How Reimbursement-Based Farm Grants Work in Canada

By GrantHub Research Team · · Lire en français

How Reimbursement-Based Farm Grants Work in Canada

Many Canadian farm grants do not pay upfront. Instead, they reimburse you after you spend the money. This model is common in agriculture because it ensures public funds support real, completed improvements. Understanding how reimbursement-based farm grants work in Canada is important. It can help you plan cash flow and avoid costly surprises. This is especially true for large on-farm projects.

One of the best real-world examples is the Poultry and Egg On-Farm Investment Program (PEFIP), a federal program run by Agriculture and Agri-Food Canada (AAFC).

What Is a Reimbursement-Based Farm Grant?

A reimbursement-based grant covers a percentage of your eligible costs after you pay them. You must complete the project first. Then, you submit proof of payment and receive grant money back from the government.

Most Canadian farm grants use this structure to:

  • Reduce risk of misuse of funds
  • Ensure projects are completed as approved
  • Tie funding to measurable outcomes

You are never reimbursed for 100% of costs. You must contribute your own funds.

How Reimbursement-Based Farm Grants Work in Practice

Using the Poultry and Egg On-Farm Investment Program (PEFIP) as an example, here is how the process typically works.

Step 1: Confirm You Are Eligible

PEFIP is only open to supply-managed poultry and egg producers. To qualify, you must:

  • Hold quota and be licensed by a provincial marketing board
  • Be a new entrant with loaned quota or a whole-farm lease
  • Have held quota or shares of provincial production as of January 1, 2021
  • Be actively farming in Canada and able to enter binding agreements

Educational institutions holding quota are not eligible.

Step 2: Apply Before You Start Spending

Reimbursement-based farm grants do not cover costs incurred before approval. For PEFIP:

  • Applications are assessed first come, first served
  • Funding remains available until sector allocations are exhausted

Timing matters. Waiting too long to apply can cost you funding.

Step 3: Pay for the Project Upfront

Once approved, you must:

  • Pay suppliers in full
  • Keep invoices, contracts, and proof of payment

PEFIP supports investments such as:

  • On-farm infrastructure upgrades
  • Equipment purchases and retrofits
  • Biosecurity and food safety improvements
  • Sustainability and efficiency improvements
  • External expertise tied directly to the project

Step 4: Submit a Claim for Reimbursement

After costs are incurred, you submit a claim with documentation. Approved claims are reimbursed at up to 70% of eligible costs, subject to sector-specific funding limits.

Payments are issued only after claims are reviewed and accepted.

How Much Money Can You Get?

PEFIP is a large, long-term program with nearly $759 million in total funding over 10 years, allocated by sector:

  • $357.3 million for chicken producers
  • $91.9 million for turkey producers
  • $219 million for egg producers
  • $90.6 million for broiler hatching egg producers

While reimbursement can cover up to 70%, you are always responsible for the remaining costs.

Cash Flow Planning Matters

Because reimbursement-based farm grants require you to spend first, cash flow is critical. Many producers use:

  • Operating lines of credit
  • Short-term loans
  • Phased project timelines

Tools like GrantHub’s eligibility matcher can help you filter programs by province and sector in seconds, so you can plan multiple funding options before committing cash.

For timing expectations, see also:
How Long Do Canadian Grant Programs Take to Pay Out Funds?

Common Mistakes to Avoid

  1. Starting the project before approval
    Costs incurred before approval are usually ineligible and cannot be reimbursed.

  2. Missing documentation
    Missing invoices or proof of payment can delay or reduce reimbursement.

  3. Assuming full cost coverage
    Reimbursement-based farm grants never cover 100% of expenses.

  4. Ignoring tax implications
    PEFIP funding is generally considered government assistance and may be taxable.

Frequently Asked Questions

Q: How much does PEFIP reimburse?
PEFIP reimburses up to 70% of eligible project costs, depending on your poultry or egg sector and available funding.

Q: Is PEFIP first come, first served?
Yes. Applications are processed in the order received until sector funding runs out.

Q: Can new poultry or egg farmers apply?
Yes. New entrants with loaned quota or a whole-farm lease may qualify if they meet licensing and activity requirements.

Q: What expenses are usually eligible?
Eligible expenses include infrastructure upgrades, equipment, retrofits, and project-related professional services tied to efficiency, sustainability, or biosecurity improvements.

Q: Are reimbursement-based farm grants taxable?
In most cases, yes. They are treated as government assistance. Confirm with your accountant for your specific situation.

GrantHub tracks hundreds of active grant programs across Canada—check which ones match your farm profile and investment plans.

  • What Business Expenses Are Eligible Across Canadian Grants and Loans?
  • How to Stack Grants and Loans Without Violating Funding Rules
  • Loans vs Grants for Women in Agriculture: Key Differences Explained

Next Steps

Reimbursement-based farm grants can fund major improvements, but only if you plan ahead. Knowing when to apply, what costs qualify, and how long reimbursement takes protects your cash flow. GrantHub helps Canadian producers identify reimbursement-based farm grants that fit their sector, province, and investment timeline—so you can move forward with confidence.

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