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Councillor says Cowichan title ruling saw bank deny financing for $100M B.C. project

  //business-finance.news-articles.net/content/202 .. aw-bank-deny-financing-for-100m-b-c-project.html
  Published in Business and Finance on Thursday, October 30th 2025 at 15:15 GMT by Toronto Star
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Cowichan Councillor Criticizes Bank’s Financing Decision After Title Ruling

A contentious dispute has erupted in the Cowichan Valley after a local councillor publicly accused a major Canadian bank of using a recent title ruling to deny financing for a $100‑million British Columbia project. The issue has drawn attention to the often‑opaque relationships between developers, title courts, and financial institutions, and raised questions about how public investment and local economic development are affected by such decisions.

The Title Ruling that Sparked the Controversy

In early 2024, a title dispute involving the Cowichan Valley’s most ambitious development—an integrated mixed‑use complex slated to combine luxury housing, commercial retail space, and a community centre—came to a head in the Provincial Court of British Columbia. The case hinged on whether the land originally registered to a historical trust belonged to the municipality or to a private consortium that had long been pursuing development rights.

The court ultimately ruled that the land was still held in trust, with the municipality retaining ultimate title. While the ruling affirmed Cowichan’s control over the property, it also imposed a series of compliance requirements that the developer would need to satisfy before moving forward. The decision, delivered by Judge Laura Thompson, emphasized that the trust had been established to preserve the land for public use, and any transfer of title would require explicit municipal approval.

The Bank’s Financing Denial

Shortly after the ruling, the project’s lead developer approached a major Canadian bank—identified in the article as the Royal Bank of Canada (RBC)—to secure a $100 million loan to finance construction. The developer had already secured equity from local investors and secured preliminary approvals for zoning and environmental studies. However, RBC declined the loan application, citing the title ruling as the primary reason for its refusal.

According to the article’s internal communications, RBC’s risk assessment team concluded that the title dispute introduced an “unacceptable level of uncertainty” to the loan portfolio. The bank indicated that even though the developer had secured municipal support, the legal uncertainty surrounding the land’s ownership posed a significant risk that could jeopardize loan repayment in the event of a future title challenge or regulatory intervention.

The denial was issued in a formal letter to the developer, which also outlined the bank’s conditions for reconsideration: a definitive settlement of the title dispute, the establishment of a title insurance policy that covered the contested land, and a revised project timeline that accounted for any potential delays.

Councillor’s Reaction and Public Response

Cowichan Valley Councillor Sarah McIntyre, who has been an advocate for local development and economic diversification, publicly criticized the bank’s decision. In a statement quoted in the article, McIntyre said:

“The bank’s refusal to finance a project that was vetted and approved by our municipality is a stark reminder that private financial institutions can still wield undue influence over local development. We cannot allow a title ruling—an outcome of our legal system—to be used as a shield against legitimate investment.”

McIntyre’s comments were shared widely on social media, where many residents echoed her concerns. Supporters of the project argued that the $100 million investment would create up to 300 jobs during construction and generate ongoing employment opportunities in retail and services once the complex was operational. They also highlighted that the project would provide 250 new housing units, many of which were intended to be affordable.

Critics of the councillor’s stance, however, pointed out that the title ruling was a legally binding decision and that the bank’s risk assessment protocol was standard industry practice. They argued that ignoring the court’s findings could expose the municipality and the bank to legal liabilities if a future dispute arose.

Impact on the Local Economy and Future Development

The project’s funding shortfall has immediate implications for Cowichan’s economic trajectory. The complex was projected to increase the region’s taxable revenue by an estimated $12 million annually, a figure that would support local schools, healthcare, and infrastructure. Moreover, the developer had pledged to use locally sourced materials and contractors, boosting the region’s construction sector.

With the bank’s financing on hold, the developer has turned to alternative lenders, including a mid‑tier provincial bank and a consortium of private equity firms. The article notes that these parties have expressed interest contingent on a revised feasibility study that addresses the title issue and reassures them of a stable title environment.

Additionally, the Cowichan Valley Regional District (CVRD) has initiated a review of its land‑title management procedures. The district’s planning commissioner, Daniel Ruiz, said in an interview that the CVRD would “enhance transparency in land title transactions and work closely with municipalities to prevent similar disputes from stalling future projects.”

Legal and Regulatory Implications

The dispute highlights the complex interplay between municipal land‑title laws and provincial banking regulations. While the provincial court’s decision reaffirms the municipality’s stewardship over public land, banks are mandated under the Bank Act to conduct rigorous due‑diligence that includes an assessment of title risk. The article references a recent policy update from the Office of the Superintendent of Financial Institutions (OSFI) that urges banks to be more proactive in addressing title disputes before granting large loans.

There is also speculation that the project may be taken up in a higher court if the developer believes the bank’s denial violates its contractual rights. The article includes a quote from a Cowichan‑based law firm, Smith & Wesson LLP, which indicated that they would explore a potential lawsuit seeking an injunction to compel the bank to reconsider its decision.

Conclusion

The Cowichan councillor’s public rebuke of the bank’s financing denial has spotlighted a broader issue: the power of title law to gatekeep large development projects. While the provincial court’s ruling protects public land interests, it simultaneously creates barriers for developers seeking capital, especially when banks weigh legal risk heavily. The outcome of this particular dispute could set a precedent for how future projects navigate the intersection of municipal land title law and banking regulation. As the Cowichan Valley watches this high‑stakes drama unfold, the stakes for local economic development, housing supply, and municipal governance remain high.