhaul of fencing where the cost is $2,000 or more
• Purchase and the planting of trees for syrup production and the purchase and planting of fruit trees, Christmas trees, and ginseng, where the cost is $2,000 or more
• Construction of a road or driveway on a farm
• Land transfer tax, survey, appraisal, and legal costs relating to the purchase of additional land
• Purchase of shares for inter-generational farm transfers
• Consolidation/refinancing of loans

Eligibility criteria of the Canadian Agricultural Loans Act Program program:

• You can apply if you are one of the following:
• Existing farmers
• Beginning farmers (that is, less than 6 years of farming)
• Start-up farmers
• Farmers taking over the family farm
• Part-time farmers
• Agricultural co-operatives with a majority (50% + 1) farmer membership
• Beginning or start up farmers may need to provide the lender with a business plan and an income tax form showing no farm income and/or expense for at least one year in the last six years.
• Agricultural co-operatives may need to provide a current income tax return showing farm income and/or expense from 50% + 1 of its members or a notarized attestation as to its membership.
• A farm operation must meet the definition of farmer and farming as defined in the Canadian Agricultural Loans Act.
• Farmer: may be one of the following that is or intends to be engaged in farming in Canada:
• An individual
• A partnership
• A corporation
• A co-operative association