SuperNISA

[charliep]

Tom4cwb

You will have to ask the feds.

I agree the issue is working capital. Given each farms situation, you don't have to contribute the whole amount - stopping at 70 % may be adequate to cover the businesses risk.

It is also margin money - something that belongs to the farmer but has to be replentished in years it is pulled out. My thought is to just have the feds mail the money out with no requirement for margin. But I would never suggest that.

[JACKFLASH]

Charlie P
I am trying to think how the old Grip program worked in Sask. This Super Nisa has some Grip similairities. Maybe I am way off. Does anybody know?

[JACKFLASH]

To all:
If I understand this correctly the old Nisa accounts will be rolled into new Nisa.
You can take your money out and pay tax on it,or roll the funds in and use the money for the margin.
Is this a one time thing? Or every year you contribute?
Do you get this money back if you never triggered a claim
Does this money sit in a gov't account.
GRIP had a surplus of money, that when the NDP gov't folded the program they took the money and added it to general revenue,it should have been paid back to the farmers.
Who knows the real ins and outs of this program.It looks like the feds don't even have the program baked.

[TOM4CWB]

Jackflash;

My understanding is that there will be several options.

1. you will likely be allowed to roll into the new NISA.

2. A special 5 year withdrawl program is being looked at... but untaxed gov cotributions will come out first... then your after tax money.

3. A special 5 year withdrawl program with a 50% producer taxed 50% untaxed gov. portion... each year, for 5 years... is being considered by Finance Canada... nothing is finalised yet...

Your concern about SuperNISA contributions you put in yourself... appears to be unfounded... any money you contribute will be your money if and when you leave the SuperNISA program.

Your contributions will be triggered out when your margins fall into the SuperNISA trigger payout zone... the money must be taken out... then producer contributions returned the next fiscal year... if you want to be covered by SuperNISA the next year.

On startup it appears only one third of the 26,000 dollars is needed the first year, the second third on the second year, the full amount on the third year is to be on deposit.

If a trigger creates a payout of the bottom 70% coverage teer... then the reloading of the producer contributions goes to the one third per year contibutions till the SuperNISA account is reloaded again.

Hope this helps... these were the rules we were told here in Alberta on March 12th... things could change again... so keep tuned in... they probably will!

[JACKFLASH]

TOM4CWB
Thanks for the info.

[charliep]

Just to note the $26,000 is based on a production margin of $100,000.

I forgot the name of margin so I did a little hunting this am to come up with more information on super NISA.

http://www.agr.gc.ca/puttingcanadafirst/index_e.php?section=brm_gre&group=docu&page=brm_gr e_pres0203

I encourage everyone to read this over and understand as best you can. Ask questions - I am not the NISA guru but can help some.

The reason I am suggesting is there are a bizillion new risk management products - some more effective than others. You need to understand them and pick the best ones for your business. Hopefully we can get some discussion going and work towards how to apply.

[TOM4CWB]

Charlie;

The production margin seems to be still changing.

Farmers want more expences in the margin... but the more expences that are included... the less negative margin coverage is folded into this new program.

The complexity of these calculations have led many who have seen computer runs of the 103,000 1996 to 2000 simulations... that there will be 3 times the farmer contribution... with significantly less total government money paid out in the new Nisa program.

Has anyone seen the simulation rundown on the new NISA after all the recent changes that have been announced?

[charliep]

Just reviewing the Super NISA presentation again , the required margin/deposit for $100,000 worth of production margin should be $20,000 - not $26,000. $10,500 on the first $70,000 (15 %), $4,500 on the next $15,000 (30%) and $5,000 on the last $10,000 (50 %). The last $5,000 of production margin cannot be covered under this program.

As a note, hopefully someone toasts the NISA name - this is a brand new program.

[charliep]

I know the people who are doing the work on ourside. Not so sure on the feds.

Interesting we are working on a April 1 deadline to come up with programs. There is absolutely no time to get information out to farmers so they can make informed management decisions - everyone is likely getting ready for spring seeding and in the process of calving. The need still exists for farmers to understand the programs, know how they can be used in managing their business risk and from there make informed decisions that have a best fit with their business plan.