Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue No. 24 - Evidence - Meeting of March 2, 2017
OTTAWA, Thursday, March 2, 2017
The Standing Senate Committee on Agriculture and Forestry met this day at 8:02 a.m. to study the acquisition of farmland in Canada and its potential impact on the farming sector.
Senator Ghislain Maltais (Chair) in the chair.
[English]
The Chair: Good morning, everybody. I welcome you to this meeting of the Standing Senate Committee on Agriculture and Forestry. My name is Senator Maltais, chair of this committee.
I would like to start by asking the senators to introduce themselves.
Senator Mercer: I'm Terry Mercer from Nova Scotia.
Senator Beyak: Senator Lynn Beyak from Ontario.
[Translation]
Senator Tardif: Senator Claudette Tardif from Alberta.
Senator Gagné: Senator Raymonde Gagné from Manitoba.
[English]
Senator Bernard: Senator Bernard from Nova Scotia.
Senator Woo: Good morning. Senator Woo, British Columbia.
Senator Oh: Victor Oh from Ontario.
[Translation]
Senator Petitclerc: Chantal Petitclerc from Quebec.
Senator Pratte: André Pratte from Quebec.
Senator Dagenais: Senator Jean-Guy Dagenais from Quebec.
[English]
Senator Ogilvie: Kelvin Ogilvie from Nova Scotia.
The Chair: Today the committee is continuing its study of the acquisition of farmland in Canada and its potential impact on the farming sector.
[Translation]
This morning, we have the privilege of hearing from Juan Sacoto, Senior Vice-President of Informa Economics IEG.
[English]
He's from Tennessee. Welcome to the Senate committee and thank you for participating. You have an opening statement, and you now have the floor.
Juan Sacoto, Senior Vice President, Informa Economics IEG: Good morning, everyone. Thank you very much, Mr. Chairman and committee members for inviting us to come, participate and share a little bit of our perspective, from my company and myself, as we work in these markets.
I will give you a bit of background on what we do in our company so you get our perspective. I work with Informa Economics. We're a global research and consulting firm, exclusively focused on food and agriculture. We follow most of the major markets, and have for about 40 years. We focus on the U.S. because that's where we're headquartered, but we cover most of the major markets in Brazil, Argentina, United States, Canada, Australia, Europe, and the supply markets, China, India, et cetera. We bring a lot of knowledge across countries to compare certain countries and how one relates to the other.
We have an ongoing practice on farmland. We looked at farmland and, in that process, we advise farmers, large farmers, mega-farmers in various countries, as well funds, financial institutions and agribusiness in general. That is a bit of background so you know where I'm coming from.
We'll try to explain, at least from our perspective, why farmland values in Canada have increased. I'll touch on that and give a bit of a global perspective when needed. I'll also touch on the challenges that represents to farmers in general. That's how I plan to make the brief presentation, and then welcome questions.
In thinking about the reasons that farmland has increased, when we looked across the globe, the reasons and the drivers for why that happened are similar across countries. No matter what country you look at, there's a common set of drivers that have pushed farmland prices across the globe in the supply countries, countries that are producing a lot of commodities for the world.
We can look at a longer period, but in the past 10 years we have seen an unprecedented increase in farmland prices across these regions. To give you some perspective, as I'm sure you know, between 2005 and 2015, farmland prices in Canada have grown an average about 142 per cent. That's about a 9 per cent compounded growth rate per year. When you compare that across other countries, some are higher or lower.
For example, in the U.S., during the same period of time, they grew just about 100 per cent. So it's about 6 per cent. When you look at Brazil, for example, it's very regional so it's hard to generalize, but there are regions that have grown in that same period about 150 per cent, to 200 and 300 per cent if you go local in some of the areas in Brazil that have had a lot of investment. If you look at Australia, depending on the area, you have that same pattern of increase.
If you were to see a chart of farmland prices in the last 10 or 15 years and how they have moved, you will see that in the countries I mentioned before, there's a lot of co-movement. Clearly, when you see that, there are the same things affecting each other.
In fact, if you look at U.S. and Canadian land, they are highly correlated in the last 15 years. They are almost to the dot. In statistics we use an indicator called R-squared — or correlation coefficient — that measures how well one set of numbers follows the others. For the U.S. and Canada, it is 95 per cent, meaning almost perfect, if you look at the last 10 years.
Some of these factors are very much driven by global factors. There are many local factors that differentiate one region from another, but by and large the majority of what's driving it are global factors of supply and demand that I'll address a bit later.
When I think about why farmland is increasing, everything falls into two categories. I'm sure you've heard this from other witnesses. One is that farmland profitability has increased substantially across every sector that you can tell. The other one is the supply and demand of land. What we find is the demand for farmland — this is a lot more localized, but it gets reflected in the national numbers — has increased. In countries like Canada and the U.S., the supply of farmland is fairly limited. In fact, it's going down every year because you have urban pressure and other things that come into it. So any kind of small increase in the demand has some effect, although the effects tend to be more localized than you can see at the national level.
When you think about farm profitability, from my perspective, it is very simple. If you think about it from a crop perspective, it is the price times the yield minus the cost of production. You can track and see what happens with any of these. When you look, again, it's the same in every country. It's the price of the commodity, and the underlying commodity is by and large the main factor that has driven farmland profitability.
To give you some perspective, in North America, you can think about wheat prices since 2005. I'm picking that number as it is 10 years ago relative to 2015, which is the last available data for Canada. In that period, prices for wheat went up 100 per cent. They have now receded to 45 per cent relative to 2004-05. They're still higher than that. In terms of corn, soybean, canola, grains and oilseeds, prices went up as much as 160 per cent. In 2011-12, they peaked, but they still remain somewhere between 60 and 70 per cent higher depending on the price measurement you look at. It has been somewhat of a permanent increase, and that is by far the main driver of prices.
Then the question is: What is driving these prices? Is it local or global? The increase in demand that we've seen is probably the major driver behind this price increase. We have seen a substantial and rapidly increasing demand in this period. I underline the two words, substantial and rapid, because both have an impact.
When you dissect to see what was substantial, there are many factors we can list, and there are many local factors in countries, but one of the two things that are the main drivers is China. China is a driver in all agricultural markets and has been for the last 15 years — kind of a constant driver. China, Southeast Asia and to some extent developing countries with appetites for proteins — for meat — as they've generated greater income, that has fuelled quite a bit of demand. If you want to consume a pound of chicken, you need about two pounds of feed. That's your grains and oil seeds, and that creates a multiplier effect when you have people consuming more meat; it's a multiplier effect throughout the supply chain, essentially. You need more grain.
The last 10 years' of growth of that is substantially greater than any period in the past. That pushed a sustained growth and demand that already started to push prices early in the 2000s. So factor number one is China and developing countries wanting more protein.
Factor two is substantial in terms of the new demand but it was more how rapidly it had to be filled. This is biofuels. Policies in the U.S., Canada, Europe and South America to produce biofuels from crops not only were a substantial new demand to the market, but they were very rapid. In about five years, because of legislation, you have to create quite a bit more production. That created a shock that the supply side, and countries like Canada, U.S. and Brazil, just could not keep up on the production side.
It didn't matter whether the production of biofuels was U.S.- or European-driven. The effects are in every country similarly, because you are using soybean oil for biodiesel, whether from Brazil or here. You're using the same thing. There's interconnectivity in the agri-market, so you have that outcome.
The other factor that has pushed prices again — pushing prices, farm profitability, farmland prices — and this is more local — is exchange rates. This is particularly for Canada and Brazil. You can think both exchange rates actually have improved local prices. By improving local prices, you improve farm profitability and increase the price of farmland.
For example, in 2015, it's been highly publicized in Canada that farmland prices went up about 9 per cent. If you look at it from a U.S.-dollar perspective, so you eliminate the exchange rate out of it, farmland prices in 2005 actually declined about 6 per cent. The difference between the increase of 9 per cent in Canadian dollars and the loss of 6 per cent in U.S. dollars — most of that is just exchange rate.
When we go to Brazil, it's a similar picture. Although they did have more investment, when you look at Brazil in a U.S. dollar equivalent, it's not the same rosy growth as when you look in the real. That has helped in a number of countries; their relative exchange rate to the dollar has helped move internal prices and move farmland prices as well.
Some people ask why everything is from the dollar. It's just because all these commodities are priced in dollars. They do change a little bit with exchange rates — of course, they're influenced — but since they are priced in U.S. dollars, if you're a farmer and your costs on your land are based on Canadian dollars, all of a sudden your currency goes down but you receive more Canadian dollars for your crop. That's why we use the U.S. dollar as a benchmark — just because all the prices are kind of U.S.-based.
In terms of profitability, I mentioned farm profitability is driven by yields. Yields have had an effect in Canada and just about everywhere in the world, but it is a minor effect relative to price. For perspective, in Canada, during the period 2005-15, crops increased 10 to 15 per cent yield, so you have a corresponding effect on profitability. The message is the main effect was price. Yield provides a sustainable push for profitability, because you expect yield to grow 1 to 2 per cent a year, and then you can say demand prices can, in a neutral year, grow about that much. It has an effect but not substantial.
Cost of production — I won't cover too much. I'll take any questions, but that hasn't been a factor, per se.
We talk about the demand for land. That has been a factor. Even though it seems like in Canada it has been a big factor, in Brazil, Uruguay, Eastern Europe and Ukraine — some of the countries that have a supply base, it's been a lot more intensive because there's a lot more foreign investment going into those — Australia, for example, and New Zealand.
Why we have this greater demand in Canada and the U.S. comes down to very similar patterns. We have essentially three drivers, three main cases. We have a lot of farmers that we call "cash rich,'' with well-leveraged farms. You have a lot of farmers buying up their neighbours because they have a lot of cash after a nice run of profits. Sometimes when they buy their neighbours, they can pay a higher price because they can extract a higher value than someone who is a few kilometres away. That has pushed the demand. Farmers have money and they've been leveraging that.
The other one is the profits of agriculture. We saw that in our business 10 years ago. The profits of agriculture attract the financial community significantly. All of a sudden, they wanted to come and invest in agriculture because they saw the profits are good. They relate that to what they get in the bond market with low interest rates: All of a sudden, investment in farmland looks more appealing relative to the alternatives they had. So you see the investment in farmland.
Again, the U.S. and Canada are similar in terms of the players. You have investment funds, pension funds and insurance companies. When you go to Brazil or Australia, you add your private equity firms which are a lot more evident in these countries in the influence of non-farming acquisition of land.
One of my last points is to turn these reasons back into what are the challenges to the farmer. I know that's one issue. I'll give you one example to end this. The average farm size in Canada is 315 hectares. If you want to be a new farmer at the average scale, which tends to be on the low side if you really want to make a living, you're probably looking at investing about C$845,000. That is very tough to finance, and that's just the land. You need operating capital and equipment capital. That becomes tough to finance for someone who is a new entrant. That's probably the main barrier or consequence of high prices. That's not to say that most farmers like higher prices, because they can cash in, but that becomes the underline. There are many other things that make it difficult, but that's become the barrier when we hear from farmers. How do I get $1 million credit when I don't have another job?
I went through a number of things, and that's what I prepared. At this point, I'll be happy to hear any questions that you may have.
The Chair: Thank you, Mr. Sacoto. We'll go to questions.
Senator Mercer: I couldn't help but think we've come a long way in this committee. We're now talking about cash- rich farmers in relationship to the bond market, et cetera, where we don't normally get into those types of conversations, but we are on a particular special topic on land acquisition.
You mentioned at the beginning about the growth in Brazil. By way of background, I suspect — and you can confirm or deny this — that part of the growth there is the deforestation of the rainforest and bringing it into agriculture production. Is that a fact?
Mr. Sacoto: Yes, that's a fact. Some of it has been that, although there are areas in the northeast where it's not truly rainforest. It's land that hasn't been developed. It's not the rainforest that you will see on TV. Some of it is land that has to be invested in. But there is part of the rainforest that they keep pushing, but there's a lot of land that is just pasture and not necessarily the rainforest that we talk about.
Senator Mercer: Let me see if I understand your theory on the increase in land prices. One is the increase in the price of commodities like wheat, grains and corn, the exchange rate, demand from China and, obviously, the old reliable supply and demand.
Mr. Sacoto: Yes.
Senator Mercer: Of those factors, what fluctuates the most?
Mr. Sacoto: Looking back, it was probably the biofuel demand that came very suddenly and quickly. That created a shock. The Chinese demand was growing very fast, but I also believe very steadily. That was from the demand side.
One thing I failed to mention before was that we also had a perfect storm in 2012, 2013 and 2014, three years in a row where we had bad weather somewhere in the world that had an impact on prices. Had it not been for that bad weather, prices would have come down a little sooner than they did. That was another factor that influenced things, the bad weather in that period that things went up. While demand was very strong, on top of that we had bad weather three years in a row.
Senator Mercer: But the biofuel demand is mainly directed at corn, would you say?
Mr. Sacoto: Corn was probably the main one, because it came, again, within four or five years and you had very big targets, so you would have to pull corn, soybean oil and rapeseed in Europe. It's also pulling soybeans out of Brazil and Argentina.
Senator Mercer: By 2050, we will have 9 billion people on this planet and we have to find a way to feed them. If we don't feed them, they will be unhappy people, and unhappy people cause disturbances and wars, et cetera.
You have a bit of a global perspective, I know. My final question is: How do you see us bringing more land into production so that we can meet that demand by 2050?
Mr. Sacoto: Great question. I'll answer you in two parts. When you look globally at where you can add more land, there are only a few regions where you can meaningfully add more land, and North America is not one of them. There's not a lot more land you can add in a meaningful way. There's Brazil and Africa, and in Eastern Europe a little bit of land that essentially was not produced. But really it's Brazil and Africa. That's where you can bring more land into production.
How you do that is really price. The only reason why you haven't expanded Brazil by another 10 per cent is that the prices of commodities today are not high enough. Some of that land needs a higher price to clean, produce and transport it. That's the only reason. If you have higher prices, you have an incentive.
If you look back 40 years ago and you see what the growth factor has been in the last 40 years for total food production, by and large, it has been north of 80 per cent, and that has been productivity, not more land coming into the system. There's a chart I can send you. It hasn't been in the last four years that we've had that challenge of feeding lots of people.
Productivity has, by and large, been the number one driver of in-house production. Globally, land has increased, but not a lot. A lot of the increase actually happened in the last 10 years because prices were very good, so you brought more marginal land into production.
Going forward to 2050, you can bring more land into production, but the real challenge is whether you can keep up with productivity. That is where it should meet demand. That also plays well to North America, because you have very productive land, and you can increase that.
Senator Oh: Thank you for being here with us.
My question is similar to Senator Mercer's. With the emerging market in Asia and other parts of the world with the increasing middle class, I believe that in those countries, farm production has also increased demand for the middle class. You have a report that came in 2012 talking about this middle class increase in emerging countries and markets. Do you see a significant increase in farm value globally due to the demand from the middle class on environmental issues and food production?
Mr. Sacoto: Great question. It has a similar answer because the increase, essentially, is called the productivity challenge. If we can keep up with yields in the main crops, then there's no need to bring more land to production, and prices, ironically, will not grow as much. If you don't bring more land to production, then you have a steady increase in farmland prices.
But if we cannot keep up with the productivity — and it is in the hands of the seed and agro-chemical companies and, mainly, farmers to apply these new technologies — then we have to bring this land into production with higher prices and higher environmental consequences, and so forth.
Senator Oh: I understand that the emerging countries are also stepping up food production. They have been coming here to Canada at different times, learning about how to increase productivity on their farms.
Mr. Sacoto: Yes, they have. Many countries like China still have a lot of room to go in terms of enhancing productivity, but some of these countries have inherited structural issues that keep them from becoming a Canada, a U.S. or a Brazil. Some of the countries that produce, like Canada, the U.S. and those in South America, they do have a very unique infrastructure on land. They're very productive. It's hard to picture a Southeast Asian country, like China, becoming as productive as North America. It's not just because of the knowledge side, but you have some physical attributes of the land itself, and the infrastructure, that keeps it from reaching that. But they have been improving, and they are very incentivized to improve.
Senator Tardif: Thank you very much for an informative, interesting and clear presentation on the whole issue. You did mention foreign ownership as being a factor in driving up prices. I was wondering if you could expand further and perhaps tell us how much weight this really does have in driving up farmland values.
Mr. Sacoto: Let me clarify. The weight of foreign ownership is hard to measure, because there's no tracking in North America on how much foreign ownership there is, per se. What we know from many studies and consultations that we ourselves have done is that that is very small. I'm talking about actual foreign ownership in the form of a fund, not a foreign farmer, like a Canadian farmer, who goes to Brazil and sets up a farm. Not that type.
It's very small and can be influential at the local level, because usually, if it's a big fund, they come to buy not a hundred hectares, but a couple thousand, so they have to sometimes increase the price a little bit to capture everything. It's very local.
At the national level, the impact of foreign ownership is probably very small and not significant at all, because it's very tiny. By far, the majority of the land is still owned by farmers. It is changing and shifting a little bit. You do have that, but we're talking about less than 5 per cent.
And if you want to look at Brazil, you could say foreign non-farmer ownership is greater, but still, you would be hard-pressed to say they have influence at the national level, because they tend to be focused in certain areas and not nationally.
Senator Tardif: And would you say it's the same for insurance or investment companies that are buying for equity purposes?
Mr. Sacoto: Similarly, I think they would potentially have an impact, but not necessarily, because they're buying in one region. If they want to buy a few thousand acres in Alberta and they go after that, then they could have an influence.
Some of these companies are very profit-driven. They are not going to intentionally pay more; they are really trying to make sure the price is right. Is the margin there? They are not purposely trying to increase the price, of course.
Nationally, there is no evidence, but everything that we see will be very limited at best. At the local level you can have some because they are in very few and sporadic places. If you look at Brazil, this is where you could say it's Canada times many times the effect of these foreign ownerships. You haven't had that effect there at a national level. Local level, perhaps yes.
Senator Woo: Thank you for your testimony. In the 10-year period that you have been focusing on, has there been any appreciable change in the composition of output for Canadian farm produce, and does that effect your analysis of farmland prices in any way?
Mr. Sacoto: If I understand your question, it has been a little different. In Canada, we are producing, in relative terms, a lot more canola than before. I think that's probably the most meaningful in terms of the portfolio of crops that are built. Your pulses as well, but at a smaller scale.
In terms of your average prices, the price of canola and all other oilseeds have grown proportionally higher than wheat in terms of pricing just because of what the market has asked. As you have turned that, you have elevated the price of land if you can grow canola on that land, because now you have the option to have a larger profit. Did I answer your question?
Senator Woo: Yes, thank you.
There has been some discussion in previous testimony about the impact of encroaching urban development leading to a loss of farmland and consequent hypothesis this might have pushed farm prices up. You didn't mention urban encroachment on farmland at all. Was that deliberate? Do you see any effect from urbanization?
Mr. Sacoto: That definitely has an effect. Again, it has a local effect. So if you're within 10 or 15 kilometres of an urban area, the price of the land is more driven by speculation of economic development. Can we put the next mall in there, or a residential project? It has a lot less to do with the economics of what you produce. You see that more in Canada in British Columbia. When we study that, you can see some of that land is really trades-based on real estate and not really by what you can produce out of it.
But if you look only at those areas, you can say urban encroachment has an effect and has had for a long time. It is no different in the past 10 years than it was 10 years before that. If you go to the middle country, where it's mostly agriculture, urban encroachment has no effect other than the townships that are around there that are also growing. It's something that I imagine you can't control either. People will move where they want.
[Translation]
Senator Dagenais: Thank you, Mr. Sacoto, for your presentation. I would like to pick up on what you said about the increase in farmland prices and the compounded growth rate of 9 per cent. In reality, it is a 6-per-cent decrease over the U.S. Where would land prices be if the Canadian dollar were stronger?
[English]
Mr. Sacoto: To clarify that my statement was right, I said if you take Canadian farmland prices and just price them in U.S. dollars for the past five years, in 2015 you would have a decline of 6 per cent. So if the exchange rate would have remained at 1 instead of what we were trading now, at about 75, you probably would have price declines. Just like in the U.S. you're having price declines. You have price declines in 2016. You didn't have much in 2015. Again, the price declines after a big run up.
Essentially, it's very straight forward. The market was expecting prices to be "x'' amount higher. The prices are coming down, so essentially the price has come down. It's the effect of that. The currency in this case hedged farmers from that decline in prices. When the currencies become more stable, so 2016, 2017 or 2018, if we remain at the same currency levels, we are no longer hedged from any new changing commodities. If commodity prices come down another "x'' per cent, you should have a decline on farmland prices.
It is the same effect, by the way, in Brazil. With similar factors for both countries, the currency depreciated and farmland prices in reals in Brazil went up. So farmers didn't see that decline in farmland prices. That's the same in Australia, which had a depreciation of the currency. Farmland didn't go up.
We are in the business of forecasting farmland. When we forecast, we said this is in U.S. dollars. The local currency depends on the exchange rate.
Senator Pratte: I want to follow up on Senator Tardif's question, because it is central to our Order of Reference. You mentioned that the interest by institutional investors for farmland was, if I understand you correctly, a minor factor except locally as far as farm price increases are concerned.
How about future trends? Because obviously those investors, as long as interest rates are low, are looking for better investments. They are interested in infrastructure and things like that, but farmland is one potential investment that is interesting in the future. Can you see a future trend where farmland would remain an interesting investment, maybe even more, and therefore there could be a trend where they would become a more important factor in farm price evolution in the future?
Mr. Sacoto: Certainly. They can become a bigger share of the market, you could say. I think the attractiveness of farmland has already been seen by the market, so even if interest rates go up, people are not going to leave the ag market. That is an understanding. The agriculture market as an industry became a lot sexier for investments. Suddenly they realized it is pretty good and they can actually make money out of these over 20 years. So I think they will remain.
The chances of increasing are relatively high. They will continue because they are having some successes. The increase is going to be substantially more in countries like Australia, Brazil, Uruguay, where you have a little more openness to foreign investment and a larger presence of what we call "mega farms'' of 20,000, 40,000, 60,000 hectares. They are better operators of that land.
Can they influence farmland prices? They could, a little bit more. It is the scale of the amount of farmland that we have in the world relative to what they can buy. They could not have a large share. In the next 20 years, you couldn't put 20 or 30 per cent of the farmland in the world into the hands of investment. It is a tremendous amount of wealth to put it in that.
Furthermore, farmland is a very asset-rich investment, so only certain segments of the economy want to do that. If you are a private equity firm, investment fund, as interest rates go up, you will probably favour other sectors just because, with farmland, unless we have another big demand, it is going to be a pretty steady increases and steady returns that are a little bit safer. But you wouldn't have a lot of new investment going in.
Senator Pratte: What would their impact be up until now on the type of farming? One of the concerns that we have heard from some witnesses in front of this committee is that institutional investors are less interested in farming. They are interested in speculation more than anything else, and that if we let them invest in farmland, it could eventually hurt farming itself.
Mr. Sacoto: Yes. There are various types. I'll give you the case of Brazil. If you think the trend is going to go, then you say Canada might get there in 10 years. In Brazil, during the high, you had the category of very speculative investors that would just buy farmland, wait five years and sell it because the price was going up. Those, for the most part, have moved on, and the ones that remain are the ones who want to become operators for 10 or 20 years. They're the insurance companies that really are not looking for a quick 5 to 10 year investment. So in Brazil, a lot of them have moved on. They are no longer there, and there is not a lot of appetite for that from large investors either. Did I answer your question?
Senator Pratte: So you mean that those who remain are interested not only in land but in farming as a profit driver?
Mr. Sacoto: As a profit driver. Because the land itself, after we get through this period, it's not going to give them enough return just to hold the land. So the ones we talk to are very interested on farming operators. They are interested in getting the returns, and there is nothing against that, but they are interested in getting operators and farmers to run the farm.
What they are going to put on that farm is whatever makes sense. These are business-driven people, not too different than our individual 100-hectare farmer will be in any province. At the end, one is small business. The other is a large business. They will farm whatever crop they think is more suitable.
So I don't think there is a conflict necessarily that they are going to farm only one crop or another crop. They will kind of do what the market wants.
Senator Gagné: Thank you for your very informative presentation. I really enjoyed it.
I am also interested in future trends, but I want to take a different take on this. I was wondering, in your forecast model, if you consider climate change as a driver, just to look at prices in different areas of this country or even the world, and how that will be driving land prices and productivity. Is that part of your analysis and your model?
Mr. Sacoto: Strictly thinking, in the model we forecast, we haven't factored in that directly, because we normally think 10 years out. The effects of climate change probably are longer than that. There is not a consistent "this is what will happen.'' Officially, in our company, we have an integrated numeric approach or a quantifiable approach. What I can share with you is what I have read or heard about it, and there is still a fair amount of speculation of what the effects could be in terms of specifics.
In some studies, it even kind of favours it, because, in certain areas, depending on who you talk to, you could say the fact that Canada and the northern part of the U.S. are planting crops that normally you couldn't and you have a lot longer season as an effect of climate change. If you ask the seed companies, they will say, "It's really our technology that's enabling some of that.'' So there is not a definite answer to that.
From my perspective, I couldn't give you definite precision as to whether it would be good or bad. We have heard things that are not conclusive one way or another. So I'm sorry, but I cannot give you a good answer to say, "This is the effect.''
Senator Gagné: Do you think that will still be a driver that could be measured at one point in time?
Mr. Sacoto: Yes. As the effects are understood and unfold, if it is in fact creating a bigger season in some areas, then it is quantifiable.
Senator Mercer: I want to go back to the issue of foreign ownership. Brazil recently introduced proposed changes to land ownership to allow for more foreign ownership with partnership with Brazilians. Do you see this as a threat to the displacement of small local farmers if a similar trend were to happen in Canada? How is it playing out in Brazil?
Mr. Sacoto: First, a lot of the motivation to changing that legislation is that they essentially need more foreign investment. That's one way of addressing it.
Can it affect over time? It could affect, but it's difficult to conclude directly that it would have a negative effect, because some of the people buying in Brazil, for example, run very efficient farms.
Senator Mercer: By "efficient,'' do you mean — they are not family farms?
Mr. Sacoto: Yes, they're corporations for all intents and purposes. There are even public companies managing, I would say, more than running, 100,000 hectares of various things. They are very efficient. Just the scale that they have, they make it.
So if that were to come to Canada, yes, it would displace smaller farms, to the extent that the smaller farms want to sell out. If you go to the southern part of Brazil, the majority of small farmers are co-operatives. The large companies have not gone over there. They prefer to go into the new areas where lands are a little cheaper and there aren't any farmers. It's very difficult for a company to come to a place that has existing farm infrastructure and try to buy large pieces of land.
Again, even if they buy a large piece of land, they cannot influence the price or the output. They cannot afford to overpay for land. If they are producing canola, they cannot sell that canola for one cent higher just because they are a large farm. All they can try to do is become more efficient than the farmer who owned it before. If you overpay for the land, that is not going to happen.
Senator Mercer: It's curious. How would you see the supply management that we have in Canada fitting into a market where we have greater foreign ownership with the larger farms? Most supply-managed farms are not large; they are small family farms. The reason they are successful is because of supply management. If we were to move to more foreign ownership and larger farms — the corporate model — would supply management have difficulty adapting to that?
Mr. Sacoto: It will have less of a need. But I want to go back to the point that if you go to that model, still it is a large amount of land, so it'd be hard to say that the majority of the land, or even 20 and 30 per cent of the land, is in the hands of these large corporations. You still have the majority of the land being served by small farmers. I don't necessarily say a farmer with 5 or 10 hectares, but a farmer with a couple hundred, because that's the current family farm that is a large farm. The majority of the land will still be there, as I can see.
If you go past 20 or 30, maybe you can see a scenario like that, but there is so much land that corporations could not buy all that land, at least in the foreseeable future, as I see it. Their effect, again, can be very localized or regionalized. If you have some supply, they could limit what you said, but you still will need supply companies to help to work with the remaining farmers, which should be the majority of the land under their hands.
Senator Mercer: The theory of many people is that if we didn't have supply management, we would have much larger egg producing farms, larger poultry, larger turkey and much larger dairy farms. That would mean that we would have fewer small and fewer local dairy, chicken and turkey farms. Are there examples where this is true or where this isn't true?
Mr. Sacoto: Can you be a little bit more specific?
Senator Mercer: Has the move to the larger farms, and particularly to foreign ownership, forced more consolidation of the production of products, thus closing the production in regions so that one region is now dependent on another for things like eggs or chicken?
Mr. Sacoto: I do not think there are any examples. I'm thinking as I speak. I don't think there are examples you can cite to say that wasn't a good thing.
If you think about the U.S., there is definitely a regional consolidation of lifestyle. You have poultry in one area, and it's the same as in Canada. There are hogs in certain areas, but that is not necessarily good or bad. It is where the industry is making rational decisions, generally, but not all the time, on where to locate businesses and where to buy land to be more productive.
Where it becomes a potential issue for Canada is that Canada is, by and large, an export country for agriculture products. If you somehow limit the competitiveness of the farm sector, that particular sector can, but not necessarily, become less competitive in the world. That comes back to hurt the farmer, eventually.
Senator Mercer: A lot of our farmers, for example, in dairy, tackle that by being cooperative, where farmers come together collectively and market their products as a co-op. That's very prominent in dairy in Quebec and Atlantic Canada. Does that not counterbalance that when a group of small farmers become a corporate entity by uniting as a cooperative?
Mr. Sacoto: Uniting as farmers in cooperative is a successful model. It has also had some failures in history, but it is a principle that gives the small farmer a lot more leverage. It does help. You have fairly large corporations in the U.S. that are cooperatives.
Where they have failed, sometimes, is when they haven't acted in the interest of the company or the farmer and they deviate. If you do kind of a case study of the cooperatives that have failed, sometimes they just deviated from their business purpose into too many other things. If you're focused on leveraging the farmer from a marketing perspective, the examples overwhelmingly point positively to that helping them.
[Translation]
Senator Ogilvie: Surprise! I am still here.
[English]
There was a time when I had a lot of interest in the issue of farmland around the world and the impacts on it. In the last third of the last century, one of the issues that was a major discussion point in terms of concerns about meeting the food needs of populations was the then-reported increasing salinity of soils around the world.
I can remember including in slides and talks photos from the international analysis of land production in various countries showing, in some countries, according to these reports, up to 10 per cent loss of quality in land to salinity on an annual basis. It was considered a major issue. In the last 20 years, I haven't heard a thing about salinity as a major factor.
You have looked at a lot of issues. First of all, I have some speculation as to why that might be, but I'll turn it over to you: Is it an issue that that has come into your analysis and your corporate views on this?
Mr. Sacoto: The quick answer is no. I've been in this industry for 20 years, so maybe I just missed it. On this specific issue, frankly, I think I read about it at one point, but have never seen it surface in a meaningful way.
There is a renewed interest in taking care of the land, but I don't know how much of that is just on paper. I haven't seen any actionable positive things, but they are moving farm trade organization to ask, as they see potential issues, "What is the best means of managing the soil?'' Again, on the surface, they are doing little things, but not anything impactful.
What can be an issue is a lot of the investment going on by agriculture and non-agriculture companies in trying to understand, with data analytics, the effects of all these factors on yields. As these data analytics evolve, and that is still in a beginning stage, you could have these issues come and say the salinity is here and we can control it, and this is the effect in dollars per bushel or per acre. There is an opportunity to take that issue on more with technology, but it hasn't surfaced in a meaningful way, that I have heard.
Senator Ogilvie: My interest came from the point of view of biotechnology and the projections we were making were in the development of plants that would be resistant to a wide range of factors, from pests to salinity and so on.
Over the same period, there has been a dramatic change in the approach to drainage in soils around the world, and in fertilizers, which were one of the major sources of salts going into the soil. It may well be that the projections that were made at the turn of the biotechnology era have come true and, in fact, the combination of technologies has dramatically decreased the impact on soils from raising crops.
Thank you for your answer. Obviously, it's not a problem today, in your analysis.
Mr. Sacoto: Not that I know.
[Translation]
The Chair: Mr. Sacoto, I have a quick question for you. How do states protect their farmland from urban encroachment and industry? Are there any measures in place to protect farmland on your side of the border? How does that work?
[English]
Mr. Sacoto: In terms of urban encroachment, there is no specific broad approach that I know. There are some regional laws that help that, but nothing on a national level that is trying to limit the impact of encroachment, particularly on farmland.
To the second part of your question on any broad effort to limit other effects, I am not aware of anything directly, from a government perspective, to try to limit that. There are some states in which corporate ownership is limited or is reviewed, so it's more of a state-by-state approach. Generally, there are not a lot of barriers that I'm aware of, per se. Some of the funds that have bought land haven't necessarily met resistance, I would say, in doing so. They generally haven't gone to the centre of Iowa to buy that, so the issue has not surfaced in a large way, that I'm aware of.
[Translation]
The Chair: In the medium and long terms, could access to drinking water become a problem? It is an important consideration for agricultural production in the central U.S.
[English]
Mr. Sacoto: Definitely. Access to water is probably the issue of the century in terms of agriculture. In the United States, it is a problem, and it is very regionalized.
You have California, where that is obviously an issue that has had an effect on almond production, for example. That's where you essentially are shifting some of the tree production into areas or crops that consume less water, so you definitely see an effect there and changes happening in crop selection, with people planting things that are less water-intensive. So it is very regionalized.
If you see a U.S. map, from the western part of Nebraska all the way down to Kansas, Texas, there's an aquifer there that has a problem in that it's essentially running out of water. You see that problem because that area used to get irrigation. The cost of irrigation has increased, there's not enough water, and we've seen the effect on yields, so that is a problem for those areas.
For the rest of the United States and the Corn Belt, where most of the land is reliant on rainwater, you haven't had that problem yet. In the U.S. there's plenty of water in these regions, so it hasn't had that effect, other than in those specific areas. Other parts of the world have much more severe problems than that.
[Translation]
The Chair: Thank you very much for your input, Mr. Sacoto. It was very informative. It is helpful for the committee to know what is going on south of the border. It is useful to see how the farmland sector has changed. That is important for Canada and the U.S. as well.
As Senator Mercer pointed out, there will be a lot more people to feed in a few years, and we will need every single good idea out there to feed the entire planet.
Thank you and have a safe trip back to Tennessee.
[English]
Mr. Sacoto: Thank you, everybody, for the invitation. I'm glad I could be informative and helpful. I'd be happy to help in any other way that I can.
[Translation]
The Chair: Joining us now, from Athabasca University, is Ella Haley, Assistant Professor of Sociology. Welcome, Ms. Haley. The floor is yours.
Ella Haley, Assistant Professor, Sociology, Athabasca University, as an individual: It is a pleasure to speak to you today.
[English]
I come from a farm one hour west of Toronto. There are handouts for you. I'm sorry; my PowerPoint is not available, but it will be afterwards.
I'm the fourth generation farmer from my community on the farm. I'm a professor as well. We have had a small organic farm since 2005, but I grew up on a mixed farm, dairy, poultry. My organization was the Ontario Federation of Agriculture. I now belong to the National Farmers Union. I feel they protect farmland and are being more vocal right now than even the OFA in Ontario. I'll give you my reasons.
I wanted to tell you about my backyard. I think you've had lots of technical and academic information. I know I'm an academic, but when I read some of the literature, I want you to know what it's like to live in a community where there's a land grab. I want you to know what it's like in the family and in the community, because it can be very devastating. I'll give you some of the facts, but I also want you to see the reality.
I call it the farmland grab in Brant County. I'll move to my slides. I have a map here, but for any of you not from Ontario, we're an hour west of Toronto. We're in Brant County, just west of Hamilton. The greenbelt stops at Brant County, at my laneway. We're not in the greenbelt, and it changed our lives. The Ontario greenbelt is probably one of the largest in the world, but it stops at our driveway and at my mother's driveway, and it changed everything in 2005. We're trying to grow the greenbelt. I know you're looking for solutions, so we feel government policy is a solution. We also have solutions from land trusts.
Brant County had one of the very first greenbelts. Brant County and Brantford are like a doughnut. The City of Brantford is the Timbit, with 90,000 people. Brant County is the doughnut, with 30,000 people. I'm in the county.
We had a greenbelt created in 1980. It was a provincial greenbelt negotiated by the city, the county and the province, and it's provincial legislation from 1980. It's called the "protected agriculture'' ribbon.
Since the Ontario greenbelt was made in 2005, we have leapfrog development. I don't know if anyone has spoken to you about it before, but they jump over the greenbelt, come to Brant County and gobble us up. Corporations buy up the land. Since 2005, I would take my father to the coffee shop, and the farmers would talk about who the next millionaire would be. They're talking because suddenly a farmer is a millionaire; suddenly development corporations are paying five times the price for land. For retiring farmers, it's great. Your pension, your lottery cheque, has come in, but it doesn't help new farmers get started at all.
Developers and a land banking company buy up prime farmland outside of greenbelts. I'm going to focus on the company in Brant County. It's buying up land in Simcoe County, Niagara, Brant County and outside of the Ottawa greenbelt. It's Walton International. The problem is that farmers cannot compete. They can't pay five times the price for the land. It makes it especially difficult for new farmers.
I call it a David-and-Goliath scenario. You have Walton, the largest landowner in Brant County, which has 5,000 acres. If you look at an individual farm — if we search the mayor's farm — the Mayor of Brant County sold to Walton. If you look at his farm, you'll see about 650 owners from Malaysia, Singapore and Hong Kong. You will see a typical deed there for a Walton-owned property. Jacqueline is handing out some of the owners of this land. You see a typical deed that we've searched. It's very expensive to search these deeds. A typical deed search costs $8 to search, but if you have many owners, it costs $130. When we searched in 2010, it was $130 per deed, which makes it expensive to do the homework. Some Walton investors are from Germany and Canada.
Walton is based in Calgary. It's a multinational. They say they're a multinational, privately owned business buying strategically located land in major North American growth corridors. They determine where there's a growth corridor, and that's where they go. Just outside of the greenbelt is where you're especially vulnerable. That's us.
Walton literature states that the goal is to be the dominant landowner in the area. One retired lawyer spoke at a public meeting and said, "You're here to change the rules.'' I would agree with him.
Walton does a syndication; they talk about syndication. I'm not a financial expert, but here's one example of Walton talking about a farm in Brant County that they advertise publicly on their own website. Roseborough is the development now. It's the eighty-sixth Ontario land syndication completed by Walton. This was in June 2009. Walton sold the farm to 186 purchasers for $5,470,000.
The other problem is when politicians end up selling their farm, and if they are also determining provincial — right now, the province has been reviewing whether they should grow the greenbelt in Brant County. The mayor has to tell the province whether Brant County wants the greenbelt. If the mayor sells to a land banking company, the optics don't look good.
Mayor Ron Eddy oversaw the public meetings on expansion of the greenbelt. Seventy five per cent of written submissions were in favour of the greenbelt. We ourselves collected 3,000 petitions to grow the greenbelt. Mayor Eddy wrote to the province and said, "We don't want the greenbelt.'' You start to wonder how selling your farm to a land banking company is influencing things. It's hard to track, but the optics don't look good.
Walton also comes bearing gifts. They donate funds to the local swimming pool, to heritage work and to the Six Nations band council. They gave $20,000 for a skateboard park.
We're unique in Brant County. We have Six Nations in the southeast corner. It's just south of our farm — maybe a 15-minute drive. Six Nations is one of the largest reserves in Canada for population, and if you remember, we had Caledonia. Caledonia happened just after the greenbelt was made. It was all of this development on the edge there, and you had a huge land claim issue.
In this year of truth and reconciliation — last year — I think we need to really be more considerate of land claims issues and meaningful consultation, not just with band councils but with traditional chiefs and with the different groups at Six Nations.
Walton also struck an economic prosperity deal with Six Nations band council. So the traditional group at Six Nations is saying the band council cannot strike a deal with a corporation like that. There's disharmony about this deal. We're still trying to get the text of it.
Walton sued one First Nations group at Six Nations for $73 million. This document here shows all of the owners from mainly Malaysia and Singapore that sued Mohawk workers — $73 million.
Walton does not own land to the northeast of Brantford. They own land to the north, the east and the south. In the land to the south, the Mohawk workers stopped an archaeological dig on land that Walton owned, and the lawsuit then was against these Mohawk workers.
How does Walton influence growth? Another thing that happens, and the reason I'm coming to you — right now growing the greenbelt is a legislative, political solution. It's not permanent. If there's a government change, you may not have a greenbelt.
But what happened with the review of the greenbelt is that you have the revolving door. Former top bureaucrats in the provincial government — so the former deputy minister, Fareed Amin, left the provincial government. He was working for the ministry that reviews the greenbelt. A year later, or just shortly after — he passed that time period when you have that window where you cannot work for a corporation. Then Walton hired him to spearhead public policy and growth strategy in Ontario.
On December 13, the Minister of Municipal Affairs and Housing approved one of the largest annexations in southern Ontario in Brant County. The land to the south is Walton land. So Walton benefits from the annexation. I just question again the optics of a former deputy minister working for Walton.
So that's why we come to the federal government. We need even oversight of the provincial government in this case.
Walton also donates money to both the Liberal government and to the PCs at the provincial level.
Walton staff plays a strategic role in the local community. One Walton staff was the former head of the local home builders. They sit on subcommittees of the Brant County council. They are active in the Chamber of Commerce. So all three of these committees opposed growing the greenbelt.
So you see, we work for policy. We try to get government policy to protect farmland with the provincial greenbelt. It's not working in Brant County.
I'm trying to think federally — your hat — and where you can step in. Why is our pension fund teaming up with Walton and going and doing joint development in Edmonton? We need to look at companies that are involved in buying up farmland not for farming. In Edmonton now, this is within the settlement boundary.
But I still think when we watch this pattern of Walton buying up farmland and suing Mohawk workers, why is my pension fund teaming up with Walton? They did that in 2014 with a development in the Edmonton Henday Industrial Park, 250 acres where Walton and my pension fund are teamed up. I'm not happy about that.
The Brantford annexation that I just told you about involved 8,875 acres. The city annexed 6,718 acres. Much of the land to the south was Walton land. Then, in exchange for the city annexing 6,718 acres, Brant County gets water and sewer pipes. So the total sprawl picture on prime farmland, most of it is protected agriculture ribbon. Most of it is now paved over with this annexation. It adds up to 8,875 acres.
There are also other federal issues that I wanted to present to you. Six Nations wrote a letter right away to Premier Wynne and said there was not meaningful consultation: "How could you allow this annexation? You did not consult.'' The chief wrote from the band council, and so did Men's Fire. That's more with confederacy chiefs. I'm coming to you also because the federal government works with First Nations. There are ongoing land claims in Brant County. Brant is unique in that Six Nations was given land by the Royal Family, basically when they fought with Canada against the U.S. in the war. So they came to Canada and were given the Haldimand Tract. That's part of the land claim issue right now.
I've reviewed some of your footage and I saw you asking how many people are in the NFU. I think you have that answer. I'm proud of being in the NFU. They protect small family farms. They do not take corporate donations. My home organization where I grew up was the Ontario Federation of Agriculture. They are a wonderful organization. They have come out with a good statement lately on farmland at risk. I was one of the people that were consulted in the research. But the Brant County Federation of Agriculture did not speak up; they are not speaking up about the land grab in Brant County.
Key members of the Ontario Federation of Agriculture at the local level, the Brant Federation, include Mayor Ron Eddy, who sold to Walton, members of the OFA at the local level, any of those members on the Brant County council supported the mega-sprawl. So I do not see the OFA, at my level, protecting my farming community or farmland.
The National Farmers Union has been vocal. As soon as the minister approved the mega-sprawl in December, when everybody was busy with Christmas, they made a statement, and so did Men's Fire. Men's Fire said we they not consulted and opposed this, and the NFU opposed it. They opposed the land grab, the annexation, and they're calling for expanding the greenbelt for all of southern Ontario.
I wanted to talk to you about the impacts of farming with all of these corporate purchases. It makes farmland unaffordable. Developers and land bankers provide short-term leases to farmers, so it's not the best thing for soil or our water. We need people who have a long-term vision for their farmland.
It divides farming communities. If he's going to become a millionaire and she's going to become a millionaire, maybe your buddies there won't say anything because they don't want to break the game. Even if these people here are not selling, and you're all farmers, you seem to not be speaking up because somebody's windfall came in. If you speak up, people say you're ruining their inheritance, their pension fund.
We know we still can sell farms. We know from looking at the literature that farmland values have gone up, up, up, but in Brant County they have gone up incredibly. You can sell your farm for a good price. The ideal is to save your farmland, because we need it for food security. The population is growing. We need to feed this growing population.
But the other thing with corporate purchase is that there's no long-term stability for my farming community or for farmers in Brant County. In my community to the east of Brantford, there used to be a dairy farm at every lane. It was all small mixed farming. Now it's called an "agri-slum.'' When Walton bought up properties, eventually the farms and barns fell into disrepair, and finally neighbours said, "Will you bulldoze? Will you clean this up?'' So my community is called an agri-slum.
I have a few recommendations for you. I'm repeating some of the NFU recommendations. Restrict and curtail the transfer of farmland to non-agricultural use. We need to have oversight. We need to have a unified set of regulations across Canada that restricts speculative land buying by corporations and pension funds. We need to monitor foreign and domestic ownership and control of farmland. Speculators should not benefit from tax rates that were intended for farmers. Greenbelt southern Ontario. Support land trusts, cooperatives and community-based financing options to protect farmland. Create an RRSP or pension plan for farmers to reduce their need to sell their farm for their retirement. Prohibit the CPP investment fund from investing in or with companies that are doing farmland investment. Prohibit Farm Credit Canada from lending to farmland investment companies and prohibit investments in farmland investment companies from being RRSP eligible. Finally, honour land claims and require meaningful and inclusive consultation with First Nations communities about land use decisions.
The Chair: Thank you very much, Ms. Haley.
Senator Mercer: Ms. Haley, thank you very much for your presentation. I appreciate you being here.
I was a little confused. Earlier in your presentation, you talked about your pension fund being involved with Walton. Which pension fund is that?
Ms. Haley: The CPP investment fund. Millions and millions of dollars.
Senator Mercer: That's my pension fund, too.
Ms. Haley: All of our pension fund. So we're shooting ourselves in the foot if we let our pension fund do what we're trying to stop right now.
Senator Mercer: This urban sprawl issue is not new to us. We continue to hear about it, and the encroachment on agricultural land is an issue. In Alberta, in particular, many of the people who have been displaced because of selling their land to developers in and around the major cities have moved north and opened newer land into agriculture. Is that not an option in Ontario?
Ms. Haley: You have this little flyer here. We formed a land trust, and we were in a dragon's den. We're raising $1 million to buy a 50-acre farm and then keep the land as the commons. It will never be sold again, but let new smaller scale, organic farmers get on the land. We ran a dragon's den in Blyth, Ontario. The answer came to me: Why don't you go north? The land is cheaper. I'm fourth generation. Farmers need their roots. They need their neighbours. It's hard at my age to go north and find new neighbours that will help me if my tractor breaks.
I know land is more affordable in the north, but small organic market gardeners need to be near the eaters. The people who sign the petitions are the eaters and some farmers, but it's so handy for us. The peri-urban is so important for feeding people.
Senator Mercer: How big is your farm?
Ms. Haley: Originally my parents and brother had 500 acres. Now my husband and I have 57 certified organic.
Senator Mercer: What do you grow?
Ms. Haley: It's community shared agriculture, mixed vegetables, some fruit.
Senator Mercer: The mega-sprawl — and you referred to it as a land grab — is not unique to southern Ontario. It's happening in all major urban centres across the country, because we all tend to live in places where there's good land. How do we accommodate urban growth if more land doesn't go into urban development? How do we do that?
Ms. Haley: I think that Europe sets a very good example. Europe knows how to intensify, even without high-rises. They know how to do higher density so they can have public transit. We need to build differently.
If you drive anywhere and look at malls, they are just one storey. Why is that? Why don't you have apartments above them? That's just mega sprawl. I teach in Alberta, so I look at how Edmonton really sprawls. That's good farmland there, especially in the northeast, so how can we have more compact communities? Edmonton has a problem. If you're waiting for a bus on a cold winter day, and you're on the outskirts in Edmonton —
Senator Mercer: We know it can get cold there
Ms. Haley: Yes, so with more compact communities, I think we can grow up and intensify, but I don't necessarily think we need to be all condos. I think we could learn from Europe.
Senator Mercer: Thank you very much.
Senator Oh: Thank you, professor, and good morning.
I saw you produced five pages on foreign ownership this morning. You are probably aware Walton is from Alberta.
Ms. Haley: Yes.
Senator Oh: Walton is probably one of the biggest land banks in Canada.
Ms. Haley: Yes.
Senator Oh: They have offices all over the world, including in Asia and Europe, and they sell lands to these people who don't even know where Timbuktu is.
Ms. Haley: Yes.
Senator Oh: These people have never been to Canada and they know nothing about Canada. They have offices all over Asia. They have big sales promotions.
Ms. Haley: Yes.
Senator Oh: We have to solve the problem from the beginning, from the head, where the problem starts. These people don't know anything.
Ms. Haley: That's right.
Senator Oh: For Walton, they subdivide the land, as you say, in small lots, so these people are probably only buying a lot less than an acre.
Ms. Haley: The land is not subdivided. It has multiple owners.
Senator Oh: This has been happening for many years — for the past 20 years, I believe. You mentioned that you talked to Kathleen Wynne, the Premier of Ontario.
Ms. Haley: I wrote to her.
Senator Oh: I think it's a step up. The election is coming next year. This is a good time to step up. Her lieutenant has left her to join this company.
Ms. Haley: Her Deputy Minister of Municipal Affairs, yes.
Senator Oh: This important person has left her to join Walton. My question is: What steps have you been taking with the provincial government, on a higher level, to stop this problem? This is not only happening in Brant County; this is happening everywhere in Canada.
Ms. Haley: Thank you, Senator Oh. I think that you make a very good point. If you do look at this, you will see that these investors know very little and they are signing over their rights. They are named in this lawsuit because they gave permission to the agent to act on their behalf. I wonder if they even know that they were in a lawsuit. That's what I wonder, because if you look at the beginning, they are signing over their rights.
I think we need to go right to Wynne. I know that she cares about First Nations and I know she knows they are not happy with this and that it troubles her. I know that. I would like to have a meeting with Premier Wynne.
I do work with the Greenbelt Alliance. We have been meeting since 2005 to grow the Greenbelt, but we worry because that could change. It's a political decision. We need to ensure that, if a government changes, we don't lose protection of farmland.
Thank you for your good advice. I will go to Premier Wynne.
Senator Oh: You might want to talk to other counties who have a similar problem. I'm pretty sure you're not the only one in Ontario.
Ms. Haley: No. I did meet with an MPP from Hastings County and he told me that there was someone from China buying up 60 farms in Hastings County. I think it's happening all over. The hard part is it's expensive to document. It's expensive to go and search the deeds to do that research.
Senator Oh: Talking about buying up farmland, a lot of companies nowadays are buying farmland to farm.
Ms. Haley: Yes.
Senator Oh: They are not buying the farmland that Walton is doing because Asian buyers do not know — it takes a long time. They are not interested in taking a long time to convert the land from farmland into residential. So a lot of these companies are buying land and actually farming. I know a friend in Saskatchewan who owns almost 5,000 acres and produces soy beans and everything for export.
Ms. Haley: Our one concern about big companies — I believe Bonnefield is doing that — is that I think there is a concern the NFU has written about that we don't want to go back to farmers being serfs. It's important to have ownership. I gave you this example, here, of equity trust. If we protect lands through our land trust, we want to know that small farmers have long-term leases, or even renewable or 20 year or lifetime leases, so you may not need to own it but you have that security.
I haven't studied Bonnefield in detail, but there is that concern. I believe NFU may have given you those issues in their report titled Losing Our Grip.
One other point I wanted to speak to is that I have tried to research this and looked at chats online with investors from Singapore and Malaysia, and they have been worried. When we look at it, I'm not a financial person, but it appears as if Walton does not take much risk; it appears as if the foreign investors take the risk. We need somebody with financial tools to dissect this.
Senator Woo: Thank you for your testimony. Can I ask about your community? You said you work in Alberta, correct?
Ms. Haley: I do.
Senator Woo: But your family farm is where?
Ms. Haley: I teach for Athabasca University. Athabasca is distance education, so I can live on my family farm and clean the barn, but also teach my students.
Senator Woo: Do you consider yourself a part-time farmer?
Ms. Haley: My husband is full-time. I'm more the cleaning lady.
Senator Woo: The cleaning professor.
What about the other members your community? Are they typically full-time farmers? How do they juggle their income?
Ms. Haley: I have looked at the presentations that you have already, and even with NFU, you have farms getting larger and larger, with fewer farmers. My next-door neighbour, he probably farms 5,000 acres. He sprays with an airplane, and so that's more corporate industrial, as I see it.
You have a whole new movement since 2005, when I moved back home. I was in Alberta. You have a whole new movement of small-scale organic farmers, so we have a whole vision of repopulating and revitalizing the community by helping them.
A highway went through our farm and it cut our farm in two, but where we live on the north of the highway, since 2005 there are about eight farmers or businesses involved in small-scale organic. On the south, there are maybe three or four just in my community. That's a movement, and we want to help that as much as possible.
Then there were dairy farms. There are fewer and fewer dairy farms, partly because of quotas, and you have heard that in other presentations. What you're seeing is that if you're a conventional farmer, you usually get bigger or get out and retire. Then, as farmers retire, someone buys them up and gets bigger.
But you are seeing this whole new movement of a lot of urban people who want to do organic farming, and good training programs like CRAFT or FarmStart. We have the training. So I think there are two kinds of farming going on.
Senator Woo: There is a diversity of farming types and methods. There is organic, which is the movement you're trying to advance, and there are the traditional — industrial, if I can put it that way — farming approaches as well. So there is a diversity of farming interests within your community.
Ms. Haley: There are different kinds of livestock in our county, and there is some farming at Six Nations as well; we are connecting with Six Nations farmers.
Senator Woo: I want to follow up on the issue Senator Oh raised, which is that, for the provincial government, it's their jurisdiction, of course, and that of the municipality, I should say, to recognize farmland as farmland. In your organization, NFU or others, is there a clear set of criteria that we can agree on that qualifies for peri-urban land to be preserved as farmland? Are we close to that understanding, or is it all ad hoc from municipality to municipality?
Ms. Haley: I think it's ad hoc. I think David Connell did a better study of that in his presentation. We're in what you call the G.T.A., the Greater Toronto Area. There is such pressure. There is so much growth and there is such pressure that the developers have a lot of clout and influence. Am I answering your question?
Senator Woo: The pressure is legitimate. That has to be one of the factors. When you think about peri-urban land, one of the criteria has to be how much pressure is there for development? That has to be weighed against preserving long-time family farms or preserving the productivity of the land and wildlife ecodiversity.
The question really is: Do we have a set of principles and criteria by which, through evidence, good public policy and reasoning, we can come up with reasonable measures to make decisions about whether or not to preserve land as farmland?
Ms. Haley: We have in Ontario the provincial policy statement. It sounds good, but it basically says "protect class 1, 2 and 3 farmland.'' I would go further and say you should protect the top three categories of farmland near any community, because you need to make sure you have the ability to grow your own food, if you're talking food sovereignty. Food sovereignty is knowing we can supply our own food and don't just rely upon California.
I would say the provincial policy statement is good. I worry about the clause on farm development, because it can easily jump to agri-industrial where you lose the farmland to agri-industrial on farmland. But I think we should make it sacrosanct that prime farmland — peri-urban — never gets paved over.
There is an issue with Toronto, though. There are so many people moving to Toronto. That is some of the very best farmland in Canada. Do we rethink where we put our population? Do they all have to live on the prime farmland? Could they not go to where it's rock?
Senator Woo: This is difficult, but this should be the direction in which this committee and others think about the issue in terms of weighing off the different interests and coming up with criteria that the broad majority of the population can agree on as to whether or not to protect farmland in peri-urban areas.
I want to clarify your view on an issue that Senator Oh also raised and which you touched on a number of times: corporate investment in farmland, both by land banks, such as Walton, but also by institutional investors. It's clear from your view that you do not approve of them buying up farmland for conversion into industrial and property development purposes, but are you supportive of institutional investors and other co-operative investors buying farmland for the purpose of enhancing farmland, maintaining the land as farm, perhaps leasing it out to farmers, and providing capital for them to increase the productivity and therefore to increase what you call food sovereignty?
Ms. Haley: I'm a member of the NFU, and we do not support the idea of institutional investors owning the land and then contracting to farmers so much. We support autonomy more. But I do support the idea — Saskatchewan had it — of a land bank. So land bank is used by Walton in a different sense, but Saskatchewan had a wonderful history of land banking land for farmers and making sure that farmers could access that land. I like what Saskatchewan had.
[Translation]
Senator Dagenais: Thank you, Ms. Haley, for your presentation. You frequently referred to the financial contributions that come from various organizations, and it almost sounds as though something corrupt is going on. When you are dealing with the acquisition of farmland and you see financial contribution after financial contribution, it raises eyebrows. No doubt, this isn't the first time you've had to raise the issue. You also said that appeals had been made to Kathleen Wynne's government. What do Ontario politicians tell you when you talk about the financial contributions?
[English]
Ms. Haley: We have written a letter to Premier Wynne. I didn't get to speak to her personally. I did hear from a delegation that met with her that she was very troubled by Brant County and by what had happened, especially because of First Nations not being happy.
I haven't followed it closely, but there has been a campaign in Ontario to ban corporate donations to politicians, so I think that's a step in the right direction. I believe that's law now. I think we should have it at the municipal level. We need oversight. We need to stop in kind or financial donations. It's not just money, but taking someone to dinner and giving them a vacation. We need much more oversight on that.
We have written to Premier Wynne and documented the donations to the Liberal Party and to the PCs, and someone just wrote to me now that in Niagara area, at the municipal level, Walton donated money for a campaign for somebody. Now that man sits on the conservation authority. The people in that area are very troubled by that Walton- affiliated person.
We need to really follow the money. It's a very good question. We need to ban corporate donations but really follow that money. If you have any advice, I welcome it too.
[Translation]
Senator Dagenais: You said you wrote to the premier. Did she respond?
[English]
Ms. Haley: She said that she would send my letter to the Minister of Indigenous Affairs and the Minister of Municipal Affairs.
[Translation]
Senator Dagenais: Did the indigenous affairs minister get back to you?
[English]
Ms. Haley: We saw a letter go 10 days ago to the municipality, telling them that even though the annexation happened, if they do any land-use change, whenever they propose something, they must consult with Six Nations. But it happens after; it's too late. They've done the annexation.
There has been a warning, but the Six Nations wrote a letter. The one thing they could do right now is legally challenge it. They could say they were not consulted and do a legal challenge. The next step is to meet with Wynne. Can we have some federal government oversight of the provinces?
[Translation]
Senator Dagenais: Thank you very much. Use the election to your advantage when the time comes. I think you should get a prompter response.
[English]
Senator Tardif: Thank you for being here this morning. I'm from Alberta. I can certainly relate to the urban encroachment you're speaking about in Edmonton. You're absolutely right: We're losing prime agricultural land to strip malls and other things that are being settled in the areas around the city.
You mentioned several recommendations that the federal government could put into effect. In your view, what is the one representation, or two, that you would like our committee to put forward in our report?
Ms. Haley: I followed some of the presentations here, and I followed your discussion where you say, "Well, you know, farmland and land is a provincial issue,'' but I have tried to flag some of the federal issues — First Nations issues. With Brant County, especially with that larger population at Six Nation, it's important that the federal government look at Brant County and use us an example. How can we solve the land grab in Brant County, especially with indigenous issues?
The federal government could look right now at the Farm Credit Corporation. The farm next to me was bought by a man who, when I searched his deed, he got $500,000 from Farm Credit. He bought it just to speculate. He rents out the land, and he was hoping to develop. So we need to stop Farm Credit from giving loans to people who are investing in farmland and waiting for it to be developed.
We need to stop investing — Canada Pension Plan investment fund. Even if we're not in Henday Park in Edmonton, that's not farmland now; it's now within the settlement boundary. We need to look at who our investment partner is and what else they're investing in. I don't want my pension fund to be teaming up and investing in a corporate land grab. Those are three things for the federal government.
I think we need some oversight, some consistency. I think Quebec is doing good things, B.C. and Prince Edward Island. Now Saskatchewan is cracking down, but Ontario's not cracking down. So how do we make Ontario have more oversight? If they are not doing it, if we have corporate donations or if a company is able to hire a former deputy minister to help them influence the greenbelt policy, then I turn to you. How do we get federal oversight?
I have also looked at the global land grab. It is a terrible problem in Africa and Latin America. We're just a small part of the global land grab. But it's here. There are people in Georgia who write to me about Walton. There are people in northeast Edmonton who write to me. We need some federal oversight. We also need to see it in a global picture. We are part of the global land grab. This is it. I'm on the ground level with part of it.
Senator Tardif: Thank you for sharing your story with us.
[Translation]
The Chair: Thank you, Ms. Haley, for sharing with us your story and your efforts in support of the Ontario greenbelt. I understand why you are so concerned. Quebec had to pass very strict legislation in order to protect its farmland. For your sake, I hope Ontario does the same. Unfortunately, it is not a matter for the federal government to decide but, rather, one for the provinces. It is up to the provinces to take the first step, but it is the tireless efforts of people like you that will give rise to statutory measures to protect farmland, which we will need to feed the planet in the years ahead.
[English]
The committee is now adjourned.
(The committee adjourned.)