While many believe owning property is a fundamental right, the reality is that the government has the power to seize your property at any time if they deem it for a 'public purpose.'
Given this current period of massive spending and investment in building roads, schools, railways and hospitals, the government's need to acquire land to meet the demands of the population and ageing infrastructure is at an all-time high. And if your commercial property is at risk of being expropriated, you'll want to know your rights and your options.
What does expropriation mean in legal terms?
Expropriation is a process where the government and other public bodies have the right to acquire land that is privately owned without requiring the permission of the property owner. This usually happens when the government needs commercial or private land for public purposes, like construction or expansion of roadways, transit projects, or upgrades to infrastructure and utilities.
Can the Canadian government take my commercial property?
Yes. Expropriation is permitted in Canada under a piece of legislation called the Expropriations Act. This act gives the government the authority to take property from an owner without their consent.
Does the government have to pay me for the land my commercial property is on?
Yes. Under the Expropriations Act, the government must compensate the owner based on the fair market value of the land. However, this compensation is rarely favourable to the owner and often does not take into account disturbances or the costs associated with the expropriation process, including legal and expert fees, relocation costs, and the interruption and/or delay of business operations. Landowners can also be compensated for 'injurious affection', which can happen when part of an owner's land is expropriated, thus devaluing the remaining land. This generally happens when land is seized for roads, pipelines or railways. In these situations, the owner can claim compensation for the expropriated lands as well as the devaluation of the remaining land.
Where is expropriation most prevalent in Canada at the moment?
While the government can expropriate land in any location, there are a few key areas that are feeling the impact of this process more acutely. This includes the development of the Bus Rapid Transit (BRT) system in London, Ontario, the Metrolinx Crosstown Light Rail Transit (LRT), Finch West LRT, and Scarborough Subway projects in Toronto, the Hurontario LRT in Mississauga, Ontario, the Hamilton LRT, Ottawa LRT, the Calgary Green Line LRT and the Valley Line Light Rail Transit (LRT) system in Edmonton, Alberta. Commercial businesses located along the transportation lines where these systems are being built are at a higher risk of having their land expropriated by the government to make way for these new infrastructure projects.
What are my options if my commercial land is being expropriated?
Your first steps should be to reach out to an expropriation lawyer to discuss your situation and review any notices or communications you have received from the expropriating authority. Working with a team of experts, they can help put together a claim to ensure you receive fair compensation from the government for your commercial property. Crucially, expropriation financing can help provide an advance on your claim to help cover legal fees and business-critical expenses until you receive compensation. This includes costs associated with business disruption and working capital to stabilize the business, preserve goodwill and mitigate damages.
Commercial property owners aren't the only ones who can experience disruption to their business due to expropriation. Commercial tenants also often have to make claims to cover the cost of relocation and legal fees. Both commercial property owners and commercial tenants can also claim for business disruption if construction negatively impacts their business income or operations.
How do I get the highest compensation on my expropriation claim?
Having access to funding will significantly increase the value of your expropriation claim. This financing means you can hire top lawyers and experts without having to settle for less due to cash-related issues or existing financial obligations. Getting fairly compensated also means not having to foot the bill for costs associated with your claim. Current legislation provides for full recovery of these costs, and your legal counsel can provide you with guidance about this and how it relates to your financing requirements.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.