Canada

How is 'market value' determined for expropriation compensation?

Open market
Sale condition
Willing buyer
Party standard
Willing seller
Party standard
No compulsion
Key assumption
The Short Answer

Market value for expropriation compensation in Canada is the price the land would have fetched on the open market between a willing buyer and willing seller, assuming no compulsion to buy or sell.

What the Law Says

The federal Expropriation Act sets out how compensation must be calculated when the government takes private land for public purposes.

Under section 25 of the Expropriation Act, the value of land taken is based on its 'market value' — defined as the amount that would have been paid for the interest in land if it had been sold on the open market.

This means the valuation assumes a hypothetical sale between two informed, willing parties — neither forced to buy nor sell — with reasonable time for marketing and no unusual pressures affecting price.

The market value reflects the land’s highest and best use at the time of expropriation, not its current use alone, provided that use is legally permissible and physically possible.

Statutory Text

Land value is the amount that would have been paid for the interest in land if sold on the open market.

— Expropriation Act, s. 25 — Rules for determining compensation

What to Do

1

Obtain an independent appraisal from a qualified appraiser familiar with expropriation law.

2

Review the expropriating authority’s offer and compare it to your appraisal.

3

If you disagree with the offered compensation, file a notice of objection within 30 days of receiving the offer.

4

Negotiate with the expropriating authority or apply to the Canadian Transportation Agency (for federal expropriations) or provincial tribunal/court for a hearing.

5

Keep records of all communications, appraisals, and evidence supporting your claimed market value (e.g., recent comparable sales).

Sources

statuteExpropriation Act, s. 25 — Rules for determining compensation

Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.