How much should municipalities have to pay to preserve sensitive areas? Windsor paid so dearly in Windsor (City) v. Paciorka, 2011 ONSC 2876, that other municipalities may be loath to try.
The City expropriated 267 lots to preserve an environmentally sensitive area. The developer refused the City’s offer of compensation, and appealed to the Ontario Municipal Board (OMB), which often rules against environmental causes.The OMB ordered the City to pay the developer a surprising $3 M for the market value of the lands expropriated and $767,000 for injurious affection (plus interest). It ruled that the natural features on the land did not make it unsuitable for residential development until the city took steps to protect it. In addition, it ruled that development and servicing of the remaining lands would be more costly, because of the obligation to work around the protected area.
On appeal, the Divisional Court upheld the OMB decision. In other words, the public importance of the sensitive area had absolutely no influence on the price the municipality had to pay.