Sarah Spitz
Rayman Harris LLP
Leah Cummings
Rayman Harris LLP
Overview
One year ago, the Supreme Court of Canada released its judgment in St. John’s (City) v Lynch, 2024 SCC 17 (“Lynch”), an appeal which centered on the question of how a court or tribunal should go about assessing market value of expropriated land where the value of the land increased or decreased as a result of the very project for which the expropriating authority acquired the land. The Supreme Court provided guidance on the so-called “Pointe Gourde” principle or “screening out the scheme” in its unanimous decision.
In April 2025, the Ontario Land Tribunal (“OLT”) had occasion to apply the Supreme Court’s guidance in Lynch in determining compensation owing in its reasons in 2090396 Ontario Limited v Regional Municipality of York, 2025 CanLII 34622 (ON LT) (“209 v York”). This was one of the first times since Lynch that the application of the “Pointe Gourde” principle has been a central issue in determining compensation in an OLT hearing.
This article will comment on how the OLT applied Lynch in 209 v York and the extent to which its analysis signals that Lynch is a departure from the way the “Pointe Gourde” principle had previously been applied. The OLT’s decision in 209 v York has been appealed to the Divisional Court and the outcome of this case may change depending on the reviewing court’s analysis. This article is written solely with the benefit of the OLT’s reasons.
Assessing the “Scheme” Post-Lynch
In its May 2024 decision, Lynch,[1] the Supreme Court of Canada revisited the long-standing “Pointe Gourde” principle. The purpose of the Pointe Gourde principle is to remove extrinsic influences associated with the taking at issue when determining market value of land.[2] This is known colloquially as “screening out the scheme”.
The “Pointe Gourde” principle was originally a principle of common law. However, it has now become part of provincial and federal expropriation legislation across Canada. Lynch dealt with the statutory provision in the Newfoundland and Labrador Expropriation Act, however, the Supreme Court of Canada looked to case law across Canada on how the principle must be interpreted.
In Ontario, this principle is codified by paragraph 14(4)(b) of the Expropriations Act, RSO 1990, c. E.26, which states that in determining market value, no account shall be taken of “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”.
In the Lynch appeal, the City of St. John’s took issue with the Newfoundland and Labrador Court of Appeal’s direction that the zoning of the Lynch Property under the 1994 Development Regulations could not be taken into account in assessing highest and best use of the Lynch Property since the 1994 Development Regulations were “causally connected” to the City’s constructive taking of the Lynch Property for the purpose of using it to preserve the watershed area. The Supreme Court granted the appeal, concluding that there was no basis to overturn the application judge’s conclusion that the watershed zoning was part of an independent zoning regulation and not part of the expropriation scheme.
In reaching this conclusion, the Supreme Court of Canada provided helpful guidance to parties on the determination of the scope of the “scheme” to be screened out. The key findings of the Court in Lynch are summarized below:
The key question is whether the enactment was made “with a view to the expropriation” or whether it was an independent enactment;[3]
Courts and Tribunals should look at the purpose of the enactment and its effects;[4]
Causation is not determinative of whether a regulation forms part of the scheme. The “but for” standard, should not be applied;[5]
Determining the “scheme” for which the expropriation took place recognizes that expropriation is a process, notwithstanding a fixed date of expropriation;[6] and
It is not necessary to find that the regulating authority acted in bad faith for that regulation to form part of the scheme.[7]
In assessing the “scheme”, a Court or Tribunal may look at whether the regulation at issue applies province-wide policy, or targets a specific property. If the restriction on the use of the property is part of a province-wide policy this is an indicator, though not conclusive proof, that the enactment is independent.[8] While different levels of government may work in concert to advance a project, where the regulation is enacted by a different public authority than the expropriating authority (for example a provincial policy statement restricting development of land but the land is expropriated by the City) this is an indicator, though not conclusive proof, that the enactment is independent.[9] However, if one level of government has knowledge of another level of government’s development plans and restricts land use on that basis, this is an indicator, though not conclusive proof, that the enactment formed part of the scheme. [10]
209 v York – Background and Positions
The Tribunal’s decision in 209 v York determined a claim for compensation under the Expropriations Act, RSO 1990 c. E-26 arising from the expropriation of 1500 Centre Street in Vaughan (the “Subject Property”) by the Region of York. The purpose of the expropriation was to accommodate road improvements that enabled the construction of a bus rapid transit (“BRT”) system involving dedicated bus lanes called the vivaNEXT rapidway.[11]
The key issue between the parties was the Highest and Best Use of the Subject Property. The Claimant sought compensation for market value at a rate of $182 per square foot on the basis that the highest and best use of the Subject Property, absent the expropriation, was a 12-storey mixed-use residential/commercial development consisting of 121 units, a density of 6.19 FSI, a gross floor area of 11,754 square metres, a gross buildable area on the ground floor of 1204 square metres, commercial space at grade, and a parallelogram built-form.[12] The Region argued that the market value rate was $80 per square foot based on the post-expropriation highest and best use of the Subject Property being the same as the pre-expropriation highest and best use, being a low-rise commercial development.
The Region argued that screening out the scheme required the Tribunal to “eliminate from consideration […] all land use planning and urban design policies, and the increased density or urban built form that they justify, that were ‘influenced by’ the imminent development of the BRT”.[13] The Region’s position was that the Claimant’s position on highest and best use was inflated because it failed to screen out policies in the Regional Official Plan (“ROP”) 2010 and the following other policy instruments, which it said had been influenced by the Region’s BRT project:
The Region’s 2006 Transit-Oriented Development Guidelines;
The designation of Centre Street as a Primary Intensification Corridor, a Regional Transportation Corridor (Schedule 1) and a Regional Rapid Transit Corridor (Schedule 10) in the Vaughan Official Plan (VOP) 2010;
The designation of Centre Street as a Regional Intensification Corridor in the 2014 consolidation of the VOP 2010;
The Thornhill Plan;
The City’s 2013 Urban Design Guidelines (UDGs); and
The City’s Centre Street Streetscape Plan 2013.
The Claimant disagreed and identified the Region’s position as an overly broad reading of section 14(4)(b). The Claimant argued that the Region was applying a different test that was not consistent with Lynch: i.e., whether the relevant planning instruments were “influenced by” the scheme, not whether the particular policies were enacted with a view to the expropriation.[14]
The Tribunal’s Analysis
The Tribunal accepted the Claimant’s arguments with respect to the scope of the scheme and the test to be applied.
The Tribunal was not persuaded that the designations, policies and policy documents relied upon by the Claimant were made with a view to the expropriation. This was the case for four reasons:
ROP 2010 – The Tribunal noted that ROP 2010 does not expressly stipulate that Regional Corridors must have a BRT with dedicated lanes. Prior to the expropriation, there was already a BRT running on Centre Street which circulated in mixed traffic. The reference to rapid transit in the ROP 2010 referenced the conditions as they existed on the valuation date;
“Influenced by” vs “With a view to” – The Tribunal found that the Region’s reliance on arguments that policies were “influenced by” the scheme was not consistent with the test as set out in Lynch;
Scope of the Planning Documents: As in the Court of Appeal’s decision in Windsor (City) v. Paciorka Leasehold Limited[15] (“Paciorka”) and the Supreme Court of Canada’s decision in Lynch, the Tribunal found that the impugned policies and regulations were of a general scope and did not target specific properties or corridors. They were made with a view towards managing the overall growth of the Region and the City rather than for the purpose of the expropriation specifically. The Tribunal specifically referenced the comments of Martin, J., writing for the Court: “if a land use restriction is enacted as part of a city-wide or province-wide policy, or does not target specific properties, that may indicate that the restriction is an independent enactment”.[16]
Evidentiary Gaps: The Region’s planning witness testified that there may have been a connection between the Scheme and the designation of Centre Street as a Rapid Transit Corridor in the Region’s 2009 Transportation Master Plan. However, the Tribunal found that this was speculative and lacked evidence to create a “clear and genuine line of causation or connection, expressed unambiguously, in a policy document adopted by the Region or the City”.
The Tribunal therefore refused to screen out policies or documents that neither “contemplated nor required the taking” and agreed that there must be a “more direct relationship between the enactment and the subsequent expropriation”. Something more than mere “influence” is required.[17]
The Tribunal went a step further and noted that even if the ROP 2010 was enacted with a view to the expropriation, the Claimant would still be entitled to rely on other policies that supported higher order development at the site.[18] There was evidence that even without the ROP 2010, the Subject Property would have been identified, absent the scheme, as a Primary Intensification Corridor / Intensification Area that would have engaged policies respecting mid-rise development in the Vaughan Official Plan and the 2006 Growth Plan.[19]
Commentary on Tribunal’s Analysis
The Tribunal’s reasons in 209 v York raise two points for discussion:
Did the Supreme Court narrow what will be considered scheme-related enactments by identifying that the enactment must have been made “with a view to the expropriation”; and
To what extent does “screening out” a single regulation impact value.
What does “with a view to the expropriation” mean?
In 209 v York, the OLT put considerable focus on the Region’s choice of language. It rejected the idea that establishing that a regulation was “influenced by” the pending expropriation is sufficient to meet the “Pointe Gourde” principle. For the OLT, enacted “with a view to the expropriation” is something more than mere influence. Where the line exists between “influenced by” and “with a view to the expropriation” is still unclear. While the Supreme Court was clear that regulations of general application may form part of the “scheme”, tribunals and courts appear to be reticent to find that these types of regulations form part of the “scheme”. Decisions like the Ontario Municipal Board’s (“OMB” as it was then known) decision in Gadzala v. Toronto (City),[20] may still present a circumstance in which designations under an official plan or similar regulation may be screened out as being enacted “with a view to the expropriation”.
In Gadzala the OMB found that the scheme commenced approximately 30 years prior to the expropriation with the announcement and implementation of a 1967 Waterfront Plan, which indicated a clear intention of the authority to initiate a significant scheme that included the specific works at issue and explicitly contemplated the taking of private property for those works.[21] The board therefore disregarded the designations of the expropriated lands for low intensity open space use in the relevant official plans, despite the authority’s arguments that the designation was a community-wide planning exercise and not implemented with a view to the scheme or the expropriation. In its decision upholding this portion of the Board’s ruling on appeal, the Divisional Court noted the highly specific nature of the scheme and found no error in the Board’s analysis.[22]
Does screening out the scheme matter?
With regards to the second takeaway from the OLT’s decision in 209 v York, the OLT identified that even if they had screened out the influence of the ROP 2010, the other planning instruments applicable would still have supported the Claimant’s position on highest and best use. This finding mirrors the results in the Paciorka case in which the Ontario Court of Appeal upheld that the Provincial Policy Statement (“PPS”) did not constitute part of the “scheme” and should not be screened out. The Ontario Court of Appeal’s rationale appears consistent with the Supreme Court’s guidance in Lynch as the court noted that the PPS was passed “independently of, and without any connection to, the specific development for which the land was expropriated”.[23] However, when the Paciorka matter went back before the Tribunal and the courts for a second time, the Tribunal found that the PPS would not have been a complete impediment to development of the properties.[24] The result was that there was a very small difference between the compensation awarded to the claimants at first instance (when screening out the PPS) and on the re-hearing (when the PPS was not screened out).[25]
It may be that 209 v York and Paciorka are the exceptions, not the rule. In Lynch, the City’s appraiser – who had screened out the influence of the 1994 Development Regulations – opined that the value of the Lynch property was $105,000, whereas the Lynches’ appraiser – who had not screened out the influence of the 1994 Development Regulations – opined that the value of the Lynch property was $875,000.[26] This is a considerable difference in opinion of value, though the Newfoundland and Labrador Board of Commissioners of Public Utilities has yet to release a decision determining value.
Conclusions
Comparing the outcomes in 209 v York, Paciorka and Gadzala, and considering the Court’s guidance in Lynch, the lesson remains that the scheme is a fact-specific analysis. An official plan designation may be part of the scheme in one case but not in another, depending on the specificity of the planning instrument and whether the expropriation of the property is explicitly contemplated in that document.
Regardless of the outcome, the principle underlying section 14(4)(b) and the Lynch decision underscores the theme of all jurisprudence in expropriation law. To take all or part of a person’s property constitutes a severe loss and a very significant interference with a citizen’s private property rights. The purpose of expropriation legislation is to adequately compensate those whose lands are taken to serve the public interest.[27] The principles in Lynch are those of fairness, and the interpretation of those principles as codified in statute can be and should be consistent with the purpose and intent of the Expropriations Act.[28]
*The authors are grateful to Conner Harris for his comments and feedback on this post.
[2]St. John’s (City) v Lynch, 2024 SCC 17 at para 37 [“Lynch”]
[5]Lynch at paras 52-53.
[6]Lynch at para 40 citing Toronto Area Transit Operating Authority v. Dell Holdings Ltd., [1997] 1 SCR 32, 1997 CanLII 400 (SCC) at para 37 [“Dell Holdings”].
[7]Lynch at para 56, citing Kramer v. Wascana Centre Authority, 1967 CanLII 115 (SCC) [“Kramer”], [1967] SCR 237 and Re Gibson and City of Toronto (1913), 1913 CanLII 531 (ON CA), 11 DLR 529.
[8]Lynch at para 55, citing Kramer at p. 239; Atlantic Shopping Centres Ltd. v. St. John’s (City) (1985), 1985 CanLII 1876 (NL CA), 56 Nfld. & P.E.I.R. 44 at para 20; Windsor (City) v. Paciorka Leaseholds Ltd., 2012 ONCA 431 at para 27, 111 O.R. (3d) 431 [“Paciorka”].
[9]Lynch at para 55, citing Paciorka at paras 16 and 26.
[10]Lynch at para 55, citing Kramer at p. 329.
[15] 2012 ONCA 431.
[20]Gadzala v Toronto (City) (2004), 84 L.C.R. 176, 2004 CarswellOnt 6718 (O.M.B.) [“Gadzala”].
[21]Gadzala at para 25.
[22]Toronto and Region Conservation Authority v Gadzala, 2006 CanLII 12974 at paras 76-85 (ON SCDC)
[23]Paciorka at para 27.
[24]The Corporation of the City of Windsor v. Paciorka Leasehold Limited, [2021] O.J. No. 1694, 2021 ONSC 2189 at paras 66-78, 89 [“Paciorka 2021”]
[25]Paciorka 2021at para 60.
[26]Board of Commissioners of Public Utilities – Re: Expropriation Act, [2020] N.J. No. 128, 2020 NLSC 92 at paras 4 and 7.
[27]Dell Holdingsat paras 18-20, citing Diggon‑Hibben Ltd. v The King, 1949 CanLII 50 (SCC), [1949] SCR 712 at p. 715.
[28]Lynch at para 30.