P.E.I. Premier Rob Lantz removed a senior member of his inner circle over a legal opinion detailing how a $100,000 donation from a private developer was allegedly made to a group in his district.

Lantz’s statement Saturday confirmed Gilles Arsenault has been removed, effective immediately, as minister of economic development, trade and artificial intelligence.

Lantz said he made the decision after receiving a report “detailing a review of the handling of a permitting issue during his time as minister of environment, energy and climate action.”

Arsenault was moved out of the environment portfolio during a cabinet shuffle in February.

The premier’s office provided CBC News with a copy of that legal opinion carried out by Murray Murphy, managing partner with the Charlottetown law firm, Stewart McKelvey. The allegations in the document have not been proven.

That review reveals a group in Arsenault’s district of Evangeline-Miscouche received a $100,000 e-transfer donation to Comité Diversité et Equité on Jan. 28, 2026.

The donation came from a Summerside developer. It came after the minister had approved changes — described in this document as “tweaks” — to permits for work being carried out in a wetland area.

It goes on to say, “The minister described the tweaks as ‘no big deal’ and he advised that he had given verbal approval to the developer.”

It says the province’s Wetland Conservation Policy was not followed.

As for the donation, the lawyer met with and interviewed Arsenault, along with an official with the Evangeline-based group, and a contractor connected with the development. 

The legal opinion was then sent to Norbert Carpenter, deputy minister of land and environment on Tuesday, March 24, 2026. 

In it, the lawyer writes, “The minister indicates that he gave a commitment to the developer that they could proceed with the work without any additional approvals or compensation, and that this commitment was given well before the idea of a community donation was raised. He was adamant that he did not request a donation, and that the donation was not made in exchange for approval.”

But a contractor, who works with the developer, told a different story.

The legal opinion says, “It was [his] understanding that approval would be granted in exchange for the donation. Work could not commence until the donation was made.”

CBC News has not been able to reach Arsenault for comment on Saturday or Sunday.

The lawyer also interviewed Elise Milligan, with the group Comité Diversité et Equité.

In her interview with the law firm, Milligan said the minister contacted her and advised that “he was in contact with a person who wanted to make a community donation. He asked Ms. Milligan if the Comité was active, could receive a donation, and oversee a community project.”

Milligan said they were.

It wanted to move six buildings onto local school grounds, buy tools and equipment to support watershed projects and co-ordinate volunteer watershed projects in local schools. 

“Ms. Milligan gave Minister Arsenault a void cheque to be used to facilitate the funds transfer for the donation,” the legal opinion says. 

It also says the Comité is not incorporated and its address on departmental applications is 48 Mill Road in Wellington, the same building that houses Acadian and francophone affairs, part of the minister’s former responsibilities. The organization’s names does not appear to be listed on the tenant list with all the other tenants on the front of the building. 

Milligan said she didn’t have a comment. CBC News was unable to reach the developer for its response.

CBC News requested an interview with Lantz and was told he would answer questions from the media Monday.

‘Serious error of judgement’

In his statement, Lantz said, “Despite having positive intentions, Gilles [Arsenault] made a serious error of judgement for which he’s been held accountable.”

An official in the premier’s office told CBC News the group has paid the money back. 

Lantz also announced that Jenn Redmond will be sworn in Monday as the minister of economic development, trade and artificial intelligence, replacing Arsenault.

Zack Bell will take over responsibility for Acadian and francophone affairs. 

He also announced that Kent Dollar will be sworn in as minister of housing and communities, “returning cabinet to its full complement following the passing of Hon. Mark McLane.” 

McLane died March 17 following an illness. 

Sidney MacEwen was juggling two departments: housing and communities and transportation, infrastructure and energy.