Bill C-323 dies — a sacrificial lamb?

Sacrificial lamb: someone or something that suffers so that someone or something more important can succeed  ~ Macmillan Dictionary

Suffers — or in the case of Bill C-323, An Act to amend the Income Tax Act (rehabilitation of historic property) — dies.

Today, there’s good news and bad news.  Well, I’ve already told you the bad news.

Last week the House of Commons Standing Committee on Environment and Sustainable Development (ENVI) effectively pulled the plug on Bill C-323.  It happened just as the committee was about to start clause-by-clause consideration of the bill (the usual last step before reporting a bill back to the House).  John Aldag, Liberal MP for the B.C. riding of Cloverdale — Langley City, made a motion that the committee recommend that the House not proceed further with the bill.  The motion passed (the Liberal members voting for it, the opposition members against) — and that was that. [1]

The full House will have the final say, and apparently can debate the matter for an hour, but there can be no doubt of the result.

Bill C-323 — a private member’s bill proposed by Peter Van Loan, an opposition member, and one that would have had an impact on tax revenues — was always going to be a long shot.  It’s remarkable that it made it this far. [2]

It’s clear the Liberals on the ENVI committee (all of whom had voted for the bill at Second Reading, except for one who didn’t vote) had mixed feelings about the demise of the bill.  The motion/report begins: “The Committee is supportive of the principle of Bill C-323 and believes that financial incentives, including tax credits, which encourage investment in the rehabilitation of historic properties and heritage places is necessary; however ….”

There then follows a list of concerns with the bill.  Most of the concerns the government had expressed earlier during the Second Reading debate.  Chief among these are:

• “tax changes undertaken outside the [annual] budget process make it more difficult to ensure a coherent and consistent approach to fiscal management”
• unclear effect on federal revenue (the Parliamentary Budget Officer assessed costs at $55 to $67 million in the first five years; officials from the Department of Finance stated it could be as high as $90 million a year) — Mr. Aldag later referred to the bill as a “deluxe model”, suggesting perhaps that it was too broad in terms of the number and kind (commercial and residential) of eligible properties
• the cost to the government of administering the tax credit.

A new concern was also raised: The lack of consultation and collaboration on the measures in the bill with provinces and territories, as well as municipal and Indigenous governments.

This point is a good one, especially as, in our harmonized income tax regime, the provinces and territories would end up incurring a (small) part of the cost of any tax credit claimed.

On the bigger issue of the impact on revenue: In introducing his motion to kill the bill, Mr. Aldag had mentioned a nagging question — whether claims that the tax credits might actually make more money for the treasury than they cost were justified.  The ENVI committee had heard evidence from both the National Trust for Canada and the National Trust for Historic Preservation that the U.S. historic tax credit, the model for Bill C-323, returned $1.20 to $1.25 of tax revenue resulting from commercial rehabilitation projects for every $1.00 paid out.  But it also heard some skepticism about this.  The Department of Finance folks questioned whether the “incremental benefit” of the credit to revenues might be less, in that some of the projects that made use of the credit might have been built anyway, and would therefore have generated tax revenue without the tax credit.

As I see it, while this question might be interesting for further study, it is largely beside the point.  Some projects for rehabilitation of historic buildings might go ahead without the tax incentive, but they might not be as large or comprehensive as they would have been with access to the incentive.  And without the accountability measures that go along with historic tax credits projects almost certainly wouldn’t be as respectful of heritage features.

Even if a heritage tax credit returns only half of what it costs, that is still a lot more than most tax credits!

And then there’s the considerable spin-off effects of rehabilitation projects in their neighbourhoods and communities.  The Finance folks didn’t look at that.  As Conservative members of the committee later complained:  “… [T]heir analyses neglected to analyze the economic spinoffs such measures would have on the Canadian economy and the additional tax revenues such economic activity would generate.”

Now for the good news!

You may recall that the ENVI committee examined Bill C-323 as part of a bigger study of the federal role in heritage.  The committee’s report, “PRESERVING CANADA’S HERITAGE: THE FOUNDATION FOR TOMORROW” was released a few days ago, on December 4th.  Please, please have a look! [3]

The report has 17 terrific recommendations, including:

• the federal government introduce legislation to, among other things, provide a statutory underpinning for the protection for federal heritage buildings; bring federal Crown corporations (like Canada Post and the CBC) under the Federal Heritage Buildings Review Office (FHBRO) policy and purview; and ensure that federal actions do not adversely effect national historic sites or properties and buildings designated by provinces and municipalities (gold star for that one!)
  
  
• the government adopt a “heritage first” policy requiring federal departments and agencies to, when appropriate, give preference to existing heritage buildings when considering leasing or purchasing space
  
  
• the government restore the funding level for the National Cost-Sharing Program to a minimum of $10 million a year (this program, for work on national historic sites, is chronically oversubscribed and is scheduled to return to a measly $1 million in funding next April)
  
  
• the government consider supporting a main streets initiative modelled on Main Street America to encourage public and private investment in commercial historic buildings in rural areas and small cities (Main Street America is a program of the National Main Street Center, an offshoot of the National Trust for Historic Preservation)
  
  
• the government support an Indigenous-led initiative that would be responsible for determining how places that are important to Canada’s Indigenous peoples should be protected and preserved, and for enhancing the capacity of Indigenous communities to preserve places important to them

And then there is:

• the federal government establish a tax credit for the restoration and preservation of buildings listed on the Canadian Register of Historic Places
  

Sound familiar?! [4]  A phoenix arising from the ashes of Bill C-323?

But this one, like all the other good things in the report, is just a recommendation — not yet a real bill or policy or funding commitment.

Hon. Catherine McKenna

The Minister of Environment and Climate Change, Catherine McKenna, has 120 days to respond to the ENVI committee’s report.  So until about April 1, 2018.

She could just come back with: “Very nice, thanks so much.”

The Minister needs to know that people all across the country want to hear a clear and earnest commitment to act on the report.  Heritage groups Canada-wide need to speak up with one voice.

The National Trust for Canada is orchestrating just that. [5]

Stay tuned.

Note 1: The ENVI committee’s brief report on the bill is here. 

Note 2: OHA+M has devoted a lot of ink to Bill C-323 and its progress. See “Finally, a federal tax incentive for heritage?” and several later posts.

Note 3: The ENVI report is here.

Note 4: One can’t help sympathizing with the sentiments of the Conservative Party (in its dissenting opinion on the report, on page 65):

The Conservative Members of the Committee … question how the Liberal Members can simultaneously recommend the establishment of a federal tax credit for the restoration and preservation of buildings listed on the Canadian Register of Historic Places in Recommendation 11 and reject Bill C-323 which accomplishes exactly that objective. This is particularly surprising in light of the fact that a number of Liberal Members have publicly spoken out in favour of exactly such a tax credit program. We are disappointed that the Liberal Members of the Committee appear to have been instructed by the Office of the Minister of Environment and Climate Change to vote against this critical tool for protecting Canada’s historic sites.

Note 5: For the latest updates see https://nationaltrustcanada.us11.list-manage.com/track/click?u=5dd5f9c97cc4e7df3f1a5d21d&id=125d25bad6&e=33db282bb9.

The blog takes a bow!

Today, it’s all about the blog.

I don’t often get to toot my own horn, but … drum roll please.

At the joint National Trust for Canada and Canadian Association of Heritage Professionals awards ceremony in Ottawa last month, I received an Award of Excellence for the blog in the Heritage Awareness, Education and Scholarship category.

It is a great honour and pleasure to have been recognized by CAHP with this award.

For those curious about how the blog came to be, here is the story.

OHA+M was launched in the depths of February 2015 — Heritage Week to be precise. 2015 marked the 40th anniversary of the passage of the Ontario Heritage Act in 1975 and the 10th anniversary of comprehensive amendments to the Act in 2005. As former senior policy advisor with the Ontario culture ministry and the lead policy expert on the 2005 changes, I wanted to write a behind-the-scenes account of the province’s long and tortuous path to stronger heritage legislation over the 30 years between.

But there were few forums for an article of this type. Existing publications tended to be discipline-specific and limited in their scope and reach.

So, as a platform for telling this and other “policy stories” about the beginnings and evolution of Ontario’s heritage legislation, policies and programs, I opted to create my own on-line vehicle, a blog that would reflect my legal and policy background and interests. The inaugural post was “Welcome to my new blog — and the OHA at 40.”

The name OHA+M highlights the focus on legislation, public policy, and tribunal decisions.  But over the last two and a half years the blog has evolved into something more.  Besides the main fare, it is (now and then) a bit of a bully pulpit.  Sometimes it vaunts my favourite places and subjects (ruins, por exemplo).  Often posts are imbued with personal recollections.  One of my favourites is a tribute to conservation pioneer Peter Stokes.

New posts to OHA+M get cranked out every two-three weeks — and, with this one, number 68 in all!

Considering that posts are usually 1000+ words in length, that’s a lot of blah-blah.

In June 2016 the blog welcomed its first guest author, heritage architect Michael McClelland, writing on the OHA and the "New Heritage.”  (Hey, I’m looking for more guest bloggers!)

OHA+M now consistently attracts 400-500 pageviews a month.  While information is limited and largely anecdotal, the readership (this means you) appears to be mainly those with a professional interest — consultants, heritage planners, heritage educators — and members of volunteer organizations — municipal heritage committees, Architectural Conservancy Ontario members.

Indulge me while I share some of the positive feedback on the blog:

• “WOW - another super article from your blog. Great to see the Gore Park reference so I am forwarding it to all the heritage groups in Hamilton — Friends of the Gore, Heritage Hamilton, HeritageWatchHamilton, etc — and it should go to the Councillors.” Carol Priamo, Hamilton, on a post about a redevelopment project on Gore Park.
• “I enjoyed reading your blog post on the Building Code. Your explanation was clear and it was well illustrated.” William Gerard, Senior Policy Advisor, Ministry of Tourism, Culture and Sport
• “Great update Dan, thanks for your diligence. I especially liked the quotes from parliamentarians on all sides.” Amy Calder, Vancouver, BC, on a post about Bill C-323.
• “The blog is a great general resource for topics in heritage; I definitely recommend becoming a subscriber.” Samantha Irvine, ERA architects
• “A very logical and succinct analysis Dan! Bravo and thank you. Let us hope it garnishes the attention it deserves!” Dave Colby, President, Rondeau Cottagers Association, on a post about the situation at Rondeau Provincial Park
• “Thanks again for your great postings — most enjoyable.” Owen Scott, Guelph
  

If I had to describe (in typical bureaucratic fashion) the goal of OHA+M, it would be to develop an increased awareness and understanding of Ontario heritage policy through:

• the publication in an on-line format of information on the historical development of the province’s policy and programs,
• analysis of and commentary on current heritage issues, including court and tribunal decisions, and
• providing an on-line forum for stimulating discussion of current heritage policy and issues.

The blog faces some challenges in meeting this goal, including:

• not much of a forum — in part this is because the Google Blogger commenting function is awkward, contributing to few reader comments (most feedback is received by me via email rather than through comments posted on the blog)
• statistics on who/how many are subscribing to and reading the blog are limited
• promotion is weak (mostly word-of-mouth)
• limited research capacity, as the blog relies on one person (me, a volunteer)

But thanks to more very good news, help with these things is on the way!  Another drum roll.

I am very happy to announce that I have signed a Memorandum of Understanding with the Heritage Resources Centre at the University of Waterloo for the hosting of the blog.

The transfer of the blog to the HRC website is tentatively scheduled for early 2018.

For those not familiar with the Heritage Resources Centre, check them out here.  The HRC sees the benefits of the blog to the HRC as “expand[ing] its role as ideas generator and centre for the discussion and debate of heritage legislation, policy and issues.”

From my end, collaboration with the HRC will bring the blog heightened awareness and attention, not to mention a better, more interactive blog platform, greater outreach including social media promotion by the HRC, and even assistance with research by UW students.  Looking ahead, the association may assist both sides in exploring potential public and private sector funding sources to help sustain and expand the blog.

The commitment of the Heritage Resources Centre to house, manage and promote OHA+M marks a major turning point for the blog.

You’ll be hearing more about this soon.

But without you, dear reader, none of this would be happening.  I don’t say it enough: thanks for reading!

Bill C-323 at committee

Just a few weeks ago in mid-late October, the House of Commons Standing Committee on Environment and Sustainable Development (ENVI) took up detailed consideration of Bill C-323.  This is the private member’s bill we’ve been following that would provide income tax incentives for heritage property. [1]

Heritage enthusiasts have been advocating for such measures for decades.  For heritage conservation in this country the incentives in the bill would be a game-changer.

Much of the argument for the income tax measures included in Bill C-323 relies on the experience of our neighbours next door.  The U.S. historic tax credit, which goes back to the 1970s, is in fact the main model for the tax credit proposed in the bill now before Parliament.

Very ironic, then, that just as Canada may be finally groping its way toward such a measure, the United States is proposing its elimination!

No comment … except what should surprise us coming from the current U.S. President and Congress?

While the poor National Trust for Historic Preservation south of the border rallies the troops to beat back the wacky proposal to ditch the (historic) U.S. historic tax credit, our own National Trust for Canada is engrossed with a national effort to urge Canadian parliamentarians to seize the day — and spring for key income tax and other tools for preserving our heritage.

Here is where things stand.

The ENVI committee held two days of hearings on Bill C-323, the last stage of its more fulsome study of the federal role in heritage conservation that we got a taste of last time. [2] The study was a smart move, as it gave the committee background and context for considering the particular income tax policies on offer in the bill, while also looking at the need for a broad suite of legal, financial and other measures to address the generally stingy and laggardly federal approach to cultural heritage.

Over the two days the committee heard from several more witnesses.  First up was Peter Van Loan, the bill’s sponsor, who gave a vigorous plea for the proposed tax measures.  Then came officials from Parks Canada and the Department of Finance.  Just after Mr. Van Loan, a former cabinet minister in the Harper government, had given the committee a pep talk about standing up to the bureaucrats [3], they politely poured cold water on the bill, although not in very convincing fashion and not without some squirming under questioning.

More officials, this time from the office of the Parliamentary Budget Officer, offered guesstimates as to the potential cost of the bill’s tax measures (in the $60M range); they too fielded some pointed questions.  Lastly, the committee heard a generally supportive presentation by a former director for tax policy legislation at Finance, who had worked with former Parks Canada executive director Christina Cameron on the unrealized early 2000s efforts to develop a tax policy for heritage.

And that was it.  At the following meeting, last week (October 26), the committee went in camera — members would have been discussing their findings and conclusions and the next steps in producing the report on their study of the federal role in heritage.

And likely how they will proceed with clause-by-clause consideration of Bill C-323, which is reportedly scheduled for November 20th to 24th. [4]

Sources say the committee’s report on its study — which would presumably include its recommendations with respect to Bill C-323 — is expected November 28th.

Meanwhile … the government continues to say it is not supporting the bill.

What will the ENVI committee say in its report and could that change the government’s mind?

The answer may depend on the public response — the response from all of us who believe the time has finally come for game-changing tax incentives for heritage!

Watch this space.

Note 1: See previous OHA+M posts, starting with ”Finally, a federal tax incentive for heritage?"

Note 2: The two days of ENVI hearings on the bill can be found here.

Note 3: In response to a question about why the previous government hadn't acted, Mr. Van Loan said:

My assessment at the end of the day is that we have something called the Department of Finance. Their default posture is always no. It's no to additional tax credit programs. The only way things like this happen is when politicians choose to exert political will and exercise their authority to give that direction and say, “This is a priority for us. We want to see it happen.” We are in the position of being able to do that.

I think we've seen that dynamic at play here already. I don't put it down to a partisan dynamic at all. I put it down to the natural bureaucratic response of a Department of Finance that will say that to any program like this, anywhere.

When you've talked about tax credits in the past, I think it probably would not surprise anyone that none of those came as initiatives from the Department of Finance. They all came as initiatives of politicians, political platforms, finance ministers, prime ministers, whoever thought it was important to do these things. I think we're in a similar situation here in terms of the tax credit.

Note 4: At clause-by-clause consideration a committee studies each clause of a bill and votes to adopt it, delete it, or amend it. When this is done the committee is ready to report the bill back to the House.

Heritage on the Hill: Parliamentary committee studies federal framework for the conservation of cultural heritage

We’ve been following Bill C-323 — legislation to provide income tax incentives for heritage property, which has been referred to the House of Commons Standing Committee on Environment and Sustainable Development but not yet taken up. [1] 

Presumably in part to give them context for the coming Bill C-323 debate, the committee is currently in the midst of a milestone study on “Heritage Preservation and Protection in Canada.”

Starting on September 19th and wrapping up last week, the committee devoted six days to hearings and discussion of heritage issues in the country.  The focus is naturally on the federal role; the 23 witnesses invited to address the committee have some connection, present or past, to federal heritage programs (Parks Canada, the Historic Sites and Monuments Board of Canada), national organizations (National Trust for Canada, ICOMOS Canada), and national historic sites (Buxton National Historic Site and Museum near Chatham, Ontario).  Or to efforts to conserve Canada’s indigenous heritage (National Centre for Truth and Reconciliation, Indigenous Heritage Circle).

The committee also heard, via video conference, from the Executive Vice-President and Chief Preservation Officer of the (U.S.) National Trust for Historic Preservation.

Remarkably, the study is moving ahead very quickly with the committee already moving into the report-writing and recommendations phase.  In addition to the witness testimony and supporting briefs, the committee is also open to public comments (see the National Trust’s alert about this [2], but at this point you’ll have to hurry!).

The audio of the witness presentations and question-and-answer with members of the committee can be found here, along with transcripts of the discussion.

For the heritage advocate most of it is pretty absorbing stuff.  To give you a taste I’ve selected a few favourite bits, grouped according to some of the main issues that emerged.

The need for federal action

Christina Cameron, formerly with Parks Canada, Historic Sites:

What I have attempted to briefly outline are what I consider to be the main components of a comprehensive heritage conservation program for Canada's historic places. The pattern of loss and neglect has not changed in decades. The Parks Canada Agency Act, I remind you, charges the minister responsible for Parks Canada, who is the Minister of Environment and Climate Change, with responsibility for national historic sites, historic canals, heritage railway stations, heritage lighthouses, federal heritage buildings, historic places in Canada—hence the [Canadian Register of Historic Places]—federal archaeology, and the design and implementation of programs that relate primarily to built heritage writ large. The agency act emphasizes that it is in the national interest to protect and commemorate these special places “in view of their special role in the lives of Canadians and the fabric of the nation”, but the minister cannot accomplish this work without a more robust suite of legislative, financial, and fiscal tools.

The need for federal heritage legislation

Gordon Bennett, formerly with Park Canada, Historic Sites:

“I don't think I am the only person who has ever wondered why it is that the Government of Canada has sponsored and passed comprehensive legislation dealing with national parks, national marine conservation areas, national museums, wildlife, migratory birds, species at risk, and general environmental protection—to cite only a few examples—but there is no comprehensive federal legislation—with the emphasis on comprehensive—dealing with national historic sites and historic places. To be sure, there is legislation on heritage lighthouses and heritage railways, but significantly, both were initiated by private members, whereas the former were all government bills.

This is not to say that there are no statutes that deal with historic sites. In fact, there are three: the Historic Sites and Monuments Act; a single section of the Canada National Parks Act that deals with some national historic sites administered by Parks Canada; and the Parks Canada Agency Act. However, … none provide the systematic or comprehensive type of statutory protection that is required.

Why legislate? Parliament is the highest policy-making authority in the country in respect of matters falling under federal purview, and legislation is the highest expression of that policy-making authority. It is essential that Parliament legislate in the area of built heritage in order to signal to Canadians, as well as federal departments, agencies, and crown corporations and other orders of government, that the federal government values this heritage. Policy that is not expressed in, and hence sanctioned by, legislation does not possess the same degree of credibility, stability, or predictability as legislation, not only outside government, but equally important, inside government as well.”

The need for federal incentives

Natalie Bull, Executive Director, National Trust for Canada:

… [T]he carrot and the stick are at the heart of most jurisdictions' heritage strategies. We know that incentives are rarely available in amounts sufficient to influence an unwilling owner's decision to invest or demolish, and heritage designation generally does not bring absolute protection against demolition. …

Number one [of the priority actions she recommends], the federal government can join municipalities, provinces, and territories in offering much needed incentives to attract investment. A range of approaches may be appropriate to reflect the different ownership types and property types. For example, a predictable go-to source of federal matching funds like the cost-share program works well for heritage properties owned by charities and non-profits. Consideration might be given to a mechanism where donations by private individuals and corporations are matched by the federal government as an interesting way to encourage philanthropy. A federal rehabilitation tax incentive like measures recently proposed in Bill C-323 is a proven way to attract corporate investment to revenue-generating historic places, and gives older buildings vibrant, new uses.

Grant programs versus tax measures

Chris Weibe, National Trust for Canada:

Essentially there are only two mechanisms for the federal government to intervene in the commercial property market, and those are income tax measures or grants and contributions. You've heard about the CHPIF [Commercial Heritage Properties Incentive Fund] fund and its success as a pilot program for a tax credit program. Analysis by Deloitte and Ernst & Young concluded that refundable tax credits would be more effective than would a grant program. A refundable tax credit offers a number of advantages to the private sector that a contribution program does not. It offers predictability and timeliness. Contribution programs often require more than double the time for approvals on the front end. It leverages existing familiarity with the tax system, creating investor confidence. It also offers flexibility: it works well for large or small projects.

Julian Smith, Willowbank Centre for Cultural Landscape:

I would hope the emphasis, if there are tax credits, is on income-producing properties. Among the concerns that have been raised about somebody owning a beautiful historic home in Westmount or Rockcliffe or Shaughnessy or whatever is whether they should be getting a tax credit for work on that house. The idea that the U.S. adopted, that it should be for income-producing properties, has put the focus on tax credits for the rehabilitation of commercial buildings, of main streets in little towns, of urban neighbourhoods, abandoned industrial places. … It’s in income-producing properties that you get the real swings in urban areas that are either going to allow places to continue to exist or not.

How indigenous peoples see heritage and its protection

Karen Aird, Indigenous Heritage Circle:

But [in addition to sacred sites] for many indigenous groups, [indigenous heritage] can mean intangible things like laws, stories, and oral histories. It can mean places that may have no physical objects but that are sacred, where people go for ceremonies. It can be artifacts that many of you see in museums. It can be even things like intellectual properties that are passed: our stories, our songs, our totem poles. Those are all just some of the many things that represent indigenous heritage.

Madeleine Redfern, Indigenous Heritage Circle:

… [I]ndigenous heritage is simply not part of most of the conversations. … I’m listening to the proposals for tax credits and the value of having systems that protect heritage sites, and while I understand and appreciate that it is important, it does not include our indigenous realities. [W]e’re almost having two different conversations ….

The systems that are in place are not set up for our communities to actually access. We do not meet the criteria. The tax credit system is beyond what we are able to access in being able to not only have our heritage sites recognized but protected in the way we want. … [I]t’s often brought up in a developmental context, and even then it focuses usually only on archaeology. If there are some sort of traditional burial grounds or some sacred sites, they're to be preserved. But outside of that, everything that we know we need....

There's a mindset, and it's challenging to begin to expand it: how do we have ourselves included? Not even in an existing system that we find ourselves that we don't fit in; how do we create a parallel system or integrate those systems that allow indigenous communities across this wonderful nation to be able to have the resources, outside of a development project, to actually begin to have national funds that allow us to begin to have our sites or our practices designated, recognized, and financially supported?

The committee’s report is expected in November.

Note 1: See previous OHA+M posts: "Finally, a federal tax incentive for heritage?"; “Debating Bill C-323”; ”Bill C-323 clears a hurdle”; and “Probing Bill C-323.”

Note 2: See http://www.nationaltrustcanada.ca/get-involved/hcf-news/5-minutes-your-time-today-can-help-change-game-historic-places-canada