Federal Financing Measures Specifically Targeting Young/Beginning Farmers and/or Farm Transfers

Canadian Agricultural Loans Act Program










The Canadian Agricultural Loans Act (CALA) program is a financial loan guarantee program that gives farmers easier access to credit. 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.

Under the CALA, the federal government guarantees repayment of 95% of the loan to the financial institutions.

The maximum loan is: $500,000 for land and the construction or improvement of buildings; $350,000 for all other loan purposes. The aggregate loan limit for any one farmer is $500,000 and $3 million for agricultural co-operatives. Beginning/start-ups are eligible for a loan of up to 90% of the value or the purchase price.






Farm Credit Canada (FCC) Loans

Young Farmer Loan

Offers qualified producers, who are under 40 years of age, loans of up to $500,000 to purchase or improve farmland and buildings.

Variable rates at prime plus 0.5% and special fixed rates.

No loan processing fees.

Start Now-Pay Later Loan

This Loan allows producers to defer payments for up to three years followed by two years of interest-only payments. It is designed to help producers start or improve their business.


1-2-3 Grow Loan

The 1-2-3 Grown Loan is designed to benefit start-up farmers with limited cash flow. It offers up to five years of interest-only payments, allowing farmers to use their limited cash flow for other things rather than making principal payments.


Transition Loan

This loan helps farmers who are looking to transfer their farm assets and young farmers who are looking to get established in agriculture. This loan allows the beginning farmer to make payments so that they can manage his cash flow or build equity.

The principal features of the loan include:

  • disbursements are made to the seller over time, up to five years, and interest is charged only on the disbursed amount
  • FCC will finance the down payment for a maximum of seven years for qualifying purchasers
  • choose interest-only payments or principal-plus-interest payments

Other FCC activities 

FCC Business Planning Award


This award is open to agriculture students at participating colleges and rewards those who build strong business plans.

Participants are eligible to win up to $2,500.

FCC Learning Events and publications

Helps farmers improve their management skills and their operation.

Topics include succession planning and farm transfers among others.

Go AG! Initiatives

Provides up to $4,000 in funding to eligible student groups to plan, promote and host an educational event.

The FCC 4-H 4 Ever Grant

Provides up to $500 for individual Canadian 4-H clubs to help cover things such as start-up costs, transportation, equipment and supplies.

FCC on Campus

Provides free FCC Management Software for accounting students who use AgExpert Analyst in their curriculum.

 Fiscal Measures that facilitate farm transfers

Capital Gains Exemption


The Capital Gains Exemption from the sale of farm assets was introduced in 1985 and then increased to $750,000 in 2007. Only individuals are eligible for this benefit.


Up to $750,000 of capital gains may be exempt during the lifetime of an individual. In the case of a farm family, the spouses can also benefit, thereby increasing the exemption to $ 1.5 million.

The Rollover Provision


The Rollover Provision allows farmers to transfer farm property to their children or grandchildren without incurring capital gains if the farm is transferred as a gift or at cost (without profit).

Reserve Provision

The Reserve Provision allows for capital gain from the sale of a farm to a child (for profit) to be deferred up to 10 years for income tax purposes, when the proceeds of the sale are receivable over time. This reserve provision is limited to five years when the farm is sold outside the family.

 (last updated August 30, 2013)



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