I can see both sides here. That land is too valueable to have a trailer park on it, period. But the way it's been handled seems pretty heartless (at least the way you've described it). You're right an elderly person won't have anywhere to go and to simply say "too bad, business is business, read your contract" is pretty shitty.
Mar, have the residents talked to airdrie or strathmore about land?
If the city covered moving costs I would think that would be fair and work out a deal with a neighbouring town to help cover the cost of utility setup. Of course the residents that wanted to move would have to pitch in too (call it a "special assessment").