Trudeau government set to boost cash advances for farmers as canola crisis drags on

The Trudeau government is expanding a federal loan guarantee program for farmers in response to Western Canada's canola crisis — more than doubling the maximum amount of money available to individual producers.

CBC News has learned the federal government is set to announce at a news conference Wednesday morning a boost to the maximum amount available to individual farmers under the Advance Payments Program (APP), from $400,000 per year to $1 million.

The news comes not long after Prime Minister Justin Trudeau promised that help for canola farmers would be "coming out in a few days."

Agriculture Minister Marie-Claude Bibeau and International Trade Diversification Minister Jim Carr will announce details at a news conference on Parliament Hill at 9:30 a.m. ET and CBCNews.ca will carry it live.

Under the former APP rules, producers could receive up to $400,000 per year in advances based on the value of their crops or livestock, with the federal government paying the interest on the first $100,000.

Producers repay the advances after they sell their product. Cash advanced for most commodities has to be repaid in 18 months; cattle and bison producers get 24 months to pay.

Ottawa is changing the APP rules in response to market turmoil in the canola sector. China has blocked Canadian canola seed from Richardson International and Viterra, two of Canada's biggest exporters, saying that shipments were contaminated with pests.

Other China-bound shipments of Canadian canola have been cancelled, forcing exporters to sell the seed elsewhere at a discount. And Reuters reports more commodities are hitting inspection roadblocks at Chinese ports, leaving exporters to scramble for alternate markets.

Canadian politicians have insisted there is no basis for China's pest claim. China's move is widely seen as an act of retaliation over Canada's decision to arrest Meng Wanzhou, an executive with the Chinese telecommunications giant Huawei, for extradition to the United States.

"Canadians know, of course, as do people around the world, that Canadian food inspection and the quality of Canadian agriculture and produce is world-class, and the processes we have cannot be beaten anywhere in the world," Trudeau told a media event Monday morning.

While the move is being driven by the plight of canola growers, the revised APP program is available to all farmers. For canola farmers, however, the federal government is increasing the interest-free portion of the cash advances to $500,000.

Prime Minister Trudeau is expected to call premiers tonight to fill them in on the new APP rules.

Meanwhile, the Trudeau government is trying to go to the source to end China's trade action. Agriculture Minister Marie-Claude Bibeau recently sent a formal request to Beijing for permission to send Canadian Food Inspection Agency officials to China to personally inspect Canadian canola shipments for pests.

Sources tell CBC News that while Chinese officials have been talking positively about the trade relationship with Canada and their desire to solve the canola spat, they've yet to give the CFIA permission to send its own inspectors to China. The sources said the federal government isn't viewing China's stance as an outright rejection of its proposal and plans to keep pushing the idea with Beijing.

Meanwhile, Ottawa continues to search for new markets for Canadian canola. International Trade Minister Jim Carr is expected to lead a trade mission to locate buyers beyond the Chinese market but the government isn't sharing details at this point.