Legislative Authority

Legislative Authority

The Foreign Ownership of Land Regulations were passed on the dual authority of the Citizenship Act (Canada) and the Agricultural and Recreational Land Ownership Act (Alberta).

Controlled Lands

"Controlled land" means land in Alberta but does not include:

(a) Land of the Crown in right of Alberta

(b) Land within the boundaries of a city, town, new town, village or summer village

(c) Mines and minerals

Note: Crown land, when sold, is usually sold to Canadian citizens or Canadian corporations. However, non-Canadians may purchase Crown land in the case of a sell back agreement. This type of agreement is usually only entered into with non-Canadian corporations requiring Crown land for industrial development, in situations where title is required for security.

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) are not 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 controls

  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 (under certain conditions, industrial processing, manufacturing, commercial or transportation facilities and residential subdivisions are exempt)

  6. Wills and the transfer of land on death are not controlled

  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 himself or itself of the land within three (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 (he 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.