Canada’s Saskatchewan province has banned investment into farmland by pensions and other institutions as it continues its review of land ownership regulations in the province, according to a statement on Monday. The review launched late last year after complaints about rising farmland values.
The news prompted Candian Pension Plan Investment Board, which would not comment on the government’s review earlier this year, to release a statement expressing concern about the temporary ban on land purchases and the pension will conduct a full review of the new restrictions in the coming days.
“CPPIB has owned farmland in Saskatchewan for more than a year and intended to make further purchases,” reads the release. “CPPIB was pro-active about ensuring that it was a qualified buyer before it bought farmland in the province, including notifying Saskatchewan’s Farm Land Security Board about its plans in advance. CPPIB did not receive any indication at the time that its investments in farmland were not welcome.”
CPPIB’s C$128 million ($108 million; €92 million) acquisition of 115,000 hectares of Saskatchewan farmland at the end of 2013 was the subject of complaints from farmers and politicians that encouraged the government to start the review.
But the pension argues that it has polled Saskatchewan residents about the issue and that the majority, 69 percent, are happy with pension funds buying land in the province. The survey of 500 residents over 18 years old was conducted by Innovative Research Group at the end of March.
Saskatchewan will hold “further consultations” on the Saskatchewan Farm Security Act and also plans to hear from producers and other interested Saskatchewan residents. The Farm Land Security Board will still be able to make exemptions for economic development initiatives, according to the announcement.
Stewart said the original intent of the act was to limit ownership of Saskatchewan farmland to Canadian residents and 100 per cent Canadian-owned corporations. It is already seen as one of the strictest farmland ownership regulations in the world. But, Stewart added, it did not explicitly define institutional investors such as pension plans, administrators of pension fund assets and trusts.
“Saskatchewan farmland is a strategic asset that should be owned by Canadians for the benefit of Canadians,” Stewart said. “Our goal is not to limit investment, but to ensure the long-term success of Saskatchewan’s agriculture industry and economy.”
During the review the Farm Land Security Board will enforce the following regulations:
- To further define pension plans, administrators of pension fund assets and trusts as not Canadian-owned entities.
- A family trust with fewer than 10 Canadian individuals listed as beneficiaries will still be able to purchase farmland.
- That having an interest in farmland is defined to include any type of interest or agreement, direct or indirect that results in any of the benefits (i.e. capital appreciation), either directly or indirectly, of owning of the land.
- When financed, farmland purchases must be through a financial institution registered to do business in Canada, or a Canadian resident.
Further information about the review will be released later in the spring, according to the release.