Expropriation decisions are common under Québec law, with the amount paid by the expropriating entity often being a source of discussions and disagreements.
Today, we present a decision from the Immovable Property Division of the Administrative Tribunal of Québec, Ville de Mercier v. 9218-3763 Québec Inc.1, concerning the application of the principle of Planning Blight in Québec expropriation law.
This theory can be summarized as follows:
“Planning Blight can be defined as the economic decline or depreciation of a property’s value that begins with the public announcement that certain lands or properties will be subject to restrictive regulations and may be subject to expropriation procedures and continues until the point when the public authority actually takes possession of these lands through expropriation or their sale by mutual agreement because they are threatened with expropriation.2“ [free translation]
Thus, when it comes time to assess the compensation that the expropriating authority must pay to the owner whose land is being expropriated, a regulation or other restriction implemented by an authority—whether or not it is the same authority as the expropriating one—can be set aside if it is proven that this restriction was adopted to facilitate the objective of the expropriation itself. The municipality cannot use its own actions to justify a lower expropriation compensation than what would have been warranted had it not been for its behavior:
“In a recent decision, the Court of Appeal reminded us that the value of a piece of land must always be assessed from the most advantageous perspective for the expropriated party. It further emphasizes that since the value of land depends on the zoning it is subject to, a municipality cannot cause a significant drop in property value through restrictive zoning and then benefit by expropriating it at a lower cost 3.” [free translation]
For example, if the municipality, the Regional County Municipality (“RCM”), or any other authority implements a regulation targeting the land to be expropriated to prevent building construction because the municipality intends to expropriate the land to create a park, it cannot use this same regulation—which will inevitably reduce the market value of the land due to its now very restricted use—to justify the amount of compensation payable. The Tribunal must disregard this regulation when determining the amount of compensation to be paid to the expropriated party.
However, if a regulation adopted by the municipality affects the market value of the land but does not have an apparent connection to the planned expropriation (for example, the adoption of a new general zoning by-law), proving Planning Blight will be more challenging, as the causal link between the regulation and the expropriation is weak.
In the case studied today, the City of Mercier (the “City“) intended to acquire a parcel of land owned by 9218-3763 Québec Inc. (“9218“) through expropriation and took steps with the Montréal Metropolitan Community (“CMM“) to obtain financial assistance. The City subsequently issued a first notice of expropriation to 9218 for the land, approximately two months before the CMM adopted the Interim Control By-law 2022-96 (“RCI“), which prohibited any construction on the land. Given that the RCI was closely linked to the City’s expropriation process for the land, and that the RCI reduced the market value of the land, the Tribunal has no doubt that this constitutes a case of Planning Blight. As a result, the Tribunal disregards the RCI when assessing the compensation to be paid.
The application of this theory protects the expropriated party from any reduction in their compensation due to the adoption of restrictive regulations aimed at achieving the objective of the expropriation.
12024 QCTAQ 1020.
2Lapray Realties Ltd. v. Montréal (Communauté urbaine), 1999 CanLII 10531 (C.Q.), par. 72.
3Ville de Longueuil v. José Henrique Pinto et al., SAI-M-083558-0304, March 16 2005, referring to Montréal (Ville de) v. Benjamin, 500-09-013983-036, 2004-11-30 (In appeal of Charles
4Benjamin v. Ville de Montréal, 500-05-016054-924, 2003-11-05).
By Me Bruno Fraticelli
