Farmers turn their eyes to P.E.I.’s red dirt
Land values on Island rise more than 13%
Tyler Hinsperger has been farming in Ontario for as long as he could reach the pedals on his father’s tractor.
But last year Hinsperger traded his 120 acres of Ontario farmland for about four times as much in P.E.I.
“There’s too many people trying to fight over land and it’s driving the ( Southern Ontario) prices up too high,” Hinsperger said, explaining his decision to move.
Demand from farmers like Hinsperger is one of the reasons P. E. I farmland values increased by 13 per cent in 2016, more than in any other province, according to figures released this week by Farm Credit Canada (FCC.)
It is the second- highest annual increase on record for P. E. I., according to the FCC, and bucks a nationwide trend that saw overall farmland value growth slow to 7.9 per cent in 2016, down from 10.1 per cent the year before and 14 per cent in 2014.
Alberta came in second to P. E. I with an increase of 9.5 per cent in 2016. Nova Scotia saw an increase of 9.1 per cent and British Columbia saw an increase of 8.2 per cent.
While newcomers have played a r ole in P. E. I . , Charles Dubé, an FCC appraiser for the Atlantic provinces, attributes the majority of the increase to farmers expanding their existing operations there.
“The demands that have occurred on P. E. I. this year are mostly small appraisals which were bought by either neighbouring farmers or farm entities that are looking to expand their land base in order to either provide for a better crop rotation schedule for the crops and also for producing forage crops for their livestock,” he said.
“It could be just a small farmer with a 100 acres looking to get an extra 45 acres or it could be a large farmer just wanting to have a better rotation schedule for his crops.”
David Mol, the president of the P. E. I. Federation of Agriculture said P.E.I is simply playing catch- up to the other provinces, which have enjoyed much faster price appreciation over the past decade.
“Because P. E. I. is so small it doesn’t take a big fluctuation in any one of those things to upset the market,” he said.
“I think our size works against us that way. If you can get twenty farmers coming to P. E. I. to buy land it’s a big deal. You get twenty farmers moving from Alberta to buy land in Ontario, nobody notices it.”
From 2005 to 2015, Ontario farmland prices rose by 150 per cent, the thirdlargest percentage increase in Canada, according to an analysis of Statistics Canada data. That trailed only Saskatchewan and Manitoba at 200 and 175 per cent, respectively. P. E. I, meanwhile, saw the smallest per cent increase in value per acre during that time period.
The average value per acre of land in Ontario was about $10,000 in 2015 — far ahead of the second- most expensive land, in B.C., at around $5,400 per acre. In P.E.I., the average acre was valued at $2,700 in 2015.
Hinsperger said he would have had to use his farm as equity to buy more land in Ontario if he had stayed there. “If I threw my entire salary at that mortgage payment and everything I would net off that farm I wouldn’t even be able to make the mortgage payment on that farm for the year,” he said.
For young farmers looking to enter the market and buy land, the challenge is even greater. “I don’t believe that there’s any way a young person — if you’re not already i nvolved i n farming — I don’t believe there’s any way you can do it in southern Ontario,” Hinsperger said.