The Rural Voice, 2019-02, Page 56By Francois Bourgeois, CPA
and Maggie Van Camp
The second phase of the national
$250 million program to help dairy
farmers mitigate the impacts of the
Canada-European Union
Comprehensive Economic and Trade
Agreement (CETA) is now available.
This assistance program was
developed to aid Canadian licensed
cows’ milk producers to improve
productivity through upgrades to
their equipment.
Under the Comprehensive
Economic and Trade Agreement
between Canada and the European
Union and its Member States,
Canada agreed to a tariff rate quota
of 16,000,000 kilograms for EU
cheeses. As a result, Canada will
nearly double the amount of EU
cheese it imports duty-free. It's the
first time our country has awarded
new cheese quota since the 1970s.
Imports make up about five per cent
of the current cheese market and it’s
estimated the new EU cheese will
bump that up to nine per cent
The impact to dairy farms will be
substantial, especially in conjunction
with the newly negotiated NAFTA
deal, now known as United States-
Mexico-Canada Agreement
(USMCA) opens 3.6 per cent of
Canada’s dairy market to tariff-free
imports and limits Canada’s.
Recently, on Dairy Day at the
Grey Bruce Farmers’ Week, Ralph
Dietrich, Chair of Dairy Farmers of
Ontario, lamented how Canadian
farmers will lose about another four
per cent of market share under
USMCA to imports. He said that
becomes a very significant erosion of
domestic market share when it’s
added to CETA and other trade deals.
During his presentation he estimated
the total imports of dairy will
eventually increase to 18 per cent.
One way for dairy farmers to
mitigate these trade losses is to
improve production efficiencies and
by taking advantage of the
government assistance. However,
you have to apply right away – by
February 8, 2019. The five year
program was started in 2017/2018
and Phase 1 is already completed.
Phase 2 will provide assistance from
April 1, 2020 until March 31, 2022.
The program supports investments in
all provinces based on their share of
the total national milk quota.
Only Canadian licensed cows’
milk producers are eligible, and only
one application per dairy license will
be accepted. Any licensed dairy
producer who received funding under
Phase 1 will initially not be eligible
to submit an application under Phase
2, unless of course funding remains
unallocated after all Phase 2
assessments. If a producer has more
than one license, the license that did
not receive funding under Phase 1
can be used to apply under Phase 2.
The maximum available funding
is 50 per cent of eligible costs to a
maximum of $100,000 funding.
Minimum contribution is $1,000.
There’s a common stream for all
projects, so no distinction between
small and large projects.
To qualify the projects must relate
to improving productivity of milk
production from cows. For example,
hiring external expertise, purchasing
equipment, training, or retrofits of
current facilities. Buying equipment
for use or installation outside the
barn, new buildings or barn
expansions are ineligible activities.
Similarly, commercial future
expansion is not eligible, for example
buying an extra robot to produce on a
future purchase of quota.
Eligible costs may be future
planned or actual costs. Cost
categories are equipment plus
associated costs (consultant,
installation, retrofits, etc.).
Acceptable associated costs are
limited to the total actual cost of the
equipment. Eligible activities (costs)
must incur between August 1, 2017
and March 31, 2022. So if a deposit
has been paid before August 1, 2017
or a contract/purchase order signed,
the activity is ineligible.
Project request forms are being
accepted between January 7, 2019
and February 8, 2019 and no
supporting documents are required
with these forms. However, it’s very
important to use accurate cost
estimates on the forms since any
increase could be refused.
A Dairy Farm Invest Program
project number will be assigned.
Once the submission window closes
(February 8, 2019), projects will be
randomly ranked for funding.
If the project is considered
acceptable for Phase 2, a Detailed
Application must be submitted within
four weeks and must include quotes,
invoices, receipts and proof of
payment (depending if the project
was completed before or after the
application). Also, additional
information must be submitted with
the Detailed Application such as
Articles of Incorporation, dairy
license documents, milk payment
statements or proof of financing.
The Detailed Application form
will be assessed based on certain
criteria, and successful applicants
will receive a decision package with
a step-by-step reimbursement claim.
Projects outside the available funding
for Phase 2 will be placed on a
waiting list.
For more information and access
the forms follow this link.
http://www.agr.gc.ca/eng/programs-
and-services/dairy-farm-investment-
program/applicant-
guide/?id=1494010428766#1.4
If you want some help applying to
this program, your accountant should
be able to help. If not, call your local
BDO office and they should be able
to help you.
It’s probably worth the effort to
fill out the forms. Potentially you
could get up to $100,000 to reinvest
on your farm and mitigate the risk of
some of these trade losses with
practical improvements. Although
you have to match the investment,
the program was created as a way to
stir improvements and help farmers
drive their businesses to be more
competitive. ◊
February 2019 53
Dairy investment
program now
open
Maggie Van Camp
is the National
Agricultural
Practice
Development
Leader for BDO
Financial Management