CAIS to be split in two

By Gary Sliworsky
Ag. Rep.

Recently there have been news releases of announcements made by governments on changes that are planned to the Canadian Agricultural Income Stabilization (CAIS) program.
As a result of these announcements the former CAIS program will be split into 2 components. One will be known as AgriInvest which will look and operate much like the former Net Income Stabilization Account (NISA). The second will be known as AgriStability and will continue on the principles of CAIS all be it with some changes in calculations and terminology.
Please note that agreement in principle has been reached between the federal and provincial governments but formal implementation agreements have yet to be signed. When signatures are in place funds will begin to flow.
Contributions to AgriInvest will be based on what will be known as Allowable Net Sales (ANS). This change is of particular importance to operators of farms that have a combination of supply managed sales and non supply managed sales.
Where the former Eligible Net Sales (ENS) calculation deducted all qualifying seed and feed purchases from qualifying sales frequently leaving supply managed operations with negative ENS, the new methodology will prorate qualifying purchases against qualifying sales at the same rate as the qualifying sales to the supply managed sales of the farm. For example if 75% of a farm’s sales are supply managed (non qualifying) only 25% of the qualifying feed and seed purchases would be deducted from the qualifying sales to calculate ANS.
The contribution rate for AgriInvest will be set at 1.5% of ANS for 2007 with contributions matched by government to maximums. There will be no deemed deposits. Upon withdrawal, government dollars come out first and will be considered investment income for tax purposes. Contribution limits will be calculated on the annual T1163 farm income statement filed for income tax purposes but it is anticipated that there will be some modifications to the forms to facilitate ease of calculating ANS.
AgriStability will have a fee of 0.45% of 85% of the fee reference margin for 2007. Current participants in CAIS should have received an invoice at this time. The fee payment is due December 31, 2007. After that time a late penalty will be applied. Only one coverage level is available, 85% of the reference margin.
Producers not currently enrolled in CAIS or who did not receive a federal COP payment will want to contact AgriCorp to participate in AgriInvest and AgriStability. AgriCorp can be reached at 1-888-2474 or by email at contact@agricorp.