Executive Summary: Key Legal and Evidentiary Issues

• The dispute concerns whether the City of Edmonton must acquire land designated for public use under s 644 of the Municipal Government Act (MGA) and the method for determining its value.

• The parties disagree on whether the Future MR Lot should be valued as serviced or unserviced land, which directly affects compensation.

• The interpretation of “commence proceedings” under s 644 of the MGA is central, specifically whether this requires expropriation proceedings.

• The Court determined that the City is required to initiate expropriation proceedings to resolve the valuation issue.

• The Land and Property Rights Tribunal (LPRT) was identified as the appropriate authority to determine compensation, utilizing a modified expropriation process.

• The City was ordered to commence expropriation proceedings within 90 days, with the LPRT to determine the compensation for the Future MR Lot.

Facts of the case

Qualico Developments West Inc. (“Qualico”) owns land in Edmonton described as Lot 1 Block A Plan 232 0512 (the “Lands”), subject to the Meadows Area Structure Plan Bylaw 13531 and the Aster Neighbourhood Structure Plan Bylaw 17366. On April 20, 2023, the City of Edmonton Subdivision Authority issued Subdivision Approval LDA23-0023, through which the City acquired 10.478 hectares of the Lands as Municipal Reserve and designated a 1.932-hectare lot as “future municipal reserve” (the “Future MR Lot”). The Subdivision Authority later advised that the size of the Future MR Lot would increase to 2.238 hectares.

Qualico obtained a subsequent Subdivision Approval for Stage 12 of the Aster NSP and appealed three conditions to the Land and Property Rights Tribunal (LPRT), including the requirement to service the Future MR Lot. On August 12, 2024, the LPRT upheld all three conditions, stating that the serviced condition of the Future MR Lot would be considered in determining its value at the appropriate time. This decision was not appealed.

The Future MR Lot was zoned as Urban Services (US) Zone on July 10, 2023, and is now zoned as Parks and Services (PS) Zone under the current Edmonton Zoning Bylaw No. 20001. Both zones permit uses such as schools, parks, and recreation facilities. Section 644 of the MGA requires that, if land is designated for such uses and the municipality does not own it, the municipality must acquire the land, commence proceedings to acquire it, or amend the land use bylaw within six months. The Future MR Lot has been zoned for more than six months, and the City has not acquired it or commenced proceedings to acquire it.

The City concedes that s 644 applies and that it is required to acquire or commence proceedings to acquire the Future MR Lot or rezone it. However, the City and Qualico have been unable to agree on a purchase price. The City has not taken steps to rezone the Future MR Lot, as this would result in non-compliance with the Meadows ASP and the Aster NSP, and residents have relied on the Future MR Lot being developed as a school park.

Policy terms and statutory provisions at issue

Section 644 of the MGA is at the center of the dispute. It provides that if land is designated under a land use bylaw for use as a municipal public building, school facility, park, or recreation facility, and the municipality does not own the land, the municipality must, within six months, either acquire the land, commence proceedings to acquire it, or amend the bylaw to designate the land for another use.

Arguments of the parties

Qualico argued that expropriation is the only available mechanism when the parties cannot agree on price, emphasizing that there was never an agreement on price or valuation method. Qualico contended that the City was attempting to obtain fully serviced land at unserviced prices, shifting servicing costs to Qualico without proper compensation. Qualico requested a process to determine whether the land should be valued as serviced or unserviced, with the LPRT to decide the ultimate valuation if necessary.

The City argued that collecting cash in lieu of MR at unserviced rates aligns with its standard practice and that expropriation is not a suitable remedy because Qualico is not an unwilling vendor. The City suggested that both expropriation and rezoning are available remedies under s 644 and that the Judicature Act could permit a modified expropriation process. The City also expressed concern that the LPRT might focus too narrowly on market value rather than broader notions of fairness and statutory context.

Court’s analysis and reasoning

The Court applied the modern principle of statutory interpretation, considering the words of the legislation in context and in light of the object and scheme of the Act. The Court noted that the meaning of "commence proceedings" under s 644 of the MGA had not been previously considered. The Court reviewed relevant case law, including Hartel Holdings Co Ltd v City of Calgary and Three Sisters Mountain Village Properties Ltd v Canmore (Town), but found limited guidance on the specific issue.

The Court concluded that, aside from land dedication authorized by the MGA, expropriation under the Expropriation Act is the only method by which a municipality can unilaterally acquire land for municipal purposes when there is no agreement on price. The Court found that the LPRT, established by the Land and Property Rights Tribunal Act, is the appropriate entity to determine compensation, given its expertise and statutory mandate. The Court determined that the City must commence expropriation proceedings, with certain procedural modifications due to the context of subdivision approval. Specifically, the Court dispensed with the requirement to file a notice of intention to expropriate, an inquiry, and certain other formalities, as the subdivision approval and appeal process had already addressed these issues.

Ruling and outcome

The Court declared that the Future MR Lot has been designated for use or intended use as a school facility, park, or recreation facility within the meaning of s 644 of the MGA. Because more than six months had passed without acquisition or rezoning, the City is obliged to acquire or commence proceedings to acquire the Future MR Lot. The Court granted an order in the nature of mandamus directing the City to commence expropriation proceedings to acquire the Future MR Lot within 90 days by applying to the LPRT to determine the compensation payable. The LPRT will determine the compensation as if the land were expropriated, with the provisions of the Expropriation Act and its regulations applying, subject to the modifications outlined by the Court. No exact amount was determined by the Court; the compensation will be determined by the LPRT in subsequent proceedings.