Saskatchewan’s provincial auditor has identified a number of shortcomings in how the Farm Land Security Board regulates the purchase of farmland by foreign, non-eligible entities.
Unfortunately, rather than embracing the auditor’s recommendations, the newly re-elected Saskatchewan Party government seems oblivious to the concerns.
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Let’s start with a bit of history.
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Back in the 1980s, non-residents of Canada were restricted to 10 acres while non-Saskatchewan Canadian residents could only own 320 acres. That changed in 2003 with no restrictions on how much land Canadian residents could own and also no restriction on corporations that are 100 per cent Canadian owned. In 2016, further amendments to the act and regulations made pensions and trust funds ineligible to own farmland.
The provincial auditor didn’t identify any cases where farmland ownership laws are being breached, but there is certainly opportunity for that to be happening, at least on a limited scale.
The auditor found that statutory ownership declarations are not always being requested, even when the purchaser is a corporation not registered in Saskatchewan.
Even when the board makes declaration requests, the information isn’t always provided in a timely manner. The auditor found the board doesn’t have procedures in place for fines or penalties when documents are not received, even though it has that authority.
The auditor says that in some cases, the board cannot conclude whether transactions are in compliance with the law, years after the land sales have occurred. A foreign entity could buy land knowing it’s likely to be a long time before it is actually discovered and forced to dispose of the property. By then, with rapidly rising land prices, it could have made a handsome profit, without paying any penalties.
Belief of foreign ownership is widespread among Saskatchewan farmers. This may in part be fueled by buyers who have recently become Canadian citizens and are not actually offside on ownership laws.
It’s also widely believed that offshore money must be involved in rapidly expanding large farms. This accusation is often levelled at Monette Farms, although those close to Monette say this isn’t the case.
Even though foreign ownership is more of a perception than a reality, the desire to clamp down on any violations is widespread. That’s why the provincial government’s reaction to the auditor’s report is mystifying.
Freshly appointed Saskatchewan agriculture minister Daryl Harrison could have easily promised actions to address the auditor’s concerns, and this would have been widely welcomed by farmers as well as the urban population.
Instead, Harrison seemed to brush away the auditor’s concerns, both in the legislature and when speaking with reporters. If he truly believes the Farm Land Security Board is doing a good job, he needs to be more explicit.
Having strict farm ownership laws and requiring declarations that money to buy land came from only Canadians or Canadian lending institutions isn’t enough if the laws are being enforced in a lax manner.
Transparency is also important. In cases where foreign entities are forced to dispose of illegally purchased land, why doesn’t that become public knowledge?
Foreign ownership is not actually to blame for the meteoric rise in Saskatchewan farmland values, but not everyone is convinced. The laws exist for a purpose and need to be properly enforced. What’s more, everyone needs to know about the enforcement.
The 40,000 farmland transactions each year in the province are a lot to monitor, but laws aren’t of much use if they have loopholes and aren’t being upheld.
Kevin Hursh is an agricultural journalist, consultant and farmer. He can be reached by e-mail at kevin@hursh.ca.
