QUESTION PERIOD — Agriculture and Agri-Food
Advance Payments Program
December 2, 2020
Honourable senators, my question is for the Government Representative in the Senate. Senator Gold, as I’m sure you’re aware, the federal government’s Advance Payments Program — also known as APP — is a loan guarantee program that provides agricultural producers with easy access to low-interest cash advances. Honourable colleagues, programs such as the APP are critical, not only while we continue to navigate the ongoing COVID-19 pandemic, but to ensure that producers have the marketing flexibility to sell their products based on market conditions rather than the need for cash to meet their immediate financial needs and obligations.
At present, the Government of Canada pays the interest on the first $100,000 of funds accessed by agricultural producers under the APP. I recently met with the Canadian Cattlemen’s Association, and they highlighted this cap limits the way in which producers can effectively market their product.
My question today, Senator Gold, is this: Is the federal government considering increasing the interest-free portion available under the APP from $100,000 to $500,000? This increase would provide added liquidity and flexibility for producers such as those in the cattle, hog and poultry industries to market their commodities at the best time and at the best price. Thank you.
Senator, thank you for your question. You described the program well: easy access to low-interest cash advances. Indeed, in 2019, the government increased the limit, as senators would be aware, to help producers manage their cash flow, increasing the limit from $400,000 to $1 million. As of early September of this year, the APP has issued over $1.8 billion of advances for 2020, an increase of $100 million over the previous year.
As to your specific question, I am not aware of any planned increase to the limit.
