Land ownership in Canada is held by governments, corporations, native groups and individuals. Since Canada uses common law that is primarily English derived, the holders of the land actually have land tenure which is the permission to hold land from the crown rather than absolute ownership. Canadian agriculture has experienced a markedly distinct evolution in each region thus increasing the demand for land ownership in Canada. A varied climate and geography have been largely responsible, but each and every region has been settled at different period in the economic and political development in Canada with a range of national and international forces being exerted. The government has been the unifying factor from the colonial era to the present.
Why Agricultural Land ownership in Canada is booming
The boom in the farming land ownership across Canada which began three years ago, continues in high gear. A good deal has been heard and written lately about this great land boom in Canada which has attracted thousands of immigrants from various parts in past. Never in the history of North American continent or any other part of the world has there been a boom in land so feverish, so long continued or so widely extended, or with prices so enormously inflated as that now in progress in Canada.
About 115,000 acres of land in the southern part of the province of Canada produces agricultural products such as barley, wheat and canola which are products that have made price to tremendously increase in the past few years due rising global demand. Prices of farmland in Canada has risen by approximately 12 per cent each year since 2008, this is attributed to rising yields of the crops, low interest rates and also growing markets in the overseas. According to Farm Credit Canada which is a lender, the value of farms in Saskatchewan has increased steadily since 2002 due to the increased demand for land from buyers coming from other provinces. This is an attractive high opportunity for people to invest in a platform that is extremely established with farmland of high quality in a strategically agricultural regions of Canada.
The portfolio of land generates returns through price appreciation, leases and some production-sharing agreements with the growers. Agricultural products are expected to enjoy demand as the level of incomes rise in emerging real estate markets. Also they are deemed to enjoy the shifts in diets to more protein as well as high value crops such as canola. In the long run there is increasing demand for agricultural product, population growth and at some point the suppliers are uncertain and constrained.
The main reason prices of land have gone so high in Canada is the excess of cash in hands of the farmers who are protected by marketing boards but are unable to spend on new quota. But in Saskatchewan the demand is being driven by interest from out of province buyers while some farmers who are retiring have decided to sell their blocks of land while the price is still good. Having those who contributed so much for so long to the heart and soul of Saskatchewan retire in dignity is a wise thing. The government has controls in place that continue to limit the ability of absentee foreign nationals from owning too much land in Canada, but there is no easy mechanism to track where all this money to buy the land comes from.
Also while the prices are good for those who really want to leave the land, the cost makes it hard for the next generation to take over. This is could be due to the tendency to sell farmland with first advertising it in the province. There also exists the danger that higher interest rates or bank failures may dictate Saskatchewan’s agricultural potential but in the meantime the influx of new capital into the province is a greater contributor to the booming economy of Canada.
Farmland prices in Canada have been increasing with an annual increase of about 10 percent. This new world of extremely escalating prices speaks well of the buyer’s confidence that they have in the future considering Saskatchewan is a province in Canada that hit the skids in the early 1980s when there was very high interest rates, various attempts at nationalization and extremely restrictive legislation land ownership which froze the prices.