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CHARLOTTETOWN — P.E.I. Premier Rob Lantz says his government has alerted the RCMP about a former cabinet minister who was dumped over a perceived conflict of interest after approving an altered redevelopment plan for a Summerside golf course.
“I can’t describe how disappointed I’m feeling,” Lantz said Monday during a news conference. “Cabinet ministers have a fundamental duty to be accountable for the decisions that they make.”
On Saturday, Lantz removed Gilles Arsenault as economic development minister, saying he had shown poor judgment when the developer, P.E.I. Ocean View Resort, asked the minister to change its permit to alter some wetlands in October 2025.
Arsenault was the province’s environment minister at that time.
On Sunday, Lantz announced he was suspending Arsenault from the Tory caucus and asking the province’s conflict of interest commissioner to investigate.
“Elected leaders need not only be free of conflict of interest, they must also be free of the perception of a conflict of interest,” Lantz said. “Obviously, there’s a perceived conflict, and I felt I had no choice but to take the decisions I’ve taken.”
Citing results from a third-party investigation, Lantz said the document raised questions about a $100,000 donation the developer gave to a non-profit environmental group led by Arsenault’s former campaign manager. In the past, the group had organized local youth to do cleanups and collect returnable containers.
The investigation, conducted by the law firm Stewart McKelvey, said Arsenault insisted he did not ask for the donation, delivered to the non-profit on Jan. 28, 2026. As well, he said it was not made in exchange for his approval of the amendment. The report, however, says a contractor hired by the developer said it was his understanding that Arsenault’s approval would only be granted in exchange for the donation.
“Regardless whose version is more accurate, the timing of the donation suggests that it was linked to the approval,” the report says.
Lantz said a deputy minister in the provincial government alerted the RCMP about the report’s initial findings on March 13. The allegations in the law firm’s report have not been tested in court.
Arsenault issued a statement Monday apologizing to his constituents and the premier, adding that he “never implied the amendment to the permit being contingent on the donation, or vice versa.”
“The suggestion of making a donation was not my idea, it was the developer’s,” the former minister said, adding that he responded by providing him with options. “Where he chose to make his donation was completely up to him.”
Arsenault said that when the developer said he wanted to contribute to education and the environment, that’s when the politician mentioned the non-profit organization in his district.
“I never wanted to break rules or cause issues for our community, the organization, nor the developer,” his statement says. “However, I realize now that the optics … matter. If the developer thought the donation was contingent on the permit, that was never the intention. Clearly there was a miscommunication.”
The law firm’s report says that after Arsenault gave the developer verbal approval for the changes in the autumn of 2025, the minister told his deputy that the altered permit was “no big deal.”
The premier said it was “relatively clear” that Arsenault did not personally benefit from the transaction. “(But) it’s exceptionally clear that he demonstrated poor judgment,” the premier said Monday.
The report says the province’s wetland conservation policy was not followed and the developer should have submitted an application to amend its plans rather than seek direct intervention from the minister. On another front, the report says that under certain circumstances, the policy allows for development of wetlands so long as compensation is paid. That money can be donated to a non-profit group to conduct watershed work.
But in this case, the Environment Department’s rules were not followed, according to the report. As a result, the report recommends that the developer should file a new application and the non-profit group should return the donation it received. Lantz indicated the money had already been returned.
The law firm’s report says the Environment Department was tipped off by a member of the public who alleged the developer was working in an area not covered by their permit. Department officials determined the developer was working on an additional five hectares outside the approved zone.
The premier has said deputy ministers in the departments of Environment and Justice contacted his office after the Environment Department ordered the developer to stop work on Feb. 27, citing concerns about the way the project was approved.
The law firm’s final report was handed to the premier on Friday.
The RCMP was not immediately able to provide a comment about the allegations.
Arsenault also served as minister responsible for Acadian and francophone affairs. A swearing-in ceremony was held Monday to fill the portfolios he vacated.
This report by The Canadian Press was first published March 30, 2026.
— By Michael MacDonald in Halifax
The Canadian Press
