PROCEDURES UNDER THE ONTARIO EXPROPRIATIONS ACT
By ERIC R. FINN , Civil
Litigation Department
a. Introduction
The dictionary definition of "expropriate" is
to "take [property] from its owner", "dispossess"
or "deprive of ownership". In legal terms "expropriation"
refers to the exercise by the Crown or its authorized agencies
of a statutory power to acquire an interest in land without
the consent of the owner.
The federal government and each of the provinces have enacted
expropriation legislation and this section of the course
will provide a comparative analysis of that legislation
particularly with regard to the aspects of procedure and
entitlement to compensation.
b. History of Expropriation Law
The modern day right of the government or its agencies to
acquire land without the consent of the owner is a concept
that developed at the time of the industrial revolution.
In England, at the time, there was seen to be a public need
to move raw goods to industrial areas and then move the
finished product to consumers. The railway was the preferred
method of transportation and to assist with this public
need railways were given the right to expropriate.
A similar phenomenon was seen in Canada, where the railways
became instrumental in the creation of the nation. Thus
prior to confederation, expropriation powers were incorporated
in a Public Works Act of 1841 and the Canadian Railway Clauses
Consolidation Act of 1850. Subsequent to confederation,
the federal government enacted the Dominion Expropriation
Act of 1886.
Over the years a number of statutes were enacted giving
expropriation powers to many institutions and each was subject
to its own procedural requirements for approval of the project
and the determination of compensation. In the early 1960s,
the Province of Ontario made an attempt to reform expropriation
law in that province with the enactment of the Expropriations
Procedures Act, S.O. 1962-63, c. 43.
A major redevelopment program in the City of Toronto gave
rise to a number of concerns that this first attempt at
consolidating procedures had not overcome. A study of the
Ontario Law Reform Commission and a Royal Commission study
of civil rights within the province led the way to the enactment
of the Expropriations Act, S.O. 1968-69, c.
36, which replaced the earlier legislation. This Act formed
the basis for the federal Expropriation Act
of 1970 and for several of the other provinces.
One must look to legislation to determine whether there
is a power of expropriation, what procedures must be followed
in order to expropriate, whether there is any entitlement
to compensation and what terms or conditions are provided.
Generally, the power or authority to expropriate is found
in the legislation creating the institution or agency. For
example, provincial municipal legislation authorizes municipalities
to enact by-laws for the expropriation of land. For procedural
issues and entitlement to compensation, one can refer to
the expropriation legislation enacted by the federal government
and the provinces. At present, the principal legislation
relating to expropriation is as follows:
- Federal - The Expropriation Act, R.S.C. 1985, c. E-21.
- Alberta - Expropriation Act, R.S.A. 1980, c. E-16.
- British Columbia - Expropriation Act, R.S.B.C 1996,
c. 125.
- Manitoba - Expropriation Act, R.S.M. 1987, c. E190.
- New Brunswick - Expropriation Act, R.S.N.B. 1973, c.
E-14.
- Newfoundland - Expropriation Act, R.S.N. 1990, c. E-19.
- Family Homes Expropriation Act, R.S.N. 1990, c. F-1.
- Nova Scotia - Expropriation Act, R.S.N.S. 1989, c. 156.
- Ontario - Expropriations Act, R.S.O. 1990, c. E.26.
- Prince Edward Island - Expropriation Act, 1988, c. E-13.
- Quebec - Expropriation Act, R.S.Q. 1977, c. E-24.
- Saskatchewan - The Expropriation Act, R.S.S. 1978, c.
E-15. - The Expropriation Procedure Act, R.S.S. 1978,
c. E16. - The Municipal Expropriation Act, R.S.S. 1978,
c. M27. - The Education Act, R.S.S. 1978, (Supp.) c. E-0.1.
A wide variety of bodies exercise powers of expropriation.
These include Federal and Provincial governments and their
agencies, departments, ministries and commissions, Crown
corporations, counties, regional municipalities, municipalities,
regional districts, school districts, public utilities and
universities.
The interest, which is to be expropriated, may be complete
(fee simple) or limited (easement), and may be temporary
(leasehold) or permanent. In addition, all or part of a
person's land may be expropriated.
c. Terminology
Before dealing with a discussion of the procedural aspects
of expropriation, there is some terminology with which one
should be familiar. The definition section of the legislation
is an important guide in this regard:
- Expropriating Authority - the Crown or any institution
empowered to expropriate land.
- Approving Authority - the Minister responsible
for the administration of the Act in which the power to
expropriate is granted; except for a municipality where
the approving authority is the municipal council and an
elected school board where the approving authority is
the school board.
- Land - any estate, term, easement, right or interest
in, to, over or affecting land.
- Owner - generally includes a mortgagee, tenant,
execution creditor, a person entitled to a limited estate
or interest in land, a committee of the estate of a mentally
incompetent person or a person incapable of managing his
affairs, and a guardian, executor, administrator or trustee
in whom land has vested.
- Registered Owner - an owner of land whose interest
in the land is defined and whose name is specified in
an instrument in the proper land registry or sheriff's'
office, and, where applicable, on an assessment roll.
d. Procedures
Expropriation legislation provides a process that the expropriating
authority must follow in order to acquire the property rights
in requires. It must first be determined that there is a
need for the expropriation. Once that is determined, there
is a procedure for vesting the title to the property in
the expropriating authority, usually by the registration
of a document on title such as a plan showing the extent
of the expropriation or a notice of confirmation or approval.
Upon the vesting of title, the owner's interest in the property
is extinguished and replaced by an entitlement to compensation
as defined by the legislation. Procedures are then available
for, if necessary, an independent determination of the compensation.
The procedural aspects of expropriation, therefore, break
down conveniently into pre and post expropriation procedures.
1. Pre Expropriation Procedures
a. Notice of Intention to Expropriate
The expropriation process is commenced by the expropriating
authority applying to its approving authority for permission
to expropriate. The legislation provides that notice of
this application be brought to the attention of the registered
owners by personal service and publication in newspapers.
The form of the notice is prescribed and the information
required includes a description of the land, the nature
of the interest to be expropriated, an indication of the
public work or purpose for which the interest is required
and some indication of the owners rights set out in the
legislation.
b. Public Hearing or Inquiry Process
Unless the Lieutenant Governor in Council has directed that
an intended expropriation proceed without an inquiry procedure
or where otherwise restricted by the legislation, any owner
of land, in respect of which a notice of intention to expropriate
is given, may, within thirty days of the publication of
the Notice of Intention to Expropriate, by a notice, advise
the approving authority of a desire for an inquiry hearing.
The purpose of the inquiry is to inquire into whether the
taking is “fair, sound and reasonably necessary”
to achieve the objectives of the expropriating authority.
The Inquiry Officer cannot question the need for the project
but can question the need for the expropriation.
Upon conclusion of the hearing, the inquiry officer reports
to the approving authority on the findings and provides
an opinion or recommendation on the merits of the application
for approval. N.B. the inquiry officer does not decide whether
the expropriation will be approved.
c. Approval or confirmation of the intention to expropriate
When an inquiry hearing takes place, the approving authority
is required to consider the inquiry officer's report and
approve or not approve the expropriation or approve the
expropriation with modifications so long as such modifications
do not affect registered owners who were not parties to
the inquiry hearing. The decision of the Approving Authority
must be in writing and must be served on the parties to
the inquiry within ninety days of the report of the Inquiry
Officer.
d. Registration of approval of expropriation
The approval is followed by the expropriating authority
registering a plan of expropriation, prepared by a land
surveyor, in the appropriate land registry office within
three months after the granting of the approval. The title
to the land vests in the expropriating authority on the
registration of the plan.
2. Post Expropriation Procedures
a. Notice of Expropriation
Within thirty days of the registration of the Plan of Expropriation,
the expropriating authority must serve a Notice of Expropriation.
The Notice of Expropriation must be served on all registered
owners and may be served on owners. Failure to serve the
notice does not invalidate the expropriation.
The Notice of Expropriation or Confirmation contains:
i. the name of the owner (s)
ii. a description of the land
iii. the nature of the interest to be expropriated
iv. the name and address of the expropriating authority
v. a copy of the relevant portion of the plan showing
the land expropriated
vi. where applicable a statement that the owner may elect
to have compensation determined a. as of the date of the
inquiry hearing (where there has been an inquiry hearing)
b. as of the date of the registration of the plan or c.
as of the date of service of the notice of expropriation,
and must include a notice whereby the owner can make this
election (Notice of Election), and
vii. a statement that the expropriating authority will
be making an offer and the owner is entitled to challenge
the offer and negotiate the compensation or have it determined
by arbitration.
b. Entry for Appraisal
After serving the Notice of Expropriation, the expropriating
authority is entitled to enter the property for the purpose
of conducting an appraisal. Should the owner refuse such
entry, the authority can obtain an order granting permission
to enter.
c. Statutory Offer of Compensation
Where no agreement as to compensation has been made with
the owner and before taking possession of the land, the
expropriating authority shall serve the registered owner
with an offer of full compensation for the owner's interest
and, where the registered owner is not a tenant, a statement
of the total compensation being offered for all interest,
except compensation for business loss. This offer must be
served within three months of the registration of the Plan
of Expropriation. At the same time, the expropriating authority
must offer immediate payment of 100% of the amount of the
market value of the owner's land, as estimated by the expropriating
authority, without prejudice to the owner's right to claim
further compensation. The offer of compensation must be
based on an appraisal report a copy of which shall be served
with the offer.
The expropriating authority may obtain an order extending
the time for service of the offer but failure to serve within
the prescribed time does not invalidate the expropriation.
Consequences of failure to serve are a delay in obtaining
possession and payment of interest on the compensation from
the date of the registration of the plan of expropriation
rather than the date on which the owner ceased to make productive
use of the land.
d. Correction of Errors
Provision is made for the expropriating authority to correct
errors in the plan of expropriation, for example, where
the land could not be properly surveyed prior to the registration.
A subsequent, corrected, survey can be registered and is
deemed to have been registered on the original date of the
registration of the plan of expropriation.
e. Possession
Once the title to the land has vested in the expropriating
authority and the statutory obligations for service of an
offer or advance payment have been complied with, the expropriating
authority may obtain possession of the land. When possession
is required, the expropriating authority must, at least
three months prior to the intended date of possession, serve
the registered owner with a Notice of Possession. The Notice
of Possession contains the name of the registered owner,
the name of the expropriating authority, the date that possession
is required, a description of the land and a statement that
the owner or the authority may obtain an order adjusting
the date.
On the date set out in the notice for which possession
is required (assuming no judicial adjustment of the date),
the expropriating authority may take possession. The taking
of possession must be visible and of a permanent nature,
such as building a fence, padlocking a gas pump or gate,
or posting a notice on the wall of a building. Simply writing
a letter to the owner or walking onto the property alone
is insufficient to constitute possession. If an owner refuses
to give up possession, an order for possession can be obtained
and enforced by a sheriff.
f. Negotiation
The legislation provides for a formal negotiation process
where either party can request the Board of Negotiation
to facilitate the negotiation of compensation claims. These
negotiation proceedings are without prejudice and are not
binding on either party.
g. Arbitration
In Ontario, the Ontario Municipal Board has jurisdiction
to ultimately determine claims for compensation. The process
is commenced by either the owner or the authority filing
a Notice of Arbitration with the OMB. The owner’s notice
will include a claim for compensation to which the authority
can reply. After the initial filings, each party is subject
to documentary and oral discovery. Prior to a hearing, expert
reports are exchanged. The hearing takes the format of a
trial, with each party calling factual and expert witnesses.
The OMB normally issues written reasons for its decision.
An appeal lies to the Divisional Court on a question of
law or fact or both.
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The above is not intended to constitute
legal advice. Please contact a lawyer to clarify your
legal rights.
