Property rights: the key to environmental protection

June 1, 1993

Dear Friend:

In 1949, the Supreme Court of Canada ordered a pulp and paper company in Espanola, Ontario, to stop polluting downstream waters, ruling that the property rights of the affected fishermen, farmers, and tourist operators must be respected. The Ontario government immediately passed new legislation allowing the pulp mill to continue releasing chemicals. For good measure, the government—anticipating that the court might rule against the company—had several months earlier also changed the Lakes and Rivers Improvement Act to encourage courts to allow pulp mill pollution.

Soon after, in 1955, citizens suffering from water pollution successfully sued the Ontario municipalities of Richmond Hill and Woodstock, whose shoddy sewage disposal practices were polluting rivers that flowed through their land. The Ontario government again acted to deny citizens their property rights, passing legislation to overturn these two court decisions, and creating the Ontario Water Resources Commission to protect polluters against citizens.

Imagine the frustration felt by these courageous individuals—to fight through the courts for their livelihoods and the simple enjoyment of their lands against corporate and government adversaries, to have the courts ultimately decide justice lay with them, only to have the politicians then change the law to get their way. Since these events, polluters across Canada have multiplied: with the degradation of property rights, citizens lost the power to protect their environments and their livelihoods.

Today’s right to pollute—to treat our rivers, lands, and air as sewers—can be traced back even further, to Britain and the U.S. in the bleak days of the Industrial Revolution, when governments and courts began to override property rights to promote a greater, so-called national interest—the interest of industry. Courts began to shield railway magnates from liability for fires set by sparks from their locomotives, and laws gave mill owners the right to flood their neighbours’ land. Following those early precedents, the property rights of individuals and communities have steadily been eroded, generally to serve large and powerful commercial interests like the railroads or smokestack industries, and generally at the expense of individuals and smaller, less powerful commercial interests, like farmers. The right to pollute did spur economic activity, but the activity was often uneconomic for society as a whole: both the economy and the environment would suffer, because the benefits from the polluting activity were outweighed by the costs to others.

The pulp mill operation at Espanola provides a useful example: the company continued its polluting activities after the legislation was passed, but its special dispensation didn’t spare it from economic woes. In fact, since the first pulp was produced at that site in 1905, one company after another failed to make a go of it, with a series of shutdowns, bankruptcies, changes in ownership and even a 13-year period during which Espanola became a ghost town. In effect, for decades a series of marginal or losing operations received preferential treatment to allow them to continue, while sound and sustainable operations downstream providing stable jobs and creating genuine wealth were forced to suffer and finally close—a lose-lose proposition for the economy and the environment.

Yet the notion persists that pollution is necessary to a modern society, and that allowing people property rights would frustrate development. In fact, this belief is so ingrained that a Nobel Prize for Economics was awarded just two years ago for proving the opposite—that economic efficiency does not depend on giving preference to polluters. Ironically, Dr. Ronald Coase won the Nobel for a paper he wrote in 1960—conventional wisdom took three decades to remove its blinkers and recognize the obvious.

But times are changing. The public is waking up to the realization that human values captured by terms such as thrift, preservation, conservation, and husbanding our resources are not relics of a former era, and that people need strong rights to protect their values against those who would debase them.

No rights are more important to environmental protection than the rights to property, whether the property be land or belongings, an apartment lease or any other contractual right. Property rights would create a protector out of every one of us—a force 25 million strong—to guard against environmental insults to our homes and communities.


Elizabeth Brubaker
Director of Policy Research


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