Why property rights are important

They act as a defence against the encroaching power of governments

February 3, 2013

LETHBRIDGE, AB, Feb. 3, 2013/ Troy Media/ – Why are property rights important?

Property rights allow us to live free of the control of others, economically and politically, and act as a defence against the encroaching power of governments.

In fact, a weakening of property rights is a sure sign that a society is becoming less free.

In our comfortable Canadian existence, we sometimes forget the link that exists between individual dignity and property rights, and between the role property rights plays in ensuring our prosperity.

While most of the industrialized world has guaranteed property rights within their constitutions, indicating the value they place on ensuring a free society, Canada hasn’t.

And while common law tradition recognizes that outright expropriation should never occur without compensation, Canadian governments have given themselves the power, through the passage of laws and regulations, to expropriate private property without consultation or compensation.

The Frontier Centre for Public Policy recently released its first annual Canadian Property Rights Index, which examine property rights protections in the 10 provinces and three territories. The eight indicators track the registration and transfer of property, expropriation, land use planning and constructive takings, civil forfeiture, municipal power of entry, heritage property, endangered species, and wills and successions.

So how are our governments doing?

In first place is Nova Scotia, mainly due to its higher scores in how it handles endangered species, heritage property, and civil forfeiture. Then come Nunavut, Alberta, and British Columbia. Manitoba and Saskatchewan tie for sixth.

The next lowest jurisdictions are the Northwest Territories, Newfoundland, Yukon, and Quebec. Prince Edward Island comes in dead last.

We also found that most jurisdictions are also moving toward the Torrens system of registering property, which provides more secure property title – a positive sign.

Unfortunately, the index also demonstrates how governments – with sweeping discretionary power – are regulating real and personal property, often to the detriment of personal liberties.

Are you aware that most provinces and territories allow municipalities to expropriate private land for almost any municipal purpose? While most jurisdictions provide procedural protections for individuals caught in expropriation processes, by granting government wide discretion we are leaving ourselves open to abuse.

For example, governments often use economic development to justify expropriation. In June 2012, the Nova Scotia government sided with an Australian gold miner over a local Christmas tree grower and allowed the company to expropriate 14 parcels of land in Moose River. Those parcels included 8.1 acres owned by the Higgins family, which has operated a tree farm business for the past 120-years. The family fought the expropriation but the government justified it by pointing to greater potential jobs.

Most jurisdictions also allow provincial and municipal governments to protect a property that is deemed to be of historical or cultural importance; this designation then limits the owner’s use of their own property. And some provinces and territories don’t even mandate compensation to owners whose property has been so designated.

The potentially abusive power of government doesn’t end there. Civil forfeiture is also a widespread and underestimated threat to property rights. Provincial laws empower governments to seize property believed to have been gained from or likely used in criminal activity, even without conviction and even though the burden of proof is lower than in a criminal case. Innocent third parties often become entangled in civil forfeiture by simply being connected to property supposedly used in criminal activity.

Take the case of Calgary senior whose condo was wrongfully targeted by authorities using civil forfeiture legislation because her son had used the condo in a fraud scheme and even though the dwelling was in her name. Fortunately, in 2010 an Alberta court ordered the Crown to repay her over $85,000 in legal costs.

Property rights are also eroded by governments through land use planning legislation, as they are often not required to compensate for any reductions in land value. An example occurred with the implementation of Ontario’s Green Belt Act that placed two million acres out of development. Another is Alberta’s Land Stewardship Act that centralizes regional planning.

The Frontier Centre’s Index shows that property rights across Canada are precarious. And given that governments are increasing regulations instead of reducing them, we need to start now to reverse the trend.

Joseph Quesnel is a policy analyst with the Frontier Centre for Public Policy. He is author of The First Canadian Property Rights Index: Assessing the State of Property Rights Protections in Canada. www.fcpp.org

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