What is Expropriation?
Expropriation is the taking of private land without the consent of the owner by the government or by one of its agencies in the exercise of statutory powers. Various provincial enactments authorize expropriation, including the Municipal Government Act, Hydro and Electric Energy Act, Post-secondary Learning Act, Education Act, Irrigation Districts Act, Forest Reserves Act, and others. Every expropriation authorized by the laws of Alberta is subject to the provincial Expropriation Act. The Expropriation Act sets out the process that must be followed strictly by any expropriating authority and prescribes how the owner must be compensated. The Act applies to the compulsory acquisition of not only the entire (“fee simple”) title, but also leases, rights of way, or other lesser estates or interests short of full ownership. A similar federal Act governs expropriation by the federal government.
Market Value Compensation
The starting point for computing compensation under the Alberta Expropriation Act is the “market value” of the land. Market value is defined in the legislation as “the amount the land might be expected to realize if sold in the open market by a willing seller to a willing buyer”. Another basis for compensation, which has been rejected in Alberta, as in the federal and most provincial expropriation statutes is “value to the owner”, which is defined as what a prudent owner, at the moment of expropriation, would pay rather than being ejected from the property. The market value approach is more objective and therefore regarded as superior. However, the special provisions in the statute are designed to address special circumstances under which a strict market value approach would result in insufficient compensation. For example, section 47 of the Act grants a homeowner additional compensation where it would be necessary to enable the owner to relocate the owner’s residence in accommodation that is at least equivalent to the accommodation expropriated.