The chairman of the Island Regulatory and Appeals Commission has said its investigation of a controversial land sale involving an Irving-owned company has been complicated by recent changes to laws governing corporations.
Speaking before the standing committee on natural resources and environmental sustainability on Tuesday, Scott MacKenzie, chairman and CEO of IRAC, was asked by Progressive Conservative MLA Sidney MacEwen about the recent transfer of ownership of over 2,200 acres from the family-owned Brendel Farms Ltd. to an Irving-affiliated company, Red Fox Acres Ltd.
Approval from executive council was not obtained prior to the transfer of ownership, a requirement of land sales involving non-resident corporations or individuals.
“How do we, as a province, not allow that to happen, without getting executive council approval?” MacEwen asked MacKenzie.
MacKenzie said he could not comment directly on the Brendel Farms-Red Fox sale because of the ongoing IRAC investigation.
However, MacKenzie raised the Business Corporation Act, which was passed in 2018. Under this act, corporations are no longer required to publicly disclose the names of shareholders.
"We cannot simply call up and find out who the shareholders are. That puts us into the situation where we have to look into the transaction. And that's what we're doing," MacKenzie said.
It remains unclear how the Brendel-Red Fox transaction occurred. A similar sale of the same 2,200 acres of land was denied by executive council in March of 2019. Shortly after the decision, then-Communities Land and Environment Minister Richard Brown told The Guardian the sale would have contravened the Lands Protection Act. The purchasing companies were connected to the Irving family, owners of Cavendish Farms.
By August, the same land was owned by Red Fox Acres Ltd. Red Fox had initially listed the P.E.I.-based owners of Brendel Farms as directors when it was incorporated on June 27. But by July 12, Rebecca Irving was listed as the sole director.
It is unclear whether there may have been a transaction involving the shares of Red Fox from the owners of Brendel. When the story was first reported in The Guardian last August, a representative of Red Fox Acres Ltd. referred to the land transfer as a “company acquisition".
“I don't know if you can call something, where you have never ever had to do it, a loophole,” MacKenzie said.
"Until we find who actually owns the shares of that corporation, how they're held, who the people are involved in it, we won't know, and the minister won't know, whether things were complied with."
MacKenzie said he expects the investigation to be completed within 60 days.
"Once that investigation is done, is it possible for you or executive council to reverse this decision?" MacEwen asked MacKenzie.
"If there has been a violation of the act, the minister has the authority to seek a court order that the lands be divested," MacKenzie said.
Green MLA Michelle Beaton asked MacKenzie if IRAC is usually notified when there is a corporation change in shareholders of land-holding companies.
"We would get an application if there was a non-resident that was going to get the shares of the corporation. We would not get a notification in changes in shares," MacKenzie said.
"There is no mandatory requirement that someone update the shareholdings with us."
MacKenzie’s presentation was briefly interrupted by the removal of an individual from the public gallery by legislative security.
The woman, Daphnée Azoulay, had brought a copper drum with bells attached to it into the legislature. She was also wearing a clown nose and wore a backpack bearing the words "kids want a future".
A loud scuffle broke out between Azoulay and the security guard after Azoulay refused to leave the gallery. Azoulay was later removed from the building by Charlottetown Police.
“It is very concerning that the Irvings are buying up so much land in P.E.I. in a way which is clearly not protecting the land,” Azoulay later told The Guardian.
- 'Loophole' in Act allowed sale of P.E.I. land to Irving-affiliated company
- Irving land sale, similar to acquisition previously denied, goes ahead without cabinet approval
- P.E.I. government denies Irving purchase on the same day election called