Ontario Expropriation Law: What is the Expropriation “Scheme” and Why Does It Matter?

In Ontario expropriation law, the expropriation “scheme” is often a major point of contention because it can significantly impact both the compensation paid and the evidence presented by expert witnesses. 

Whether the expropriation scheme is considered or ignored when determining entitlements under the Expropriations Act depends on the type of compensation claimed, including for market value, injurious affection and disturbance damages.

The expropriation scheme must be excluded in determining the fair market value of expropriated lands. However, it must be considered when determining other types of compensation such as for injurious affection or disturbance damages. 

What Is the Expropriation Scheme? 

In simple terms, the expropriation scheme is the overall government project that causes the authority to acquire the lands being expropriated. Examples include construction of an LRT project, a road widening from 2 to 6 lanes, a municipal infrastructure project to install new storm water management facilities, building of a school, construction of affordable housing, a new bus terminal, and the like.  Sometimes the expropriation scheme has several components for projects that are interconnected but are completed in phases. For example, a municipality might expropriate land for a new transit depot a couple years after building a bus rapid transit project in which it expanded the roadway.  

It’s also possible that there might be two different expropriation projects occurring at the same time by different governmental agencies – for example, Metrolinx builds out a light rail transit project and the City of Toronto expropriates land for a childcare facility along that same LRT route. 

The Expropriations Act on the Scheme 

As a starting point, the Expropriations Act sets out important scheme-related directives in section 14(4)(b), which states:

• (4) In determining the market value of land, no account shall be taken of,
  • (a)  the special use to which the expropriating authority will put the land;
  • (b)  any increase or decrease in the value of the land resulting from the development or the imminence of the development in respect of which the expropriation is made or from any expropriation or imminent prospect of expropriation; or
  • (c)  any increase in the value of the land resulting from the land being put to a use that could be restrained by any court or is contrary to law or is detrimental to the health of the occupants of the land or to the public health. 

The Expropriations Act is directing in 14(4)(b) that the expropriation scheme and the government’s use of the expropriated lands shall be ignored or excluded when determining the market value of lands. 

For example, if the government expropriates land to build affordable housing, in appraising the market value of the expropriated lands the appraiser should not value the lands as affordable housing lands. Instead, the scheme should be ignored, the government’s ultimate end use of the lands should be ignored, and the lands should instead be valued on their highest and best use and this analysis must exclude the scheme.  

In this example, the highest and best use of the expropriated lands might be a mixed-use, high-density development resulting in a higher valuation of the lands compared to their use for affordable using. The property owner would be entitled to market value compensation based on the highest and best use (while disregarding the scheme, provided that the scheme does not impact the highest and best use). Valuing lands based on their highest and best use is an entirely different appraisal and land use planning concept which you can read more about here. The scheme is therefore irrelevant in determining the market value of expropriated lands. 

Screening out the Scheme that Leads to Higher Property Values 

The expropriation scheme must also be disregarded or excluded when the scheme causes an increase  in the value of expropriated lands. A simple example is  a light rail transit project  that may be utilized as a land use planning reason to support an intensification in-fill project and a zoning by-law amendment  permitting for the building of many more storeys for a mixed-use development. The idea here would be that a zoning by-law amendment for a higher and better use might be more supportable if the property is along a light rail transit route putting the lands into a major transit system area as a result. 

Any value increase in the lands or a more favourable / profitable higher and best use as a result of the scheme must be disregarded by the appraisers. 

Scheme Analysis – What to Consider 

Expropriated property owners and their appraisers will want to justify a higher market value on a highest and best use theory that they say disregards the scheme. The government responding to an expropriation claim  may argue that the scheme has impacted higher values based on comparable transactions in the marketplace. A scheme analysis involves very technical considerations based on potentially many different factors. 

Lawyers, appraisers and land use planners working as a team on an expropriation claim need to carefully analyze and determine (1) what the scheme is; (2) whether it has impacted sales or property values nearby and in the comparable marketplace sales; and (3) whether the highest and best use is influenced or impacted by the underlying government project. 

Factors to consider in a scheme analysis include:

• Who the expropriating authority is and what the project is (this is true in determining which scheme to evaluate where two different expropriating authorities might be undergoing works); 
• The timing of the announced expropriation scheme or project – for example project funding commitments and the extent of those funding commitments; 
• How the projects morph over time and any phases of works; 
• The location of the scheme and proximity of the lands expropriated to the scheme; 
• Any land use planning instruments that may be scheme-influenced – for example, Official Plan Amendments, Zoning By-Law Amendments, etc.; 
• Any Minister’s Zoning Orders (MZOs) issued that might be scheme-influenced;
• Whether comparable transactions utilized by appraisers are scheme-influenced;
• Whether any development applications nearby reference the scheme or project; 
• Whether the Ontario Land Tribunal placed weight on an expropriation scheme in determining whether a development application should be approved;
• Whether municipal staff or the planners acting for development applicants place weight on scheme-influenced projects in support or rejection of a development application; and  
• How the formal Expropriations Act notices refer to the expropriation scheme, works, project and purpose of acquisition.   

This analysis requires careful, in-depth research and analysis and cannot be overlooked by lawyers, appraisers and their land use planning consultants. 

Utilizing the Scheme for Disturbance Damages and Injurious Affection Claims 

We have established that the scheme must be disregarded when determining the market value of lands. However, the Expropriations Act provides for other types of compensation over and above the market value of the lands taken. 

The scheme can and must normally be taken into account in determining claims for disturbance damages and injurious affection damages. 

Pursuant to Section 18 of the Expropriations Act, disturbance damages are the reasonable costs that “are the natural and reasonable consequences of the expropriation.”  This means that damages that are the natural and reasonable consequences of the expropriation scheme are claimable. The scheme should therefore be considered. 

An example of a disturbance damage might be for business losses arising from an extended road widening project along a commercial corridor. The scheme here must be acknowledged and the claimant would have to prove that business losses were incurred as a result of the expropriation project or scheme. 

The scheme must also be  considered  when determining any claims for injurious affection. Injurious affection claims are inherently scheme-related because they seek to provide compensation for both short-term and long-term impacts on the value of lands, and any business losses, arising from a partial expropriation. 

Injurious Affection is defined in the Expropriations Act as follows:

“injurious affection” means,

• (a)  where a statutory authority acquires part of the land of an owner,
  • (i)  the reduction in market value thereby caused to the remaining land of the owner by the acquisition or by the construction of the works thereon or by the use of the works thereon or any combination of them, and
  • (ii)  such personal and business damages, resulting from the construction or use, or both, of the works as the statutory authority would be liable for if the construction or use were not under the authority of a statute

As such, injurious affection damages relate directly to the acquisition of lands and the resulting project. Therefore, the scheme can and must be taken into account in determining compensation for these damages. 

Recent Case Law 

In the 2025 case 1255870 Ontario Limited v. Metrolinx, the Ontario Land Tribunal presents an excellent overview and analysis in considering the impact of the Metrolinx Ontario Line on the underlying expropriation scheme.  It found, in part, that a Minister’s Zoning Order granted was clearly impacted by the expropriation scheme and therefore disregarded any impact of same on valuation and compensation. 

In the 2023 decision Nemeth v. Toronto, the Ontario Land Tribunal also provides an excellent analysis and overview of  the claimant’s and respondent’s arguments on various scheme-related issues. It considered the impact of the Eglington Light Rapid Transit Project on the compensation sought by the property owner but found that the government’s experts screened out the wrong scheme.  The Tribunal held that the Eglington LRT was not the scheme to be screened out; rather, the construction of a new childcare centre was the scheme to be screened out in determining market value. 

Reviewing these cases demonstrates the technical arguments and evidence that can and must be presented when considering the highest and best use arguments of the appraisers. 

Contact Us About Your Expropriation 

The expropriation scheme and related compensation issues involve highly technical areas of property law and a deep understanding of how the Expropriations Act operates, and how the case law from the Ontario Land Tribunal analyzes such issues. You need experienced expropriation lawyers to assist you. 

Unified LLP’s property & commerce department has significant experience handling high value expropriation claims involving technical arguments and evidence. 

Please contact Michael Paiva, leader of Unified LLP’s expropriation practice, directly at 416.800.1733 to discuss your expropriation entitlements.