Exemption allows Al-Pac to grow poplars on leased land

EDMONTON, February 26, 2003 - A conditional exemption from foreign ownership restrictions has been approved, allowing Alberta Pacific Forest Industries Inc. (Al-Pac) to lease 25,000 hectares (approximately 250 square km) of privately owned land in northeastern Alberta to grow poplars.

Al-Pac will be able to enter into 30-year leases, with the option of renewing for another 30 years, provided the renewal occurs before the first term ends. The longer-term leases will give local landowners another stable source of income and the company the flexibility to grow trees to a sufficient maturity for harvest.

David Coutts, Minister of Alberta Government Services, recommended Cabinet approve the Order-in-Council granting the exemption, after consulting with the Ministers of Alberta Agriculture, Food and Rural Development and Alberta Sustainable Resource Development. "The hybrid poplars to be used by Al-Pac can be planted and harvested within as little as 30 years, making these trees a viable alternative to traditional crops," said Coutts. "This is clearly a case where farmers will benefit by having another crop option for their land."

Alberta's Foreign Ownership of Land Regulations normally restrict leases by foreign-owned companies, such as Al-Pac, to a maximum of 20 years. However, the regulations also permit the government to exempt companies if it would result in an economic benefit for the province.

Shirley McClellan, Deputy Premier and Minister of Alberta Agriculture, Food and Rural Development said the last several years have been challenging ones for many in the agricultural industry and this may be an option some producers will want to consider. "The decision to lease farmland to plant poplars makes sense, as they were the original vegetation in many of these areas. This will be good news for farmers who are looking for ways to diversify," said McClellan.

Conditions placed on the exemption will ensure Albertans benefit from any longer-term leases. They stipulate that landowners may permit oil and gas related activity on the leased land and keep any revenues generated. Landowners also retain the right to transfer the title and lease to a new landowner. Al-Pac may only lease parcels of 80 acres or more if the parcel has a farmland capability rating of 50.99 or less (lower grade farmland), as determined by the municipality; if the parcel is less than 80 acres, it may have a rating of more than 51.00.

If Al-Pac stops using a parcel of land for three continuous years, it must terminate the lease for that parcel. If the trees are destroyed by natural causes, such as drought or insect infestation, Al-Pac will not receive compensation from any disaster relief program funded by the Alberta Government.

Al-Pac must provide a yearly summary of all land leased for more than 20 years. The Minister of Government Services may conduct audits for compliance with the conditions.

For information on Alberta's Foreign Ownership of Land Regulations, see www.gov.ab.ca/gs/information/registries/fola.cfm.

Megan Parker - Alberta Government Services - (780) 415-6051

Backgrounder

The Order-in-Council approved by Cabinet permits Al-Pac, a foreign-controlled company located about 50 km northeast of Athabasca, to lease 25,000 hectares of privately owned land in a region of northeastern Alberta for up to 30 years, with option of renewing for another 30 years (provided specific conditions are met).

Alberta's Foreign Ownership of Land Regulations:

• Apply to controlled land, defined as: privately held lands outside the boundaries of a city, town, village or summer village, but does not include Crown land.
• Generally permit a foreign-owned corporation or foreign person to lease controlled land as required, as long as the leases are for a maximum of 20 years and are non-renewable.
• Allow Cabinet to grant an exemption to the regulations through an Order-in-Council when an application by a non-Canadian person or corporation includes a feasible project that would result in an economic benefit for the province.
• Do not discourage non-Canadians from investing in Alberta.

Alberta Agriculture, Food and Rural Development

• The land covered by the exemption has a lower productivity rating;
• Poplar was once the original vegetation that covered much of the land when it was first prepared for farming.
• Tree farming offers an option to farmers wishing to diversify; tree farming can offer landowners dependable revenues; planting poplars will be just another alternative crop for our producers; many Canadian companies are purchasing land for this same purpose.
• Planting hybrid poplars is good for the environment and in turn works well with Alberta's Climate Change Strategy. The Al-Pac agreement will open the door for the sequestering of carbon dioxide, and producers may also be able to market carbon credits.
• Landowners should carefully examine the long-term impact of someone leasing their land for up to 30 years.
• This legislation is designed to protect prime agricultural and recreational lands.

Contact for media inquiries: Terry Willock, Agriculture, Food and Rural Development, (780) 422-7683