Screening Out the Scheme in Urban Transit Expropriations

Introduction

The entitlement to compensation for the expropriation of property is rooted in the principle of economic reinstatement: displaced owners should be restored to the same financial position they occupied before the taking, no better and no worse.[1] Market value provides the baseline, but it must be assessed without regard to distortions caused by the expropriation project itself. This is the essence of the “screening out the scheme” principle, codified in clause 14(4)(b) of Ontario’s Expropriations Act.[2]

In plain terms, screening out the scheme means that the Ontario Land Tribunal (the “Tribunal”), when determining market value, will disregard any increase or decrease attributable to the “scheme”[3] underlying the expropriation. At common law, this is a principle known as the “Pointe Gourde rule.”[4] Its purpose is to ensure fairness by excluding both windfalls and losses that flow from the expropriation scheme itself. The Supreme Court of Canada recently issued guidance on the application of the principle in St. John’s City v. Lynch, 2024 SCC 17, underscoring that the key inquiry is whether enactments or policies are made “with a view to the expropriation.”[5]

Recent Tribunal decisions illustrate the challenges of applying this principle in complex urban transit contexts, where overlapping planning frameworks and long-term infrastructure visions blur the line between independent policy and scheme-related enactments. This article reviews three such decisions and the guidance they provide for applying clause 14(4)(b) of the Expropriations Act.

Case 1:               2090396 Ontario Limited v. Regional Municipality of York[6]

In 209 York, the Tribunal addressed whether planning policies promoting intensification in transit-supported areas should be screened out when valuing land expropriated for a bus rapid transit (BRT) system. The Regional Municipality of York (“York”) expropriated property along Centre Street in Vaughan to facilitate the vivaNEXT rapidway, involving dedicated bus lanes. 

The claimant argued that the site's highest and best use (HBU) was high-density mixed-use development, supported by pre-existing policies favoring urbanization in transit corridors. York contended that all policies "influenced by" the imminent BRT should be disregarded, effectively reducing the site's value by eliminating density bonuses tied to transit.

The Tribunal rejected York's broad interpretation, holding that the test under clause 14(4)(b) is not whether a policy is merely "influenced by" the scheme but whether it was enacted "with a view to the expropriation" or as an "independent enactment." Drawing on Lynch and the Ontario Court of Appeal's decision in Paciorka, the Tribunal emphasized that York's position represented a "substantial overreach."[7] It found no "clearly established connection or direct relationship" between the BRT scheme and the policies in question, such as the designation of Centre Street as a Regional Corridor under the 2010 Regional Official Plan (ROP).[8]

Key evidence included testimony from the claimant's experts that the site already benefited from frequent transit service via York Region Transit routes and the Viva Purple BRT, rendering the dedicated lanes immaterial to market value. Buyers, they argued, would not pay a premium for the scheme-specific improvements, as the practical transit benefits were pre-existing. The Tribunal agreed, noting that policies like those in the ROP 2010 predated or were independent of the vivaNEXT project and aligned with broader provincial goals for transit-oriented development.

209 York illustrates that in transit-rich urban areas, new infrastructure may add little to no additional value where similar benefits already exist. Planning policies that support intensification in such areas cannot be screened out simply because they were “influenced by” the imminence of a new project; without clear evidence that they were enacted with a view to the expropriation, their effects on land value must be taken into account.

Case 2:                1255870 Ontario Limited v. Metrolinx[9]

125 Metrolinx involved the expropriation of downtown Toronto property for the Ontario Line subway, with the Tribunal tasked to determine if earlier transit planning, including the Downtown Relief Line (DRL), formed part of the scheme to be screened out. Metrolinx argued for an expansive scheme dating back over 20 years, claiming that the claimant’s valuation improperly relied on scheme-inflated development potential. The claimant countered that the Ontario Line was a distinct 2019 project, and its proposed HBU—a high-density mixed-use tower—was grounded in independent planning context.

The Tribunal sided with the claimant, defining the scheme narrowly as commencing with the April 10, 2019, provincial announcement of the Ontario Line. It rejected Metrolinx's correlation-based evidence, such as charts showing height increases in post-2019 approvals, as insufficient to prove causation. The Tribunal reasoned as follows:

[…] [T]he Claimant says there is no evidence that it is aware of that shows that the development underlying the Expropriation contributed to the value it has asserted. On the other hand, Metrolinx through cross-examination and in final argument maintains that the Claimant's experts […] ought not to be believed in this regard. However, Metrolinx has not assisted this Tribunal by bringing forward specific evidence to show exactly how the Claimant's case relies on an increase in value resulting from the development relating to the Expropriation. Perhaps, this is simply because no such specific evidence exists.[10]

With all due respect to Metrolinx's counsel—who are very skilled, thorough and eloquent litigators—the submissions set out in paragraph [60] seem overstated. In the Tribunal's view, what is depicted on the Clewes Chart shows, at best, a chronological correlation between one alleged date of the Scheme's commencement and certain approvals granted on development projects. In the Tribunal's opinion, more than this would be required to show positive causation of an "increase in the value of" the Property "resulting from" the development underlying the Expropriation—the Scheme.[11]

The Tribunal criticized Metrolinx for pointing to a general correlation between the announcement of the Ontario Line and increased development approvals, without offering specific evidence of causation—that is, without showing that the scheme as defined (e.g., a station, etc.) led to an increase in the subject property's value.

The Tribunal clarified that while there is no rigid rule assigning the burden of proof entirely to one party, both parties share a duty to assist the Tribunal in determining whether and how the scheme affected market value. While claimants must show their HBU does not rely on scheme-related elements, expropriating authorities also bear a "positive obligation" to produce specific evidence of value impacts (if any exists), on what specific increase or decrease in value resulted from the expropriation that the Tribunal should ignore.[12] 

Metrolinx's failure to do so led the Tribunal to accept the claimant's position that the site's density was achievable absent the Ontario Line, aligned with prevailing approvals in the area.

Case 3:                1289777 Ontario Limited v Metrolinx[13]

In 128 Metrolinx, the Tribunal considered the expropriation of two adjacent properties in Toronto's Liberty Village area. The properties were taken to facilitate the construction and operation of the Ontario Line subway project, including the Exhibition Ontario Line Station (the western terminus, integrating with the existing Exhibition GO Station), and ancillary works.

The key issue was whether the proposed Liberty New Street, a planned public road alignment across the southern portions of the properties, formed part of the expropriation scheme. The claimant contended that Liberty New Street was integral to the scheme, necessitating that any related value impacts be screened out under clause 14(4)(b) of the Expropriations Act. Metrolinx argued that the scheme was limited to the Ontario Line and its direct ancillary works, treating Liberty New Street as a separate City of Toronto initiative.

Testimony from Metrolinx's project manager and engineer indicated that while the takings were primarily for the Ontario Line and Exhibition Station, substantial portions of the land would become surplus after construction, with ongoing discussions between Metrolinx and the City for its potential use in realizing Liberty New Street.[14] Supporting evidence included planning documents such as the Planning and Urban Design Rationale and Transportation Impact Assessment for the Exhibition Transit-Oriented Community (TOC), a mixed-use development area, which highlighted Liberty New Street's critical role in enabling multi-modal access to the station, vehicular circulation, and overall integration with the TOC.[15]

Adopting a purposive approach, the Tribunal examined the factual context, including post-expropriation details, to determine the scheme's scope. It found Liberty New Street to be inextricably linked to the Ontario Line, Exhibition Station, and TOC and thus part of a broader scheme encompassing transit infrastructure and associated urban development. Accordingly, under clause 14(4)(b), any increase or decrease in the properties' value attributable to Liberty New Street, the Exhibition Station, or the TOC were to be disregarded in assessing market value.[16]

Conclusion

Taken together, the decisions reviewed above affirm that “screening out the scheme” is a fact-driven exercise. In the context of large urban transit projects, the Tribunal has resisted expansive or speculative interpretations, insisting on clear evidence that planning policies or development permissions were enacted with a view to expropriation. This narrowing approach places a heavy evidentiary burden on expropriating authorities, making scheme-related arguments difficult to sustain except in the clearest cases where a defined scheme can be shown to have had a measurable impact on market value.

[1]St. John’s City v. Lynch, 2024 SCC 17 at para. 28 [“Lynch”].

[2]Expropriations Act, R.S.O. 1990, c. E.26.

[3] The word “development” as it is now appears in clause 14(4)(b) is synonymous with the jurisprudential term “scheme”, which refers to the broader project or initiative, such as a transit line, highway, or public works, that necessitates the expropriation. It encompasses the full set of government actions, plans, and policies leading to the taking, not just the expropriation itself: Windsor (City) v. Paciorka Leaseholds Limited, 2012 ONCA 431 at para. 1 [Paciorka]. Note that this decision has been appealed to the Divisional Court.

[4] Originating in Pointe Gourde Quarrying & Tpt. Co. v. Sub-Intendant of Crown Lands, [1947] AC 565 (PC).

[5]Lynch, at para. 46.

[6] 2090396 Ontario Limited v. Regional Municipality of York, 2025 CanLII 34622 (ON LT) [209 York].

[7]209 York, at para. 36.

[8]Ibid., at para. 38.

[9]1255870 Ontario Limited v Metrolinx, 2025 CanLII 50810 (ON LT) [125 Metrolinx].

[10]125 Metrolinx, at para. 52.

[11]Ibid., at para. 61.

[12]Ibid., at para. 51.

[13]1289777 Ontario Limited v. Metrolinx, 2025 CanLII 19723 (ON LT) [128 Metrolinx].

[14]Ibid., at paras. 60-61.

[15]Ibid., at paras. 81-89.

[16]Ibid., at para. 90.