Prince Edward Island Lands Protection Act
Frequently asked questions with information on non-resident, corporate and global permit applications for land acquisition in Prince Edward Island.
Why is there a Lands Protection Act?
The issues involving land ownership and land use in Prince Edward Island began in the early history of the province. The Island was initially divided into sixty-seven 20,000-acre lots or townships. These lots were allocated in advance of settlement to a relatively small elite group of absentee proprietors. Over time, the land was purchased from the absentee landlords and returned to local ownership.
Issues associated with absentee landlords resurfaced again in the 1960’s, as non-residents began investing in local real estate throughout the province. As a result, substantial amounts of land in the coastal areas fell out of the control of local residents. In 1972, Government introduced amendments to the Real Property Act to restrict the purchase of land by non-residents.
In 1981, an application by a non-resident corporation to acquire 6,000 acres prompted public concern over the perceived impacts of land ownership distribution and its implications for the future. Some viewed this as giving pre-eminent control of the province’s agricultural industry to one company. This led to the introduction of Bill 37 – the Lands Protection Act (the Act) in 1982.
What is an aggregate land holding?
A person’s aggregate land holding consists of:
- all land holdings of that person and of his/her minor children;
- the relevant amount of land holdings of any corporation in which he/she, they or any of them, hold more than 5% of the issued voting shares; and
- the relevant amount of the land holdings of any other corporation in which the person in #1 or any corporation in #2 holds more than 5% of the issued voting shares.
A corporation’s aggregate land holding consists of:
- all land holdings of that corporation;
- all land holdings of any person who holds more than 5% of the issued voting shares in that corporation and of his/her minor children; and
- the relevant amount of the land holdings of any other corporation in which the corporation in #1 or any person in #2 holds more than 5% of the issued voting shares.
A corporation includes a partnership, cooperative association or body corporate and for the purposes of the Act, a corporation and other corporations directly or indirectly controlled by the same person, group or organization shall be deemed to be one corporation.
What is the Commission’s role?
The Commission is responsible for the general administration of the Act. It reviews and obtains pertinent information and makes recommendations to Government on applications for land purchases governed by the Act.
What is the Government’s role?
Executive Council, on behalf of the Lieutenant Governor in Council, makes the final decision on applications for land acquisitions governed by the Act, based on the recommendations of the Commission.
What factors does the Commission consider?
Among the factors considered by the Commission are:
- aggregate land holding
- shareholder structure
- residency status
- number of parcels/acreage to be acquired
- shore frontage
- concentration of non-resident ownership in the community where the land is located
- intended use and best use of the land
- capability for agriculture
- ecological value
- land value
- intention of purchaser to relocate to PEI
- coastal access
- potential economic impact of the purchase
- local significance of the property
- general land use in area
- traditional land use in area
- speculative intent/nature
- impact on land values
- land fragmentation
- compliance with requirement to advertise land
- need for identification
- number of parcels/acreage already owned by applicant
Who is required to make an application?
A non-resident person or corporation, or a resident corporation must make application if the person or corporation will have an aggregate land holding
- in excess of 5 acres, or
- having shore frontage in excess of 165 feet. Refer to Shore Frontage Regulations.
A non-resident person who acquires a land holding by gift, devise or inheritance from a spouse, sibling or direct descendent or ancestor is exempt from making application.
Do I need to make an application to “lease” or “rent” land?
Yes, Executive Council approval is required if you are a corporation or a non-resident person who will have an aggregate land holding in excess of 5 acres or shore frontage in excess of 165 feet, and you have or intend to have use, possession or control of a parcel regardless of the value and formality of the agreement. You may apply to obtain approval to hold specific parcels of land by way of lease on the appropriate application Form 1 or Form 2, or apply for a Global Lease Permit Form 8A.
What is a Global Lease Permit?
A Global Lease Permit enables you to apply for permission to acquire land by way of lease and to continue to hold a permitted number of acres of land as part of your aggregate land holding. This permit is especially useful for farm corporations that use different parcels of land each year in their crop rotation process. Application can be made to change the permitted acreage amount.
A statement (Global Lease Permit Report Form 8B) must be filed yearly with the Commission by every global lease permit holder on or before December 31, whether or not you leased land that particular year. The total permitted acreage of a global permit is included in the calculation of a person or corporation’s aggregate land holding, whether the acreage leased in is equal to the total permitted amount or not. This ensures that the allowable land holding limits are not exceeded. If you have a global lease permit but do not lease land, the total amount of your permit is still included in your aggregate land holdings.
Do I need to include lands that I lease out as part of my land holdings?
Landowners are able to deduct 50% of the land leased out to another person or corporation, up to the lesser of one-half the number of acres of arable land held to a maximum of 500 acres of arable land for a person, and 1,500 acres of arable land for a corporation.
Under what conditions can an application be approved?
Government may approve a land purchase with conditions, including:
- That land not be subdivided except for:
- agricultural, forestry or fisheries production;
- a conservation use pursuant to a designation as a natural area, archaeological site or heritage place;
- a parks use by federal, provincial or municipal government;
- a residential use by the owner;
- That land be identified for non-development use under the Land Identification Regulations;
- That land be consolidated with adjoining parcel(s) of land; and
- That the applicant becomes a resident within a specified time period.
Do the conditions of identification for non-development use or no subdivision always remain on the land?
The conditions of identification and no subdivision run with the land and continue to be in effect even if the land is sold or conveyed to another party.
All identification agreements and no-subdivision conditions expire automatically after 10 years and without application by the land owner. Information to cancel, suspend or amend a condition prior to 10 years can be accessed here.
For what reasons have applications been denied?
Applications have been denied for the following reasons:
- A large acreage of farm land would be controlled by non-resident(s) that had no intention to relocate to the province;
- Aggregate land holdings were beyond the limits set out in the Act;
- Land holdings of a person or corporation in a particular area of the province were at a level beyond what was believed to be in the public interest;
- Land flipping and speculation appeared to motivate the transaction;
- The purchase would have resulted in the control of the majority of the shore frontage of a local body of water being held by a non-resident person;
- Government wanted to provide an opportunity to local residents/farmers to purchase the land;
- A significant proportion of land or shore frontage in a local area was already controlled by non-residents; and
- An intention to circumvent the land identification program appeared to motivate the transaction.
What should I do if I did not make an application at the time that I acquired an interest in land?
You should file a retroactive application to ensure that you are in full compliance with the Act.
What is the maximum amount of land that a person or corporation can hold in Prince Edward Island?
A person or corporation can hold an aggregate land holding of no more than:
- 1,000 acres for a person
- 3,000 acres for a corporation
Some of the land that I own or lease is woodland, pasture, marsh, a buffer zone, etc. so I can’t use it for planting crops. Can I deduct this non-arable acreage from my aggregate land holdings?
Yes, the non-arable acreages can be excluded from the calculation of the aggregate land holding of up to 400 acres for a person or 1,200 acres for a corporation. However, the exclusion of non-arable land does not exempt the requirement to make application for approval to acquire the land (i.e. if a corporation or a non-resident person is acquiring 10 acres of land, 6 acres of which is non-arable land, an application would still be necessary).
How long does it take to process an application?
Generally 3-4 weeks is required from the date an application is filed to the date a decision is rendered. However, depending on the complexity of the application, additional time may be required.
The Order confirming government’s decision is usually issued within seven to ten days of the date of the decision and should be registered with the deed.
Please see the Application Review Process at the end of this publication.
What is required make an application?
An application for a land purchase must include the following:
- a completed application form;
- an orthophoto or GeoLinc map of the parcel(s) outlined in red;
- a legal description of the subject parcel(s);
- if the applicant is a non-resident person or corporation, details of recent advertising of the land on the local real estate market (more information); and
- a fee of $550 or 1% of the agreed purchase price, whichever is greater [for all applications by non-resident corporations or corporations where the majority of voting shares are owned by non-resident(s), and most non-residents] (more information). Cheques should be made payable to the Island Regulatory and Appeals Commission.
The completed application is submitted to the Island Regulatory and Appeals Commission. Tentative schedule for land applications.
I or my corporation have received Executive Council approval to acquire a property. It has now been determined that the transaction will not occur. What should I do?
It is important that you return the Executive Council Order to the Commission with a request that the Order be rescinded, especially if the Order states that the approval is conditional, i.e. subject to identification for non-development use or subject to the condition that the parcel not be subdivided, etc. Executive Council conditions only attach to a parcel at the time title is transferred to the applicant. Therefore, rescinding Orders that will not occur enables the Commission to change our database to reflect that the condition does not apply to the parcel because the applicant did not acquire the land. Otherwise, the parcel will continue to show as “identified”, “subject to no subdivision”, etc., in our records.
Is the application fee refundable?
When an application is denied or is approved but no part of the purchase has been or will be completed, the Commission may refund up to 50% of the application fee upon application. An application must be made to the Commission within six months of the date of the decision and must include:
- a statutory declaration stating the grounds for the refund: and
- the original Order that granted or denied permission to acquire the land.
Does the Commission monitor my land holdings?
A person having an aggregate land holding in excess of 750 acres or a corporation having an aggregate land holding in excess of 2,250 acres is required to file an annual land holding disclosure statement with the Commission.
How is the Act enforced?
Pursuant to subsection 15(1) of the Act, the Minister responsible for the Act, the Commission or any person authorized by the Minister may request information and conduct an investigation for the purpose of determining whether a person or corporation has contravened the Act or the regulations. The Act provides for penalties for non-compliance that can be imposed by the Commission and/or the Minister. For example, the Minister may issue an order requiring that a person or corporation reduce his aggregate land holding to comply with the maximum allowable limit., the Minister responsible for the Act, the Commission or any person authorized by the Minister may request information and conduct an investigation for the purpose of determining whether a person or corporation has contravened the Act or the regulations. The Act provides for penalties for non-compliance that can be imposed by the Commission and/or the Minister. For example, the Minister may issue an order requiring that a person or corporation reduce his aggregate land holding to comply with the maximum allowable limit.
For further information contact:
The Island Regulatory and Appeals Commission
5th Floor, National Bank Tower,
134 Kent Street, PO Box 577
Charlottetown PE, Canada C1A 7L1
Tel: (902) 892-3501
PEI toll-free 1-800-501-6268
Fax: (902) 566-4076
The Application Review Process
Application is filed with Commission
Commission reviews and makes recommendation
Commission submits recommendation to Lieutenant Governor in Council
Lieutenant Governor in Council reviews and makes final decision
Lieutenant Governor in Council sends Order containing disposition of application to applicant or his/her representative
Order is registered with the deed for the parcel
The information contained in this publication is intended as a guide and not as a legal reference. The PEI Lands Protection Act should be consulted for an exact statement of law.
Initially Published: 1997-08-25
Last Reviewed or Updated: 2019-09-05