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Canada: A Growing Concern – How to Keep Farmland in the Hands of Canadian Farmers

Some witnesses said there is still a risk that farmland owned by non-agricultural investors will not be used for agriculture and will eventually be sold for other purposes. To this end, strengthening the legislative framework for farmland protection would make a major difference.

Report of the Standing Senate Committee on Agriculture and Forestry
The Honourable Diane F. Grifin, Chair
The Honourable Ghislain Maltais, Deputy Chair
March 2018
(Must see. Mike)

FOREWORD

In the course of other work, the Committee heard concerns regarding the rising costs of farmland in Canada, including how families could pass their farms from generation to generation and the ability of new entrants to afford to buy land.

The family farm has been the backbone of rural Canada for generations. The Committee felt it would be remiss if it did not undertake a study on the acquisition of farmland in Canada and its potential impact on the farming sector to address these concerns.

The first part of the report focuses on the use of farmland and changes in farmland values. The second part of the report explains changes in farmland values and their impact on farmland availability. The final part of the report outlines ways to ensure access to farmland for future generations of Canadians.

The Committee appreciates the time stakeholders took to talk to us about this very important issue. We would like to thank all who contributed to this study. We hope the findings and recommendations in this report will further enhance the discussions concerning the acquisition of farmland in Canada.
We would also like to thank all of our colleagues who have participated in this study as well as the staff from both the Senate and the Library of Parliament who have helped in the preparation of this report.

EXECUTIVE SUMMARY

The Standing Senate Committee on Agriculture and Forestry undertook a study to evaluate the acquisition of farmland in Canada and its potential impact on the farming sector. During its study, the Committee heard from roughly 60 witnesses from the agricultural sector, academia and the financial sector, and from provincial and federal government officials. The Committee also heard from representatives of conservation organizations.

To gain an international perspective on the increase in farmland values and its impact on the economic productivity of Canada’s major trading partners, the Committee heard from witnesses from Australia’s and Argentina’s agricultural sectors and from international experts. The Committee members also went on a fact-finding mission to Washington, D.C., United States.

As farmland is a major asset for farmers, it was important to understand the use of farmland and changes in farmland values in Canada, as well as the factors behind their upward trend. In addition, this report describes the underlying challenges associated with access to farmland, including farmers’ financial capacity, ownership types and the profitability of the agricultural sector.

Financial stakeholders described ways to tackle the increase in farmland values and issues of access and availability. Other non-agricultural investors can partner with farmers to reduce the risks of farming while offering farmers the ability to benefit from economies of scale. However, some witnesses said there is still a risk that farmland owned by non-agricultural investors will not be used for agriculture and will eventually be sold for other purposes. To this end, strengthening the legislative framework for farmland protection would make a major difference.

Under the Constitution of Canada, the provinces have jurisdiction over the ownership of Canada’s farmland. Consequently, suggestions were made to better protect farmland and its use for agriculture at the provincial level. The Committee also made recommendations to strengthen the financial capacity of farmers, including the next generation of farmers. It also encouraged cooperation between the federal and provincial governments to facilitate land-use planning and to better protect farmland for agricultural uses.

LIST OF RECOMMENDATIONS

RECOMMENDATION 1:

The Committee recommends that the Department of Finance Canada explore the possibility of increasing the amount of the Lifetime capital gains exemption for qualified farm property to make it easier for new farmers to acquire farmland.

RECOMMENDATION 2:

The Committee recommends that
• Agriculture and Agri-Food Canada, Statistics Canada and Natural Resources Canada continue to cooperate to improve the data on the classification and use of farmland; and
• Federal departments better cooperate with provincial departments in order to keep them informed about technological advances in imaging and remote sensing, and the way in which the resulting soil maps could assist provincial land-use planning.

RECOMMENDATION 3:

The Committee recommends that Innovation, Science and Economic Development Canada renew the funding for the national research project on farmland protection through the Social Sciences and Humanities Research Council. This renewal would encourage cooperation between provincial land-use planning experts and support the development of standardized analytical frameworks and tools that would enable harmonized land-use planning data to be obtained for all provinces.

RECOMMENDATION 4:

The Committee recommends that the federal government work with its provincial counterparts to take advantage of initiatives such as the national research project on farmland protection, in order to enhance the tools they need to better track land transactions.

RECOMMENDATION 5:

The Committee recommends that the federal and provincial governments work together to protect and promote the use of land for agricultural purposes.

Read the complete report here. (large download.)