WORLD TRADE
ORGANIZATIONG/AG/N/CAN/36
14 July 2000
(00-2898)
Committee on Agriculture Original:  English/
French
NOTIFICATION
The attached notification concerning new or modified domestic support measures exempt
from reduction (Table DS:2)  was received from the delegation of Canada  on 10 July 2000.G/AG/N/CAN/36
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Table DS:2
DOMESTIC SUPPORT: CANADA
Notification under Article 18:3 of the Agreement:
New or modified domestic support me asures exempt from reduction
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(1) Full title of measure:
Canada-Saskatchewan Adjustment Program
Canada-Manitoba Adjustment Program
(2) Domestic legislation reference:
Department of Agriculture and Agri-Food Act, Section 5, for the federal share
Farm Financial Stability Act  for the provincial share in Saskatchewan
Farm Income Assurance Plans Act  for the provincial share in Manitoba
(3) Detailed description of measure with reference to criteria:
The purpose of the program is to provide a one-time decoupled income payment to producers
in Saskatchewan and Manitoba.
The program is available to producers in Saskatch ewan and Manitoba that grew eligible crops
in 1999 and who filed an income tax return for the 1999 tax year or who were a Status Indian
farming on a reserve.  Eligible crops are those crops that were eligible under the Western
Grain Transportation Act  .  This would include all major grains, oilseeds and special crops.
The amount of the payment is based on a percentage of the first $125,000 of producers
qualifying sales.  For producers with qualifying sales starting in the 1999 tax year, the
payment will be based on a percentage of those sales in that year.  For producers with
qualifying sales prior to the 1999 tax year, the payment will be based on a percentage of the
greater of their 1998 qualifying sales or their average annual qualifying sales for all years in
which they farmed between the 1994 and 1998 tax years inclusive.
The payment percentage will be determined by dividing the total available funds by the total
eligible sales in the province.
The program conforms to the general criteria of Paragraph 1 of Annex 2 of the Agreement on
Agriculture:
(a) The program was provided through a publicly funded government program not
involving transfers from consumers; and
(b) The program did not have the effect of providing price support to producers.
In addition, it meets the policy specific criteria of Paragraph 6 of Annex 2 of the Agreement
on Agriculture:
(a) The eligibility for payment is based on status as a producer in Manitoba and
Saskatchewan in 1999.G/AG/N/CAN/36
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(b) The amount of the payment is not related to, or based on, the type or volume of
production in any year after 1999.
(c) The amount of the payment is not related to, or based on, prices, domestic or
international, applying to any production undertaken in any year after 1999.
(d) The amount of payment is not related to, or based on, factors of production employed
in any year after 1999.
(e) No production is required in order to receive payments.
(4) Cost of measure:
The total cost of the program was $360 million.
(5) Date of entry into effect:
The program entered into effect in March 2000.
(6) Period of application:
Payments were made in the 2000/01 fiscal year (April-March).
(7) Products to principally benefit (if any individual product(s)):
Those crops that were eligible under the Western Grain Transportation Act .G/AG/N/CAN/36
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Table DS:2
DOMESTIC SUPPORT: CANADA
Notification under Article 18:3 of the Agreement:
New or modified domestic support me asures exempt from reduction
__________________________________________________________________________________
(1) Full title of measure:
Agricultural Income Disaster Assistance Program (AIDA)
(2) Domestic legislation reference:
Farm Income Protection Act, Section 12(5) (for the federal portion of the payment) and as
authorized under the various provincial legislations (for the provincial portion of the
payment).
(3) Detailed description of measure with reference to criteria:
The Agricultural Income Disaster Assistance (AIDA) program is a two-year program that is
national in scope providing funding to Canadian agricultural producers to cushion extreme
income reductions beyond their control.  It is a cost-shared program that includes a federaland provincial component and was carefully designed to meet the criteria of Annex 2,
paragraph 7, of the WTO Agreement on Agriculture.  It was also designed to work closely
with the Canadian income tax system and to cover all agricultural commodities.  AIDA is a
voluntary program available to all producers who file a Canadian income tax return reporting
farming business income or losses, and whose gross margin has dropped below 70 percent oftheir historic average gross margin.  In the 1998 tax year, the historic margin was based on the
preceding three year period.  In the 1999 tax year, the historic margin was based on either the
preceding three years or the preceding five year period, excluding the highest and lowest
entry.  The gross margin is defined as the difference between farm revenues and operating
expenses.  Payments will bring a producer’s margin up to 70 percent of their historic margin.
Only revenues associated with primary agriculture are included as allowable revenue.
Off-farm income is not included in allowable revenue.  Certain farm expenses are excluded
from the calculation in order to ensure that AIDA does not influence farm production and
purchase decisions.  For example, in order to ensure that the program does not influence buy
versus rent decisions for farm machinery, both rental costs and depreciation are excluded
from the calculation.
The first year of the program is the 1998 tax year.  In order to ensure that payments are based
on all revenue and expenses related to the producer’s tax year, various adjustments are made
to the program margin.  For example, deferred income is added to the program margin in the
claim year.  This ensures that a producer cannot increase his AIDA payment by deferringincome.  Other adjustments to expenses and inventory are also made to ensure that only
revenues and expenses for the claim year are included in the calculation of the program
margin.  Payments under same or similar income disaster programs are not included in the
gross margin calculation and are factored into the amount of eligible payment to avoid
duplication of payments.
AIDA conforms to the following basic criteria of Paragraph 1 of Annex 2 of the Agreement
on Agriculture:G/AG/N/CAN/36
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(a) AIDA is provided through a publicly-funded government program not involving
transfers from consumers; and
(b) AIDA does not have the effect of providing price support to producers.
In addition, it meets the policy specific criteria of Paragraph 7 of Annex 2 of the Agreement
on Agriculture, for direct payments to producers under government financial participation in
income insurance and income safety net programs:
(a) Eligibility for payments under AIDA is based on a drastic reduction in the  margin for
the farm as a whole.  If a producer’s current year margin falls below 70 percent of
their historic margin, the applicant is eligible to make a claim.  Any producer meetingthis condition is eligible to receive payments under AIDA.
(b) AIDA payments will always compensate for less than 70 percent of the producer's
loss.  Payments are only made to bring a producer's margin up to 70 percent of their
historic margin.
(c) AIDA payments relate solely to farm inco me.  Payments do not relate to the type or
volume of production (including livestock units) undertaken by producers or to the
prices, domestic or international, applying to such production or to the factors of
production employed.
(d) Where a producer receives in the same year payments under this paragraph and under
paragraph 8, the total of such payments will be less than 100 percent of the producer's
total loss.  Payments under other programs that have been claimed under this
paragraph (G/AG/N/CAN/8, G/AG/N/CAN/29) represent the provincial component
of this cost-shared program.  As a result, AIDA will not provide a benefit to
producers beyond the 70 percent historic margin permitted under the program.
Canada has not claimed any programs under paragraph 8.
(4) Cost of measure:
Payments under AIDA will not exceed $1.78 billion in the 1999/2000 and 2000/2001 fiscal
years (April 1st to March 31st) that the program is in effect.
(5) Date of entry into effect:
AIDA came into effect for the 1998 taxation year (defined as a financial year for a producer
that ends at any time in 1998).
(6) Period of application:
AIDA is a two year program covering the 1998 and 1999 taxation years.
(7) Products to principally benefit (if any individual product(s)):
AIDA is a whole farm income safety net program.  All producers of all agricultural
commodities are eligible.
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