In an apparent attempt to increase the pace of transit project completion, the Government of Ontario has proposed changes to the Expropriations Act, R.S.O. 1990, c. E.26. These changes are set out in Bill 245, the Accelerating Access to Justice Act, 2021, and follow earlier curtailments of certain rights under the Expropriations Act brought about through the Building Transit Faster Act, 2020, S.O. 2020, c. 12 (read our previous article here). It is noteworthy that these changes are being put forward as part of omnibus legislation without meaningful public consultation.
The Bill 245 changes focus on further limiting Hearings of Necessity, eliminating the Board of Negotiation, changing the prescribed 6% interest rate on unpaid compensation to an annual prescribed rate, and opening the door to changes to the cost regime under the Act through regulation.
More broadly, Bill 245 will consolidate Ontario's five Land Tribunals, including the Local Planning Appeal Tribunal which deals with expropriation matters, into one new Ontario Land Tribunal. This reorganization also contemplates the elimination of the Board of Negotiation. Under the existing regime, expropriation related mediations are heard by the Board of Negotiation while arbitrations are heard by the Local Planning Appeal Tribunal. Bill 245 will eliminate the Board of Negotiation and the new Ontario Land Tribunal will preside over both mediations and arbitrations.
The requirement that mediation occur prior to commencing arbitration proceedings will also be eliminated; however, it may be open to the Ontario Land Tribunal to institute Rules of Practice and Procedure allowing for, or requiring, mediation.
Currently, section 6 of the Expropriations Act allows expropriated landowners to request a Hearing of Necessity before their land is expropriated. During a Hearing of Necessity an Inquiry Officer determines whether the proposed expropriation is fair, sound, and reasonably necessary in the achievement of the expropriating authority's objectives. The Inquiry Officer's determination is not binding on the expropriating authority, but must be considered in the authority's decision to approve or not approve the expropriation. A newly proposed section 8.1 of the Expropriations Act would allow the Government to provide an alternative to Hearings of Necessity through regulation. If such an alternative is provided for, then Hearings of Necessity would not be available. Any such alternative must create a process allowing owners to comment on proposed expropriation and for the approval authority to consider those comments when determining whether to approve the expropriation.
Since the enactment of the Building Transit Faster Act, Hearings of Necessity have already been eliminated for expropriations with respect to four key transit projects in the Toronto Area: the Ontario Line, the Scarborough subway extension, the Yonge North subway extension, and the Eglington Crosstown West extension. In cases where Hearings of Necessity would still be available, the applicable statutory provisions would largely remain the same, but instead of appointing Inquiry Officers, Hearings of Necessity would be presided over by members of the Ontario Land Tribunal (an entity to be created by Bill 245).
Bill 245 also proposes to change the statutory 6% interest rate on unpaid market value compensation to a rate set on an annual basis, calculated by a method to be set out in regulation. Regulations under the Expropriations Act would also set out the minimum and maximum rates that could result from a finding of delay on the part of either the claimant or the expropriating authority. These changes likely aim to ensure that the interest rates set out in legislation more closely track changes in market interest rates. Finally, the amendments proposed to the cost regime under the Act could open the door to regulations under the Act establishing limits on costs beyond the current statutory requirement that they be 'reasonable'. It is notable that the existing regulations under the Act provide that legal costs are paid on a full indemnity basis. Bill 245 proposes to add subsection 32(3) which states:
(3) If no tariffs or rules are prescribed under clause 44 (d), the assessment officer shall instead have reference to the rules made by the Tribunal for the purposes of section 20 of the Ontario Land Tribunal Act, 2021.
Under the present Act, a regulation exists providing rules to be applied for the purposes of subsection 32(1) of the Act. There is nothing that suggests that this regulation would be repealed should Bill 245 receive Royal Assent. However, there are no tariffs or rules currently prescribed under clause 44(d) of the Act that apply to subsection 32(2).
Notably, the proposed Ontario Land Tribunal Rules do not add a specific rule with respect to costs under expropriation proceedings. This could leave costs to be dealt with under Rule 23 which is the general cost rule for the tribunal. This rule was not drafted with the cost regime of expropriation proceedings in mind, requiring conduct of a party to be unreasonable, frivolous, vexatious or acting in bad faith for costs to be awarded.
The policy objective of achieving full compensation for the owner of lands has been the guiding policy for numerous committees and commissions for law reform. It was with this policy in mind that the principles of indemnification were reflected in subsections 32(1) and 32(2) of the Act. The changes proposed in Bill 245 have the potential to disrupt the fine balance between the rights of expropriated landowners and expropriating authorities that has existed for the last 50 years.
- The Board of Negotiation will be abolished.
- Hearings of Necessity will be available in more limited circumstances.
- Significant changes to the interest and cost regimes under the Act may be forthcoming.
Bill 245 is currently at the committee stage of the legislative process, with committee meetings held on March 11 and 12, 2021.
 R.R.O. 1990, Reg. 364: RULES TO BE APPLIED FOR THE PURPOSES OF SUBSECTION 32 (1) OF THE ACT
 Ontario, Department of the Attorney General, Report of the Ontario Law Reform Commission on the Basis for Compensation on Expropriation (Toronto: 1967).