Foreign Ownership of Land Regulations (SOR/79-416)

Short Title

1 These Regulations may be cited as the Foreign Ownership of Land Regulations.

Interpretation

2 In these Regulations,

Act

Act means the Citizenship Act (Canada); (Loi)

controlled land

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, and

• (c) mines and minerals; (terrain réglementé)

corporation

corporation means a corporation with or without share capital; (société)

foreign controlled corporation

foreign controlled corporation means

• (a) a corporation incorporated elsewhere than in Canada,

• (b) in the case of a public corporation whose shares are not traded on a stock exchange in Canada or a private corporation, a corporation

  • (i) the percentage of foreign ownership of which calculated under section 13 is 50% or greater, or

  • (ii) that is the last in a succession of corporations the outstanding shares of each of which are more than 50% owned by its predecessor in the succession of corporations if the outstanding shares of any of the corporations in the succession are more than 50% held by ineligible persons or by any other corporation the percentage of foreign ownership of which calculated under section 13 is 50% or greater, or

• (c) in the case of a public corporation whose shares are traded on a stock exchange in Canada, a corporation

  • (i) less than 2/3 of whose directors are Canadian citizens or permanent residents, or

  • (ii) in which 50% or more of its outstanding shares are held in blocks of 5% or more by ineligible persons or corporations the percentage of foreign ownership of which calculated under section 13 is 50% or greater; (société sous contrôle étranger)

ineligible person

ineligible person means

• (a) an individual who is not a Canadian citizen or a permanent resident,

• (b) the government of a country other than Canada or a political subdivision of a country other than Canada, or any agency of such government or political subdivision, or

• (c) a corporation incorporated elsewhere than in Canada; (personne inéligible)

limited partnership

limited partnership means a limited partnership to which The Partnership Act (Alberta) applies or to which sections 48 to 66 of chapter 230 of the Revised Statutes of Alberta, 1955 continue to apply; (société en commandite)

Minister

Minister means the Associate Minister of Public Lands and Wildlife; (ministre)

parcel

parcel means an area of land the boundaries of which are

• (a) shown on a plan registered or filed in a land titles office, or

• (b) described in the certificate of title to the land,

and that has not been divided into smaller areas by an instrument or plan registered or filed in a land titles office, other than a registered road plan or right of way plan, or by a natural boundary shown on a plan registered in a land titles office; (parcelle)

private corporation

private corporation means a corporation incorporated under the laws of Canada or a province of Canada that by its memorandum, articles, by-laws, charter or regulations,

• (a) in the case of a corporation having share capital,

  • (i) restricts or prohibits the right to transfer any of its shares,

  • (ii) limits the number of its members to 50 or less (exclusive of persons who are in the employment of the corporation, and persons who, having been formerly in the employment of the corporation, were while in that employment and have continued after the termination of that employment to be members of the corporation), but where two or more persons hold one or more shares in the corporation jointly they shall, for the purposes of this definition, be treated as a single member, and

  • (iii) prohibits an invitation to the public to subscribe for any shares or debentures of the corporation, or

• (b) in the case of a corporation not having share capital,

  • (i) limits the number of its members to 50 or less (exclusive of persons who are in the employment of the corporation, and of persons who having been formerly in the employment of the corporation were, while in that employment and continued after the termination of that employment to be members of the corporation),

  • (ii) prohibits an invitation to the public to become members or to subscribe for debentures of the corporation, and

  • (iii) restricts or prohibits a transfer of the interest of a member in the corporation; (société privée)

permanent resident

permanent resident means a permanent resident within the meaning of the Immigration Act, 1976 (Canada); (résident permanent)

public corporation

public corporation means a corporation incorporated under the laws of Canada or a province of Canada that is not a private corporation. (société publique)

Effective Control of Corporation

3 A corporation that is a foreign controlled corporation is, for the purposes of the Act and these Regulations, effectively controlled by persons who are not Canadian citizens.

Prohibition

• 4 (1) Subject to these Regulations, no ineligible person or foreign controlled corporation shall take or acquire, directly or indirectly, an interest in controlled land.

• (2) Nothing in subsection (1) affects the succession by any person to an interest in controlled land arising out of the death of a person.

General

• 5 (1) An ineligible person or foreign controlled corporation may take or acquire, directly or indirectly, an interest in controlled land if as a result of that taking or acquisition the ineligible person or foreign controlled corporation will own or beneficially own interests in controlled land consisting of not more than two parcels containing, in the aggregate, not more than 20 acres.

• (2) Subject to subsection (3), an ineligible person or foreign controlled corporation that owns or beneficially owns, as a tenant in common, an interest in a parcel of controlled land is considered to own or beneficially own an interest in that area of controlled land equal to the product obtained by multiplying the area of the parcel by the extent, expressed in a percentage, of the ineligible person’s or foreign controlled corporation’s interest in the parcel of controlled land.

• (3) No ineligible person or foreign controlled corporation shall as a tenant in common take or acquire, directly or indirectly, an interest in a parcel of controlled land that is greater than 20 acres in area if as a result of that taking or acquisition more than five ineligible persons or foreign controlled corporations will own or beneficially own, as tenants in common, that interest in the parcel of controlled land.

• (4) Foreign controlled corporations that are associated with one another as determined under section 256 of the Income Tax Act (Canada) shall be considered as a single corporation for the purposes of this section, but in determining whether and at what time foreign controlled corporations are associated for the purposes of this section, subsection 256(1) of the Income Tax Act (Canada) shall be read as though the words “at any time in the year” were struck out.

6 An ineligible person or foreign controlled corporation may take or acquire a lease of controlled land for a term of 20 years or less, other than a lease that contains a provision by which its term may be extended or renewed so that the period in which the lease is in effect will exceed 20 years, if the lease is registered in a land titles office within 60 days of its being made.

7 An ineligible person or foreign controlled corporation may take or acquire an option to purchase an interest in controlled land if

• (a) the option to purchase is exercisable within a period of one year from its effective date and not afterwards, and

• (b) the option to purchase contains a condition that it may be exercised only in favour of the ineligible person or foreign controlled corporation when the ineligible person or foreign controlled corporation becomes eligible to acquire the interest under these Regulations.

Application

• 8 (1) Subject to subsection (2), these Regulations, except for sections 22 to 25, do not apply in respect of the following:

  • (a) a right of entry order under The Surface Rights Act (Alberta);

  • (b) an interest in controlled land acquired for a purpose for which a right of entry order under The Surface Rights Act (Alberta) may be granted;

  • (c) the taking or acquisition of an interest in controlled land for the purpose of establishing an industrial, processing, manufacturing, commercial or transportation facility if the area of controlled land in respect of which the interest is taken or acquired does not exceed 80 acres for any separate facility;

  • (d) the taking or acquisition of an interest in controlled land for the purpose of the construction of

    • (i) a pipeline, a processing plant, an installation, a manufacturing plant, a marketing plant, or a refinery as those words are defined in The Pipeline Act, 1975 (Alberta), or

    • (ii) a transmission line, power plant or an electric distribution system as defined in The Hydro and Electric Energy Act (Alberta), or

    • (iii) a system as defined in The Alberta Government Telephones Act (Alberta);

  • (e) the taking or acquisition of an interest in controlled land for the purpose of extracting sand, gravel, clay or marl if the area of controlled land in respect of which the interest is taken or acquired does not exceed 160 acres for any separate project or development;

  • (f) the taking or acquisition of an interest in controlled land for the purpose of establishing a residence or carrying out a residential development if

    • (i) in the opinion of the Minister or any person authorized by him, the land is located in an area in which the establishment of a residence or subdivision for the purposes of residential development is or will likely be permitted, and

    • (ii) the area of controlled land in respect of which the interest is taken or acquired does not exceed

      • (A) in the case of a single residence, 20 acres, or

      • (B) in the case of a residential development, 80 acres for any separate development;

  • (g) the taking or acquisition of an interest in controlled land pursuant to section 30 of The Water, Gas, Electric and Telephone Companies Act (Alberta);

  • (h) the taking or acquisition of an interest in controlled land by a foreign state for diplomatic or consular purposes;

  • (i) the taking or acquisition of an interest in controlled land by a person as the executor or administrator of the estate of a deceased person;

  • (j) an order of a court charging an interest in controlled land for the benefit of a spouse or child of the owner of that interest in controlled land;

  • (k) a burial lot or plot to which The Cemeteries Act (Alberta) applies.

• (2) If an interest in controlled land is taken or acquired by an ineligible person or foreign controlled corporation for any of the purposes set out in paragraphs (1)(b) to (f), the ineligible person or foreign controlled corporation, or any associated corporation to which the interest in controlled land is transferred under section 12, shall

  • (a) divest himself or itself, as the case may be, of the interest in controlled land within three years of completion or termination of the purpose set out in paragraphs (1)(b) to (f) for which the interest was taken or acquired,

  • (b) if reclamation is required in respect of the land, divest himself or itself, as the case may be, of the interest in controlled land within three years of the completion of the reclamation,

  • (c) if the purpose set out in paragraphs (1)(b) to (f) for which the interest was taken or acquired is not proceeded with, divest himself or itself, as the case may be, of the interest in controlled land within three years of the time at which the ineligible person or foreign controlled corporation, in the opinion of the Minister or any person authorized by him, became aware that the purpose would not proceed, or

  • (d) if an interest in more than the required area of controlled land is taken or acquired and the area of controlled land actually required is less than 50% of the area taken or acquired and may be separated from the area not required, subdivide off the area not required and divest himself or itself, as the case may be, of the interest in controlled land in respect of the area of controlled land so subdivided off within three years of it being so subdivided off.

• 9 (1) Subject to subsection (2), an ineligible person or foreign controlled corporation may acquire an interest in controlled land that he could not otherwise acquire under these Regulations by way of

  • (a) the completion of a purchase under an agreement for sale or interim agreement,

  • (b) the exercising of an option to purchase,

  • (c) the foreclosure of a mortgage, or

  • (d) the specific performance of an agreement for sale, made or given in writing before April 26, 1977 if, in the case of paragraph (a) or (b), the agreement for sale, interim agreement or option to purchase is registered in a land titles office by August 1, 1979.

• (2) Subsection (1) does not apply where a transfer or caveat, as those words are defined or used in The Land Titles Act (Alberta), relating to

  • (a) the completion of a purchase under an agreement for sale or an interim agreement, or

  • (b) the exercising of an option to purchase,

  in respect of an area of controlled land consisting of 5000 or more acres that is used in a single operation for the production of food or fibre, has not been registered under The Land Titles Act (Alberta).

10 An ineligible person or foreign controlled corporation that was, prior to April 26, 1977, the beneficiary of a trust that prior to April 26, 1977 owned an interest in controlled land may take or acquire that interest in controlled land from the trust in accordance with its terms.

11 Subject to section 3(1.1) of The Dower Act (Alberta), nothing in these Regulations affects any right under that Act accruing to any person.

• 12 (1) A transfer by a foreign controlled corporation of an interest in controlled land to a foreign controlled corporation that is associated with it, as described in subsection 5(4), or a change in the manner in which an interest in controlled land is owned by an ineligible person or a foreign controlled corporation is not, for the purposes of these Regulations, the taking or acquisition of that interest in controlled land by the associated foreign controlled corporation, the ineligible person or the foreign controlled corporation, as the case may be.

• (2) Notwithstanding subsection (1), subsections 22(1) and (2) apply to a transfer referred to in subsection (1).

Percentage of Foreign Ownership

• 13 (1) For the purposes of this section and section 2, a person holds a share or membership in a corporation if

  • (a) that person owns the share or holds the membership,

  • (b) in the case of a share or membership that is held in trust, that person is the beneficiary of the trust, or

  • (c) that person, not being the owner of the share or membership, controls any rights attached to the share or membership through a contract or other arrangement.

• (2) If a share or membership in a corporation is held jointly by two or more persons, each person is considered to hold a fraction of that share or membership in relation to the extent of his interest in the share or membership.

• (3) The percentage of foreign ownership of a corporation with share capital is the sum of

  • (a) the percentage of its outstanding shares held by ineligible persons,

  • (b) in the case of each other corporation incorporated in Canada with share capital that holds any of the first corporation’s shares, the product of the percentage of the outstanding shares of the first corporation held by that other corporation multiplied by the percentage of the outstanding shares of that other corporation held by ineligible persons, and

  • (c) in the case of each other corporation incorporated in Canada without share capital that holds any of the first corporation’s shares, the product of the percentage of the outstanding shares of the first corporation held by that other corporation multiplied by the percentage of the members of that other corporation who are ineligible persons.

• (4) The percentage of foreign ownership of a corporation without share capital is the sum of

  • (a) the percentage of the persons holding memberships in the corporation who are ineligible persons,

  • (b) in the case of each other corporation incorporated in Canada with share capital that holds a membership in the first corporation, the percentage of the shares of that other corporation held by ineligible persons divided by the number of members of the first corporation, and

  • (c) in the case of each other corporation incorporated in Canada without share capital that holds a membership in the first corporation, the percentage of the members of that other corporation who are ineligible persons divided by the number of members of the first corporation.