Canada must curb farmland speculation: Report

Canada has a conundrum: a new generation of farmers wants to take over agriculture, but farmland prices are escalating out of their reach, a new Senate committee report has found.

That puts them at risk of becoming employees or tenants of big land owners, and puts Canada’s own food security at risk if governments can’t find ways to curb investment speculation and keep ownership of Canada’s farmland in Canadian hands.

“What struck me personally is that so many young people want to become farmers,” said Sen. Ghislain Maltais, deputy chairman of the Senate standing committee on agriculture and forestry, “but their hands are tied,” when it comes to their ability to buy land.

The Senate committee released its report, the culmination of two years of work studying the issue, in Vancouver Monday before public hearings on the impact of climate change on agriculture and forestry.

It found that in 2015, it cost, on average, $5,400 to buy an acre of farmland in B.C. and $10,000 in Ontario — the highest price in Canada. The report found multiple factors behind soaring farmland values including low interest rates and strong commodity prices that bolstered farm businesses, but speculative purchases by institutional investors also boosted values.

In British Columbia, particularly in the Lower Mainland, land values have also been pushed higher by buyers who build mega-mansions in agricultural zones, said Richmond Coun. Harold Steves, who is a longtime farming advocate.

“What it amounts to right now, the next generation in Richmond can’t take over (farms), the prices are too high,” Steves said, and he argues that the same dynamic applies across most of the Fraser Valley.

That, Steves said, puts farmers in the position of having to lease fields as tenants, which comes with the insecurity of not knowing how long they will have to recoup investments made in sound farming practices such as composting and crop rotation.

Steves didn’t have any input into the Senate committee’s work, but his advice to its members would be similar to the representations that have been made to B.C.’s agriculture officials: Limit the size of houses that can be built on farm properties, ban foreign ownership and promote methods of land banking that can give tenant farmers long term security.

However, the committee’s conclusion touched on some of the same sentiments that were reflected in committee chairwoman Sen. Diane Griffin’s comments Monday about the choices Canadians have about passing the traditional family farm on to the next generation.

“It’s exceedingly important, in terms of the security of our food supply in Canada that we have Canadian farmers producing food for us on land that they own,” Griffin said.

And Maltais, a senator from Quebec, speaking through an interpreter, said both levels of governments need to act to make sure Canadians remain in control of it.

“If we don’t do our part in feeding the world, the world will come to us to feed itself,” Maltais said, if foreign investment funds buy too much Canadian farmland.

The committee concluded with five recommendations to help make passing farmland from one generation to the next easier and encourage federal-provincial cooperation on ways to curb land speculation.

The key recommendation, however, is that the Department of Finance look at the feasibility of increasing lifetime exemptions from capital gains taxes for qualified farm properties, which would make buying farmland easier.