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REAL ESTATE "It certainly shows the government's willingness to make the tough call to set aside land in order to preserve it for future generations with the consequence that the land cannot be used for industrial use which breeds revenue and employment." TRENT MERCIER, MACLEOD DIXON LLP planning traditionally carried out on a municipality-by-municipality or pro- ject-by-project basis. The first of these is a recently released draft plan for the Lower Athabasca Region, a huge swath of territory in northern Alberta that includes most of the oilsands develop- ment. A key feature of this plan is that it proposes increasing the size of existing conservation areas by two million hec- tares or 20,000 square kilometres — an increase to 22 per cent from six per cent of the region's land mass. "It certainly shows the government's willingness to make the tough call to set aside land in order to preserve it for future generations with the conse- quence that the land cannot be used for industrial use which breeds revenue and employment," says Trent Mercier, an associate at the Calgary office of Macleod Dixon LLP. "It's a tough deci- sion and they've done it in an area that is the economic driver of the province and one of the significant engines of growth for the country." The Land Stewardship Act makes protection of the environment and conservation of natural resources inte- gral considerations in setting planning priorities and evaluating development plans. Colin Lipsett, an associate at the Edmonton office of Davis LLP, who represents conservation areas on real estate matters, says the legislation will likely make conservation "a top-of-mind issue" whenever development is being considered and put more pressure on developers to use tools such as conserva- tion easements, offsets, or transfer of development credits that facilitate agree- ments or trade-offs to limit development in environmentally sensitive areas. Harper notes that the regional plans established under the legislation can set cumulative emissions thresholds for certain substances for an entire region, so an individual development must ensure its emissions do not contribute to excessive pollution region-wide and industries may have to co-operate to ensure they do not collectively exceed the thresholds. He believes industry is generally prepared to accept this con- cept, providing the limits, which have yet to be spelled out, are not so stringent that it is impossible for companies to have multiple operations in the same area. "They accept it. They just want to know what the rules are," he says. The new law stipulates that local gov- ernments and regulatory bodies comply with the regional plans, thus requir- ing revisions to numerous other pieces of legislation governing sectors such as energy, oil and gas, forestry, mining, and water management. In a province where many people are suspicious of central- ized government and believe individual rights are sacrosanct, the legislation has led to widespread fear that people will lose existing property rights and that land could be expropriated for conserva- tion purposes without compensation. As several legal commentators have pointed out, some of these concerns arise from a commonly held, but mis- taken, belief that Canadians have the kind of constitutionally guaranteed property rights that exist in the United 22 JULY 2011 www. CANADIAN Lawyermag.com States, and ignorance of the fact that governments in Canada do have the power to expropriate property without compensation. Nevertheless, the act, as it was passed in 2009, was unclear about landowners' rights and the government's obligations to consult them with respect to expropriation plans or restrictions on land use. "The original act was silent on compensation and that always makes people nervous," says Lisa Semenchuk, an associate in the Edmonton office of McLennan Ross LLP. The amendments, which were passed by the Alberta legislature in May, spell out some safeguards and protections for those adversely affected by expro- priations or new restrictions on land use. One is that the regional plans must now be approved not just by the cab- inet, which deliberates in secret, but by the legislature, where they may be subject to public hearings and open debate. Another key change is that a party directly or adversely affected by the application of a regional plan can request, and likely get, a review of the plan — a provision criticized by vari- ous public interest groups concerned that an environmental or citizen group may not be able to request a hearing since they may not be considered to be directly affected. The amendments also allow landowners to ask for a variance in the plan if they feel they will suffer unreasonable hardship. Another key change involves com- pensation. Now the law states that people have a right to compensation if the plan has impaired their property rights. However, a key issue for landowners or developers is the basis on which this compensation is calculated. Under the legislation, they will only be compen- sated for actual expenditures rather than what they could sell the properties for on the open market. "We will see tension because the compensation mechanism