08 December 2014

Québec Farms in Debt

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Debt levels among Québec farms remain the highest in Canada, but are not necessarily excessive.

Many analyses and statements have been made in recent years about debt levels on Québec farms. The St-Pierre Report in 1999 found that farms in Québec were over-indebted and that the policies to support farmers were an obstacle to effective financial management on farms. 

Last June, the Institut de recherche en économie contemporaine (IREC) released a study on debt levels on Québec farms, which paints a more positive picture.

In fact, while the average debt level of farms in Québec is higher than elsewhere in Canada, it has not become excessive. Farmers are getting a leverage effect from their loans, which increases their investment capacity and boosts their return on equity. “The capital productivity, and especially the economic profitability, of Québec farms really stand out on a cross-Canada scale,” explained François L’Italien, Lyne Nantel and Clément Bélanger Bishinga, project managers at IREC and authors of the study.

This new look at farming operations shows that the industry is doing well in the current economic and financial climate in North America. That’s good news for the province!

What do you think about the findings of this study? Share your opinion.

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