What is AgriStability in Canada? A Complete Guide

What is AgriStability?

AgriStability is a government-led risk-management program offering financial assistance to Canadian farmers and agri-business owners. It protects you when your net farming income falls below 70% of your recent average. We will explore this further in the next section.

The program's primary function is to support producers in dealing with extreme market fluctuations and revenue drops, helping to stabilize their operations and finances when faced with significant losses. 

The program is part of the Canadian Agricultural Partnership (CAP). It is administered by federal and provincial governments, fostering a strong partnership between the agriculture community and the authorities responsible for its growth.

How Does AgriStability Work?

At its core, AgriStability is about providing financial peace of mind. The program compares your current year's production margins to a historical reference margin. Essentially, AgriStability calculates your benefit based on your production margin:

Production margin = Value of your production - Allowable expenses.

Reference margin = Average of your net farming income from the previous five years, with the highest and lowest years excluded.

A payment is triggered if your current year's margin falls more than 30% below your reference margin.

Example:

For example, if your average reference margin over the past five years is CAD 100,000 (after removing the highest and lowest-earning years), and in the current year, you earn CAD 60,000, you would be beneath the 70% threshold, i.e. your current year's margin fell more than 30% below your reference margin.

With a simple calculation: 70% of CAD 100,000 is CAD 70,000; since CAD 60,000 is below this threshold, you're eligible for assistance.

Potential applicants need to understand that payments are not calculated on a dollar-for-dollar basis below the 70% threshold – the mechanism is designed to cover a proportion of the difference (80%). 

Therefore, in this example, the difference below the threshold is $10,000 ($70,000-$60,000). That means $8,000 (80%) will be paid out to the farmer. 

Who is Eligible for AgriStability?

The eligibility criteria for AgriStability include Canada's diverse agricultural landscape. You can apply if you're an individual farmer or part of an agri-business entity, provided your primary production activity is covered under the program. Specifically, it would be best if you met the following conditions:

• Your farming operation must be located and actively operating in Canada.

• Your farming operation must have a valid Farm Business Registration Number (FBRN).

• You must complete a minimum of six consecutive months of farming activity.

• You must file a tax return reporting farming income (loss) to the Canada Revenue Agency (CRA).

How Do You Enroll in AgriStability?

Enrolling in AgriStability is designed to be as straightforward as possible to encourage broad participation among eligible farmers. Here's an overview of the steps you'll take to enroll:

• Request an AgriStability application form by April 30, typically available from your provincial administration.

• If you have been part of AgriStability in the past two years, you will receive an Enrolment Notice automatically.

• Once enrolled, pay your fees. You will also need to pay a $55 administrative cost share.

• Complete the form using accurate financial data from your farming operation.

• Each province has different forms. See them here.

• Submit the completed form and supporting documents to the appropriate provincial administration.

• Watch for your Program Enrollment Notice confirming your AgriStability participation.

Forms Needed

When applying for AgriStability, you must typically submit a T1163 form, 'Statement A,' which outlines your production income and expenses. This form is the backbone of your application, providing the necessary details for officials to assess your current situation against the program's benchmarks.

Important Dates to Remember

Here are the key dates in 2024 to engrave in your calendar:

• March 31: Submission deadline for the interim application. Remember, you must be enrolled in AgriStability for the current program year.

• April 30: The deadline for new participants to request a New Participant Package.

• September 30: Deadline for submitting harmonized AgriStability and AgriInvest programs information and statement of farming activities without penalties.

• December 31: The final bell rings, marking the deadline for submitting harmonized AgriStability and AgriInvest program information with penalties.

Recent Changes to the AgriStability Program in 2024

The year 2024 has seen several essential alterations to the AgriStability program. 

For farmers in Manitoba, Nova Scotia, New Brunswick, Newfoundland and Labrador, Yukon, or Northwest Territories, upcoming changes will take effect in the 2024 program year.

• The ultimate deadline for submitting your AgriStability program forms will be revised.

• June 30, 2025: Original deadline for submitting your 2024 forms without penalties.

• September 30, 2025: Final deadline for submitting your 2024 forms with penalties.

• New optional program features will be offered to participants.

• Tax-aligned reference margins:

• You now have the option to align your reference margins with your tax filing method (cash or accrual) moving forward. If you file taxes on a cash basis, this change eliminates the need to provide up to 5 years of historical accrual data, reducing the information needed significantly.

• Coverage Notices:

• To enhance program predictability, you may receive a coverage notice estimating your reference margin and coverage level for the current program year. These notices are accessible if you have:

• Enrolled in the program for the current year.

• Opted for a tax-aligned reference margin.

• Provided your intended productive units for the current year.

Conclusion

In conclusion, AgriStability stands with the Canadian agricultural community, guarding against market unpredictability and the risks associated with farming. As we've explored, this program helps safeguard your farming income, offering a buffer in times of substantial income declines.

With a structure that caters to a wide range of producers nationwide, AgriStability is more than just a financial program—it's a commitment to the stability and prosperity of a sector that feeds the country.

Take the Next Step with Our Agricultural Experts

Partnering with a professional can make all the difference when understanding the AgriStability program and other financial aspects of your farming operations. Crowe MacKay's experienced agriculture advisors bring a depth of knowledge and expertise that helps demystify the program's nuances and pinpoint opportunities to maximize your financial benefits.

We encourage you to consider seeking financial expertise to ensure the prosperity of your agricultural business. Secure your financial well-being and entrust your agronomic vision to those who can best support your aims under the AgriStability program.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

If you are in the Agriculture industry and require personalized support from a financial expert, Crowe MacKay's advisors have the knowledge and expertise to support farming and agriculture businesses.