Dissolving a Municipality

What is Dissolution?

Dissolution is the process for a municipality to stop being a municipality.  It results in an area being unincorporated and without a local council.  

How does the municipal dissolution process start?

In order to dissolve a municipality, a proposal needs to be filed with the Island Regulatory and Appeals Commission (IRAC). The Minister or the Council of a municipality can start the process to submit an application.

What must a proposal to dissolve a municipality include?

A proposal to dissolve a municipality must include:

  • A statement that the proposal is to dissolve the municipality
  • The reason for the proposal
  • The names of the adjoining municipalities and unincorporated areas and other affected areas.
  • A plan for the winding up of the municipality, including the sale or transfer of assets and payment of the debts and obligations of the municipality. 

How will I know if my municipality is proposing to dissolve?  

IRAC must publish a notice in a local newspaper in the area where the dissolution is happening.   There also must be a notice in at least 3 visible places in the area that is going to be affected (such as a community hall or a rink). 

IRAC can also use additional methods, such as electronic means, to publish the notice.  The notice must include information about how a person can file an objection to the dissolution proposal.

IRAC must notify adjoining municipalities, and municipalities and First Nations Bands that may be affected by the dissolution.  The Federation of PEI Municipalities (FPEIM) must also be notified. 

How can I voice my opinions about a proposal?

You will have an opportunity to share your opinions about a proposal to dissolve a municipality.  You must fill in a form and submit it to IRAC within 30 days of the date that the notice was in the newspaper or was posted. 

IRAC may choose to hold a public hearing if there are objections.  IRAC will hold a public hearing if the Minister determines that there is significant public interest.

If a municipality has an objection to the proposal, IRAC will appoint a mediator to assist the municipalities in resolving the dispute.  If the dispute remains unsolved (and the objection is not withdrawn), IRAC will hold a public meeting. 

How is the decision made to dissolve a municipality?

Once any mediations or public meetings are complete, IRAC will provide the Minister with a written report containing its finding, recommendations and reasons for the recommendations.  This report will be sent to the council, nearby municipalities, nearby First Nations Bands, FPEIM, and any other persons that IRAC believes should receive it.

The Minister will review the report from IRAC and will make a recommendation to the Lieutenant Governor in Council.  The Lieutenant Governor in Council may then decide to:

  • Approve the dissolution of the municipality and specify the process for dissolution, or
  • Deny the dissolution of the municipality.
Note: This page is prepared for information purposes only and should not be relied upon as a substitute for specialized legal or professional advice.
Published date: 
January 11, 2018
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