Foreign Investment in Canadian Farmland and Forests: What Are the Rules?

Are you a first-time investor in Canadian agricultural land or forests and unsure where to start? This article provides an overview of the federal and provincial legislation governing foreign investment in Canada.

The Investment Canada Act

All foreign investments in Canada are subject to the Investment Canada Act (ICA), which is regularly updated to address concerns about national security and the use of Canadian resources. The most recent amendments, from September 2024, expanded national security reviews of foreign investments in specific sectors such as high-tech, natural resources (minerals), and digital media. However, no changes have been made regarding the purchase of land by foreign entities.

Regulations for Investments into Canadian Farmland and Forests

When it comes to agricultural land, current federal legislation allows each province to regulate the purchase of farmland and forests by foreign citizens or corporations. As a result, there are varying approaches across the provinces and territories.

In fact, only a few provinces have no restrictions on foreign ownership of agricultural and forest land. These provinces are

• British Columbia
• Ontario
• Nova Scotia
• New Brunswick
• Newfoundland and Labrador.

All other provinces and territories impose restrictions on either the amount of farmland or forests that can be owned by non-residents or foreign entities. Quebec takes this one step further, requiring specific authorization from its agricultural regulatory authority.

For more detailed information, we recommend consulting the article by Blakes law firm providing a comprehensive guide to the regulations in each Canadian province.

Foreign Investments in Canadian Agriculture and Forests

At FIAN, we currently manage investments in farmland and forests for our foreign clients in Ontario, Nova Scotia, and New Brunswick:

• Farmland in Southwestern Ontario: Known for its excellent soil quality, agricultural land has seen continuous improvement through the adoption of regenerative agriculture practices. Farmland values in this region have surged in recent years, driven by strong operational returns and rising demand for agricultural land.
• Forests in New Brunswick and Nova Scotia: We are revamping our investment model in these provinces. The objective is to generate carbon credits through sustainable forest management practices, in addition to traditional logging revenues.

Conclusion

In conclusion, Canada remains a highly attractive destination for foreign investors seeking secure investments and solid returns.

With its stable economy, vast natural resources, and well-regulated investment landscape, Canada offers a unique opportunity for foreign investors looking to diversify their portfolios.