Fédération des producteurs acéricoles du Québec
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Financing Back

Financing the Strategic Maple Syrup Reserve

Last August, the Federation received a $60 million loan from the National Bank of Canada to finance the Strategic Reserve. This means that producers can receive advances on unsold maple syrup being held at the Federation warehouse. The financing is a loan that will be automatically reimbursed when the corresponding quantities are sold. The current interest rate on these advances is 2.70% per annum, and it is tax deductible.

In 20215, producers had until October 23 to complete the process. In the subsequent years, the planned deadline will be August 31 and producers will receive all the necessary forms by mail. 

Here are the steps for requesting financing for this year:

  • Select the years for which financing is being requested (here is an example of a completed form).
  • Fill in the “Avance demandée par le producteur” box.
  • SIGN the form.
  • Return the “Demande de participation au programme de financement de la réserve
    stratégique” form to the Federation by mail, fax, or email. 

The producer services team will then review the request, prepare the agreement for advance payment and a surrender document (as needed), and send the document(s) to the producer. The producer will need to sign the financing document(s) (agreement, and surrender document, if any) and return them to the Federation by mail. The documents must be signed by all corporate and business shareholders.

Example

It’s always easier to understand with an example. Let’s take a look at a fictional case of financing for a producer—we’ll call him Paul Jones—who wants to upgrade some of his equipment. Here are the options available to Mr. Jones:

Production year

Value of eligible inventory

Financing %

Available advance

Requested advance

2010

$1131.39

50

$565.70

$565.70

2011

$534.40

50

$267.20

$267.20

2012

$674.37

50

$337.19

$337.19

2013

$2,124.51

50

$1,062.26

$0

2014

$1,508.70

50

$754.35

$754.35

Total

$5,973.37

 

$2,986.70

$1,924.44

 

This year, Mr. Jones could have received financing of up to $2986.70. This does not include the organic bonus for each year or the industrial syrup for 2014. If he wants an advance for one of the years, he needs to take the full amount, and the total amount of the advance has to be over $1,000. So Mr. Jones requests a $1,924.22 advance, partly because he wants to be able to request an advance next year and the amount for 2013 is over the minimum amount. Next year he’ll be able to tap into the unused amount from this year as well as the amounts available for other years—including the 2015 reserve amount.

The interest on this advance will be deducted from the producer’s earnings in the annual March 15 statement of accounts. As the reserve quantities are sold, the advance will automatically be reimbursed. If he so wishes, Mr. Jones can also decide to repay the Federation for the loan before the syrup is sold.

Obviously, Mr. Jones has not stopped payment, is not in default with the Federation, and has respected all of the retail sales rules. 

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