Incentive for Historic Places

Years have passed since there has been attention to federal legislation for historic places in Canada. As Canada marks its 150th year, it may be the year to make a difference that would bring Canada to an equal footing with most G20 countries.

A new private members bill has been tabled by Parliament: Bill C-323, an act to amend the Income Tax Act (rehabilitation of historic property) . Introduced by York-Simcoe MP Peter Van Loan, he stated in the House:

Mr. Speaker, this bill creates a tax credit for the rehabilitation of historic buildings in Canada. It is designed to help those who invest in our cultural heritage.

It is a meaningful measure to strengthen heritage infrastructure. By maintaining historic buildings and undertaking costly heritage renovations, citizens undertake a considerable private burden from which we all benefit through the preservation of our past and the places that have made our country. This bill seeks, in a small way, to provide some support for them for the considerable investment they make on behalf of all of us.

With the 150th anniversary of Confederation nearing, this bill is an opportunity for all members of the House to show their support for preserving Canada’s built heritage. These changes will help save our most important historical structures for our children and grandchildren to enjoy for generations to come.

This bill introduces:

  • a 20% tax credit on eligible costs for rehabilitation work done to designated historic places (commercial & owner-occupied residential); and
  • an accelerated Capital Cost Allowance (25%/50%/25%) for eligible capitalized costs incurred under the same conditions of the tax credit (commercial only).

It would apply to private and non-profit historic places, but not to federally owned sites since the government does not tax itself.

Recently I was told that few countries actually have legislation in place at the federal level – a surprise to me. If we were to compare apples to apples, our legislative environment is on par with continental Europe, the UK, the USA, Australia, New Zealand, Japan, South Korea and perhaps Singapore. Most of these countries have comprehensive legislation that is more than commemorative in nature. In the case of the USA, their tax incentives have created billions of financial wealth while retaining many of their historic places.

In Canada, national historic sites are governed by the Historic Sites and Monuments Act (updated in 1985), the National Parks Act and the Parks Canada Agency Act. The Minister of the Environment and Climate Change may:

(a) by means of plaques or other signs or in any other suitable manner mark or otherwise commemorate historic places;

(b) make agreements with any persons for marking or commemorating historic places pursuant to this Act and for the care and preservation of any places so marked or commemorated;

(c) with the approval of the Governor in Council, establish historic museums;

(d) with the approval of the Treasury Board, acquire on behalf of Her Majesty in right of Canada any historic places, or lands for historic museums, or any interest therein, by purchase, lease or otherwise; and 

(e) provide for the administration, preservation and maintenance of any historic places acquired or historic museums established pursuant to this Act.

The weakness of this process is that it is commemorative in nature and does not protect or create an incentive to save a historic place beyond mounting a plaque. An all too common pattern was to demolish the place and then erect a plaque to mark what once was there. As in this case, it is clear that Canada remains behind much of the world in terms of understanding and protecting its historic places at the federal level.

There is strength at the provincial and municipal levels, but they too have their own obstacles to overcome.

In 1999, the federal Liberal government of the day developed the Historic Places Initiative (HPI). It would build a national register of historic places, create national standards for conservation of historic places, develop a tax incentive, and propose new legislation which would create in law protection of historic places at the federal level (rather than commemorative and administrative protection). Only parts of this initiative were fulfilled.

The passage of a private members bill can be challenging. All-party support is a must, committee reviews need to be collaborative, readings require good amendments and a non-partisan Senate review is best. Finally, the bill may pass royal ascent. It is a long and arduous process.

The passing of Bill C-323 is the beginning of a return to the Historic Places Initiative – which oddly was not supported by the Harper Government yet this bill is supported by two members of the former government’s cabinet!

The other initiative (a separate Historic Places Act) may be the next step. For now, Bill C-323 is a start.

For more information:

RAIC support for Bill C-323

National Trust’s Financial Arguments for Bill C-323