Can KW businesses get compensation for losses from LRT construction?

Cherolyn Knapp spoke to CTV Kitchener and Abigail Bimman for their 3-part series, “Up to Speed“.  Cherolyn explained that when a municipality or other level of government undertakes a public works project that causes business losses, businesses can seek compensation for Injurious Affection.  The remedy arises under Ontario’s Expropriations Act  (even when no land was expropriated).

Claims can be brought by commercial landlords or business owners and must be started within 12 months after they become aware of actual losses. It is not permitted to sue in Court. A claim is commenced by serving notice on the Municipality and filing it with the Ontario Municipal Board.   The business claiming compensation has to prove:

  •  the loss resulted from an act of an entity exercising statutory authority (i.e. a provincial government or municipality);
  • the loss resulted from a substantial interference with the business’ operations and the interference was unreasonable (i.e. the interference has to be substantial, not minimal); and
  • the loss resulted from the construction of the public work, not its use or operation (i.e. the fact of the construction of an LRT line, airport, highway, as opposed to the later use or operation of that public work).

Businesses should maintain financial records including records of when and how the  losses were incurred, records of communications from the municipality, photos, notes and video recordings with time and date stamps of actual construction interference.  They may also likely need to obtain expert reports from accountants and engineers to give opinions on the losses and the unreasonableness of the interference.

The upshot is that we all benefit as a society from improvements to public works and infrastructure. The law of injurious affection, as laid out in the Expropriations Act, requires that governments such as municipalities or the Province compensate business owners for the business losses caused by those projects.

Click here to see the 3 part Series.  Part 3: “Can You Sue for LRT Construction” includes Cherolyn’s interview.

For more information, contact Wolfe, Smith & Forster LLP in association with Nelson, Watson LLP and ask to meet with Cherolyn Knapp’s litigation team about a potential injurious affection claim.