The history of land ownership and use in Prince Edward Island has been marked by various issues, starting with the initial allocation of sixty-seven 20,000-acre lots or townships to a small group of absentee landlords. Although local ownership was eventually established, problems resurfaced in the 1960s as non-residents began investing in local real estate, causing concerns about the control of coastal areas falling out of the hands of local residents. To address this, the government introduced amendments to the Real Property Act in 1972 to limit land purchases by non-residents.

However, public concerns were reignited in 1981 when a non-resident corporation applied to acquire 6,000 acres of land. This was viewed by some as a potential threat to the province’s agricultural industry, as it could give one company undue control. As a result, the Lands Protection Act (the Act) was introduced in 1982 as Bill 37 to address these concerns.