News Releases

BMO Lowers Estimate of Summer Flood Damage Costs for Prairie Farmers to $1.5 Billion

REGINA, December 1, 2010 – Today, BMO Bank of Montreal revised its estimate of the financial loss to farmers due to this summer's extensive flooding across the Prairies. The bank has lowered its estimate to $1.5 billion from its preliminary estimate of $3 billion. This downward revision reflects stronger prices in the wake of production problems in major exporting counties (e.g., Russia, Ukraine) and reduced forecasts for global production and stocks.

“Now that harvest is over, we have a strong indication of the degree to which the flooding has affected prairie farmers,” said Douglas Porter, Deputy Chief Economist, BMO Capital Markets. “While our estimate is lower, the losses of $1.5 billion remain a heavy weight on Prairie economies. In Saskatchewan, the 2010 grain harvest is estimated to have dropped 36 per cent below last year's level. We believe that the decline in crop production alone carved more than 3 percentage points from real GDP growth in the province for the year,” added Mr. Porter.

In July, 2010, to assist commercial customers affected by the extensive damage, BMO Bank of Montreal launched a Financial Flood Relief Program. Under the program, BMO customers could/can apply for:

Deferred principal payments
And/or waiver of new loan application or renewal fees.

“We feel it is important that we stand behind our customers and want to do what we can to assist them, especially those affected by the extensive flooding and crop damage,” said Robert Hayes, Senior Vice President, Prairies, BMO Bank of Montreal. “Since August, we have made this program available for our customers, many of whom suffered significant losses as a result of the flooding, and we will continue to offer it until November 30, 2011, giving them enough time to market a portion of next year's crop,” added Mr. Hayes.

The program was specifically designed for producers directly affected by the flooding and those in related industries who faced and may continue to face cash-flow challenges in the coming months given their dependence on a productive agriculture industry.

BMO Bank of Montreal offers numerous additional programs and products including a specialized farm-equipment line of credit, flexible farm mortgages, and BMO's new AgriInvest Savings Account, which allows agricultural customers to double their savings by generating a matching government contribution. The savings rate on BMO AgriInvest account balances is a market leading 1.20 per cent.

About BMO Bank of Montreal

BMO's roots in the Canadian agricultural sector date back almost 200 years, to 1817, when it first began working with farmers. Today, BMO enjoys a well-founded reputation for providing customized loan and deposit solutions to Canada's agri-business owners, the single largest core commercial sector that the bank serves.

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For news media enquiries:

Paul Cunliffe, Toronto, paul.cunliffe@bmo.com, 416-867-3996
Laurie Grant, Vancouver, laurie.grant@bmo.com, 604-665-7596
Ron Monet, Montreal, ronald.monet@bmo.com, 514-877-1873

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