A number of Canadian provinces regulate and restrict the amount of land that non-residents can acquire. For companies doing business in Canada, it is important to be aware of and understand these rules, as they can often have an impact on transactions in unexpected ways. A transaction involving the direct purchase of land that is subject to some type of foreign ownership restriction is one of the more obvious situations to consider; however, even mergers, acquisitions or similar agreements can be affected by foreign ownership of land restrictions when the corporate entities involved own land that is subject to the restrictions. Where these transactions result in a change of control for the purpose of foreign ownership considerations, a corporation could be required to sell some, or all, of its holdings in the land in question.

British Columbia, Ontario, Newfoundland and Labrador, New Brunswick and Nova Scotia have no restrictions on foreign ownership of land. In this article, we summarise the foreign land ownership regimes in the provinces that have adopted them.

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In Alberta, foreign residents and foreign-controlled corporations can only own the stipulated maximum of two parcels of land with an aggregate area of 20 acres. These rules cover all ‘controlled land’ (i.e. lands located outside of a city, town or village) and are overseen by the province’s Foreign Ownership of Land Administration (the FOLA). All interests, whether acquired directly or indirectly, are affected and include acquisitions through, among others:

  • sale agreements
  • options to purchase
  • rights of first refusal
  • leases.

However, a mortgage interest in land to secure a debt obligation is not restricted unless a foreclosure occurs.

Who is affected?

Companies that are considered to be foreign-controlled under the rules may be ineligible to hold land. Companies incorporated outside of Canada are always considered to be foreign controlled, while those incorporated within Canada are generally subject to the restriction of having no more than 50 per cent of their legal or beneficial ownership vested in foreign individuals to avoid being considered foreign-controlled. Additionally, public companies that trade on a Canadian exchange are generally required to have boards of directors comprised of at least two-thirds Canadians (or Canadian permanent residents).

The rules related to corporate control are detailed and encompass most corporate structures, with the aim of ensuring that any type of corporate structure that may result in the foreign ownership of land, whether directly or indirectly, is captured.


Saskatchewan restricts non-residents and non-Canadian owned entities to owning parcels with an aggregate area of ten acres. The Farm Land Security Board oversees this regime and publicly advises that the purpose of these restrictions is to maintain opportunities for Saskatchewan residents to acquire ‘farm land’ (i.e. all land located outside of a city, town, village or smaller settlement for agricultural purposes) and to support the development of strong rural communities. All land defined as farm land falls under these requirements; however this does not include land used primarily for extracting, processing, storing or transporting minerals.

All types of interests in land are affected including any interests in farm land under an agreement to purchase or lease and any interest in farm land that directly or indirectly results in the vesting of title or conferring a right to possession or control. An interest in farm land held by way of security for a debt or other obligation is not captured by this regime unless the creditor enforces its security interest.

Who is affected?

Non-residents are subject to the restrictions and this includes persons who reside in Canada for less than 183 days in any year. Canadian citizens will always be considered resident, regardless of where they normally reside.

Canadian-owned entities are not affected provided the corporation is primarily engaged in farming or all of its shares or interests are legally and beneficially owned by Canadian residents. If a corporate entity does not meet these requirements, it is considered to be a non-Canadian entity and subject to foreign ownership restrictions. While the legislation does not specify a threshold that will amount to effective corporate control, it does state that an interest in land includes both indirect and direct control; therefore, investors planning to use Canadian-owned entities as investment vehicles in Saskatchewan must consider how the entity will be controlled. Recent legislative amendments have clarified that the following are not Canadian-owned entities:

  • pension plans
  • administrators of pension plans
  • trusts (other than trusts where there are ten or fewer beneficiaries and all of them are residents).

Non-Canadian owned entities controlled by Saskatchewan residents

A non-Canadian owned entity can hold an interest in up to 320 acres of land if the majority of issued voting shares are legally or beneficially owned by Saskatchewan residents or agricultural corporations. A Saskatchewan resident is a person who resides in Saskatchewan for at least 183 days and an agricultural corporation is one that is engaged in farming.

Recent legislative changes

Saskatchewan is currently undertaking a review of its foreign ownership rules and will be conducting consultation sessions. Until the review and consultation is complete, the government has enacted various amendments to the regulations to prevent dispositions to certain types of entities, such as pension plans and trusts, and has restricted financing options for farm land purchases to financial institutions registered to do business in Canada or to Canadian residents.


The foreign ownership regime in Manitoba limits foreign interest in ‘farm land’ (i.e. land outside of a city, town, village or hamlet that is used or reasonably capable of being used for farming) to 40 acres, to maintain opportunities for Canadians to acquire farm land for agricultural purposes and to support the development of strong rural communities. The Manitoba Farm Industry Board is responsible for overseeing this legislation and only lands classified as farm land are affected. Farm land does not include:

  • Land used for the extraction, processing, storing or transporting of minerals (except sand and gravel)
  • Land used by a corporation for telecommunication, railway or pipeline facilities.

An interest in farm land under the rules is extremely broad and includes any right, title, or interest recognised in law and includes, without limitation:

  • an agreement or option to purchase
  • a right of first refusal
  • a mortgage
  • an encumbrance or other type of security interest
  • an agreement or option to lease
  • a power of attorney
  • any other interest that could result in the vesting of legal or beneficial title, possession or control of farm land.

However, an interest does not include a builder’s lien or a judgment of a court registered against land.

Who is affected?

The restrictions apply to nonpermanent residents, non-Canadian citizens and non-qualified Canadian organisations. There are some exceptions made for qualified immigrants and family farm corporations that are primarily engaged in the business of farming, provided they are under the control of farmers and where a majority of shares are owned by farmers.

Qualified Canadian organisations can hold over 40 acres of land. These organisations include corporations, partnerships, syndicates, joint ventures, cooperatives or associations where all of the shares are legally and beneficially owned by permanent residents and Canadian citizens. A corporation that has any shares listed on a stock exchange does not qualify.


In 2012, Quebec amended its laws to make it more difficult for nonresidents to acquire interests in land. The restriction prohibits non-Quebec resident ownership of more than four hectares of land (about ten acres). The restrictions applies to ‘farm land’ (i.e. at least four contiguous hectares (about ten acres) that is used for agricultural purposes). The legislation only applies to lands south of the 50th parallel or any lands within the province that are designated as a reserve area or agricultural zone. The interests affected include land ownership, rights of redemption, leases and any other direct or indirect acquisition of land.

Who is affected?

Both natural persons and corporations can be considered non-residents of Quebec. In order to be resident in Quebec a person must either be a Canadian citizen or a permanent resident of Canada and have lived in Quebec for not less than 1,095 days during the 48 months before they acquired farm land.

Residency for corporations depends on whether the corporation has share capital. If it has share capital, residents of Quebec must make up at least half of the corporate directors and more than 50 per cent of the voting shares of the capital stock. If the corporation has no share capital then more than onehalf of its members must be residents of Quebec.

In order for a corporation to maintain its Quebec residency status it must not be directly or indirectly controlled by non-Quebec residents. Corporations need to be diligent about who becomes a director, member, or share-owner in order to maintain residency status. In addition, the residency status of existing directors, members or share-owners must be continuously monitored to ensure that a change in control does not occur inadvertently.

Prince Edward Island

In Prince Edward Island, non-residents and corporations are allowed to hold land with a maximum aggregate area of five acres, or land that has a shore frontage of 165 feet or less. The Island Regulatory and Appeals Commission administers the legislation which affects all land other than land less than one acre in size that is located in a city or town. Any interest in land that provides a right to use, possess or occupy land is captured under the legislation; however this does not include interests in land acquired by way of security for a debt or other obligation.

Who is affected?

Non-residents include individuals that have not resided in Prince Edward Island for at least 183 days in a year. All corporations, regardless of residency, are restricted.


Each of the jurisdictions described above have certain exemptions available to eligible individuals. These exemptions may be available for industry-specific projects, or for purposes promoting the public interest. Generally, exemptions must be sought from the regulatory authority responsible for administering the relevant regime.

Federal law: Investment Canada Act

Canada’s foreign investment review law, the Investment Canada Act (ICA), applies to screen acquisitions of control of a Canadian business by a non- Canadian. Transactions that exceed a prescribed monetary threshold are subject to a pre-closing review which involves satisfying the responsible federal minister that the transaction is ‘likely to be of net benefit to Canada’. That threshold was changed in April 2015 to C$600 million, based on the enterprise value of the acquired business. Lower thresholds apply where the buyer is a state-owned enterprise or is from a country that is not a member of the World Trade Organisation. If a transaction is not subject to review, the non-Canadian buyer need only submit a notification of investment within 30 days of closing.

The ICA exempts from review and notification the acquisition of control of a Canadian business the revenue of which is generated from farming carried out on the real property acquired in the same transaction.

All acquisitions of a Canadian business by a non-Canadian, regardless of the value or size of the interest acquired, are subject to review on national security grounds.

The importance of compliance

Any company considering investing in land in these provinces should closely examine its corporate structure, ownership and operations to determine whether any of these restrictions do, or could, apply. It is important to consult with counsel to explore the various nuances of these rules and the authorities that govern them, and to plan strategically when considering acquiring new or expanding current holdings.

Failure to comply with these restrictions could have serious repercussions, including fines (both corporate and individual), land seizures and/or forced sales.

Other considerations

In addition to the specific regulations listed above, foreign corporate entities that wish to own land in a province may also need to be registered in the province in which they want to conduct business. Holding land typically falls within the definition of doing business in a province.

Some provinces also have land use controls that require the conservation of agricultural land or limit the use of these lands. Any individual or corporate entity, foreign or domestic, needs to be aware of how land use regulations may affect development or investment plans.