Municipal Restructuring - Municipal Government Act

The new Municipal Government Act sets out requirements and consistent processes for changing municipal boundaries including criteria and conditions for initiating and restructuring municipal boundaries, the process to change the name or class of a municipality, stakeholder engagement requirements and decision-making regarding requests to restructure.

Separate Processes

The process for physically changing municipal boundaries has been separated from the processes for changing the name or class of a municipality. This provides an opportunity for increased consultation with both the public and municipal councils and a standardized process for doing so.

Initiating a Restructuring of Physical Boundaries

All processes for the establishment, dissolution and restructuring (amalgamation, annexation and boundary changes) of a municipality will now involve a single and consistent approach. The formation of a new municipality may be initiated by either the Minister or by a petition signed by at least 30% of the population who would be electors of the new municipality. The dissolution or restructuring of municipal boundaries, including annexation, amalgamations and boundary changes, may be initiated by either the Minister or the council of a municipality.

Proposals for formation, dissolution or restructuring need to be in writing and filed with the Island Regulatory and Appeals Commission (IRAC). If the proposal would result in a town or city that does not meet certain criteria that are described in the new Act, the proposal must be submitted to and approved by the Minister prior to being accepted by IRAC.

Stakeholder Engagement

IRAC will notify and inform the Minister, nearby municipalities, nearby First Nations Bands, the Federation of Prince Edward Island Municipalities (FPEIM) and the public about the proposal through various methods. Once notice has been provided, any person opposing the proposal has 30 days to file a written objection with IRAC.

If the Minister determines there is a significant public interest in the proposal after the objection period, IRAC will hold a public hearing. IRAC may also decide to hold a public hearing without direction from the Minister if objections to the proposal have been received.

If an objection is received from a municipality during the objection period for a restructuring, IRAC will appoint a mediator to assist the municipalities in resolving the dispute. If, following the mediation, the dispute remains unresolved and the objection is not withdrawn by the municipality, IRAC will hold a public hearing.


The cost associated with any proposal to establish, restructure, or dissolve a municipality, including costs for notification or for holding a hearing, will be the responsibility of the applicant. The cost associated with any mediation will be the responsibility of the parties involved and the mediator may recommend to IRAC how the cost of the mediation be split between the parties involved.

Criteria and Conditions

Regulations will set out criteria and minimum standards that must be taken into consideration regarding the establishment or restructuring of municipalities.

IRAC Recommendations

Once any mediation or public hearings are complete, IRAC will provide the Minister with a written report containing its findings, recommendations and reasons for the recommendations. IRAC will send a copy of the report to the person or persons who made the proposal, nearby municipalities, nearby First Nations Bands, the FPEIM, and any other persons that IRAC believes should receive it.

Decision Making

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:

  • Establish or restructure the boundaries as proposed or with changes;
  • Deny the establishment or restructuring as proposed; or
  • Approve or deny the dissolution of the municipality.

Changing a Municipality’s Name or Class

A municipal council must apply in writing to the Minister to have the name or class of their municipality changed. The Minister has flexibility in engaging with the public on changes to a municipality’s name or municipal class. For example, the Minister may invite residents to provide written submissions or might hold public meetings to gather feedback. Other methods may be used to collect information if the Minister thinks it is necessary for considering the request.

The Minister will consider the submissions and comments prior to making a recommendation to the Lieutenant Governor in Council. Lieutenant Governor in Council may then approve or deny the change of name or change of status for the municipality.

Existing Legislation Framework:  What’s in Place Currently

Existing municipal restructuring processes and procedures are not consistent.

The Minister is responsible for the review of applications for: forming a new municipality in an unincorporated area, amalgamating two or more municipalities, dissolving a municipality and changing the status or name of a municipality.

The final decisions regarding these processes are then made by the Lieutenant Governor in Council.

For a municipality to annex land outside of its boundaries, the Island Regulatory and Appeals Commission (IRAC) must hold a public hearing and provide a report and recommendation to the Minister. The report and recommendations produced are then brought to the Lieutenant Governor in Council for a decision.

Note: This document is prepared by the Municipal Affairs Section of the Department of Communities, Land and Environment for general information purposes. This document should not be relied upon as a substitute for specialized legal or professional advice. 
Published date: 
January 6, 2017
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