The Canadian Agricultural Loans Act (CALA) Program is a loan guarantee program designed to increase the availability of loans to farmers and agricultural co-operatives. Farmers can use these loans to establish, improve, and develop farms, while agricultural co-operatives may also access loans to process, distribute, or market the products of farming.
Through the CALA Program, we are supporting the renewal of the agricultural sector and enabling co-operatives to better seize market opportunities.
Under the CALA, the federal government guarantees, to the lender, repayment of 95% of a net loss on an eligible loan issued.
The maximum aggregate loan limit for any one farm operation is $500,000.
Loans are limited to a maximum of:
$500,000 for the purchase of land and the construction or improvement of buildings
$350,000 for all other loan purposes, including consolidation/refinancing
The maximum aggregate loan limit for agricultural co-operatives is $3 million, with the Minister's approval.
For example: If a farmer gets a CALA loan for $300,000 for a tractor, he can still access up to $200,000 for land purchase or building repair, or $50,000 for another implement and $150,000 for land purchase or building repair.
Lenders, such as banks, credit unions and caisses populaires, issue and administer loans under the CALA program.
Lenders must take the same care and prudence in issuing CALA loans as would be taken in conducting ordinary business. The CALA Program has been designed to enable lenders to incorporate it into their normal lending practice, while providing the government guarantee on eligible loans to farmers and agricultural co-operatives.
If a purchase has already been made, a lender has 60 days from the purchase date to issue a CALA loan.