Expropriating for Economic Development: A Carte Blanche for Municipal Mismanagement

Research Paper, Municipal Government, Joseph Quesnel

Executive Summary

Canadians who live in provinces where expropriation is allowed for economic development face the danger of municipal abuse.

• One family, the Fouillards of Manitoba, serves as an example of a family that had
a portion of its property expropriated for a tourism venture.

• The Rural Municipality of Ellice and the Town of St-Lazare have not made their intentions clear to the Fouillards. They have also entered into discussions with third parties to develop the property.

• The problems started in 1997 when the Conservative government of Manitoba allowed expropriation for economic development purposes.

• Prominent organizations that represent the vast majority of rural landowners, such as the Keystone Agricultural Producers and the Manitoba Cattle Producers Association, are greatly concerned about the potential abuse of this kind of expropriation in all rural communities.

• Prominent U.S. justices have noticed the great potential for abuse with these expropriations, noting that they can be very arbitrary and susceptible to local politics.

• While some provinces have taken note of these abuses, several U.S. states have already enacted legislation protecting individual landowners from these kinds of expropriations. Canadian provinces are lagging behind.

• While the preference is to remove economic development as a legal ground, at the very minimum, clear procedural safeguards should be in place to protect property owners.

• There should be more independent oversight of the process, with the possibility of a third-party review panel.

• Provincial legislators should also draft a landowner’s bill of rights that can be used against governments. Consideration should also be given to the idea of requiring a good faith effort on the part of municipalities to seriously consider the independent inquiry report into the attempted expropriation.

• All provincial governments should include clauses in their municipal expropriation legislation that specify what may and may not be expropriated. This would limit the scope of the legislation.

• Instead of becoming directly involved in businesses, municipalities can better assist community economic development by focusing on broad-based tax relief for all businesses, and they should work with higher levels of government in improving the training and education of the local workforce.

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