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Expropriations (Ont) - Compensation (EA). Regional Municipality of York v. 2090396 Ontario Ltd.
In Regional Municipality of York v. 2090396 Ontario Ltd. (Ont Div Ct, 2026) the Ontario Divisional Court dismissed an appeal, here brought against an Ontario Land Tribunal compensation valuation of an expropriated lot.
Here the court considered the planning principle of 'land dedication', as it bears upon expropriation market value:B. Land Dedication
(i) The Issue
[45] Sections 41(8) and (9) of the Planning Act provide that in certain circumstances, a municipality from whom certain development approvals are sought may require as a condition of such approval that the owner of the land convey to the municipality at no expense portions of the land in accordance with the municipality’s official plan, a process known as “land dedication.”
[46] Before the Tribunal, the appellant argued that the approvals necessary for Development Concept 1 would have been conditional on land dedications of up to 30% of the property’s area and the remaining area would have been too small for the proposed development. The risk of such a land dedication would have been taken into account by a reasonably informer buyer, and as such had to be considered when determining the land’s market value in accordance with s. 14(1) of the Act.
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(iv) Analysis
(a) Considering the Likelihood of Dedication Rather Than Risk
[49] The Tribunal’s reasons focussed on whether the Region would have obtained a land dedication. I agree with the appellant that the issue for the purposes of determining market value pursuant to s. 14(1) of the Act was not whether the Region would have done so, but rather what effect the risk of a land dedication would have on what a reasonable buyer would be willing to pay. Nonetheless, there are two reasons why I am not persuaded that the Tribunal committed any reversible error.
[50] First, while a reasonable buyer would take the risk of a land dedication into account, the effect of that risk on the amount the buyer would be willing to pay would depend on the extent of the risk. The more remote the prospect of a land dedication, the less effect the risk of it would have on what the buyer would be willing to pay. The Tribunal’s analysis of the likelihood that the Region would obtain a land dedication was therefore relevant, as a reasonable buyer would engage in the same type of analysis.
[51] Second, it is obvious that a reasonable buyer would have considered the risks associated with purchasing the property, including the risk of land dedications, and the Tribunal appreciated this. This is evident in the Tribunal’s list of the issues that had to be determined, set out in para. 16 of the reasons, which includes: “What impact, if any, does potential land dedication have on the claim?” . Regional Municipality of York v. 2090396 Ontario Ltd.
In Regional Municipality of York v. 2090396 Ontario Ltd. (Ont Div Ct, 2026) the Ontario Divisional Court dismissed an appeal, here brought against an Ontario Land Tribunal compensation valuation of an expropriated lot.
Here the court relevant legal principles of Expropriations Act s.14(4)(b) [Market Value - 'Point Gourde Principle']:(iii) Relevant Legal Principles
(a) Codification of the Pointe Gourde Principle
[25] Section 14(4)(b) is a codification of a common law principle known at the “Pointe Gourde principle,” the origins of which can be found in a 1947 decision of the Judicial Committee of the Privy Council: Pointe Gourde Quarrying and Transport Co. v. Sub-Intendent of Crown Lands, [1947] A.C. 565 (P.C.). The principle is designed to ensure that the expropriation results in neither an economic burden nor a windfall for the landowner, who is entitled to “fair compensation but not more than fair compensation”: St. John’s (City) v. Lynch, 2024 SCC 18, 491 D.L.R. (4th) 581, at paras. 37, 49.
(b) Terminology
[26] Before considering the explanation of the Pointe Gourde principle set out in Lynch, it should be noted that the terminology used in that decision, other decisions and the Act is not always the same. The two key concepts discussed in Lynch are referred to as “enactments” and “the expropriation scheme,” terms which do not appear in the Act.
[27] An “enactment” includes governmental decisions that restrict land use, such as zoning by-laws, regulations, and municipal or provincial land-use policies: Lynch, at paras. 33, 38, 55. In the context of this case, the relevant “enactments” are the instruments and documents Mr. Volpentesta relied on to conclude that various by-law and official plan amendments that would have been necessary for Development Concept 1 to have been granted.
[28] The “expropriation scheme” refers to “the government actions that culminated in the expropriation”: Windsor (City) v. Paciorka Leaseholds Limited, 2012 ONCA 431, 111 O.R. (3d) 431, at para. 1. As noted, the term does not appear in s. 14(4)(b) of the Act, which instead refers to “the development or the imminence of the development in respect of which the expropriation is made.”
(c) St. John’s (City) v. Lynch
[29] The basic elements of the Pointe Gourde principle were set out in Lynch and can be summarized as follows:. applying the principle “requires consideration of whether an enactment was made with a view to the expropriation,” that is, whether it was “made for the purpose of expropriating rather than regulating”: Lynch, at paras. 54, 56;
. whether an enactment was made with a view to expropriation “depends entirely on a case’s factual circumstances” and the assessment “calls out for flexibility in its application and deference in its review”: Lynch, at para. 57;
. the inquiry requires an examination of the purposes and effects of the enactment, which can be discerned from the terms of the enactment itself or from evidence such as policy statements, correspondence, or other sources: Lynch, at para. 48;
. a “broad conception of causation should [not] drive the inquiry,” that is, the analysis does not turn on whether the regulatory enactment was a link in the chain of events leading to the expropriation (i.e., that “but for” the enactment there would have been no expropriation), although “it is not enough for a regulatory enactment to be a ‘related connection’ to the … expropriation to be ignored in assessing compensation”: Lynch, at paras. 52-53;
. factors to consider may includes whether the enactment is part of a city-wide or province-wide policy that does not target specific properties and whether it was enacted by the same public authority that expropriated the property: Lynch, at para. 55. (d) The Nature of the Inquiry
[30] Central to the analysis in Lynch is the recognition that an act of expropriation is always “part of a continuing process”: Lynch, at paras. 20, 40, 53, 61. “The key question is, therefore, What is the scope of the expropriation scheme?”: Lynch, at para. 39. However, this type of determination “does not admit of bright-line rules”: Lynch, at para. 65. The reason for this was explained by Denning L.J. in Wilson v. Liverpool Corporation (1971), 1 All E.R. 628 (C.A.), a p. 634 (as cited in Windsor (City) v. Leaseholds Ltd., 2011 ONSC 2876 (Div. Ct.), 106 O.R. (3d) 690, at para. 54 (rev’d on other grounds, supra)):A scheme is a progressive thing. It starts vague and known to few. It becomes more precise and better known as time goes by. Eventually it becomes precise and definite and known to all. Correspondingly, its impact has a progressive effect on values. At first it has little effect because it is so vague and uncertain. As it becomes more precise and better known so its impact increases until it has an important effect. It is this increase, whether big or small, which is to be disregarded at the time when the value is assessed. [31] Because of the lack of bright-line rules, as noted in Lynch, at para. 47, whether an enactment was made with a view to expropriation... is normally a factual determination to be made by the board or other authority tasked with determining compensation (…Vision Homes Ltd. v. Nanaimo (City) (1996), 59 L.C.R. 106 (B.C.C.A.), at para. 20; Clements v. Penticton (City), 2005 BCCA 212, 86 L.C.R. 81, at para. 12). Courts reviewing these determinations must accord deference to first instance decision-makers. On an appeal, compensation determinations are generally reviewable only for palpable and overriding error, absent an extricable error of law (Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 36). To similar effect, the Court of Appeal in Paciorka, at para. 18, stated:The determination of which of the various government actions form part of the expropriation scheme is a factual one that engages squarely the OMB’s specialized expertise in applying the relevant legal principles under the Expropriations Act. is a factual one. As such, it is reviewable on a standard of palpable and overriding error. (iv) Alleged Errors
[32] Section 14(4)(b) of the Act requires the “screening out” of “any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation.” The appellant alleges a number of errors in the Tribunal’s analysis, but the common theme is a submission that the Tribunal took an overly narrow view of what constitutes a “development in respect of which the expropriation is made” and the required connection between such a development and any increase in value. At paras 36-43 the court applies these principles to the case.
. Regional Municipality of York v. 2090396 Ontario Ltd.
In Regional Municipality of York v. 2090396 Ontario Ltd. (Ont Div Ct, 2026) the Ontario Divisional Court dismissed an appeal, here brought against an Ontario Land Tribunal compensation valuation of an expropriated lot.
Here the court summarizes the compensation valuation procedures of the Expropriations Act (Ontario):[1] Owners of land are ordinarily free to decide whether to sell it and, if so, for what amount. However, the Expropriations Act, R.S.O. 1990, c. E.26 (“the Act”) permits the government take private land without the owner’s consent, but requires it to compensate the owner. How that compensation is determined is the subject matter of this appeal.
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A. The Expropriations Act
[6] The Act sets out how and in what circumstances land may expropriated, none of which is at issue on this appeal. Section 13(1) of the Act provides that an individual whose land is expropriated is entitled to compensation as is determined in accordance with the Act based on the factors set out in s. 13(2). The factors that are relevant in this case are the market value of the land (s. 13(2)(a)) and damages for injurious affection (s. 13(2)(b)).
[7] Section 14(1) provides that the market value of land is “the amount that the land might be expected to realize if sold in the open market by a willing seller to a willing buyer.” This has been interpreted to mean the amount that a reasonably informed person would pay for the property based on its “highest and best use”, which is determined based on information available as of the valuation date: 1353837 Ontario Inc. v. Stratford (City), 2022 ONSC 6347 (Div. Ct.), 36 R.P.R. (6th) 207, at para. 19. To establish the highest and best use of property, a four-part test must be met. The proposed use must be (1) legally permissible; (2) physically possible; (3) financially feasible; and (4) maximally profitable. Each part of the test must be considered sequentially and all four parts must be met to establish highest and best use: 135387 Ontario, at para. 21.
[8] The determination of the market value is subject to the requirements of s. 14(4)(b) of the Act, which provides as follows:(4) In determining the market value of land, no account shall be taken of,....
(b) any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation; This process is sometimes referred to as “screening out” the expropriation scheme.
[9] If the highest and best use of the property would require rezoning or other types of planning approvals, the claimant (here 209) must establish that it is probable that such approvals would be granted: Farlinger Developments Ltd. v. East York (Borough) (1976), 1975 CanLII 587 (ON CA), 9 O.R. (2d) 553. In some cases, a municipality will only grant approvals if the landowner agrees to convey part of the land to it pursuant to ss. 41(8) and 41(9) of the Planning Act, R.S.O. 1990, c. P.13, a process known as “land dedication.” . Di Blasi v. York (Regional Municipality) [for case cites see the link]
In Di Blasi v. York (Regional Municipality) (Div Court, 2022) the Divisional Court set out a principle of Expropriation Act compensation:[27] The Board quoted s. 14(3) in the Decision.[9] It provides:(3) Where only part of the land of an owner is taken and such part is of a size, shape or nature for which there is no general demand or market, the market value and the injurious affection caused by the taking may be determined by determining the market value of the whole of the owner’s land and deducting therefrom the market value of the owner’s land after the taking. [28] The respondent’s expert evidence and the Tribunal’s decision correctly applied this provision. The Tribunal determined the highest and best uses of the entire property, not just the expropriated portions, and determined the value, per acre, of the entire property. It then applied that valuation to the expropriated property.
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