Ontario Looks to Limit Foreign Ownership of Farmland: What Farmers Should Know

Ontario farmers face increasing pressure when buying, selling, or passing on farmland. Rising land values, competition for good soil, and development pressures have all made land decisions more complex. Against this backdrop, the Ontario government has announced plans to introduce limits on foreign ownership of farmland.

While the proposal is still under development, it signals a policy shift that could affect who is eligible to buy farmland, how transactions are structured, and what due diligence may be required. For farmers planning expansions, retirements, or succession, these changes are worth watching closely.

A Change in Direction for Ontario

Historically, Ontario has taken a less restrictive approach to foreign ownership of agricultural land than some other provinces. Saskatchewan, Alberta, and Quebec have had controls in place for decades. Ontario has indicated that its proposed framework would draw from the Alberta and Quebec models, which either limit the amount of agricultural land non-Canadians may own or require regulatory approval for such ownership.

The stated policy objective is to preserve farmland for agricultural production and ensure it remains accessible to those actively engaged in farming.

How This Fits Within Ontario’s Existing Legislative Landscape

Although Ontario currently has no foreign ownership restrictions specific to farmland, agricultural land use is already shaped by several important statutory frameworks. The Planning Act governs land use planning across the province and empowers municipalities and the province to restrict non-agricultural uses on designated farmland. The Greenbelt Act, 2005, further limits development on protected agricultural lands in Southern Ontario, recognizing their long-term importance to food production.

These laws already constrain how farmland may be used. The proposed foreign ownership limits would instead address who may own farmland, adding ownership controls to the already existing land use rules that govern how farmland can be used or developed.

Importantly, the government has acknowledged that the proposal remains subject to consultation, and the detailed regulatory language has not yet been released. That means key questions remain open, including how “foreign ownership” will be defined, whether exemptions will apply, and how enforcement will work in practice.

What Farm Owners and Purchasers Should Be Watching

From a commercial perspective, any ownership restrictions could affect farmland transactions, financing, and succession planning. Ontario farmland values have increased substantially over the past decade, particularly in Southern Ontario, where high quality Class 1 soils are concentrated.

For sellers, changes to the pool of eligible buyers may influence market dynamics. For buyers and lenders, regulatory clarity will be essential to assess risk and structure transactions appropriately. Depending on how the rules are drafted, longstanding arrangements involving corporate entities, joint ventures, or family ownership structures may need to be reviewed to ensure compliance.

The proposal also arrives alongside renewed attention to the loss of farmland to non-agricultural uses, a trend well documented by agricultural and conservation organizations. Critics have pointed out that ownership limits alone will not address development driven land loss, but they may influence how farmland is held and transferred over time.

What This Means for Buyers and Sellers

For buyers:
Proposed ownership restrictions may require additional due diligence on the ownership structure and beneficial ownership. Transactions involving non-Canadian individuals or entities may be subject to limits or approval requirements, depending on how the legislation is finalized. Farmers looking to expand should be prepared to assess eligibility early in the process.

For sellers:
Changes to buyer eligibility could affect who can purchase farmland and how deals are structured. This may influence timing, pricing, or transaction certainty, particularly for retirement or succession driven sales.

For both parties:
Greater scrutiny of farmland transactions is likely. Early legal and financing review can help avoid delays as the new framework becomes clearer.

Practical Takeaways

Ontario’s proposed limits on foreign ownership of farmland are best understood as a policy signal rather than a finalized legal framework. Farmers, agri-business operators, and landowners should monitor upcoming consultations and draft regulations closely.

For those considering a purchase, sale, or restructuring, proactive legal review and planning can help keep transactions workable as the rules develop. Clear ownership, use, and compliance planning will remain central to protecting long-term business objectives.

Consult with a Business Lawyer at Lerners

If you are buying, selling, or restructuring a farm operation and want to understand how Ontario’s proposed limits on foreign ownership of farmland could affect your transaction, the team at Lerners can help.

We work with farmers, landowners, and agri-businesses to review ownership structures, identify compliance risks, and plan next steps as the regulatory landscape evolves.

To discuss your situation, call 519 640 6307 or email jhentz@lerners.ca

Disclaimer: This story was provided by the Business Law Group at Lerners LLP for commercial purposes.