Mandryk: Sask. agriculture minister's denials on foreign farmland ownership bizarre

[chuckChuck]

Mandryk: Sask. agriculture minister's denials on foreign farmland ownership bizarre

While foreign ownership of Saskatchewan farmland is a major concern to the provincial auditor, the provincial agriculture minister denies it's a problem.

Published Dec 05, 2024 • Last updated 3 days ago • 3 minute read
([url]https://leaderpost.com/opinion/columnists/mandryk-sask-agriculture-ministers-denials-on-foreign-farmland-ownership-bizarre#comments-area[/url])

Saskatchewan farmland is getting more pricey and the provincial auditor is suspicious foreign investment is involved. Agriculture Minister Daryl Harrison begs to differ. Photo by BRANDON HARDER /Regina Leader-Post

According to newly-minted Agriculture Minister Daryl Harrison, foreign ownership of Saskatchewan farmland isn’t really a problem.

But it’s perhaps the biggest problem in agriculture today, according to provincial auditor Tara Clemett ([url]https://leaderpost.com/news/saskatchewan-auditor-concerned-with-tracking-foreign-ownership-of-farmland[/url]) and a whole lot of farmers.

Any minister seemingly denying a well-explored problem raised by the provincial auditor in a formal report seems troubling.

But maybe the bigger problem for the Saskatchewan Party government is having an agriculture minister who doesn’t comprehend a serious issue in his portfolio — a surprising problem for a governing party that won every constituency in the October vote that had a farm within its borders. The standards for this portfolio have been high.
Consecutive agriculture ministers from Bob Bjornerud to Lyle Stewart to Dave Marit all demonstrated a knack for homing in on the issues that are most important to rural and farm voters.

The issues have often been difficult — none more so than the critical problem of rising farmland prices.

They’ve gone up by a nation-leading 391 per cent since 2001 and 259 per cent since 2016. That should be the one issue that would most pique the new agriculture minister’s curiosity.

Frankly, whether farmland is still affordable in rural Saskatchewan is an issue that people have been talking about for years now. Certainly, it’s a big reason why the number of farms in Saskatchewan has declined 82 per cent to 24,523, compared to a peak of 138,713 in 1941.

Everyone knows big money is behind bigger and bigger farms. However, what no one knows — including the auditor and the Farmland Security Board — is how much farmland prices are being driven up by foreign interests.

“Having foreign entities buying Saskatchewan farmland does increase the risk that we don’t have Saskatchewan and Canadian residents that own that farmland, and it could be making prices higher than they should be,” Clemett told reporters Tuesday morning during the release of Volume 2 of her 2024 report.

Her report noted the Farmland Security Board did not request proof of residency for purchases made by out-of-province corporations in nine of 18 purchases, and further noted 140 exemptions were granted in the last five years, many to European companies.

Maybe that doesn’t seem horrific, given that there are 40,000 land transactions annually. And the provincial auditor admits she “can’t say the extent” of the problem.

But, critically, her report notes the board has an “effective process except” it needs to insist on statutory ownership declarations, review transactions more quickly than five months after they happened, “set escalation procedures for non-compliance” and “determine how to effectively regulate farmland leases” where the problem may be much greater than ownership.

Such recommendations seem perfectly reasonable, even stopping short of the more restrictive measures in Manitoba and Alberta, which require a review before finalization of land transactions instead of after the fact, as is Saskatchewan’s approach.

But rather than help alleviate concerns by suggesting there actually might be a problem, Harrison stuck to the nonsensical talking points he was fed by communications staff.

Multiple times in the chamber, he emphasized that the auditor said there was an “effective process.” Dutifully, Harrison critically omitted the word “except” and didn’t properly acknowledge her recommendations.

Later, he told reporters there is “no foreign ownership” (except for the 140 examples Clemett cited). And he insisted “the audit did not find any confirmed instances of unauthorized foreign ownership” (except that the Farmland Security Board didn’t even ask for proof of Canadian residency on half of the out-of-province purchases cited).

In fairness, Clemett’s office can’t say to what extent foreign ownership and leasing are driving up farmland costs. And Harrison may be right that some foreign entities could be mining or oil companies, or other ventures.

But it was irresponsible for a minister to simply misrepresent the intent and words of an officer of the legislature the way he did.

Without fact or substance, what he mostly offered was flat-out denials to thoughtful, careful concerns in a provincial auditor’s report.

We’ve come to expect better from the Sask. Party agriculture minister.

Mandryk is the political columnist for the Regina Leader-Post and the Saskatoon StarPhoenix.?

[chuckChuck]

You gotta wonder about the new rookie ag minster in Saskatchewan who seems to not care if foreign controlled corporations and foreign investors are buying up large amounts of Saskatchewan farm land after the Auditor raised red flags?

Does that mean Daryl would accept Chinese investors covertly funding large land purchases?

Is he not even curious enough to say we need to look into this and determine what has happened?

Either the rookie minister is over his head, or worse, doesn't care.

Because there are a lot of young farm families that have been priced out of competing for farmland. The end result will be further consolidation and declining rural communities.

I

[blackpowder]

Farmland values are set by demand.
Be thankful prices are going up.
The rate of increase since 2001 is a direct result of previous protection from market forces. You can't freeze time. Or reverse it. SK had it's head in the sand for generations.
No one wants foreign ownership.
Foreign cash has always been another matter.

[farmaholic]

Grain farming in Western Canada seems to be moving closer to serfdom every passing year. I'd bet in some areas the landlord makes as much, or more, than the guy farming the land who is taking all the risk growing the crop.

I don't feel the need to compete with neighbors/friends/relatives to say I'm farming the same amount or more acres as them. ...at my "expense".

The current grain prices hardly justify current rent prices, this isn't 2021/22 any longer.

[AlbertaFarmer5]

Grain farming in Western Canada seems to be moving closer to serfdom every passing year. I'd bet in some areas the landlord makes as much, or more, than the guy farming the land who is taking all the risk growing the crop.

I don't feel the need to compete with neighbors/friends/relatives to say I'm farming the same amount or more acres as them. ...at my "expense".

The current grain prices hardly justify current rent prices, this isn't 2021/22 any longer.

I agree. The thought that farmers will all be tenants, which our ancestors came here to get away from is depressing. Hard to blame the farmers themselves, what other options are there?

But what is the solution?

How much more government intervention do we want into our businesses?

I think it could be addressed through taxes, property taxes, capital gains and income taxes could all be prohibitively high on land that is not being actively farmed by a bona fide farmer.

The problem with that is that the line between an active farmer and an absentee landowner hiring custom farming is blurry and would be a loophole big enough to drive an x9 through.
?

[farmaholic]

BP, Sask was definitely in a low price bubble. It was the worst kept secret right under every Sask-farmer's nose. Too bad I didn't capitalize on it to some extent post 2008(with early purchases in the parabolic price increase since that time). When ever I bought land between 1986 and 2004 it always seemed like too much at the time. In fact land prices did fall after my first purchase in 1986 so in essence it was too much "at the time".

In my opinion land price increases have cooled, there seems to be increases here, but not in leaps and bounds like the past. So if the speculative side of buying land has cooled, maybe it's up to guys actually farming rented land to not make absentee land ownership so lucrative for foreign owners or even "estate beneficiary" land owners.

For land beside me I wanted my whole life, not farmed for 3 decades now by the family who generationally owns.... what's their incentive to sell it with the current high rental price they're receiving?

Will we ever get to a time again when owning farmland was a bit of a liability for someone who didn't actively farm it themselves?

[blackpowder]

The older I get the more I see that all things come to an end.
My grandfather's farm is going up the nose of the fourth generation.
Even John Dutton failed to maintain any legacy. Even the word is mis-used.
Vagaries of human nature will never change. Manipulation of market forces only cushion the cycles.

[blackpowder]

Is 2.5% of market value a lucrative income?

[farmaholic]

Is 2.5% of market value a lucrative income?

No. It might be closer to a 3.5% ROI here(not including appreciation), which still isn't.

But in situations where the landlord is making about as much per acre as the tenant, that might be a better measuring stick.

Then there is hopefully value appreciation for whomever is owning the asset.

[checking]

Not that this actually represent your value system, but that new truck that was equivalent to the price of the quarter up for sale next to you, at the time, was more important. Ten years later, said truck was parked, rusting with scrap value, on the property line next to the quarter you thought was too overvalued at the time. Choice, best word in the dictionary.

Do you own any possession that you would not part with for any value offered? Some don't, some do. At least one does, because I do. Yet some would penalize me for refusing to sell it. I consider you no better than government.

Be thankful that farmland values are going up. I'm not. Up to 2010 I owned, free and clear, the possession I value more than money. At the present time, the government owns more than half of it in a waiting game that it may change to-morrow thru legislation caused by their funny money decisions, not mine. It is difficult to accept it, and becomes more difficult when peers think the same way.

[farmaholic]

Checking, I agree with some of your thoughts.
Although I can't buy what has never been for sale(beside me)!

I may not own a schwack of land but was able to put a nice block together, buying when other people would have had their heels dug in or sitting across the table with their arms crossed and scowling eyebrows. ....like me the last 15 years.

[blackpowder]

I have a landlord that has never risked his neck in farming since he was given the land 50-60 years ago.
Although he has managed his capital gains risk. His beneficiaries will sell it when it becomes a burden. I agree that taxes are a double edged sword.
I have no answers. I only know that change is inevitable and time unstoppable. If something holds no value, it will be wasted eventually. And if you have something of value, there will always be someone who wants to take it from you.

[LEP]

Don't fool yourself when you look at your net worth. Estate taxes like in the UK and US are coming.

That is how governments will pay for Trudeau's mess.

[shtferbrains]

Equity growth in agriculture has been a bright spot in the stagnant economy.
Low hanging fruit for governments buying votes from those tiny spots on the map that elect the LPC?

[LEP]

Absolutely. Most Canadians have no tie to the farm. They don't care if your farm reaches 3, 4 or 5th generation intact.