Amid rise in provincial infrastructure projects, Bill 245 proposes amendments to Expropriations Act

Changes 'some of the most substantive' in 'several decades,' says lawyer

Amid rise in provincial infrastructure projects, Bill 245 proposes amendments to Expropriations Act
Abbey Sinclair, Scargall Owen-King LLP

The Ontario government’s recently tabled Accelerating Access to Justice Act includes “some of the most substantive changes” to the Expropriations Act, “in several decades,” says Abbey Sinclair, a lawyer at Scargall Owen-King LLP.

The changes would have a “notable impact” on landowners facing expropriation, amid the province’s current surge in infrastructure projects, says Sinclair. Ontario’s 2020 budget details how the province plans to spend more than $86 billion in the next decade on highways, public transit and other transportation infrastructure projects.

Introduced on Feb. 16, Ontario’s justice reform legislation would consolidate Ontario’s five Land Tribunals. The Local Planning Appeal Tribunal, Environmental Review Tribunal, Board of Negotiation, Conservation Review Board and the Mining and Lands Tribunal would merge to form the Ontario Land Tribunal. The province said the change will “help reduce delays and make the land dispute resolution process more efficient.”

“It's going to make them move better. Sometimes in front of these land tribunals, you end up in front of more than one at the same time. And there's inherent inefficiencies and overlap in that,” Attorney General Doug Downey told Law Times.

Whether the changes will accelerate the resolution of land disputes partly depends on whether the Board of Negotiation’s mediation function remains intact, says Sinclair. Currently, mediation is a mandatory step in the dispute resolution process before expropriation matters proceed to the Local Planning Appeal Tribunal’s arbitration forum. Bill 245 appears to eliminate the mediation requirement, she says.

“These proceedings are conducted on a without-prejudice basis and provide the parties with the ability to informally exchange information. A significant number of cases resolve at through the mediation process, which saves costs, and it focuses the parties to narrow the issues,” says Sinclair. “And having a third-party expert with expropriation valuation matters can assist in resolving disputes by providing an objective opinion.”

“The particulars of the mediation function of the new tribunal are unclear, and no details have been provided in the bill as to whether mediation will remain a mandatory step or precondition to arbitration… That will be an important factor in determining whether or not some of these changes actually accelerate the dispute resolution process.”

The legislation also proposes changes to the interest provisions in the Expropriations Act. As the law stands now, there is six-per-cent annual interest on outstanding compensation – whether related to the market value of expropriated land or injurious action, where only part of the land is acquired and the rest loses value, says Sinclair.

Currently, if the landowner is causing a delay in the proceedings determining compensation, the Tribunal can lower the interest, as well as raise it up to 12 per cent, if the delay is caused by the expropriating authority, she says.

The Act would have the annual interest rate determined by regulation.

The current interest provisions “are really designed to provide the expropriating authority with an incentive to work with the owner to resolve the matters as expediently as possible,” says Sinclair. “… That's another factor that could have an impact on whether or not these reforms actually accelerate the resolution of disputes.”

The proposed legislation comes as the province aims to stimulate the economy with investments in transportation infrastructure. Last year’s Building Transit Faster Act removed hearings of necessity from priority transit projects: the Ontario Line, Scarborough Subway Extension, Yonge Subway Extension and the Eglinton Crosstown West Extension. That was followed by the COVID-19 Economic Recovery Act, which eliminated hearings of necessity for expropriations made under the Public Transportation and Highway Improvement Act.

Through a hearing of necessity, a landowner facing expropriation can convene a formal hearing with an inquiry officer and submit evidence to argue that the proposed expropriation is unfair or not optimal in achieving the objectives of whatever public project is precipitating the expropriation. But the inquiry officer’s decision is non-binding and the expropriation authority needs only to take it into account.

The changes proposed by the Accelerating Access to Justice Act would extend more widely the “expedited process” enjoyed by the projects within the scope of the Building Transit Faster Act and Public Transportation and Highway Improvement Act, says Sinclair.

Under the proposed changes the Ministry of the Attorney General would no longer appoint inquiry officers and any hearings of necessity would be conducted by the new Ontario Land Tribunal, she says. The Lieutenant Governor in Council would have the authority to make regulations allowing the owners to make comments on the proposed expropriation, which the expropriation authority would then consider.

Scargall Owen-King is a boutique firm focused on expropriation law and acts for both expropriated landowners and tenants, as well as expropriating authorities, such as municipalities and other public entities.

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