You can apply if you are one of the following:
- existing farmers
- beginning farmers (i.e. 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; or
- a co-operative association.
- the production of field-grown crops, cultivated and uncultivated, and horticultural crops;
- the raising of livestock, poultry, and fur-bearing animals;
- the production of eggs, milk, honey, maple syrup, tobacco, fibre, wood from woodlots, and fodder crops; and
- the production or raising of any other prescribed thing or animal.
The following are eligible purposes under the Act.
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 installing 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 which 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 of 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
The following are ineligible purposes under the Act:
- Improvements to the family dwelling
- Quota purchases of any kind
- Operating loans and loans for the purchase of short term feeder livestock
- Consolidation of a lender's ordinary loans
How to Apply
Please visit any of the following lender organizations to apply for a loan under the CALA program:
- chartered banks
- credit unions
- caisses populaires
- Alberta Treasury Branches
- any other organization designated by the Minister
The lender will go through its loan application process and determine the financing best suited for your needs, which may include a loan under the CALA program.
Maximum Interest Rates
Interest to be paid on a floating rate is a maximum of the lender's prime rate plus 1%.
Interest to be paid on a fixed term rate is a maximum of the lender's residential mortgage rate, for a comparable term, plus 1%.
The maximum repayment terms are:
- 15 years for land purchases. Lenders may amortize loans for longer than 15 years provided a balloon payment is scheduled for the loan at the end of the 15 year period. The remaining loan amount could then be refinanced under the Canadian Agricultural Loans Act (CALA) for a further 10 years.
- 10 years for all other purposes.
The registration fee is 0.85% of the amount of the loan. This fee must be submitted to the “Receiver General for Canada” at the time of loan registration.
An administration fee may also be charged by the lender. For loans up to $250,000, the administration fee is capped at 0.25% of the amount of the loan (to a maximum of $250). For loans over $250,000, the administration fee is capped at 0.1% of the amount of the loan.
Both of these fees may be incorporated into the amount of the loan provided the total doesn’t exceed loan maximums.
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