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The federal government needs to take several measures in this fall’s 2026 budget to improve farmers’ security and strengthen the agricultural and agri-food sectors, says the Canadian Federation of Agriculture (CFA).

Ottawa should permanently increase the interest-free portion of the Advance Payments Program for farmers and establish a dedicated agriculture and agri-food infrastructure stream, the CFA said in a pre-budget submission.

The government also should make the Accelerated Investment Incentive permanent and mandate agricultural impact assessments for federal infrastructure and natural resource management initiatives, the CFA said. The CFA’s executive director is Scott Ross (photo at right).

The CFA is Canada’s largest general farm organization, representing approximately 190,000 farmers and farm families from coast to coast to coast.

“While Budget 2025 acknowledged agriculture as a strategic sector, Budget 2026 must translate that recognition into investments that strengthen productivity, food security and Canada’s global competitiveness,” the CFA said.

Canada’s agriculture and agri-food system contributes nearly $150 billion annually to Canada’s GDP and supports 2.3 million jobs – more than the automotive, forestry, steel and aluminum and oil and gas sectors combined, the organization noted.

In recommending that the government increase the interest-free portion of the Advance Payments Program (APP) for farmers, the CFA noted that producers are facing sustained financial pressure from rising input costs, higher interest rates and increasing debt levels.

While the APP remains a critical tool for accessing operating capital, the current $100,000 interest-free limit no longer reflects the scale and cost structure of modern farm operations, the CFA said.

The APP is a core financial tool for farmers and the program issued $3.2 billion in advances to 17,789 producers in 2025, the CFA said.

However, “the APP has not kept pace with modern farm scale and costs,” the organization said.

Statistics Canada’s Farm Input Price Index shows total farm input costs in 2025 remained approximately 43 percent above 2020 levels, increasing working capital and financing pressures for producers.

Growing capital requirements are reflected by the sharp rise in farm debt, which rose 14 percent in 2024 – the largest increase since 1981.

Competitiveness in agriculture depends on innovation, market access and infrastructure, and addressing regulatory and infrastructure barriers is key to unlocking growth and productivity. the CFA noted.

 “Strategic infrastructure investment is critical to ensuring Canada’s agriculture and agri-food sector can grow, compete and meet increasing demand,” the CFA said in recommending a dedicated agriculture and agri-food infrastructure funding stream.

Existing federal infrastructure programs are not always well aligned with the sector’s needs, the CFA pointed out.

Agriculture and agri-food projects are often multi-partner, regionally distributed and span multiple infrastructure categories, making them difficult to advance within current program structures. “Gaps in support for mid-scale, supply chain-enabling projects, along with misalignment with industry-led delivery models, are limiting investment.”

Major federal infrastructure financing tools, particularly the Canada Infrastructure Bank, emphasize revenue-generating projects, while many agriculture investments deliver broad economic and supply chain benefits.

Infrastructure needs span irrigation and water management, transportation, processing, storage and connectivity systems, requiring flexible policy approaches that reflect regional and sectoral realities.

Addressing these structural challenges will improve access to funding, reduce administrative burden and better position the sector for long-term growth, the CFA said.

Rising cots and tight margins are limiting producers’ ability to invest

Agriculture is highly capital-intensive, requiring continual investment in equipment and technology to remain productive and competitive, the organization said.

Rising costs and tight margins are limiting producers’ ability to invest, even though incentives like the Accelerated Investment Incentive have been shown to spur equipment and machinery purchases, the CFA said.

The farm equipment investment in 2024 was nearly $900 per acre, the organization noted. The Accelerated Investment Incentive increased farmers’ investment in equipment and machinery by 8.2 percent annually following implementation.

However, the program’s temporary nature creates uncertainty,” and needs to be made permanent to enhance capital investment incentives, the CFA said.

The CFA also pointed out that over 60 percent of farm operators are aged 55 and older. Despite this, only 12 percent of farms have a written succession plan, highlighting barriers to effective farm transfer, according to Statistics Canada.

Expanding eligibility for farm rollover provisions to include a broader range of family members, such as aunts, uncles, nieces and nephews, would help facilitate intergenerational farm transfers, reduce tax barriers, and ensure continued investment in farm operations, the CFA said.

The CFA is also calling on Ottawa to mandate agricultural impact assessments for all federal infrastructure and natural resource management initiatives.

Canada’s agricultural resources – both land and water – are finite, making their protection essential to maintaining domestic food production capacity and food security, the organization said.

Canada has lost over 5 million hectares of farmland since 2001 – a 3.2-percent decline. And only five percent of Canada’s land is suitable for agriculture, with a smaller proportion classified as prime agricultural land

Despite this, federal decision-making processes do not consistently assess the impacts of major infrastructure projects, development and conservation initiatives on the agricultural system, the CFA said. “ As pressures from infrastructure expansion and land and water use grow, the absence of a coordinated approach increases the risk of permanent loss of agricultural capacity.”

The CFA also recommended that the federal government develop a Critical Farm Input Strategy, in consultation with industry, to ensure reliable access to essential inputs, including seed, crop protection products, breeder stock, fertilizer, energy, animal feed inputs and veterinary tools. “Reliable access to critical farm inputs is fundamental to agricultural production,” the CFA said. “Increasing volatility in global supply chains, rising input costs, transportation disruptions and regulatory barriers are creating uncertainty and limiting producers’ ability to plan and invest.”

Fertilizer prices rose by 70 percent to 100 percent at peak levels in 2021-2022 driven by post-pandemic supply chain disruptions and sanctions on Russian fertilizer exports following the invasion of Ukraine, the CFA noted.

Recent geopolitical tensions have contributed to further increases of 30 percent to 40 percent. Ongoing instability in key supply regions, like the Middle East and Russia, threaten fertilizer supply.

Canada’s transportation system adds further vulnerability, with more than 62 transportation-related work stoppages in the past two years.

Canadian livestock producers rely on imported feed inputs such as vitamins, amino acids and specialty nutrients, exposing farms to global supply disruptions, shipping delays and price volatility.

Regulatory barriers and lengthy approval timelines have limited access to key inputs including crop protection products and veterinary tools. An estimated 40 percent of medications previously accessible to Canadian vets are no longer on the market in Canada.

Canada’s reliance on global markets leaves the sector exposed to external shocks, while the absence of a national approach compounds these risks, the CFA said.

The organization proposed that the federal government  consult on and develop a Canadian Critical Farm Input Strategy, similar in principle to the Canadian Critical Minerals Strategy, to examine options to stabilize and diversify the supply of critical farm inputs that support the development of domestic and global value chains and food security.

Increased investment required in disease prevention and surveillance

The CFA also recommended that the federal government increase investment in prevention, surveillance, and response capacity for major animal and plant disease threats, including financial preparedness, international zoning agreements, coordinated federal-provincial-industry response plans, and updated regulatory frameworks.

Canada’s agriculture sector is vulnerable to major animal and plant disease outbreaks, which can disrupt farm operations, domestic supply chains and export markets, the CFA said.

Diseases such as Highly Pathogenic Avian Influenza (HPAI), African Swine Fever, Foot and Mouth Disease, and major plant health threats require rapid, coordinated responses across governments and industry, the organization said.

“However, Canada’s preparedness – spanning surveillance, response capacity, regulatory tools, compensation frameworks and international agreements – has not kept pace with evolving risks.”

Since December 2021, HPAI has resulted in the loss of over 17 million birds in Canada through disease and culling, impacting 80 commercial poultry flocks in 2025 alone, revealing gaps in compensation values, response coordination and market access protection.

Canada lacks comprehensive zoning agreements across all key trading relationships and commodity sectors, the CFA noted. “ Ad hoc emergency funding after outbreaks delays response, creates uncertainty, and undermines confidence in Canada’s reliability as a supplier.”

Plant health threats, such as Amaranthus Palmeri, require proactive action to prevent establishment before becoming entrenched, the CFA said.

Pre-negotiated international zoning agreements are essential to maintaining export access during contained outbreaks, while compensation programs for destroyed animals must reflect current economic realities, the organization said.

The CFA also recommended that the federal government accelerate access to new tools and technologies by leveraging trusted jurisdictions’ risk and science-based decisions to streamline approval timelines, and use mechanisms such as conditional approvals and regulatory sandboxes to bring safe, innovative products to market faster.

“Timely access to new tools and technologies, including veterinary products, is essential for maintaining productivity, competitiveness, and sustainability in Canada’s agriculture and agri-food sector.”

However, Canadian producers often face significant delays in accessing products that are already approved and in use in other jurisdictions, the CFA said.

Duplicative regulatory processes, limited commercial incentives and lengthy approval timelines are restricting innovation, increasing cost, and limiting treatment options for animal health, the organization said.

Canadian producers often face delays of two to five years in accessing products and technologies already approved in jurisdictions such as the U.S. and EU, placing them at a competitive disadvantage.

Limited access to veterinary treatments increases reliance on broad-spectrum antimicrobials, contributing to antimicrobial resistance and public health risks.

Regulatory processes frequently duplicate assessments conducted by trusted international regulators. And existing authorities under the U.S. Food and Drugs Act to rely on trusted foreign decisions are not fully utilized.

Access challenges extend beyond veterinary products to vaccines, feed additives pesticides, and livestock feeds, the CFA noted.

Productivity growth in Canadian agriculture is projected to fall below one percent annually without increased adoption of new technologies. Restoring growth to two percent could increase returns to farmers by $30 billion, according to Farm Credit Canada.

“Leveraging trusted international decisions and more flexible regulatory approaches can help ensure Canadian producers have access to safe, effective tools and veterinary products without unnecessary delay,” the CFA said.

Labour programs needs strengthening

When it comes to maintaining a stable and sustainable agricultural workforce, persistent labour shortages are limiting productivity and increasing costs, the CFA said. “Strengthening labour programs and pathways to permanence will be key to a stable agricultural workforce.”

Labour shortages remain a constraint on agricultural production, limiting growth, increasing costs and putting pressure on Canada’s food supply and global competitiveness.

While the Temporary Foreign Workers Program (TFWP) plays a critical role in seasonal labour needs, many agricultural and agri-food operations also require a stable, year-round workforce, the CFA said.

Despite bringing in over 70,000 TFWs, 28,200 jobs remained unfilled in the sector in 2022, costing $3.5 billion in lost revenues.

The absence of clear and permanent pathways to permanent residency for experienced workers contributes to higher turnover, increased costs and ongoing labour instability, the organization said.

Labour shortages are projected to increase to 101,100 in 2030 during peak season. Canada’s aging population will further reduce domestic labour availability; agriculture industries will see over 85,300 retirements by 2030.

The Agri-Food Pilot supported year-round labour needs by enabling 4,500 agri-food workers and their families to transition to permanent residency, before the pilot ended in May 2025.

The CFA recommended that the federal government support pathways to permanent residency by reintroducing the Agri-Food Pilot as a permanent program covering all agricultural sectors to help meet year-round labour needs, while continuing to support temporary and seasonal labour requirements through the TFWP.

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