Canadians lock out foreign investors, snaps up $4b of Aussie farms

Canada’s state-owned PSP Investments has bought up swathes of Australian farmland. But our special investigation reveals you can’t do the same over there.

Canada’s PSP Investments recently bought NSW-based farming giant Auscott and its water rights for $500 million. Picture: Andy Rogers

Canada’s largest state-owned pension fund has snapped up more than $4 billion of Australian farms and irrigation water, while its provincial government strictly limit the amount of rural land foreigners can buy in its massive maple-leaf states.

Australia’s relatively open foreign investment rules have allowed Canadian crown corporation PSP Investments to become our biggest foreign land owner, by value - holding a vast array of dairy, cotton, cattle and cropping properties.

But back in Canada, provincial governments have imposed non-resident land acquisition acts that restrict foreign ownership “to limit speculation and support the development of strong rural communities”.

In French-speaking Quebec, where PSP Investments runs its principal office, the provincial government limits foreigners to buying a maximum of 4ha of farm land.

Any foreign company or individual who wants to buy more than 4ha of rural land must first gain approval from the Commission de la protection du territoire agricole du Québec, which caps the total area of land sold to all foreigners each year at 1000ha.

The legislation even demands Canadian citizens must have “lived in Québec for not less than 1095 days during the 48 months immediately preceding the date of acquisition of farm land”.

Further west in the hearts of Canada’s grain belt the provincial government of Saskatchewan’s Farm Security Act states: “no non-Canadian-owned entity shall have or acquire an aggregate land holding in excess of 10 acres (4ha)”.

In Alberta the law states non-Canadians and foreign-controlled corporations can only own “up to two parcels of controlled land, which cannot exceed 20 acres in total”, with the only exemptions relating to the construction of pipelines, processing plants, extractive industries, residential developments and digging a cemetery plot.

Manitoba’s Farm Lands Ownership Act restricts foreign interests in farm land to 40 acres “to limit speculation and support the development of strong rural communities

When asked if PSP Investments supported Canada’s predominantly protectionist policy when it comes to foreign investment in farmland, the crown corporation’s media Adviser Verena Garofalo stated “we will not participate in this article”.

Nationals leader Barnaby Joyce declined to comment on Canada’s protectionist policy, with his spokesman simply stating the Coalition had made changes that ensured “foreign investment in our agricultural land and agribusiness is in the national interest”.

The National Farmers Federation also dodged a similar question.

But former NSW Farmers Association executive council member Jock Munro said it was outrageous that Australia allowed Canada to buy up whatever they wanted, while they protected their own patch.

“It shows how stupid we are, selling off our competitive advantage (in agriculture),” Mr Munro said. “We’ve already sold off our co-ops and supply chains.”

Mr Munro said Canada was no different to many other nations that had invested in Australia, such as China, while limiting or banning foreigners from owning farm land back home.

“I have friends who’ve come back from China, who tell me they’re (the Chinese) are quite bemused that we sell off our land (to foreign companies).”

Grains Growers chairman Brett Hosking said Australia was far more open to foreign ownership than Canada, but said “we need foreign capital boost the nation’s prosperity”.

“(However) we don’t want family farms shut out, because they drive our communities,” Mr Hosking said.

“Foreign investors will purchase three or four family farms, which chips away at the resilience of these communities.”

Mr Munro said it was nonsense to argue Australia needed foreign capital, if all they were doing was buying “going, developed farms”.

“There’s every possibility that Australia will become a nation of serfs.”

Montreal-based PSP Investments manages the pension funds of 900,000 public servants, the armed forces and the Royal Canadian Mounted Police, worth about $204 billion (Convert to $AUS), as of March this year.

In its 2021 annual report PSP Investments states it is “committed to upholding the high standards of corporate governance and ethical conduct expected of a Crown corporation of the Government of Canada.”

All up PSP holds $6.1 billion of assets and investments in Australia, with its directors appointed by the Canadian Government, which also sets its risk tolerance for its investment funds.

EDITORIAL: TIGHTEN GRIP OR LOSE LAND

Canada, China and many other nations strictly limit or ban foreign ownership of their rural land, “to limit speculation and support the development of strong rural communities”.

So why shouldn’t we ban them buying Australian farms and irrigation water? It’s no skin off our nose, given they’re doing little to boost our regional economies by buying well developed properties in a relatively mature sector.

Canada and China are drafting foreign-ownership laws to protect their home patch, while their state-owned enterprises use vast reserves of capital to outbid Australian families and corporations for some of our most valuable rural properties. It’s clear Canada and China are engaged in outright hypocrisy. Yet Nationals Leader Barnaby Joyce, a vocal critic of Australia’s policy on foreign investment in the past, is dodging the issue now that he has become Deputy Prime Minister. Even the National Farmers’ Federation has refused to comment.

Many farmers are angered by the sale of their agricultural supply and processing chains to foreign corporations, making it harder for them, their communities and politicians to hold them to account. Imagine how they now feel seeing foreign state-owned enterprises not only buying Australian farm land, but also our scarcest resource — water.

Of course the land and water has to be used locally, but you can bet profits are flowing straight offshore, with very little tax going to our economy.

Even if our political leaders and peak farmer lobby group believe foreign investment in Australian farms is a necessary part of being engaged in a more open global economy, they should not accept Canadian and Chinese protectionism without a murmur of protest.

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