Supreme Court Of Canada Clarifies Test For Constructive Taking Of Land By Government

In its recent decision in Annapolis Group Inc. v. Halifax Regional Municipality, 2022 SCC 36 (Annapolis), the Supreme Court of Canada (SCC) clarified the test for constructive taking of private property, or de facto expropriation. The SCC has arguably expanded the circumstances in which municipalities and other governments can be liable to compensate landowners for eliminating the owners' ability to make profitable use of their land.

In a 2006 decision, Canadian Pacific Railway Co. v. Vancouver (City) (CPR), the SCC had explained the constituent elements of constructive taking were: (1) an acquisition of a beneficial interest in the property or flowing from it, and (2) removal of all reasonable uses of the property. Some lower courts had interpreted the "beneficial interest" element as meaning that the state acquired an actual proprietary interest.