Foreign ownership of land

FOLR came into force in 1979, prompted by concerns that foreign interests and absentee foreign owners were acquiring tracts of prime rural land in the province. The FOLR protects ‘controlled land’, which is defined as all land in Alberta except:

• land of the Crown in right of Alberta
• land within the boundaries of a city, town, new town, village or summer village
• mines and minerals

Nearly all land within the boundaries of a County or Municipal District is controlled land except for certain specified lands from former villages that have dissolved and are excluded by way of Order in Council. Land located within the boundaries of a city, town, village, or summer village is not subject to oversight under the FOLR.

The intent of the FOLR is to strike a balance between limiting foreign ownership of prime land, while still encouraging investment. This balance is achieved by prohibiting foreign individuals or foreign controlled corporations from acquiring interests in land (ownership as well as some caveat and lease interests) unless they meet one of the several exemptions in the FOLR. The ‘general’ exemption allows foreign individuals and foreign controlled corporations to acquire interests of up to 2 parcels of controlled land, totalling 20 acres in aggregate. Several ‘use-specific’ exemptions are also available to allow interests in larger amounts of land, where specific and allowable uses will occur.

Parties involved or anticipating involvement in transactions which may be subject to, or fall under, the FOLR should seek legal advice for assistance and interpretation of the FOLR. If you have questions, FOLA may also be contacted at [email protected], but they cannot provide legal advice.

• Foreign Ownership Form 1 – Citizen Declaration for Canadian Citizen(s) and Permanent Resident(s)
• Foreign Ownership Form 2 – Corporate Ownership Declaration for Corporations that are not Foreign Controlled
• Foreign Ownership Form 3 – Citizenship and Corporate Ownership Declaration for Non-Canadians, Non-Permanent Residents, and Foreign Controlled Corporations or Those Relying on a Statutory Exemption
• Foreign Ownership Form 4 – Citizenship and Corporate Ownership Declaration for Trustees

1. Foreign citizens and foreign controlled corporations may own or beneficially own up to 2 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
   1. 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 do not 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.
   1. Under certain conditions, industrial processing, manufacturing, commercial or transportation facilities and residential subdivisions are exempt.
6. The regulations do not affect the succession by any person to an interest in controlled land if a person dies.
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.
   1. The same principle is involved for an amalgamated or merged corporation. In this situation, the foreign controlled corporation has 3 years to divest itself of the controlled land 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 controlled land 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 (such as transfers, caveats transmissions and leases) and investigations.
    1. The Registrar of Land Titles shall refuse to register a transfer, transmission, caveat or lease without statutory declaration as set forth).

Controlled land refers to land in Alberta but does not 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

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.
5. 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).
6. Specific exemptions may be made by Executive Council, where exemption will allow development which will be of economic benefit to the province of Alberta.

• Foreign Ownership Form 1
• Foreign Ownership Form 2
• Foreign Ownership Form 3
• Foreign Ownership Form 4