Pension funds and other institutional investors will be prohibited from purchasing farmland in Saskatchewan while the provincial government reviews its farmland ownership rules, Lyle Stewart, Saskatchewan agricultural minister, said Monday.
The review will focus on the 1974 Saskatchewan Farm Security Act, which limits farmland ownership in the province to Canadian residents and 100% Canadian-owned corporations. However, the law does not explicitly define institutional investors such as pension plans or administrators of pension fund assets and trusts.
Under the act, a Canadian-owned entity must be an “agricultural corporation,” primarily in the business of farming, in which all the shares or interests are owned by Canadian citizens or other Canadian-owned entities. It bans any entity that has its shares listed on an exchange.
Farmers in Saskatchewan have complained that the acquisition of farmland by the C$238.8 billion ($191 billion) Canada Pension Plan Investment Board, Toronto, has artificially inflated land prices and kept small farmers from expanding their operations.
“Recently, the issue has arisen of whether institutional investors like pension plans should be able to purchase Saskatchewan farmland,” including whether pension plans should be defined as not Canadian-owned entities, Mr. Stewart said. “There are differing views on this matter, so we want to hear from producers and other interested Saskatchewan residents.”
CPPIB said in a news release that it was “concerned about the Saskatchewan government's decision” and did not receive any indication when it bought farmland in the province in 2014 “that its investments in farmland were not welcome.”
CPPIB “is quintessentially Canadian,” the release said. “It was and still is permitted to buy the land under the Saskatchewan Farm Security Act.”
CPPIB acquired the assets of Assiniboia Farmland, a fund that owned and managed 115,000 acres of Saskatchewan agricultural land, with an initial equity investment of C$120 million.
Details of the province's consultation process will be announced later this spring.