About farming in Canada

Foreigners with a yen for a nice chunk of rich farmland need look no further than Canada, where the climate for business is as fertile as the soil.

Economy and infrastructure

The Canadian government encourages potential investors, including those interested in the agriculture sector, to take note of the country’s excellent fiscal status and low inflation reflected in low domestic interest rates. Over the past five years, the Canadian inflation rate averaged at 1.6 per cent – 30 per cent lower than the U.S. rate. The OECD (Organisation for Economic Co-operation and Development) projects Canada’s growth to average 2.9 per cent over the 2000-2001 period, second only to France among the G7.

Any discussion of the advantages of investing in Canada begs comparison to her giant ally and competitor to the south. Canada boasts lower overall business costs. For example, electricity, construction, and telecommunications are 7.8-15 per cent cheaper than the U.S., and her labour costs are 20 to 40 per cent less. Canadian manufacturing wages and engineering costs are lower, too. U.S. benefit costs are 31 per cent of total salary, while Canada’s are 18.

Canada’s production input costs – construction, electricity, telecommunications and transportation – are a better bargain than in the U.S., and Canada boasts a high quality, available labour force. Indeed, Canada ranked fourth while the U.S.A. ranked 24th in skilled labour availability. Education quality is tops in Canada – 18 of the 40 highest rated NAFTA Engineering Schools are in Canada. Canadian labour turnover rates are half U.S. rates, resulting in lower overall costs. Canada is immigrant-friendly, offering fewer limitations than other countries to newcomers and their spouses. The OECD says Canada has the highest computer literate population in the G7.

Canada has a world-class technology infrastructure, with the lowest telecom and Internet charges, and the best research and development structure in the G7.

Business climate

Another incentive to invest in Canada is her positive business climate. Canada ranks first in the G7 for ethical business practices. Canada is two to three times less litigious than the U.S. Although Canada has a higher rate of unionisation than the U.S., the U.S. loses more person days per capita than Canada. As well, Canada’s National Food Inspection Agency, the world’s best, ensures the quality and safety of food products.

Trade

Canada also enjoys smooth North American market access. Canada and the U.S. are the world’s largest trading partners with two-way trade of $502 billion in 1999 and $1.7 billion dollars a day in cross border trade. In North America, what is divided by geography is united by transportation. Canadian cities are within a 10-hour drive of 60 per cent of the U.S. market. An added bonus is the NAFTA agreement, which has allowed freer and easier trade for some agriculture-related business. The superior buying power of the American dollar is an important U.S. purchasing incentive.

Quality of life

And Canada is a superior place to live. The country has the lowest cost of living – 17 to 40 per cent cheaper than living in the U.S. Canada is a safe place to do business, ranking fourth in that criteria out of 22 countries. Canada is a multicultural nation, welcoming more immigrants than any other country. Bill C-31, The Immigration and Refugee Protection Act tabled in the House of Commons in February of 2001, reaffirms the government’s commitment to be tough on criminals while strengthening efforts to attract skilled immigrants.

Procedures and regulations

Equipped with evidence of the wisdom of investing in Canada, the prospective foreign farm buyer must next contact Citizenship and Immigration Canada for an application to come to Canada as a business immigrant. There are three categories of business immigrants: investors, entrepreneurs and the self-employed. Farmers are counted in the self-employed category.

Self-employed immigrants must establish or purchase a business in Canada that will keep them employed and contribute significantly to Canada’s economy. To be selected as business immigrants, applicants must meet the selection criteria of the business immigration category in which they are applying. Self-employed applicants are assessed on a point system. Among the criteria are education, experience, personal suitability, and occupational demand. The point system does not apply to persons who apply under the Quebec program; Quebec selects its own business immigrants.

Foreigners are governed by a number of rules and regulations for acquiring land in Canada. A potential landowner will be subject to the Investment Canada Act. Typically, the interested party will have to file a notification of their investment (land purchase) and may be up for review but only if certain criteria are met (e.g. investment is greater than $184 million). Rules and regulations for land purchases vary from province to province.

In Alberta, for example, the Foreign Ownership of Land Regulations prevents foreign citizens from acquiring an interest in agricultural land within the boundaries of a city or town unless they meet a list of regulations, one of which is that they cannot own more than two parcels of land for a total of 20 acres. Manitoba preserves farmland resources for existing and future Manitoba residents.

The provinces of New Brunswick, Nova Scotia and Newfoundland have no legislation restricting ownership of realty by non-residents, but foreign purchases of realty outside the boundaries of a city or town in Nova Scotia must be registered with the Foreign Land Registry Office.