The First Canadian Property Rights Index: Assessing the State of Property Rights Protections in Canada

Joseph Quesnel, Property Rights, Publications, Uncategorized

Executive Summary

• The inspiration for this Index came from the International Property Rights Index (IPRI), a measure of most countries in the world on a battery of indicators on their legal environment, as well as physical and intellectual property protections.

• Composite measures of property rights protections in Canada exist at the national level but not at the provincial or territorial level, which is odd considering that in the constitution the provinces are responsible for property rights.

• This property rights index is not an exhaustive account of property rights in every Canadian jurisdiction; however, it seeks to understand how each jurisdiction has handled some of the most significant property rights challenges.

• The basic premise behind the scores is that the greater the number of procedural hurdles the provincial and territorial governments must leap to interfere in lawful property ownership, the better. Hence, the higher the score, the more the property rights are protected.

• Property rights are not absolute. In Canada, they are quite precarious and subject to government regulatory whim, especially since our constitution does not formally protect them as is done in other jurisdictions. However, the common law does provide compensation if land is taken.

• The only requirement is a common law presumption that the statutes provide compensation in case of expropriation.

• Canadians ought to care about property rights, because they are connected to our economic well-being and our liberal democratic rights.

• To measure property rights protection, a Canadian Property Rights Index is necessary. This Index measures eight indicators or items that affect property rights. Each indicator or item has several components that are measured to determine an overall score for a given indicator. Each indicator has a total possible score, and each jurisdiction’s score is converted to a percentage, which is used to rank each province or territory in that area and overall.

• The first indicator measures registering and/or transferring property. Regimes with the Torrens registration system receive higher scores, because it protects property better than does the older deed system. In addition, land transfer taxes act against a province’s score, because they hinder the transfer of property.

• The second indicator deals with expropriation. Provinces and territories with greater protections for individuals caught in the expropriating process receive higher scores. Jurisdictions with narrower grounds for municipal expropriation are rewarded with higher scores.

• The third indicator is land-use planning and constructive takings doctrine. A constructive taking occurs when a land-use regulation is so severe it almost amounts to a full expropriation. Different legal systems in Canada treat these takings differently. The more rights to compensation, the higher the score. The Quebec Civil Code offers better protections against regulatory or constructive takings than what is available in common law provinces and territories.

• The municipal power of entry is the next indicator. Jurisdictions with notice, warrant and judicial oversight requirements score higher in the Index.

• Civil forfeiture is the next indicator, and it measures protections for individuals in provinces with civil forfeiture regimes. Civil forfeiture is a civil proceeding where the government uses the courts to take title of property used in unlawful activity. Jurisdictions with more procedural protections against these proceedings receive a higher score.

• Endangered species is the sixth indicator, and it deals with how well jurisdictions safeguard property from regulation that seeks to protect endangered wildlife, fish and plants. Jurisdictions that provide procedural safeguards for landowners receive higher scores.

• The seventh indicator is heritage property. Governments may designate property of historic and heritage value and thereby limit its use to the owner. Jurisdictions that provide compensation and respect property owners who are facing designation receive a higher score.

• The last indicator deals with successions, addressing the rights of individuals to dispose of their estate upon their death as they wish. The less regulatory interference with a testator’s will, the higher the score.

• The rankings reveal that Nova Scotia, Nunavut, Alberta, British Columbia and Saskatchewan/ Manitoba have the highest scores on the Index. The lowest ranking jurisdictions are Prince Edward Island, Northwest Territories, Newfoundland, Yukon, and Quebec. Thus, with some notable exceptions, the Index confirms the conventional wisdom that the Western provinces have stronger property rights than the Eastern provinces do.

• The results show that property rights are precarious across Canada. Some central recommendations are the constitutional entrenchment of property rights as is common elsewhere; the governmental rollback of regulation, as this constitutes the greatest threat to property rights today; and the creation of national and regional research centres or movements dedicated solely to property rights enhancement across Canada.

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