Lacking constitutional protection, governments routinely trample property rights

Printer-friendly version
Appeared in the Calgary Herald and Okanagan Saturday

Back when Canada's premiers and then-Prime Minister Pierre Trudeau debated what to put into what later became the Canadian Charter of Rights and Freedoms, property rights were one possibility and on the table.

Trudeau had pushed for property rights as justice minister in 1968, again as prime minister in 1969, and in 1980 during constitutional talks. But property rights never made it into the final 1982 Charter because Trudeau and Bill Bennett, then-Premier of British Columbia, were the lone advocates.

While one can only theorize about the positive impact of including property rights in the Charter, the effect of excluding property rights are demonstrably harmful. (I chronicled some examples in a recent book on the subject).

Consider the case of Calgary-based company, Geophysical Service Incorporated (GSI).

GSI was founded in 1930 by two geophysicists, John Karcher, who commercialized the process by which most of the world's oil reserves were discovered, and by Eugene McDermott, who pioneered seismic services to oil companies.

GSI was once profitable and spent hundreds of millions of dollars and employed 250 people, mapping massive amounts of offshore seismic data on Canada's East Coast, which was used by energy companies for exploration. The company now employs five people, having had their intellectual property confiscated by regulatory fiat.

Under a National Energy Board (NEB) rule, companies that do such mapping must submit their work to the NEB and similar provincial boards in Nova Scotia and Newfoundland as a condition of permitting. The companies must, by law, also pay out of pocket to maintain and store that data, a cost that can run into the hundreds of thousands of dollars every year.

According to the government, this data was to be publicly released after 10 years. GSI argues it provided data on the understanding its proprietary rights would be respected that agencies would use the data for regulatory purposes only or act as libraries, allowing viewing only of data in paper form to prevent wholesale duplication and re-selling.

Instead, all three governments have facilitated reproduction of the data, placed it online, and in some cases, gave it to other seismic companies who then profit from the already-created intellectual property. GSI is now in court alleging governments do not have a right to ask for or possess the data in the first place, and that the various agencies are exceeding their authority.

But what do our politicians think?

Former Newfoundland and Labrador premier Kathy Dunderdale once said she "understood" GSI was only trying to look out for its own interests, but that "the greater good needs to be served."

But imagine if the Swiss government required Albert Einstein to file patents in the patent office in Geneva for each one of his great ideas 'fair enough so far' but then deliberately gave away or sold his patents so others could profit from his work.

Regrettably, the GSI case is not unique. When researching my book on property rights (and ever since) I continually find examples of governments that use regulation in order to avoid paying compensation for their infringement of property rights.

Cases range from demanding property owners pay for expensive archaeological digs (British Columbia), to regulatory requirements that turn private land into green space but without the 'hassle' of paying property owners for their essentially frozen and devalued property (Ontario's green belt). Of course, in some cases, the remedy is simple: allow people to do with their property what they wish within sensible necessary rules or pay them where there really is a wider public interest at stake.

But requiring companies to file information with government only to later give it away for free or for some other company's bottom line is not an example of a wider public interest.

What GSI (and perhaps others) face is akin to what many companies face in China where proprietary information and knockoffs are sold without authorization. We normally think such problems are unique to other less-than-liberal-democratic precincts where the rule of law is routinely injured. But here in Canada, stealing happens with the full blessing of the federal government and the governments of Newfoundland and Nova Scotia.

This is what happens when property rights are not entrenched in a country's constitution and enforced. Eventually, governments will take your work without compensation.

Subscribe to the Fraser Institute

Get the latest news from the Fraser Institute on the latest research studies, news and events.