|Agriculture & Canada
Is Canada a good place to buy agricultural land?
This is a great country to invest in farms, ranch properties, or vacant land, and Royal LePage can help you do so. Below, we've prepared an introduction to business, trade, and agriculture in Canada.
Economy and infrastructure
The Canadian government encourages potential investors, including those interested in the agriculture sector, to take note of the country's excellent fiscal status and low inflation, reflected in low domestic interest rates. Over the past five years, Canada has outdone the US by recording an inflation rate of just 2.2%. The Organization for Economic Co-operation and Development (OECD) projects Canada's growth to average 3.1% over the 2004 to 2006 period, placing it as the leader among G7 members.
Any discussion of the advantages of investing in Canada begs comparison to its giant ally and competitor to the south. Canada boasts lower overall business costs. For example, construction and electricity are 8 to 22% cheaper than the US, and its labour costs are 20 to 24% less.
Canada's production input costs – construction, electricity, telecommunications, and transportation – are a better bargain than in the US, and Canada boasts a high-quality, available labour force. Indeed, The Institute for Management Development's 2003 World Competitiveness Yearbook ranked Canada first in "higher educational achievement." Canada ranked 4th, while the US ranked 24th, in skilled labour availability. Education quality is tops in Canada – 18 of the 40 highest rated North American Free Trade Agreement (NAFTA) Engineering Schools are in Canada. Canadian labour turnover rates are half US rates, resulting in lower overall costs. Canada is immigrant-friendly, offering fewer limitations than other countries to newcomers and their spouses.
Canada has a world-class technology infrastructure, with the lowest wireless communications costs. Also, Canada is a leader in terms of Internet access charges, boasting an 18% cost advantage over the US in research and development. The OECD says Canada leads the G7 in broadband or high-speed Internet usage.
Another incentive to invest in Canada is its positive business climate. Canada ranks first in the G7 for ethical business practices. Canada is two to three times less litigious than the US. Although Canada has a higher rate of unionization than the US, the US loses more person days per capita than Canada. As well, Canada's National Food Inspection Agency, among the best in the world, ensures the quality and safety of food products.
Canada also enjoys smooth North American market access. Canada and the US are the world's largest trading partners with two-way goods-and-services trade valued at almost half a trillion US dollars in 2003, or nearly $1.2 billion US a day. In North America, what is divided by geography is united by transportation. Canadian cities are within a 10-hour drive of 60% of the US market. NAFTA is an added bonus, because it has allowed freer and easier trade for some agriculture-related business. The superior buying power of the American dollar is an important US purchasing incentive.
Quality of life
Canada is a superior place to live. It has the lowest cost of living in the G7, which in most large cities is better than or comparable to similar US cities. Canada also leads the G7 as a safe place to live, and is one of the most reliable places anywhere to do business. In fact, in a survey of 90 countries, the Economist ranked Canada third to Finland and Sweden for honesty and reliability in business dealings. Canada is a multicultural nation, welcoming more immigrants than any other country.
Procedures and regulations
People wanting to immigrate to Canada must apply to Citizenship and Immigration Canada.
As "self-employed business immigrants," farmers must establish or purchase a business that will keep them employed and contribute significantly to Canada's economy.
Self-employed applicants are assessed on a point system that takes into consideration education, experience, personal suitability, and occupational demand. The point system does not apply to people applying under the Quebec program. Quebec selects its own business immigrants.
As a potential landowner, an immigrant buying a farm will be subject to the Investment Canada Act and will have to file a notification of his or her investment. Investments in excess of $184 million are subject to review.
Each province also has specific rules and regulations for land purchases:
- Alberta's Foreign Ownership of Land Regulations prevent foreign citizens from acquiring an interest in agricultural land within the boundaries of a city or town unless they meet certain regulations.
- Manitoba preserves farmland resources for existing and future Manitoba residents.
- New Brunswick, Nova Scotia, and Newfoundland do not restrict non-residents from owning realty. Foreign realty purchases outside the boundaries of a city or town in Nova Scotia must be registered with the Foreign Land Registry Office.
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