Measures To Assist Industry In Response To BSE
The Government of Canada's top priority for assisting the Canadian cattle industry in light of BSE remains getting borders reopened and markets operating as quickly as possible. In the interim, the government has taken many steps to provide assistance.
For more information on BSE programs, please call 1-866-613-4800.
Repositioning the Livestock Industry
On September 10, 2004, the Government of Canada announced the Repositioning the Livestock Industry Strategy with a federal investment of up to $488 million to assist Canada's livestock industry in repositioning itself to ensure its long-term viability. The strategy, developed in close consultation with the provinces, territories and industry, is aimed at continuing efforts to reopen the US border, taking steps to increasing ruminant slaughter in Canada, introducing measures to sustain the cattle industry until capacity comes online and expanding access to export markets for both livestock and beef products. To date, Manitoba, Alberta, Saskatchewan, British Columbia and Ontario have announced their participation in the various programs.
Producers and other members of the industry with questions related to the BSE programs announced on September 10 can call toll free at 1-866-613-4800 from 8:00 a.m. to 4:30 p.m. MDST.
Below is a list of additional measures and programs that were introduced to
assist the industry.
BSE Recovery Program
In June 2003, federal, provincial and territorial governments introduced the BSE Recovery Program. This program was extended in August 2003, bringing total program funding to $520 million. The program helped to keep the domestic market moving and provided improved returns to feedlots and processors in light of severely depressed prices.
Work Sharing program
In June 2003, the Government of Canada announced it had signed Work Sharing agreements in Alberta and Saskatchewan to assist some companies affected by BSE. In Alberta, an agreement worth more than $9 million was signed with Lakeside Packers to help avert the layoff of 900 employees. In Saskatchewan, an agreement worth more than $400,000 was signed with Heartland Livestock Services, owned by Nilsson Bros. Inc., to help avert the layoff of 53 employees. For more information on Work Sharing, visit http://www.hrdc-drhc.gc.ca
Canadian Agricultural Income Stabilization (CAIS) program
This CAIS program is available to producers across Canada and will provide assistance to those producers who have experienced a loss of income as a result of BSE or other factors. The program integrates stabilization and disaster protection into a single program, helping producers protect their farming operations from both small and large drops in income.
On September 22, 2004, federal, provincial and territorial Agriculture Ministers
agreed to extend the 1/3 simplified deposit for CAIS for the 2004 program year.
They also agreed to extend the deadline by which deposits for 2003 and 2004
must be made to March 31, 2005.
In addition, the federal government has also announced a CAIS special per/head
interim for 2004 for producers of eligible cattle and specified ruminants
based on inventories as of December 23, 2003 in order to address cash flow
and liquidity issues related to BSE. These special interims will begin to
flow to producers once authorities are in place.
For details on the CAIS program, producers can use the following contact information:
- In
British Columbia, Manitoba, Saskatchewan, Nova Scotia, New Brunswick and
Newfoundland and Labrador, call toll-free 1-866-367-8507 or visit the
CAIS program Web
site.
- In Alberta, call
toll-free 1-877-744-7900 or visit the Agriculture
Financial Services Corporation (AFSC) Web site.
- In Quebec, call toll-free 1-800-749-3646 or visit the Web
site of La Financiere Agricole
du Quebec .
- In Ontario, call toll-free 1-877-838-5144 or visit the Web
site of the Ontario Ministry of Agriculture
and Food .
- On Prince Edward Island, contact the P.E.I. Agricultural Insurance Corporation at (902) 368-4842 or visit their Web site.
Cull Animal Program
In November 2003, the federal government announced $120 million for the Cull Animal Program. On February 16, 2004, the Government of Canada announced that producers would no longer have to wait until cattle are slaughtered to receive assistance under the program.
Loan Loss Reserve Program
The Loan Loss Reserve Program was announced on September 10 as part of the national strategy to reposition the Canadian livestock industry.
Producers and other members of industry with questions related to this and other programs announced on September 10 can call toll free at 1-866-613-4800 from 8:00 a.m. to 4:30 p.m. MDST.
Loan Loss Reserve Program Description
To facilitate a more rapid expansion of ruminant slaughter capacity, the Loan Loss Reserve Program will support the provision of debt capital to all but the largest slaughter facilities.
Program :
Following the model of the Loan/Investment Fund Program of Western Economic Diversification, the Loan Loss Reserve Program will provide $37.5 million for the creation of Loan Loss Reserves to support loans for the expansion and establishment of small and medium-sized ruminant slaughter facilities.
Eligible applicants:
- will reasonably be expected to have less than $100 million in total assets and slaughter fewer than 10,000 animals per week at the completion of the project;
- will either be operating, or will be planing to operate, a federally inspected ruminant slaughter facility by December 31, 2006;
- will demonstrate that their project will increase slaughter capacity;
- will demonstrate management commitment and financial exposure. For new operations, a borrower must finance at least 20% of the cost of the project through equity capital. For existing operations, equity must be reasonably expected to be equal to at least 20% of total asset values before and after the completion of the proposed project; and
- will demonstrate that the facility is expected to be viable over the long term.
Capital providers:
- could include private financial institutions (banks, credit unions, caisses populaires, etc.), Farm Credit Canada, the Business Development Bank of Canada, and provincial financial crown corporations that grant credit strictly on commercial terms in accordance with sound business practices comparable to those used by private sector financial institutions.
- will collectively provide loans of up to $50 million on commercial terms to any one eligible enterprise for terms of up to 10 years (could be amortized over a longer period);
- will be solely responsible for loan approval decision and the administration of loans under the Loan Loss Reserve Agreements;
- will assume responsibility for their loans and portfolio management, loan collection, reporting and accounting;
- will be responsible for any losses beyond those that can be booked against the reserve; and
- will repay any amounts remaining in their Loan Loss Reserves to the government, including accrued interest, after the Reserves are closed.
Loan Reserves:
- will be established for each capital provider through agreements with government;
- will contain repayable contributions (40% of eligible loan disbursements) made to the capital provider for all eligible loans;
- will cover up to 90% of net losses against the loan portfolio for enterprises other than cooperatives, and up to 95 % for cooperatives to a maximum of the booked portion of a Loan Loss Reserve; and
- will collectively not exceed the lesser of 40 % of the total value of loans provided by all capital suppliers or $37.5 million.
Transitional Industry Support Program
On March 22, 2004, the Government of Canada announced $930 million for the Transitional Industry Support Program (TISP) to support the integrity of the Canadian agricultural industry. The program includes direct payments to producers of cattle and other ruminant animals totaling $680 million, and general payments that represent bridging assistance to help the industry transition to new business risk management programming totaling $250 million.
Fairness provisions of the Income Tax Act
The fairness provisions of the Income Tax Act give the Canada Revenue Agency (CRA) discretion to cancel or waive penalties and interest to those who, because of extraordinary circumstances, are unable to meet their tax or duty obligations. The CRA has indicated it will seriously consider applying these provisions to individuals or businesses whose tax, GST or employee deduction payments are late due to situations resulting from BSE.
For more information, producers can call the CRA Business Window toll-free at 1-800-959-5525 or visit the agency's Web site at www.ccra.gc.ca
Net Income Stabilization Accounts (NISA)
The new CAIS program replaces NISA, but the money in NISA accounts continues to be owned by producers. After completing their 2002 deposit and withdrawal options, producers have immediate access to money in their NISA accounts and had the option of withdrawing it as a lump sum or over up to five years. There is more than $2 billion available to producers in their NISA accounts. Since January 2004, producers have withdrawn almost $2 billion from their NISA accounts. Producers can access their funds by calling NISA toll free at 1-800-665-6472.
Provincial programs
In addition to federal and cost-shared programs, many provinces have introduced additional programs tailored to their provincial situations. Producers can find details on any additional provincial programs on the following Web sites: