Okay, one cheer may be in order, but that is hardly sufficient. If IRAC manages the land file in future, let’s hope it is made up of a group of people who are not politically appointed…and let’s hope we have elected a government that does not interfere when things don’t go as they and their corporate cronies wish.
One Cheer for IRAC: Doing What the Public Wants
by Ian Petrie
It will be up to Rory Francis to recommend how land will be regulated and managed in the province in the future: who can own how much land under the Lands Protection Act, and settling land use conflicts using the Planning Act.
Not surprisingly, the current regulator — the Island Regulatory and Appeals Commission (IRAC) — came under heavy criticism during public hearings held by Francis’ three-person commission this month. Several presenters talked about a lack of transparency, accountability and public oversight. There were also allegations of conflicts of interest arising from how IRAC’s commissioners are appointed.
There are two groups of Islanders who are closely involved in IRAC’s investigations that likely won’t make any public presentations to Rory Francis: commercial real estate lawyers and real estate brokers. They’d have a different story to tell.
A real estate lawyer told me years ago that when a client comes to them looking to buy some land, it’s their job to do everything possible to make that happen. If they won’t, then someone else will. It may not be pretty at times to the rest of us but it’s what the profession demands.
What I’ve found interesting over the last few years is how many controversial land purchases involved lawyers and brokers doing everything possible, including lobbying government and legal maneuvering, specifically to avoid any scrutiny by IRAC. That tells me that IRAC is effective and doing exactly what the public wants.
For example, at the end of August, there will be new rules for non-Islanders buying small properties in urban areas with municipal land-use plans. These purchases will now have to be reviewed by IRAC and approved by cabinet. When this was first proposed more than a year ago, real estate brokers and the Federation of PEI Municipalities both objected, arguing there would be unintended consequences.
In essence it would shrink the pool of potential buyers. Real estate brokers would lose business and municipalities transaction fees and possibly new developments. The government hopes the regulatory change will increase the housing supply for Islanders rather than investment opportunities for non-Islanders. Who knows. It might even make these properties more affordable. IRAC can play a role in making this happen.
I have knowledge of a property sale in a rural area where the broker insisted the lot with the house be under five acres so IRAC wouldn’t be involved. A potential American buyer was held up because he had a previous purchase and this new one would push him over the five acre limit. No one likes red tape, and there may be future debates about whether PEI’s land laws are too restrictive, but for now this irritation means IRAC is an agency doing its job.
Then there’s the 2019 Brendel sale where 2,200 acres in Bedeque were sold by the Gardiner family to Irving family interests. The Liberal government of the day accepted IRAC’s recommendation that the sale be refused. On paper, Irving lawyers were presented as principal shareholders to get around the land ownership restrictions, but the government, using the concept of “beneficial ownership,” said it was still the Irving family who would benefit from the farm’s operation. IRAC had reviewed the sale because of the involvement of non-Island lawyers and corporations.
The Irvings lawyers made note of that and the next time the sale was announced five months later, it was Rebecca Irving and two other Islanders not named Irving who were put forward as the shareholders of the company buying the farm. The key here was as Islanders, the sale avoided an IRAC investigation. Instead, Land Minister Bloyce Thompson had to call for a special investigation. IRAC hired outside lawyers to do this and came to the same conclusion. The sale was refused. Whatever shareholder arrangements were made after that continues to be a mystery.
There was also an amendment to the LPA, which states that all corporate land sales regardless of where the shareholders live, has to go through IRAC.
Have there been IRAC missteps? Of course. The on again, off again 2018 investigation into land holdings by two Buddhist organizations in Eastern PEI is certainly one. IRAC should have been clear from the outset that while some investigative work was done back then, there was no final report. This puts the credibility and thoroughness of the current investigation already in doubt and will do little to change the minds of groups convinced the Buddhist monasteries and followers control too much land.
I’m not pushing for IRAC to necessarily retain its current role. I am hoping whatever agency is proposed is as disliked by lawyers and real estate brokers as IRAC is now. Then I’ll know it’s doing its job.
