Star Phoenix | 19 December 2012
BY LORI COOLICAN
Agriculture Minister Lyle Stewart has heard the coffee row story more than once.
Wealthy offshore investors are buying huge chunks of rural Saskatchewan, cleverly burying their money in ground that grows more valuable every year.
The old family farm down the road is now owned by some company in China, they say.
"Anytime I've tried to pin them down, nobody has any details," Stewart said.
"But they're all convinced that some international entity is buying up all of the farm land in their community."
The Saskatchewan Farm Security Act restricts ownership - or having any interest that would normally accrue to an owner - of more than 10 acres of Saskatchewan farm land to Canadian citizens, permanent residents of Canada, and 100 per cent Canadian-owned entities whose shares are not traded on the stock exchange.
The Act contains provisions for fines and forced divestitures if owners do not meet the criteria, although exemptions can be granted at the discretion of the Farm Land Security Board (FLSB).
Mark Folk, general manager of the FLSB, recently sent an open letter to all members of the Law Society of Saskatchewan, reminding them of the provincial law.
"Saskatchewan is seeing an unprecedented increase in the demand for land due to a number of factors, including strong commodity prices, low interest rates and a positive outlook for agriculture," he wrote.
"The increase in demand is not only coming from local farmers, but from investors from across Canada and beyond. ... The FLSB feels it is very important that all potential purchasers of farm land are fully aware of the existing legislation, so they can be assured of being able to continue to own the land they are planning to purchase."
Folk said he can only recall his office ordering one divestiture of farmland for non-compliance with the Act in recent years.
"We do basically check every transfer that comes through Land Titles, we do some followup to en-sure the people are permanent residents of Canada or Canadian citizens, and that companies comply with the legislation," he said.
"We're looking at the owners, and if there is any other interests in that farm land. Now, is it easy to hide? That I wouldn't be able to comment on."
Stewart confirmed the province has now hired an investigator with some "special skills" and experience to augment the FLSB's usual efforts.
"You know, there are a lot of rumours out there about foreigners buying Saskatchewan farm land, and so we're trying to be responsive," he said.
"We haven't really found any significant sales yet that are illegal in that respect, at least not recently, but we want to have the investigative capacity to make sure it's not happening."
Folk said his office will work with the investigator, passing along information about any suspicious-looking sales.
"They are basically going to do a little further investigation in terms of source of funds, so it's kind of our next step of investigation that we are following up on," Folk said. "It'll be files that we would like a little bit more snooping to be done on, to see if there's anything that does lead us to believe the owner or somebody else that has an interest in the property is not complying with the legislation."
According to Farm Credit Canada, the value of Saskatchewan farm land has been on a steady upward trend for a decade. Average prices went up 9.1 per cent in the first half of 2012. But compared to provinces where foreign ownership is allowed, such as Ontario, agricultural land in Saskatchewan remains relatively cheap. That combination is attracting attention from investors who have no interest in farming.
"There's still probably some room for upward movement in a more speculative market, but as far as productive capacity, it's pretty difficult for a farmer to pay the prices that land is going for now and expect it to ever pay for itself," Stewart noted.
"So as far as agricultural productive capacity, we're at a high level price-wise already. But when you get speculators - particularly international ones - engaged in the marketplace, actual productive capacity isn't really the main consideration sometimes.
"We don't want Saskatchewan farmers to all be tenant farmers, farming the land for ownership that may be foreign-based. We're pleased to see that farm land values have responded to low interest rates, high commodity prices, and so on, but as far as international speculators affecting the price of land ... we don't think that's a burden we necessarily want our farm families to bear."
lcoolican @thestarphoenix.com
Farm land near Regina. (Photo: Bryan Schlosser/Regina Leader-Post)
BY LORI COOLICAN
Agriculture Minister Lyle Stewart has heard the coffee row story more than once.
Wealthy offshore investors are buying huge chunks of rural Saskatchewan, cleverly burying their money in ground that grows more valuable every year.
The old family farm down the road is now owned by some company in China, they say.
"Anytime I've tried to pin them down, nobody has any details," Stewart said.
"But they're all convinced that some international entity is buying up all of the farm land in their community."
The Saskatchewan Farm Security Act restricts ownership - or having any interest that would normally accrue to an owner - of more than 10 acres of Saskatchewan farm land to Canadian citizens, permanent residents of Canada, and 100 per cent Canadian-owned entities whose shares are not traded on the stock exchange.
The Act contains provisions for fines and forced divestitures if owners do not meet the criteria, although exemptions can be granted at the discretion of the Farm Land Security Board (FLSB).
Mark Folk, general manager of the FLSB, recently sent an open letter to all members of the Law Society of Saskatchewan, reminding them of the provincial law.
"Saskatchewan is seeing an unprecedented increase in the demand for land due to a number of factors, including strong commodity prices, low interest rates and a positive outlook for agriculture," he wrote.
"The increase in demand is not only coming from local farmers, but from investors from across Canada and beyond. ... The FLSB feels it is very important that all potential purchasers of farm land are fully aware of the existing legislation, so they can be assured of being able to continue to own the land they are planning to purchase."
Folk said he can only recall his office ordering one divestiture of farmland for non-compliance with the Act in recent years.
"We do basically check every transfer that comes through Land Titles, we do some followup to en-sure the people are permanent residents of Canada or Canadian citizens, and that companies comply with the legislation," he said.
"We're looking at the owners, and if there is any other interests in that farm land. Now, is it easy to hide? That I wouldn't be able to comment on."
Stewart confirmed the province has now hired an investigator with some "special skills" and experience to augment the FLSB's usual efforts.
"You know, there are a lot of rumours out there about foreigners buying Saskatchewan farm land, and so we're trying to be responsive," he said.
"We haven't really found any significant sales yet that are illegal in that respect, at least not recently, but we want to have the investigative capacity to make sure it's not happening."
Folk said his office will work with the investigator, passing along information about any suspicious-looking sales.
"They are basically going to do a little further investigation in terms of source of funds, so it's kind of our next step of investigation that we are following up on," Folk said. "It'll be files that we would like a little bit more snooping to be done on, to see if there's anything that does lead us to believe the owner or somebody else that has an interest in the property is not complying with the legislation."
According to Farm Credit Canada, the value of Saskatchewan farm land has been on a steady upward trend for a decade. Average prices went up 9.1 per cent in the first half of 2012. But compared to provinces where foreign ownership is allowed, such as Ontario, agricultural land in Saskatchewan remains relatively cheap. That combination is attracting attention from investors who have no interest in farming.
"There's still probably some room for upward movement in a more speculative market, but as far as productive capacity, it's pretty difficult for a farmer to pay the prices that land is going for now and expect it to ever pay for itself," Stewart noted.
"So as far as agricultural productive capacity, we're at a high level price-wise already. But when you get speculators - particularly international ones - engaged in the marketplace, actual productive capacity isn't really the main consideration sometimes.
"We don't want Saskatchewan farmers to all be tenant farmers, farming the land for ownership that may be foreign-based. We're pleased to see that farm land values have responded to low interest rates, high commodity prices, and so on, but as far as international speculators affecting the price of land ... we don't think that's a burden we necessarily want our farm families to bear."
lcoolican @thestarphoenix.com
