Mineral Rights Debate : Canadian System or US System?

This discussion is timely in that with 'fracking' for oil and natural gas becoming so popular in many states that previously had no chance for this industry, now see natural resources as a real revenue boom. Which system works better can only be realized through comparing results, and then having the will to make changes to the individual systems.

Given the United States' basic right to 'private property', ownership, change will be nearly impossible as this change will be an open door for progressive socialists to demand Constitutional changes that deny those rights and decrying only government should have such ownership.

One has to understand the definition of 'private property' to include not just land or minerals rights but also liquid assets as well like money and many other individual rights under the first 10 amendments to our Constitution, the bill of rights.

Mineral Rights Regimes in Canada and the United States
Source: John Dobra, "Divergent Mineral Rights Regimes A Natural Experiment in Canada and the United States Yields Lessons," Fraser Institute, April 2014

April 25, 2014

Differences in mineral property rights in the United States and Canada yield very different regulatory regimes, says John Dobra, founding director of the Natural Resource Industry Institute.

While Canada and the United States began with similar laws concerning mineral and mining rights, the two countries' legal systems subsequently diverged. Dobra looks at some of the key differences between the two:

• Mining is much more important to Canada's economy. 2.1 percent of Canada's 15.4 million person workforce is directly employed in mining, while just 0.14 percent of the United States' 155.8 million person labor force is employed in mining jobs.
• Canadian mineral rights are owned by the provinces. When land is sold or granted to private parties, provinces reserve those minerals. This is not the case in the United States, where mineral rights are privately owned.
• Canadian provinces receive tax revenue directly from mining development, which gives them an incentive to create a favorable policy environment, unlike the U.S. federal government, which has little incentive to exercise regulatory restraint. Surveys by the Fraser Institute of mining industry managers and executives indicate that this is so, with respondents declaring much higher favorability toward the Canadian regulatory regime than the American one.
• The strong system of private property rights in the United States, however, means that potential land disputes are less of a deterrent to mining investment in the United States than in Canada.

Surveys also indicated that respondents found U.S. tax policy to be much more hostile to mining investment than Canada's tax system. Dobra encourages American policymakers to look at this issue and harmonize their tax treatment of mining with the Canadian regime.