The Canada Pension Plan Investment Board, the country’s largest pension fund manager, said on Monday it is concerned about the Saskatchewan government’s decision to temporarily ban certain institutional investors from buying farmland in the province.
The western province said on Monday it plans a review of farmland ownership rules under the Saskatchewan Farm Security Act. Pension plans and other institutional investors will be unable to purchase farmland in Saskatchewan while the review is ongoing. No completion date was given for the review.
In January, Reuters reported the province, whose plains grow more wheat than Argentina, is likely to tighten what are already some of North America’s strictest rules for buying farmland as Saskatchewan looks to fend off big money managers hungry for what they see as a winning investment.
Saskatchewan law already requires that companies that invest in farmland be 100 percent owned by Canadians. Purchases by pension funds are also banned, but the Saskatchewan Farm Land Security Board allowed CPPIB to buy 115,000 acres in 2013 on the basis that its corporate structure was unique. CPPIB made a $128 million purchase of cropland assets owned by Assiniboia Farmland.
“Our goal is not to limit investment but to ensure the long-term success of Saskatchewan’s agriculture industry and economy,” Lyle Stewart, the province’s agriculture minister, said in a statement.
The province plans to release details on the consultation process later this spring.
The CPPIB, which manages contributions from 18 million Canadians to support the Canada Pension Plan, said it had ensured it was a qualified buyer before it bought farmland in the province and notified Saskatchewan’s Farm Land Security Board about its plans in advance.
CPPIB said it did not receive any indication at the time that its investments in farmland were not welcome.
“We are confident that our farmland investments will generate returns for the CPP Fund while doing no harm to Saskatchewan, its farmland market or the farmers,” CPPIB’s senior managing director Michel Leduc said in a statement.
(Reporting by Euan Rocha; Editing by Cynthia Osterman)
(This story has been edited by Kirk Falconer, editor of peHUB Canada)
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