What Is AgriStability In Canada? A Complete Guide – Land Law & Agriculture

In a fluctuating market and unpredictable environment, programs
like AgriStability provide financial stability for farmers, helping
manage the uncertainties of the trade. If you’re a Canadian
farmer or agri-business owner, understanding and leveraging the
AgriStability program could mean the difference
between taking a loss and fostering stability in your
operations.

In this article, Crowe MacKay’s Agriculture industry
experts simplify the AgriStability program by explaining what it
is, how it works, the application process, and enrollment criteria.
Tailored for Canadian agricultural sector members, clear
information is vital when understanding this program.

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production margins to a historical reference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.

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.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.