More than one-third of the owners of properties expropriated to make room for CentrePort Canada Way have balked at the purchase price -- setting the stage for the highway's property-acquisition budget to exceed the provincial target.
Since 2010, the province has expropriated 261 hectares of land in northwest Winnipeg and the RM of Rosser to make room for a $212-million highway to serve CentrePort, an industrial development taking shape near Richardson International Airport.
The new road, which remains under construction, runs from Inkster Boulevard and across Sturgeon Road before connecting to the Perimeter Highway.
The province expropriated a total of 31 parcels of land to make room for the highway and proceeded to attempt to negotiate purchase prices with the former property owners, according to the provincial Crown Lands and Property Agency.
'They're using non-payment to negotiate: Take my offer or you won't get paid for years. It's what someone would do in private practice, but governments should be held to a higher standard.'
-- Rocky Neufeld, a land appraiser who represents some of the property owners
Those negotiations have resulted in only two settlements to date, while 16 others have yet to be negotiated and may wind up in a contested hearing before the provincial Land Value Appraisal Commission.
Another 13 properties are already heading into contested hearings, which were supposed to begin in May but have been pushed back to September.
"It may be that in and of itself says something about whether or not people feel they're being offered a reasonable amount for their properties," said Antoine Hacault, a Manitoba lawyer who deals with expropriations and represents some of the property owners.
Crown Lands has set aside $7.1 million to compensate the owners of all 31 properties and has already spent $5.4 million on preliminary payments, according to the province.
Rocky Neufeld, a land appraiser who represents some of the property owners, said he doubts the remaining $1.7 million will be able to cover the negotiated or contested settlement of the 29 other parcels of expropriated land.
"It's a tremendous shortfall someone has left them with," said Neufeld, surmising the cash-strapped province will be forced to find the money somewhere else.
But Crown Lands maintains it's offered a fair price for the expropriated land.
"We've done a thorough investigation of the properties. Our appraiser has done his work. We're comfortable in the numbers," said Ken Dzogan, the agency's former land-acquisition officer, earlier this year.
The CentrePort Canada Way property acquisition amounts to one of the largest sets of involuntary expropriations Crown Lands has ever made, added Dzogan.
His agency prefers to settle expropriations through negotiation, he said. "We recognize this is an expropriation. No one came to us and said, 'Please buy my land.'
"The owner didn't come to us with an offer to sell, so they ought to receive every vehicle they're entitled to. At the same time, we're keenly aware we're paying taxpayers' dollars."
In theory, property owners are entitled to compensation for the cost of hiring lawyers, land appraisers and planners to assist their side of the fight. Neufeld said in this instance the province has not covered those fees for his clients, who are left with mounting costs while the contested-hearing process crawls toward resolution.
"It could be years before these cases are ever brought forward," said Neufeld, claiming this is a deliberate provincial tactic. "They're using non-payment to negotiate: 'Take my offer or you won't get paid for years.' It's what someone would do in private practice, but governments should be held to a higher standard.
"Legal counsel, the owners and appraisers want these things brought forward in an expedient fashion."
In a statement, the province said compensation issues are complex and it's attempting to work out fair settlements as quickly as possible.
Hacault, the expropriation lawyer, said the province must balance the needs of taxpayers with those of the property owners.
"From my perspective, people should be entitled to the reimbursement of their reasonable expenses on an ongoing basis," he said.
Property owners who reject provincial purchase offers have two years to appeal to the Land Value Appraisal Commission. The province is obliged to pay whatever amount the commission determines must be paid.