Getting approved for farm financing can be challenging, especially if you are starting out or looking to expand. The CALA program helps by encouraging banks to lend to farms and agribusinesses. It does this through a federal loan guarantee provided by Agriculture and Agri-Food Canada (AAFC).
The Canadian Agricultural Loans Act (CALA) Program is not a grant. It is a loan program designed to improve access to credit for Canadian farmers and agricultural co-operatives.
The Canadian Agricultural Loans Act (CALA) Program is a federal loan guarantee program run by Agriculture and Agri-Food Canada. Under CALA, the Government of Canada guarantees 95% of a lender’s net loss on an eligible loan if the borrower defaults.
This guarantee reduces the risk for banks and credit unions. As a result, they are more likely to approve loans for farms and agribusinesses that might not qualify for regular financing.
Key facts about the CALA program:
Eligibility is defined in the Act and is strictly applied.
You may qualify if you are one of the following:
Your operation must be engaged in eligible agricultural production in Canada and meet the legal definitions of “farmer” and “farming” under the Act.
Not eligible:
CALA loans can be substantial compared to many other government-backed programs.
According to AAFC:
Loan funds can be used for eligible purposes that help establish, improve, or develop a farming operation. These purposes include buying land, constructing or renovating buildings, purchasing equipment, or covering other approved capital costs directly linked to farming activities.
You do not apply directly to the federal government for a CALA loan. Applications are handled through participating lenders.
Before approaching a lender, gather:
Lenders will assess your application as they would any other commercial loan.
Most major banks, credit unions, and Farm Credit institutions participate in the CALA program. Ask the lender directly if they offer CALA-backed loans.
If the lender approves your loan, they register it under the CALA Program with Agriculture and Agri-Food Canada. This is where the federal guarantee applies.
Once registered, your loan proceeds like a normal commercial loan. You repay the lender under the agreed terms.
If you are comparing CALA with other agriculture financing options, you can use resources that help you sort programs by province, industry, and business stage. GrantHub provides information about funding programs across Canada, which can make this process easier.
Applying directly to the government
CALA loans are only available through lenders, not AAFC application portals.
Assuming CALA is a grant
This is repayable debt, not non-repayable funding.
Using funds for ineligible activities
Loans must relate directly to farming operations as defined in the Act.
Not clarifying “beginning farmer” status
If you have more than six years of farming experience, you may be assessed as an existing farmer instead.
Q: Is a CALA loan government funding or a bank loan?
A CALA loan is a bank or credit union loan. The federal government guarantees 95% of the lender’s potential loss, but you are fully responsible for repayment.
Q: How much can I borrow through the CALA program?
Eligible borrowers can access up to $3 million in total CALA-backed loans, depending on lender approval.
Q: Who qualifies as a beginning farmer under CALA?
A beginning farmer is someone with less than six years of farming experience, as defined by the program.
Q: Can agricultural co-operatives apply?
Yes. Agricultural co-operatives are eligible if they have a majority farmer membership and use the loan for eligible farming-related activities.
Q: What types of farming activities are eligible?
Activities must directly support the establishment, improvement, or development of a farming operation in Canada.
GrantHub tracks active federal and provincial funding programs across Canada. You can check which ones match your business profile.
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