Proposed changes for non-Islanders buying municipal property facing criticism
'There could be unintended consequences,' Federation of P.E.I. Municipalities warns
A proposed change to how non-residents would be allowed to buy property on Prince Edward Island is raising concerns about the consequences it could have on municipalities.
P.E.I.'s Department of Housing, Land and Communities is proposing an amendment to the Lands Protection Act, a unique piece of legislation that includes limitations on non-resident and corporate land ownership in the province.
The change would lead to people who are not Island residents needing cabinet approval to buy properties of one acre or less that are located within municipalities with an official plan.
According to the province, the amendment is meant to create more transparency and oversight over who owns land on the 1.4 million-acre Island.
The Federation of P.E.I. Municipalities worries about the repercussions, though.
"I understand the government's rationale behind bringing this legislation. Land protection is important," said Satya Sen, the federation's executive director.
"But there could be unintended consequences by introducing this legislation."
The proposed amendment says that if someone who doesn't yet own property on P.E.I. wants to buy a house on a plot measuring under one acre — and that house is in a municipality with an official plan — the person will need cabinet approval. But if the desired property is outside a municipality with a plan, cabinet approval would not be required to buy land of five acres or less.
Sen is concerned that the "bureaucratic red tape" will result in people preferring to buy properties outside municipal boundaries, and that could lead to sprawl in areas that don't have the infrastructure to support it.
"Municipalities are best positioned to manage growth and welcome people, new residents, new Islanders," he said.
"Is the cabinet ready to approve all the applications, even for a single lot in Charlottetown brought by an incoming doctor or a nurse from a different province? I don't think that's the role of cabinet in this regard."
'Not the end of the conversation'
The P.E.I. Real Estate Association has problems with it too. In a letter to the province, the association raised concerns ranging from the potential negative impact on immigration to how the move could hurt local homeowners who are trying to sell their houses.
"The negative impacts listed above greatly outweigh any potential positives," the letter said.
In the context of a housing crisis, policies that further limit access to housing — whether by reducing demand or investor participation — only exacerbate affordability issues.— P.E.I. Real Estate Association
"In the context of a housing crisis, policies that further limit access to housing — whether by reducing demand or investor participation — only exacerbate affordability issues."
Land use across P.E.I. has been a topic of discussion for decades. In February, the province said changes to the Lands Protection Act would be tabled "to enhance oversight of land holdings for non-residents."
That announcement came the same day that Land Minister Steven Myers said he had ordered a new investigation into Buddhist land holdings in the province.
Boyd Allen with the Coalition for the Protection of P.E.I. Lands said he is pleased to see that updating the act is on the government's radar. Still, he doesn't understand why this is the priority rather than the concept of beneficial ownership.
That's a mechanism under the act to try to determine whether large land owners might control land under different names or corporations, and thus be able to skirt land ownership limits.
"If you're going to look at the Land Protection Act and put it under the microscope and make amendments to it, then you have to look at other items which have been, up to this point, not addressed," Allen said.
Allen also has concerns about the public engagement process and wonders if this will be the model for future amendments.
"It's a frustration because it was announced on a Friday afternoon and attached to it was a two-week comment window, which ended on Good Friday," he said.
There was no guarantee that what was being said was being noted or listened to or considered.— Boyd Allen
"There wasn't much opportunity for those concerned about this to actually speak to it. And given the structure, there was no guarantee that what was being said was being noted or listened to or considered."
Sen agrees that this proposal requires more discussion and said he would also like additional details. For example, he's not sure what it means for municipal properties measuring between one and five acres.
"You can protect the land while not being protectionist about it," he said.
"If the government [wants] to have more consultation on this legislation before it is tabled, that would be great. If not, I understand the government's position on this. However, this is not the end of the conversation."
Province reviewing submissions
The province said Myers won't speak to the proposal until it gets tabled in the legislature.
It also said provincial staff are reviewing the submissions from the consultations and may make changes based on the feedback before tabling the bill.
P.E.I.'s Lands Protection Act came into effect in 1982, in part as a response to concerns about ownership of the province's limited land base being concentrated under large corporations including those controlled by the Irving family in New Brunswick.
The act requires non-residents and corporations to seek cabinet approval if a land purchase would push their total land holdings beyond five acres, or if it includes 165 feet of shorefront.
The act also includes overall limits on land ownership of 1,000 acres per individual and 3,000 acres for corporations, with additional allowances for things like non-arable land or land leased out to someone else.