Canada’s property rights slipping behind global competitors

Property rights protections deliver prosperity and good jobs for all Canadians

Despite its professed commitment to the rule of law at international gabfests, Canada is slipping behind other countries in a foundational measure of economic and political liberty – property rights.

Canada has now slipped to 16th place globally among 125 countries and behind the United States, according to the International Property Rights Index (IPRI).

The IPRI is a sophisticated measure of both physical and intellectual property rights protections in most countries of the world where reliable data is found. The U.S.-based Property Rights Alliance compiles and releases its Index report every year. The Frontier Centre for Public Policy is a partner of the Property Rights Alliance, and its Canadian Property Rights Index was inspired by the IPRI.

The Index also includes important measures that situate a credible property rights regime, such as rule of law, judicial independence, political stability, and control of corruption.

Photo by Gene Gallin

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Canadians don’t need to comb through mountains of official data to know there has been a steady erosion of property rights in this country. Canada, by and large, is a beacon of constitutionally protected individual rights, but a couple of years ago the Trudeau government gave our country a well-deserved big black eye when it froze the private bank accounts of average Canadians (many of whom had joint bank accounts with spouses not even involved in the convoy protests) who were engaged in peaceful protest and civil disobedience against government pandemic policies.

Restrictions on property rights come closer to home when they affect our ability to use land as we see fit. Even amidst a tragic housing shortage, Canadian provinces have allowed municipalities to pass zoning and land use restrictions that prevent homeowners and home builders from addressing our pressing housing needs.

Despite being embroiled in political controversy, Ontario’s Greenbelt is a prime example of the extensive and often unwarranted land use restrictions that hinder the availability of land crucial for expanding housing options. Urban containment boundaries, such as the Greenbelt and the Agricultural Land Reserve (ALR) in British Columbia, drive up housing prices by restricting land supply in urban areas globally.

While the IPRI ranking shows Canada performing above average on physical property protections, this masks the fact that Canada is much lower in the rankings than other high-income, highly developed countries, and is declining, not improving.

Canada lacks national constitutional protection for property rights and is well behind many European and advanced economy countries when it comes to compensating landowners entangled in expropriation and so-called regulatory takings proceedings. Regulatory takings refer to regulations that remove all reasonable land uses from the owner and are, in effect, almost the same as an actual expropriation.

In 2022, the Supreme Court ruled in favour of landowners facing regulatory takings by the government. But, at the same time, provincial laws allow police or the state to seize properties believed to be associated with criminal activities, requiring a relatively lower standard of proof. The British Columbia government has contemplated revisions to its civil forfeiture laws that would make it even easier to confiscate money and property.

But the rule of law and physical property rights are only one piece of the puzzle. A significant part of the IPRI ranking pertains to intellectual property (IP) rights, encompassing the protection of patents, copyrights, and commercialized IP rights. Canada’s diminishing global standing is largely attributed to our persistent challenge in safeguarding intellectual property.

The strength of Canada’s intellectual property (IP) protections is vital to our nation’s prosperity and standing in the global economy. Small and medium-sized enterprises, which form the backbone of our economy, rely on IP protection to expand and thrive. Moreover, robust IP is essential for our domestic pharmaceutical industry as it innovates and develops new medications and treatments for various diseases.

In 2018, during the renegotiation of the North American Free Trade Agreement (NAFTA) with the United States and Mexico, informed trade experts noted that the resulting agreement did not properly reward Canadian innovation or strengthen our global intellectual property (IP) protections, unlike the United States which vigorously defends its IP rights.

Finally, there are foreign policy dimensions to intellectual property: IP theft threatens our national security and competitive position. National security experts in Canada for years have criticized the federal government for not going after and prosecuting intellectual property theft.

Strong physical and intellectual property rights, the foundation of a functioning market economy, deliver prosperity and good jobs for all Canadians. Canada is letting these protections slip further and further behind other economies.

Our politicians and policymakers must commit now to property rights protections that will better position us to advance our economy.

Joseph Quesnel is a senior research fellow with the Frontier Centre for Public Policy. He is the author of the newly revised Canadian Property Rights Index.

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