Canadian Agricultural Loans Act (CALA) Program

Establish, improve, or expand

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.

Key Benefits of the CALA Program include:

  • Preferred Interest Rates - you can choose from a fixed or variable rate options
  • Lower Down Payments - 20% for established producers and 10% for beginning farmers
  • Flexible Repayment Options
  • No Prepayment Penalties (Fixed Rate Mortgages excluded)

The nitty-gritty

Farmers eligible for a CALA loan guarantee include:

  • Existing farmers
  • Beginning/start-up farmers (i.e. less than 6 years of farming) 
  • Farmers taking over the family farm
  • Part-time farmers
  • Agricultural co-operatives with a majority (50% + 1) farmer membership

Eligible loan purposes include the following that must be used in the applicant’s farming operation:

  • Equipment
  • Building/ Construction
  • Land
  • Livestock
  • Shares in a farming operation

A detailed list of eligible loan purposes is available on the program website.

If a purchase has already been made, a farmer has 60 days to receive funding from a lender for a CALA loan.

CALA loans are limited to:

  • $500,000 for land and the construction or improvement of buildings.
  • $350,000 for all other loan purposes.

The maximum aggregate loan limit for any one borrower is $500,000 - which simply means a producer can have more than one CALA loan, however, the total amount of loans issued under the CALA program can not exceed $500,000.

The maximum aggregate loan limit for agricultural cooperatives, 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.

Preferred Interest Rates

As stipulated in the program, CALA loans enjoy preferred interest rates.  Producers can choose between:

  • a floating rate of prime rate plus 1%, or
  • a fixed term rate WCU residential mortgage rate, for a comparable term, plus 1%.

Repayment Terms

The maximum term for loans is 10 years, with 15 years for loans on land purchases.

Lower Down Payments

We can lend up to 80% of the market value of the security offered. Beginning farmers may borrow up to 90%.

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