Two strategies for getting the most out of the AgriInvest and Agri-Québec programs

4 min read

The information presented in this article pertains to farm businesses located in Quebec. To learn more about AgriInvest strategies for producers outside Quebec, please read our article on this topic.

A change of season or a rainy day is an ideal time to take a close look at your farm’s financial situation, including a review of self-managed risk management programs such as AgriInvest and Agri-Québec. Both initiatives — put forward by the federal and provincial governments, respectively — follow a similar process: each participant makes an annual deposit into an account and, in return, receives a government contribution calculated as a percentage of the business’ allowable net sales. In Quebec, given the similarities and complementary nature of AgriInvest and Agri-Québec, La Financière agricole du Québec (FADQ) oversees the full administration of these programs.

AgriInvest is available to all farms in Canada, except those under supply management. Agri‑Québec is available to all active agriculture and aquaculture operations in the province, except those covered by or associated with the Farm Income Stabilization Insurance (ASRA) program and those under supply management. If your farm is transitioning to organic production, Agri‑Québec offers additional support to help you through the process.

Important deadlines

You have nine months following the end of your fiscal year to submit your financial data. Beyond that, a penalty will be applied. For each program, this amounts to a 5% reduction of the maximum matchable deposit for each full or partial month past the deadline, up to a maximum of three months.

Once your information has been processed, if your farm is eligible for the AgriInvest and Agri‑Québec programs, FADQ will issue a deposit notice. This tells you the amount you can deposit and what you can expect to receive for matching funds from the government. You then have a strict 90 days from the notice date to make this deposit. There is NO extension to this deadline, so it is important to ensure the funds are deposited on time to benefit from the program.

Strategies for optimizing the use of accumulated funds:

1. Minimize the tax impact

The funds accumulated in your account are entirely yours, allowing you to withdraw any amount you choose at any time in any given year. However, it is important to plan your withdrawals carefully to minimize their tax impact, since the amounts you receive from government contributions and interest earned will be considered investment income. This means you can time your withdrawals for lower-income years, allowing you to benefit from a more favourable tax rate. Given the substantial funds held in these programs, it is in your best interest to make use of them for your business.

2. Manage your account wisely

You can also use the funds for operational expenses, debt repayment, or even to assist with an expansion. It is strongly recommended that you use these funds strategically, particularly to cover income losses or invest in measures that help address risks your business may be facing.

Furthermore, since the interest earned on the funds in this account is almost always lower than the interest rate charged on a business loan, choosing to withdraw the funds rather than taking out a loan at a higher interest rate could be a financially advantageous strategy.

Bottom line

Given the substantial funds held in the AgriInvest (estimated at $2 billion in Canada) and Agri-Québec programs, producers are clearly not regularly using the funds in their operations. It is in your best interest to make use of these programs for your business.

For sound advice on this matter, consult an agricultural accounting and taxation advisor who can help you make informed decisions tailored to your specific situation.

Article by:

Marc-Ange Doyon, CPA, Tax Specialist
Mélanie Lagacé, Content Editor

Accounting & taxes