The process begins with the delivery of a Notice of Application for Approval to Expropriate Land, which must be served by the expropriating authority on every owner (the definition of which includes a “mortgagee, tenant, execution creditor, a person entitled to a limited estate or interest in land, a guardian of property, and a guardian, executor, administrator or trustee in whom land is vested”). The Notice sets out the nature of the taking and lists the property requirements of the expropriating authority.

Service of the Notice is by registered mail. The authority is also required to publish the Notice for three consecutive weeks in a newspaper of general circulation.

A Hearing of Necessity is the only opportunity for a property owner to challenge the expropriation. After a hearing, the Ontario Land Tribunal will determine whether the proposed taking meets the legal test: whether the expropriation is “fair, sound and reasonably necessary” to meet the objectives of the expropriating authority. Under the Expropriations Act, a landowner is not permitted to question the expropriating authority’s objectives.

This process provides affected landowners and expropriating authorities the opportunity to make submissions on the merits of a proposed expropriation prior to its final approval. The Member of the Ontario Land Tribunal presiding over a Hearing of Necessity has the duty to give both the landowner and the expropriating authority the opportunity to present evidence and argument. This includes the right to examine and cross examine witnesses.

However, the Ontario Land Tribunal’s power is limited to non-binding recommendations to the “Approval Authority”. After the hearing, the Member produces a written report. The authority must consider the report and approve the expropriation with or without modifications. While the authority must consider the report, it does not have to follow the recommendation.
Unfortunately, a landowner is not entitled to reimbursement of any legal costs associated with the Hearing of Necessity, other than a token amount of $200.00.

Certain priority transit projects such as the Ontario Line, Scarborough Subway Extension, Yonge North Subway Extension and Eglinton Crosstown West Extension are not eligible for this process.

Within three months of the approval to expropriate being granted, the expropriating authority will register a Plan of Expropriation. When registered, land is then owned by the authority. However, absent a consent, the owner remains in possession until the expropriating authority takes lawful possession.

Within 30 days after the registration of the plan of expropriation the expropriating authority is required to serve a Notice of Expropriation, Notice of Election and Notice of Possession.

The Notice of Election gives the owner options to select a date when market value of the expropriated lands is assessed. The choice is generally made taking into account market conditions. If an election is not made within 30 days from the date of service of the Notice of Expropriation, the owner is deemed to have elected the date of the registration of the plan of expropriation as the Valuation Date.

The expropriating authority cannot take possession of the land until at least three months after registration of the Plan of Expropriation, and the service of a s. 25 Offer, except by Agreement or Court Order.

An offer of compensation must also be made within three months of the registration of the plan of expropriation, and before the expropriating authority takes possession of the expropriated lands. This offer is commonly known as a “s. 25 Offer” because it is made according to the provisions of s. 25 of the Expropriations Act. A s. 25 Offer will have two parts:

• Offer A, which, if accepted, is an agreement that payment of the set amount will constitute a full and final settlement.
• Offer B, which is a “without prejudice” offer of advance compensation. If accepted, the Owner will be paid the offered amount without prejudice to the right to continue to negotiate or litigate for additional compensation.

A s. 25 Offer must be accompanied by an appraisal report upon which the offer is based. The report will estimate of the market value of the land as of the Valuation Date, and any injurious affection resulting from the expropriation.

If the parties are unable to come to a settlement, an arbitration process is set out in the Act. In Ontario, the Ontario Land Tribunal arbitrates expropriation claims. The process is commenced either by the owner or the expropriating authority. Pleadings are exchanged, followed by documentary and oral discoveries, motions, procedural conferences and, ultimately, a hearing. The process is very much like a civil trial.

The ability to mediate a settlement continues until there is a final decision of the OLT if the parties are so inclined.

While a landowner is normally fully reimbursed for the costs incurred in the context of a settlement (whether negotiated privately or during mediation), in the event of a hearing, the rules are different.

An expropriation appeal of an arbitration decision from the OLT lies without leave on questions of law or fact to the Superior Court of Justice (Divisional Court). Subsequent appeals to the Ontario Court of Appeal and Supreme Court of Canada require leave.