In an effort to keep Ontario’s farmland in the hands of Ontario’s farmers, the Ford government proposed the Farmland Security Act last week as part of the newly introduced Protecting Ontario’s Food Independence Act.
The act would restrict foreign investors from buying farmland in Ontario, aiming to secure the province’s long-term food sovereignty.
“Our proposed legislation aligns us with five other provinces and other U.S. states, which currently have legislation restricting the amount of farmland non-Canadian individuals or entities can acquire in place. Regulations will be developed through consultations to ensure the approach is targeted, evidence-based, and gets it right,” said Spencer Fair, press secretary for the Minister of Agriculture, Food and Agri-Business.
Currently, the government is in the consulting stage, meeting with partners, including farmers, municipalities and industry, to work out the details of how the restrictions will apply.
Many Ontario agricultural experts were surprised by the proposed legislation, as foreign ownership of farmland is not a pressing issue in the province. While the Ontario government has not provided specific data on the total acreage of farmland owned by foreign investors, a 2013 survey of southern Ontario farmers suggested that only roughly one per cent of the land rented by Ontario farmers was owned by foreign investors.
“Nobody was expecting this, and I didn’t really think there was any need for it. There hasn’t been any pressure from foreign investors buying land for many, many years now,” said Philip Chabot, a farm broker involved in farm sales in the Ontario and Manitoba markets since the early 1980s.
“All across the province, very little land is going to foreign investment, like minuscule [amounts]. I don’t even remember the last time we sold any farmland to a foreign investor.”
He noted that his biggest customer for buying farmland in Canada is still Ontario farmers.
“Outside of that, in Canada, a few investment firms have been buying land, but they’re predominantly Canadian. It’s predominantly all Canadian-owned, and it’s all [for] pension funds and that sort of thing,” explained Chabot.
Rather than mysterious overseas players, some of the biggest investors in Ontario’s farmland are Canadian, including Bonnefield Financial, Area One Farms, and the Ontario Teachers’ Pension Plan (OTPP).
According to Chabot, domestic investors can play a key role in enabling new farmers to access more farmland without taking on massive debt.
“The companies that have been formed in the last 10 to 15, years in Canada that are acquiring farmland and leasing it back to farmers for pension funds or for independent family corporations, that sort of thing, investment firms, they’ve been providing capital for farmers to transition from somebody who’s farming 100 or 200 acres, to being able to farm 1,500 or 2,000 acres, if you need that many acres to be efficient,” explained Chabot.
“It’s just impossible to buy it if you don’t have a source of capital that will lease it back to you at a two per cent return.”
In southwestern Ontario, the average price of farmland is $33,700 per acre. A new farmer looking to buy even 50 acres of farmland would need more than a million dollars to get started.
Chabot added that other provinces, such as Alberta and Quebec, have introduced legislation similar to the proposed Ontario Farmland Security Act, yet have still seen increases in farmland prices similar to those in Ontario.
Urbanization is a key factor driving up farmland prices as developers and farmers compete for land. According to the National Farmers Union, Ontario loses approximately 319 acres of agricultural land every day to development and non-agricultural uses, such as mining. Over the past 35 years, this has resulted in the loss of 18 per cent of Ontario’s farmland.
“I would wager that land owned by developers and land speculators far outweighs land owned by foreign individuals,” said Martin Straathof, executive director of the Ontario Farmland Trust.
“This [act] is really essentially just preventing the foreign ownership of farmland, but not addressing the other threats that come with it.”
Straathof cited threats to farmland, such as urban sprawl, forced urban boundary expansion, and developers and land speculators buying up agricultural land.
“Farmland has tripled in its average price per acre from 2015 to 2025,” explained Straathof.
“A big part of that is that, if you think about it from the simple economics, if there’s less farmland, and at the same time, farms need to get bigger to remain viable, there’s a lot of competition for the depleting agricultural land base that we have in Ontario. So, removing competition to purchase land from folks like land speculators will make it easier for farmers to be able to own their land, and also make it more affordable.”
So far, there is nothing in the act that keeps farmland specifically in the hands of farmers.
The Farmland Security Act “just talked about keeping it (farmland) locally owned. And land speculators and developers from Ontario would be considered locally owned,” said Straathof.
“If we’re thinking about wanting to keep ‘land in the hands of farmers,’ as that quote from the minister had said, that’s not what this is getting at, at all. It’s just preventing foreign buyers from owning land. And again, there’s no data that backs up that it is something that’s going to lead to farmland security.”
The Farmland Security Act has not yet been passed, and Straathof noted that the devil will be in the details of the regulations that emerge.
“There’s a lot of opportunity for the province to step up in a lot more meaningful ways, to be able to help keep land in the hands of farmers and protect it for long-term agricultural uses,” concluded Straathof.
