Several years ago Mary Jean Irving was speaking to a group of young entrepreneurs at a conference in Charlottetown. It wasn’t just what she said that stuck with me, but how she said it. “Never, never, never give up” was the message, and she said it with a relentless determination. I remember this because I was curious what it would have been like growing up as the only daughter in a family of fiercely capitalist machismo men who inherited great wealth and power and were expected to make both grow. With the convoluted purchase of Brendel Farms by her daughter, Rebecca, she clearly hasn’t forgotten that message.
When Horace Carver reviewed the Lands Protection Act six years ago, he warned that lawyers and accountants were cooking up new ways to get around the restrictions in the act, and this latest Brendel sale is a five course banquet.
The Gardiner family thought they had sold their 2,200 acre Prince County farm to the Irvings earlier this year, but just before the call of a provincial election, Wade MacLauchlan’s Liberal cabinet denied the sale. Richard Brown, then minister of Community, Lands, and Environment said, "We applied the rules of the Lands Protection Act. The beneficial owners are one family, basically.”
Guardian reporter Stu Neatby did some excellent reporting on what happened next. Lawyer Geoff Connolly, a partner in one of PEI’s largest law firms Stewart McKelvey, suggested a different approach using PEI’s Business Corporation Act. A new company, Haslemere, was created with the Gardiners as directors, and the 2200 acres legally transferred to it from Brendel Farms, an inter-company transfer essentially.
The Gardiners then sold Haslemere and were replaced as directors by Rebecca Irving. The deed was done. A company, not a piece of land was sold, so no scrutiny by pesky IRAC. Geoff Connolly put it this way: “The land transfer happened before the company acquisition. That land transfer was from Brendel Farms to Haslemere and that was done within the Gardiners' organization and structure.”
A new corporate entity Red Fox Acres Ltd. with Rebecca Irving the sole director has now been registered, and replaced Haslemere which is being wound down. Interestingly Red Fox is listed as a “land holding company”, not a farm, in the PEI Corporate registry, perhaps to further the idea that this is a company purchase, not a land transaction. Someone will presumably lease the land to farm it and this will offer more clues about what’s really going on, and possibly allow IRAC to pass judgment. There has also been public notice that Galloway Farms, the company initially set-up for Rebecca Irving in the first failed purchase, is being wound down as well.
The Green Party, the National Farmers Union, and some editorial writers have made a strong case that this is a huge test for Dennis King’s new Conservative Government. It promised strict adherence to the Lands Protection Act.
Agriculture Minister Bloyce Thompson hasn’t said anything publicly as of this writing, but has used his Twitter account to express frustration with what’s happened: “I am concerned that this was carried out without government’s knowledge or approval. IRAC has a mandate to enforce the Lands Protection Act, and I have requested and expect IRAC to conduct an investigation into this transaction.” He later wrote that the government would seek outside legal advice to see if there’s anything it can do.
I’ve been trying to understand why the Irvings were so determined to buy this land. Other than stubbornness (remember: Never give up!) there is growing evidence of a real shortage of potatoes going to Cavendish Farms. The company continued to bring in truckloads of potatoes from Idaho through August to meet its contract obligations with Wendy’s.
Two years of drought (and likely a third) has production down on PEI. As well for the first time growers are refusing new or expanded contracts from the company. The economics just don’t make sense. French fry producers simply can’t tell their fast food customers they’re short no matter the cost to meet the contract demands. One land purchase won’t solve the company’s supply problem, but it’s 800 acres of potatoes (with proper crop rotation) the company could count on in the future.
There’s also the question of how many people other than the Irvings could afford to buy a big block of land like this. Finding buyers with deep pockets will be a challenge for other operations that have grown since the 1970’s and don’t have family members able or willing to carry on. A land bank would help, but tens of millions of dollars would be needed to be effective.
If the Irvings and their lawyers ever wonder why there is so much hostility and suspicion about what they’re up to, this particular land sale will be held out as a prime reason for years to come. Legal? Probably. Within the spirit of the Lands Protection Act? Absolutely not.