Foreign real estate buyers interested in sinking money into B.C. but less interested in paying the province’s new 15% foreign buyers tax in Metro Vancouver have several options. Farmland is one. That should be raising concern for local food production costs because speculative foreign investment that has been a prime driver in pushing residential real estate prices beyond the reach of many local residents could have the same effect on farmland and its produce.
Unlike its Western Canadian neighbours, B.C. has no restrictions on the foreign purchase of farmland. In Alberta, non-residents are limited to owning 20 acres of agricultural land; Saskatchewan limits non-residents’ farmland ownership to 10 acres.
As pointed out in a Vancity report released earlier this year, cost pressures on Metro Vancouver farms driven in large part by land costs are eroding their financial viability.
It pointed out, for example, that, while the economics of most B.C. farms becomes questionable when per-acre land prices hit $80,000, the current per-acre market price for the region’s farmland ranges between $150,000 and $350,000 for parcels of less than five acres.
The report noted that 35% of leased farmland in Metro Vancouver is owned by businesses, “many of which are holding companies.”
Many of those are holding land in hopes that it will be freed from agricultural land-use requirements.
More government meddling in the real estate marketplace is rarely good for its long-term health, but the growing importance of local farmland requires initiatives to limit speculation over its use. For example, the Agricultural Land Reserve (ALR) inventory needs to be updated to determine which parcels are really viable farmland and which will never be. Applications for ALR exclusions for viable farmland should then be prohibited permanently.
Removing doubt over farm futures would help cool foreign and domestic property speculation, reduce dependence on food imports and promote more local production. That would be good for local diets and local growers’ bottom lines.