MITCHELL: Aboriginal land rulings are undermining Canada’s property rights and its future

Matthew Mitchell is a senior fellow at the Fraser Institute.In the seventeenth century, the Innu people of Quebec and Labrador had little use for private property rights in land. They hunted to feed and clothe their families. But their resource demands were limited, so it didn’t make sense to bother with the cost of defining and enforcing private property rights. Then fashions changed, and the fur trade exploded. Suddenly animal furs were very valuable, and hunting was a lucrative business. The Innu responded by developing a sophisticated system of private property rights. Plots of land became the exclusive territory of individual bands of hunters. Markings indicated which groups owned which beaver lodges, and these private ownership rights were enforced through formal and informal rules. The Innu understood that well-defined and secure private property rights enable peaceful and prosperous coexistence. Now, across Canada, property owners are learning that their property rights are not nearly as secure as they once thought. In British Columbia, the City of Richmond recently sent letters to more than 125 owners warning them that a court had “declared Aboriginal title to your property, which may compromise the validity of your ownership.” As Bruce Pardy, a senior fellow at the Fraser Institute, explains, the letter was sent as a consequence “of a recent decision of the BC Supreme Court, which awarded Aboriginal title over 800 acres of land in Richmond to the Cowichan First Nation. Wherever Aboriginal title is found to exist, said the court, it is a ‘prior and senior right’ to other property interests, whether the land is public or private.” .In 2024, BC’s Eby government gave Haida Aboriginal title to Haida Gwaii, the West Coast archipelago. Among the 5,000 residents, about half are non-Haida. The Ontario government is negotiating a claim with the Algonquins for some 36,000 square kilometres, including the land under Parliament. In New Brunswick, the Wolastoqey Nation has been seeking title to more than half the province. Last year, the New Brunswick Court of Appeals declared it was not possible to grant Aboriginal title to privately-owned land. The Wolostagey Nation has vowed to appeal to the Supreme Court of Canada. The instinct to return land to its original owners is understandable. Much of that land was taken by force or fraud. But the truth, as Noah Smith recently put it in the Free Press, is that almost every square inch of land on Earth “has been stolen and re-stolen again and again.” We simply do not know who the “original” owners were. But as the Innu understood, societies progress when they adopt institutions that enshrine stable and widely recognized private property rights. In Canada, those institutions were built centuries ago. And Canadians have been relying on them ever since. To upend these rights in favour of historical claims — often based on oral traditions such as song and story — is neither just nor wise..The late economist Armen Alchian helped pioneer the economic study of property rights. In Alchian’s words, “Well-defined and well-protected property rights replace competition by violence with competition by peaceful means.” But private property doesn’t just permit peaceful coexistence. It also permits prosperity. A private property owner bears the cost and reaps the benefits of any decision he makes concerning his property. This incentivizes him to act wisely; to maximize the benefits that flow from the property and to minimize the costs of improving it. In contrast, when property is owned in common — such as common fisheries or government budgets — people are incentivized to overexploit the resource, wasting it or even driving it to extinction. If people doubt that their property rights are secure — if they believe that others might take or use their property—then they tend to underinvest in it. This starves an economy of capital, limiting production and depressing the standard of living. As the Nobel Laureates Daron Acemoglu and James Robinson put it in their influential study of Why Nations Fail, “A businessman who expects his output to be stolen, expropriated, or entirely taxed away will have little incentive to work, let alone any incentive to undertake investments and innovations.”These aren’t just theoretical considerations. Decades of economic research — from Iraq to Northern Italy to Latin America — shows that the institution of private property is indispensable for economic growth. Statistical analyses find that secure property rights and the rule of law, often measured through the Fraser Institute’s index of economic freedom, are far better predictors of prosperity than other factors such as geography.But these sophisticated statistical techniques only confirm what the Innu knew: productive and peaceful societies need stable and predictable property rights. If only Canadian policymakers knew this. Matthew Mitchell is a senior fellow at the Fraser Institute.