January 24, 2008
On January 18, 2008 a meeting was held in Toronto between Agriculture Canada, the five chartered banks, Canadian Bankers Association, ATB Financial and credit union system representatives from across Canada.
The purpose of the meeting was to discuss the current status of the AgriInvest program and to provide a forum for two-way discussion and consultation about future producer AgriInvest account parameters. At the meeting federal government representatives indicated that they are seeking different ways to deliver the AgriInvest program in 2008.
In October 2007, the information provided indicated that the government intended to hold the 2008 AgriInvest program producer deposits and matching government funds until January 1, 2009. At that time the funds were then to be transitioned to a newly created “AgriInvest Deposit Account” at the producer’s financial institution of choice.
As of the January 18 meeting, the new proposed approach is that there will be no deposit account required with the government for 2008 since the government does not have the capacity to administer such accounts.
Government officials have indicated that they expect to have a clearer sense of the shape of the 2008 program in six to eight weeks. At that time, another meeting will take place involving government officials and financial institutions to discuss possibilities for the 2008 program framework.
KEY POINTS:
At the present time agricultural producers are receiving an information package and application forms for the new “Kick Start” program. This is federally funded one-time initiative intended to “kick start” or provide producers with seed capital for their participation in the AgriInvest program in the future. The Kick Start program is for a total of $600 million and is being delivered now.
Producers do NOT have to make a deposit with the government or financial institution in order to be eligible for the Kick Start funds. Producers will simply receive a letter advising them of the amount of Kick Start benefit they are eligible for with the program. As stated above, producers do NOT have to make a matching deposit in order to receive these funds. They will be receiving a cheque from the program and are able to use this money however they choose.
This is a very important point that credit unions need to note as credit unions may have members coming into branches seeking to open an AgriInvest account. Credit unions are advised NOT to open a new “AgriInvest deposit account” at this time. The producer is free to deposit their funds into any existing deposit product that your credit union offers, except for the existing NISA accounts. These funds can be used to pay down any existing credit facility such as loans or lines of credit, if the producer chooses to do that.
Changes and revisions have been made to the Federal Government’s program website to reflect this latest information and to clarify for producers that AgriInvest accounts are not required at this time. There are planned AgriInvest producer information sessions to start February 4, 2008 and these sessions will occur across Canada and will be facilitated by Agriculture Canada staff.
In the event that producers have questions or concerns about the programs - either AgriInvest or Kick Start - please refer them to the Federal Government’s information line, 1-866-367-8506 or direct them to the AgriInvest website here.
NEXT STEPS:
The Federal Government is currently considering its options for program delivery in 2008. Government officials have indicated they will be able to provide more detail to financial institutions by the end of February or early March 2008.
As more information becomes available it will be shared with the credit union system.
If you have any questions from a credit union perspective, please contact Rob Martin at Credit Union Central of Canada, 613-238-6747 ext 327 or by email at: martinr@cucentral.com.