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Farmers for economic freedom

Updates from the Prairie Centre/Centre for Prairie Agriculture in Regina, Saskatchewan.

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web posted December 24, 2001

Planning to fail

By Craig Docksteader

There's no doubt about it, rural Saskatchewan has the attention of the provincial government. In the past two years, Saskatchewan's NDP government has implemented the Action Committee on the Rural Economy (ACRE), and established a new department called the Rural Revitalization Office. Both of these initiatives share the common goal of encouraging rural economic development.

Without question, rural Saskatchewan needs economic development. The province has the most farmland in the country, but boasts the lowest returns to farmers. While Alberta has only half of Saskatchewan's farmland and Manitoba only a quarter, Alberta's food processing sector is four times larger than Saskatchewan's, and Manitoba's twice as large. And while Alberta experienced a 22 percent growth in rural population between 1966 and 1996, and Manitoba's dropped by one percent, Saskatchewan's plummeted a full 25 percent.

Although the challenges facing the rural areas are not new, the provincial government has taken a renewed interest in them since losing most of the rural seats in the 1999 provincial election. Over the next few months, the ACRE committee will be making its findings public and will submit its final report to the government in March 2002, which is expected to provide a detailed blueprint for revitalizing rural Saskatchewan.

But while the details of the plan have yet to be drafted, preliminary research done for the Saskatchewan Department of Agriculture and the ACRE committee recommends a target of doubling the size of Saskatchewan's rural economy over the next 20 years. Getting there will require projects in cattle, hogs, agro-forestry, organic crop production, nutraceuticals, windfarms and ethanol plants. Returns per acre will have to double, the rural population will have to grow from 575,000 to 800,000, we'll need 20,000 more farmers, and the spin-off employment will create over 100,000 jobs.

To many, these targets will sound optimistic, perhaps laughable. But whether they are or not, will be determined primarily by the answer to one question: Where will the capital come from? Significant capital investment will be necessary to achieve these targets, which will come in one of two ways. Either it will be attracted by creating an environment which is friendly to investment, or it will put up by taxpayers through the arm of the government.

Ominously, two recent announcements clearly indicate which direction the government is leaning. On December 14, the Saskatchewan government reported that despite losing $27.9 million in the potato business, they considered the venture to be a success because it was an "investment in rural Saskatchewan." The Minister responsible, Maynard Sonntag, was quoted as saying, "I think it has been largely successful. We need to diversify agriculture in Saskatchewan."

Within days of this announcement, another press release was cranked out of the Cabinet office. This one declared that the government was "creating jobs in rural Saskatchewan" by investing $15 million in Premium Brands Inc., Western Canada's leading producer and distributor of specialty food products. Premium Brands Inc. was ranked one of Canada's 500 largest companies from 1995 - 1998. Its revenue last year was $502 million, and it boasts assets of $274 million. The provincial government claims that by dropping $15 million into the pot, it will create 120 jobs in rural Saskatchewan.

Attempting to stimulate economic growth by government spending has never worked. The so-called jobs that are created are not new jobs, but ones which are lost from other sectors as resources are redistributed through the tax and spend strategy. If Saskatchewan's government takes this approach to economic development, they're simply planning to fail. There will be no rural revitalization in Saskatchewan. If, however, they begin to change the policies which drive away jobs, capital, investment, and entrepreneurs, Saskatchewan's future will be bright.

Craig Docksteader is Coordinator with the Prairie Centre Policy Institute.

web posted December 17, 2001

Leveling the field

By Craig Docksteader

According to recent statements made by Saskatchewan's Minister of Agriculture, the provincial government is considering changes to its farm land ownership rules. Although no firm commitments have been made yet, Ag Minister Clay Serby is suggesting the issue will come up for review when the legislature resumes sitting in February.

Since being introduced in 1974, the law governing the sale of Saskatchewan farm land has been changed a number of times. Amendments were made in 1977, 1980, and 1988. Each time, the rules were relaxed, allowing non-residents to purchase greater amounts of farm land.

In spite of the changes, however, Saskatchewan's farm ownership legislation remains far more restrictive than either Manitoba's or Alberta's. If the government is going to put Saskatchewan producers on a level playing field with their neighbours, it will have to make changes in a number of areas:

1. Restrictions on Canadian Residents

While all three prairie provinces place restrictions on non-Canadian individuals and corporations, only Saskatchewan restricts other Canadians from owning its farmland. Canadian residents who do not live in Saskatchewan are restricted to owning no more than 320 acres of Saskatchewan farm land. Neither Alberta nor Manitoba place any restrictions on Canadians living outside of their province.

2. Restrictions on Canadian Corporations

When the legislation was first passed in 1974, Saskatchewan not only placed limitations on Canadians who did not reside in Saskatchewan, but it also restricted farm land ownership by Canadian corporations. All three prairie provinces restrict sales of farm land to foreign-owned corporations, but only Saskatchewan restricts Canadian corporations from purchasing more than 10 acres of farm land.

3. Restrictions on Saskatchewan Corporations

Saskatchewan also restricts the ownership of farm land by corporations within the province. Unless a corporation is involved in agriculture and controlled primarily by Saskatchewan producers, it is restricted from owning more than 320 acres of farm land. Neither Alberta nor Manitoba place any restrictions on provincial corporations.

4. Restrictions Based on Residency

In Saskatchewan, the eligibility of prospective farm land buyers is determined by their place of residency. Manitoba and Alberta, meanwhile, determine eligibility on the basis of either residency or citizenship. This means that a Canadian citizen who resides in another country would still be permitted to own farm land in either Manitoba or Alberta, as long as they retain their Canadian citizenship.

Putting Saskatchewan on a level playing field with Alberta and Manitoba involves more than simply allowing other Canadians to buy Saskatchewan farm land. After addressing the concerns that some Saskatchewan residents have about changing the Act, each of the preceding restrictions will need to be amended.

Craig Docksteader is Coordinator with the Prairie Centre Policy Institute.

web posted December 10, 2001

Writing tomorrow's report today

By Craig Docksteader

Earlier this year, the Canada West Foundation released a report entitled, "State of the West -- Western Canadian Demographic and Economic Trends". The study examines twelve different economic and demographic trends across the four western Canadian provinces, and provides a 30-year picture of the provinces' performance in each of these areas.

At first glance, one might think the information is little more than dull statistics. Issues such as population growth, immigration, interprovincial migration, population aging, aboriginal population, urbanization, employment, income, gross domestic product, exports, and public finance, do little to capture the imagination of the average person.

But underneath the blur of numbers, graphs, and charts, is a thuddingly repetitious message, which is so obvious, it's easy to miss: Significant differences in opportunity, prosperity, and standard of living, can be determined simply by which side of an invisible line you live on.

Take population growth, for instance. Population growth is significant because it tells us something about the perceived opportunity in a region. As stated in the study, "If a province is thriving, its residents are more likely to stay, and migrants... are more likely to move in. Simply put, people vote with their feet."

In Alberta, the average annual change in population, from 1972 to 2000, was 2.1 percent. In Manitoba it was 0.5 percent. In Saskatchewan it was 0.3 percent. Projected average annual growth for the next 25 years puts Alberta at .68 percent, Manitoba at .14 percent, and Saskatchewan at minus .06 percent. Dramatically different results, separated only by an invisible line on the ground.

Then there's the drop in rural population. Despite similar challenges in each of the three prairie provinces, Saskatchewan's rural population dropped by 25 percent from 1966 to 1996 and Manitoba's dropped by 1 percent, while Alberta's grew by 22 percent.

Family income and employment is also different. In 1998, the average after-tax income for a family in Alberta was $52,388. In Manitoba it was $45,373, and in Saskatchewan it was $43,477. From 1971 to 2000, the average annual growth in employment was 3.2 percent in Alberta, 1.3 percent in Saskatchewan, and 1.4 percent in Manitoba.

While different factors can contribute to the disparities that exist, one general observation is inescapable: The direct positive or negative impacts of public policy stop at the invisible line on the ground which separates one province from the other. In other words, provincial borders define political boundaries, to which the impact of each government's decisions are primarily confined. Although there are exceptions to this rule, it is nonetheless generally true.

If the implications of this fact appear obvious, they are rarely reflected in our attitudes and outlook. Rather than assuming that the prosperity of a province is a matter of uncontrollable fate, we need to clearly recognize that our present state of economic and social well-being is significantly influenced by the result of many public policy decisions, right or wrong.

In this respect, the future is in our hands. Alberta is not guaranteed to always be a rich province and Saskatchewan destined to be a poor one. In actual fact, we are writing the results of tomorrow's report today. The outcome will be largely determined by what we believe, what decisions we make, and what policies we demand from our politicians.

Craig Docksteader is Coordinator with the Prairie Centre Policy Institute.

web posted December 3, 2001

Farm land ownership laws

By Craig Docksteader

Over the last few years, there has been growing interest in seeing changes to Saskatchewan's farm land ownership law. And for good reason. While all three prairie provinces have legislation which restricts the sale of farm land to non-Canadian citizens, Saskatchewan farmers are the only ones who cannot sell to anyone who does not live in the province, or any corporation that is not owned primarily by producers.

Only two other provinces have legislation which is as restrictive as Saskatchewan's, and for decidedly different reasons: Quebec's Agricultural Land Protection Commission oversees the transfer of agricultural land, primarily to prevent the loss of agricultural land to growing cities; and, because of its small land base, Prince Edward Island places heavy restrictions on various kinds of land transfers, for both non-residents and residents alike.

Saskatchewan's farm land ownership legislation was motivated by significantly different concerns, as detailed in a 1973 report by the Special Committee on the Ownership of Agricultural Lands.

In 1973, the issue of the day was rural depopulation and the decline of the farming community. Since the 1930's, increasing efficiency in the agricultural sector had caused a steady increase in the size of farms and a steady decline in the number of farmers. The resulting drop in rural population posed many challenges for the rural communities and the businesses that served them.

From the Committee's point of view, allowing large corporate farms and foreign ownership of farmland, contributed to the decline of rural Saskatchewan. Consequently, the Committee reported back to the legislature stating that, "Without strong and remedial action further increases in farm size and decreases in the number of farm operators can be expected... The cycle of declining population leading to cut backs of social amenities and local businesses leading to further loss of population must be stopped." They recommended imposing significant restrictions on the ownership of farm land as one way to address the problem.

As statistical records show, however, the legislation did not achieve its intended results. According to Statistics Canada's census information, Saskatchewan farm population in 1971 was 233,792. Over the next 25 years, census results would show a steady drop, with the 1996 census reporting a farm population of only 145,560. The increase in farm size continued unabated as well. By 1996 the average Saskatchewan farm had reached 1,152 acres in size, up from 845 acres in 1971.

In the last fiscal year, the Saskatchewan Farm Land Security Board monitored over 25,000 land transfers. 5,718 of those were reviewed and documented by the Board because they were transfers to non-residents, corporations, or Crown agencies. Only 244 of these transfers were prohibited by the provincial legislation and the parties involved applied to the Board for an exemption. After examining the applications, the Board granted exemptions to all but six of them.

In 1983, Manitoba introduced legislation governing farm land ownership which was similar to Saskatchewan's. Ownership of farm land was restricted to non-Canadian citizens and non-Manitoba residents. But then in 1997, Manitoba changed their law, opening up farm land purchases to any Canadian citizen. The reason for this change was simple: Almost all applications were being approved anyhow, and the Manitoba Farm Lands Ownership Board felt the time and money spent investigating the applications was a waste.

Both the historical record and recent land transfer statistics suggest that perhaps it's time for Saskatchewan to do the same.

Craig Docksteader is Coordinator with the Prairie Centre Policy Institute.

Prairie Centre/Centre for Prairie Agriculture, Inc.
#205, 1055 Park Street
Regina, SK
S4N 5H4

Phone: 306-352-3828
Fax: 306-352-5833
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The CFEN needs your help! The battle against the Canada Wheat Board can only continue with your support.

Canadian Farm Enterprise Network
Box 521
Central Butte, Saskatchewan
S0H 0T0

Write the following and demand free market rights for Western Canadian farmers!

The Canadian Wheat Board
423 Main Street
P.O. Box 816, Stn. M.
Winnipeg, MB
R3C 2P5

Telephone: (204) 983-0239 / 1-800-ASK-4-CWB
Fax: (204) 983-3841

Email Address:

Ralph Goodale
Minister Responsible for the Canada Wheat Board
Department of Natural Resources Canada
21 - 580 Booth Street
Ottawa, ON
K1A 0E4

Telephone: (613)996-2007
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