New powers proposed in the government’s latest budget bill could set the stage for one of the biggest rounds of expropriations in modern history, according to a Toronto lawyer who specializes in expropriation cases.
The House of Commons is currently studying C-15, a more than 600-page omnibus budget bill that proposes a wide range of legislative changes related to the Nov. 4 budget.
Inside the bill is a proposal to adopt a new law related to the government’s planned high-speed rail network between Quebec City and Toronto. The megaproject has an estimated cost of between $60-billion and $90-billion.
Called Alto High-Speed Rail, the plan has been referred to the new Major Projects Office for support.
The Alto Crown Corporation, an arm’s length subsidiary of Via Rail that is responsible for the project, has been consulting with communities along the route.
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While federal governments have been discussing options for high-speed rail in Canada for decades, Ajay Gajaria, a partner with the Aird & Berlis LLP law firm, who has worked on large expropriation files in the Greater Toronto Area and across Ontario, said the proposed new legal powers to expropriate land along the route makes the plan seem “more real” and property owners should take note.
“Both in terms of dollar value and in terms of number of properties, if they go ahead and do the property acquisition for a new corridor from Toronto to Quebec City, that will be the largest number of expropriations in modern Canadian history,” he said.
Prime Minister Mark Carney announced in September that Alto is among a second category of projects that are at an earlier stage and need further development support from the Major Projects Office.
Mr. Carney said this step would allow construction to start in four years, down from eight.
Bill C-15 includes the new High-Speed Rail Network Act, which lists steps that would accelerate regulatory approvals related to impact assessments and speed up expropriations.
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Expropriation is a process in which the government can seize private property without a negotiation. The property owner is then compensated based on a determination of fair market value.
The precise route of the high-speed rail line has not yet been announced. However, maps show it would run from Toronto to Peterborough, then on to Ottawa, Montreal, Trois-Rivières and Quebec City.
The law would grant Ottawa the right of first refusal related to sales of land that may be required for the rail line.
It states that any sale of the property “to a third party other than the Corporation” that is subject to such a notice is considered “void or null.”
The proposed law also allows an exemption to a requirement in the Expropriation Act that the government first attempt to purchase a desired property before moving to expropriation.
Mr. Gajaria said some of the changes involve aligning federal law with recent updates to Ontario’s expropriation laws.
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However he said some of the proposed wording of the federal law could create confusion for property owners, including the references to a right of first refusal.
“Are they going to register a right of first refusal over every property along the route from Toronto to Quebec City? That will create unforeseen consequences, including claims for compensation. Also, is it wise to do so and is it even practically possible?” he said in an interview.
The Montreal Economic Institute warned Monday that the bill allows Ottawa to throw out the normal safeguards that protect homeowners from abusive expropriation.
The organization released a statement describing the changes as “steamrolling” property owners and criticized the government for attempting to “bury” them in a large budget bill.
In an interview, Renaud Brossard, the MEI vice-president of communications, said expropriations should be a tool of last resort.
“By removing this obligation to start with good faith negotiations before going through the expropriation process, the government is unfortunately undermining one of the key tools that landowners have to make sure that their property rights are respected and that it gets fair value for their land,” he said.
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Transport Canada spokesperson Hicham Ayoun said the right of first refusal change will align federal law with Ontario and Quebec legislation.
“The purpose of the Act is to facilitate the project, reduce duplication and achieve regulatory efficiencies recognizing that a project of this magnitude requires certain considerations,” he said in an e-mail.
The budget bill is currently being debated at second reading in the House of Commons. It will then go to committee, where MPs will hear from public servants and interest groups.
At a news conference in February, then-prime minister Justin Trudeau announced that the government had selected a consortium called the Cadence group to lead the project.
The group includes CDPQ Infra, the infrastructure division of Quebec’s pension fund; AtkinsRéalis, the new name for SNC-Lavalin; Air Canada; Keolis; SYSTRA; and SNCF Voyageurs, a major French provider of high-speed rail services in Europe.
An earlier version of the proposal involved traditional passenger trains on dedicated passenger tracks. The February announcement confirmed the plan is to build nearly 1,000 kilometres of high-speed rail, where trains will operate on dedicated tracks at speeds of 300 kilometres an hour or more.
Current Via Rail trains are capable of reaching 200 km/h but are limited to 160 km/h because of the class of track on which they operate.
Martin Imbleau, chief executive of Alto, said earlier this year that some of the project cost could be covered by outside investors. Mr. Carney has been travelling the world speaking with governments and sovereign wealth funds to promote Canada’s list of major projects as potential vehicles for foreign investment.