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Cohen Highley LLP

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Proposed Species at Risk Act vague on compensation
December 4, 2001

Bill C-5, the proposed Species at Risk Act, is currently under detailed consideration in Ottawa. The bill is now receiving clause by clause debate from the Standing Committee on Environment and Sustainable Development.

The bill, known as SARA within government circles, aims to protect wildlife at risk from becoming extinct or lost from the wild. SARA will cover all wildlife species listed as being at risk nationally and their critical habitats. The federal government has established a website at www.speciesatrisk.gc.ca to provide public information on this matter.

While the environmental objectives appear laudable, SARA will achieve some of those objectives by restricting land use. This has the potential to significantly affect private land and market values.

The bill was first considered prior to the federal election in 2000. That bill died on the order paper in Parliament when the election was called. In the spring of 2000 when the original bill was introduced, a report on the compensation issues arising from the proposed legislation was commissioned by the government. This report, prepared by Peter H. Pearse, was released in the fall of 2000. A copy of Dr. Pearse's paper is available from the government website. The present Bill was introduced for first reading on February 2, 2001.

Bill C-5 contains only one section dealing with compensation. Section 64 provides that "the Minister may, in accordance with the regulations, provide compensation to any person for losses suffered as a result of any extraordinary impact of the application of" several provisions of the Act giving the Minister power to make orders preventing destruction of habitat.

In his paper on compensation, Pearse stated that the Act would not require powers of expropriation. However, he anticipated that some of the powers that could be exercised by the Minister would amount to a regulatory taking for which compensation should be available. He believed that this would be a welcome although unusual feature for the legislation. Section 64 of the present Bill is clearly intended to provide the compensation feature he comments upon.

Regular visitors to The Expropriation Law Centre will have noticed that an article titled "Regulatory Takings in Canada" is available from this website. The article makes clear that a compensation provision is not unique in Canadian legislation.

Unfortunately, s.64 provides no comfort to land owners. This section does not give a landowner any rights whatsoever as the decision to pay compensation is entirely discretionary. The power to make regulations prescribing procedures to be followed and methods by which compensation will be determined is meaningless so long as the Minister retains the discretion whether or not to pay.

A further problem is that the Minister's discretion depends upon a determination that the land owner has suffered an "extraordinary impact". The Act does not state what the difference might be between an extraordinary impact and a merely ordinary impact. Neither does it state who would determine whether such an impact had occurred.

We also note that leaving compensation features out of the bill and relying upon regulations to establish a compensation scheme is like asking a fox to guard the chickens. Regulations would be established by the same government department that is responsible for paying the compensation awards. We assume that any such regulations will ensure that little or no compensation is ever paid. If a compensation scheme is to have any value it must be expressly set out in the legislation.

It appears to The Expropriation Law Center that the compensation provision of this proposed Act is mere window dressing.

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