ONTARIO PRODUCERS REVIEWING THEIR DEPOSIT OPTIONS FOR CAIS

by the Ontario Ministry of Agriculture & Food

Close to 40,000 Ontario producers will receive a personalized Deposit Options Notice (DON) from the Canadian Agricultural Income Stabilization (CAIS) program in their mailbox by the end of this month.

The DON package tells producers how much they need to deposit into a new CAIS account in order to secure program coverage for the 2003 and 2004 tax years. The package also includes the required application forms.

Producers are encouraged to act now and follow the steps required to participate in CAIS. While there may be modifications and some details to be finalized, it is important for Ontario producers to realize that CAIS is the only stabilization program available. If they do not sign up by April 30, 2004, they will not be eligible for both 2003 and 2004.

The personalized DON uses information submitted to NISA, the Ontario Farm Income Disaster Program (OFIDP) or the 2003 Advanced Ontario Agricultural Payment. This information is used to calculate a producer's production margin for each of the last five years.

An average of these production margins, termed reference margin, is then calculated. Producers must deposit at least 14% of this figure into their CAIS account by April 30, 2004 to be eligible for any program coverage for 2003 and 2004. To ensure that they access as much government income stabilization support as possible, producers can deposit up to 26% of their reference margin into their CAIS account. Again, this 26% deposit will ensure maximum income stabilization support in the event of a complete margin decline or negative margin in 2003 or 2004.

It is anticipated that 65% of NISA participants can simply rollover their Fund 1 NISA account into a CAIS account and thereby provide a maximum deposit for full coverage.

Farmers who have not participated in NISA, OFIDP or received a 2003 Advanced Ontario Agricultural Payment, are encouraged to contact the CAIS administration at 1-877-838-5144 to request an application package. Like other producers they must follow the steps outlined in the CAIS program Participation Checklist. In addition, because they have not been in past programs, the CAIS administration does not have historical information for these producers. For this reason, these particular producers will have to submit copies of their farm income statements for the past five years. The program administration will enter this information and send the producer a personalized Deposit Options Notice (DON) to tell how much is needed in their CAIS account. These producers will then have a period of time after the receipt of their DON to deposit the funds to secure program coverage for 2003 and 2004.

The steps to secure CAIS program coverage for the 2003 and 2004 tax years are outlined in the attached checklist and in the DON package sent to most Ontario farmers.

Ontario farmers are encouraged to bring along their DON and attend one of many free CAIS program information sessions that are being held across the province. These sessions are meant to help farmers learn more about the CAIS program and to assist them in understanding their deposit options. Producers can register for the location nearest to them by calling toll free 1-877-838-5144.

CAIS PROGRAM PARTICIPATION CHECKLIST

• Contact the CAIS program administration if you have not received a DON by the end of February 2004.
• Open a CAIS program account at a participating financial institution.
• I/ Deposit into your CAIS program account at least the minimum deposit required, as outlined on your DON by: April 30, 2004
• Complete and submit the following information by April 30, 2004: Joint 2003 and 2004 CAIS program application form, and 2003 Schedule 2-inventory, receivables & payables
• Submit your 2003 farming income (or loss) for tax purposes on a Tl 163 by June 15, 2004 if you are an individual or June 30, 2004 if you are a business entity.