Bill C-323 clears a hurdle

The Speaker:

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Environment and Sustainable Development.

~ Hansard, March 23, 2017

By a vote of 150 to 140, Bill C-323, which would create a tax credit for the rehabilitation of historic properties, passed Second Reading in the House of Commons last Thursday. [1]  Wow!

To get this far is quite an achievement for a private member’s bill, especially one with revenue implications.  Peter Van Loan, Conservative member for York—Simcoe and the bill’s sponsor, issued a press release calling the vote “A Victory for Heritage.”

Said Mr. Van Loan: “This Bill represents a historic opportunity to invest in our cultural heritage. It is very exciting that the House of Commons supports our initiative. We’re looking forward to debate in committee.”

The bill now goes before the House Committee on Environment and Sustainable Development for detailed review.  No word on the timeframe for that yet, although the press release says the bill is due for committee discussion “in the near future.”

With a healthy MP presence in the House that afternoon — 292 out of a total of 333 MPs voted on the bill — we get a good sense of where the parties, and most individual MPs, currently stand on the bill. [2]  It’s clear the main opposition parties — Mr. Van Loan’s own Conservatives and the NDP — both support the legislation, at least in principle.  All of the Conservative and NDP members in the House at the time voted for it.  Of the 150 MPs voting in favour, 128 were opposition members. [3]

As for the Liberal government, MPs are split on the bill — 22 Liberal MPs voted “yea”, enough for it to pass, and a whopping 140 of their colleagues voted “nay.”  (With 180 Liberal MPs in total, that leaves another 18 or so Liberal MPs who weren’t there and didn’t vote.  If those MPs had voted with the majority of their party, the vote, and bill, would have been lost.)

During the Second Reading debate most members speaking for the bill cited support for the legislation from their own communities and even quoted from letters they’d received.  There can be no doubt that extensive lobbying for the bill from all parts of the country contributed to last Thursday’s win! [4]

But as the numbers show, there is still a ways to go.  And if the bill ever gets to Third (final) Reading and the vote is whipped — with members required to vote as directed by party leaders — as is likely, there is farther to go still.

Given some of the Liberal MPs' speeches at Second Reading, it’s not surprising at this stage that the two cabinet ministers most closely interested in the subject matter, and who received direct entreaties urging support of the bill (and were copied on most of the MP correspondence), did not vote for it.  Finance Minister Bill Morneau was not in the House at the time. (He was busy selling the budget he’d brought down the day before.)  Environment Minister Catherine McKenna, who would be the minister responsible for implementing the legislation should it ultimately pass, was there — and voted no.

With the bill off to committee, there is time to change minds. Or really just one mind … the government’s.

The Standing Committee on Environment and Sustainable Development has 10 members — six Liberals, three Conservatives and one New Democrat:

• Deborah Schulte, MP (Lib.) for the Ontario riding of King—Vaughan (chair)
• Jim Eglinski, MP (Conservative) for the Alberta riding of Yellowhead (vice-chair)
• Linda Duncan, MP (NDP) for the Alberta riding of Edmonton—Strathcona (vice-chair)
• John Aldag, MP (Lib.) for the British Columbia riding of Cloverdale—Langley City
• William Amos, MP (Lib.) for the Quebec riding of Pontiac
• Mike Bossio, MP (Lib.) for the Ontario riding of Hastings—Lennox and Addington
• Darren Fisher, MP (Lib.) for the Nova Scotia riding of Dartmouth—Cole Harbour
• Mark Gerretsen, MP (Lib.) for the Ontario riding of Kingston and the Islands
• Joël Godin, MP (Conservative) for the Quebec riding of Portneuf—Jacques-Cartier
• Martin Shields, MP (Conservative) for the Alberta riding of Bow River

Whatever happens later, at least the bill is ensured a favourable reception.  Every member of the Environment Committee voted for the legislation at Second Reading!  (The one exception was Mr. Amos, who did not vote.)  And two of the Liberal members, Mr. Gerretsen and Mr. Aldag, spoke fervently for the legislation at Second Reading.

The role of the committee?  To review the actual text of the bill and to approve or change it.  Usually the committee will choose to hold public hearings.  With a private member’s bill, the practice is that the first witness to appear before the committee is the member — here Mr. Van Loan.  Other witnesses/presenters may be invited to express their views on the bill, including individuals, experts or representatives of organizations that would be affected by the legislation.  Committee members get to question all of these folks.

Will Environment Minister Catherine McKenna appear before the committee?  If so, what will she say?

You can be sure that Mr. Van Loan, while not a member of the committee, will play an active part.  In addition to being the first witness, he can participate in committee discussions. [5]

At committee a bill undergoes close scrutiny.  So it’s high time to probe the details of this landmark policy initiative.  For next time.

Note 1: To check the vote tally and see how your MP voted, here is the link to Hansard for March 23, 2017 (scroll down to Private Members’ Business): March 23 vote.

Note 2: 292 = 150 + 140 + 2 (two MPs abstained in the vote on the bill). There are 338 seats in the House of Commons but five are currently vacant. The robust attendance in the House on March 23 may have been owing to the vote on Liberal MP Iqra Khalid’s contentious Islamophobia motion, which took place immediately after the vote on Bill C-323.

Note 3: Opposition members supporting the bill included several Bloc Québecois MPs and Green Party Leader Elizabeth May.

Note 4: The two Second Reading debates can be found here: first hour and second hour. Scroll down to Private Members' Business.

Note 5: The House rules provide that any MP may attend standing committee meetings, question witnesses and participate in the committee’s public proceedings, although non-members can’t move motions or vote.

Debating Bill C-323

[M]ost of those who have grown to know and love our country's history have travelled that path guided by heritage buildings that were the gateways to the stories of the past.

~ Peter Van Loan, MP (CPC)

The most interesting heritage discussion in Canada right now is going on in Ottawa — in the House of Commons!

This week MPs engaged in a second hour of Second Reading debate on Bill C-323, a private member’s bill that would provide income tax incentives for the rehabilitation of historic places.  The March 9 debate followed a first hour of debate on February 10. [1]

The bill was introduced in Parliament late last year by Peter Van Loan, MP for the Ontario riding of York—Simcoe and Official Opposition Critic for Canadian Heritage and National Historic Sites.  For background on the bill see my OHA+M post from December 21, 2016.

Leaving aside for the moment consideration of the bill itself, it is wonderful to see our representatives, from all three major parties, engaged in a passionate discussion of the importance of our cultural heritage.

These [historic] buildings tell a story about who we are and where we came from. They impart important lessons from the past and remind us about the challenges we have overcome and the accomplishments we have had in this country. In short, they highlight and bring to life those special moments in our history that are worth remembering.

~ Mark Gerretsen, MP (Lib.)

As a private member’s initiative, the bill faces an uphill climb.  As a measure amending the Income Tax Act and affecting government revenues, that climb is especially steep.

At Second Reading a bill is discussed at a high level, with MPs weighing in on whether the concept or principle of the legislation should be supported.  More rigorous scrutiny of the details of the bill comes — if it comes at all — later, when the bill moves on to the committee stage.

So how's it going so far?

Considering that the fate of the bill is in the hands of the Liberal government, one would have to say… there is still reason to hope.

In the first hour of debate last month two Conservatives, three Liberals and three NDP members took part.  Not surprisingly, the two Conservatives, including Mr. Van Loan himself, spoke in favour of the bill.  The NDPers were clear that while they had some concerns they supported the bill in principle, in part because of its “greeness.”

New Democrats have long supported Canadian heritage and we support the goal of this private member's bill of preserving historic stock. … This legislation would help to clear the path for the creation of good green jobs; jobs that are stable, safe, and family-supporting; jobs that do not endanger the climate or the environment; and jobs that help us in the gradual transition away from reliance on fossil fuels.

~ Sheila Malcolmson, MP (NDP)

As for the Liberal MPs who spoke, one said he was “definitely sympathetic” to the bill and asked some good questions.  But the other two — one of whom was the Parliamentary Secretary to the Minister of Finance — were much more guarded.  While not saying the legislation was a bad idea, they made the point that “tax changes should ideally be made as part of the budgetary process”, since obviously a new tax credit is going to cost something in terms of foregone revenue. [3] They also mentioned the government’s 2016 commitment to undertake a “comprehensive review of tax expenditures”, part of a broader exercise to “eliminate poorly targeted and inefficient programs, wasteful spending and ineffective or obsolete government initiatives.”

Both these points seem to suggest that, in the eyes of the government, the timing of the bill is not great.

Rather than simply dismiss the bill on that basis, the Liberal critique — and this could actually be construed as a more positive sign — went on to identify several substantive issues (some more coherent than others):

• cost/lack of cost controls — many thousands of properties would be eligible; no caps on amount of tax credits
• effectiveness — would tax credits actually promote preservation or just provide a perk to owners “for doing work that they are already obliged to do”
• inequality/unfairness — people who own designated property would be eligible while their neighbours who don’t would not, ”even though costs are incurred in both cases”
• need — there are already tax incentives for donations to preserve heritage buildings
• potential administrative burdens — could the system handle the expected increase in heritage designations; what about the burden on the Canada Revenue Agency 

One might observe that less-than-ideal timing of a bill should not be a fatal flaw.  Nor should specific policy and administrative criticisms and concerns, if they can be countered, fixed through amendments or addressed through implementation planning.

Across the country, Canada's built heritage reminds us of where we came from and where we have been along the way. From the smallest rural towns to our grandest cities, the history contained within these buildings forms what it means to call our communities home.

   ~ John Aldag, MP (Lib.)

Remarkably, a month later during the continuation of Second Reading debate on March 9, all MPs spoke forcefully in support of the bill. 

Speakers comprised three Conservatives, including Mr. Van Loan, two Liberals and one NDP member.  The Liberal members did not raise any of the issues mentioned previously.  Mr. Van Loan, who spoke last, took the opportunity to thank “all those who have spoken in support of this from all sides of the house”, adding:

It is indeed, as those addresses indicate, a non-partisan bill. This is not a partisan effort. It is very much a product of the work of previous governments, both Liberal and Conservative, under which the foundations of this tax credit have been developed in this proposal, and it is a benefit to all of Canada. That is why all of us are indeed advocating for it.

He then went on to address some of the criticisms voiced on February 10.  He punctured the inequality argument, saying that what was unfair was that private owners of designated properties were effectively providing a public benefit with little/no help.  With respect to the need for the measure, he pointed out that existing tax rules may benefit donations to preservation charities but not the preservation efforts of private businesses and individuals.

Finally, in response to the cost concerns, Mr. Van Loan said that the costs were calculable and would be “very modest.” [3]

What’s next?  Second Reading debate is concluded and the vote is scheduled for March 22.  If the bill isn’t killed, it’s on to committee!

* * *

I was happy to see my MP, John Nater, the Conservative representative for the riding of Perth—Wellington, participate in the March 9 debate.  His remarks included a personal story:

There are many beautiful older buildings in my riding…. In fact, my Wellington county constituency office is in one such heritage building. It is a beautiful old post office. It was the Harriston town post office for many years. … Shortly after I was elected, I was able to take a tour of the building and to see the state of repair it was in at the time. Thanks to a hard-working local family, it took ownership of the old post office and restored it to an exceptionally high level of standard. Now my constituency office in Wellington county is located in that building. It has been renamed the “Old Post” and is now home to a number of different local businesses and community groups. I am proud to have played a small role in the restoration of that building.

It was no surprise that Mr. Nater is backing Bill C-323.  He had assured me as much in his reply to my letter urging his support.

Have you written to your MP?  If not, this is the time!

Note 1: See Hansard for February 10 (first hour) and March 9, 2017 (second hour) and scroll down to Private Members’ Business.

Note 2: Part of the case for the tax credits is that, while they reduce income tax for the taxpayer in the year of filing, over time there is a more-than-offsetting increase in tax revenue as a result of the returns on investment they stimulate. This argument is sounder in the case of a commercial, income-producing rehabilitation project than for a home restoration.

Note 3: Less clearly, Mr. Van Loan suggested that the government would have some control over the number of properties eligible for a tax credit since only properties on the Canadian Register of Historic Places qualify. In fact, under his bill properties designated under the Ontario Heritage Act and similar legislation could also be eligible.