Canadian farm debt increased the most in almost two decades this past year.
A Statistics Canada farm income report released earlier this week estimated nationwide farm debt at the end of 2024 at $166.7 billion, up 14.1% from a year earlier and largest annual increase since 1981 when it jumped almost 15% to $18.3 billion.
Alberta farm debt soared 17.2% or about $5.6 billion from a year earlier to $37.4 billion in 2024, while Ontario farm debt increased about $5.1 billion or 13.5% to $42.8 billion. Manitoba farm debt was up 13.7% to $13.9 billion, while Saskatchewan debt increased 13.2% to $24.4 billion.
With debt rising, interest rate expenses as a share of total farm operating expenses also jumped to a multi-year high - up to 11.5%, the most since 12% in 1987 (see graph below).
This past year was a difficult one for Canadian farmers overall, with national realized net income tumbling $3.3 billion or almost 26% to $9.4 billion. It was the largest percentage decrease in realized net income since 2018.
Meanwhile, total farm operating expenses (after rebates) rose 2.4% to $78.3 billion in 2024.
For the second consecutive year, interest expenses led the gain in total farm operating expenses, up 28.6% or more than $2 billion to just over $9 billion in 2024. In response to easing inflation, the Bank of Canada began cutting its key interest rate in mid-2024 after over two years of hikes.
“Producers took on more debt, driving up interest expenses,” StatsCan said.
Farm input costs soared during the Covid 19 pandemic, and while they have moderated since, they remain elevated. Land prices have also continued to move higher, forcing buyers to borrow more heavily.
Chart: Interest expenses as a share of total operating expenses, Canada, 1981 to 2024
