Expropriations | Quebec changes the rules of the game

(Quebec) The Legault government is changing the rules of the game in terms of expropriation to protect itself from speculation and save millions, has learned The Press.

The Metropolitan Community of Montreal (CMM), which is meeting at the Palais des Congrès on Tuesday, is granted by the very fact: it has been calling for this state intervention for many years, as has the Union des municipalités du Québec (UMQ ).

The Minister of Transport, Geneviève Guilbault, will table a bill this week to modify the Expropriation Act, for which she is responsible. This law, adopted in 1973, has not undergone any significant changes over the past 40 years.

According to our information, the bill will ensure that the compensation will be fixed on the basis of the market value of the expropriated property and no longer of the “value to the owner”.

Currently, the government and municipalities have to compensate a landowner for the potential income they could earn from their land, which drives up the bill.

The government’s intention is that the compensation be fair and reasonable, that it neither impoverish nor enrich the owner.

Different scenarios studied

Quebec has studied different scenarios in recent weeks to measure the difference between the old and the new expropriation regime. It would cost about 26% less under the new regime to expropriate a business depending on the scenario examined (2.1 million instead of 2.9 million). For a golf club, this would be a major saving of 43%: 7.7 million rather than 13.4 million. Finally, in the case of a residential building studied, the expropriating party would pay $355,600 instead of $383,900, a difference of $28,300.

The Quebec state is the largest expropriator, through the Ministry of Transport, the Société d’habitation du Québec and Hydro-Québec, in particular.

Year after year, the Ministry of Transport makes expropriations affecting 1,000 owners and tenants.

The government was particularly irritated by the case of the extension of the blue line of the Montreal metro. The estimated expropriation bill almost quadrupled, from $341 million to $1.2 billion. Under a decision of the Administrative Tribunal of Quebec (TAQ), the Société de transport de Montréal had to pay 115 million dollars to acquire an old shopping center when it had planned less than 30 million at the start.

Municipalities also expropriate and complain about the current legal framework.

Section 58 of the Expropriation Act indicates that “compensation is fixed according to the value of the property expropriated and the damage directly caused by the expropriation”. The Civil Code provides for its part that one “cannot be forced to cede one’s property, except by way of expropriation carried out according to the law for a cause of public utility and subject to fair and prior compensation”.

“Over time, the courts established that the owner should be compensated based on the value of the building to the owner, which, as its name suggests, gave rise to the jurisdictional concept of “value to the owner”. “”, explains the UMQ in a memoir dating from 2021.

According to her, “this approach generates a great deal of arbitrariness in the process of agreeing on the amount to be paid to the expropriated person”.

It recommended to the government that “the compensation to be paid to the expropriated party be based on the concept of the market value of the building, including the incidental compensation, rather than on the concept of value to the owner”.

“By basing its expropriation regime on the concept of value to the owner, Quebec is an exception,” says the UMQ. Indeed, the governments of Canada, Ontario and British Columbia (among others) were also evolving in this context before specifying the factors that could be used to set the fair compensation to be paid to the expropriated person. »

Protection against speculation

In 2019, the CMM demanded changes to the expropriation rules in order to protect more natural environments. She, too, asked that the compensation no longer be based on the potential value of the land – if there were to be residential development, for example. We want to protect ourselves against speculation.

In particular, the CMM is targeting six golf courses that it wants to turn into parks, under interim control regulations (ICRs) which were adopted last year and which aim to protect them. In Candiac, the Boda Group, a consortium of Chinese investors, bought a golf course at the end of 2021 for 22 million and is now suing the City for 69.2 million.

Under a TAQ decision, the City of Carignan has already had to pay compensation 50% higher than expected by its assessor (1.8 million in total) in order to acquire land to build a school. .

When the 2020-2024 tax pact was signed, the Legault government and the municipalities agreed to look into changes to the Expropriation Act. A committee was created for this purpose and concluded its work last year, but no report was made public.

A year ago, a few months before the general election was called, Premier François Legault pledged to review the law at a UMQ convention.

Geneviève Guilbault’s bill will also streamline the expropriation process in order to reduce delays. Projects such as the Réseau express métropolitain and the tramway in Québec have already benefited from such flexibility under specific bills. The Legault government has also relaxed the rules of expropriation with its 2020 law aimed at accelerating the realization of 180 infrastructure projects – schools, seniors’ homes, hospitals and the blue metro line, for example. This week’s bill will go further with a comprehensive review of the Expropriation Act.