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<< back to all ArticlesCompensation for Municipal Road Closures Under the MGA
When a municipality closes a road, the closure may affect the value or use of nearby land. For landowners, the impact can raise questions about whether compensation is available.
Section 23 of the Municipal Government Act (“MGA”) provides a statutory right to compensation for certain damages arising from the closure of a road by municipal bylaw. The provision is separate from Alberta’s Expropriation Act, but it raises similar questions about property rights, land value, and compensation.
What is Section 23 of the MGA?
Section 23 states:
23(1) Any person who occupies, owns or has an interest in land that sustains damages through the closing of a road by bylaw must be compensated for the damages.
(2) If the municipality is not able to agree with the claimant on the amount of compensation, the compensation must be determined by the Land and Property Rights Tribunal.
If the municipality and the claimant cannot agree on the amount of compensation, the amount must be determined by the Land and Property Rights Tribunal (“LPRT”).
There are several important considerations for municipalities and landowners when assessing a potential claim.
The Road Must Be Closed by Bylaw
Section 22 of the MGA provides that, among other things, a municipality may not close a road except by bylaw. Section 23(1) compensation is predicated upon the passing of such a bylaw.
As section 23 proceedings pertain to compensation only, the passing of the bylaw is taken as a fact. The validity or propriety of the bylaw itself is not within the LPRT’s jurisdiction when it determines compensation under section 23. The LPRT’s role is limited to determining whether the claimant is entitled to compensation, and if so, the amount of that compensation.
Procedural Considerations
There is currently no dedicated procedural framework that governs compensation applications under section 23. Although the LPRT has the authority to establish its own rules of procedure, it has not done so. In lieu of specific rules, the LPRT is likely to adopt the Rules of Procedure and Practice, Alta Reg 187/2001 (the “Rules”), which continues to govern proceedings before the Tribunal under the Expropriation Act despite the formal expiry of the Rules.
The Rules provide for several procedural steps, including:
- A claimant may commence proceedings by serving an Application for Determination of Compensation
- Timelines apply to pleadings and responses, including a 21-day period for filing a reply
- Part 5 of the Rules of Court applies to the discovery process
- The parties must exchange “Rule 9 Documents” at least 14 days before the hearing. These documents must include expert reports and other documentary evidence on which each party intends to rely on.
- The LPRT has broad case-management powers, including the ability to set hearing dates and locations, extend or shorten procedural deadlines, and consolidate related proceedings.
Limitation Periods
A further area of uncertainty is the applicable limitations period for section 23 claims. The MGA itself does not prescribe a deadline for commencing or pursuing a compensation claim. As a result, the LPRT has been required to consider whether, and to what extent, limitation periods found in other legislation should apply to claims brought under section 23.
In Lethbridge County v Twogee Developments Ltd., the LPRT held that neither section 36(2) of the Expropriation Act nor the limitation periods in the Limitations Act apply to compensation claims brought under section 23 of the MGA.
The Tribunal reasoned that section 23 creates a distinct statutory right to compensation and that neither legislative scheme could be imported into the provision absent clear statutory direction.
This decision highlights the importance of considering limitation issues when assessing a potential claim under section 23.
Compensable Damages
The wording of section 23 of the MGA raises an important question: what types of damages may be compensable when a road is closed?
In 566320 Alberta Ltd. v Lethbridge (City), the Court considered whether the provision applies to damages to land itself, rather than other losses suffered by a person as a result of a road closure.
The Court interpreted the wording of section 23 as referring to damages sustained by the land. Although the decision was overturned on appeal, the Court’s interpretation of the scope of section 23 was not disturbed.
This interpretation is important because it may limit the types of losses that can be claimed under the provision to “injurious affection”. For example, it raises questions about whether compensation is available for business losses or other personal damages, as opposed to damages affecting the value of the land.
Injurious Affection
The concept of injurious affection is relevant to compensation claims under section 23.
In Sabo v AltaLink Management Ltd., the Alberta Court of Appeal described injurious affection as a reduction in the value of land caused by public or private activities on adjacent land.
Where a road closure affects the market value of land, appraisal evidence will be important in establishing the amount of compensation being claimed.
In addition to the 566320 Alberta Ltd. v Lethbridge (City) case referenced above, further support of this interpretation was rendered in the 2025 interlocutory decision of the ongoing Twogee Developments claim, the Panel described its authority as “limited to the determination of market value to the Claimant’s land as a result of the Closure Bylaw.” However, the scope of damages in the Twogee Developments claim still remains uncertain as the final LPRT decision regarding Twogee Developments’ claim for compensation, following a five day hearing in June 2026, is yet to be published and is expected to resolve any uncertainty on the scope of damages covered by section 23.
Key Takeaway
Municipal road closures can raise important compensation issues for affected landowners. Section 23 of the MGA provides a potential avenue for compensation, but entitlement, applicable limitation periods and the types of damages available will depend on the circumstances. Landowners affected by a municipal road closure should obtain legal advice early to understand their options and any applicable deadlines.
This post is meant to provide information only and is not intended to provide legal advice. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this post to be outdated.
