This article, by Elizabeth Brubaker, first appeared in the National Post on April 16, 2015.
Empty buildings and vacant lots scar downtown Fort McMurray – signs of a bust that cannot be blamed entirely on falling oil prices. Instead, much of the blame lies with municipal politicians, who were too quick to expropriate for a redevelopment plan that never made sense.
In the heady days of expensive oil, Fort McMurray dreamt big, envisioning new waterfront parks, housing, commercial and retail space, healthcare facilities, a public square and civic centre, and a hotel and casino. A centerpiece of the plan was to be a new arena – a privately financed and operated sports and entertainment complex. The arena was seen as a “catalyst project” that would pave the way for wider city-centre revitalization. It was described variously as a spark, a bright signal of intent, and a project to establish confidence, kick-start redevelopment, and energize the urban core.
These dreams didn’t come cheap. The municipality spent $47 million acquiring properties for the arena, many through expropriation, and millions more on properties for other projects. The municipality also expected to contribute $228 million towards the arena’s operating costs over 30 years.
But the redevelopment plans have stalled. Although once-thriving businesses were kicked out in 2013 and prime lands now stand empty, construction remains a fantasy. In March, almost four years after issuing the initial Request for Expressions of Interest for the construction and operation of the arena, the municipality announced that “a suitable deal … could not be reached” with the lead proponent. It has opened discussions with another company, but will not speculate about the cost of the project or when it might be complete. It admits that even the arena’s location isn’t set in stone.
That Fort McMurray’s revitalization plans would fail should surprise no one. Expropriation for the arena was examined in a four-day inquiry in 2013, after which the provincially appointed inquiry officer found that the proposal was “not sound.” The inquiry officer noted that studies concerning transportation, parking, utilities, and the comparative suitability of the site had not been conducted, and that there was no evidence that the municipality could enter into a reasonable private-public partnership for the project. He concluded, “there is no reasonable assurance that the project will ever proceed, and accordingly, the expropriation of the lands is not reasonably necessary at this time.” He acknowledged the municipality’s desire to fast-track revitalization by using a private-public partnership and to secure a site before issuing a Request for Proposals, but insisted that this was “not a sufficient reason to deny Owners their property rights.”
The inquiry officer’s report did not deter the municipality. The director of the downtown redevelopment project explained that the report was not legally binding and that the administration did not agree with its conclusions. He defended the municipality’s right to ignore the report, suggesting that councils routinely do just that. The municipality pushed ahead with its plans.
That decision was irresponsible. As local columnist Tyler King asked, “Who now can truly defend the city administration’s push to spend nearly $50 million to expropriate and purchase downtown properties … for construction that never came?”
Fort McMurray is by no means alone in expropriating prematurely. Many expropriations occur before governments know whether planned projects will go ahead, or how they will finance them. Ontarians learned hard lessons about premature expropriation in the 1970s, when the federal government expropriated 18,600 acres for the still-unbuilt Pickering Airport. The expropriated lands have sat in limbo for four decades. The government rented out 700-plus houses and farms to their former owners. But farmers were loath to invest in quota or infrastructure, and uncertainty made it difficult to attract workers. The government allowed the properties to deteriorate over the years, eventually evicting residents from dilapidated houses in order to demolish them. Once thriving communities became ghost towns.
Last year, when Ottawa announced it would proceed with the airport by 2027, it admitted it wouldn’t need all of the land it had expropriated. It planned to retain about 8,700 acres for the airport. It would give 5,000 acres to Parks Canada for Rouge National Urban Park – a troubling gift, since Canada’s National Parks Act prohibits the use of expropriation to establish or enlarge a park. And it would open the balance of the expropriated land for business development.
History repeats, and repeats. In 2010, Hamilton, Ont., acquired – through the threat of expropriation – and razed 13 houses and 7 businesses in the Barton-Tiffany neighbourhood in order to make way for the Pan Am Stadium. Then the stadium plans fell through, leaving the city with a derelict wasteland. Guysborough, N.S., likewise put the expropriation cart before the project horse when, in 2013, it expropriated land for the proposed Black Point quarry – even though the quarry’s proponent will not decide until 2018 if the project makes economic sense. In the last two years, Edmonton, St. John’s, Moncton, and others have similarly expropriated for uncertain projects.
Expropriation is legitimate only for sound projects that are certain to go ahead. The Fort McMurray redevelopment, like so many planners’ fantasies, never qualified.
Elizabeth Brubaker is executive director of Environment Probe and author of Expropriation in Canada: Discretion Masquerading as Law.