There is no right to absolute ownership of real property. Governments and government agencies retain the right under law to take land or a portion of land for works that are in the public interest; for example, construction of a hydroelectric dam, laying a major highway, building a bridge, or widening an existing highway, or laying an electrical transmission line.
In Canada and several other countries, the power of a government department or agency to take privately owned property for the construction of works in the public interest, such as the construction of a hydroelectric dam, is called “expropriation.” In Alberta, the standard of review is set out in the Expropriation Act, which requires the expropriating public authority, be it a provincial department, agency, or a municipal government, to demonstrate that the expropriation action was “fair, sound and reasonably necessary.” The Expropriation Act sets out what constitutes an “approving authority” regarding an expropriation action:
· The Minister (government department) responsible for administering the relevant legislation,
· A municipal county council in the case of a municipal action, and
· In some cases, the Tribunal itself.
However, a far more common acquisitive action the public authorities engage in involves taking portions of privately owned land by virtue of Right-of-Entry Orders (ROE). These acquisitions of portions of land typically arise in the widening of existing roads or highways, laying pipelines, or building power transmission lines. The governing legislation in these instances is the Surface Rights Act. In accordance with the Surface Rights Act, a landowner who loses a portion of land to a seizure duly authorized by law is entitled to compensation from the public purse for the market value of that portion of the land. Furthermore, a landowner may also be entitled to compensation for the decline in value of the remainder of the land if the landowner can establish a claim for “injurious affection.”
A decision in late February of 2022 from the Alberta Court of Queen’s Bench (Red Deer district) provides a good discussion of the law surrounding injurious affection. Sabo v AltaLink, 2022 ABQB 156 (CanLII), <https://canlii.ca/t/jmkn3 saw several rural landowners in central Alberta pitted against AltaLink Management. At issue was whether the landowners had a right to compensation for the decrease in value of their lands because of high voltage power transmission lines and towers running adjacent to their property lines.
Over the course of 2016-17, AltaLink had installed two new transmission lines and towers in two central Alberta locations: one in the Cooking Lake area southeast of Edmonton, the other near Innisfail south of Red Deer. Before proceeding with the projects, the company had obtained the necessary licenses and permits from the Province, then sought consent from adjacent landowners to take small portions of their lands along the transmission lines to facilitate the projects. When the owners refused, AltaLink applied to the Surface Rights Board (SRB)[i] for a ROE to obtain the use of rights-of-way 10 metres wide along the perimetres of the property owners’ lands. In accordance with section 23 of the Surface Rights Act, the SRB the issued an order to compensate the landowners for the market value of the property they lost, which ranged from about 1/3 of an acre to two acres. The landowners did not appeal this. However, they did appeal the refusal to award compensation for injurious affection for the decline in land values resulting from the presence of high voltage transmission lines on the rights-of-way adjacent to their lands.
The SRB had refused to order compensation for injurious affection because their understanding of section 23 of the Surface Rights Act was that it prevented them from doing so. In their understanding, unless infrastructure (the transmission lines and towers in this case) was actually on the lands subject to the ROE orders, there could be no injurious affection. However, the appellant landowners argued that the SRB had erred in its interpretation, and that compensation could be awarded for injurious affection for the decline in land value.
A plain reading of only section 23 would not have been particularly helpful, since the section simply said that upon a ROE order being made, the SRB would conduct a hearing to determine the amount of compensation to be paid and who would receive it. However, another section of the legislation provided some guidance. Section 24 laid out several factors the SRB could consider in determining a compensation award, including the “adverse effect” on the actual land transferred to the operator and any incidental effects arising from the operation, i.e., the resulting nuisance, inconvenience, and noise. The landowners and AltaLink agreed with what adverse effect meant, viewing it as synonymous with injurious affection. However, they disagreed with whether compensation could be awarded for injurious affection when the infrastructure was not on the lands obtained through ROE orders.
As part of his analysis of the issue, the Honourable Mr. Justice John Henderson considered the context and purpose of the Surface Rights Act. First of all, in the installation and operation of public works like power transmission lines, it is a given that some private landowners will suffer a loss. The applicable legislation provides an orderly way for a public undertaking to acquire the lands it requires while compensating the landowners for their consequent losses. Furthermore, the legislation provides a process whereby fair compensation is paid to landowners who have had a portion of their lands acquired by a provincial department or agency in fulfillment of a public good. Within the legislative context, the SRB has a broad discretion to award compensation for injurious affection stemming from the nuisance, inconvenience, and noise emanating from the operation of public infrastructure even if such infrastructure was not actually on the subject lands.
In conclusion, the court ruled that the transmission lines and towers which AltaLink had built abutting the subject lands did constitute a nuisance and consequently had a negative impact on the land values of the subject properties. Consequently, the court found that the Surface Rights Board had erred when it decided that it lacked authority to award compensation for injurious affection in a case where the source of the nuisance was on property outside the subject lands.
[i] As of June 2, 2021, the Alberta Land Compensation Board (ABLCB), Alberta Municipal Government Board (ABMGB), Alberta Surface Rights Board (ABSRB) and the Alberta New Home Buyer Protection Board (ABNHBPB) were merged into a new single tribunal called the Alberta Land and Property Rights Tribunal (ABLPRT).