Manitoba Agriculture, Food and Rural Initiatives

Provincial Initiative Helps Farm Families with Transfer Options

The provincial government is highly aware of the challenges farm families face when making decisions to transfer farm operations and has responded with the successful Bridging Generations Initiative (BGI). Manitoba Agricultural Services Corporation (MASC) can help farm families wanting to transfer assets from one generation to the next with several financial options and incentives through BGI.

Created in 2002, the Bridging Generations Initiative has already helped over 575 young Manitoba farmers with $75.6 million in financing options for intergenerational farm transfers. It can provide young farmers, between the ages of 18 and 39, with low-cost mortgages, and retiring farmers with immediate payments or guaranteed incomes from the transfer, as well as loans for retirement.

Young farmers can reduce their mortgage payments with BGI’s Management Training Credit (MTC). The credit is earned when farmers take farm management courses in subjects such as business and financial planning, taxes, marketing, employee management and computers. Credit applicants customize their own training plans based on a self-assessment questionnaire for farm management skills and abilities.

The credit is based on one per cent of the original principal amount of the client’s Bridging Generations Loan, up to an annual maximum credit of $2,500, and is available in each of the first five years of the loan. The lifetime maximum credit available is $12,500. The Management Training Credit is applied as a credit toward the BGI Loan repayment requirements. The maximum BGI Loan available is $525,000 for individuals and $1,050,000 for corporations and partnerships.

MASC’s longstanding Young Farmer Rebate is also available. The Young Farmer Rebate is based on two per cent of the original principal amount of the loan to an annual maximum of $3,000, and is available in each of the first five years of the loan. There is a lifetime maximum of $15,000. By combining the Young Farmer Rebate and the Management Training Credit, substantial loan payment savings are available to young farmers.

There are over 260 approved training courses that farmers can take to be eligible for the Management Training Credit. Applicants must complete a minimum of 25 hours of training in pre-approved courses each year. Applicants must also develop an annual farm business plan and complete an income and expense statement.

Approved courses are available through institutions such as Assiniboine Community College, Red River College and the University of Manitoba and include a variety of new home study courses. Participants are responsible for any training costs incurred. Assistance in covering training and related costs may be available from the Canadian Agricultural Skills Service. More information is available from www.agskills.mb.ca. Manitoba Agriculture, Food and Rural Initiatives (MAFRI) also offers approved training courses in various GO Office locations in Manitoba. MAFRI’s training covers a variety of topics at no cost to producers.

Trevor Atchison of Pipestone was the first MASC client to complete a year of approved training and receive the MTC. His customized plan incorporated MAFRI courses, including farm accounting software and farm record keeping and training from other sources.

The Bridging Generations Mortgage Guarantee allows a retiree to hold a farm’s mortgage while the young borrower makes mortgage payments to MASC. The corporation in turn makes guaranteed payments to the retiree to ensure retirement income. Loans can be guaranteed up to a maximum of $250,000. While MASC establishes the maximum interest rate that can be charged, the eventual interest rate is subject to agreement between all parties involved. This provides another low-cost mortgage financing option for young farmers while providing a guaranteed income for the retiring farmer.

For details on these and other MASC programs, please contact your nearest MASC lending representative or visit our the  MASC web site.