The Frontier Centre for Public Policy has released a study from policy analyst Joseph Quesnel which looks at the practice of municipal expropriation for economic development. In his study, Quesnel argues that this practice must be curbed as it prone to serious abuse.
The backgrounder, titled Expropriating for Economic Development: A Carte Blanche for Municipal Mismanagement, looks at the case study of the Fouillard family in rural Manitoba. This family had their land forcefully expropriated by the municipality of Ellice in order to make way for the municipality’s planned tourist venture. During the process, the municipality ignored recommendations from an independent inquiry that said Ellice did not require as much land as they eventually expropriated. The Fouillards also have evidence the municipality is seeking third-party developers for the project. They also have yet to hear of any concrete plans for the property.
“Individual property owners need to be protected from this sort of government duplicity and abuse. In many cases, it is clearly a case of David-versus-Goliath where governments act as the latter with the ability to bully individuals into selling their land,” notes Quesnel. “Unfortunately, expropriation on the grounds of economic development is a municipal power not only available in Manitoba, but also in Alberta, Saskatchewan, Ontario, and New Brunswick.”
Instead of broad-sweeping expropriation powers, Quesnel suggests that provincial legislation restore expropriation to its original intent: a last-resort measure to allow for public interest projects, such as highways, bridges and other publicly-available infrastructure. Quesnel points out municipalities can better aid local economic development by working with higher levels of government to improve the training and education of their local workforce and providing for broad-based tax relief for all businesses, not just the politically-connected.
Moreover, in the case of Manitoba, provincial legislators should adopt procedural safeguards for individual landowners who find themselves in these situations. Measures should include:
- The passage of an individual landowner’s bill of rights;
- Third-party panel reviews of expropriation actions;
- A binding requirement that all municipalities consider inquiry independent reports in good faith, and clauses that define what may or may not be expropriated.
Manitoba and all Canadian provinces should follow the lead of the United States, where the majority of state governments have enacted legislation that curbs or eliminates this practice. After a narrowly-decided U.S. Supreme Court judgment, 41 states moved to prevent local governments from expropriating land for the purposes of third parties or for raising local tax revenue. Prior to 2005, only eight states had such laws on record.
“While job creation and community economic development are useful goods to pursue, they do not justify government encroachment on private land, “says Quesnel. “Such encroachment is too arbitrary, and it leaves individuals and families too vulnerable to the government’s substantial powers.”