There’s growing controversy over whether pension funds such as the Canada Pension Plan should be allowed to buy farmland in Saskatchewan. And with almost half of Canada’s arable land in Saskatchewan, it’s promising to be a good, old-fashioned Prairie dust up.

In late 2013, the Canada Pension Plan Investment Board (CPPIB), which manages the pension funds of 18 million Canadians, bought 115,000 acres of farmland from a Regina company called Assiniboia Farmland LP, for $128 million.

The transaction was vetted by Saskatchewan justice ministry officials and allowed to proceed by the Farm Land Security Board, which oversees purchases of farmland to prevent foreigners from buying more than 10 acres of land.

Under the legislation, only Canadian individuals and 100% Canadian-owned entities are allowed to buy farmland in the province. (Other provinces have restrictions on non-Canadian ownership of farmland, while British Columbia and Ontario have none.)

But the Farm Security Act was also supposed to prohibit farmland from being purchased by pension funds and other institutional investors.

At least, that’s the view of a growing number of farmers, such as Rick Swenson, who is also leader of the Progressive Conservative Party of Saskatchewan, which governed the province from 1982 to 1991. Last summer, Swenson attacked the transaction as “wrong, both legally and morally” and a “precedent-setting sale of Saskatchewan’s greatest resource.”

Swenson’s one-man campaign appears to be gaining traction, with farmers ringing the Saskatchewan Ministry of Agriculture’s phone off the hook to complain.

Now, even Agriculture Minister Lyle Stewart, a farmer and a former political opponent of Swenson’s, seemed to be siding with the critics when he announced a public review of farmland ownership legislation. Stewart said the review will take place over the summer, with any proposed legislation or regulations debated during the fall sitting of the legislature and passed next spring. Until the new rules are in place, pension funds and other institutional investors are barred from acquiring farmland in the province, Stewart says.

The CPPIB wasn’t impressed with the temporary ban, noting that CPPIB’s 2013 transaction with Assiniboia had been allowed by ministry officials.

The CPPIB’s concern is shared by others. What kind of signal does this send to the rest of the world, or even the rest of Canada? Is Saskatchewan open for business and investment or not?

But Swenson says the government isn’t going far enough. The CPPIB should be forced to divest itself of its Saskatchewan farmland holdings in three years, he says.

What kind of message would be sent by banning all future purchases of Saskatchewan farmland by institutional investors, possibly making a legal transaction illegal and forcing divestiture of legally acquired assets? Not a very welcoming one for out-of-province investors.

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