Regulations Amending the Agricultural Marketing Programs Regulations (Canola 2025 and 2026): SOR/2025-188

Canada Gazette, Part II, Volume 159, Number 21

Registration
SOR/2025-188 September 16, 2025

AGRICULTURAL MARKETING PROGRAMS ACT

P.C. 2025-659 September 16, 2025

Her Excellency the Governor General in Council, on the recommendation of the Minister of Agriculture and Agri-Food with the concurrence of the Minister of Finance, makes the annexed Regulations Amending the Agricultural Marketing Programs Regulations (Canola 2025 and 2026) under paragraph 40(1)(c)^{footnote a} of the Agricultural Marketing Programs Act ^{footnote b}.

Regulations Amending the Agricultural Marketing Programs Regulations (Canola 2025 and 2026)

Amendments

1 (1) Subsection 10(7) of the Agricultural Marketing Programs Regulations ^{footnote 1} is replaced by the following:

(7) Subject to subsection (7.1), for the purposes of subsection 9(1) of the Act, the amount fixed by regulation is $250,000 for program year 2025.

(7.1) For the purposes of subsection 9(1) of the Act, the amount fixed by regulation is, for canola producers, $500,000 for program year 2025 and $500,000 for program year 2026.

(2) Subsection 10(8) of the Regulations is replaced by the following:

(8) The following definitions apply in this section.

program year 2019

means the program year that ends on March 31, 2021. (année de programme 2019)

program year 2022

means the program year that ends on March 31, 2024. (année de programme 2022)

program year 2023

means the program year that ends on March 31, 2025. (année de programme 2023)

program year 2024

means the program year that ends on March 31, 2026. (année de programme 2024)

program year 2025

means the program year that ends on March 31, 2027. (année de programme 2025)

program year 2026

means the program year that ends on March 31, 2028. (année de programme 2026)

Coming into Force

2 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

With approximately 90% of Canadian canola being exported, the sector is susceptible to trade and market issues. It is currently facing unprecedented uncertainties as a result of a number of trade challenges, including China’s tariffs on Canadian canola oil and meal (100%) and canola seed (75.8%). These trade actions are threatening to significantly depress prices over the next year and possibly beyond. These trade challenges are in addition to continuing financial pressures due to factors such as high input prices, increased interest rates, extreme weather events (drought and wildfires), and geopolitical unrest.

Canada’s approximately 40 000 canola producers are currently preparing to harvest their 2025 crop and will be looking to sell their canola when prices are likely to be depressed due to the factors mentioned above.

Background

The APP is a statutory program under the Agricultural Marketing Programs Act (the Act), and its regulations. It is a federal loan guarantee program that provides eligible agricultural producers with access to low and no-interest cash advances to increase their cash flow over their production and marketing periods and increase their marketing opportunities (e.g. sell when it is most opportune and at the best price). Eligible producers can access cash advances of up to 50% of the estimated market value of eligible agricultural products being produced or held in storage. The maximum APP advance is $1 million (i.e. $1 million against a crop value of around $2 million), with the federal government typically paying the interest to administrators’ lenders on the first $100,000 advanced to each producer (referred to as the interest-free limit). Most major agricultural commodities are eligible under the program, including grains and oilseeds, fruits and vegetables, and livestock.

The APP is administered by 24 industry organizations (APP administrators) across Canada, which issue advances using credit that they are able to negotiate with their lender(s) [banks, credit unions, etc.]. Because of the federal guarantee, APP administrators are able to negotiate lower interest rates, which allows them to offer competitive interest rates to producers on the interest-bearing portion of advances.

APP advances are typically available starting April 1 of each year until March 31 of the following year (when advances for the next program year become available). Producers are required to make repayments within 30 days of a sale of the commodity on which an advance was obtained, with up to 18 months to fully repay advances on most eligible commodities (up to 24 months for cattle and bison advances). For example, the application deadline for 2025 advances closes on March 31, 2026, with a repayment deadline of September 30, 2026 (March 31, 2027, for cattle and bison advances).

On average (based on 2016–2021 data) and under normal program parameters, the APP issued $2.5 billion in advances to over 20 000 producers and paid approximately $17.3 million in interest on behalf of producers. However, interest rates were much lower during these years, so costs were also lower. As APP advances are guaranteed under the Act, where necessary, Agriculture and Agri-Food Canada (AAFC) will repay defaulted advances to APP lenders, which then become debts to the Crown. This, however, is a rare occurrence under the program (only around 0.96% of total advances) and on average, 50% of defaulted amounts are recovered.

The APP’s interest-free limit was increased to $250,000 for the 2022 program year, $350,000 for 2023 and $250,000 for 2024 and 2025 for producers of all eligible agricultural products. On an accrual basis, additional interest savings for the sector are estimated to amount to $175.1 million over the three-year period (2022 to 2024), with 2025 projecting to have a total savings of $65 million.

• For 2022, 18 940 producers received $3.5 billion in advances. A total of 9 634 producers benefitted from the limit increase, and of these, 5 122 were able to maximize the $250,000 interest-free benefit.
• For 2023, 21 467 producers received $4.5 billion in advances. A total of 7 504 producers received interest-free advances above $250,000, and of these, 4 950 received the maximum interest-free benefit of $350,000.
• For 2024, 22 324 producers have received $4 billion in advances. A total of 13 286 producers have received interest-free advances above $100,000, and of these, 6 969 have been able to receive the maximum interest-free benefit of $250,000.
• For 2025, 17 789 producers have received $3.2 billion in advances to date. A total of 9 822 producers have received interest-free advances above $100,000.

The APP program limits are set in the Act and can be adjusted through an amendment to the Regulations. While this temporary measure will increase the interest-free limit to $500,000 for 2025 and 2026 canola advances, the Regulations currently require that the interest-free limit return to $100,000 for all other non-canola advances beginning with the 2026 APP program year. AAFC will continue to monitor the agriculture sector to ensure the APP is providing sufficient support.

Objective

The objective of this temporary measure is to decrease the cost of borrowing under the APP related to canola production, increasing access to the cash flow it provides to canola producers over the 2025 and 2026 growing and marketing seasons. As APP cash advances are advances against producers’ future sales, reducing the interest paid by producers will also ensure they retain more of their sales revenues, which they can then reinvest into their farming businesses. The measure is expected to help to relieve some of the uncertainty and financial pressures as Canadian canola producers harvest and look for the best markets for their 2025 products and begin to prepare for the 2026 growing season.

Description

The measure amends section 10 (Fixed Amounts) of the Regulations by:

Amend section:

• 10(7) Subject to subsection (8), for the purposes of subsection 9(1) of the Act, the amount fixed by regulation is $250,000 for program year 2025.

New section to be added:

• 10(8) For the purposes of subsection 9(1) of the Act, the amount fixed by regulation is, for canola producers, $500,000 for program year 2025 and for program year 2026.

Renumbering the previous 10(8) to 10(9) and adding the following:

• Program year 2026 means the program year that ends on March 31, 2028.

Regulatory development

Consultation

The amendments were not prepublished in the Canada Gazette, Part I, as they constitute a simple and temporary change to the APP, one which has been made several times over the past few years and which the sector has supported.

There has been significant media coverage concerning China’s preliminary anti-dumping duty on imports of Canadian canola seed, with coverage focusing on the severe economic implications for farmers and the sector. Producers and industry organizations, such as the Canola Council of Canada and Canadian Canola Growers Association, warned that the tariffs would have a significant impact on marketing options and farm incomes. Provinces, farmers, industry, and business groups called for the Government to act quickly to mitigate the impacts.

Modern treaty obligations and Indigenous engagement and consultation

An Assessment of Modern Treaty Implications was conducted on the amendment. The assessment did not identify any modern treaty implications or obligations. It is anticipated that canola producers in modern treaty areas could be recipients of the cash advances and benefit from the increased interest savings, where they meet the program’s eligibility criteria.

An assessment was conducted to ensure that the amendment is consistent with the United Nations Declaration on the Rights of Indigenous Peoples and statutory obligations from section 5 of the United Nations Declaration on the Rights of Indigenous Peoples Act. While the objective of the amendment is to decrease the cost of borrowing under the APP, increasing canola producers’ access to the cash flow it provides and market flexibility, the benefit may not be enjoyed on an equal basis by First Nations, Inuit, and/or Métis Peoples, given that Indigenous Peoples can face barriers to accessing the program, which were identified in the 2023 Review of the Agricultural Marketing Programs Act.

AAFC has begun consultations with Indigenous organizations with the aim of discussing and addressing barriers to accessing government financing programs, such as the APP. AAFC will also monitor and assess implications during the delivery of funds.

Instrument choice

Under the Act, an increase to APP limits must be made by obtaining the approval of the Governor in Council to amend the Agricultural Marketing Programs Regulations. The Minister of Finance must concur with the program change.

Regulatory analysis

Benefits and costs

The benefit to canola producers of this program change will be in the form of increased interest savings on advances over $250,000 in program year 2025, and over $100,000 in program year 2026, up to $500,000. It is expected that the program change will provide approximately 1 745 canola producers in program year 2025 and 6 000 canola producers in program year 2026, with a combined $36.3 million ($5.1 million in program year 2025 and $31.2 million in program year 2026) in additional interest savings on an accrual basis, with average incremental savings per producer of $3,195 in program year 2025 and $5,333 in program year 2026, with individual amounts depending on the value of their advance.

The total estimated cost of the program change to the Government includes the cost of bearing the added interest payments for program years 2025 and 2026, as well as costs related to defaulted advances paid by the Government under the guarantee. It is expected that this program change will result in incremental costs to the Government of $35.3 million on an accrual basis, including $27.6 million ($4.1 million for program year 2025 and $23.5 million for program year 2026) in interest costs and $7.7 million ($1.2 million for program year 2025 and $6.5 million for program year 2026) in default costs (net of recovered amounts). These estimates are based on a prime rate of 4.95%, an increase in participation based on experience at this limit, and average historical default and recovery rates.

To cover the costs of delivering the program, the not-for-profit APP administrators charge producers interest rates on the interest-bearing portion of advances above the rate they pay their lenders (i.e. an interest spread). As a result, the producer interest savings will be higher than the interest cost to the Government. The administrators also charge certain fees, such as administrative and default management fees. Fees vary significantly across the program and are determined by the administrator’s business model and the size of its APP clientele. To offset the loss of interest spread revenue resulting from the interest-free limit increases from 2022 to 2025, some APP administrators will increase their fees to cover their costs.

Through this temporary measure, the Government will provide a transfer to Canadian canola producers. However, in doing so, it generates corresponding benefits in the form of an increase in the interest-free portion of APP advances in order to provide participating canola farmers with access to affordable financing at a time when they are facing significant uncertainty and financial pressures.

Small business lens

Analysis under the small business lens concluded that the regulatory amendment will impact small businesses as defined under the Policy on Limiting Regulatory Burden on Business of the Treasury Board Secretariat (fewer than 100 employees or less than $5 million in annual gross revenues). The majority of Canadian farms fall under this definition. The amendment is not anticipated to result in additional direct costs to small businesses. It would increase the affordability of the APP and, therefore, increase farming businesses’ access to credit with which to cover their operating costs over the growing season.

One-for-one rule

The one-for-one rule does not apply. The regulatory amendment will not result in an increase or decrease in administrative burden on farming businesses.

Regulatory cooperation and alignment

The regulatory amendment is not anticipated to result in any regulatory cooperation and/or alignment issues and is not related to a work plan or commitment under a formal regulatory cooperation forum.

International obligations

This regulatory amendment can be accommodated under Canada’s commitment levels and notification obligations under the World Trade Organization Agreement on Agriculture. The risk of countervail action already exists, especially given recent changes in United States regulations. However, this change, which is designed to benefit only the canola sector, would increase the risk of countervailing action against the canola sector by any one of our trading partners.

Effects on the environment

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment (SEEA Directive), a preliminary scan concluded that a strategic environmental and economic assessment is not required.

Gender-based analysis plus

A gender-based analysis plus (GBA+) assessment was undertaken for this regulatory amendment based on program requirements and sector demographic information from Statistics Canada’s 2021 Census data (Census of Agriculture, Census of Population, Agriculture-Population Linkage). Its conclusions were as follows.

This amendment only targets canola growers and will not have an impact on other commodities. The majority of APP advances are issued on grains, oilseed, and pulse commodities. Women are less represented in sectors that grow commodity type products, such as the grains and oilseeds sector, where they represented 26% of operators, compared to 30.4% of total farm operators in the sector. Indigenous farm operators represented 2.2% of all farm operators and 1.2% of all grain and oilseed farm operators in 2021. In terms of age, the grains and oilseeds sector has a slightly higher representation of older operators. In 2021, 62.8% of grains and oilseeds operators were over the age of 55 and 8.7% were under 35, compared to the sector as a whole where 60.5% of operators were 55 and older and 8.6% were under 35. Given the demographics of the primary agriculture sector and grain and oilseed operations, the APP initiative will mainly support farms where operators are white men over the age of 55 years.

However, while under-represented and marginalized groups make up a smaller portion of farm operators in the sector, they are more likely to benefit from financial measures, such as keeping the interest-free limit, as they generally have smaller-scale operations. The 2023 review of programming under the Agricultural Marketing Programs Act (AMPA) found that while there was a lack of data on APP participation by under-represented groups, such as Indigenous, women and young (under 40) farmers, the program could be more relevant for these farmers, as they may be less likely to have access to traditional loans. Small-scale farms tend to operate with fewer financial resources, have less capital to invest, and may have less access to credit. Further, they may have less access to crop insurance to recover from catastrophic losses and reduced financial security to withstand multiple poor production years.

Following the 2023 review of programming under the AMPA, the APP launched a GBA+ data collection plan that includes voluntary demographic data on recipients of the APP. Analysis of this data will support AAFC in identifying barriers to participation and identifying future program policy analysis.

As this regulatory amendment is targeting the farming sector related to primary food production, by supporting agricultural producers, the Government will support a robust and competitive food system that benefits the general population. Indirect benefits may be felt in regions where agriculture is a main economic driver, as income and profits are likely to have downstream positive impacts on the surrounding community.

Implementation, compliance and enforcement, and service standards

The Regulations come into force upon registration. For canola producers, the 2025 APP program began on April 1, 2025, as APP advances are typically available starting April 1 of each year until March 31 of the following year (when advances for the next program year become available). Similarly, the 2026 program year will begin on April 1, 2026.

AAFC will work with APP administrators to implement the program changes in order to roll them out to producers as quickly as possible. In the short term, this will include working with administrators to amend 2025 advance guarantee agreements, update 2025 program forms and other documents, promote the extension of the interest-free limit increase, and take any other necessary steps.

Contact

Justin Sugawara
Director
Financial Guarantee Programs Division
Programs Branch
Agriculture and Agri-Food Canada
Email: justin.sugawara@AGR.GC.CA