Minister says no LPA infraction at Point Deroche

Green MLA suggested owner sold next-door property without holding ownership

P.E.I.’S minister of land, says the sale of two properties, including a controversial home at Point Deroche, did not involve a contravention of the province’s Lands Protection Act.

Rob Lantz made a statement in the legislature on March 12 about the two properties in Point Deroche after a line of questions by Green MLA Matt Macfarlane last week. While both properties listed different owners, they were both sold to Pan American Properties in December.

Pan American lists local developer Tim Banks as a president and shareholder.

The two properties are located next to one another. One property includes a laneway and a partially constructed waterfront home. Up until December, it was owned under the corporate name 251 Kelpie Lane. This Ontario registered corporation is reportedly owned by Toronto investment fund manager and philanthropist Jesse Rasch.

The adjoining property, a 47-acre stretch of marshland and forest, was owned by Nicholas Jay, a contractor who worked on the property at 251 Kelpie Lane.

Banks, who now owns both properties, has said he plans to continue construction of the home.

The 251 Kelpie Lane property has been the subject of controversy since late summer 2022 due to the construction of an armour stone wall that extended onto a public beach. The construction of this armour wall, which was permitted by the province, irked local beach walkers and raised concerns about the province’s enforcement of its own shoreline protection policies.

Speaking in the legislature on March 7, Macfarlane suggested the former owners of the Point Deroche properties had contravened the Lands Protection Act.

At issue was the fact that the owner of one of the properties held a mortgage on both properties, even though they were owned by different individuals.

“The Ontario people building the monstrosity took a mortgage over both parcels, giving them a beneficial interest in both parcels, even though they never received cabinet approval to acquire an interest in the 47-acre parcel,”

Macfarlane told the legislature.

Macfarlane said the mortgage over both properties meant the owners of 251 Kelpie Lane held an ownership stake in the adjoining 47-acre property, which they acquired without obtaining approval from cabinet, as required under the Lands Protection act.

The Lands Protection Act requires cabinet approval for purchases of land by either corporations or non-resident persons who hold more than five acres of land.

Macfarlane asked if Premier Dennis King would move to have the Island Regulatory and Appeals Commission (IRAC) investigate the transaction involving the 47-acre parcel.

“Islanders need to have confidence that the government is working their interests, and not those from away with deep pockets,” Macfarlane said.

Due to the limited supply of agricultural land in P.E.I., questions of whether the act is enforced draw frequent and vociferous debate in the province’s legislature.

Days after Macfarlane’s questions, in a statement in the legislature on March 12, Housing Minister Rob Lantz said he has been told by IRAC there was no infraction.

He said IRAC has informed him that a beneficial interest in a mortgage on one property was not the same as beneficial ownership of that property.

“In the case of a private mortgagee or mortgage holder, there is no present right to the use, possession or occupation of a property over which it holds a mortgage,” Lantz said.

“If a mortgagee seeks to enforce the default provisions of its mortgage and take possession of the property, then – and only then – would executive council approval be required.”

In an email, IRAC communications representative Jaclynne Hamel said the commission does not deem a private lender to be a "legal or beneficial owner" under the Lands Protection Act because they do not have a legal right to "present use, possession or occupation of the property."

Hamel said this understanding is based on a 1987 P.E.I. court decision, and that legal definitions of land holdings have not significantly changed since 1987.

In a statement to Saltwire, Tim Banks said the political dustup had little to do with his ownership of the Point Deroche home.

“Any approvals required with respect to the mortgage would be the mortgagee's responsibility. We applied for and received our approval to acquire the property as owner,” Banks said in an email.

Saltwire has contacted the former owner of the Point Deroche property, as well as his legal counsel.

No response was received by deadline.