About the evaluation
- The Office of Audit and Evaluation of Agriculture and Agri-Food Canada undertook an evaluation of the Canadian Agricultural Loans Act (CALA) Program to assess relevance, design, delivery, efficiency and effectiveness.
- The evaluation assessed the Program from 2018-19 to 2022-23 using a variety of methods including: a review of program documents, literature and media; analysis of Program and secondary data; and interviews with internal and external stakeholders.
What we found
Canadian Agricultural Loans Act Program summary
- The CALA Program aims to support the agricultural sector by increasing the availability of affordable private sector loans to farmers and agricultural co-operatives.
- Farmers with less than 6 years of farming experience are offered preferential down payment options.
- The Program guaranteed a total of 3,561 loans valued at $322.9 million.
- Net costs were $1.96 million from 2018-19 to 2022-23.
Relevance
- The CALA Program filled a gap in access to affordable credit for beginning farmers, underrepresented groups and Saskatchewan lenders.
- There is a risk of non-productive overlap between the CALA Program and federal and provincial crown corporation lending programs.
Design and delivery
- The CALA Program’s 95 percent loan guarantee was a key benefit for credit unions and lenders in Saskatchewan. These groups issued the majority of CALA loans.
- Last updated in 2009, Program loan limits are no longer sufficient to meet farmers’ needs due to rising farm capital values.
Performance
- The CALA Program benefits from leveraging the well established Canadian banking industry to efficiently deliver the Program; however, the Program operated at a deficit due to declining uptake.
- Lender awareness of the Program was low and the Program experienced declining lender use, numbers of loans issued, and total values of loans.
- Access to capital was not a limiting factor for farmers to invest in their operations due to the robust credit market in Canada.
- The Performance Information Profile is outdated and should better reflect program theory.
Recommendations
Recommendation 1: The Assistant Deputy Minister, Programs Branch, in consultation with the Assistant Deputy Minister, Strategic Policy Branch, review and propose changes to the CALA Program parameters to ensure its relevancy.
Recommendation 2: The Assistant Deputy Minister, Programs Branch, in consultation with the Assistant Deputy Minister, Public Affairs Branch, should work to increase the awareness of the CALA Program among lenders.
Recommendation 3: The Assistant Deputy Minister, Programs Branch, in consultation with the Assistant Deputy Minister, Corporate Management Branch, should update the performance information profile and ensure administrative data is consistently collected.
Management response
Management from the Programs Branch, in consultation with Strategic Policy Branch and Corporate Management Branch are supportive of this evaluation as well as the recommendations and have outlined an action plan to address them by March 2025.