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After years of shouting across the tracks, Vancouver and CP conclude agreement over the Arbutus Corridor, and the Supreme Court of Canada deserves some credit
by Doug Harris
Ten years ago the Supreme Court of Canada ruled in CPR v City of Vancouver that the City’s prohibition of development along the Arbutus Corridor did not amount to a taking of property. This decision, forgotten and unmentioned in the coverage of Vancouver’s purchase of the Arbutus Corridor from Canadian Pacific, set the stage for the recent and widely acclaimed agreement.
Canadian Pacific has owned most of the corridor since 1886 when it acquired land from the provincial government as part of a deal to extend the transcontinental line from Port Moody to Vancouver. The company ran freight trains on the 10kms of track through the west side of Vancouver for a century beginning in 1901, and it leased the line to the British Columbia Electric Railway for streetcar service until the late 1950s. More details on all of this (including maps) can be found in Douglas C Harris, “A Railway, a City, and the Public Regulation of Private Property: CPR v. City of Vancouver” (2012),
The last freight train, which serviced the Molson brewery, rolled along the line in 2001, but by then Canadian Pacific and the City were already looking at the corridor for other purposes. The company saw development potential; the City imagined public transit and a greenway. Negotiations stalled, and the City, concerned that the company would begin development, passed the Arbutus Corridor Official Development Plan to limit its uses to trains, public transit, or greenway.
Canadian Pacific took the City to court. In CPR v City of Vancouver, the company claimed that the City, by prohibiting development, had taken its property and that it should be compensated. The challenge for Canadian Pacific in making this claim was that it still owned the corridor. In order to secure compensation, it had to establish that the development prohibition amounted to a taking of its property. In legal terms, it had to convince the Court that this was an instance of de-facto expropriation or regulatory takings.
The Supreme Court was not convinced. It ruled that regulatory takings required the confiscation of “all reasonable uses of the property,” and the City’s development plan allowed the company to use the land as it had done for a century—as a railway line. Prohibiting other development did not compel compensation.
Following the decision little happened. The tracks rusted, brambles grew, and garden plots began to creep from the City-owned boulevards to the privately owned corridor. In frustration that a valuable asset was sitting unused, the Canadian Pacific began in 2014 to prepare the line for trains and to reassert its property interest by pushing back the garden plots.
Whether or not the return of trains to the Arbutus Corridor was ever a viable option, the company’s actions raised the visibility of its property interest and prodded the City back to the negotiating table. Both parties profess to be well satisfied with the eventual agreement, and most commentators think they are justified. The company received a fair return on its asset; the City acquired a precious ribbon of automobile free land.
Although preceding it by a decade, the Supreme Court decision set the stage for this agreement. Had the Court ruled in favour of Canadian Pacific, the City would have been compelled to rescind the prohibition on development or compensate the company for taking its land. It’s possible this would have focussed the City’s attention on the Corridor earlier and prompted negotiations that would have produced a similarly positive outcome. Canadian Pacific had commissioned an Arbutus Lands Advisory Panel, and its 2007 report, recommending a mix of greenway, transportation, and development for the Corridor and adjacent City-owned land, deserves another look. However, I suspect time was needed to let the land settle into its post-railway existence and for the company and the City to reach an agreement that preserves the integrity of the corridor and the possibility of development.
The Arbutus Corridor had been a potential location for the Canada Line, but by 2006 the decision had been made to run it up Cambie Street and the City’s transit focus lay there. Moreover, the Olympics and the Olympic Village development were demanding much of the City’s attention. The Supreme Court decision provided the City with time. However, by indicating that governments could not prohibit all reasonable uses of property without compensation, it also provided Canadian Pacific with a lever—the resumption of rail traffic—which it used lift the corridor back into the public eye and onto the City’s agenda
Although it took a decade, the agreement between the City and Canadian Pacific is vindication of the Supreme Court’s careful and cautious approach to regulatory taking. The ambit of public regulation is broad, but when regulation denies all reasonable use then the property owner is entitled to compensation. We have the City, Canadian Pacific, and the Supreme Court to thank for the current optimism that surrounds the future of the Arbutus Corridor.
Douglas Harris is the Nathan T. Nemetz Chair in Legal History at UBC’s Allard School of Law. He has led his property law classes on field trips along portions of the Arbutus Corridor for a decade.
Posted 18 April 2016