This article summarizes a number of significant expropriation decisions released in 2024 from across Canada, as selected by Gowling WLG's National Expropriation Law Group. The team highlights a number of important issues and key takeaways for those parties involved in the expropriation process. The decisions are not listed in rank order.

St. John's (City) v. Lynch, 2024 SCC 17 (CanLII)

In 2024, the Supreme Court of Canada once again addressed the issue of constructive expropriation in its St. John's (City) v. Lynch decision. This follows the Supreme Court’s recent (2022) restatement of the test for constructive expropriation in Annapolis Group Inc. v. Halifax Regional Municipality (2022 SCC 36).

In this decision, the Supreme Court provided useful guidance on how market value compensation should be assessed in relation to "screening out the scheme." In "screening out the scheme" in constructive takings (and full takings), courts and land tribunals will be required to focus on the purposes and effects of the regulatory enactment (at the root of the constructive expropriation) by making a factual determination as to whether the regulatory enactment was made with a view to the expropriation or was an independent regulation.

The Lynch Family owned land located in the Broad Cove River Watershed zone under the City of St. John’s Municipal Plan, which was designed to protect the City's water supply, and which restricts the land usage to agriculture, forestry, and public utilities as discretionary uses. Over the years, the Lynch Family made numerous attempts to develop the land all of which were rejected by the City for being contrary to The City of St. John’s Act and provincial planning legislation. The Lynch Family commenced an action, seeking a declaration of constructive expropriation.

The Newfoundland and Labrador Court of Appeal found that the Lynch family's property had been constructively expropriated by the City as of 2013, when the City refused to approve a plan for a 10-lot subdivision, and found that the compensation owed to the Lynch family must be determined as if the property had no land use zoning restrictions whatsoever. The Court of Appeal's reasoning was guided by the longstanding Pointe Gourde principle, which provides that increases or decreases in land value due to a public authority's "scheme" cannot be considered when determining compensation.

The City appealed to the Supreme Court on the issue of how to assess compensation for the land which had been constructively expropriated. The Supreme Court rejected the Court of Appeal's application of the Pointe Gourde principle, explaining that its use of causation to "screen out the scheme" was too broad and runs afoul of jurisprudence that confirms zoning regulations have a bearing on market value compensation. Instead, the Supreme Court determined that the key factor was whether the legislated restrictions were intended as an expropriation or whether they were an independent enactment.

The Supreme Court found that, in this case, the restrictions were aimed at protecting the City’s water supply, not targeting the Lynch Family’s land, and were not enacted with expropriation in mind. In a unanimous decision, the Supreme Court allowed the appeal, finding that compensation for the constructive expropriation must consider the narrow discretionary uses in the watershed zone.

Click here to read our in-depth article on this important Supreme Court decision.

Société immobilière 2081-2083 Marie-Victorin inc. c. Ville de Varennes, 2024 QCCS 3969

On December 29, 2023, Québec introduced a new expropriation law. Since then, expropriation proceedings are not automatically stayed upon the landowner’s contestation of the right to expropriate and request to cancel the notice of expropriation, it is necessary for the landowner to apply to the Superior Court and request a stay of the expropriation. The Superior Court, in Marie-Victorin, considered and applied the standard for granting a stay.

Marie-Victorin contested the City of Varennes’s decision to expropriate its property in order to destroy the building and sell the plot to a third party for the purpose of building a parking lot in the scope of a development project. The Court specified that though article 17 of Québec’s Act Respecting Expropriation does not provide criteria for granting a stay of an expropriation, case law provides that the landowner must demonstrate:

  1. The appearance of a right or that the question to be ruled on is serious.
  2. That they will suffer serious or irreparable harm if the stay is not granted.
  3. That the balance of convenience between the parties favours granting the stay (the landowner, if the stay is not awarded, will suffer a greater harm than that of the expropriating party were the stay to be awarded).

Regarding the appearance of a right, the Court specified that a demonstration that the application is not frivolous nor vexatious, and that the dispute raises a serious question, suffices. The Court agreed with prior case law that the appearance of a right is fulfilled where the authority does not expropriate for a public purpose and where the authority expropriates to substitute itself to the landowner and exercise the same activities the landowner would have carried out had it not been expropriated.

The Court found that the dispute raised serious questions, notably regarding the fact that the City would be selling the property at a loss, which could also have an effect regarding laws prohibiting municipal grants, that the public utility of the expropriation was contested, and that the applicable law was in question.

Regarding the landowner suffering a harm, the Court rejected the authority’s argument whereby a landowner does not suffer a harm if they are compensated at the conclusion of the expropriation proceedings: such reasoning would make the contestation of the right of expropriation theoretical. The Court agreed with Ville de Sept-Îles whereby the landowner suffers a harm if the expropriation proceedings occur prior to a ruling on the merits regarding the legality of the expropriation.

The Court also confirmed that serious harm is a necessary condition for granting a stay, but not the singular condition. The Court also rejected the City’s argument that, by abolishing the automatic stay of proceedings, the legislator’s intent was that the loss of the landowner’s property is not a serious or irreparable harm. Ultimately, the Court found that Marie-Victorin would suffer irreparable harm.

Regarding the balance of convenience, the court reiterated that in the absence of a stay, the building would be demolished and the plot, after having been expropriated by the City, would be sold to a third party. Ordering a stay could lead to the City being sued by the third party for contractual non-performance. The Court found that, at the stage of the proceedings, such a lawsuit was hypothetical, and that the City, having contracted with the third party for the sale of property it did not own, would have orchestrated its own demise. The Court also found that public interest did not carry significant weight in the assessment, even though the expropriation was part of a special planning program. The Court found that the balance of inconveniences favoured Marie-Victorin.

Ultimately, the Court ordered the stay of proceedings, having confirmed the test for obtaining a stay of proceedings in an application to contest an expropriation in Québec under the new Act Respecting Expropriation.

Procureur général du Québec c. Développements St‑Antoine Inc., 2023 QCCQ 9294

In St-Antoine, the Court of Québec—on appeal from the Administrative Tribunal of Québec (“ATQ”)—reviewed the ATQ’s decision to indemnify the landowner, St-Antoine, for the loss of the property’s appreciation between the date of the notice of expropriation (March 2, 2017) and the date of taking possession of the property (July 15, 2020). The ATQ compensated St-Antoine on two fronts.

First, in conformity with article 69 of Québec’s Expropriation Act, the ATQ granted St-Antoine an indemnity for the value of the property at the time of the notice of expropriation. Second, the ATQ granted St-Antoine an accessory indemnity, representing the value the expropriated property accrued between the date of the notice of expropriation and the date of taking possession.

The Court of Québec confirmed the ATQ’s decision that the increase in property value could not be awarded as part of the principal indemnity under article 69 of the Expropriation Act. The Court confirmed that the accessory indemnity, awarded under article 58 of the Expropriation Act, could be granted, due to the lengthy period of time elapsed between the notice of expropriation and the taking of possession.

The Court found that the Attorney General of Québec (“AGQ”) had to act in conformity with equity and diligence, and had to aim to minimize the damages St-Antoine would suffer. Where the AGQ caused a prejudice to St-Antoine, St-Antoine could claim damages. The Court found that the ATQ correctly compensated St-Antoine for the loss of the property’s appreciation.

Regarding an indemnification for loss of profits, the ATQ had determined that the conditions to indemnify St-Antoine for the loss of profits were fulfilled, but did not grant an indemnification on that ground, deeming a compensation for loss of profits, combined with the indemnification for the loss of the property’s appreciation, to be a double indemnification. The Court did not indemnify St-Antoine for loss of profits, ruling that there was insufficient evidence to find that St-Antoine would have been made whole had it obtained, on March 9, 2017, the indemnity for the value of the property and another for loss of profits, combined with the return on the sums awarded.

Furthermore, the Court found that the loss of profits estimated by the AGQ would be insufficient to compensate St-Antoine’s loss. Instead, St-Antoine had to be compensated so that it obtained, as of the date of taking possession, the funds necessary to start another project, that is, the sum needed to buy another piece of land on which St-Antoine could design another project, carry it out, and sell it for a profit.

Interest on the damages for both indemnities began to run on the date of taking possession, July 15, 2020. The additional indemnity also began to run on July 15, 2020. The Court confirmed that the calculation of the value of the loss of the property’s appreciation was to end on July 15, 2020, the date of the end of the expropriation proceedings, even though St-Antoine only obtained the supplementary provisional indemnity on October 21, 2020.

At the time of publication, the St-Antoine saga is progressing to judicial review in front of the Québec Superior Court, and is a file to watch for 2025.

Newgen Restaurant Services Inc. v Metrolinx, 2024 CarswellOnt 15046 and 2024 CanLII 94882

Newgen Restaurant Services Inc. (“Newgen”) operated a restaurant in a plaza at the corner of Eglinton Avenue and Warden Avenue in Toronto, Ontario. In 2015, Metrolinx expropriated a portion of the property’s frontage as part of the Eglinton Light Rail Transit Project. Newgen’s lease (to a unit in the plaza) granted Newgen a non-exclusive license to use the expropriated land.

Newgen claimed that construction activities caused significant traffic disruptions, delays, and disturbances in the vicinity, hindering customer access to the restaurant. Newgen asserts that this led to a decline in customers, which severely impacted their business. Metrolinx argued that Newgen was not an “owner” as defined in Ontario’s Expropriations Act because Newgen’s lease did not grant it an interest in the expropriated lands (merely a non-exclusive use license).

Section 1(1) of the Expropriations Act broadly defines interests in land as "any estate, term, easement, right, or interest in, over, or affecting land." The Tribunal determined that the “common facilities” included in Newgen’s lease, particularly the parking and landscaped areas, as well as the plaza entrances, were essential for Newgen’s use and enjoyment of the premises. Being granted a non-exclusive license for Newgen’s use of the plaza’s common facilities created an interest in land, and brought Newgen within the definition, such that Newgen could claim expropriation compensation. 

In a related decision, the Tribunal considered whether Newgen was entitled to interest under Section 33(1) of the Expropriations Act on compensation awarded for Newgen’s business losses. Metrolinx argued that Section 33(1) did not apply to business losses, but the Tribunal found that interest is to be paid on damages for injurious affection, which include business losses resulting from the construction or use, or both, of the works as the statutory authority would be liable for if the construction or use were not under the authority of a statute.

Georgina Tamtakiridis et al. v The Corporation of the City of Toronto, 2024 CanLII 62419 (ON LT)

This decision of the Ontario Land Tribunal addresses a perennial issue: the sufficiency of notice of injurious affection as required by Section 22(1) of Ontario’s Expropriations Act.

Section 22(1) requires that a claim for compensation for injurious affection “be made by the person suffering the damage or loss in writing with particulars of the claim within one year after the damage was sustained or after it became known to the person, and, if not so made, the right to compensation is forever barred.”

In this case, the municipality began sewer repairs in 2009, and the repairs concluded sometime in 2012 or 2013. A property owner communicated with the municipality about the impact of the repair work on her property, including through e-mails sent in September 2011, a letter sent in December 2011, and subsequent e-mails with the municipality about its claim process. The property owner served a formal Statement of Claim in 2015.

The municipality sought an order dismissing the injurious affection claim on the basis that the property owner did not give notice of the claim within the one-year period. The Ontario Land Tribunal determined that the municipality had notice of the claim from:

  1. The December 2011 letter.
  2. The subsequent e-mails indicating that the property owner were engaged in the claims process (in which the owner expressed concerns about damage to the property and requested information).

Notably, the Tribunal reached this conclusion even though the letter did not reference “injurious affection” or contain particulars of the damages claimed.

Also of importance, the Tribunal noted that:

  1. The municipality could have requested further information from the property owner if it felt that the particularization of the claim was insufficient.
  2. The property owner requested information from the municipality to particularize her claim, which the municipality did not provide.
  3. The municipality acknowledged its receipt of the claim by referring the claim to its insurers. These considerations will be helpful to both municipalities and property owners in assessing whether timely notice of injurious affection has been given.

Please also consider the Tribunal’s approach to Section 22(1) in our recent article: “Antrim and Antonakos: Similar facts, different outcome.” Antrim and Antonakos: Similar facts, different outcom

Case summary: Nanowski v Winnipeg (City of), 2024 MBCA 81

The Appellant disputed the compensation amount certified by the Land Value Appraisal Commission (“LVAC”) for the expropriation of his acreage (agricultural land, which housed his residence, a detached garage, and three outbuildings). The LVAC found that redevelopment was the property’s highest and best use.

The City’s appraiser used the typical direct comparison appraisal approach. The Appellant’s appraiser arrived at a much higher valuation, employing a “novel approach,” which took the estimated fair market value of the property after it had been subdivided and rezoned and subtracting the estimated cost of developing the property. The LVAC rejected this novel approach, relied on the City’s valuation, and arrived at its own value conclusion, slightly higher than the City’s valuation.

The property owner attempted to overturn the LVAC’s decision on numerous grounds, without success. Of note, the Manitoba Court of Appeal (“MBCA”) upheld:

  1. The LVAC’s ability to rely on the submissions received and make its own value determination without having to precisely demonstrate how it arrived at its value determination.
  2. The LVAC’s ability to rely on comparable sales evidencing a general upward trend in the market, even where the market was generally aware of the expropriation, despite the prohibition (in Section 27(2)(b) of Manitoba’s Expropriation Act, CCSM, c E190) on considering any fluctuation in land value resulting from the imminence of development relating to the expropriation or from the prospect of expropriation.

The MBCA’s statements regarding Section 27(2)(b) of Manitoba’s Expropriations Act may leave some uncertainty about the scope of this prohibition.

Case summary: Geiger v Saskatchewan Power Corp, 2024 SKQB 207

In Geiger v Saskatchewan Power Corp, the Plaintiffs owned land partially expropriated by Saskatchewan Power Corporation (“SPC”) for the construction of a transmission line. SPC applied to strike portions of the Plaintiffs' Claim, including those alleging nuisance, disturbance damages, and injurious affection.

A. Nuisance claim

Section 3(2.2) of Saskatchewan’s Power Corporation Act bars landowners from seeking damages for nuisance related to transmission lines. However, the Plaintiffs presented evidence suggesting that alternative routes for the transmission line were available. The Court determined there was a live issue about whether SPC's legislative mandate could have been fulfilled without infringing on private rights. Relying on its prior decision in McIlwaine v Saskatchewan, 2020 SKQB 36, the Court held that if a legislative mandate can be carried out without impinging on private rights, the expropriating authority is not immune to nuisance claims.

B. Disturbance damages

SPC argued that compensation for an expropriation is governed exclusively by statute, and that The Expropriation Procedures Act (EPA) does not allow for disturbance damages. Historically, disturbance costs were compensable only when revenue-generating activities were forced to relocate due to expropriation. However, the Court declined to strike the Claim, citing its earlier decision in Ratner Realty Ltd v Saskatchewan Telecommunications, which held that development-related expenses could be recoverable if reasonably incurred in the context of a practical undertaking.

The Court found that whether disturbance damages are available should not be resolved at the preliminary stage.

C. Injurious affection

Although the EPA clearly excludes injurious affection as a compensable category, the Court refused to strike the Plaintiffs' Claim. It noted that the damages alleged under injurious affection might be recoverable in nuisance. Given the preliminary nature of the application, the Court held it was inappropriate to dismiss the Claim outright.

Overall, the decision in Geiger underscores the Saskatchewan Court's reluctance to strike claims in expropriation disputes at an early stage, even when those claims challenge established legislative limits. The case illustrates a cautious judicial approach, ensuring claims are fully considered before dismissal.

Case summary: Altius Royalty Corporation v Alberta, 2024 ABCA 105

The Appellant, Altius Royalty Corporation (“Altius”), had a royalty interest in the Genesee coal mine which had been scheduled to operate until 2055. The Province of Alberta contracted with the owner of the mine to make transition payments to cease operations at the plant in an Off-Coal Agreement in furtherance of the federal government’s commitment to phase out coal by 2030. Altius was not a party to the Off-Coal Agreement.

Altius argued that this constituted a constructive taking which sterilized its royalty interests, thereby entitling Altius to compensation. The Alberta Court of King’s Bench found that Altius had not satisfied the two-part constructive expropriation test articulated by the Supreme Court of Canada (“SCC”) in Canadian Pacific Railway Co. v Vancouver (City), 2006 SCC 6 (“CPR”), which required:

  1. The Crown’s acquisition of a beneficial interest in the property or flowing from it.
  2. A removal of all reasonable uses of the property.

Since the lower court’s judgment, the SCC rearticulated the test in Annapolis Group Inc. v Halifax Regional Municipality, 2022 SCC 36, stating that the “beneficial interest” acquired by the Crown may be more broadly understood as the gaining of an advantage (the “Annapolis test”).

In applying the Annapolis test, the Alberta Court of Appeal (“ABCA”) emphasized that a constructive taking must pertain to property, and that the expropriated interest must be proprietary in nature to be deemed a constructive expropriation entitling the party to compensation, including when the alleged constructive taking arises from a regulatory action.

Altius argued that the advantage flowing from the Off-Coal Agreement was that it avoided healthcare and environmental expenses resulting from the continuing operation of the Genesee coal mine. Altius argued that in assigning a dollar amount to the cost avoidance, the Crown gained a proprietary interest. The ABCA disagreed with Altius, finding that the mere quantification of an interest does not render it proprietary.

The ABCA noted that all government regulations are intended to be in the public interest; therefore, extending the concept of advantage under the Annapolis test to include cost benefits unrelated to the expropriated interest itself would result in a proliferation of constructive expropriation claims beyond the property law principles foundational to the doctrine.

The ABCA ultimately held that Altius was not entitled to compensation as there was no constructive expropriation of their royalty interests.

Chen v Langley (Township), 2024 BCSC 154

This British Columbia Supreme Court decision addresses the assessment of fair market value for an expropriated property in the context of zoning restrictions and affirms the expropriating authority’s duty to disclose relevant information to its appraiser.

The subject property was located in an Agricultural Land Reserve ("ALR") within the Township of Langley, restricting its use and development.

The Township paid $7,645,000.00 in expropriation compensation for the property in November 2017. The owners asserted that fair market value was $26,550,000.00, which was based on an assumption that the property would be excluded from the ALR.

In 2010, the owners had applied for the property to be excluded from the ALR but were unsuccessful. Just prior to the expropriation, the property was listed for sale and a developer offered to purchase the property for $20,000,000.00. The developer’s offer included a condition precedent to allow the developer to assess whether the property could be developed in a “commercially reasonable manner.” The developer declined to remove the condition and complete the sale, advising that it had concluded that the property was unlikely to be excluded from the ALR.

The Township did not disclose the existence of the developer’s, and the offer was never disclosed to its appraiser. The Court held that a broad and purposive application of the Expropriation Act requires that the expropriating authority disclose all relevant information to its appraiser for the purpose of ensuring that the owner receives full compensation for the expropriated property. The Township did not meet this obligation.

The Court ultimately concluded that, at the date of the expropriation, the owners could not have had a reasonable expectation that the property would be excluded from the ALR. The property’s fair market value was valued at $10,500,000.00 as a strategic holding property in a desirable fringe location within the ALR.