My apologies for the cheeky “FAKE NEWS!” reference, but it does seem appropriate under the circumstances.
The Standing Senate Committee on Agriculture and Forestry just released a report entitled “How to Keep Farmland in the Hands of Canadian Farmers” and the few news outlets that noticed the report, seem to have widely mis-quoted its conclusions. The National Observer, for example quoted a Committee member as saying “…financial institutions, investment funds and foreign multinational companies [are] buying up Canadian farmland, which drives the prices up more and turns farmers into employees rather than owners of their land.” And Agri Investor carried the headline: “Canadian lawmakers warn against investment funds targeting farmland”.
For the record, the Committee’s report carries no such warnings and makes no recommendations against foreign ownership or investment funds.
While the report does acknowledge that some of the witnesses that appeared before the Committee in its 18 months of hearings expressed such concerns, the Committee’s report refrained from recommending measures that would limit either foreign ownership or institutional investment. The report also mentions other witnesses (such as Bonnefield’s Tom Eisenhauer, Farm Credit Canada, several academics and others) who found no evidence that foreign ownership or institutional investment in farmland are problematic in Canada. Indeed, the report sites examples of Bonnefield and other investors playing a positive role in providing financing alternatives to Canadian farmers and helping them reduce debt, grow their operations and transition their farms to the next generation.
While the Senate Committee’s report was not the anti-business manifesto that some news articles might lead you to believe, it was also not the call to action it could and should have been. In fact, it represents a missed opportunity to provide clear direction to lawmakers with firm recommendations for ways to ensure that Canadian farmland is protected and maintained for farmers and farming.
The report’s five recommendations range from soft (gather more data, better cooperation between levels of government, more funding for research) to downright bizarre. The report’s number one recommendation for keeping farmland in the hands of farmers? Increase the lifetime capital gains exemption for farm property. In the Committee’s view, increased capital gains exemptions will somehow help new farmers acquire farmland. Just how is unclear, as the report does not explain the connection between an increased tax exemption on the sale of a property, and easier acquisition of property by new farmers. Increased capital gains exemptions would certainly be good for retiring farmers. But new farmers? I don’t get it. New farmers need new forms of financing to build their businesses, not tax exemptions upon retirement.
Sadly, I don’t think Canadian farmland is any more protected from development or urban expansion, nor young farmers any better able to grow their farms, as a result of this Senate Committee’s report.
Note: the text of Tom Eisenhauer’s presentation to the Senate Committee, and Bonnefield’s recommendations for protecting Canadian farmland can be found here.