On October 20, 2015, Agricultural Minister Lyle Stewart introduced Bill No. 187, An Act to Amend The Saskatchewan Farm Security Act. These amendments are, in part, a legislative response to the Farmland Ownership Consultation completed in the summer of 2015. For the most part, the legislative amendments to The Saskatchewan Farm Security Act enshrine the regulations introduced in April as law. This memorandum summarizes the pertinent Bill 187 amendments. 1.     Repeal of the definition of “agricultural corporation”. The definition of “agricultural corporation” will be repealed. An agricultural corporation is presently defined as: “...a corporation: (i) that is primarily engaged in the business of farming; and (ii) the majority of issued voting shares of which are legally or beneficially owned by producers who are resident persons within the meaning of this Part”. Consequently, all other provisions relating to agricultural corporations will be repealed. The effect of the repeal of this definition is that only entities that meet the definition of “Canadian-owned entity” are permitted to have or acquire an aggregate land holding in excess of 10 acres. For a summary of the consequential appeal of exemption currently related to agricultural corporations see item 6 below. 2.     Expansion and refinement of the definition of “Canadian-owned entity”. The term “Canadian-owned entity” will be expanded to include pension plans, trusts and any other bodies prescribed by regulation. The definition will also be amended to allow for further inclusion or exclusion by regulation. 3.     Newly defined term: “entity”. The term “entity” is a new definition which expands the Act’s scope of application, particularly by inclusion of pension plans, trusts and any other bodies prescribed by regulation. This term is now included with the definitions of “Canadian-owned entity” and “non-Canadian-owned entity”. 4.     New exception to the definition of “farmland”. Land primarily for used sand and gravel extraction will be a new exception to the definition of “farmland”. 5.     Expansion of the definition of “land holding”. The definition of “land holding” will be expanded to include any interest in farm land under an agreement that may directly or indirectly (a) confer the right of obtaining the right of capital appreciation in the farm land or (b) confer any other right that is prescribed in the regulations. 6.     Repeal of exceptions for agricultural corporations and Saskatchewan resident controlled non-Canadian-owned entities. Section 85.1 will be repealed. Section 85.1 currently provides an exception from the restrictions on non-Canadian-owned entity if such entity is an agricultural corporation or a majority of the voting share are legally or beneficially owned by Saskatchewan residents or agricultural corporations. 7.     Expansion of persons prohibited from acquiring a land holding in Saskatchewan. The amendments will provide that the following persons are prohibited from acquiring a land holdings in Saskatchewan: (a) a pension plan, (b) the administrator of a pension plan while that person is acting in that person’s capacity as an administrator, (c) a trust other than a trust that, in the trust instrument creating the trust, lists 10 or fewer individuals, all of whom are resident persons, as beneficiaries of the trust and (d) a person or class of persons prescribed in the regulations. 8.  Express reverse burden of proof. A new Section 92.1 will create a reverse burden of proof, requiring such person to establish that the obtaining or intent to obtain does not contravene the Act. 9.  Increase in penalties. The amendments will increase fines for summary from $10,000 to $50,000 for individuals and from $100,000 to $500,000 for non-individuals.  Additionally, a new Section 93.1 will create administrative penalties of up to $10,000.00.  Section 93.1 established the framework for administrative sanction.

About the author:

Chris is an associate in the Saskatoon office and maintains a Corporate and Commercial Law practice with particular emphasis in the areas of Corporate Finance, Securities, Environmental Law, Commercial Real Estate, Agriculture and Agribusiness.

About McKercher LLP:

McKercher LLP is one of Saskatchewan’s oldest, largest law firms with offices in Saskatoon and Regina. Our deep roots and client-first philosophy have made us a top ranked firm by Canadian Lawyer magazine (2011, 2013). Expertise, experience and capacity provide innovative solutions for our clients’ diverse legal issues and complex business transactions. This post is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances.  Counsel should be consulted concerning your own situation and any specific legal questions you may have.