Canada's Expropriation Laws and Property Rights

The following responses are intended to provide general information about eminent domain laws in the featured state. Such information does not constitute legal advice. Anyone interested in learning more about eminent domain law and the impact it may have on a given set of facts should consult with an OCA attorney or another attorney experienced in handling eminent domain cases.

• Who Can Exercise Powers of Expropriation?

  The Ontario Expropriations Act permits Expropriating Authorities to acquire land through the powers of expropriation. Expropriating Authorities are entities authorized by the Crown or statute to exercise powers of expropriation. They may include the federal government, provincial governments, municipalities, school boards, various utilities, hospitals and universities. Before an Expropriating Authority can proceed with an expropriation it requires the approval of its “Approving Authority” who has the power to review, consider and permit the expropriation. The Approving Authority can be the provincial cabinet, municipal councils, school board councils or approving agencies at the Province who govern Expropriating Authorities such as utilities, hospitals and universities.

• What Are the Legal Requirements for Expropriating Land?

  Unless circumscribed by statute, Expropriating Authorities are granted broad powers to expropriate land. The “public purpose” for an expropriation is interpreted broadly and it is very difficult to challenge an expropriation as taking place for an improper or invalid purpose. An Expropriating Authority is allowed to take possession of property it has expropriated 90 days after the Plan of Expropriation is registered on title and the Notice of Expropriation is served. Before taking possession, the Expropriating Authority must also advance a Section 25 Offer, supported by an Appraisal Report to the property owner to provide its position on market value and injurious affection. The property can accept the Offer of Compensation for the market value of the lands taken without prejudice to its rights to seek further compensation in accordance with the Expropriations Act.

• What Limitations or Defenses Exist?

  Before an Expropriating Authority can expropriate land, it must provide notice to all parties with a registered interest in the subject property of its intention to expropriate. Owners can then request a Hearing of Necessity to require that an Inquiry Officer provide a Report on whether the expropriation is fair, sound and reasonably necessary to achieve the objectives of the project. This Report is then considered by the Approving Authority who can approve, revise or deny the expropriation. The report of an Inquiry Officer is not binding on the Approving Authority. At times, an expropriation may be challenged if the expropriation is not within the jurisdiction of the Expropriating Authority or if it is for an improper purpose. Overall, Expropriating Authorities are granted a relatively broad power to expropriate property in Ontario.

• What Constitutes a Public Purpose?

  Expropriating Authorities are permitted to acquire land for any purpose within their jurisdiction, as defined by their governing statute. In some cases, this power to acquire land is relatively narrow, but for authorities such as municipalities or the federal and provincial governments, it is broadly defined. For example, municipalities are given the power to expropriate for economic development. This municipal purpose has been interpreted to include expropriations for land assemblies that are ultimately transferred to private entities. Such land assemblies took place for a casino in Windsor, YongeDundas Square in Toronto, and the Toyota manufacturing plant in Woodstock, Ontario.

• How is Just Compensation Determined?

  The intention of the Expropriations Act is to make a property owner whole through full and fair compensation. This includes compensation for: (a) the market value for the land taken; (b) disturbance damages, including business loss, loss of site improvements and other costs or damages that arise as a natural and reasonable consequence of the expropriation; (c) injurious affection which is the loss in value to the lands that have not been expropriated or personal or business damages arising from the expropriation; (d) special difficulties in relocation and provisions to ensure at least equivalent reinstatement and amenity when an owner’s residence is taken; (e) all reasonable legal, appraisal and other costs incurred for the determination of compensation; and (f) interest paid on compensation for market value and injurious affection from the date the lands ceased to be of a productive use until the date compensation is paid.
  
  Compensation is either negotiated between the parties or determined by a specialized tribunal (with powers similar to those of a court) at a hearing that follows a similar procedure to a trial before the Superior Court of Justice.

• How Is Fair Market Value Defined?

  The market value of land expropriated is defined by statute as what a willing buyer would pay a willing seller at the date of valuation, based on the highest and best use of a property. In determining market value, no consideration is to be given of the development or the imminence of the development (known as the “Scheme”) for which the land was taken.
  
  In addition to the definitions of market value under the Expropriations Act, reference is made to the standards of appraisers (CUSPAP) and other principles that govern appraisal reports.

• What About Recovering Damages to Remaining Property

  Expropriated owners are entitled to compensation for injurious affection, which is the damage to the remaining property caused by the expropriation and works associated therewith. This can include loss of access, loss of developable area, development inefficiencies, circuitous access damages, loss of visibility and disturbance caused by the works. Damages for injurious affection are set-off by special betterment that is specific to the subject property, but not general betterment enjoyed by the neighbourhood.

• Is the Landowner Entitled to Recover Reasonable Attorney Fees? Expert Fees? Litigation Costs?

  One of the starting points of expropriation is the understanding that no one has ever asked to be expropriated. As such, an owner is meant to be made whole through full and fair compensation. This includes reimbursement for all reasonable legal, appraisal and other costs that are incurred for the determination of compensation. These fees can arise in negotiations, mediations, the litigation process or at a Hearing.
  
  The fees of lawyers and all experts engaged have to be reasonable to be compensable. Reasonableness is determined by the presiding Tribunal or by an Assessment Officer of the Superior Court once a matter has resolved. As the vast majority of expropriation claims settle before they go to a hearing, settlement agreements ordinarily provide a similar means for costs to be reimbursed as is set out under the Expropriations Act.