Modernizing The Expropriation Framework: A Year Of Change

• Published date: 04 June 2021
• Subject Matter: International Law, Litigation, Mediation & Arbitration, Real Estate and Construction, Export Controls & Trade & Investment Sanctions, Arbitration & Dispute Resolution, Trials & Appeals & Compensation, Construction & Planning, Landlord & Tenant - Leases
• Law Firm: Borden Ladner Gervais LLP
• Author: Mr Frank J. Sperduti, Isaac Tang, Robert Wood, Piper Morley, J. Pitman Patterson and Callum Hutchinson

For the first time in decades, Ontario's Legislature over the past year has enacted a number of changes to provincial expropriation procedures, including the first significant changes to the Expropriations Act, R.S.O. 1990, c.E.26 (the Expropriations Act) since it was adopted in 1970.

The changes primarily affect the public's right to challenge a proposed expropriation through a "hearing of necessity," but also have the effect of abolishing the Board of Negotiation, which has long provided an early mediation opportunity for parties to an expropriation. Even the generous interest and cost protections in the Expropriations Act, provisions that many have considered unique to expropriated landowners, are now the subject of amendment. This bulletin is intended to provide readers with a thumbnail overview of the major changes to the Expropriations Act expected to come into force on June 1, 2021, and related legislation enacted over the past year affecting the relationship between public authorities and landowners in expropriation-like circumstances.

Limiting the Availability of Hearings of Necessity

Ontario first adopted the "hearing of necessity" (HON) procedure for expropriations in 1970, following the recommendations of J.C. McRuer in the monumental report of the Royal Commission Inquiry into Civil Rights. The HON allowed expropriated owners to challenge, in front of a neutral "inquiry officer," whether a proposed expropriation was "fair, sound and reasonably necessary" to the achievement of the expropriating authority's objectives.

In practice, the HON process did deliver limited measures of accountability and due process to the expropriation process, and could result in project improvements, but it also slowed the expropriation process down and led to increased costs for expropriating authorities. Moreover, the inquiry officer's report is non-binding - approval authorities are merely obliged to "consider" the report - and expropriating authorities are typically also the "approval" authority for their own expropriations, i.e. the judge in their own cause.

Under section 6(3) of the Expropriations Act, the provincial government is authorized to exempt expropriations from the HON requirement on a case-by-case basis, but it rarely does so. A HON was thus a potential component of every provincial expropriation until July 2020, when the Legislature enacted Bill 171, the Building Transit Faster Act, 2020,¹ which exempts certain "priority transit projects" in the Greater Toronto Area from the HON requirement where the land proposed to be taken has been designated by Order in Council as "transit corridor land." The four "priority transit projects" at present are the Ontario Line, Scarborough Subway Extension, Yonge North Subway Extension and Eglinton Crosstown West Extension.

Later in July 2020, the Legislature extended the exemption to (a) provincial highway projects under the Public Transportation and Highway Improvement Act, and (b) land designated as "transit-oriented community land" in support of "transit-oriented community projects" associated with priority transit projects under the Transit-Oriented Communities Act, 2020.² Under both amendments, the Minister may establish a process for receiving comments from owners regarding a proposed expropriation, and may make regulations regarding that process. As of this publication, no regulations have been made.

In December 2020, the government enacted Bill 222,³ which amended both the Building Transit Faster Act, 2020 and the Transit-Oriented Communities Act, 2020 to broaden the potential exemption from the HON process, from the current four priority transit projects, to any other prescribed provincial transit project. The Minister can now make regulations prescribing additional provincial transit projects.

Now, Bill 245 - the Accelerating Access to Justice Act, 2021 - amends the Expropriations Act itself with respect to HONs. The current HON process remains in place, except that the Local Planning Appeal Tribunal (LPAT) or its successor, the Ontario Land Tribunal,⁴ will conduct the hearings, and the government can enact regulations to increase the long-standing cap of $200 on costs payable to an owner. However, more significantly, the government can now enact, at any time, regulations that would exempt additional classes of projects from the HON requirement under the Expropriations Act, including municipal projects.

The Province has not legislated a...