We don’t need no stinking property rights
From the Frontier Centre this week comes an article about the truly unstable state of Canadian personal wealth.
Stephanie Farrington found that 50% of Canadian’s wealth is tied up in property, will a large chunk of that sunk into primary residences. What makes this unstable, besides the current expectations of home price deflation, is that in Canada we have no guarantee of property rights. Since property rights are not guaranteed in the Constitution or other law, it means that Canadians can lose their property at the considerable whim of any level of government via an expropriation or right-to-access move intended to get at the land under the building that is owned.
Interestingly the article highlights that in rural Canada the threat of expropriation or expanded access rights is much higher than in cities. The right of resource companies that own the minerals under the surface have significant power to affect the value of owned property. Recent changes in non-owner property access rights for the purposes of mineral prospecting has caused serious unintended consequences for the owners of rural plots in BC.
As I’ve mentioned here before, clear property rights are one of the three primary pillars of economic prosperity, along with small government and legal equality. Without substantial rights to property, especially land, the value of the property erodes and makes it more difficult for people to realize and leverage the benefit of ownership. This in turn reduces the opportunities for capital leverage and investment, harming the virtuous cycle of economic expansion.
We as citizens need to challenge our political representatives to provide solid property rights, that allow for clearer pursuit of damages when our property is value is adversely affected by third-parties. Without the freedom to use our property as we choose, unhindered by policy encroachment and third-parties, we will be reduced in our economic opportunities.
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