Paul MacNeill

It was an Irving lawyer who first floated the term ‘loophole’ to describe the sale of a 2,200 acre farm to an Irving connected corporation. The term stuck. Suddenly changes made to the Business Corporation Act under the MacLauchlan government were blamed for the purchase avoiding legislated review by the Island Regulatory and Appeals Commission.

The spin implies the former government’s decision to eliminate public disclosure of corporate shareholders mitigates provisions of the Lands Protection Act.

The act, contrary to public opinion, is a strongly worded piece of legislation that sets out ownership limits for individuals and corporations. Corporations can own 3,000 acres, individuals 1,000. Purchases over five acres require approval of Executive Council.

The act is clear: ‘For the avoidance of doubt it is declared that where a person or corporation has an aggregate land holding for which permission is required under Section 4 or 5, any subsequent acquisition of a land holding by that person or corporation similarly requires such permission except where the aggregate land holding, including the land holding proposed to be acquired, is less than the maximum prescribed by that section.’

And there’s this. ‘An aggregate land holding declaration shall include particulars of the following ...

(e) the name and address of each shareholder holding more than 5 per cent of the shares and the proportion to the total number of voting shares held by each such shareholder; (f) any transfer of 10 per cent or more of the shares which has been made since the last aggregate land holding declaration.’

The Irvings want the public to believe that a short-sighted change to the Business Corporations Act legally trumps provisions of the LPA. It seems a stretch. The purchase is less about a loophole and more about an attempt to avoid public oversight.

The question is what is the King government doing about it?

Last spring, the MacLauchlan government rejected the sale of Brendel Farms Ltd to a trio of Irving related companies. The Guardian discovered that shortly thereafter the daughter of Mary Jean Irving used a share purchase agreement to buy the corporation that owns the farm, effectively avoiding public disclosure demanded by the Lands Protection Act.

It’s been six months since Bloyce Thompson, Minister of Agriculture and minister responsible for the LPA, announced a ‘review’ of the purchase. The minister’s two mandates do not naturally dovetail. As agriculture minister he is charged with promoting the industry, of which potatoes account for 50 per cent of provincial farm gate receipts. Overseeing the Lands Protection Act often demands reining in the demands of agriculture and Island farmers.

It’s easy to see why former governments have all avoided having the minister of agriculture also oversee the LPA – the appearance of conflict exists regardless of what action is taken.

We don’t know if the review demanded by Thompson is an investigation as outlined in the act, or merely an exercise in developing potential changes to the LPA. Premier King campaigned on a promise to close ‘loopholes’ that allow related companies to effectively control far more land than provincial law allows.

Bringing needed change to the act is one thing, enforcement is another. The Lands Protection Act allows for fines of up to $250,000 and includes the power to force individuals or corporations to divest of property.

How this sale unfolded is a matter of public record. So why is government dawdling to respond to an action that any ordinary observer would see as a deliberate attempt to step around provincial legislation (the entity that purchased the shares, shares a mailing address with Master Packaging, owned by Rebecca Irving’s mother, Mary Jean).

This is not just a matter of whether the Lands Protection Act was violated. It’s a matter of public trust built on a growing skepticism that government is allowing corporations and individuals to run roughshod over the act.

If as a province we believe land ownership limits are important, and few would argue they are not, then the King government must break its silence and enforce the act.

Paul MacNeill is Publisher of Island Press Limited. He can be contacted at paul@peicanada.com

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(1) comment

douglas miller

after all these years of corporate ownership concerns, PEI is still struggling to get it right and enforce it? Surely its time to give government a very loud wake up call on this one.

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