Subject to Approval

Research Paper, Property Rights, Stephanie Farrington

Executive Summary

Many Canadians invest heavily in real estate. Over 50 per cent of personal wealth is held in real estate, primarily, but not exclusively, home ownership.

The choice of early Canadians to remain closely tied to the British Empire had a major impact on the development of property rights in this country. Although we as a society tend to see ourselves as having more in common with the United States than with the United Kingdom, our system of land ownership, more accurately called real property ownership, does not permit the same level of rights and freedoms over the land we hold as the U.S. system affords. In the United States, landowners usually hold title to the mineral resources located beneath their land; in Canada, this is never the case.

Originally, the British monarchy held the rights to the land, and now the Canadian government holds the rights to most Canadian land. Under our system, all Canadian land is subject to the rights of the Crown (the federal government).

Laws governing real property ownership have been under provincial control since the Confederation Act of 1867. Royalties for mineral exploration are paid to the provinces, and they form a major part of provincial revenue. Landowners never profit from the discovery of mineral resources underneath their property.

Urban centres, created as residential and business hubs, were once fairly safe from expropriation that made use of the Crown’s subsurface rights. However, population growth, environmental concerns and the need to improve services have made expropriations in urban centres increasingly common.

As a preventative measure in the fight to protect their surface rights, some Canadians found it helpful to take an interest in the status of their land. A number of rural Canadians staked claims to their own land to discourage outside mining interests. Landowner and surface-rights holders associations are increasing in number across the country. High visibility can improve landowners’ chances of protecting the rights they do have.

Legal action is another method that can have positive results. In order for Canadian citizens to make property rights a reality, property owners must be willing to first take on the challenge of fighting for their rights at the provincial level.

Because our country was founded on the idea of property rights being Crown rights, federal law is unlikely to change. The subject of fair compensation for expropriated land has not been tackled at the national level. However, there is a precedent for the right to fair compensation based on the First Nations Oil And Gas And Moneys Management Act.

If Canadians are to have functional property rights, they need a guarantee of fair compensation for expropriated lands. Compensation should be calculated based upon the value of the land to the expropriating authority, the tenure of the landowners and the impact on their income and not the value of the land as if it were empty or as it was when the owner purchased it.

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About the Author

Stephanie Farrington has worked as a freelance writer, editor and communications professional currently based in Ottawa. Since 2005 she has worked as an independent research consultant for Humphreys Public Affairs Group where her projects have included extensive research into property rights and Aboriginal housing for the Canadian Real Estate Association. In 2006 she assisted David Humphreys in authoring CREA’s joint submission with the International Housing Coalition to the United Nations World Urban Forum, Aboriginal Housing in Canada: Building on Promising Practices. Her work has been published in The Ottawa Citizen, This Magazine, MoneySense and Books in Canada as well as online and in a variety of literary and current affairs publications. She received her education in journalism, culture and communications at Carleton University.