Thank you, Mr. Chair, and good afternoon. I guess we just made it. Good afternoon to the committee, and thank you for the invitation to meet with you once again on the CAIS program.
As you are aware, federal, provincial, and territorial ministers agreed this past June in St. John's to take the steps necessary to implement a new margin-based program and to create a new disaster assistance framework, something separate from income stabilization.
Ministers also tasked officials with reviewing production insurance and reporting back in the fall with options on expanding production insurance to better include livestock and other commodities such as fresh horticulture. As Minister Strahl indicated about a week ago in front of this very committee, he will be meeting with his provincial and territorial colleagues next week in Calgary to discuss the work of officials and industry on these three fronts, those being the new income stabilization program, production insurance, and disaster relief.
In the meantime, the CAIS program. I made sure this was the topic of discussion for the committee before I made up my presentation. The CAIS program continues to operate and pay out significant assistance to producers. The deadline for information for the 2005 stabilization tax year was September 30, and as I have mentioned to the committee many times before, this is the busiest time for program administrators as the bulk of applications received are received close to the application deadline.
To date, over 31,000 producers have received close to $600 million in payments for the 2005 program year, and we are forecasting that once all processing is complete, some $1.6 billion will be paid out, bringing total payments for the first three years under the program to well over $4.5 billion. That's just under the CAIS program, and these numbers do not include the $900 million federal inventory payment announced this past spring to help producers transition to a better method of measuring their income, or the $755 million grains and oilseeds payment program, which was paid out earlier this year.
Now under the inventory initiative, CAIS participants for the 2003, 2004, and 2005 program years are having their CAIS program benefits automatically recalculated using the better method of inventory valuation commonly referred to as the P1-P2 hybrid method. If the numbers show that the producer would have received a higher payment using the new method of inventory valuation, then the producer will get an additional benefit. To stay within the $900 million funding, inventory payments for 2003 and 2004 are being pro-rated at 50%, with payments for 2005 pro-rated at a percentage to be determined once the 2003 and 2004 processing is complete.
Payments under the inventory initiative are currently being processed where Canada delivers the CAIS program, which you may recall is B.C., Saskatchewan, Manitoba, Nova Scotia, New Brunswick, and Newfoundland, as well as Alberta and P.E.I. Ontario is expecting to begin within the next month, and we are finalizing the agreement with Quebec for the transfer of funds to La Financière agricole du Québec. We expect the bulk of payments related to the 2003 and 2004 program years to be completed by the end of this year for all jurisdictions, and payments for 2005 will go out early in the new year.
While the special inventory payment is separate but related to the CAIS program, the improvements to the rules around the eligibility for negative margin coverage that were announced at the same time as the inventory payment announcement require an amendment to the CAIS program agreement with provinces and territories. This change will see more producers qualify for negative margin coverage under CAIS and it is estimated the cost will be some $80 million, cost-shared on a 60-40 basis with provinces, for the 2005 and 2006 program years. So approximately $50 million of that $80 million would be from the federal government for just those two program years.
This assistance will flow to producers as their 2005 and 2006 CAIS applications are processed. So once again, there's not a separate process or separate application for that additional assistance. These federal budget initiatives are initial investments to facilitate the transition to the new income stabilization program agreed to by ministers, and that's, again, federal, provincial, and territorial ministers, at their June meeting in St. John's.
For the 2006 stabilization year, the sign-up deadline--that's the year we're in right now obviously--for CAIS was September 30, 2006, and we are estimating, based on our preliminary numbers, that over 140,000 producers will be in the program protecting over $11 billion in margins.
As you may recall, effective for the 2006 program year, the deposit requirement under CAIS has also been replaced by a fee of $4.50 per $1,000 of coverage. The deadline for the payment of the fee is December 31, 2006.
As far as payments to producers for 2006 go, to date over $32 million has been paid out to over 500 producers, primarily in the form of interim payments. There may be some producers who have already received their final payment because their tax year-end has finished for 2006. They could have a June 30, 2006, tax year-end and they would be eligible for a final 2006 payment.
I realize I've thrown a lot of numbers at you in the last few minutes, and trust you've been provided with the latest summary of program payments. Many of the numbers I've mentioned in my opening remarks are reflected in that document. But if there are any questions for clarification, I'd obviously be pleased to provide them.
I'll leave it there. Along with my colleague Rosser Lloyd, I'm prepared to take your questions. Thank you.