Land monetisation lessons: Canadian firm could be model for unlocking land

A landmark feature of Toronto’s skyline, the 1,815.5-ft-tall CN Tow­er, is recognised around the world and has attracted millions of visitors eager to experience its EdgeWalk, glass floors and panoramic views. Far less familiar is Canada Lands Company, or CLC, a self-financing state-owned corporation that owns and manages the famous tower (pictured).

The Canadian company is now drawing attention in India as a possible model for the monetisation of land assets held by various government entities. In the Union Budget, Finance Min­i­s­ter Nirmala Sitharaman had outlined the government’s intent to monetise surp­lus public lands by way of direct sales, concessions or other means, and propos­ed setting up a Special Purpose Vehicle in the form of a company for this exercise.

CLC, a federal Crown corporation, was formed over 25 years ago to monetise and ensure the commercially orien­ted orderly disposition of surplus government lands and building assets. Crown cor­porations in Canada typically are hybrid entities that are state-owned and accountable to the nation’s Parliament, but are run auto­nomously. Today, CLC is an Rs 1,800-crore company, specialising in real estate development and attractions management. It returned Rs 773 crore to the Canadian government last year in the form of corporate dividends, corporate income tax, and payments toward land and assets acquired from the government.

Various Indian government agencies are estimated to hold over 500,000 hectares, about a third of which is held across airports, seaports and railways, according to public reports. CLC, with its experience and expertise in unlocking land value, could provide useful pointers to the Indian government’s efforts to generate additional revenue at a time of growing fiscal deficits.

As Victor Thomas, president and CEO of the Canada-India Business Council, notes, “CLC was created when Canada’s fiscal situation had turned rocky in the mid-1990s. It was one of the pieces that put Canada’s fiscal position on steady ground.”

CLC purchases surplus lands from Canada’s central government departments at fair market value. The departments are “obligated to transact with Canada Lands for the disposal of strategic surplus lands,” notes Marcelo Gomez-Wiuckstern, vice-president of Corporate Commun­ications at CLC, and adds, “Canada Lands works with private sector businesses to avoid being seen as competing unfairly with the private sector.”

‘Canada Lands Company works with the private sector to avoid being seen as competing unfairly with it’

CLC’s development projects can range in size from one hectare in urban areas to 100-200 hectares. One such project is the redevelopment of the 200-acre Currie Barracks into a mix of housing, parks and heritage sites near downtown Calgary. 

Another area where CLC’s model could prove useful is in working with local communities around the sites being developed. For instance, Jericho Lands in Vancouver, a site formerly owned by the Department of National Defence, is being developed in partnership with local First Nations or indigenous communities, with indigenous culture at the heart of the project, according to CLC.

CLC’s work “entails extensive public engagement, urban design work, technical studies, working with the municipal bureaucracy and municipal planning approvals,” says Gomez-Wiuckstern.

The company has also advised foreign governments in the past about its model. 

The proposals outlined in this year’s Union Budget have also enthused Cana­d­ian businesses looking to invest in India, according to C-IBC’s Thomas. “This Budget is unlike any others before it that I’ve seen, with its focus on growth and in signalling engagement with the private sector,” he says, and adds, “But the process matters. It must be transparent, with effective oversight and the government must stay at arm’s length.”

Real estate is, in fact, one of the key areas of interest for Canadian companies, as Ind­ia’s High Commissioner to Can­ada Ajay Bisaria notes. Canadian firm Brook­field Asset Management is currently the largest private capital investor in India, with its $20-billion bet on various projects in the country. “There’s been a huge increase in investment from Canada to India, much of it in the real estate sector,” Bisaria says, “India is keen to professionally monetise its land assets and is studying global experiences in this field.”

Canada Lands Company, with its varied portfolio, would be a valuable guide in this process.