Considerations on Implementing a Farmland Bank in Prince Edward Island Submitted to the Department of Transportation, Infrastructure and Energy December 19, 2019 Kevin J. Arsenault, PhD [Cover: Aerial Photo of Bonshaw, PEI by Garth Arsenault] Implementing a Farmland Bank in Prince Edward Island December 19, 2019 __________________________________________________________________________________________________________ Table of Contents Research Approach and Project Scope………………………………………………………………… 3 Executive Summary…………………………………………………..…………………………….....… 4 1. Introduction 1.1 Project Scope……….………………………………………...…………….……..…………….… 11 1.2 Exactly What is a Farmland Bank? ……………………………….….....……………………...… 12 1.3 The Principal Purpose of a PEI Farmland Bank…………………………………………………... 14 2. Provincial and Territorial Crown Farmland Leasing Programs 2.1 British Columbia………………………………………………………………………………..… 18 2.2 Alberta……………………………………………………………………………………...……... 21 2.3 Saskatchewan…………………………………………………………….………………..……… 23 2.4 Manitoba………………………………………………………………….……………….…..….. 26 2.5 Ontario……………………………………………………………………..……………….….….. 28 2.6 Québec……………………………………………………………………..………………….…... 30 2.7 New Brunswick………………………………………………………………..………………...... 32 2.8 Nova Scotia……………………………………………………………………..…………….…... 34 2.9 Newfoundland and Labrador…………………………………………………..……………….…. 34 2.10 Yukon…………………………………………………………………………….………….……. 35 2.11 Prince Edward Island…………………………………………………………..………………….. 37 2.12 Summary………………………………………………………………………………….. 38 3. A 20 Year Review of Public Land Discussions in PEI 3.1 1997 - Roundtable on Resource Land Use and Stewardship…………………………….…....…... 44 3.2 1997 - Standing Committee on Agriculture Report to the Legislative Assembly…….…….….…. 46 3.3 2003 - State of the Environment Report….………………………………………….…..….…..…. 49 3.4 2008 - Island Prosperity: A Focus for Change……………………………………….…….…..….. 55 3.5 2009 - Growing the Island Way………….……………………………………….……….…..…... 56 3.6 2009 - New Foundations: Report of the Commission on Land and Local Governance.….…..…... 58 3.7 2010 - State of the Environment Report………………………………………….…………….….. 63 3.8 2013 - The Gift of Jurisdiction: Our Island Province………………………………..…………….. 68 3.9 2013 - Principles of Sustainable Development..……………………………………….………..… 71 3.10 2014 - Provincial Land Use Policies: Land Use Task Force Consultation Report…….…..……… 72 3.11 2014 - Report of the Task Force on Land Use Planning…………………………….……….……. 73 3.12 2017 - Canada Agricultural Plan (2018-2023) Consultation Report………………….…...………. 75 3.13 Summary …………….…………………………………………………………….…..………….. 78 4. The Saskatchewan Land Bank 4.1 Background and Purpose………………………………….……………………....….….…………… 79 4.2 Statutory and Structural Aspects of the Saskatchewan Land Bank …………………….…….…….... 80 4.3 Key Elements of the Saskatchewan Land Bank Program…………………………….……….……… 80 4.4 Summary…………..………………………………………………………………………….………. 82 1 Implementing a Farmland Bank in Prince Edward Island December 19, 2019 __________________________________________________________________________________________________________ 5. The PEI Land Development Corporation (LDC) 5.1 Background and Purpose …………..…………………………………………………………..….….. 83 5.2 The Legislative and Regulatory Framework of the LDC……………………………….………..…… 85 5.3 Strengths and Weaknesses of the Land Development Corporation…..…………………………….…. 88 6. Leasing Programs for a PEI Farmland Bank 6.1 Determining the Agricultural Policy Objectives for a Farmland Bank…….......................................... 91 6.2 Economic Benefits of Increasing Soil Organic Matter………………………………….…………….. 94 6.3 The Lease “Terms and Conditions” Required to Achieve Program Objectives…………….……….... 96 6.4 Different Types of Lease Programs…………………………………………………..…...................... 98 6.5 The Impact on making SOM “Increase” the Primary Objective of Program Design..............……..…. 100 7. Funding a PEI Farmland Bank 7.1 Public or Private? ………………………………………………………………………...................... 101 7.2 Farmland Trust: The Carver Commission Recommendation ……………………..……..............…… 101 7.3 A PEI Farmland Bank Public Bond Issuance……..……………………………….….....……….….... 104 7.4 Low-interest Government Loans………….………………………………………...………….….….. 105 7.5 Establishing and Funding an Initial Land Acquisition Target for a PEI Farmland Bank…………..…. 107 8. The Administration of a Farmland Bank 8.1 Establishing a Farmland Bank Crown Corporation …………………………………………….…..… 109 8.2 Establishing Collaboration Agreements with the Departments of Agriculture and Land, and the Department of Transportation, Infrastructure and Energy……………………………………………. 110 9. Consultations with the Mi’kmaq ……………………………………………………………….……….. 112 10. Summary and Recommendations 10.1 Farmland Bank Recommendations…………………………………..………………...............…….. 115 10.2 Farmland Bank-Related Recommendations…………………………….…….………….…..........…. 121 11. Concluding Observations and Next Steps 11.1 Logical Next Steps to Move the Process Forward in a Timely Manner…………………………..…. 127 2 Implementing a Farmland Bank in Prince Edward Island December 19, 2019 __________________________________________________________________________________________________________ Research Approach and Project Scope There are inherent limitations in every study. Not everything can be considered. The factors that determine what a person considers limit the scope of inquiry, and should be identified and disclosed from the outset. When first approached to undertake this research, I was asked to submit a proposal with a statement of deliverables (they are presented in the Introduction). This established the initial “scope” for the project. After beginning the research, new information prompted a request for both a revision of the scope and an extension of time to undertake additional work. It was decided that a jurisdictional scan of farmland leasing programs in other provinces, and a more focused and extensive review of land-related discussions in PEI over the past 20 years, would be added to the scope of work. A Farmland Bank can achieve a broad range of strategic policy objectives beyond simply buying and leasing farmland. A core methodological concern, aside from the many practical considerations related to implementing a Farmland Banking system in PEI, was the need to determine the most important agricultural policy objectives for the design of a Farmland Bank, as evidenced in the review of Crown farmland leasing programs in other provinces, in particular, sections of the report on the Saskatchewan Land Bank and the PEI Land Development Corporation. Policy objectives are normally designed to accomplish two things: (1) address problems and challenges, and (2) achieve certain predetermined outcomes that move closer to the realization of a future vision of what is ideally sought. The conclusion drawn from the 20 year review was that the most urgent problem that should establish the principal policy objective for a PEI Farmland Bank is the need to increase the health of soil in PEI farmland. That conclusion subsequently influenced and gave shape to other considerations and recommendations in this report. This study focuses on a land banking system designed principally to address challenges within the agricultural sector, and the term “Farmland Bank” is used consistently throughout the report. However, a Farmland Bank would have all the legislative, regulatory and administrative capacity needed to address other land-related problems; challenges which may require the purchase and disposition of non-arable land as well as farmland. This was also the case with the PEI Land Development Corporation. A final note: A considerable number of “links” to source material have been included in this report; however, webpage addresses were not provided, and sources can only be accessed with an electronic version of this report. 3 Implementing a Farmland Bank in Prince Edward Island December 19, 2019 __________________________________________________________________________________________________________ Executive Summary The current Provincial Government, with the support of the Green Party Official Opposition, has committed to establishing a Prince Edward Island Farmland Bank. In moving forward with this initiative a number of questions must be addressed. What should an agricultural land-banking system look like? Should it be privately-funded, publicly-funded, or be a hybrid of both public and private funding? What should be the organizational structure? And how should it be governed and administered? And perhaps the most important question of all: what should a PEI Farmland Bank aim to achieve by way of agricultural, economic, environmental and social objectives? In other words, what is the vision for PEI’s agricultural industry and rural communities that will guide the design and implementation process? Once the main aspects of that future vision of PEI agriculture are clarified, a “primary” objective can be decided upon for program design that will best enable a Farmland Bank to achieve the many other secondary objectives as it operates on a day-to-day basis to bring about what the future agricultural vision inspires. A Farmland Bank can be an incredibly powerful tool that makes a significant positive contribution to PEI agriculture as an industry, to Island farmers struggling to survive as a viable business, and to environmental protection and sustainable rural community development benefiting all Islanders. To obtain a better understanding of how different agricultural policy objectives shape