Who Determines the Amount of Compensation and How?

Who Determines the Amount of Compensation and How?

The Expropriation Act requires the expropriating authority to propose terms of compensation to the owner within 90 days of the approval of the expropriation. The proposed compensation must be based on a written appraisal, a copy of which must also be given to the owner. The owner is entitled to obtain another appraisal and legal advice, at the reasonable expense of the expropriating authority, before deciding whether or not to accept the proposed compensation.

If the owner and the expropriating authority cannot agree on the amount of compensation, the matter can ordinarily be referred to the Land Compensation Board. The Board is a “quasi judicial” (similar to a court) tribunal appointed by the province and has the authority to set compensation. Where the Crown is the expropriating authority, the owner may elect to have compensation set by the court instead of the Land Compensation Board. In addition, the Surface Rights Board, another tribunal, can set compensation for access to the surface of land for mineral extraction, the installation and maintenance of pipelines and telephone lines, and other prescribed activities. Property owners may appeal a determination of the Land Compensation Board to the Alberta Court of Appeal and a compensation order of the Surface Rights Board to the Court of Queen’s Bench.

Compensation for Land-use Regulation: Examples

Example 1: Canadian Pacific Railway v Vancouver (City). For about a century, the CPR ran a railway crossing the west side of Vancouver. As rail operations declined, CPR asked the City to permit it to develop the abandoned rail corridor for residential and commercial uses, or alternatively, to purchase or expropriate the land. Instead, the City adopted a bylaw which froze all development and limited the use of the land to a public thoroughfare for transportation and “greenways”, like heritage walks, nature trails and cyclist paths, effectively preventing CPR from making economic use of its own land.

In 2006, the Supreme Court of Canada ruled that the City was not obligated to compensate CPR, because (1) the City had not acquired “a beneficial interest” related to the land; and (2) the bylaw still allowed for some limited (if uneconomic) private uses of the land. Further, the Vancouver Charter (the City’s founding statute) overrode the common law presumption of compensation.

It is uncertain just what the Supreme Court meant when it said that compensation requires an owner to show that the expropriating authority has acquired “a beneficial interest” in the land. While the authority “benefits” when land is used in accordance with its own preferences, the Court did not consider this to be sufficient.