Application Process

Who Can Apply

Farmers eligible for a CALA loan guarantee include:

• Existing farmers
• Beginning /start-up farmers (i.e. less than 6 years of farming)
• Farmers taking over the family farm
• Agricultural co-operatives with a majority (50% + 1) farmer membership

Further, the borrower must:

• Meet the definition of "farmer" and "farming" as described below, per the Act.
• Use the loan for an eligible purpose under the program.

A farmer may be one of the following that is or intends to be engaged in farming to in Canada:

• an individual;
• a partnership;
• a corporation; or
• a co-operative association.

"Farming" means:

• the production of field-grown crops, cultivated and uncultivated, and horticulture crops;
• he raising of livestock, poultry, and fur-bearing animals; or
• the production of eggs, milk, honey, maple syrup, tobacco, fibre, wood from woodlots, and fodder crops;
• the production or raising of any other thing or animal, as prescribed by regulation.

Eligible Costs

The following costs are eligible to be covered by loans under the CALA.

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.

All 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; or
• machinery and apparatus for the generation or distribution of electricity, whether or not affixed to real or immovable property.
• Purchase of livestock, which will provide a long-term improvement to a farming operation (e.g. breeding stock) including:
• horses and other equines;
• cattle, sheep, goats and other ruminants;
• swine, poultry, bees and fur-bearing animals; and
• 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 maple trees for maple 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 granted under the Farm Improvement Loans Act (FIMCLA) and CALA by the lending institution where the loans originated, and loans issued by a third party originally made for the purposes eligible under the FIMCLA or CALA.

Ineligible Costs

The following costs are not eligible to be covered by loans under the CALA:

• Improvements to the family dwelling.
• Quota purchases of all kinds.
• Operating loans and loans for the purchase of short-term feeder livestock.
• Consolidation of a lender's ordinary loans.

Maximum Interest Rates

Interest to be paid on a floating rate is the lender's prime rate plus a maximum of 1%.

Interest to be paid on a fixed-term rate uses a formula based on the lender's residential mortgage rate plus a maximum of 1%.

Repayment Terms

The maximum term for loans is 10 years, with 15 years for loans on land purchases.

Fees

The farmer must pay a fee to have the loan registered and guaranteed under the CALA. This fee is 0.85% of the amount of the loan. The lender may also charge an administration fee of 0.25% of the amount of the loan for loans up to $250,000 (to a maximum of $250) or 0.1% of the amount of the loan for loans over $250,000.

Under the CALA, the federal government guarantees repayment of 95% of the loan to the lender, provided that the requirements of the Act and the Regulations have been respected.

Financial institutions are expected to take the same care and prudence in making CALA loans as would be taken in conducting ordinary business. The program has been designed to enable financial institutions to incorporate the CALA into their normal lending practice, while providing government guaranteed loans to farmers and agricultural co-operatives.

Alternative Formats

Help with Alternative Formats

Loan Registration and Fee Submission (Schedule 1) (PDF Version, 598 KB)
Request for Revision of Loan Terms (Schedule 2) (PDF Version, 579 KB)
Report on Defaulted Loan (Schedule 3) (PDF Version, 577 KB)
Report of Claim for Loss (Schedule 4) (PDF Version, 580 KB)