REGINA – Agriculture Minister Lyle Stewart has introduced amendments to Saskatchewan’s farm security legislation that will make pension plans and their administrators ineligible from owning farmland in the province.
All financing for a farmland purchase will also have to be through a financial institution registered to do business in Canada or by a Canadian resident.
“If a foreign financial institution or individual loaned the money to purchase the farmland and then subsequently foreclosed, that foreign entity would be the owner of the farmland, so I think that’s where the concern comes with foreign financing,” Stewart said Tuesday.
The changes come after almost nine out of every 10 people who responded to a government survey said they didn’t want the province’s farmland to end up in foreign hands.
Eighty-seven per cent of the more than 3,200 respondents said they didn’t support foreign ownership and 75 per cent said they were opposed to allowing investors such as Canadian pension funds to purchase farmland.
Farmers had raised concerns about loopholes they said allowed investors to drive up rents and farmland prices in the province.
The Farm Land Security Board will also get tougher powers to enforce the rules.
“There’s a belief that some transactions were slipping under the radar, transactions that would be illegal, and that the Farm Land Security Board couldn’t stop them,” said Stewart.
The question of who can own farmland in Saskatchewan prompted a spirited debate that was sparked after the Canada Pension Plan Investment Board started buying up farms in 2013. The rules currently don’t allow institutional investors to own Saskatchewan farmland and limit foreign ownership to four hectares, but the investment board’s structure made it eligible.
“While they have purchased some farmland, we will not be ordering divestiture since at the time that they purchased it, the purchase was legal,” said Stewart.
“They would not be eligible to purchase farmland again.”
Ray Orb, president of the Saskatchewan Association of Rural Municipalities, says the big concern was around so-called mega-farms that weren’t locally owned. He believes the changes to the legislation will help protect communities.
“We see our small communities dwindling,” said Orb.
“We’ve had that actually happen in our community of Cupar, where we had foreign-land ownership and it kind of decimated our community because people weren’t moving there. They were sending the money out of the country.
“And so we want people to move there, to bring their kids with them, to expand the schools and to keep the hospitals running.”
The legislation still has to be passed, but the new rules are expected to come into effect by next year.