New farmland trust aims to preserve good soil

Tax treatment key to saving cropland

[UPDATED: Nov. 26, 2019] A new and innovative effort to save prime Alberta cropland from being turned into another suburb or industrial site is close to becoming a reality.

Grain farmer Kim Good and lawyer-rancher Stan Carscallen say the Alberta Farmland Trust should be a registered charity by early in the coming year. And they’re hopeful the *federal government will make the tax changes that will put top-quality cultivated land on the same footing as ecologically sensitive land.

Right now, the door to preserving cultivated land through a conservation easement is firmly shut.

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“People will contact a land trust and as soon as (they learn) it is mostly agriculture, the land trust will say, ‘This will be a regular capital gift and when you make the donation, capital gains will be triggered,’ — and that usually stops the conversation right there,” said Good.

“Basically you end up having to pay to give something away.”

And there is a critical need to protect good cropland in the province, Good and Carscallen say.

“Much of the land in Alberta, especially farmland in some of our best soil areas has competition that is not agriculture,” said Good, a Carstairs producer who has worked with land trusts since 1996.

This is especially true for land with Class 1 and 2 soils along the Highway 2 corridor, said Carscallen, who practises law in Calgary and ranches near Priddis.

A lot of people don’t even try to put their land into an agricultural trust because they know it won’t work, and those who do are in for a rude surprise, said Good.

“There was a couple from High River that had about 600 acres and they wanted to put it into a conservation easement,” she said. “But because most of their upland was hay, agricultural, (the federal Ecological Gifts Program) wouldn’t certify it. They had gone through the process to draft the easement and everything, but were not able to go through it, because the tax hit would have been so high with it not being eco-gift certified.

“So they didn’t go ahead and do it, and very sadly, the woman was diagnosed with cancer not long after and passed away without her land being protected. And I don’t know what happened with the property since. I assume the husband probably sold it and moved on.”

Most of the conservation easements in Alberta have been used for environmental purposes, by organizations such as Ducks Unlimited Canada and the Nature Conservancy of Canada.

Under the federal Ecological Gifts Program, land that is ecologically sensitive, is an important wildlife habitat or deemed to be of “national or provincial significance” qualifies for a tax credit.

“One of the challenges right now is that if a farm family wants to invoke a conservation easement to protect their land for agriculture indefinitely, they are deemed to have disposed of a part interest in their land and that triggers a tax on the capital gain,” said Carscallen. “When there is an eco-gift in Canada, where conservation easements are placed to protect the ecological integrity of a special property, the tax on the capital gain is waived.

“We’re asking government to set up a farmland gift program to give the same incentive to landowners to do just that.”

That would open a door to farmers who want to see their land continue to grow crops.

“There’s really been no organization (doing this), which is really why Alberta Farmland Trust is coming on board,” said Good. “If you are a landowner who has land to sell, why wouldn’t you sell it at fair market value? This way you could downgrade the price a little bit and guarantee that it could stay in farming.”

The Alberta Farmland Trust would do that by holding conservation easements on land and will be responsible for monitoring that land into the future.

Carscallen and Good met with senior officials from Alberta Agriculture and Forestry last month to discuss their proposal.

“The current government may have a good deal of interest in this,” said Carscallen. “The policy branch in Alberta Agriculture has a lot of people who are thinking and writing policy development on this very point. They were very receptive to the submissions that we made to them.”

Meanwhile, Good and Carscallen are completing the process of becoming a registered charity, including recruiting board members.

“We just haven’t been qualified to issue tax receipts to donors,” said Carscallen. “We are getting very close to being able to receive donations.”

The organization, which will be funded through grants and donations from individuals and corporations, will administer conservation easements and management agreements throughout Alberta. When landowners come to the Alberta Farmland Trust, the organization will help them determine what they want to do with their land and, if they want to go that route, help them develop an easement (which would take about a year to 18 months to complete).

Ontario has the Ontario Farmland Trust, and the U.S. has the American Farmland Trust (which covers the entire country).

“We want to make sure Alberta has the same opportunity,” said Good.

To get involved or learn more about the Alberta Farmland Trust, contact Good at [email protected].

*UPDATE: The article previously stated the provincial government will make tax changes.

About the author

Reporter

Alexis Kienlen lives in Edmonton and has been writing for Alberta Farmer since 2008. Originally from Saskatoon, she has also published two collections of poetry and a biography about a Sikh civil rights activist. Her freelance work has appeared in numerous publications across Canada.

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