Canadian Government Announces $252 Million in Aid for Agriculture and Agri-Food Sector

On May 5, 2020, the Government of Canada announced an aid package for Canadian farmers and the agri-food sector in response to the far-reaching impacts of the COVID-19 on the agriculture industry.

The funding will be distributed as follows:

  • $125 million to help cattle and hog producers;
  • $50 million on a food surplus purchasing program; and
  • $77.5 million to support food processors.

The funding announcement reflects the government’s commitment to the agriculture sector, which is an essential service.

The $125 million will be directed through the AgriRecovery program, which is designed to help pork and beef producers cover the additional costs of continuing business during the pandemic, including covering the additional costs resulting from retaining livestock due to the temporary closure of food processing plants. The $77.5 million dollar fund is intended to assist food processors in retrofitting factories and increase production capacity. The $50 million food purchasing program is intended to purchase surplus agricultural products that are susceptible to spoilage.

Prime Minister Trudeau also announced that the Federal Government intends to increase the Canadian Dairy Commission’s borrowing limit by $200 million to assist with additional costs for the storage of surplus cheese and butter.

Details about how businesses can access these funds have not yet been released.

While the funds fall short of the $2.6 billion agriculture and agri-food emergency fund the Canadian Federation of Agriculture called on the Canadian Government to provide, it is in addition to the $50 million in government assistance to cover the cost of housing temporary foreign workers for 14 days after they arrive in the country. The aid is also in addition to the $5 billion in additional lending provided to producers, agribusinesses and food processors which is being distributed through Farm Credit Canada. The $5 billion in loan funding, announced on March 23, 2020, is to ensure producers, agribusinesses and food processors have the funds required to continue operating.

For more information concerning the Agriculture and Agri-Food aid package, please do not hesitate to contact a member of our agribusiness group. In the meantime, the MLT Aikins agribusiness team will continue to monitor the situation and provide additional updates on legal issues that may impact businesses in the agriculture sector.