Reuters/Staff — 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 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 per cent Canadian-owned.

The rule also defines “having an interest in farmland” to include any type of interest or benefit, either directly or indirectly, that is normally associated with ownership of the land.

All farmland financing in the province must also be through a financial institution registered to do business in Canada, or a Canadian citizen.

Under rules that were “in place previously and will not change,” the province noted, non-Canadian citizens can still own up to 10 acres of farmland, and exemptions can still be sought for “economic development initiatives.”

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.

Pension plans were banned from ownership before the latest rules, but the province’s Farm Land Security Board (FLSB) still allowed the 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.

The new rules will also give the FLSB “new and expanded authority to enforce the legislation,” the province reiterated Monday.

At the discretion of the FLSB, for example, any person buying farmland must complete a statutory declaration. The onus goes on a person buying land to prove compliance with the legislation.

Fines for breaching the land ownership rules will increase to $50,000, from $10,000, for individuals and to $500,000, from $100,000, for corporations. The FLSB will also be authorized to charge “administrative penalties” of up to $10,000.

Changes to Saskatchewan’s farmland law are in sync with the views of the province’s residents, whom the government consulted at meetings between May and August, Agriculture Minister Lyle Stewart said.

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 per cent 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 for Reuters by Rod Nickel in Winnipeg. Includes files from AGCanada.com Network staff.

Tagged Canada Pension Plan, Canada Pension Plan Investment Board, CPPIB, farmland, FLSB, pension plans, saskatchewan