Chapter 12: No Expropriation Without Full Compensation

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“The Legislature within its jurisdiction can do everything that is not naturally impossible, and is restrained by no rule human or divine. If it be that the plaintiffs acquired any rights, which I am far from finding, the Legislature had the power to take them away. The prohibition “thou shalt not steal” has no legal force upon a sovereign body. And there would be no necessity for compensation to be given. We have no such restriction upon the power of the Legislature as is found in some States.”

-Ontario Justice Riddell, 1908(1)

“There are some things I prefer not to remember. Property law, for example, is a system of concepts better forgotten.”

-Bob Rae, future premier of Ontario, 1976(2)

In 1949, Peter Lewington discovered a surveyor’s stake on the farm he rented north of London, Ontario. In this way he learned of Imperial Oil’s plans to install a pipeline; the company, granted expropriation powers by the federal government, had not bothered to inform him that it would be digging a ditch diagonally across his property. Imperial’s secrecy served as a rude introduction to pipeline companies’ negligent expropriation practices, preparing the Lewingtons for what was to become a 30-year struggle for environmental responsibility and justice.(3)

Pipelines seemed to follow the Lewingtons. In 1950, the city of London drilled two wells and installed a water pipeline across a wheat field rented by the family, all without asking the Lewingtons’ permission or offering compensation. In 1956, Interprovincial Pipe Line Limited (IPL) sought easements for its first oil pipeline in the area. It expropriated a 60-foot strip of land the following year, taking its pipeline through the middle of the Lewingtons’ recently purchased Larigmoor Farm. IPL installed a second pipeline in 1967. And in 1975, IPL expropriated an additional 30 feet of working rights to install a larger pipeline.

Construction of the three oil pipelines wreaked havoc on Larigmoor Farm which, as Class I farmland with a pure, shallow well, had been ideally suited both for raising a dairy herd and for growing grain and forage seeds. Excavators breached the aquifer, which had supplied the well and aided underdrainage. Their machines broke and blocked drainage tiles, brought stones to the surface, mixed topsoil with infertile subsoil, and compacted the soil, further damaging crops. Weeds proliferated. Construction debris harmed cattle; open gates and damaged fences led to further livestock losses. Gaping trenches and above-ground pipes blocked the Lewingtons’ access to half of their farm.

The Lewingtons were by no means IPL’s only victims. Between 1950 and 1974, IPL installed over 5,000 miles of pipeline, at least two-thirds of which crossed agricultural land. Property owners suffered insults ranging from oil spills, which IPL would intentionally ignite, to the incessant noise pollution from nearby pumping stations.

IPL neither denied nor apologized for the harm it caused. Instead, it insisted that it had a right to destroy the environment. “You shall grant us a warrant,” the company’s senior lawyer told an expropriation judge. “We can go in and make a wasteland of these farms if we want to.”

But IPL was not to have the last word. The Lewingtons and their neighbours lobbied the federal government to change the archaic law that allowed pipeline companies to indiscriminately expropriate without consulting affected landowners and without mitigating damage. They pressured the pipeline regulator, the National Energy Board, to introduce environmental guidelines and to more effectively involve the public in route selection. And in 1978, two years after having turned to the courts, they won a suit for damages caused by the most recent pipeline. From then on, pipeline companies who refused to implement environmentally sound practices would have to pay the consequences.

The law enabling IPL to expropriate with impunity was modelled on an early Railway Act, which allowed railroad companies virtually unrestricted access to private property. Governments justified such broad powers in the name of progress: railroads, facilitating resource development, would generate tremendous wealth. But it was personal rather than public wealth that frequently motivated the railroads’ parliamentary promoters: many stood to gain financially as participants in the ventures.(4)

Governments continue to benefit from expropriation laws that give them and their agents freedom to act with little regard to costs or consequences. Although both federal and provincial governments have improved laws governing expropriation proce-dures and compensation, they continue to grant expropriation powers recklessly. According to the Law Reform Commission of Canada, Parliament “has given the power to virtually anyone that in meeting a public need might require land.” At the time of the commission’s 1976 report, federal legislation had conferred expropriation powers on 29 government entities and 1,234 companies, some of which were under no obligation to follow fair procedures or provide compensation to their victims.(5)

Provincial governments have been even more lavishly irresponsible. In 1968 the Ontario Royal Commission Inquiry into Civil Rights lambasted “the promiscuous manner in which the power is conferred and the methods by which it may be, and often is, exercised.” Ontario then boasted 8,017 expropriating authorities, ranging from 241 agricultural societies to 3,238 cemetery owners to a cancer research foundation to 299 public library boards. Such numbers, the commission noted, indicated that “the power to expropriate land has been conferred in Ontario with reckless and unnecessary liberality.” The commission criticized expropriation as a civil rights violation: “[T]he mere existence of the power to expropriate property is in itself an encroachment on the rights of an individual in the sense that the security of his rights to property has been diminished.” Expropriation is only justified, it suggested, when exercised properly in proper cases – when “inescapably necessary” and truly serving the public interest.(6)

The public interest, however, fails to justify many projects for which land is expropriated – projects such as the casino for which the City of Windsor, Ontario started expropriation proceedings in 1993. Some projects – such as the never-built Pickering Airport for which the federal government expropriated homes and farms in 1973 – are unnecessary.(7) Others do extraordinary environmental damage. Hydrodams may poison ecosystems, uproot communities, and destroy traditional ways of life; transmission lines may expose nearby residents to magnetic fields; landfills may contaminate ground water; and myriad other projects may ravage landscapes, tear apart communities, or devalue the property of those living nearby. The environment would clearly benefit if many of these expropriations did not occur, or if they were differently handled.

The guiding principle behind expropriation should be that those who benefit from a project should bear its costs. This principle can be traced back to the Magna Carta, the Great Charter of Liberties, signed in 1215, that forbade the king’s agents to take a man’s timber or horses without his agreement, and provided for compensation in the event of expropriation.(8) If the king benefited from a taking, the king would have to pay.

Likewise, if society benefits, society should pay. Britain’s Baron Bramwell advocated such an approach in 1862:

[T]hat law to my mind is a bad one which, for the public bene-fit, inflicts loss on an individual without compensation. . . . The public consists of all the individuals of it, and a thing is only for the public benefit when it is productive of good to those individuals on the balance of loss and gain to all. So that if all the loss and all the gain were borne and received by one individual, he on the whole would be a gainer. But whenever this is the case, – whenever a thing is for the public benefit, properly understood, – the loss to the individuals of the public who lose will bear compensation out of the gains of those who gain. . . . [U]nless the defendant’s profits are enough to compensate this [the plaintiff’s loss], I deny that it is for the public benefit he should do what he has done; if they are, he ought to compensate.(9)

Expropriations are fair only if, through compensation, they leave all affected parties as well off as they were before.(10) Just compensation could, for example, enable people to purchase property and rights similar to those which have been taken, and reimburse them for the costs – including the emotional costs and inconvenience – of doing so. If compensation truly leaves owners with their well-being undiminished, they will be indifferent to the expropriation.(11)

The best way to ensure that no one loses is to leave the choice in the hands of those affected – to replace expropriation with voluntary agreements. The experiences of those who have not resorted to expropriation belie the often heard argument that the expropriation process is necessary. Expropriation powers have traditionally been unavailable to real estate developers, who have successfully assembled tracts of land for large developments. Nor have Ontario’s independent power producers been able to expropriate; they have instead had to negotiate easements with landowners affected by their generating stations or transmission lines. If they have failed to reach mutually acceptable agreements, so be it; their failures have signified that the projects’ benefits could not support their costs.

Those with the power of expropriation threaten dire consequences for society if their privileges be lost. In many cases, however, curbing expropriation would have less dramatic effects. Undoubtedly some projects wouldn’t be built, since some people’s compensation demands would be prohibitively expensive, and others couldn’t be bought out for any price. And some projects would be reconfigured to reduce the costs to those affected.(12) But under certain conditions, giving those affected the right to say no to proposed projects – assigning them firm property rights, in short – would not impede development.

Economist Ronald Coase won a Nobel Prize by demonstrating that if transaction costs are low – if information is readily available and bargaining is easy – the assignment of property rights will not affect resource allocation.(13) The same decisions will be made regardless of which party has the power to decide: whoever values a resource most will end up with it. Of course, transactions may be extremely costly.(14) But secure property rights help minimize transaction costs to the degree that they enhance easy and fast bargaining between buyers and sellers and help assure that agreements can be enforced.

Coase pointed out that while the assignment of rights may not affect the outcome of a proposed project, it will change the distribution of income. If a polluter holds the stronger rights, its victims will have to pay it to stop polluting. If those affected by the pollution hold the stronger rights, the polluter will have to pay them for the right to use their property.

Voluntary exchanges that do occur will reflect both the true value of the lost property and the real cost of the proposed project. Using this knowledge, the parties will make meaningful choices. Rights will be maintained or purchased by those who most value them, leading to the efficient use of resources.(15)

Expropriation need not involve the physical taking of land: it can occur when governments limit owners’ uses of their lands or reduce their value through laws and regulations.(16) As with a traditional taking, those benefiting from a regulation whose effect is to expropriate should bear its costs; compensation should leave the regulated party as well off as it would have otherwise been.

Regulations serving the public interest may well be justified. But the fact that the public interest justifies an expropriation should not affect the requirement for compensation. It is critical to distinguish between the public interest and the public’s right: although the public has an interest in many things, it should have a right to expropriate private property only if it pays for it.(17)

Many expropriative regulations are specifically designed to protect the environment. Ontario’s 1992 wetlands policy restricted development on designated wetlands and “buffer” lands adjacent to them. Land so designated lost up to 90 per cent of its value, costing provincial landowners hundreds of millions of dollars. Not surprisingly, many property owners objected that the policy expropriated their property rights, forcing them to bear the costs and burdens of achieving a goal that benefited all of society. While not disputing wetlands’ importance, they objected to footing the bill to save them.(18)

The Ontario government has also designated thousands of public and private properties as Areas of Natural and Scientific Interest, or ANSIs. Their purpose? To encourage the protection of non-park lands, including eight million acres of privately held property. One landowners’ association called the designation “expropriation by stealth and deception” – an arbitrary transfer of control from private property owners to the state without consent or compensation.(19)

The Ministry of Natural Resources first used the ANSI designation in 1990 to prevent property owners from developing their land. John and Sylvia Richards owned 150 acres of land fronting Matchedash Lake, one of Southern Ontario’s few remaining wilderness lakes and a designated ANSI. They had, according to MNR, been “outstanding custodians” of the environment for 25 years; on their land could be found numerous rare species of Atlantic coastal plain flora. In the late 1980s they decided to sever six lots for their children and grandchildren. The township amended its official plan and rezoned the area in order to allow the severance. But MNR, wanting to preserve the significant plant species on the Richards’ shoreline, opposed any further development; it appealed to the Ontario Municipal Board. The OMB, trying to compromise between the public interest and private property rights, consented to the severing of just two lots, which MNR agreed would not adversely affect the ANSI. Its decision created the strictest cottage development requirements in the province.(20)

Numerous other acts and regulations restrict development in environmentally sensitive areas, violating people’s common law property rights to use their property as they wish as long as that use does not violate others’ property rights. As Ontario Chief Justice McRuer explained in 1951, “Everyone has a right to use his own property in any way that he may see fit, so long as he does nothing that will be a legal nuisance to his neighbours. That is a common law right. It is a question of liberty that is to be jealously guarded by the Courts, and while one’s rights may be affected by proper legislative action, until that is done, one’s personal common law rights are to be strictly guarded.”(21)

The United States Supreme Court has recognized that restrictive land-use regulations may, due to their expropriative nature, demand compensation. In a series of decisions between 1987 and 1994, the court required governments to pay compensation for “regulatory takings” that deprived landowners of all economically beneficial use of their land, and insisted on a rough proportionality between the regulation and the restricted activity.(22) Canadian courts, unencumbered by a constitutional requirement that expropriation be compensated, have not dealt with the issue to the same extent. Nevertheless, providing com-pensation has become a legal and legislative convention. Courts have maintained that unless explicitly stated therein, laws are presumed not to condone expropriation without compensation.(23) They have also found that expropriation by regulation can occur and can require compensation.(24)

Clearly not all regulations limiting land use are takings, and not all should be compensated. Regulations benefiting the regulated don’t require monetary compensation; the benefits conferred provide compensation in kind, making the regulation a “giving” as well as a taking.(25) Nor should regulations that prevent harm to others be considered takings; since people don’t have the right to harm others, government action cannot “take” it from them. Environmental regulations don’t take away a polluter’s right to pollute when the polluter doesn’t have that right in the first place. Likewise, regulations protecting commonly held (or, in some provinces, publicly owned) animals, which no one has the right to destroy, don’t constitute takings.(26) On the other hand, government actions that diminish others’ rights, or that transfer control of property from private to public hands, do amount to expropriation, and require compensation.

Ironically, expropriation by regulation is generally not the best way to preserve the environment, and is often counterproductive. Just as voluntary agreements are often superior to traditional expropriation, non-coercive schemes appealing either to landowners’ consciences or to their pocketbooks have often proven more successful than regulations.(27) Increasing interest in private stewardship has accompanied the public’s growing concern about the environment. Property owners hunger for information on how to sustainably manage their lands. According to the Muskoka Heritage Foundation, which promotes stewardship of private lands in south-central Ontario, most landowners who have the necessary information and skills will “do the right thing”: they will preserve their natural lands and enhance habitat.(28) Other organizations’ experiences confirm that as landowners become aware of the significance of their natural areas many will voluntarily protect them.(29)

Complementing those who protect the environment out of the goodness of their hearts are the myriad others who conserve their lands and resources for economic gain. Property owners are learning that it often pays to create habitat or protect wildlife. Canadian Pacific Resorts and Hotels understands that conservation can be good for the bottom line. Its Kenauk fish and game reserve covers 65,000 acres of hardwood forests and over 70 lakes near Montebello, Quebec. The reserve has been off limits to the general public for centuries: first held by the Bishop of New France in the seventeenth century, it was purchased in 1801 by the Papineau family, who sold it to investors – including CP – in 1929. CP now manages the property for both forestry and tourism. By limiting clearcuts to 100-foot strips in restricted areas, it has succeeded in both retaining an unspoiled beauty and maintaining an impressive density and variety of wildlife. People come from around the world to enjoy the unspoiled wilderness, paying handsomely to hunt or fish on lakes they share with no other guests. Tourism revenues make up for reduced forestry profits, leaving CP with a better overall return than it would realize from unrestrained forestry alone.(30)

In 1991, Abitibi Price started experimenting with managing its privately held forests to enhance conservation and recreation. On the theory that conservation brings financial rewards, the company initiated reforms – ranging from trash removal to more restrained logging practices – on its half-million acres near Thunder Bay, Ontario. Three years later the company signed its first agreement with a tourist outfitter to turn one block of land into a money-making park; it also developed plans to lease cottage lots around remote lakes. “We can market our products – our forests and lakes – better and get more value from them,” explained Abitibi’s Forestry Systems Supervisor. “We can supply not just sawmills but lots of users,” he went on, noting that that makes sense financially. “And we’re in the business of making money.”(31)

If landowners do not independently realize the economic advantages of conservation, environmental groups can intervene, increasing incentives to conserve. Defenders of Wildlife works to increase wolf populations in the American Northwest through programs that shift economic responsibility away from the ranchers who suffer wolf-related damage and toward the people who seek wolf restoration. To overcome ranchers’ reluctance to protect animals that may kill their livestock, the environmental group began in 1987 to compensate them for any losses caused by wolves. During the following seven years, it paid over $16,000 to 15 ranchers, effectively neutralizing their opposition to wolves. In 1993, the group decided not just to reduce landowners’ liability but to turn what were once liabilities into assets: it offered $5,000 to landowners who allowed wild wolves to rear pup litters on their property. It paid out its inaugural reward in 1994, for the first litter raised in the area in over 30 years.(32)

When all else fails, environmental groups can lease or purchase lands or waters that they wish to preserve. They can outbid their competition if the resources they want to protect are worth more to them than to others. Such is often the case. When other resource users can find satisfactory substitutes for unique environmental tracts, they will find it cheaper to turn elsewhere than to engage in a bidding war with conservationists. Since many industries have grown accustomed to having access to virtually free resources, they may be unable to match even the modest bids of those hoping to preserve the resource.(33)

Some conservation groups, particularly in the United States, purchase “negative covenants” – promises to neighbours binding future as well as current owners – that restrict uses of environmentally important properties. Covenants may include promises to refrain from developing, polluting, or otherwise altering sites. Often, a conservation organization purchases a property, places a covenant on it, and then resells it, confident that future uses will not threaten the environment. Conservation groups also purchase easements that allow them to cross others’ properties or to use them in specific ways, such as for hiking.(34)

Land trusts are common in both Europe and the United States. The National Trust, established in 1895 and now supported by more than two million members, is Great Britain’s largest private landowner. It owns over 580,000 acres, holds conservation covenants on another 78,000 acres, and has protected 535 miles of coastline from development.(35) A non- government trust owns and manages the Netherlands’ largest national park. The United States probably boasts over 1000 trusts.(36)

Trusts can protect water as well as land. Conservation groups regularly buy water rights in the American West, where all too often fisheries, wetlands, and recreational water uses have been compromised by the megaprojects of water bureaucracies and by agricultural and urban users who have demanded more and more water. Trusts have learned that there is no surer way to restore a river’s flow than to purchase or lease rights from those who would otherwise remove water from the river. Their efforts have paid off: voluntary transactions between conservationists and water rights holders have provided more water for conservation than have government regulations.(37)

American environmental groups increasingly use the market to protect air quality as well. In 1993, environmentalists joined electric utilities in bidding at the Chicago Board of Trade’s first auction of sulphur dioxide pollution permits. In acquiring the rights to emit a specific amount of sulphur dioxide and retiring them unused, they kept them out of the hands of utilities and reduced a primary cause of acid rain.(38)

In Canada, where environmentalists have traditionally relied more on government than on private initiative, private sector conservation is less well established. However, land trusts and other private conservation organizations have grown increasingly important in recent decades, shifting at least some of the costs of conservation to those who most value it.(39)

Since 1962, the Nature Conservancy of Canada has protected more than 115,000 acres of wilderness in 504 nature preserves. The organization purchases threatened natural areas, since, as their executive director explained, “there is no more direct way to protect land than to buy it.” Many enthusiastically support this free-market approach to preserving biological diversity: the organization grew exponentially in the early 1990s, when its membership increased nine-fold (to 20,000) and when it raised more money than it had over the course of the previous three decades combined.(40)

Ducks Unlimited – a private conservation organization boasting 700,000 supporters worldwide – has developed or protected over 17 million acres of waterfowl habitat in Canada. The organization often leases or purchases important habitats. Several of its Canadian programs provide technical and financial assistance to farmers who agree to restore waterfowl habitat on their lands. Behind the programs is the organization’s belief that farmers should not have to foot the bill for conservation that benefits duck hunters: they are compensated not only for their outlays but also for any agricultural losses incurred.(41)

There is no reason governments can’t behave in the same way. Sometimes, in fact, they do. Between 1970 and 1990, Saskatchewan’s Fish and Wildlife Development Fund used hunting and trapping licence revenues to purchase 100,000 acres of wildlife habitat; in 1990, Saskatchewan Parks and Renewable Resources also leased 14,000 acres of waterfowl habitat.(42) And Ontario’s Minister of Agriculture announced in 1994 that the government would pay fruit farmers to resist development pressures on the Niagara Peninsula. To protect 2,000 acres of unique farmland, the province set aside $18.75 million to purchase covenants that would limit any non-farm uses by current or future owners. The program was strictly voluntary: only farmers who believed they would profit would participate.(43)

Curbing traditional and regulatory expropriation and providing just compensation for that which does occur will pro-tect both property rights and the environment. But even secure property rights will enable people to protect only that which they own outright. It is therefore necessary to broaden property rights to cover resources held in trust – to assign them to some of the resources that now lie in government hands.

Notes

1. Mr. Justice Riddell, Ontario Court of Appeal, Florence Mining Co. Ltd. v. Cobalt Lake Mining Co. Ltd. (1908), 18 O.L.R. 275 at 279 (C.A.).

2. Financial Post Magazine, April 1994.

3. For the following section I have relied solely on Lewington, No Right of Way.

4. Lewington, ibid., 43 and 54-5, citing the Law Reform Commission of Canada’s (the Hartt Commission’s) report on expropriation.

5. Law Reform Commission of Canada, Report on Expropriation, 5-8. The Commission listed a number of expropriators in Working Paper 9: Expropriation, 78-9.

6. Ontario Royal Commission Inquiry into Civil Rights, Report Number One, Volume Three, 960-80.

Note that the commissioner, the Honourable James McRuer, penned the admirable KVP decision discussed in Chapter Four.

7. In Paper Juggernaut, Stewart describes the deeply flawed decision-making process that led the government to turn a thriving community into a 35,000-acre wasteland.

8. Magna Carta, Chapters 28, 30, 31, 39, 52. Also see J. C. Holt, Magna Carta, 1, 4, 16, 297, 300, 327, 332.

9. Baron Bramwell, Bamford v. Turnley (1862), 3 B. & S. 66, 122 E.R. 27 at 33.

10. Economists call this the Pareto criterion. Projects are justified as efficient if at least one person is made better off and no one is made worse off. A situation is Pareto-optimal when it is not possible to reallocate resources without making someone worse off.

11. Market value, the conventional determiner of compensation, understates the value to the owner of the expropriated property. As a consequence, “nearly all public acquisition policies leave property owners with their well-being diminished” and cause a “perverse shifting of losses away from the beneficiaries of the community scheme to individual owners” (Knetsch, Property Rights and Compensation, 46, 53). Also see Knetsch and Borcherding, “Expropriation of Private Property and the Basis for Compensation.”

The only time most real estate owners can be said to value their property at market prices is when they decide to sell it. At any other time they value their property at higher than market prices, either because of its use value, their emotional attachment to it, or the transactions costs associated with selling it.

12. U.S. courts have recently ruled that electric utilities must compensate people for the economic impacts of their transmission lines, including reductions in property values resulting from “cancerphobia” – the real or perceived health risks associated with electric and magnetic fields (EMF). In response to this reassignment of property rights from utilities to those they affect, many utilities are rerouting and reconfiguring their lines to reduce EMF levels (Wall Street Journal, “Power Lines Short-Circuit Sales, Homeowners Claim”).

13. Coase, “The Problem of Social Cost.”

14. Transactions costs may rise with the number of parties involved. Negotiating with large numbers increases the “holdout” problem – the risk that one or several people will hold out for higher prices and wreck a deal.

Ready availability of alternatives mitigates the holdout problem. Those avariciously holding out for large sums are restrained by the costs of the alternatives. If the holdouts’ prices exceed those costs, the negotiator simply looks elsewhere. Thus, those who hold out simply for money have an incentive to keep their demands modest.

Some property owners, in contrast, hold out for higher prices because they truly place a higher value on their property. Their personal valuations should be respected and treated like any other costs – i.e., avoided if possible and paid if unavoidable.

15. For more information regarding the effects of limiting expropriation and requiring full compensation for those that do occur see Pollot, Grand Theft and Petit Larceny, xxix, xxxiii, 120.

16. For more information on expropriation by regulation see Epstein, Takings. Epstein suggests that “All regulations, all taxes, and all modifications of liability rules are takings of private property prima facie compensable by the state” (95).

17. For more on the distinction between the public interest and public rights, see Pollot, op. cit., xxii, 61, 64, 80, 81, 99; and Bromley, Environment and Economy, 179.

18. Valley Farmers Forum, “Wetland designation devaluates property 90%” and “New wetlands regulations cuts off farmer’s retirement plan.”

The estimated costs of hundreds of millions are based on projected losses of $17 million in the Ottawa-Carlton region alone.

19. Markdale Standard, “GADG survey finds evidence of massive government land grab.”

20. Ministry of Natural Resources v. Township of Matchedash Land Division Committee (1990), 26 OMBR 31.

21. Re Bridgman and the City of Toronto et al., [1951] O.R. 489 at 496.

22. The fifth amendment of the U.S. Constitution prohibits the government from taking private property for public use without paying its owners just compensation. In the 1980s, in a series of decisions including Keystone Bituminous Coal Assn v. DeBenedictis, Nollan v. California Coastal Commission, and First English Lutheran Church v. County of Los Angeles, the U.S. Supreme Court began to protect individuals from regulatory takings. In a 1992 case, Lucas v. South Carolina Coastal Council, the court held that the government must compensate an owner whom it has deprived of all economically beneficial and productive use of his land unless those uses would constitute nuisances. In 1994, the court found in Dolan v. City of Tigard that a city could not condition the grant of a building permit on the surrender of private property for public use without showing that the property owner’s sacrifice was roughly proportional to the harm his proposed development might cause.

For more information on recent U.S. court decisions, see Pollot, op. cit.; Wall Street Journal, “Private Property Rights vs. Public Works” and “Takings Cases Don’t Always Favor Takers”; New York Times, “Excerpts From Court Ruling Limiting Governments’ Power Over Property.”

23. In Manitoba Fisheries Ltd. v. The Queen, the Supreme court cited Lord Radcliffe’s 1960 decision in Belfast Corporation v. O.D. Cars Ltd.: “[T]here would be the general principle, accepted by the legislature and scrupulously defended by the courts, that the title to property or the enjoyment of its possession was not to be compulsorily acquired from a subject unless full compensation was afforded in its place.” [1979] 1 S.C.R. 101 at 109-10.

The Supreme Court has several times approvingly cited the House of Lords’ 1920 decision in Attorney-General v. De Keyser’s Royal Hotel Ltd., which established that “The recognized rule for the construction of statutes is that, unless the words of the statute clearly so demand, a statute is not to be construed so as to take away the property of a subject without compensation.” See Manitoba Fisheries Ltd. v. The Queen at 109 and The Queen v. Tener, [1985] 1 S.C.R. 533 at 559.

The Honourable James McRuer, of the Royal Commission Inquiry into Civil Rights, cited the Judicial Committee of the Privy Council’s 1918 decision in Minister of Railways v. Simmer etc. Mines Ltd. that “general or ambiguous words should not be used to take away legitimate and valuable rights from the subject without compensation,” op. cit., 965.

24. In The Queen v. Tener (ibid.), the Supreme Court of Canada found that Tener was entitled to compensation for what amounted to expropriation, even though a formal expropriation mechanism had not been invoked. The Teners owned 16 mineral claims on land that had become part of a provincial park; B.C. regulations prevented them from obtaining park use permits necessary to work their claims. As Madam Justice Wilson explained, “While the grant or refusal of a licence or permit may constitute mere regulation in some instances, it cannot be viewed as mere regulation when it has the effect of defeating the respondents’ entire interest in the land. Without access the respondents cannot enjoy the mineral claims granted to them in the only way they can be enjoyed, namely by the exploitation of the minerals. . . . [T]he respondents now have no access to their claims, no ability to develop and realize on them and no ability to sell them to anyone else. They are effectively beyond their reach. They are worthless” (550-1).

25. Regulations limiting land uses but not requiring compensation might include some noise restrictions, zoning requirements, fire regulations (such as those requiring a minimum distance between homes), or other safety regulations (such as rules restricting digging around gas mains).

26. In most provinces, it is the province that owns wildlife. In Ontario, no one owns wildlife, although the provincial government manages it. In contrast, property owners do own the plants on their property. (Personal communication with Jim MacLean, director, Wildlife Policy Branch, Ministry of Natural Resources, May 20, 1994.)

Property rights should not include the right to destroy biological diversity any more than they include the right to pollute commonly held waters. Wildlife users, managers and owners would benefit from the development of a reasonable-use theory similar to that governing water use under a riparian rights regime.

27. Some environmental regulations limiting land use have actually proven to be disincentives to conservation. For information on how the U.S. Endangered Species Act has prompted landowners to destroy both wildlife and habitat in anticipation that a species may be listed as endangered and discovered on their land, see Fisher and Hudson, Building Economic Incentives Into the Endangered Species Act, 19, 38, 74, 96, 97.

28. Letter from Donald Gordon, administrator, spring 1993.

29. Reid, Bringing Trust to Ontario, 6.

30. Personal communication with Bill Nowell, manager of recreation and fisheries, May 18, 1994; personal communication with R. A. Payne, general manager, May 5, 1994; Kenauk press kit; and the Globe and Mail, “Wilderness by the Chateau.”

31. Personal communication with Volker Kromm, forestry systems supervisor, May 18, 1994; information on Abitibi’s program also obtained from personal communication with Malcolm Squires, divisional forester, May 16, 1994.

32. Wall Street Journal, “Wolves in the Marketplace”; and personal communication with Hank Fisher, Defenders of Wildlife’s Northern Rockies representative, May 5, 1994.

33. Stroup and Shaw, “The Free Market and the Environment,” 41.

34. Findlay and Hillyer, Here Today, Here Tomorrow.

Conservation easements are less common in Canada than in the U.S. Laws in Ontario, British Columbia, and Prince Edward Island authorize such easements to some degree, and other provinces are considering following suit (Hilts and Mitchell, “Bucking the Free Market Economy,” 21).

35. The National Trust, “Facts and Figures.” Also see the Trust’s “Annual Report, 1992” and “The National Trust: An Introduction,” 1993.

36. Hilts and Mitchell, op. cit., 16. The authors’ 1993 estimate of the number of U.S. land trusts considerably exceeds Reid’s 1988 estimate of 550 (op. cit., 31). They note a rapid growth in the formation of land trusts between 1988 and 1993.

37. Moore, “Water: The Rights and Wrongs of U.S. Policy,” 10; and Smith, “Water Reallocation Through Market Transactions.”

38. Wall Street Journal, “Environmentalists Vie for Right to Pollute.”

39. Hilts and Mitchell, op. cit., 16 ff.

40. Letter from John Eisenhauer, April 1993; The Nature Conservancy of Canada, “Profile”; and personal communication with Sherry Armstrong, Nature Conservancy communications, May 5, 1994.

In addition to acquiring land for the above-noted preserves, the Nature Conservancy has helped acquire almost 2 million acres of national park land. The organization negotiated the 1993 donation and sale of six resource companies’ mineral permits to 670,000 hectares of Yukon land. The companies, inhibited by the local Gwichin community’s opposition to mineral exploration on their traditional lands, had long been unable to use their permits. But the federal government could put the lands to “work” immediately: it created Vuntut National Park and the Old Crow Flats Special Management Area. The protected area covers 1.3 million hectares, including habitat for one of the world’s largest Porcupine caribou herds and wetlands that support 300,000 nesting – and even greater numbers of staging – waterfowl (Globe and Mail, “Six resource firms donate, sell mineral rights for park”; “Yukon land donated,” Canadian Geographic, 15; and The Nature Conservancy of Canada, “Unrivalled partnership protected outstanding Yukon Lands”).

Land donations supplement the Conservancy’s purchases. Shell Canada’s 1992 gift of 8,903 undeveloped hectares in southern British Columbia constituted the largest land donation in Canadian history. Shell benefited along with the newly protected elk, bighorn sheep, moose, deer and grizzlies: in addition to buying favourable publicity, the company won a sizable tax credit for the gift (Globe and Mail, “Shell donates land: Nature group gets spectacular tract”; and The Nature Conservancy of Canada, “Mount Broadwood Heritage Conservation Area: the largest donation of land in Canadian history”).

41. Ducks Unlimited brochures, “Prairie Care: A Conservation Partners Program” and “Ontario Land CARE”; and Ducks Unlimited Canada, 1990 and 1992 Annual Reports.

42. Saskatchewan Parks and Renewable Resources, Fish & Wildlife Development Fund Activities 1989-1990, 2, 4.

43. Ontario Ministry of Agriculture, Food and Rural Affairs, “Buchanan announces Niagara tender fruit lands program”; and Elmer Buchanan, Minister of Agriculture, Food and Rural Affairs, speech introducing the program, May 7, 1994.

Go Back to the Table of Contents for Property Rights in the Defence of Nature

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3 thoughts on “Chapter 12: No Expropriation Without Full Compensation

  1. Quebec stole our 175 acre ancestral heritage farm, first cleared (to make money), then purchased in 1852 by my greatgrandfather, the first “Ferrigan” Irish Immigrant to settle in Quebec. 160 years later, we lose it because “one” single Municipality refused to build a treatment plant on the Ottawa River. They entered one of our productive hayfields after having been repeateadly Refused to do so, they sunk a well (permanent structure on private property without permission or agreement with farm owner, they worked wiithout permits, they ignored a “Mise En Demeure” served to them July 19, 2005 telling them to stop all wwork immediately due to multiple illegalities perpetrated, working on and destroying Private Farm Property. They flooded hay field in 2005 (groundwater testing), we’ve lost mor than $1,500.00/year in lost hay revenue. They locked us out of our own property 2004 toll 2008. We had to “break in” to access what was left of hay in field. Mayor told us to “F— off and get out of his way or he’d expropriate the whole farm.” They broke every lock we put on the gate (after having to break their lock to get in to our own property)! Thefy’d then put their own lock on again, leaving us locked out. Spent $130,000.00 in legal fees, personal expenses, travel to and from the farm (disallowed by CPTAQ to re-build farm house and live on our own farm, which we were to do in 2004). Refused agin in 2006 and 2008. Lawyer we hired … attended multiple court cases …, accepted “primary Indemnity” deposited at court house in Campbell’s Bay as deposit on “land to be expropriated” (about $9,500.00 in two deposits, one in Sept. 2007 ($5,???., the other Feb. 2008, ($4???.00). We found out about these … proceedings with the help of a free over the phone legal service in July 2011! Reprted lawyer to Barreau du Quebec. They believe HIM – he says “we knew about everything he was doing.” In Dec. 2011 received notice from school board of “two year tax refund due to Edith Ranger Ferrigan, properyt owner. Called MRC Pontiac. E-mailed long French Document (We’re Anglophones – can’t read it). Told by MRC representative “Expropriation papers signed by OUR lawyer in 2007”. Two lots (from surveys done that I knew nothing about) now belonged to the Municipality of Campbell’s Bay for “the purpose of providing groundwater” to approximately 735 people. Taxes can only be refunded “two years back. (Jan.1, 2010)” They built a road in 2008, a building, drilled all over hay field,(totally destroyed), stripped all topsoil (replaced with sand, large rocks all over the field, over 300 foot length of trees cut down in back of hay field, (now an access road), large area fenced off around wells and building in OUR hayfield. Found out MRC changed agricultural zoning of farm to include “commercial water use” on Feb. 23, 2001. They then waited for my father to die (Jan. 30, 2003), Farm then owned by elderly widowed wife = IN FOR THE KILL! We were insulted, yelled at lied to, put out of meetings (told “private”) because they didn’t want us to knowd they were ammending by-laws and stealing our land by changing laws to suit their greed for groundweter. We now own 17? acres of “used-to-be” prime agricultural land. All cattle had to be removed in 2008 and multiple restrictions imposed on us and our land (Mother’s land, a now 85 year old senior who is disallowed to use her own land). The farm is now in a “Restricted Zone” due to “Campbell’s Bay Quebec’s Potable Water Project. ALL OTHER MUNICIPALITIES WENT TO THE OTTAWA RIVER WHICH BORDERS THE MAIN STREET IN CAMPBELL”S BAY! Now a drought – all farmers crying for hay and grains! If the water is coming from the farmers field then maybe they should try planting their crops and getting their feed from the Ottawa River! Our family now lives in poverty with Heavy debt cause dto us by “trying to hold onto that which was already ours!” I have to appear in court sometime later this year (with a pro bono lawyer who is also the lawyer for the Municipality of Litchfield Quebec where the farm is located). The land evaluator works for MRC Gatineau, who are partners with MRC Pontiac, the one’s who re-zoned our agricultural land without our knowledge in 2001. They’re offerring us $70,000.00 total. Nothing for the water (contrary to the Civil Code of Quebec when all this started). I have NO HELP in trying to calculate damages…. Mother lives in a senior’s home, a room the size of a walk in closet for $1,856.40/month, $756.40 short every month of her pension income. I’m disabled with degenerative disc disease, osteoarthritis, fibromyalgia and osteoporosis and can no longer work (I’m an RN). Quebec Sneaks created a legalized theft and we can’t afford to BUY THE JUSTICE needed to expose all of the illegalities that brought us to this end! I have no car since 2007 – that’s when they really went to town with illegalities on our land! They had me out of the way! NOW, the MPP says the Province will pay for a $766, or $788,000.00 additional money for this project to install an ionization unit AND a wdater softener ON SITE! Roche engineer Francois Ganyon told them in 2003 that “they should not use our farm due to the expense of the chemicals that would be needed to treat the high manganese levels!” He said “the population is too small, elderly and unemployed to pay this ongoing annual very high expense and we have MANY OTHER PLACES that we can go for water.” The Mayor of Campbell’s Bay INSISTED that they would stay right there in our hayfield, and the water would be chemically treated for the (too high) Manganese levels.
    Bottom Line: The Rich will always win. The Government, with their Team of Marketing Lawyers cannot be beat by a senior citizen (76 to 85 in years that passed) … They forgot to register the land in Their name back in 2007, as I was told by the Vice President of the Tribunal Administratif du Quebec, Guy Gagnon, on Sept. 28, 2011. He said, “it will have to go back to court.” My Pro Bono lawyer … called me a few days later, denied that Mr. Guy Gagnon had ever told me that it would have to back to court, and that Mr. Albert Prevost was registering the land in Campbell’s Bay’s name “as we speak”. I called the land registry office for region of Pontiac in Campbell’s Bay. I also called the head office in Quebec city. The land is indeed listed as having been registered in October 2007! IT WAS NOT REGISTERED UNTIL OCTOBER 2011! In the Long Document sent to me by the MRC in Dec. 2011, signed by OUR Lawyer in October 2007 it said that “the expropriation (contents of this long French Paper) would be null and void if the land was not registered immediately, and that … our lawyer … had the right to act alone or with the land owner in signing this document of expropriation.
    I am very sorry that I always write too much, making it ineffective. It is just such an emotional, illegal, heartbreaking, abusive, abuse of a senior citizen, abuse and loss of prime agricultural land, loss of human rights, human dignity, and much needed farm crops and revenue. There is a lot more to this story than I am able to put here, but I expect you get the idea. WHAT THE GOVERNMENT WANTS, THE GOVERNMENT GETS, AT ANY COST TO WHATEVER OR WHOEVER! Who can match the millions of dollars that they have to spend on taking whatever they want from any of us?!? (Money that they get from robbery of land and groundwater tax paying citizens, and from the working poor, who will always be “the working (or not working) poor”. Can anyone take on the Government and win? We couldn’t. We lost everything and now live in poverty.

    • I’m not sure since this is older that you will get my reply. I read all you had to write and it makes me want to cry! We have had half our farm expropriated and I do really feel for you and your parents. It’s like they try to hold out till they die. We have been through all the lies and deception. The money they want to give us now won’t even buy the same amount of land. They would rather give the lawyers and appraisers hundreds of thousands of dollars than us. I’m so sorry and hope your mom is ok.

  2. Pingback: Yes, in their backyard – but on their own terms | Environment Probe

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