Whether you are an out-of-province purchaser considering an acquisition in Saskatchewan or a business operating in Saskatchewan considering a sale or acquisition, this article offers a quick summary of some common issues for mergers and acquisitions in Saskatchewan.
Farm Land Security Board
The Farm Land Security Board is responsible for administering The Saskatchewan Farm Security Act (the "Act"). The focal point of the Act is that a "Non-Canadian-owned entity" or a "non-resident person," as those terms are defined in the Act, is restricted from acquiring an interest in farmland in Saskatchewan unless an exemption from the Farm Land Security Board is granted.
It is important to note that the Act is drafted broadly to make the legislation expansive. For example, "farmland" includes land that is used or capable of being used for the purposes of farming, a "Non-Canadian-owned entity" or a "non-resident person" essentially consists of any entity or person not from Saskatchewan, and the Act is not limited to fee simple ownership as the Act applies to various interests in land, including leasehold interests and mortgages.
Provincial Sales Tax
In Saskatchewan, Provincial Sales Tax ("PST") is payable on certain personal property, including furniture, machinery, equipment and vehicles. Purchasers should be aware that unpaid PST by a vendor can form a lien against a property. Whether you are a purchaser or vendor, it is important to understand PST obligations in Saskatchewan.
Saskatchewan Due Diligence
When considering an acquisition in Saskatchewan, a purchaser must engage local counsel to assist with due diligence. Our office completes due diligence searches across all of Saskatchewan, and we are versed in preparing legal, due diligence reports for our clients.
Saskatchewan Land Titles
It is critical to be aware of nuances in the Saskatchewan land titles system during each transaction stage, including due diligence and closing. For example, there is no property transfer tax in Saskatchewan, but purchasers of real property in Saskatchewan are required to pay a land transfer fee equal to 0.4% of the value of the real property.
Title Insurance
Title Insurance has become a routine aspect of transactions involving real property in Saskatchewan. Purchasers should be familiar with title insurance and understand its nuances, including the difference between a lender's and owner's policies.
Secured Lending in Saskatchewan
Common security taken by lenders when financing an acquisition in Saskatchewan includes mortgages registered against real property and general security agreements or purchase money security interests registered against personal property in the Saskatchewan Personal Property Registry. A floating charge is not registerable in Saskatchewan's land title system, rather any charge on real property needs to be related to specific real property.
Conclusion
Navigating mergers and acquisitions in Saskatchewan requires familiarity with local issues, which supports the engagement of knowledgeable local counsel. If you have questions regarding mergers and acquisitions in Saskatchewan, please do not hesitate to contact our office.
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.
