Saturday, December 19, 2015

Agricultural Land Reserve - Friend OR Foe

Whereas, the government of British Columbia has through the application of legislation effected a circumstance that has farmland inflating in price due to speculation and yet precludes ownership from taking advantage of the perceived opportunities that drive inflation of land values and whereas, government legislation impairs the full spectrum of land use thus effecting a reduction in opportunities and by extension lost revenue, the government is responsible to provide expanded opportunity OR to reimburse for opportunity forgone by the affected parties.
More Below

Any discussion regarding state encroachment on the use and deployment of private assets needs to be considered from first principles.  The state needs strong rationale to encroach on the choices of ownership, a clear public good must be being served. While “land rights” or “property rights” are excluded from the Charter of Rights and Freedoms, the document was drafted with a longstanding Westminster or Common Law tradition as its backdrop, a tradition that has held private property paramount in the execution of the law. One can assert quite comfortably that the vast majority of court business flows from, or results in the actuation, or transfer of an asset.Land is an asset that holds stronger importance than other assets, particularly in the Anglo economic tradition where land travels from one generation to the other.

The Agricultural Land RESERVE has been put in place so that the land is held in reserve to satisfy a perceived common good. The common good summarized as; in the event of disturbance in trade or a calamitous event we have in RESERVE the land resources to provide food for our population, to hold land in RESERVE to provide for ongoing support of an agricultural industry and its benefits to our economy and ongoing food security, to hold land in reserve to protect against development for industrial and residential uses and to protect the athletics of the British Columbian countryside.  When Land fell into the ALR it affected ownership by limiting the options of ownership for its use in the interest of a widely held belief in a common good.

It is inherent in the right to liberty in the context of the Common Law tradition and by extension in the Charter of Rights and Freedoms, is that assets that have been accumulated by an individual or relatives, assets held in ownership, can be deployed in a manner that said individual sees as most favorable to their interests and values. This is a widely held understanding and it must be respected. When the state or collective perceives a common good justifies that, all or a portion, of an individual’s private assets, must be forfeited for a common good, this is an act of expropriation. 

The reason why government avoided expropriation under the advice of legal experts was to circumvent exposure to a requirement to reimburse landowners for the opportunity forgone. There was opportunity forgone at the implementation of the ALR and in the administration of the act there is still opportunity forgone. It is incumbent upon the government to remediate or mitigate the loss in this case. 

Excerpt from BC Land Act.

"expropriate" means the taking of land by an expropriating authority under an enactment without the consent of the owner, but does not include the exercise by the government of any interest, right, privilege or title referred to in section 50 of the Land Act;

The value in land stems from its value as a tradable asset in the context of the law, there are “spiritual” elements to land ownership that are intrinsic in nature, which is why state encroachment on land ownership choice is so sensitive. It is readily apparent that a state action directed at a common good, that reduces the value of land or curtails the lands actuation in a manner that is seen as most favourable for the ownership is a de facto expropriation when there is a resulting reduction in income generation or degradation in asset value. This assertion is supported to some degree by the fact that when settling around the expropriation of rights of ways, the courts recognize more than just the value of raw land, they also recognize the cost to ownership that impediments make – operational considerations fall under judgement.

When the Agricultural Land Reserve (ALR) was implemented there was callous disregard for this reality, I believe one can use the term RIGHT safely.  Throughout the history of the ALR to this day and with the contemporary issues with respect to operational choices of ownership, this issue is given to little wait. In review the literature, there is a near arrogance in the tone of discourse I find most offensive, I believe this is true of many landowners as well.

Contemplations on the Degree of State Encroachment on Land Ownership

Given the argument above, one needs to find justification for the present degree of state encroachment on land ownership.  State encroachment on ownership has gone well beyond the intent of the act, briefly summarized as preserving farmland, people are advocating the Agricultural Land Commission (ALC) actually assess proportional income and limit income from “non-farming” activities to a percentage of total income. This is more than an affront of all things wholly with respect to private asset management in the context of common law, it can be easily be demonstrated to contravene the intent of the act – income supports ownership by provision income against the cost of ownership, thereby, supporting land stewardship. This degree of micromanagement by the ALC is indicative of mission creep and the unnecessary expansion of state influence over private land. One understands that in the administration of an act that the need to enforce does at times challenge first principles, it is the writer’s observation that there is undue encroachment here.

I think also that reviewing the justification for encroachment is a worthy exercise at this point. The entrenchment of the ALR / ALC is understood, but in reviewing its mission in the context of modern knowledge and technological advancement one can perhaps begin to get a clearer view of the ALC mission and perhaps its augmentation or retraction. The writer offers the following dialog as a point of contemplation, an opportunity for reflection as a means to forge a future that sees to the collective values at stake and yet provisions for either the right to maximize income for ownership as the market dictates OR for the state, in the interests of curtailing Faustian effects to reimburse owners for opportunities forgone.

In reviewing some of the historical documentation related to the creation of the ALR many of the assertions there are almost laughable in retrospect. There were assertions made with respect to the “world food shortage” as a justification to “protect land for food security”.  The document making the assertions was written in 1973, I would invite any rational person to review history from that point until now and state that the ALR is justified on the basis of food security – that is to say that during the period from 1973 until now, there has never been any threat to the provinces food security that would justify the expropriation of lands. The “threat” to food security was ill-conceived then, history has shown this to be true – it is justifiable to ask is the concern misplaced in the future.  The fact is that food is more abundant now than it has ever been, in the world context and the distribution of food is more efficient than it has ever been – modern agriculture is a miracle that we enjoy every day.

It was with the wisdom of the time that the British Government planted Oak forests to ensure a ready supply of wood to build ships, post-1800 metal became the material of choice – the forests still stand, they have other values perhaps, however, the original purpose was overtaken by events.   To some extent, one can argue this is true of the ALR. There are technologies at play now that render the necessity for farmland defunct for food production, there is economic and environmental value and viability in farm buildings erected in densely populated urban areas.  Both the economic and engineering modelling is favourable for “high-rise” built “farms” – this is in no way “futuristic” it is occurring now at the margins in the form of urban rooftop farms and the like. This is offered to challenge one of the strongest underlying “values” supporting the ALR and the resulting state encroachment on land ownership and now to a greater extent the actual management choices of ownership.

The Court’s Interpretation of Permanent Alteration of the Land

Excerpt Provide from Discussion Paper – Court Decision Reasons

[51] The Regulation also requires that an agri-tourism use be temporary and seasonal. A golf course requires alteration of the land in the form of particular landscaping, sand traps, water hazards etc. Photographs that were put into evidence show changes of precisely that kind to the petitioners’ property. Those changes must remain in place as long as the operation of the golf course continues and cannot reasonably be described as temporary.

Taking this expert as it stands; the Justice is passing judgement on the duration of action against the backdrop of reclamation from a recreational use back to a strictly agricultural use. If food security is the value for preservation, the court rejected temporary in the case of the golf course, with undue consideration to permanence.  What is relevant to state values and the subsequent intrusion on choice is the cost of reclamation to farming in the event the land is required for food production and the timeliness of response to reclaim. The justification for state intrusion here needs clarity; on what basis has the judge determined that golfing and related alterations to the land to be permanent – when they are clearly in no way permeant.  In the event of a calamitous event, war or world famine, the demand for food would elevate prices substantially and the result is a cost benefit assessment for reclamation to farming greatly altered from now. The calamitous event would render either reclamation viable or, more likely, another solution would be deployed.  The impetus for action as is determined by real events should determine land use as opposed to government officials trying to anticipate the future or arbitrarily impose “state values”; so long as the state imposed value can be readily reclaimed or met in some other fashion.

The assumption that a golf course is a permanent impediment to agricultural use is certainly wrong. The use of farms as venues for weddings or other gatherings offers no impediment to agricultural use and offers the opportunity to diversify income, clearly, this should be encouraged.  The assertion that farms offer unfair competition to other venues is in no way a valid argument. In government policy we seek to gain a regional advantage in any way we can, we should make policy that lets the market work and where regulation offers an arbitrage we should support the most efficient model as opposed to propping up the less efficient model.

Why Managing Operational Income is Harmful & Inappropriate

The government's only valid concern is stewardship as related to agricultural land in the context of the ALC mandate. ALC has no mandate to determine where income comes from; their attempts to limit "non-farm" income are grossly off the mark and well outside ALC mandate.

Please see attached several business model concepts I view as works in progress; Mid Frazer Agro was rejected by the supply management complex in British Columbia, one hopes that opportunity will be offered to resurrect the project. The Winer / Brewery/tourism operation requires capital and one awaits word on the land in question. The Crofter model has farm viability at its heart. They all draw on vertical integration and or companion enterprise, land use rarely offers income at parity with the operations it supports.

The ALC is part of a complex of regulators that introduces complexity to pursuing opportunities like these; government needs to move from obstacle to facilitator.  In the case of the ALC, there are steps that can be taken to firm ALR inclusion and arrest uncertainty and better serve the mandate of the organization.

Relevant Links
Douglas Lake - Cattle, Timber, Land Development & Real Estate

Vineyard & Tourism Operation - Crofters - go to documents at bottom of page
Link to Relevant Documents 

The aforementioned models capitalize on companion enterprise and or vertical integration to bring viability to a given land base.  It is critical that when integrating primary production with secondary processing or when seeking to occupy as much of the supply chain as possible, that appropriate scale is accessed. Scale plays a role in market access, that is to say, there needs to be adequate product volume to occupy “shelf space” to have critical mass in the market. The retail aspects of any product chain have greater margins or income than the primary production elements of the product supply chain (Normally True).  So trying to assign income levels to various production strata is errant, what is of the essence is whether the land is being unitized and whether the enterprise, in general, is supporting the ownership of land.

A building, regardless of its use, so long as it generates income supports the ownership of the land and can finance stewardship of the land – what is relevant with respect to the building is the extent to which it encroaches on land in the ALR slated for preservation – it is conceivable that the farm has areas that are unsuitable for agriculture due to the presence of some geophysical reality, a pocket of land that is within the ALR in an errant fashion. That land should be permitted to be utilized to its full potential.  It is almost always the case on any site that there are places like this.

If the foregoing fails to challenge the ALC commission in its entirety, it certainly challenges the prospect of further encroachment on the landowner – I believe it justifies a degree of retraction. The ALC, as it the case with all government “departments”, is finding reasons to extend its reach – perhaps it is time, as a matter of government policy, to exercise some containment on expansion.


I think it is a widely held view in society that the ALR has value; it holds value to the writer. I love the countryside, I have an attachment to the land – farms and humanities interface with the land is a thing of beauty. Value, at the society level, or personal level, has no obligation to be found in reason – but when the collective encroaches on people's right to manage private assets, especially when there is a cost to those affected; the government has a responsibility to mitigate loss.

This is an excerpt from a document written in 1973 lamenting that speculation was inflating land values. The challenge with “land speculation” and land values persists to this day. The ALR has in no way constrained speculation, and the ALR having put up impediments to non-agricultural development has restricted the supply of land for development – hence increasing the price of land and exacerbating the influences of speculation on land value. I have studied land values in British Columbia and can find very little relationship between the price of agricultural land and the land's ability to generate income when directed toward an agricultural enterprise.  There are cultural propensities and speculative realities driving inflated agricultural land values. The only way to curtail inflated agricultural land values due to speculation is to make the land in the ALR permanent; if the value of that land is real, then we need to make the commitment to preserve it. To stop speculation on development revenue we need to say there will never be development done on ALR land. When we do that, the people holding title to ALR lands will incur a loss, as people did when the ALR was implemented. When through government action people incur loss – the government must reimburse people for their loss. It is extremely unfair to circumvent the responsibility to land ownership to repay for loss in the face of actuation of policy for a perceived common good. 

Of these seven stated desired outcomes I would say in the main the ALR / ALC has helped more than hindered, save one. There is no benchmarking to draw on to know what would have transpired had there been no ALR - one can only speculate that it has been beneficial. There has been no improvement in access to land for farming for young people – in fact the opposite is true – farmers are older now than they ever have been. So in deliberations related to administering the ALR, the ALC must seek to expand opportunity for land use so that there is revenue sufficient to support viability – farms tend of form a gestalt over time and revenues that flow from enhanced associative enterprise will flow to the care of the land; better serving land ownership and the ALC’s mandate.   

Monday, December 14, 2015

Christmas Letter - 2015

Another year, another Christmas letter – what shall I bore you with this year?

As has become the custom in my annual Christmas Letter, I think one should start with a Barkley and Max update, as they are the cutest creatures on the face of the earth, in spite of the fact they still fail to scratch back and they shed hair about my humble abode. Barkley had a mishap a couple of years back, she tore CCL, the canine equivalent to an ACL; I am very pleased to report a nearly complete recovery. Barkley possesses, even at 10 years old, exceptional athleticism – when fit she weighs about 75lbs and every pound of muscle functions with perfect symmetry, the result being something beautiful to watch in action. I am very grateful to see her back at about 90% of her old self and I am deriving pleasure from watching her run.

Max is as affable as ever, kindness is his contribution to the world – that, and he often sleeps outside on guard duty – he keeps me up to speed on the comings and goings of things – never has a gentler soul found a place on the earth. The challenge Max poses as a guard dog, is his inclination to speak to hear the sound of his own voice – the eco thing. We spend time in the woods and on lakes, wherever we encounter an eco-opportunity Max keeps me up at night barking at himself. As has been pointed out on Facebook by some good friends, it's apparent he is seeking expert advice. Do as I say, do as I say, do as I say ………………………… 

Last year’s big event was Kate’s wedding; this year’s big event is the pending birth of Ry & Kate’s little boy. I’m very excited about the arrival of another playmate; Nash & Olin are a most agreeable addition to my friend roster. It has become apparent to me that the whole adult thing is bothersome, grandchildren provide a great way to avoid adulthood - they like to play, pretend and generally ignore what the middle generation deems as reality. When tinkering with alternate realities, spend time with children, they have a healthy, unfettered view of the world – a view that informs one that offloading the weight of the world frees the mind – it is a “beyond the rabbit hole” experience – gravitational as opposed to hallucinogenic.

There are fortuitous turns of events and we had one in Kamloops this year, fate returned Jess to Kamloops along with her two little boys. We also get Kevin back on regular intervals, so for Samba (me) this is a very good thing. It has been the case that Jess has been near in the mornings, so I’ve been able to attend to the boys at breakfast time, make them tea, shoot the breeze, and impart vital data to them, like how to make the world’s longest raspberry. There is no greater source of joy than grandchildren I believe, it is difficult to explain, they liberate you to a degree and yet they evoke a great sense of responsibility.

There comes at this time of year, now, more than ever, a confluence of thoughts that has my father held prominent; Harry was his name. I was Nash’s age when my brother Duncan picked me up to bid him goodbye – Harry’s time had come, too early for me and everyone else – we congregated as a family around him lying there stock still in a casket – at four I was too short to see him; Duncan, 12 at the time, picked me up to kiss him goodbye. This seems a somewhat melancholy artifact to offer in a Christmas letter; joy however, is as much a product of contrast, as it is of jolly. Seeing my grandsons grow brings this to mind, it provides some leave for me to be as I am and I derive happiness in their contrasted circumstance.

It is useful at Christmas time, I think, to reflect a little on the metaphysical.  I had as an introduction to theology the words of Molly, a teacher by trade. She said to me that if you want to make sure that someone you love is safe, go through this exercise. Imagine the earth, then imagine a circle of light around it, reach to that circle of light and pull down a string of light from it and wrap the string of light around the person you want to keep safe. I was eleven when she gave me this as a gift; I have used it successfully a million times, particularly where my daughters are concerned and now my grandsons. There was nothing attached to this, it was a mental exercise, it liberated me and does to this day. It has been my greatest source of comfort, it has been there in the absence of people or in their presence, it offers no judgement, it gives no direction – it is an affirmation the there is a link for us all, a means to be connected even when distance of any kind exists between us. I thought this Christmas would pass this comfort on to you all to have and use as I have so many times – there is no theological bias in its application, so please consider it a gift at Christmas time rather than a Christmas gift and apply it to seek peace for yourself.

Life progresses, I hope your life progresses favourably in 2016. Merry Christmas from me, Barks & Max – to you whatever greeting works for you – enjoy what matters – the people you love.  

Sunday, December 13, 2015

CMHC - Liberals Recent Changes to the Rules

The challenge of bubbles forming in the Real Estate market is very difficult to regulate. CMHC and other countries’ equivalents have errored in that they have elevated both confidence of lenders and the availability of credit, thereby, to some degree distorting the market. There is no question that insuring mortgages reduces risk to lenders and by extension credit becomes both more widely accessible and more readily available. There is no question that Credit makes real estate more accessible, increases demand and elevates price.  It is more the case that government can exacerbate cycles in the real estate market, than it will ever be able to control cycles, or in any real way regulate markets away from cyclicality; save perhaps in the use of the draconian measures that were forwarded in the 1970’s by the then Liberal government in the form of wage and price controls – a disastrous policy foray that should be avoided with extreme prejudice.

One wonders what affect the recent bid by the new government at cooling the housing market will really have. One understands, that while it will be sometime before there is upward pressure on interest rates, that interest rates will rise and inherent in that reality is a “national” risk of widespread over extension  amongst the population holding large mortgages. How is this policy going to help. This will have little or no effect on the overall challenge; policy only makes sense when policy is effective. The government would be much better off issuing a payment matrix at the time of mortgage issue that shows the payment at today’s rates and the payments at 2 point intervals to 18%, the highest number I remember from the dirty 80s. This policy is false comfort at best.

What values are being exalted at the chosen price point; it is okay to have a $500,000 home, but $650,000 home is different – how?

CMHC as an agent to help young people get their foot in the housing market is a good thing, CMHC should be aggressive as it can be in helping New Entrants to the market. CMHC has a limited role to play in some other areas of the market as well – but in the main, lending intuitions need to be exposed to the risk of their choices. We saw the disasters that emerged from other realties in last big downturn, when people become isolated from responsibility they become irresponsible.   

Tuesday, December 1, 2015


It is a good thing that so much attention is going toward managing humanities’ entire interface with mother earth. It has been a long time concern of mine that we will destroy the very source of our existence. As a young person I used to worry a lot about the issue. There were very dire predictions about the year 2000, the predictions were made, 2000 came and they simply never transpired; so from my perspective the “scientists” have a credibility gap. It is important to note that the perception of a credibility gap and the absence of concern are different; I believe attention to the issue is required – I just have heard the rhetoric before.

What is concerning to me is the degree of isolation there is in the contemplation of the issue, there is an inclination to ignore reality.  The fossil fuel nihilists scream for the end of fossil fuels and offer no viable alternative. Please see below, this is where we are, this is the reality check – transition to alternatives is a 30 to 50 year process. There is a demand for fossil fuel, it will be filled, Canada can supply it and extract the wealth necessary to facilitate transition OR we can give the money to Nigeria, Iran, Saudi Arabia, Venezuela … it is more than stupid to curtail our industry, it is irresponsible in the extreme.

There is also an inclination with in the environmental community to “reduce” the use of the natural environment. This inclination tends to shrink more than impact on the earth, it tends also to reduce the expectation of possibility – a culture of limitation has evolved: in the 1950s we were going faster, farther, higher – in 2015 we are seeking to reduce movement. It is important to note however, that the west has this inclination while many are just forging ahead absent an aft glance.

The effort people spend fighting the Oil Industry should be directed to developing technology and the safe use of fossil fuel. People tend to forget how good of a fuel fossil fuel is and using is in no way the problem, emissions are. We could, as a transition strategy, devote efforts to the safe use of fossil fuel more aggressively.

The earth has had larger swings in temperature in the past than we are experiencing now, quite recently in fact, so while we must seek to reduce our impact, we need to develop adaption strategies as well. There will come a time where we need to cool or warm the earth for one reason or another; we need the technologies to do it and an international venue to manage it.  

Finally, I believe in a market based economy, I believe in that the efficiency of business can be directed in a manner that harmonizes human activity with the earth. Many of the people I listen to speak on the issue have a blind spot when it comes to economics, worse they have a prejudice against economic thinking. The very best way to understand people and their interface with the earth is to look at the capsulized view of human activity financial data provides.  

More Thinking on the Subject