Expropriation in the news: The private projects edition

Elizabeth Brubaker

“Sheesh!” That was the reaction of one City of Toronto planner when Mayor Rob Ford explored using expropriation to benefit a client of his family business. The story, which came to light in September of this year, dates back to 2011. At the time, Apollo Health and Beauty Care wanted to acquire land from its neighbour, Suncor Energy, in order to create parking spaces for its new factory. The mayor invited the planner and the city official in charge of expropriation to a meeting with Apollo. Despite the official’s protests that the city could expropriate only for municipal purposes and not for private property owners, he was required to attend the meeting.

Too often, proposed expropriations for the benefit of private companies are met not with a “sheesh” but with the enthusiastic cooperation of politicians and bureaucrats alike. Some of this year’s most notorious stories of expropriations on behalf of private companies come from Nova Scotia, where governments have taken private property for an Australian gold mining conglomerate, a US mining giant, and an international energy company. (For more on these takings, see Corporate bullying: Expropriating for private purposes in Nova Scotia.)

Expropriations for private purposes happen here in Ontario, as well. Because there is no centralized source of information about what land is being taken for what purposes, it is impossible to know how common such expropriations are. (For more on this problem, see Expropriation in the news: The public projects edition.) But we do know from news reports that governments often forcibly take land from one private owner in order to transfer it to another private owner. The following sampling of cases that have attracted media attention in 2014 provides an overview of some of the private drivers of recent expropriations across Ontario, and some of the shortcomings of the process.

• Chinese-owned Dufferin Wind Power (DWP) demanded easements on private and public properties for a 47-kilometre transmission line through Dufferin County, threatening to expropriate if it could not obtain them through negotiations. The line will connect DWP’s 49-turbine wind farm in Melancthon Township to a Hydro One transformer station in Amaranth Township. Dufferin County granted DWP an easement to run the line along a former rail corridor turned recreational trail. In March, the county was able to negotiate $1.4 million in compensation, along with some financial and environmental protections. But the county warden complained that the county negotiated the easement with “a gun to our head” and said its pleas to both the company and the province that the transmission line be buried along the entire route had been “absolutely ignored.” “This is not a democracy, it’s disgusting,” he said.

Many officials with the towns and townships that make up the county were infuriated that, as one councillor put it, “the Ontario government has given the Chinese government the right to expropriate Canadian land.” Giving DWP the power to expropriate, one mayor explained, meant that “They don’t have to talk to us anymore.” One deputy mayor called the threat of expropriation “draconian and ridiculous.”

Not having to negotiate with municipalities freed the power giant from having to act cooperatively and sensitively. DWP ran roughshod over the town of Shelburne, failing to produce required plans or to obtain approvals before starting construction. In June, the town’s deputy mayor, alarmed that DWP’s drilling could put the town’s ground-water supply at risk, and frustrated that he couldn’t stop the project, accused the company of not being a very good corporate citizen and threatened to make it as miserable as he could for work to continue. The friction only increased in the following weeks, with the deputy mayor accusing the company of not caring, and threatening to call the police to stop the project.

Environmental concerns about the project increased in July with the news that 300-plus utility poles may have been improperly installed. The Ministry of the Environment directed DWP to seal the foundations of the poles to ensure that surface contaminants could not seep into the shallow aquifer below the line. The company missed the mid-September deadline for completing the work, but has since finished the job. The province’s Environmental Review Tribunal will be holding a hearing into the project in the coming months.

• Hamilton is looking for a private developer to buy the site of the former City Motor Hotel and to build a mix of residential and commercial space there. Last year, the city took possession of and demolished the run-down hotel that had long stood on the site. The expropriation was driven by Councillor Sam Merulla, who argued that the hotel was notorious for drug use and prostitution. But the councillor never satisfactorily explained why the city should use expropriation rather than law enforcement to stop illegal activities. Nor did he explain why the real estate market could not have solved the problem on its own – a relevant question, since media reports have referred to at least two offers to purchase the property.

Owner Ted Dabrowski – now 96 years old – has accused the city of stealing his hotel. “This isn’t Russia,” he protested. “If somebody’s got something, we don’t say, ‘Here, I’ll give you a dollar for it. And if you don’t like it, I’ll give you a punch in the mouth.’” In fact, Mr. Dabrowski hasn’t received even a dollar for the property. The city, claiming its hands are tied by competing ownership claims, has yet to provide any compensation. But had he received payment, Mr. Dabrowski wouldn’t be satisfied with the $1.96 million price set by the city. In May, he took his case to the Ontario Municipal Board, asking for $3.94 million in compensation.

Councillor Merulla isn’t phased by the dispute. He explained, “I simply eliminated a blight on the community.” As for whether Mr. Dabrowski had been treated fairly, he said, “I think the issue of fairness lies in that community and the fact that we had to deal with that blight, with prostitution, gun activity, criminals … So to hell with him, I don’t care.”

• In September, Councillor Merulla, pleased by the expropriation of the City Motor Hotel, set his sights on derelict properties along Barton Street, proposing to expropriate them and replace them with affordable housing. But there are other, less heavy-handed ways to turn the area around: One planning consultant hired by the city has proposed simply reducing financial and administrative barriers to redevelopment.

• Barton Street is no stranger to expropriation. Several years ago, Hamilton expropriated and razed 13 houses and 7 businesses in the neighbourhood of Barton and Tiffany Streets in order to make way for the Pan Am Stadium. Then the stadium plans fell through, and the city was left with a derelict wasteland. This September, the city’s planning committee approved a new plan for the area involving residential and commercial development. According to the Hamilton Spectator, the city expects to profit handsomely from selling the expropriated properties to one or more developers.

• Four years after Belleville expropriated 600 acres of land to promote industrial development on its north-east side, it is still fighting with four of the five former owners over what constitutes fair compensation. The city is also still looking for purchasers for the land. When it expropriated in 2010, it didn’t have a specific industry in mind. Rather, it wanted to own a “bank” of serviced industrial land to sell at affordable prices as the demand arose. That demand has been slow to materialize. Despite the city’s willingness to sell the land at a loss, it did not make its first sale until August of this year.

• 2014 saw the resolution, in court, of a long-standing dispute about Oxford County’s expropriation of one private business – a shopping mall – and its sale to another private business – Toyota – to entice the motor company to build a plant in Woodstock. The expropriation occurred in 2005, when the company was looking for 1,000 acres near a major highway. The county, anticipating $1.1 billion in investment and the creation of 2,000 new jobs, was happy to help by acquiring 28 properties and selling them to the company. The owner of the property on which the shopping mall stood refused to sell, prompting the county to expropriate the land. The mall owner didn’t have an opportunity to challenge the proposed expropriation at a public hearing – at the county’s request, the province waived the hearing in order to expedite approval of the car plant. But the mall owner and its mortgage company did take their fight to court. The court case dragged on until this spring, when the court confirmed, “It is clear that Oxford expropriated the mall lands for a valid public purpose,” i.e., “to promote economic development.”

[Update, December 11, 2014: Earlier this week, the Ontario Court of Appeal dismissed an appeal of the above court decision. Today, the mall owner and mortgage company announced they will seek leave to appeal the ruling to the Supreme Court of Canada.]

• Woodstock also made the news in September for agreeing to pay an additional $1.7 million to the Bakker family, to more fully compensate it for the 97-acre property it had expropriated for an industrial park 12 years ago. The city had paid the family just $770,000 for the land, and the family had challenged the fairness of the price at the Ontario Municipal Board. Negotiations with the dissatisfied owners of another property expropriated for the same industrial park are ongoing. Woodstock’s mayor has drawn this lesson from the experience: “The message to municipalities is to be sure you treat people fairly.”

1 thought on “Expropriation in the news: The private projects edition

  1. Pingback: An abuse of power? | Environment Probe

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