LAND GRAB

Taking down the for sale signs—while there’s still time

Harry Bruce May 1 1975

LAND GRAB

Taking down the for sale signs—while there’s still time

Harry Bruce May 1 1975

LAND GRAB

Harry Bruce

Taking down the for sale signs—while there’s still time

We must have priorities in our national worrying and therefore the bigger controversies have always had more to do with boardrooms, banks and bilingualism than with cottages, canoes and campfires. In the light of this, it hardly seemed important a few years ago that a bunch of loose-spending Bostonians and New Yorkers were goosing the price of farmland in the Annapolis Valley. Or that a Dallas fashion king had just bought himself a chunk of a perfectly darling little island off British Columbia. Or even that a Madison Avenue land hustler was peddling thousands of acres of prime Laurentian playground — for roughly eight times what he’d paid for it — to people from Oklahoma, Idaho. Wisconsin and Louisiana.

This sort of thing, among Debates of National Importance, was still very small potatoes only three or four years ago. And why not? No one was doing anything illegal. Americans have a perfect right to buy land in Canada. Canadians have a perfect right to sell land to whomever they choose; and, indeed, to hear some politicians and many real estate wheelers talk, no right is more sacred. And anyway, beside the economic nationalists’ latest figures on the frightening speed with which the Americans had gobbled up whole Canadian industries, the discovery that Americans had also gobbled up the whole shore of good old Lake Onawongdangdawa was puny news.

Now, however, foreign ownership of Canadian land is blossoming as a major and endless issue right across the country. There’s scarcely a province that's not taking a hard look at the law to see how to control the flow of Canadian land into foreign hands. Prince Edw'ard Island and Saskatchewan both have laws to limit foreigners’ investment in their land. Ontario has a special tax on land transfers to foreigners. And Nova Scotia, in a swooping and unprecedented act of expropriation, announced last year that it was taking frorh an Ohio woman more than 5,400 acres of gorgeous South Shore property.

Within the past half-dozen years, Americans, Europeans, Japanese and, more recently, Arab oil kings and Mafia interests have determined that Canada is one beautiful big place in which to put money into land. Many wealthy Europeans fear what a socialist take-over would do to their property at home. They admire the political stability of Canada. The return on investments in Canadian land is high and. perhaps even more important to. say, a West German doctor, the whole investment is safe.

Such considerations apply particularly to the heavily populated and economically high-flying area of southern Ontario, and perhaps, too, to the foreigners’ urge to own thousands of acres of prime agricultural land in the Prairies.

But in the Atlantic Provinces, in BC, in Quebec’s Lauren-

tian country and the resort belt of Ontario, the pressure is on from Americans, who will pay more than any of the locals can ever hope to raise. (In the past two years, a Mahone Bay, NS, real estate dealer says, he has sold 55 of the 3,500 islands off Nova Scotia, mostly to rich Americans. As investments, he says, such islands double in value within 24 months.)

American cottage-owners may be ideal guests of Canada, generous summertime members of a Canadian community, blameless neighbors and superb groundskeepers. But sometimes the land they buy at what the locals regard as outrageously inflated prices is land these same locals have coveted. land these same locals may even have used for generations into the past.

There are other problems. In some parts of the country, an American’s innocent act of paying a fat price for a farm not only takes one more farm out of production but also encourages assessment officials to raise the taxes on neighboring properties. Some of the neighbors may be having a tough enough time keeping their own farms in production anyway and, when the next rich American drops by with a stupendous offer, one of them may accept it. And there goes another farm out of production.

The farmer insists he has a right to sell to the highest bidder. And maybe he has. Moreover, some foreigners — notably two Americans who’ve challenged the PEI government’s refusal to let them buy 36 acres near Summerside — insist that, under the Canadian Citizenship Act. they have the same rights as Canadians to buy and sell Canadian land. They have taken the case to the Supreme Court of Canada.

Some real estate experts wonder what the fuss is all about. They argue that if Canada must sell anything to foreigners, why not sell the one thing no one can actually take out of the country. The land will still be here, no matter who owns it.

They miss the emotional point.

Even the most stridently continentalist businessman, when he considers the strip of lakefront forest that’s most dear to him. becomes a nationalist. We cannot make the land again. It is not potatoes, sugar, rolls of newsprint, or barrels of oil. It is where we have walked, and where we stand and. like a stubborn farmer whom the Depression has laid low. we have to ask. “If I can no longer call even that my own. what have I got?" This is why the issue has begun to bubble across the country, and why you're likely to see new laws, in assorted provinces, in the months to come.

Harry Bruce is a Halifax author, free-lance writer and broadcaster, and a frequent contributor to Maclean’s.

The issue in dispute: a man’s right to sell his own and versus a nation’s right to protect its sovereignty

BRITISH COLUMBIA For decades, the mild climate and extravagant beauty of British Columbia’s coastline and saltwater islands have made her a wilderness mecca not only for colder Canadians but also for Americans and Europeans with the money to build retreats there. Some foreigners are buying BC land to speculate in other foreigners’ dreams of retreat. but until last spring it was impossible to know exactly what was going on because the provincial land registry did not compile statistics on foreign land holdings.

Enter Karen Sanford, the NDP member for Comox. Her constituency is at the north end of Vancouver Fsland and, lately. Americans have been buying up a lot of it. They are particularly keen on the beautiful islands in the Gulf of Georgia. Their wealth enables them blithely to create for certain West Coast commercial fishermen the same problem that. 3,000-odd miles away, other Americans are creating for Nova Scotian farmers. The Americans pay so much more for the land than it was worth before their bulging wallets appeared in the backwoods that they inflate the market value of everything around them; and. since market value determines property assessment, the neighboring farmers and fishermen are beginning to experience what, for them, is a crippling tax bite. A good example of that occurred in Ms.

Sanford’s own constituency: a small Gulf island, inhabited for 60 years by a few families

— fishermen who enjoyed neither ferry service nor electricity

— was spotted by an American. He had his lawyer buy one lot (he made an incredible offer) and the next year another American bought a neighboring lot (for a little more).

When the tax assessor arrived the lots were worth a fortune, and the taxes became prohibitive, forcing some of the original homesteaders off the island. There was no choice but to sell out and move.

Last spring Ms. Sanford and several other NDP members of the BC legislature pushed through legislation that now requires everyone w'ho buys BC land to register his or her citizenship. There is also a private member’s bill in preparation that would outlaw' the sale of BC land to anyone who is neither a Canadian nor a landed immigrant. The BC land commission, which the government established in 1973 to preserve farmland, might supervise whatever control on foreign ownership of land BC does decide to impose. However Premier Barrett prefers to stall independent action until after discussions among all the premiers, and the federal government’s own deliberations, lead to a nationwide policy.

ALBERTA Alberta passed an Act in 1973 to restrict the sale of public land to Canadians and to corporations whose ownership was at least 75% Canadian, but anyone, anywhere, may still own private land in Alberta. As in most other provinces,

there are no hard data on how much land foreigners do own (except for agricultural land — \ %) but the Land Site Amendment Act, passed last October, will partially remedy that. It will monitor all future acquisitions, and require a statement of citizenship from buyers. This is an attempt to determine the extent of foreign ownership, and could be used, if it’s felt necessary, to limit it in the future.

It may be a Reflection of the sturdy western belief in free enterprise but, at the moment, the idea of foreigners owning Alberta land does not drive Albertans wild w'ith patriotic rage. Consider, for example, the statement of Dr. Vern Wood, chairman of a provincial committee studying foreign ownership: “. . . nearly all Canadians were onetime foreigners or

are the descendants of foreigners. The difference between resident and foreign status may only be the time it takes to get Canadian citizenship.” Albertans have, in any case, lived for many a fat and friendly year with U.S. investment in their oil fields, and w'ith hundreds of U.S. citizens as neighbors on Alberta soil. Moreover, many Canadian Albertans, come January and February, begin to lust after a private chunk of the sunny American southwest or even Hawaii. If we tell Americans they can’t buy our land, will they tell us we can’t buy theirs? A lot of people ask the same question in Ontario.

SASKATCHEWAN Though

registry is currently in process, no one has yet documented a serious intrusion on Saskatchewan land by foreign buyers but the fear of the Saskatchewan government is much like Manitoba’s: that huge outside interests may buy up vast tracts of prime agricultural land and milk it to their own advantage rather than the Prairies’. There’s been a lot of talk about protecting the family farm and maintaining rural populations.

The NDP government tried to introduce legislation to control nonresident ownership of Saskatchewan land in 1972 but the bill had certain ludicrous and offensive qualities, and eventually it died on the order paper. Last year, however, agriculture minister Jack Messer brought in a second and more acceptable bill to control the future acquisition of land by nonresidents.

It defines a resident as anyone who lives in the province at least 183 days of the year, or anyone who farms Saskatchewan land and lives within 20 miles of any Saskatchewan border; and it stipulates that no nonresident may buy Saskatchewan farmland worth more than $15,000. It also establishes controls on the value and acreage of land transfers by either residents or nonresidents. One purpose of the legislation is to make sure that nonresi dent banks and mortgage companies no longer hold liens and mortgages on Saskatchewan farm properties. (Lending institu tions with headquarters outside the province were given 20

years to divest themselves of the liens and mortgages they held when the legislation was passed but they’ll have the right of appeal to the Court of the Queen’s Bench in Saskatchewan.)

The new legislation also insists on annual disclosures of all properties larger than 160 acres that the banks and other nonagricultural corporations happen to be holding. It establishes a Farm Ownership Board, to arbitrate disputes; and, finally, it allows the bona fide Saskatchewan farmer — one who’s lived and farmed there for five years — to give his land to his immediate family even if they do not live in the province.

MANITOBA Most Manitoba cottage-owners lease their land from government, and therefore the issue of foreign land ownership there has little to do with vacation property. It has everything to do with farming.

For two years running, the NDP government rejected Liberal resolutions to forbid foreigners from buying Manitoba land and yet, at the same time, it has proclaimed to the world its unrelenting opposition to outside corporations that buy up massive tracts of Manitoba farmland. However, the government’s posture may not be quite the contradiction it appears to be.

It is not the fact of a Manitoba landowner’s being “foreign” that bothers the government. It’s his location that matters. Sam Uskiw, the agriculture and co-op development minister, is probably more outspoken about foreign landownership than anyone in the cabinet but even he has no quarrel with outsiders who come to Manitoba, buy farms and work them themselves.

What the NDP — and particularly Sam Uskiw — really dislike are the absentee landlords, the people Uskiw calls the “private land barons,” the foreign corporations who buy up huge chunks of farmland and profit by leasing them back to Manitobans. Uskiw talks about foreign-landlords who now own Manitoba farmland in 5.000to 20.000-acre blocks. He talks, too. about efforts by international syndicates to introduce into Manitoba agriculture “the federal system of old Europe.”

The Liberals insist Uskiw is using the foreign land owners as a smokescreen to hide his true purpose — which is to have the province acquire land and to assert government control over the means of agricultural production.

No one. however, can accuse Sidney Green — the Minister i of Mines, Resources and Environment Management — of loys alty to socialist ideology. Not in this case anyway. He’s one of g Premier Schreyer’s strongest cabinet ministers, but he’s death > on the very idea of government interference with any man’s E God-given right to sell his land to the buyer of his choice. On g that issue, Green is Tory blue but, despite the confusion, it ? seemed probable early this year that the government of ManiE toba would soon get around to legislating some sort of restric-

tions on foreign ownership of Manitoba farmland.

ONTARIO The Ontario government’s first real move against foreigners who buy private land in the province came last spring and it was part of a larger tax program to dampen all inflationary land speculation. The legislation put a 201 tax on the profits of everyone who buys and sells land without adding any real value to the property; but there is also a new 201 land-transfer tax for foreigners who buy property in Ontario. John White, then Ontario Treasurer, explained, “Speculation both by Canadian residents and by nonresidents bids up prices artificially, increases the cost of housing and generates unwarranted windfall gains.”

The land-transfer tax for foreigners was significant but it did not go nearly so far as the select committee on economic and cultural nationalism had proposed in September of 1973. The committee’s decision was not unanimous but it did recommend a complete ban on the sale, to anyone but Canadians and landed immigrants, of recreation land, agricultural land, and even of year-round residential properties near the U.S. border. (Many Americans live in Ontario, work in the States, and keep U.S. citizenship. The committee, apparently, would prefer to see them restricted to renting in Canada.)

The committee found there’s no precise information on the extent of foreign land ownership in Ontario. Facts are spotty. One study shows that Americans own 921 of the land in a township north of Sault Ste. Marie. Others indicate that Americans own anywhere between 301 and 651 of vacation properties in the holiday hotbeds of Muskoka and Haliburton. A government study as far back as 1964 showed that 121 of Ontario cottage-owners were Americans, and that the bulk of their properties were close to the border. The committee reached the highly unspecific conclusion that, although foreign ownership of Ontario recreation land was negligible in some places, it was undoubtedly as high as 901 in others.

It concluded, too, however, that no matter what the exact situation was now. it was bound to get worse. Unless the government took action.

Moreover, in Ontario the question of foreign landownership involves far more than farms and cottages. Southern Ontario is among the world’s hottest real estate territories, and no one knows how many foreign-owned or foreign-controlled companies invest in Ontario land not for pleasure but as Big Business. Liberal leader Robert Nixon says foreign firms own a “staggering” amount of land in central Toronto, and that their money is driving up the prices Canadians pay for lots and houses. The Urban Development Institute had already estimated that companies either wholly or partly con-

It might be exciting to have Dean Martin for a neighboi

trolled by foreign interests have bought up as much as half of all future housing land for 30 miles around Toronto.

The select committee on economic and cultural nationalism said foreign commercial ownership of real estate in Ontario “amounts to several billions of dollars, and is increasing annually.” It proposed that the government should outlaw all future sales of land to companies whose ownership was not at least 75% Canadian.

QUEBEC Leon Harris of the Montreal Gazette revealed last year the extraordinary case of one Robert Edwards, a New York real estate dealer who had bought 5,000 acres of juicy Laurentian resort land for “pretty close” to $400,000. Edwards sells the land, mostly to Americans living in the Midwest and southwest and, according to Harris, “This American is getting eight times his outlay on our land. Not bad!”

The Quebec government did design a bill to eliminate land speculation in Quebec.

That was back in June of 1972 and, according to its provisions, anyone who wanted to buy Quebec property would have to apply to a government superintendent for a broker’s permit. Under the Civil Code of Quebec, there’s doubt whether anyone has the legal right to prevent a landowmer from selling his property to the buyer of his choice. The purpose of the permit system was to bypass this problem by enabling the government to block certain sales at the permit stage; but apparently this attempted end run around the Civil Code did not work.

Many farmers had told financial institutions minister William Tetley they should be allowed to do what they want with their property; but one of their own official voices, the Union of Agricultural Producers, has urged a ban on all foreign ownership of Quebec land. They also wanted the government to impose a special tax on owners of Quebec farmland who do not live in Canada. Agriculture minister Normand Toupin heartily endorsed their proposals while Tetley said there w'ould be no quotas to restrict the amount of Quebec land foreign buyers could acquire.

NEW BRUNSWICK Asfaras anyone can gather, people who live outside New Brunsw ick own 12,146 properties in the province, and these are worth more than $17 million. New' Englanders and Upper Canadians are probably the bulk of the nonresident owners and, last year, the government figured more than 8,100 of these properties saw use as vacation places.

Nonresidents bought 1,200 New Brunswick properties in 1972-73, and 900 in 1973-74. In one county, American-owned properties numbered 460 in 1970; the number in 1974 was 1,012. The local agent for the Land Auction Bureau of Boston quietly purchased 2,000 acres of oceanfront property in West-

morland County in 1973 and it went up for auction to U.S. buyers in Massachusetts. New Brunswickers complained that the deal had denied them the chance to bid on land in their own province, and a citizens group protested.

The Boston land auction did dramatize the pressure on certain specific and choice vacationland areas but New Brunswick is big enough so that, so far, nonresident landownership is weak as a province-wide issue. Telling farmers they can’t sell their land to the highest bidder does not endear them to a government on election day and the nationality of nonresident landowmers does not particularly bother Premier Richard Hatfield: “My greatest concern is the speculators. It’s just as wrong for somebody from Vancouver to buy land, sit on it, and then

sell it at a high price as it is for somebody from Boston to do it.”

In a study of nonresident ownership in south-coast Charlotte County, 27 people freely admitted they were holding land to turn a profit, but among those who said they used their land for recreation “only a small percentage” had cottages on their holdings. Moreover, several owners of large blocks simply refused to reveal their motives. Elmer Cronk. New' Brunswick’s director of assessments, has no great faith that legislation against nonresident ownership w'ould frustrate speculators:

“A friend or relative could hold the land in trust for a nonresident. There are many ways to get around it.”

NOVA SCOTIA In April

1974. the Nova Scotia government coolly (and, some thought, brutally) announced the expropriation of 5,462 acres of land on the South Shore. The land included tw'o white beaches, 11 miles of shoreline, and a bunch of lakes. For 28 years it had been in the family of Mrs. Dorothy Wood of Ohio. Her son Winslow' is a landed immigrant who’s been living on the land for five years.

Immediately. there were rumors that Nova Scotia had only begun, that more expropriations of choice recreation land might follow; and, whatever anyone might think about the justice of the Regan government's methods, the move seemed likely to cool the extraordinary land speculation, among nonresidents, that's recently been hitting all the most beautiful corners of the province. A Mahone Bay realtor happily announced last April that Dean Martin was considering buying land in the Molega Lake area and that movie actor Arthur Kennedy. who's owned property in the Annapolis Valley for several years, had bought more land on the shore. There were rumors that Raymond Burr (Perry Mason. lronside), Steve McQueen and Lucille Ball were all interested in Nova Scotia land and that Miss Ball had in fact bought some. The sight of Dean Martin wandering into a Nova Scotia

ut is it worth losing all those farms and beaches?

liquor store might arouse a certain amount of pleasant excitement; hut many Nova Scotians who are much poorer than he is are deeply upset about what nonresident land purchases threaten to do to the old province. The show-biz personalities merely dramatize a land boom that threatens a lot of Nova Scotians where they live, both physically and spiritually.

The Citizen’s Alliance for the Preservation of Nova Scotian Land argues that “the land is fundamental to everything that is unique in the Nova Scotian way of life . . . And so, what it has taken Nova Scotians hundreds of years to preserve and build is slipping away from us.” The land sharks, in the alliance’s opinion, are everywhere, manipulating prices, hoarding prime farmland, driving up tax assessments, luring and indirectly forcing Nova Scotians off their land.

The alliance’s concern may be dramatic but it is not hysterical. Ralph Surette, in The 4th Estate, a Halifax weekly, revealed that a company in Massachusetts owned 6,425 acres of Nova Scotia; that a Toronto outfit owned 6.000 more; that a Chicago company owned 4.586 acres in four counties; that a German doctor owned 1,562 plus 12 parcels of undisclosed size; and that “in all, nine of the largest holders on the list are Canadian. 18 are American and one is West German.” Most apparently had little interest in the welfare or character of Nova Scotia.

They were speculators, landhustlers. inflation-hedgers.

Once again, reliable figures for the whole province are impossible to find. Under Nova Scotian law. nonresident landowners must list their properties with the Registrar of Land Holdings, and its records show 7,172 entries. The office believes, however, that at least 4.000 nonresidents are ignoring the law since county assess ment figures show 11,348 nonresident landowners.

For reasons that escape a lot of people, nonresident corporations (as opposed to individuals) have no obligation under the Land Holdings Disclosure Act to list their properties with the registrar, and this confuses the picture even further. Lands and Forests records, however, suggest that, out of the province’s total of 14 million acres, nonresidents now own 727.000 acres. Most of them are in the lush Annapolis Valle.y, among the Scottish charms of Cape Breton Island, or along choice stretches of waterfront.

Farmers feel that unless the government does a lot more to make farming attractive then, as the Nova Scotia Federation of Agriculture argues, “each and every farmer of this province must retain the exclusive and absolute right to sell to the highlest bidders.” And in many constituencies, the politicians know each and every farmer by his first name. PEI Our smallest province is intensely agricultural and. among would-be landowners “far away,” dangerously popu-

lar. For these reasons, PEI has the country’s toughest restrictions on nonresident landownership. A few years ago the government concluded that, at the rate outsiders were buying PEI land, they’d own half the island within 25 years. It therefore ruled in 1972 that, without cabinet approval, no nonresident could buy more than 10 acres or more than 330 feet of shore frontage.

At the moment, nonresident individuals and corporations own more than 10% of PEI and. as in other provinces, their holdings tend to be superior vacation land. Nonresidents, for instance, now own between 10% and 15% of the shoreline.

What scares the government is the drift of farmers off their farms, and fat land prices encourage the drift. Premier Campbell says his government is “determined to encourage the fullest possible use of land in PEI for agriculture.” Nonresident owners rarely leave farms in production. At best, they use them for occasional recreation. At worst, they hold them and wait for another speculator to offer the right price.

The farm population of PEI was 63% of the island total in 1931. It was 43.6% in 1956. It was 19.1% in 1971. Moreover, despite the recent establishment of large and efficient farms, not only the number of farms but also the size of improved agricultural acreage has steadily declined. While the farmers were leaving good acreage to the recreational land market, government advertising was inspiring more and more people to vacation among the island’s peculiar charms. Many farms rolled down to a warm summer sea, and were for sale.

Now, the province is considering legislation to keep farmers farming by granting tax exemptions to islanders who keep agricultural land in production, and imposing restrictions on non-islanders who decide to keep it out of production.

NEWFOUNDLAND Foreign ownership of Newfoundland real estate is so insignificant right now the government has no plans for legislation to control it. The Newfoundland and Labrador real estate board confidently states that nonresidents are buying very little land in the province.

Moreover, most years fog sits on the south coast of Newfoundland and the southern shore of the Avalon peninsula from May till early August. Shorelines are rocky, beaches are gravel. A real estate dealer said, “The type of land Americans are looking for is not for sale in Newfoundland anyway.”

The government, however, has introduced legislation to control the industrial use of forests, and it plans to revamp mineral land tenure. The government does recognize nonresident land ownership as a potential problem for Newfoundland and Labrador, and may yet consider special taxes on foreignowned land or restrictions of some sort.