Highway project raises new legal issues for property owners facing expropriation

Province recently restricted rights for owners of land being expropriated: lawyers

Highway project raises new legal issues for property owners facing expropriation
Ajay Gajaria

With a new highway project planned for the northwest Greater Toronto Area, recent provincial legislation has eliminated hearings of necessity, a process by which property owners can dispute a land expropriation made under the Public Transportation and Highway Improvement Act.

Ontario’s Ministry of Transportation recently announced the preferred route for a new 400-series, four-to-six-lane highway. The GTA West Corridor will traverse the York, Peel and Halton regions, beginning around highway 400 in Vaughan and ending in Western Mississauga at the 407-401 junction. The Ministry expects the corridor to be used by at least 300,000 commuters-per-day by 2031.

“This project… will likely result in a substantial number of expropriations,” says Ajay Gajaria a lawyer in Aird & Berlis LLP’s municipal and land use planning group and expropriation law group. “That would affect the property rights of individuals and the taking of land and other property interest, both in fee simple and in the form of easements.”

Under s. 11 of the Public Transportation and Highway Improvement Act, the provincial government can expropriate any land considered necessary for the purposes of the act, without the consent of the property owner. Prior to the COVID-19 Economic Recovery Act, property owners whose lands were subject to expropriation would have access to a process called a hearing of necessity. The hearings were an opportunity to seek an “inquiry from a third-party decision-maker to determine if the taking of the lands are fair sound and reasonably necessary in the achievement of the objectives of the expropriating authority,” says Gajaria.

A hearing of necessity consisted of parties coming together in a formal hearing, submitting evidence – including expert evidence, such as engineering or design opinions – and property owners could argue the plans are not optimal to achieve the objectives of the expropriating authority, says Gajaria.

“So there's one less tool in the toolbox for an owner whose land is being expropriated for a public project, to take issue or raise a challenge to that project,” he says.

Stephen D’Agostino is managing partner at Thomson Rogers and his practice focuses on municipal, planning, environmental and expropriation law. D’Agostino says that, though the hearings of necessity were “never fair anyway,” they were “an important trigger in the process,” which can allow property owners to get a better price for their land.

Though the land owner had a right to trigger a hearing of necessity to determine whether the proposed expropriation was fair and necessary, the expropriating authority did not have to follow the decision of the inquiry officer who facilitates the hearing. They needed only to take it into account.

But the hearing of necessity sets up a timeline the expropriating authority must follow. Under s. 8.2 of the Expropriations Act, the expropriating authority must take the report from the inquiry officer and either approve or not approve the expropriation, within 90 days. Without hearings of necessity, the ministry can wait for a decade, while the land is devalued on the open market because the impending expropriation is public knowledge, says D’Agostino.

Also being lost with hearings of necessity is the property owner’s ability to choose one of three valuation dates to maximize the compensation they ultimately receive for the expropriation, says D’Agostino. Once an expropriation is approved, in a rising market, the property owner would choose the latest date. In a shrinking market, they would choose the earliest.

“I'm not saying a government would do this. But what a government could then do is they could look at the real estate market and say, ‘We don't want to buy it today, because it's a rising market. But we think economic conditions are going to change in five years, let's just sit on it wait for the price to drop – because there's a recession expected – and let's buy it for the lower price later on.’ So, horribly unfair.”

While the COVID-19 Economic Recovery Act eliminated hearings of necessity, the Act added s. 11.2(1) to the Public Transportation and Highway Improvement Act, which allows the Minister to establish an alternative process to replace it.

Christina Salituro, a spokesperson for the Office of the Minister of Transportation, told Law Times that the alternative process will consist of landowners formally registering an opposition with the Ministry, after which the Ministry will review and deliver an answer within 30 days. She adds that most of the land the Ministry expropriates for highway improvements is “acquired amicably through a property purchase agreement.”

Salituro says that eliminating the hearing of necessity option was done to reduce delays in provincial highway and other infrastructure projects.  

“A hearing can add up to 12 months to the expropriation process. This delay can be exacerbated as a result of the limited construction season in Ontario due to weather,” she says. “This change allows the province to access land faster to undertake important technical investigations, including environmental and geotechnical, and prepare construction and development sites while still ensuring there are opportunities for meaningful consultation and input from landowners.”

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