On March 23, 2020 the Canadian federal government announced, as part of its emergency bill to provide funding to Canadians, that $5 billion dollars will be provided to Farm Credit Canada ("FCC") to increase lending capacity for the agriculture and food production industry. Parliament will reconvene March 24, 2020 to pass emergency legislation releasing the funds to FCC.
The funding is to be used to provide loans for producers, agribusiness and food processors to address cash-flow problems currently being faced by the industry.
In addition to increasing lending capacity, the federal government and FCC have announced that all Advance Payments Program loans currently due by April 30 will be granted an automatic Stay of Default for six months. This represents approximately $173 million in deferred loans.
All current interest free outstanding loan holders will also be eligible to apply for an additional $100,000 interest free loan so long as the total Advance Payments Program advances remain under the $1 million cap.
As of yet, no criteria has been announced regarding how the increased lending capacity will be distributed. FCC customers are encouraged to call their FCC relationship manager or the FCC Customer Service Centre at 1-888-332-3301 to discuss their individual situations and potential options available to them.
Applications for funding can be made through FCC: https://www.fcc-fac.ca/en.html.
With a team of 70 lawyers across the country, Miller Thomson's Agribusiness and Food Production Group advises farmers and producers at all levels of this sector, from the individual farmers/producers to large-scale manufacturers. We understand farmers, producers and the entire value chain, as well as the legal issues and challenges involved in agribusiness and food production.
Miller Thomson is closely monitoring the COVID-19 situation to ensure that we provide our clients with appropriate support in this rapidly changing environment.
March 25, 2020
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