May 27, 1996
(Government Services and Lands)

The following statement was issued today by Ernest McLean, Minister Government Services and Lands. It was also read in the House Of Assembly;

I wish to clarify some of the misleading and misinformed information which has been generated through the media within the last few days in response to government's new market value pricing policy to Crown lands.

First let me state that the new policy only applies to commercial, residential and recreational cottage leaseholders and it is a positive move forward in that people will be granted outright ownership to the property, rather than continuing with a leasing arrangement.

Government has initiated this new policy for a number of reasons, namely:

1) We want to continue government's objective of reducing regulations and red tape and making it easier for the public to deal with government, by implementing a lease/purchase arrangement whereby people will own their land after five years. This will in fact be an interest free loan.

2) The new system will ensure a consistent policy framework throughout the province.

3) We want to replace the old arbitrary pricing system with one which is based on market values prevalent in local areas.

4) Government needs to assure itself that it is receiving fair value for the land resource base of the province and for the people of the province generally.

Let me be clear, the new policy does not apply to people or organizations who have been issued leases under Section 9 of the Lands Act, i.e. churches, schools, cemeteries, municipal buildings or municipal parks.

Quite a bit of confusion has arisen over the cost to current leaseholders. I wish to correct some of this misinformation.

1) Government is moving to a lease purchase option.

2) People with cottage leases issued prior to October 31, 1991 will be given the opportunity to convert their leases to grants. For cottages this will be on the basis of $2,500 less rentals already paid, for example a person with a cottage lease issued in 1985 (i.e. 10 years) will get credit for the 10 years paid and in effect will be paying $1,750 to receive an outright grant (i.e. $2,500 less $750 for lease rental payments).

) For people with residential leases issued prior to October 31, 1991 the rate is set at $1,500 less rentals paid. I would like to point out that existing residential leases are locked in at $50 per year and should the lessee choose he can continue to lease for the remainder of the 50 year lease term. On the negative side should they apply for a grant after the deadline date the value for the land will be set at market value and there will be no credit for rent that is paid.

4) For individuals with leases issued after October 31, 1991 they will be given the opportunity to convert to grants on or before their five year anniversary date if they have met the conditions of their lease. Usually this means the individual has constructed a cottage or dwelling within the five year development term.

5) If individuals don't take advantage of this option or fail to meet the terms of their leases, then cottage owners will face an annual rent increase and the new pricing policy will apply, i.e. their annual rent will increase in accordance with the new policy of 20 per cent of the assessed value.

6) The new market value policy will be based on leased- purchase option and be based on assessed value. As I just said the leaseholder will be required to pay 20 per cent of the assessed value for five years, after which a grant will be issued.

7) In the case of residences in municipalities with assessments government will consider issuing the grant at the assessed value or $1,500, whichever is more advantageous to the leaseholder. In most cases, the new policy will result in less of a financial drain on homeowners.

8) It should be made clear that fees for most remote cottages, agriculture, aquaculture and resource based cabins will remain the same.

To combat the problem of illegal occupation government is currently considering a new policy which will make it quite costly for people who continue to occupy land illegally. Let me say that government is quite committed to dealing with this problem and we will implement this new policy vigorously.

I would like to inform the public that within a short period of time each leaseholder will be contacted by my department to fully explain the options and they can then choose the option that is most advantageous to them. In the interim my officials are available to answer any questions that any leaseholder may have.

I will conclude by stating that land ownership is a privilege and it should not be abused. We are trying extremely hard to be as fair as we possibly can to everyone in the province to allow leasers the opportunity to take advantage of the old fees.