Foreign investors seeking to buy farm land in Canada should consult their legal advisors before making an offer. Some provinces have placed strict limitations on the number of acres that foreign individuals or corporations may own, while other provinces allow non-residents to buy up agricultural land unrestricted.
Below is a table summarizing the restrictions on foreign ownership in British Columbia across to Québec. The rest of this article provides further detail on the legislative or policy schemes in place in those provinces.
|British Columbia||No restriction on foreign ownership. Uses of land in the Agricultural Land Reserve are regulated by the Agricultural Land Commission.|
|Alberta||Subject to certain exceptions for commercial ventures
(including limited natural resource extraction or processing and
residential development), non-residents and foreign-controlled
corporations can own up to 20 acres of agricultural land.
Foreign Ownership of Land Regulations, Alta Reg 160/1979
|Saskatchewan||Non-residents and foreign entities can own up to 10
acres of Saskatchewan farm land. Entities that are partially
foreign-owned but controlled by Saskatchewan residents or their
farming corporations can own up to 320 acres.
The Saskatchewan Farm Security Act, SS 1988-89, c S-17.1, The Saskatchewan Farm Security Regulations, RRS c S-17.1 Reg 1
|Manitoba||Non-residents and foreign entities can own up to 40
acres of farm land.
The Farm Lands Ownership Act, CCSM c F-35
|Ontario||No restriction on foreign ownership. Uses of prime agricultural areas are regulated by planning authorities acting pursuant to the 2005 Provincial Policy Statement.|
|Québec||Non-residents and foreign-controlled entities must get
permission to buy more than 4 hectares (or about 10 acres) of
agricultural land from the Commission de la protection du
territoire agricole du Québec.
An Act respecting the acquisition of farm land by non-residents, RSQ c A-4.1
In British Columbia, there is no legislation restricting foreign ownership of agricultural land. There is, however, an agency in British Columbia that regulates non-agricultural uses of certain farm land. The Agricultural Land Commission has included approximately 4.7 million hectares of land across British Columbia in the Agricultural Land Reserve, which is a land use zone in which agriculture is given priority.1
The Agricultural Land Commission produced a report in November 2010 which noted that stakeholders raised foreign ownership of land in the Agricultural Land Reserve as a concern during consultations on how to improve the agency. However, neither the 2010 report nor more recent publications from the Agricultural Land Commission recommend implementing legislative changes to effect control of ownership of land. Therefore, for the time being, no changes are expected to British Columbia laws concerning foreign ownership of agricultural land.
Alberta's legislation caps foreign ownership of agricultural land (excluding mines and minerals) at two parcels containing 20 acres in the aggregate. Only Canadian citizens, permanent residents, and Canadian-incorporated companies under Canadian control are not affected by these regulations. If a foreign person or entity acquires an interest in land contrary to the regulations, a court may order the judicial sale of the foreign owner's interest in the land.
The legislation does not apply, however, to certain commercial uses of land, including acquisitions of land for the purpose of:
- any activity for which a right of entry order may be granted under The Surface Rights Act (Alberta);
- establishing an industrial, processing, manufacturing, commercial or transportation facility, if the area for any separate facility does not exceed 80 acres;
- constructing a pipeline; a refinery; a transmission line; or a power plant;
- extracting sand, gravel, clay or marl, if the area for any separate project or development does not exceed 160 acres; and
- establishing a residence on no more than 20 acres or carrying out a residential development on no more than 80 acres.
However, the owner must divest itself of the interest in the land within three years of completion or abandonment of that purpose.
In Saskatchewan, non-residents may acquire up to 10 acres of Saskatchewan farm land (excluding minerals and land used primarily for the purpose of extracting, processing or transporting minerals). "Residents" are Canadian citizens or individuals who reside in Canada for at least 183 days per year.
Entities partly owned by non-residents but under control of Saskatchewan residents or their farming corporations may purchase up to 320 acres of agricultural land, whereas foreign-controlled corporations and other entities are restricted to 10 acres. The Farm Land Security Board can give its consent for such foreign entities to acquire more than 10 acres under any terms and conditions it deems appropriate. The Board considers the public interest and the potential impact to Saskatchewan in granting exemptions.
The penalty for failing to comply with the legislation is a fine of up to $10,000 for an individual, and up to $100,000 for a corporation. The Farm Land Security Board may issue an order requiring a foreign owner to divest itself of land, and may obtain a court order to assist in enforcement, including an injunction, a declaration of nullity, or a judicial sale.
Legislation in Manitoba allows foreign persons and entities to acquire up 40 acres of farm land, unless the board2 grants an exemption or unless the farm land is purchased for the purpose of generating wind power for sale to Manitoba Hydro. "Farm land" excludes minerals (other than sand and gravel), land used to extract or process such minerals, and land used for telecommunication, railway, and pipeline services. In considering applications for exemptions, the Manitoba Farm Lands Ownership Board will consider whether the acquisition is likely to confer a significant benefit on the province, or whether the applicant intends to take up residence in Manitoba within a reasonable period of time.
Only the following persons may purchase land in Manitoba unrestricted:
- Canadian citizens and permanent residents;
- corporations controlled by Canadian farmers and their families;
- municipalities, local government districts, and governmental agencies;
- private corporations and other entities that are 100% Canadian-owned;
- individuals who establish to the satisfaction of the Manitoba Farm Lands Ownership Board that they intend to become permanent residents or Canadian citizens within two years of acquiring the interest in farm land.
Any foreign entity that acquires over 40 acres must divest themselves of the excess acreage within one year. The Manitoba Farm Lands Ownership Board may apply to court for an order for judicial sale or voiding the interest in land. Failure to comply with the legislation can result in a fine of up to $50,000.
Agricultural land-use planning in Ontario is governed by the 2005 Provincial Policy Statement, issued under the Planning Act. Neither the policy statement nor the legislation restricts investment in agricultural land in Ontario.
Planning authorities do, however, regulate use and lot adjustments in prime agricultural areas, which are designated according to the classification system of the Canada Land Inventory.
The Minister of Agriculture is required by statute to review the policy statement every five years. That review began in March 2010, and the government is now accepting input on draft policies. At present, there are no expected policy changes concerning foreign ownership of agricultural land.
In Québec, non-residents must seek authorization from the Commission de protection du territoire agricole du Québec to acquire more than 4 hectares (or about 10 acres) of farm land.
Recent amendments to the legislation has further restricted foreign investors' access to agricultural land. In order to qualify as a Québec resident under the new rules, an individual must now be a Canadian citizen or a permanent resident, and have lived in Québec for at least 1,095 days (i.e. three years) out of the four years immediately preceding the acquisition of farm land.
A corporation or other legal person is deemed to be a Québec resident if a majority of shares or interests are owned by Québec residents; a majority of its directors are resident in Québec; and it is not directly or indirectly controlled by non-residents.
In considering an application for a purchase of farm land by a non-resident, the Commission will grant an authorization if:
- the land concerned is not suitable for the cultivation of soil or the raising of livestock; or
- the non-resident intends to settle in Québec and will live in Québec for three out of the next four years and will become a Canadian citizen or permanent resident at the end of that period.
The amendments have also introduced an annual limit on the number of hectares that can be purchased by non-residents. The Commission may only authorize 1,000 hectares of farm land to be acquired, per year, by foreign corporations or persons not intending to settle in Québec, although it may examine additional applications.
Any acquisition of farm land in Québec in contravention of the legislation is null. The Commission may order a non-resident to divest itself of the farm land within six months of serving the order, failing which it can apply to obtain authorization for judicial sale of the land. Knowingly acquiring or selling farm land contrary to the legislation can result in a fine of at least 10% of the value of the farm land for an individual or at least 20% in the case of a corporation or other legal person.
1 The Agricultural Land Commission Act, SBC 2002, c 36 provides the legislative framework for the Agriculture Land Commission and the preservation of agricultural land in BC.
2 Under the present legislation, the relevant board is the Manitoba Farm Lands Ownership Board. If Bill 39 (The Government Efficiency Act (Various Acts Amended or Replaced to Consolidate Boards and Agencies and Eliminate Government Appointments) is passed and proclaimed, the Manitoba Farm Lands Ownership Board will be eliminated and its functions and responsibilities will be assigned to the Manitoba Farm Industry Board.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.