Multiple elements are driving farmland values up such as purchases by agriculture multinationals and by institutional investors such as pension funds and trusts.
Canada must curb farmland speculation to keep grip on food security: Senate report
VANCOUVER — Canada risks losing control over its own food security if governments can’t curb investment speculation on its farmland that has sent property values spiralling out of reach for the next generation of farmers.
That is the conclusion of a Senate committee report released in Vancouver on Monday that investigated the impact of soaring farm values on agricultural production.
“Farming is a challenging way to make a living at the best of times,” said PEI Sen. Dianne Griffin, chairwoman of the Senate standing committee on agriculture and forestry.
Griffin noted 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.
So, the rising cost of acquiring farmland is emerging as a new issue that is “becoming a deterrent to the next generation of Canadian farmers.”
The committee’s hearings heard evidence that multiple elements are driving land values up such as the encroachment of urban development, purchases by agriculture multinationals and by institutional investors such as pension funds and trusts.
Canada has a substantial agricultural sector that is increasingly important to feeding a growing global population, said committee deputy chairman Sen. Ghislain Maltais, and 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,” if foreign investment funds buy too much Canadian farmland,Maltais said.
And if young farmers cannot buy their own farmland, they will simply become employees for big agricultural multinationals.
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.
“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.