ALSA, Property Rights, and Compensation

ALSA, Property Rights, and Compensation

Like most planning legislation, ALSA conflicted with the expectations of some landowners and other interest holders, and was not well received by everyone in the province. ALSA extends the government’s power to limit development of private land in the public interest through the creation of binding regional plans. ALSA also affirms Cabinet’s existing powers to cancel or override any rights granted pursuant to any other legislation to exploit subsurface minerals or other Crown resources. The Act refers to these rights as “statutory consents”. Cabinet is authorized to use its overriding power where the continued exercise of rights under statutory consents would frustrate proper planning or the protection of the province’s ecosystems. These are powerful measures, but consistent with the Canadian legal tradition and the history of property rights in Alberta.

ALSA addresses the question of compensation payable to owners affected by the legislation (or by the plans or regulations What are “Statutory Consents”? A statutory consent generally refers to any government grant of the right to use or exploit resources owned by the Crown. The term covers a large variety of government dispositions, including coal leases, licences to use and divert water, timber quotas and other dispositions under the Forests Act, grazing leases and oil and gas leases. The Alberta Land Stewardship Act provides in section 1 a legal definition that explains what counts as a “statutory consent” for the purposes of the Act. A Guide to Property Rights in Alberta 24 under the legislation) expressly, but the specific provisions require some clarification. Section 19 of the original Act limited compensation to those owners entitled to compensation under another statute and to those owners whose land is the subject of a conservation directive. Although the wording appeared to limit the right to compensation, the measures authorized by ALSA would almost certainly not qualify as compensable takings under Canadian law. In fact, section 19 provided express compensation for owners affected by conservation directives, thus creating a right which does not exist under common law.

Nonetheless, in 2011, several amendments were made to ALSA, partly in order to address public concern over property rights. Section 1 of the Act now states that “the Government must respect the property and other rights of individuals and must not infringe on those rights except with due process of law and to the extent necessary for the overall greater public interest”. Section 19 has been restated affirmatively, now recognizing “a right to compensation by reason of this Act, a regulation under this Act, a regional plan or anything done under a regional plan”. The compensation rights recognized by the original version of the legislation were maintained (that is, under the express provisions of ALSA dealing with conservation directives and as provided under another enactment), and section 19.1 was added. Section 19.1 is written to confer a right of compensation on anyone suffering “a compensable taking” as a direct result of a regional plan. The effect of this section is not entirely clear.

The critical question is what counts as a compensable taking? ALSA defines it as “the diminution or abrogation of a property right, title or interest giving rise to compensation in law or equity”. The main difficulties with this definition, other than that it is circular, are that the traditional view in Canada is that there is no compensation in law or equity (all compensation claims originate in statute), and further, that unless the government acquires an interest in the land while denying the owner all reasonable private uses, there is no “taking” at all. In sum, it is likely that the legal and practical effect of sections 19 and 19.1 is only to create a right of compensation for owners whose lands are sterilized by a conservation directive. Otherwise, those sections neither expand nor restrict the right to compensation.

The 2011 amendments also create new procedural protections for holders of all statutory consents. Section 11 now states that if a regional plan affects, amends or rescinds a statutory consent, the Minister must give the consent holder reasonable notice of any proposed compensation. Any compensation will be determined under the terms of the legislation under which the statutory consent was granted: for example, the Mines and Minerals Act, the Forests Act, the Public Lands Act or the Water Act. These and similar Acts deal with compensation for cancellation in a variety of ways. Some, such as the Mineral Rights Compensation Regulation, allow compensation on the basis of expenditures wasted by the developer as a result of the cancellation. Others allow compensation at the discretion of the relevant Minister, and still others provide no compensation at all. As a result, there is no general rule that there will be compensation for the cancellation of a statutory consent and the position of the holder of such a consent depends on the wording of the relevant Act.

Another feature of the 2011 amendments to ALSA is section 15.1, which allows an affected title holder to apply to the Minister to vary any restriction, limitation or requirement under a regional plan. The Minister may grant a variance if it is consistent with the purposes of ALSA, unlikely to diminish the spirit and intent of the regional plan, and if refusing to do so would cause unreasonable harm to the affected title holder that was not outweighed by a public benefit. While providing some recourse to an affected title holder, this section leaves the decision of whether to grant a variance entirely in the discretion of the Minister.

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