If you’re financing a farm in Ontario — whether you’re buying your first acreage or expanding an existing operation — there are government programs designed specifically to help. But finding clear information about them isn’t easy. Most of what’s out there is either bureaucratic language from government websites or vague overviews that don’t tell you what you actually need to know.
I’ve helped farmers navigate these programs from both sides. As a mortgage broker, I’ve submitted CALA applications through participating lenders. As a dairy farmer, I’ve dealt with government agricultural programs firsthand. Let me break down what’s actually useful.
What Is the CALA (Canadian Agricultural Loans Act) Program?
CALA is a federal government loan guarantee program administered by Agriculture and Agri-Food Canada (AAFC). It doesn’t give you money directly — instead, it guarantees your loan with a participating lender, which makes it significantly easier to get approved and caps your interest rate.
Here’s how it works in practice:
- You apply for a farm loan at a participating bank or credit union
- The lender assesses your application under CALA guidelines
- If approved, the federal government guarantees 95% of the loan to the lender
- Because the lender’s risk is almost eliminated, they can offer better terms
The key benefits:
| Feature | CALA Terms |
|---|---|
| Land purchase limit | Up to $500,000 |
| Other farm assets limit | Additional $500,000 (equipment, livestock, buildings) |
| Total maximum | Up to $1,000,000 combined |
| Interest rate cap | Prime + 1% (currently ~5.45%) |
| Lender fee | 0.85% of loan amount (one-time, added to loan) |
| Amortization | Up to 15 years for land; up to 10 years for other assets |
| Participating lenders | Banks, credit unions, caisses populaires |
That interest rate cap is significant. While some borrowers can get below prime + 1% through other channels, CALA provides a ceiling — your rate won’t go above that regardless of your personal credit or farm size. For beginning farmers or those with limited credit history, this cap can be the difference between an affordable payment and an unmanageable one.
Who Qualifies for CALA?
The eligibility is broader than most people think:
- Canadian citizens or permanent residents engaged in farming
- Beginning farmers — no prior farming experience required (you need a reasonable business plan)
- Established farmers expanding operations
- Farm cooperatives purchasing shared assets
- Part-time farmers — you don’t need farming as your sole income source
What surprises many people: you don’t need to be a full-time farmer. If you have off-farm income and are starting or expanding a farm operation, you can still qualify. The key requirement is that the asset being financed must be used for agricultural purposes.
What Can CALA Finance?
Eligible uses:
- Purchase of farmland (up to $500,000)
- Purchase of livestock
- Farm equipment and machinery
- Construction or renovation of farm buildings
- Land improvements (drainage, fencing, irrigation)
- Establishment of bee colonies, aquaculture operations, nurseries
Not eligible:
- Operating expenses (seed, feed, fuel)
- Quota purchases (dairy, poultry)
- Refinancing existing debt
- Residential property not associated with a farm operation
The quota exclusion is a significant gap for dairy and poultry farmers. When we expanded our dairy operation, quota financing had to come through FCC and our bank directly — CALA couldn’t help with that piece. But it covered the land and building portion at a rate that was hard to beat.
How CALA Stacks Up Against FCC Financing
This is the question I get most often: “Should I go CALA or FCC?”
The honest answer is that they serve different purposes and aren’t really competitors — but here’s how they compare:
| Factor | CALA | FCC |
|---|---|---|
| What it is | Government loan guarantee through banks/CUs | Direct lender (Crown corporation) |
| Rate | Capped at prime + 1% | Market rates, varies by program |
| Max loan (land) | $500,000 | No set maximum |
| Amortization | Up to 15 years (land) | Up to 25-30 years |
| Flexibility | Limited to lender’s products | Multiple products, tailored to ag |
| Seasonal payments | Depends on participating lender | Standard offering |
| Application process | Through your bank/credit union | Directly with FCC |
| Best for | Smaller purchases, beginning farmers | Larger operations, full-service ag lending |
When CALA wins:
- Loan amounts under $500,000 where the rate cap provides real savings
- Beginning farmers who benefit from the government guarantee
- Borrowers who already have a strong relationship with their bank or credit union
- Situations where you want to keep all your banking in one place
When FCC wins:
- Loan amounts exceeding $500,000
- Need for longer amortization (25-30 years vs. CALA’s 15-year max)
- Complex farm operations requiring multiple financing products
- Desire for seasonal payment structures (not all CALA lenders offer this)
- Quota financing (CALA doesn’t cover quota)
The broker advantage: As a broker, I can compare both options side-by-side for your specific situation. I’ve had cases where CALA through a credit union beat FCC’s rate by 40 basis points, and other cases where FCC’s longer amortization made the monthly payment $800 lower despite a slightly higher rate. The “best” option depends entirely on your numbers.
OFCAF: Ontario’s On-Farm Climate Action Fund
OFCAF is a provincial cost-share program — it’s a grant, not a loan. You don’t repay it. The program helps Ontario farmers implement practices that reduce greenhouse gas emissions and improve environmental sustainability.
How OFCAF Works
The program covers a percentage of eligible project costs:
| Practice Category | Cost-Share Rate | Maximum Funding |
|---|---|---|
| Nitrogen management | Up to 50% | Varies by project |
| Cover cropping | Up to 50% | Varies by project |
| Rotational grazing | Up to 50% | Varies by project |
| On-farm environmental assessment | Up to 85% | Varies by project |
OFCAF Eligibility
- Must be an Ontario farmer (or farm partnership/corporation)
- Must have a valid Farm Business Registration (FBR) number
- Must have a current Environmental Farm Plan (EFP)
- Project must fall within eligible practice categories
- Must complete the project before submitting for reimbursement
Important: OFCAF is a reimbursement program. You pay for the project first, then submit receipts for the cost-share portion. This means you need the cash flow or financing to cover 100% upfront.
This is where OFCAF and CALA can work together strategically. If you’re implementing eligible practices on newly purchased land, you could use CALA financing for the land purchase and OFCAF grants to offset the cost of improvements.
Current OFCAF Status
OFCAF funding rounds open periodically and have limited budgets. Check the Ontario Soil and Crop Improvement Association (OSCIA) website for current intake windows and remaining funding. Applications are processed on a first-come, first-served basis during open intake periods.
Application Process: Step-by-Step
For CALA Loans
Step 1: Prepare your documentation
- Farm business plan (especially important for beginning farmers)
- 2-3 years of farm financial statements and tax returns
- Personal financial statement
- Purchase agreement or quote for the asset you’re financing
- Proof of Canadian citizenship or permanent residence
Step 2: Choose a participating lender
Not all bank branches actively process CALA applications. Rural branches with agricultural experience are your best bet. Alternatively, ask a mortgage broker to identify the most CALA-active lenders in your area.
Credit unions with strong agricultural roots — particularly those in farming communities across Southwestern Ontario — often have the most streamlined CALA process.
Step 3: Submit your application
Your lender handles the CALA guarantee application as part of their normal lending process. You don’t apply to the government directly. The lender assesses your application, and if it meets CALA criteria, they submit the guarantee request to AAFC.
Step 4: Approval and funding
Once the lender approves the loan and AAFC confirms the guarantee, you receive the funds. The government’s 0.85% registration fee is typically added to your loan balance. Total timeline from application to funding: 2-6 weeks depending on the lender and deal complexity.
For OFCAF Grants
Step 1: Complete your Environmental Farm Plan (EFP)
If you don’t have a current EFP, complete one through your local OSCIA workshop. This is a prerequisite — no EFP, no OFCAF eligibility.
Step 2: Identify eligible projects
Review the current OFCAF practice list. Common eligible projects include installing precision nitrogen application equipment, planting cover crops, converting tillage practices, or implementing rotational grazing infrastructure.
Step 3: Apply during an open intake
Submit your application through the OSCIA portal when an intake window is open. Include project details, cost estimates, and your EFP number. Applications are reviewed and approved based on program criteria.
Step 4: Complete the project and submit for reimbursement
Do the work, keep all receipts, and submit your reimbursement claim within the program deadline. Funding is paid after the project is verified complete.
Common Mistakes That Get Applications Rejected
After helping dozens of farmers through CALA and other government program applications, here are the mistakes I see most often:
CALA Application Mistakes
1. Applying at the wrong branch Not every bank branch knows CALA exists. I’ve had clients told by their bank that “we don’t offer that” — which is wrong. The program is available at any participating institution. If your local branch isn’t familiar with CALA, ask to speak with their agricultural lending specialist or find a different branch.
2. Incomplete business plans (beginning farmers) If you’re a beginning farmer, your business plan is the most scrutinized part of the application. Lenders want to see: realistic revenue projections, understanding of operating costs, evidence of agricultural knowledge (education, experience, mentorship), and a clear path to profitability. A two-page plan won’t cut it.
3. Not shopping lenders CALA caps the rate at prime + 1%, but some lenders offer below that cap. I’ve seen participating credit unions offer CALA loans at prime + 0.50% for strong applicants. If you only talk to one lender, you might leave money on the table.
4. Trying to finance ineligible items Quota, operating expenses, and refinancing are not CALA-eligible. If you need to finance quota along with land, structure the deal with CALA for the land and a separate lender for the quota. A broker can help coordinate this.
5. Exceeding the loan limits without planning If your land purchase exceeds $500,000, you can use CALA for the first $500,000 and conventional financing for the remainder. But this needs to be structured upfront — you can’t apply for CALA after the fact.
OFCAF Application Mistakes
1. Starting the project before approval OFCAF funding must be approved before you begin work. If you install cover crop equipment and then apply, you’ll be declined.
2. Missing the intake window OFCAF opens in rounds with limited funding. When the budget runs out, the intake closes regardless of how many applications are waiting. Set a reminder to check OSCIA’s website monthly during intake season.
3. Not having a current EFP Your Environmental Farm Plan must be completed and up to date. If your EFP is expired or you’ve never done one, start this process months before you plan to apply for OFCAF.
Navigating government farm programs while running an actual farm operation is a lot. I know from experience — doing paperwork during calving season is nobody’s idea of a good time.
If you’re looking at farmland in Ontario and want help figuring out which programs you qualify for and how to structure your financing, reach out for a free consultation. I’ll walk you through your CALA eligibility, compare it against FCC and credit union options, and help you put together the strongest application possible.
Related reading:
- Agricultural Land Loans — compare FCC, CALA, bank, and credit union farmland financing options
- How to Finance Your First Farm in Ontario — step-by-step guide for first-generation farmers
- Complete Guide to Farm Mortgages in Canada — comprehensive 2026 farm financing guide