Loans available for tile drainage

By Gary Sliworsky
Ag rep, Emo

Installing tile drainage is a very common land improvement practice among farmers in Ontario.
Corrugated plastic tubing, clay, and concrete drain tile are installed beneath the surface of agricultural land to drain excess water from the crop root zone.
The benefits of tile drainage for crop productivity, farm efficiency, and even for reducing environmental impacts have been studied and generally are well-known to farmers.
In Ontario, the Tile Loan Program, authorized by the Tile Drainage Act, provides loans to agricultural property owners to help them finance these tile drainage projects.
Landowners in a municipality in Ontario planning to install a tile drainage system on their agricultural land are eligible for a tile loan under this program.
All tile loans have 10-year terms, and repayments are made annually. Landowners are eligible for a loan of up to 75 percent of the value of the tile drainage work, but the Ontario Ministry of Agriculture, Food and Rural Affairs and the local municipality may have policies that further restrict the total dollar amount of any loan in any given year.
The provincial government sets the program interest rate at a competitive level. This rate is fixed for the full term of the loan, regardless of changes in market interest rates.
The interest rate is calculated annually, not semi-annually, as is done by most financial institutions (check with your local municipality for more information on current tile loan policies and interest rates).
The application process is quite simple. Loan application forms, available at your municipality, must be submitted to the municipal council. Once council approves the application, the owner arranges to have the work completed by a licensed tile drainage contractor (for more information on licensing, see the OMAFRA Factsheet, Agricultural Drainage Licensing, Order No. 01-063).
The municipality will inspect the work and may charge a fee for this inspection. Once a month, the municipality prepares loan documents to send to OMAFRA in the amount of all the loans for that month.
After processing these documents, OMAFRA issues a cheque to the municipality, which distributes the loan funds to each individual applicant.
The municipality collects the loan repayments from the owner and remits them to OMAFRA. Defaulted payments are rare, but are treated in the same manner as unpaid taxes.
The loan can be repaid in full at any time. Contact your municipality to find out the amount still owing at the time of your proposed pay-out date.
Consider installing tile drainage if you are the property owner and can answer “yes” to these questions:
•Is there a drainage problem on my agricultural land?
•Will the soil on my land respond to tile drainage?
•Is there a ditch or tile where my drainage system can be discharged that I may legally use?

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