Foreign ownership of land

Regulations

The Regulations were passed under the dual legislative frameworks of the Agricultural and Recreational Land Ownership Act and the federal Citizenship Act.

Controlled lands

"Controlled land" means land in Alberta but doesn’t include:

  1. Land of the Crown in right of Alberta
  2. Land within the boundaries of a city, town, new town, village or summer village
  3. Mines and minerals

Description of the Regulations

  1. Foreign citizens and foreign controlled corporations may own or beneficially own up to two parcels of controlled land not exceeding 20 acres in total.
  2. Canadian citizens and permanent residents (landed immigrants) aren’t affected by the Regulations.
  3. Essentially, a 'foreign controlled corporation' is one in which the share ownership is 50% or more foreign or is effectively controlled by foreigners (Note: For public corporations with shares traded on a stock exchange in Canada, only shareholders owning 5% or more of the shares are taken into account, provided 2/3 of the directors are Canadian citizens or permanent residents).
  4. Trusts cannot be used to circumvent the Regulations.
  5. The Regulations don’t prohibit the acquisition of an interest in controlled land for pipelines, oil and gas processing plants, refineries, power plants, electric distribution systems or extractions of coal and aggregates (under certain conditions, industrial processing, manufacturing, commercial or transportation facilities and residential subdivisions are exempt).
  6. The Regulations don’t affect the succession by any person to an interest in controlled land arising out of the death of a person.
  7. Leases up to 20 years are exempt if registered at a Land Titles office within 60 days.
  8. An acquisition of the majority of the shares of a corporation owning controlled land by an ineligible person or foreign-controlled operation is considered an acquisition of an interest in controlled land (Note: The same principle is involved for an amalgamated or merged corporation. In such situations as these, the foreign controlled corporation has three years in which to divest itself of the controlled land so acquired).
  9. Mortgages are allowed but the foreclosure of a mortgage constitutes an acquisition of an interest in controlled land, and the ineligible person or foreign-controlled corporation must divest themself or itself of the land within 3 years.
  10. A 'foreign controlled limited partnership' is one in which 50% or more of the value of the outstanding contributions by limited partners are made by ineligible persons or foreign-controlled corporations.
  11. An ineligible person or foreign-controlled corporation may enter into an option to purchase for up to one year pending his or its becoming eligible under the Regulations.
  12. Enforcement will be by sworn declarations attached to transactions of land (i.e. transfers, caveats transmissions and leases) and investigations (the Registrar of Land Titles shall refuse to register a transfer, transmission, caveat or lease without statutory declaration as set forth).
  13. Penalties:
    1. The Citizenship Act (Canada) sets a penalty for breach of the act or Regulations, a fine of up to $10,000 and imprisonment of up to one year or both.
    2. Where controlled land is acquired contrary to the Regulations, procedures for judicial sale are set forth.
    3. The Criminal Code sets a penalty of up to 14 years imprisonment for swearing a false declaration.
    4. Corporations may be required to supply information concerning the beneficial ownership of their shares.
  14. The minister may require information, verified by statutory declaration or otherwise, in order to determine whether a particular transaction meets the requirements of the legislation (the minister also may instruct the Registrar of Land Titles to refuse to register a document which appears to be in contravention of the Regulations).
  15. Specific exemptions may be made by Executive Council, where exemption will allow development which will be of economic benefit to the province of Alberta.

Parties involved or anticipating involvement in transactions which may fall under the controls should seek legal advice for an interpretation of the Regulations.

Copies of the Agricultural and Recreational Land Ownership Act and the Foreign Ownership of Land Regulations are available at the Queen's Printer Bookstore.

No retroactivity in Regulations

The Regulations are not retroactive for transactions that have been registered.