Saskatchewan tweaks law to set farmland off limits for pension plans

Mon Dec 21, 2015 12:49pm EST
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WINNIPEG, Manitoba Dec 21 (Reuters) - New rules for buying farmland in Saskatchewan, Canada's biggest wheat- and canola-growing province, will take effect Jan. 4, and toughen its ban on pension plans investing, the provincial government said on Monday.

The changes make more explicit an existing ban on pension plans and trusts from buying land and continue to limit purchases of more than 10 acres to Canadian residents and corporations that are 100 percent Canadian-owned.

Saskatchewan's farmland has long been attractive to foreign investors, with values rising even as prices ease in other fertile areas like the U.S. state of Iowa.

Although pension plans were banned from ownership before the latest rules, the Saskatchewan Farm Land Security Board still allowed Canada Pension Plan Investment Board (CPPIB) to buy 115,000 acres in 2013 on the basis that its corporate structure was unique, touching off calls to close loopholes.

Changes to Saskatchewan's farmland law are in sync with the views of the province's residents, whom the government consulted earlier this year, said Agriculture Minister Lyle Stewart.

But CPPIB, in a letter to Stewart and Saskatchewan Premier Brad Wall earlier this year, said that a diverse set of investors provides stability and liquidity.

The province's farmland values rose 19 percent in 2014, the fastest rate among Canadian provinces, according to Farm Credit Canada.

They have risen every year since 2002 and keeping farms in local hands has been a passionate political issue in the province.

The Saskatchewan Party government passed the amendments to its Farm Security Act in November. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by James Dalgleish)