Bill C-323 (Historical)

An Act to amend the Income Tax Act (rehabilitation of historic property)

This enactment amends the Income Tax Act to establish a tax credit for expenses related to the rehabilitation of a historic property. It also establishes a tax deduction for the capital cost of property used in the course of such a rehabilitation.

[Jacques Archambault, Executive Director, The Canadian Heritage of Quebec]

Good afternoon.

First of all, I would like to thank the members of the committee for the invitation and for giving me the opportunity to discuss the status of heritage conservation in Canada.

I am here to make a brief presentation on heritage in Quebec and to provide suggestions from our organization. The organization is called The Canadian Heritage of Quebec, or CHQ. It is a provincial non-profit and non-governmental organization at the service of heritage in Quebec for more than six decades, more than 60 years.

In those 60-plus years since 1956, the volunteers on our board have been working to preserve about 30 heritage buildings and natural sites in Quebec. In the past, we had some in Ontario. Most of our properties were bought with money from our volunteers or our founders.

The conservation work is done with the equivalent of one and a half employees, a miller, and, of course, many volunteers and artisan-caretakers. We also have partnerships with local, regional, provincial, and even national groups, like the Nature Conservancy of Canada.

The long-term conservation of the CHQ properties is made possible by various heritage protection initiatives, both tangible and intangible, implemented by municipal, provincial or federal governments. For us, that includes a national historic site and a building in Westmount. In other cases, the long-term conservation of CHQ properties is done directly by our organization, to the extent we are able. But, unfortunately, we are running up against serious limitations. In Quebec, there is no mutual servitude to protect for owners, as is the case in Ontario.

CHQ receives no ongoing grants for our annual operations, but we do take advantage of the Young Canada Works program, which allows us to hire two summer students, in two of our 16 properties. Mainly, we fund our conservation activities through donations from the public, from foundations, and from income that we generate ourselves by selling flour from our mill, and by renting out our houses during the summer season, such as Sir John A. Macdonald's summer home in Rivière-du-Loup, which we turn into tourist accommodation for two months per year. The house was officially designated a national historic site in 2015. Some of our sites are also open to the public on payment of a small entry fee.

Conserving heritage buildings is becoming more and more difficult, expensive and complicated. This is the result of requirements and constraints on the owners from government legislation and regulations involving various ministries and sometimes different levels of government.

Restoration projects are very expensive for us, costing hundreds of thousands of dollars, even a million dollars. Sometimes, we receive grants for some restoration projects from the Quebec ministry of culture and communications, sometimes as a joint venture with major cities like Montreal. In theory, in some cases, those grants can cover 40% or 50% of the construction costs, but in fact, the overall cost is much higher, meaning that the percentage of the grant, at its highest, drops to more like 30% and 35%. The percentage also varies depending on the amounts available in the program.

I must mention that, in recent years, we have also obtained some grants for certain development projects, coming either from provincial or federal level, one of which was for a virtual exhibition on Sir John A. and Lady Macdonald. We appreciate that a great deal and are grateful to the Department of Canadian Heritage for it.

Nevertheless, the result is that the CHQ has to resort to fundraising in order to find the hundreds of thousands of dollars we need for our restoration and development projects. That is very difficult and requires years of work, since fundraising is a highly competitive market. This is not to mention that, in the recent past, certain actions on the part of the provincial government have caused us to lose tens of thousands of dollars in revenue, with additional losses already anticipated in the coming years.

In addition, the complexity, the work required, the short timelines and the costs needed to apply for grants has, on a number of occasions, deterred us from starting the process, since the anticipated result was less than convincing. That was the case with the John A. Macdonald House and Parks Canada's national cost-sharing program for heritage sites. In 2015, the entire envelope was $1 million for all of Canada with a maximum of $200,000 per project. Our restoration project was estimated at $200,000 and, according to the department's official, we needed a project with demonstrated urgency, in a very competitive, Canada-wide situation. We also had to ask professionals to prepare research, analyses, reports, plans and estimates, all for a grant that would probably be less than $5,000. Moreover, at that point, it seemed that very few projects would receive the 50% maximum that the program indicated. It turned out to be less than that.

By good luck, by help from a volunteer member of our board, and by virtue of our fundraising efforts, we were able to get some significant donations from some donors and, after a few years, we were able to complete a first phase of the project. Today, we still have to find more than $100,000 so that we can finish it. This is only one building from the 25 that we own.

All that fundraising activity, stretched over a number of years, threatens the proper conservation of the buildings in the medium and long term. Sometimes, it even exacerbates an existing problem and makes it more expensive to fix. So preservation, building maintenance or upkeep, is crucial in the process of conserving a building.

There is no support for that, no grants. What is more, our craftsmen, whom we call our “artisan-caretakers” can no longer do all the work required, because of new government regulations.

So the costs of preservation have doubled or sometimes tripled in the last three years. However, preservation is what prolongs the life of the building and reduces restoration costs. It all complicates our work and our mandate to conserve the built heritage. We often have to choose between investing in conservation or in development.

Faced with that complex situation, and after more than 60 years in existence, our organization began a strategic review of its properties at the beginning of 2017, in order to decide which would be kept and which would be disposed of, sold or transferred, if that is possible, to other institutions, organizations or individuals.

Let us now look at the dynamics of conservation in Quebec. In recent years, a number of heritage buildings have been demolished by property developers to make room for new housing projects, condos, or commercial buildings. There are few incentives to encourage those developers to conserve and incorporate heritage buildings into their development projects. Some financial assistance could encourage them to move towards conserving and rehabilitating heritage buildings.

For private owners, the situation is similarly difficult. A number of them want to conserve the heritage value of their property, to preserve it, to rehabilitate it and to restore it for the benefit of the community—it may be houses, mills, lighthouses, or industrial buildings. However, once more, the high costs of restoration, added to the complexity of grant applications, are deterring them.

So they must also be encouraged in their desire for conservation by financial assistance. The added market value of a restored house has not been proven; the opposite even seems to be the case, at times.

In Quebec, a number of non-profit organizations are trying to support, encourage and guide private owners in good conservation practices. Those organizations are sorely lacking in resources and basically count on volunteers, thereby limiting their mission and their activity. In the last three years, the few grants that some of them were receiving in operating assistance have been cut, making the situation even more critical.

In fact, our organization regularly receives calls from the public and, sometimes, from organizations, including municipalities, looking for support so that their heritage buildings can be conserved.

In 2012, the Cultural Heritage Act was passed in Quebec, transferring to municipalities and to the public more responsibility for safeguarding the heritage, but without the resources and the expertise required. So today, the organizations are called on more than previously to conserve the heritage.

Three years ago now, a dozen or so organizations established the Table de concertation des acteurs nationaux en patrimoine bâti du Québec, in order to discuss their challenges and their common issues, and to provide each other with mutual support. Next November 1, the first national summit on Quebec's built heritage will be held in Montreal, and you are all cordially invited.

I will now provide you with some observations and suggestions for encouraging owners, organizations and individuals. The federal government could implement a tax incentive, as in Bill C-323. That initiative should apply to all private owners by extending it to property developers. The notion of historic or heritage property should be expanded, without simply relying on the lists in the Canadian Register of Historic Places. Your department should become a leader in supporting heritage in the various communities across Canada. The amount available in the national cost-sharing program for heritage sites should be increased and stabilized in the coming years. A program should be developed to support and participate in multiplier effects—by which I mean the matching of donations—for organizers and individuals raising funds for heritage. They should be encouraged and supported by formally recognizing the efforts of, and the considerable role played by, non-profit and non-governmental organizations and private owners. Finally, recognize the preservation of built heritage with a specific horizontal status through all federal departments, perhaps also in concert with the provinces and territories. All this would ease the important work being done for Canada's heritage and would act as an anchor for the concept of Canadian identity.

Canadian heritage knows no provincial borders. That is actually the reason that our founders chose Canadian Heritage of Quebec for our organization's name.

Thank you.

Architecture

[Peter Van Loan, Conservative, York—Simcoe, ON]

Mr. Speaker, today marks World Architecture Day. Architects make the framework of our lives and architects dream the future of where we live, work, and play. When architects dream well, their work becomes part of the story of our lives.

Preserving our built heritage benefits all Canadians. That is why I introduced Bill C-323, which would create a tax incentive for Canadians who restore and rehabilitate their heritage properties. This bill has the support of the Royal Architectural Institute of Canada, which said it was good news and an opportunity for all members of all political parties to support the retention of Canada's historic buildings.

Canadians care about outstanding architecture around them. We are worse off when magnificent buildings are demolished or neglected. We now have an opportunity to support Canadians working to preserve historic buildings so they can be enjoyed by generations to come.

On World Architecture Day, I encourage all members to help preserve our built heritage and support Bill C-323

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

That would be great.

I have a quick question for you, Mr. Smith. Did you say that the tax credit should focus only on income-producing properties, or don't forget income-producing properties when we come to Bill C-323?

[Chris Wiebe, Manager, Heritage Policy and Government Relations, National Trust for Canada, As an Individual]

Sure.

Thank you very much for this opportunity, and thank you for your interest in historic places. The heritage field is diverse, with different ownership circumstances, and the threats and potential solutions are various. I can see that you are grappling with the question of where the federal government can make the greatest difference.

This morning I want to hone in on two areas that haven't really been explored as much in these hearings. Those are commercial heritage properties and properties owned by charities and non-profits. To assist, I have provided a handout detailing some of the existing incentives, and I'll refer to that throughout my presentation.

There are 440,000 pre-1960 commercial buildings in Canada. If we assume that about 5% to 15% of these could potentially be of heritage interest, there would be 22,000 to 66,000 buildings in this class across Canada. This is a substantial group of community-defining buildings on Canada's main streets.

But why do they need incentives in the first place? What are the disincentives that hamper their survival? First let me run through a few of them. Return on investment: heritage rehabilitation is often considered risky because there are unknowns, unlike for construction on bare ground. Construction costs: while some heritage rehabilitation projects cost less, others cost more, and then these ambiguities serve to suppress demand. Then there's financing. The big banks for the most part do not want to be involved in “staged” investments and are not prepared for the risks that come with adapting older buildings. There's some discussion around rural areas, in that they will not invest in older buildings in smaller communities at all. The fourth reason is lack of ease of property development. Investors are often discouraged by real or perceived restrictions on altering heritage properties. Fifth, there is the current federal tax system itself, which presents problems, including the inability to get a clear explanation from tax officials about which types of rehabilitation work are immediately expensable in a given tax year and which must be capitalized. There are also new-construction biases within the GST rules themselves.

So are there good examples of places where incentives have tipped the balance away from these disincentives? As Julian and others have mentioned, in the United States there has been a booming and competitive industry over the past 40 years because of the establishment of federal tax credits there for the rehabilitation of heritage buildings at a 20% level. This program stimulates private investment in abandoned and underperforming properties. Over the years, $24 billion in credits have generated more than $28 billion in federal tax revenue, and leveraged $131 billion in private investment, an impressive number. This is a 5:1 ratio of private investment to tax credits, and it has created 2.5 million jobs and preserved 42,000 historic properties.

It's important to note that there has been tremendous rural impact from this program over the past 15 years. Over 40% of U.S. tax credit projects are located in communities with populations of less than 25,000.

If you refer to the chart I provided, the one with the five circles on it, you can see that the larger projects typically have a limited ratio of incentives available as a result of caps on programs. I've chosen the $2.2 million level for a commercial project because that was the average cost of the CHPIF, commercial heritage properties incentive fund, projects back in the mid-2000s.

By comparison, have a look at the pie on the right; with all three levels of government in the United States contributing, the picture is very different. Federal tax credits of 20% can be stacked with state credits for a combined 40% to 45%. You should note that 34 states out of the 50 have these stackable credits.

My consultation across the country has shown that it is on these larger projects, those of two and a half million dollars and things of that nature, that a tax credit is needed. For example, the Farnam Block on Broadway Avenue in Saskatoon was demolished in 2015. Repair costs were estimated at $700,000. The city was able to bring forward only $150,000, and the building came down. Or take something like the Calgary Brewing and Malting site, which is sort of like the Distillery District in Toronto in the making. It's languishing for lack of a substantial incentive to give it some velocity.

What can the federal government do? 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 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.

Understandably, the potential cost of implementing a tax credit has been raised at this committee. Deloitte's analysis of the estimated cost of a historic rehabilitation tax credit in Canada found that, far from being a cost to government, these tax credits for commercial properties would create net revenue growth from corporate income tax, GST, and additional personal income tax stemming from new employment.

When we model for a universe of 22,000 commercial properties, we see that these tax credits cost $3.8 million in year two and $55 million in year five. However, these credits generate net revenue growth of $3.4 million in year two, rising to $14 million by year five. The modelling for a universe of 66,000 commercial properties follows a similar trajectory. For broader impact, the government could consider extending a rehabilitation tax credit to heritage homeowners, like that introduced by Bill C-323.

Let's shift quickly to not-for-profit and residential buildings. Tens of thousands of heritage buildings in Canada would not benefit from a tax-based measure because they are not used for revenue-producing purposes. Such heritage buildings include places of worship, historic house museums, and former residential schools.

If you look at the other side of my handout, with the three circles on it, you'll see a sample of incentives from a number of cities. Let me remind you that each of these shows the best-case scenario for grants or tax breaks, but these are often limited by annual budgets for granting programs, such as in Nanaimo, where there is a limited amount every year, and in Halifax, where there is the same situation. We wanted to be fair, so we wanted to have the best possible scenario there.

At current levels, these incentives are not game-changing or behaviour-changing. We are hearing that they are helping already-willing owners but not pushing others. You will notice that the federal government is missing from this incentives picture, and there is no dedicated fund for places outside of the national cost-sharing program for historic places, as these are only for national historic sites, including heritage railway stations and lighthouses.

Competition for mainstream federal funding is fierce. For example, the Canada 150 community infrastructure program requires not-for-profits with modest heritage projects to compete with those with projects for arenas, pools, and sports fields. Earlier this year, FedDev's website reported 1,100 applications, requesting more than $260 million in funding, for their first intake—almost six times more than the available funding. It's a difficult environment for heritage places to get heard in.

Here are the two things the federal government can do to ameliorate the situation for non-profit buildings. The first is to create a source of federal matching funds to leverage investment by other governments. Corporations and individuals could actually help encourage this kind of philanthropy. Funding could be distributed using modern approaches like crowdfunding, which is currently being used successfully by places like National Trust for Canada under the banner of This Place Matters. Over the past three years, the trust's investment of $300,000 has leveraged over $1.1 million in donations for heritage sites. Similarly, Save America's Treasures was a decade-long program in the United States that invested $318 million in federal funds to leverage $400 million from private sources, resulting in the preservation of 1,200 important historic structures and 16,000 jobs. There are also Canadian precedents for using federal matching funds in this way, including the Department of Canadian Heritage's existing matching donations program, which is restricted to endowment matching and for which only arts organizations are eligible, or the government's response to Syrian refugees or disasters and crises.

The second thing the government could do is to provide steady increased funding for the national cost-sharing program for heritage places. I think this has been mentioned on other occasions. The available funding has ranged from zero dollars for some years to as little as $1 million for other years. The current $10 million per year for this year and next year is an important piece of the puzzle, but there are more than 700 properties eligible, and many have been underfunded for decades, so $10 million per year is really a drop in the bucket. The program is already heavily oversubscribed, as Parks Canada mentioned the other day. By contrast, the Canada cultural spaces fund recently received $84 million a year for two years, so there's an order of magnitude there.

In summary, we would recommend the following. First, we would recommend implementation of a federal heritage rehabilitation tax incentive, such as the measures recently proposed in Bill C-323. That is a proven way to attract private and corporate investment to privately owned historic places and to give them vibrant new uses. Two, the government could consider extending a rehabilitation tax credit to heritage homeowners to get more impact. Three, federal investment in seed funding for creative financing mechanisms like crowdfunding could help many more charities and not-for-profits attract private donations and would save and renew some of the thousands of other heritage buildings that make up the fabric of our communities. Finally, an increase in federal cost-shared funding available for the national historic sites heritage places program would help turn the tide of neglect for these important national icons as well.

Thank you very much.

[Julian Smith, Director, Centre for Cultural Landscape, Willowbank, As an Individual]

Thank you very much, Madam Chair. It's an honour to be here.

I'm going to start with some images. The reason I use images is that I sometimes have a hard time explaining how much the field of heritage conservation has changed in the time I've been involved with it, which is now about 50 years.

Here is a drawing of the 1950s. The modernist movement was in full swing. This is when I grew up. This is a modern building and a modern floor plan. But this also shows the hierarchies that existed between blue collar and white collar; between elementary school, high school, B.A., M.A., Ph.D.; the legal system, with yes-no answers to questions; and all kinds of hierarchies that existed. There were the ideas of the nuclear family, the suburb, the prohibition in the U.S. against racial intermarriage, concerns about gay and lesbian couples, and so on.

This next image illustrates the 1960s, when you began to get grassroots movements, both on the left.... I'm using the yellow for the environmental field. People began to protest the loss of wetlands, and the use of DDT. There was Rachel Carson on the heritage side. On the blue side there was Jane Jacobs and The Death and Life of Great American Cities. It was the beginning, again, of a grassroots cultural heritage protection movement. Both environmental heritage and cultural heritage were very grassroots. They didn't fit the system; there were outsiders. This was coming, as I say, from communities.

Next is the 1970s and 1980s. This brings the introduction of heritage legislation and environmental legislation in all the provinces. Those two fields, the environment field and the heritage field, became part of the system. With the laws in place, you began to have lawyers who specialized in environmental law and in heritage law. You began to have B.A., M.A., and Ph.D. programs in environment and in cultural heritage. There was the idea of joining the system and becoming part of these boxes, shown here.

The boxes really also represent the university and the academic system, which classifies knowledge into disciplines and categorizes books in libraries; and also the museum world, which is all about objects and classifying and putting them into systems.

Next comes development in the 1990s, the idea of cultural landscapes, which really was a concern to UNESCO with the World Heritage List. They didn't know how to deal with sites that were important, both from a natural heritage point of view and a cultural heritage point of view. Cultural landscape ideas were about the relationship of people and the natural environment and about human habitat and a more holistic way. They didn't fit the model very well. I think first nations communities began to be much more a part of the conversation about heritage generally, and for them, this nature-culture distinction had always been a problem.

The idea of cultural landscapes really pushed the boundaries and pushed us, as I show in this next image, to I would say the 21st century. I spend all day with 20- and 30-year-olds at Willowbank, where I teach and where I've been the executive director for the last 10 years. This image shows a program for young people interested in questions of human habitat.

I'm going to stop there. I'll leave that image up.

I have some observations. I would say that young people are interested in this kind of ecological and more holistic approach to human habitat. They want to get over the culture-nature distinction, which is so Eurocentric and which has been such a barrier to coming to terms with sustainability. They want planning, development, and design approaches that respect traditional knowledge and existing patterns, and within those, to figure out how you add contemporary layers and levels without simply erasing everything that's there and starting over again.

They want to shift from a utopian view of the world, which is always about monocultures, to a more organic way of development that is more about diversity. They want to knit back together working with hands and working with the mind and overcoming this distinction between design and build, between blue collar and white collar, between intellectual activity...and also between apprenticeship and academic ways of learning. Not only are these people interested in this, but they're demanding it, because they see an urgency to coming to terms with questions of sustainability.

In terms of my observations or offerings to the committee, I would say a couple of things. I want to make reference to Bill C-323, which, in the slides, is back here. This is really a chance for Canada to catch up to where most other countries moved in the nineties, of saying, “We recognize built heritage as being fundamental.”

I would make two observations about it. One is that 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. What the statistics show pretty clearly...and we recently completed a study for the UN Habitat Conference in Quito on the North American situation in terms of culture, heritage, and sustainability. Older districts with these older buildings have a richer texture to them. They provide 30% to 40% more employment per square metre of building, they have more minority owners, they have more women owners, they have more young people, they have more age diversity, they are more walkable neighbourhoods, and they have more public transit. These are areas that we need to understand and deal with, and there needs to be encouragement for doing so. 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.

The other point I would make is that if you look at the American situation, since they've had so many years—and I'm sure you've heard the statistics about tax credits—you see that those tax credits generate so much other tax revenue. There are very few tax credit programs that have been so productive—seven to ten times the amount of private investment.

There are related things. Federal accommodation should happen in existing buildings, unless there aren't existing buildings available. Federal programs that support seniors housing and low-income housing should prefer existing buildings unless there are none available. This is something the U.S. has been doing for 40 years.

When I practised, very early in my career I was down in the U.S., in Massachusetts. If you wanted to do low-income housing, you had to look for old schools or old abandoned industrial buildings, because they tended to be in downtown areas with good public transit. When I came to Ontario, land value was a key component. In the first project we did, the developer moved the project at the last minute to a farmer's field, because it was cheap land and allowed them to meet the budget. These were low-income people out in the middle of nowhere without transportation.

With these other programs, the national building code needs to be adapted for existing buildings. There are many government initiatives. The environmental assessment process could knit together the culture and nature part of it, and it should be called a sustainability assessment. Unfortunately, when people think of the environment, they think of the natural environment and not the cultural part of it.

At the more general level, if we go to this other image, which is not just about historic buildings, I think we need to engage Canadians, particularly young Canadians, on the question of more sustainable human habitats.

This shows a start. ICOMOS advises UNESCO on cultural heritage, and IUCN on natural heritage. Parks Canada needs to engage in that nature-culture dialogue in a really important way, because Canada is looked at as being a potential leader in the world in this field, and yet we have national historic sites and we have national parks that tend to be two solitudes, as is the case in much of society.

That engagement has to be shared with the non-profit sector. The non-profit sector, when I was growing up, was almost irrelevant—sort of cookie sales, and hat held out to get donations. The non-profit sector has grown remarkably. I've worked part time in the academic sector, the public sector, and the private sector, and in my view the non-profit sector has become a much more important actor in this whole thing.

I think there should be consideration of an agency of the federal government that deals with urban and rural development, partly so that the federal government can connect to municipalities, to townships, to villages, to reserves, to places in which the innovation is happening. This has to be gathered on a national scale in order for Canada to contribute to the dialogue that's happening around the world, which is really a critical dialogue about sustainability. We have to integrate some of the programs with Canadian Heritage, Parks Canada, and Environment Canada so that we deal holistically with the heritage field and with the confluences that these pieces have together.

I'll stop there. I think it's an amazing time. I think we're in a period of transition. If you look at government departments, agencies, and programs, I think they reflect this image. I think we need to move to this one.

Thank you.

[Richard Alway, Chair, Heritage Designations and Programs, Historic Sites and Monuments Board of Canada]

Thank you very much, Madam Chair.

I'm sure members of the committee are used to getting a tremendous amount of information in a short period of time, but information overload, I know, is always a problem on these occasions.

Just to identify myself more completely, I'm actually president of the Pontifical Institute of Mediaeval Studies at the University of Toronto. It was sort of my retirement project when I retired as president of the University of St. Michael's College after almost 20 years, which is federated in and with the University of Toronto. I was asked to do the research institute as a retirement project, but after nine years, I think it's more of a second career.

From your point of view, my role as chair of the Historic Sites and Monuments Board of Canada is the relevant one. The board advises the Minister of Environment and Climate Change, who is the minister responsible for Parks Canada, and the Government of Canada, therefore, on the commemoration of places, persons, and events of national historic significance. It has done this since 1919, when it was founded by an order in council.

I also, at the moment, serve as vice-chair of the advisory committee on the official residences of Canada at the National Capital Commission, and previously I had two terms as CEO and chair of the Ontario Heritage Foundation, now the Ontario Heritage Trust, which is that province's lead agency for the protection, preservation, and promotion of cultural and natural resources of significance.

First of all, I want to congratulate the committee on undertaking this work. It's a great opportunity. I think a report that is broad, comprehensive, yet practical, and that might even have recommendations that would need to be phased, is really what is called for if one can hope for such an outcome. I think it's important to recognize that it was—and it's been mentioned twice already this morning—the 2003 report of the Auditor General that gained the attention of Canadians and focused it on heritage and the threat to Canada's built heritage that existed. It indicated very strongly that two-thirds of Canada's national historic sites in federal ownership were in fair-to-poor condition, many in poor condition. It was very critical of the federal government's described neglect in the area, and it advocated very strongly for a reinforced legal framework for protection, in other words, for legislation.

When the report came out, you may recall, it got a lot of attention. There was a flurry of interest. It didn't last terribly long because there was a lack of a coordinated, coherent response on the part of individuals across the country. Indeed, surveys taken more recently indicate that there is still broad support among Canadians for built heritage generally, but that when it's placed against competing interests from time to time, that's where it loses out.

I think this committee has a chance to be able to promote and analyze the role of heritage within the general cultural framework of the country.

What was the Auditor General's report really based on, and what is the narrative for historic heritage protection in Canada?

Beginning in 1908, the national battlefields of Quebec act was a piece of legislation dealing basically with the Plains of Abraham. In 1919, there was an order in council that founded the Historic Sites and Monuments Board of Canada, which started the program of federal commemoration of nationally significant persons, places, and events. In 1953, the Historic Sites and Monuments Act provided a statutory basis for the federal government to commemorate with plaques and occasional acquisitions—that hasn't happened very often recently—places, persons, and events of national significance.

In 1973, Natalie's organization, Heritage Canada—its original name—was founded by a federal government order in council. In 1982, the federal heritage buildings policy was founded, which does deal with federally owned structures. It asks for a heritage evaluation for all buildings 40 years old and older and for the production of a statement of heritage significance for each building, but there are two things here: one is a sort of registration of buildings and one is classification. For registration, there is basically no significant protection involved, and nothing of significance regarding conservation of the resource. If the building is classified, there is some degree of protection, in that demolition is made fairly difficult, but it's very incomplete.

In 1985 to 1988, as we've heard, the Heritage Railway Stations Protection Act came in, and then the lighthouses in 2008. Both were private members' bills, which is very interesting, but I would note for the interest of the committee that neither involved significant a federal outlay of money, and none involved diverting federal revenue in any way. The finance department is always interested in this. Both those pieces of private member's legislation went through.

Bill C-323, which is very current, of course does involve a tax incentive. It will be interesting to see what happens with that. I certainly would advocate that kind of approach, but I think it's much more difficult to do, particularly as more or less a first step.

What would make great sense today?

First of all, I would say that the legislation to protect federally owned national historic sites, 171 owned by Parks Canada and 65 by other federal departments, should include protections for UNESCO world heritage sites. We go to a great extent to try to add to the Canadian list in this area, as it's thought to be a very good thing, but we offer no guaranteed protection once they're on the list. We're really the only G8 country that doesn't have federal legislation protecting nationally significant places. I think this is a huge gap that could be filled fairly easily, and I suspect the government would be open to that type of recommendation.

It also should ensure any legislation measures to prevent adverse federal action on the over 730 national historic sites that are owned by somebody other than the federal government, some by provinces and most by private individuals. There is only so much one can do, as property rights in Canada, through the BNA Act and the Canadian Constitution, are assigned to provinces and territories. There's a limit here to what the federal government can easily accomplish. I think it is important to have protection for archaeological resources on federal lands and under waters as well.

I think cost-sharing has been mentioned before. The federal provision here was as much as $6 million or $7 million going back to maybe 15 years ago. It declined to $1 million for several years just a few years ago. Now we've had two years at $10 million, but that's about to expire. I think it's important to recommend an extension of cost-sharing, and let's say for five years at a $10-million level. That's as close as one gets to making a program permanent, and I think it's well merited.

Tax incentives would complete the picture of tools here, but I think it's harder to achieve that and I think we need to be practical. I would hope that the committee would sketch out broad recommendations that could carry this area forward into the future in a comprehensive manner, recognizing that some of the recommendations might have to be phased in their execution.

I wish the committee well. You have an important task. I thank you for the opportunity to say my piece.

[Natalie Bull, Executive Director, National Trust for Canada]

Madam Chair, members of the committee, thank you so much for this opportunity. Thank you for your interest in historic places and for undertaking this milestone study.

I'm here today representing the National Trust for Canada, a national membership-based, not-for-profit, non-government organization and registered charity established in 1973. As part of a global network of national trusts, we provide tools and resources to citizens to help them save places that matter, and we inspire Canadians with great places to live, work, and play. We are a proud partner with government in programs including Young Canada Works and Canada Historic Places Day.

In the 30 years between 1970 and 2000, Canada lost more than 20% of its historic buildings. Losses continue apace today. Provinces, territories, and municipal governments are doing their part. Federal leadership is urgently needed.

In this presentation I will do my best to provide an overview of historic places in Canada, review the challenges faced by those who try to save and renew them, and offer recommendations for federal leadership. We are talking about a broad range of places owned or managed by at least four different types of owners. Taken together, the places owned by NGOs and charities, private owners, provincial and municipal governments, and the federal government make up a potential universe of many thousands of historic places, perhaps half a million or more. Some of these places are already designated, usually by a municipal bylaw established under a provincial heritage act. Thirteen thousand are currently listed on the Canadian register of historic places, an important national databank and reference.

Designation often brings with it some access to financial incentives—grants, tax measures, and other sweeteners—offered as a carrot to compensate for the inconvenience or extra cost associated with heritage compliance. Indeed, the 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. The protection of historic places is a challenging business.

Why would a parliamentary committee be concerned with the state of historic places in Canada? I think there are lots of great reasons. For a start, there is the potential for positive impacts on climate change. Canada's buildings are the third-largest greenhouse gas emitting sector, and the reuse and renewal of heritage buildings capitalizes on materials and energy already invested, reduces construction and demolition waste, and avoids the environmental impact associated with new development.

In addition to climate change benefits, historic places can contribute to a strong economy. Rehabilitation projects generate up to 21% more jobs than the same investment in new construction. They're a great stimulus measure, and they typically use local labour and materials, such that 75% of the economic benefits of heritage rehabilitation projects tend to remain in the communities where these buildings are located. This is a great stimulus measure. A related economic impact comes from cultural tourism. For example, U.S. travellers seeking heritage experiences in Canada are expected to reach 12 million by the year 2025.

These places also matter to our national identity, and they have a social value, often as the last bastions of affordable housing or a low-cost base for start-ups. However, there are many barriers and disincentives that make it difficult for private sector owners to save and renew historic places, including rising land values in big cities that encourage owners to demolish existing buildings in order to maximize development on the site, and an often unpredictable bottom line, which can deter developers and even lenders. There are insufficient incentives to counteract these barriers, so we lose buildings like the 1898 Etzio building in Edmonton's Old Strathcona district, the landmark Stollery's department store at Yonge and Bloor in Toronto, and Ottawa's Somerset House, where we witnessed demolition by neglect.

NGOs and charities working to maintain and renew historic places also face financial barriers. Competition for grant funding is fierce. Just last week, after decades of effort, the building rehabilitation society in Guysborough County, Nova Scotia, was forced to accept the demolition of the 1888 Hazel Hill Commercial Cable Building, where the message of the sinking of the Titanic first reached land.

The only federal funding program dedicated to historic places is the cost-share program for national historic sites, federally designated railway stations, and lighthouses, as Joëlle described, but it is limited to just a few hundred places and they're not-for-profit owners. The funding available has ranged from zero dollars for many years to as little as $1 million a year, and the current $20 million over two years has been a really important boon, but we're very concerned about the notion of it returning to just $1 million next year.

What is the federal role in heritage conservation? Canada needs policies that create a strong economy, protect the environment, and avoid climate impacts. Recycling and reusing existing buildings, our largest consumer good, offers a great opportunity for the federal government to achieve these goals. Interjurisdictional collaboration is needed with the province and territories to develop pan-Canadian standards and explore the opportunity for stackable grants and incentives. Many instinctively look to the Department of Canadian Heritage to lead this charge with its many programs that fund, stimulate, and support a vast network of museums, culture, and heritage organizations, but historic places are not generally accommodated in its programs. According to its agency act, it is Parks Canada that has responsibility for historic places in Canada, reporting to the Minister of the Environment. It is confusing for the average heritage advocate, and frankly I would be very happy to see both ministries increasingly embrace the challenges and offer solutions for historic places.

In closing, I would like to offer the Government of Canada a series of priority actions that would do much to support the conservation of historic places inside and outside the federal family, and this is the framework that I think Joëlle referred to as well.

Number one, 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. There's a range of mechanisms available to consider.

Number two, the government can implement two simple federal measures that would have broad benefit for historic places inside and outside the federal inventory. First, a “heritage first” policy requiring government departments to give priority to federal heritage buildings, or even those owned by others, before opting for new construction or leases to fill federal space needs. These measures could help create a new market for heritage buildings overnight. I know a local developer who says that such a measure would really transform the landscape for historic places in Canada. Second, a “do no harm” policy would be interesting to consider the impact of federal actions on all places in the Canadian register of historic places, regardless of ownership. This would help ensure that when the federal government spends infrastructure dollars, for example, they aren't used to the detriment of existing cultural resources. We know that funding for new convention centres, new roads, and infrastructure can sometimes displace important historic places.

Number three, the government can get the federal House in order and be an exemplary heritage steward. Canada is the only G8 nation without laws to protect historic places owned by its national government. As Joëlle mentioned again, in November 2003, the Auditor General of Canada assessed heritage protection practices within several federal departments and agencies and reported that built heritage under federal control will be lost to future generations unless action to protect it is taken soon. Very little has changed since that date. I refer you to the Auditor General's report and urge you to consider a range of measures including statutory protection of historic places on federal lands, national historic sites, and world heritage sites in the federal inventory, and statutory protection of archaeological resources on or under federal lands and waters.

Number four, the federal government can facilitate full participation of indigenous peoples in the identification and protection of their historic places.

Finally, the government can ensure that the Canadian register of historic places and the “Standards and Guidelines for the Conservation of Historic Places in Canada” are enshrined in legislation and adequately funded because they are the essential building blocks and underpinning for all of the recommendations listed above.

Thank you so much for your interest and for your action on historic places.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

What I had envisioned in the structure of this would be to orchestrate one or two sessions; the way it's laid out now is two. One would be for looking at financial and tax incentives. It would not look specifically at the Van Loan bill but at the types of things that exist now, or it could be in other jurisdictions. The Americans have a similar program to what Bill C-323 proposes.

It would be for us to explore those measures, and then when we actually get the bill for review, we would have some context for how it could fit into an overall—

Environment and Sustainable Development

[Deb Schulte, Liberal, King—Vaughan, ON]

Mr. Speaker, I have the honour to present, in both official languages, the seventh report of the Standing Committee on Environment and Sustainable Development in relation to Bill C-323, an act to amend the Income Tax Act, regarding the rehabilitation of historic property. The committee has studied the bill and pursuant to Standing Order 97.1(1), requests a 30-day extension to consider it.

Income Tax Act

[The Speaker, Liberal, Geoff Regan]

Pursuant to an order made on Friday, March 10, 2017, the House will now proceed to the taking of the deferred recorded division on the motion at the second reading stage of Bill C-323 under private members' business.

The House resumed from March 9 consideration of the motion that Bill C-323, An Act to amend the Income Tax Act (rehabilitation of historic property), be read the second time and referred to a committee.

[John Aldag, Liberal, Cloverdale—Langley City, BC]

Mr. Speaker, today Canadians proudly stand upon thousands of years of Canadian history and heritage. From the breathtaking totem poles that line the British Columbia coast, to the Algonquin wigwams that housed indigenous peoples on the unceded land upon which this Parliament currently sits, to Cape Spear Lighthouse on Newfoundland's eastern tip, to Fort Rodd Hill on B.C.'s Vancouver Island, to even the Justice Building down the road, the history reflected in our country's built heritage is simply astounding.

In this our nation's capital, we are surrounded by structures whose foundational stones were similarly foundational to the country we now call Canada. They herald the amazing accomplishments we have had together and serve as a reminder of the chapters in our history that we have not yet atoned for.

Throughout my 32 years working with Parks Canada, I was incredibly lucky to come face to face with Canada's built heritage every day. Through my work with the Historic Sites and Monuments Board of Canada and Parks Canada's national historic sites branch, I saw the impact our heritage has on communities and heard the stories people told about their historic sites.

In Saskatchewan, Batoche National Historic Site reminds residents of the independent spirit of the northwest resistance. In Yukon, Dawson City returns us to the excitement of the Klondike gold rush, while in British Columbia, Colwood's Fisgard Lighthouse lets people on the open waters know they have reached home, just as it has done since 1860.

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.

When I think about built heritage in my riding of Cloverdale—Langley City, I think of George Lawrence House or Matheson House and what these places meant to the origins of both Surrey and Langley. While perhaps only the most ardent heritage buffs across Canada would be able to call upon their history, they have a profound value to the residents of my riding.

This is what makes heritage so valuable to maintain across the country. Everyone can think of a few national historic sites that inspire awe and instill wonder, but what makes them so valuable is their effect on the individual. Just as I take pride in the historic sites in my community, I am sure everyone in the House can identify a building, an area, or a district in their own riding without which their community would not be the same.

As the National Trust for Canada said, Canada's communities are made up of historic places that define our cultural identify, give shape and texture to our urban and rural communities, and attract tourist dollars. Yet every day, these places are being destroyed through desertion, decay, and demolition.

Today I would like to discuss Bill C-323 and measures that I firmly believe will benefit all Canadians. This discussion centres on three fundamental considerations concerning how this legislation would create tangible environmental, financial, and social benefits.

Canada's home-building industry is one our country's largest. It provides enormous economic benefits to our national economy and is the livelihood for many thousands of middle-class Canadians. This sector should be stimulated and encouraged, but we must do so in a way that is also environmentally responsible.

In most Canadian municipalities, home building is a major contributor to landfill waste. For example, Alberta's provincial department of the environment found that 25% of the province's landfill waste was generated by construction. By promoting the preservation of existing buildings, much of this discarded waste could be avoided, preserving natural resources and limiting the release of landfill greenhouse gas emissions.

In addition, the preservation and maintenance of existing housing stock has consistently been shown to decrease potential C0₂ emissions. According to the National Trust, if every heritage property in Canada were to be restored rather than demolished and replaced with a new structure, this would represent the avoidance of C0₂ emissions equivalent to the annual energy use of approximately 14.83 million homes. To put this in a more familiar context, in the city of Ottawa, which Statistics Canada listed as having 151,495 single detached homes in 2011, this energy savings would meet the energy needs of all of Ottawa's single family homes for approximately 98 years. This is not just a lot of heritage meaningfully conserved. It is an incredibly positive environmental initiative.

Despite this, there is a frequently cited argument that suggests that tearing down heritage properties is in fact environmentally prudent. The logic behind this claims that heritage properties are equipped with out of date furnishings and technology that would otherwise help reduce their environmental footprint. Despite the fact that newly constructed homes are often more environmentally efficient, the resources needed to demolish and construct a new home means that it takes several decades for the new structure to become a net environmental benefit over the existing heritage property.

As the Preservation Green Lab reported in its study, "The Greenest Building", it takes anywhere from 10 to 80 years for a new building that is 30% more efficient than an average-performing existing property to overcome, through efficient operations, the negative climate change impacts related to its construction.

The environmental benefits to heritage preservation are easy to see and an indication of the importance of the federal government's role in actively promoting it as an environmentally superior practice. Just as environmental protection benefits all Canadians, Bill C-323 would lead to equally comprehensive financial benefits.

To more closely examine the economic ramifications of Bill C-323, it is worth looking at the experience of our neighbours to the south. In 1981, the United States passed legislation creating a 25% federal tax credit for restoration of heritage sites. This built on legislation that was first introduced in 1976. In the three and a half decades since then, it is estimated that $23.1 billion in federal tax credits have generated in excess of $120.8 billion in private investment in historic buildings. This is roughly a 5:1 ratio of private to public investment, all of which ultimately ended back in the domestic U.S. economy.

Not only did the U.S. federal government's heritage restoration tax credit benefit the restoration industry, it boosted the entire national economy. This is due to the money multiplier effect, which explains how money being spent in one industry is eventually recycled into the broader civic, provincial, and national economy. If workers are paid to restore a heritage home, they may spend that money at Tim Hortons, whose employees will go on to, say, get a haircut, at which point the barber will buy sports equipment for his daughter. This cycle is essential to a government's economic considerations, and means that money invested in one area will necessarily benefit Canadians across the country.

In the United States, the confluence between public and private investments in heritage restoration has created great economic benefit. As the National Trust for Canada estimated, while the U.S. federal government spent $23.1 billion in restoration tax credits over the last 40 years, this credit resulted in an additional $28.1 billion in tax revenue, a net gain of $5 billion in tax revenue for that country. In short, the U.S. federal government made money by promoting heritage restoration.

In addition, heritage tourism represents a significant contributor to Canada's economy. Tourism is a multi-billion dollar a year industry, and it is estimated that cultural tourism accounts for one-third of that market. Reflecting the importance of this industry, the Canadian Tourism Commission reports that heritage tourism represents the past visitation of 34.5 million Americans and 2.6 million Canadian tourists.

As I have outlined above, I strongly believe that the preservation of Canada's heritage is a noble goal in and of itself. With that being said, however, the United States example shows how heritage preservation creates tangible benefits to society on the whole.

Based on the estimates of the National Trust, whose tireless efforts have left an indelible legacy on Canada's built heritage, since 1981, the United States heritage restoration tax credit has directly led to the preservation of over 41,000 historic properties that would have otherwise likely been left to neglect or demolition. This alone is a remarkable achievement, but it is the impacts on the broader society that make me believe Canada would be well served by a similar measure.

Along with tens of thousands of properties saved, the U.S. tax credit is estimated to have led to the creation of over 525,000 housing units, including 146,000 dedicated to low- and medium-income housing. In every corner of the country, we hear concerns about housing affordability. In my riding of Cloverdale—Langley City, I can safely say it is the topic about which I hear the most from my constituents.

Today, we are debating legislation that would help address Canada's growing housing issue, but this is not the only benefit that Bill C-323 would deliver to Canadians across the country. In tandem with an increase in housing units, the U.S. tax credit is credited with creating 2.4 million jobs. These are reliable, middle-class positions across a multitude of sectors, and would ultimately benefit the entire Canadian economy. This money would overwhelmingly go to small and medium enterprises based in Canada, and the increase in employment would give communities across Canada a welcome boost.

Not only is heritage good for communities as they currently exist, but it benefits community rehabilitation. One can think of communities across Canada, such as Toronto's Distillery District, Winnipeg's Exchange District, and Vancouver's Chinatown, where heritage and culture are inseparably entwined.

This bill would not guarantee the preservation of all heritage buildings in Canada, but it is a great first start. In Canada's 150th year, I can think of nothing more appropriate than signalling our support for both the history of this great country and the welfare of the people living in it today. In this spirit, I offer my support for Bill C-323 and encourage my colleagues in this House to do the same.

[John Nater, Conservative, Perth—Wellington, ON]

Mr. Speaker, it is indeed an honour to rise today to debate Bill C-323. Before I do so, I want to thank my colleague, the member for York—Simcoe, for bringing forward the bill. As our opposition critic for Canadian heritage, I consider him to be a national treasure for his hard work on this file.

In fact, this is not the only private member's business he has brought forward. He also has two other motions on the Order Paper, Motion No. 67 and Motion No. 62, which are equally important matters that I hope the House will take up at some point. There is the recognition of Sir John A. Macdonald's summer home in Rivière-du-Loup, and Motion No. 62, which recognizes the birth place of the Right Hon. John Diefenbaker in Neustadt, Ontario, which is just outside my riding. It is an important historical marker in southern Ontario, recognizing an exceptional prime minister.

To the bill at hand, it is an important bill for our communities and for the preservation of our historical heritage properties across our great country. I have to admit that I have a soft spot for heritage buildings. There are many beautiful older buildings in my riding of Perth—Wellington, which I am proud to highlight from time to time. 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. Unfortunately, as often these older buildings do, it fell into a state of disrepair.

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.

In Perth—Wellington, we also have other important sites, such as the Fryfogal Tavern and Arboretum. The Fryfogel Tavern is actually the last surviving site along the Huron Tract from the 1800s. It is an old building with a great degree of heritage and history associated with it. Its original proprietor, Sebastian Fryfogel, was a Swiss national who came to Canada at the time. He served as the first acting warden of Perth county. He served as a tax collector for the county and was the local militia leader. He had a strong history in the country.

Currently, the Stratford Perth Heritage Foundation is working to have that site designated as a national historic site. If it is successful, it would be the first national historical site in Canada to have a Swiss connection. Being of Swiss heritage myself, I find it is an important issue to highlight because it is an important site. I look forward to seeing Parks Canada review that documentation to hopefully make it a national historical site.

With 2017 upon us, and the 150th anniversary of Confederation, preserving and protecting our national heritage is important, now more than ever. Bill C-323 certainly would help us to do that.

As all members will know, rehabilitation and preservation of historic and heritage buildings is not necessarily easy. Nor is it inexpensive. When dealing with century-plus old buildings, the wiring is no longer up to code and accessibility standards have not been kept up to code. In many cases, neglected roofs need to be replaced, insulation needs to be redone, and windows need reinstallation in a way that preserves the historic and heritage nature of those buildings. Unfortunately, it is often not economically or financially viable to undertake these important renovations, so buildings are often demolished or, as the member for Kingston and Islands mentioned earlier, are left to be demolished by neglect. This is unfortunate because we lose a part of our history when we lose these important buildings.

Bill C-323 proposes to introduce a tax credit for expenses related to the rehabilitation of a historic property and will establish a tax deduction for the capital costs of property used in the course of historic properties rehabilitation. This will provide the owners of historical properties with a tax credit of up to 20% of the cost of rehabilitating the property, which will incentivize owners to restore their properties and assist them in their efforts to do so. In short, it makes it more affordable to preserve historical buildings, thus allowing more of our great historical architecture to remain standing rather than be demolished.

Bill C-323 would also create an accelerated capital cost allowance for eligible capitalized costs incurred during the same conditions of the tax credit. It would do so by allowing a minor reduction on the owner's income tax for the costs of rehabilitating the building. This would ensure that when owners of an historic property undertake restoration work at personal expense they are compensated. The restoration of a historic property, after all, is indeed a public good and it is only fair that, when individuals do the work at their own personal expense, we as a country are able to help in some way.

I understand there are some concerns that have been brought forward by different people about this bill, but I think that it strikes the right balance in preserving our heritage but also incentivizing individuals while respecting the public coffers as well. There are certain guidelines included in this bill. First, not any building qualifies. The building must first be on the National Register of Historic Places. Second, an architect must certify that the eligible building has undergone rehabilitation in accordance with the standards and guidelines for the conservation of historic places in Canada, and this will ensure that proper rehabilitation work has been done in accordance with the standards. It also incorporates a 10-year limit that the tax credit can be used. This strikes the right balance in terms of providing adequate support but not becoming too high a cost on the federal treasury.

I would also like to remind hon. members in this House that this bill is supported by a number of heritage and historical groups, including the National Trust for Canada, a not-for-profit organization dedicated to preserving our national heritage. In fact, the organization appeared with a brief before the Standing Committee on Finance, and the brief stated, “The federal tax system and federal spending are vital instruments shaping the ability of Canadians to protect and revitalize heritage places”. The brief went on to recommend that the government should introduce a federal rehabilitation tax incentive for heritage properties in Canada. Bill C-323 would do such a thing. It would help us preserve our national heritage buildings and our national collective heritage.

Again, I want to congratulate the member for York—Simcoe for bringing forward this important bill. It is an exceptionally pertinent and important way of preserving our heritage buildings, and we as parliamentarians should make every effort possible to encourage those who own heritage buildings to undertake the necessary work to keep them in good repair.

[Romeo Saganash, NDP, Abitibi—Baie-James—Nunavik—Eeyou, QC]

Mr. Speaker, I am delighted to speak to Bill C-323.

I was here when the sponsor introduced the bill. I really liked his speech during the first hour of debate because I have seen and visited most of the buildings he mentioned. Needless to say, his speech made me feel quite nostalgic. I thank the member for York—Simcoe for this bill, and I want to start off by pledging him my support.

Historic buildings in the riding of Abitibi—Baie-James—Nunavik—Eeyou are a valuable part of our heritage, our history, and our culture. I am in favour of maintaining our historic buildings, but the cost of repairing and maintaining are at times prohibitive, especially in my riding's northernmost communities.

For example, Village-Minier-de-Bourlamaque is a site of definite historical value. It is on the Canadian Register of Historic Places because of its connection to the 1930s gold rush in Abitibi.

Between 1927 and1950, many men looking for work came to Abitibi hoping to find a job. Village-Minier-de-Bourlamaque was built in 1935 by Lamaque Gold Mines Limited to house the miners. It has a very particular architectural style. The next time you are passing through Abitibi, Mr. Speaker, I invite you to stop and visit the mining village. The site has two kinds of residential structures, namely, the workers' houses and the posh homes of the former mine managers, who were called “boss” at the time, even in French.

Everything still exhibits the unique character of the1930s village. Most of the houses in the village are still inhabited today, and the owners are responsible for maintaining the historic character when they do renovations. Conservation and original appearance are important to safeguarding the heritage and drawing tourists to the village, not only for the city of Val-d'Or but the entire Abitibi-Témiscamingue region.

Very few people know that one of the first buildings in the Abitibi region was built in 1836, namely, the Sainte-Clotilde church in Kitcisakik. Still standing today, this church was built on the fur trade with Algonquin trappers from the area. It is now a designated religious heritage site in Quebec. It is one of the first buildings built in my riding. Dating back to 1836, it is nearly 200 years old.

In Whapmagoostui, which is at the limit of James Bay and Hudson's Bay, we find sites such as the Church of St. Edmund, constructed in 1879. Historic sites are important to maintain. It is critical that our history is understood and remembered, so that we can maintain an understanding of our past so that it is not forgotten.

Additionally, promotion of restoration efforts will create good, skilled jobs and promote economic development, while at the same time encourage tourism and promote respectful development while restoration efforts can help reduce environmental impacts of new building construction. This act would allow those struggling to afford the costs of rehabilitation projects to move forward.

However, it would also provide handouts to wealthy people who are not in need of assistance whatsoever. It does not seem reasonable to me that we should subsidize costs to rehabilitate these historic buildings while there is also a housing crisis in this country. I want clarity that the revenues lost from this bill will not impact Canada's ability to address the need for social housing in this country. As an indigenous person, I am very sensitive to that issue.

This bill gives me a chance to talk about the different priorities that a government needs to balance. A government has a responsibility toward the people who live within its borders. We all know that in Canada we have the Charter of Rights and Freedoms, which guarantees all people the same right. However, Canadian governments have shown that their priorities do not include ensuring the same standards of programs and services for indigenous people that they provide to other Canadians.

In general, I question the government's housing policy. However, today I question more specifically how a bill like Bill C-323 will respond to the current housing needs in indigenous communities. Unfortunately, due to Canada's colonial history, forced relocation, land appropriations, and poor government infrastructure in indigenous communities, we do not have many heritage properties. Therefore, if we are to implement a bill like this one, which will potentially reduce government revenues by millions of dollars annually, what will this mean for the indigenous people and indigenous communities in desperate need of housing? Will the government increase revenues elsewhere to ensure that the human rights of indigenous people are upheld?

Through the rules of the Indian Act, colonial governments have created the housing crisis that indigenous communities are experiencing. Under the act, restrictions on land ownership often prevent the development of housing programs. It is estimated that by 2031, the housing shortage on reserves will rise to 115,000 units. In order to bring the number of people living in each home on reserve down to the Canadian average of 2.5 persons per home, an additional 80,000 first nations homes are needed right now, yet the 2016 federal budget provided funding for first nations housing of just $206.6 million, which is enough to pay for 300 new homes, the servicing of 340 new housing lots, and the renovation of about 1,400 homes. To use the housing problem in my riding of Nunavik as another example, the aboriginal peoples Senate committee hearing on housing was told that Nunavik needs over 1,100 houses immediately. The $50 million included in budget 2016 is less than a quarter of the funds needed to address that shortage.

I have been asked many times by many colleagues on both sides of the House what the most important issue is facing indigenous people today, and what the government should do now to make reparations of historic injustices. Indigenous issues in this country have been neglected for so long that every single issue has become a priority.

I have one minute left. I just want to say that the NDP will support Bill C-323 because we believe in restoring historic buildings that are part of our heritage. Obviously, we also believe that it is important to understand how expensive these renovations are.

We will seek to amend the bill during review in committee in order for the tax credit to also be offered to people with a low or medium income. A billionaire can afford to renovate an old building, but it is harder for the average Canadian or low-income earners.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Mr. Speaker, it is a pleasure to rise today in this House on behalf of my constituents of Kingston and the Islands to speak in support of Bill C-323, an act to amend the Income Tax Act. I will begin by thanking my colleague for York—Simcoe for putting forward this substantive and very timely legislation.

My speech today will focus on three themes. First, I will address the importance of preserving heritage buildings. Second, I will draw from my experiences as a municipal politician to explain why I believe there is a desperate need for financial incentives to encourage heritage restoration. Third, I will speak to the economic benefits associated with the restoration of historically designated buildings.

In his opening remarks during the first hour of debate, the sponsor of the bill talked about the sense of awe he feels when walking through historic sites. While we may come from different parts of the province and indeed different sides of this House, I can say that I share his sense of awe when I visit one of the many historic properties in my riding of Kingston and the Islands.

These 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.

I have often said in this House that I am proud to represent Canada's first capital, which has firmly etched its place in our country's history. Kingston's rich history and culture endures and is kept alive by our treasured heritage properties. To give members some perspective, about 120 buildings in Kingston belong on the national register of historic places, and more than 1,000 are listed on the city's municipal register and designated under the Ontario Heritage Act. These include nationally important historic sites, such as the Kingston Penitentiary, the original CN station, and the Nine Mile Point lighthouse on Simcoe Island.

This brings me to the second focal point of my speech, which is the need for real incentives to restore and maintain heritage properties.

Growing up in Kingston, I was fortunate to learn from a young age to appreciate the historic value of built heritage. It was later on as mayor that I gained a deeper understanding of the challenges associated with owning or acquiring a heritage building. The reality is that many of our most prominent historical buildings are facing an uncertain future, and I would like to talk about a few examples to illustrate what I mean.

The outer station in Kingston is a designated historical site that was built by the Grand Trunk Railway in 1856, 11 years before Confederation, to serve as a halfway point between Montreal and Toronto. It holds a special role in our history and was used by Canada's first prime minister, Sir John A. Macdonald, in his travels between Kingston and this place during the early formative years of our country. Among other notable individuals, King George VI famously arrived there on a visit to Kingston in 1939. The station was closed in 1974, and despite its historical importance, it now sits derelict and in ruins. This is what is known as demolition by neglect, a reality that, unfortunately, is far too common. After years of deterioration, the city has estimated that it would cost nearly $4 million for CN, the current owners, to repair this building and clean up the contamination of the land.

Another perfect example of a challenging situation in my riding is that of the Nine Mile Point lighthouse, which was erected on the western tip of Simcoe Island in 1833 to guide vessels navigating the northeastern waters of Lake Ontario. As the oldest lighthouse on the Canadian side of the Great Lakes, and possibly in the entire Great Lakes, it is now retired from its operational duties and has appropriately been nominated for designation under the Heritage Lighthouse Protection Act. The problem is that any potential new owner of this historic lighthouse might be responsible for the significant cost of maintaining this property and remediating it appropriately, as required by federal and provincial laws.

Restoration in both cases has definite community support, but the projects present a significant undertaking, and I am concerned that right now we do not have adequate incentives to encourage anyone to take them on.

Bill C-323 proposes a modest 20% tax credit for rehabilitation work done on designated historic buildings and a three-year accelerated write-off period for spending on these buildings. This would give interested parties the incentive to take on these projects.

These measures would increase the confidence of current and future owners of historic properties, encouraging them to rehabilitate and reuse historically significant buildings and avoid the grim alternatives of demolition or demolition by neglect.

This incentive is also a win-win in situations where the federal government is trying to divest of a building that no longer has an operational use. Nine Mile Point Lighthouse, Kingston Penitentiary, and Outer Station are all examples of federally owned properties, or those owned by a crown corporation, that are considered surplus and are no longer operational. While the federal government will not outright demolish these historic properties, it is also not required to do anything to preserve them.

The options are to let them remain as a liability on the federal government's balance sheet, in which case they will slowly deteriorate over time because the federal government is not required to repair them, as a third party would, or find a way to transfer them to an interested party who will actually invest in rehabilitation.

The tax credit proposed in Bill C-323 would make the second option more feasible. It would make it less likely that federal properties will be demolished by neglect, which is exactly what has happened in the case of the Outer Station in my riding.

When we talk about heritage properties, we often think about a few particularly special landmarks. I have just named a few that stand out in my community, and I am sure every member could do the same for their own ridings. However, we have to remember that built heritage also includes homes owned by private landowners, who face high costs to maintain their properties over time. As the member for Kootenay—Columbia noted in his speech during the last hour of debate, owners of historic buildings typically incur an additional 21% in costs, so it seems fair and appropriate to offset those costs with a 20% tax credit .

I will now move to my third and final theme, which is the economic benefit of the tax credit. To estimate the financial impact of this bill, we can look to the United States, which has had a historic tax credit program since 1981. The program has been a resounding success at stimulating economic growth and creating jobs.

So far, over $23 billion in federal credits have generated more than $28 billion in additional tax revenue and leveraged over $120 billion in private investment; 2.4 million jobs have been created, and tens of thousands of historic properties have benefited.

In Canada, a pilot program was launched in 2003 that yielded equally promising results. Over the five-year pilot project, $21.5 million in federal contributions supported 49 projects and leveraged $177 million or more than eight times more in private sector investment.

We should make policies based on the best evidence, and in this case, the evidence is very clear. lncentivizing heritage rehabilitation not only serves an important public goal but also stimulates exactly the kind of economic activity we need right now. It will generate considerable private investment and will create well-paying jobs in construction, skilled trades, and many other fields.

In light of Canada's 150th birthday, I cannot imagine a more appropriate time to be having this discussion. The experience of visiting a historic site can teach us much more about our past than reading a textbook, and we should not deprive future generations of this opportunity. If we do nothing, we risk losing these national treasures to demolition or demolition by neglect, which unfortunately is happening right now in my community.

We need to positively reward the goodwill of Canadians who are acting in the public interest by preserving our built heritage. To ensure our heritage buildings can be enjoyed by current and future generations, we need to get serious about rehabilitation, and we must act now before it becomes too costly or impossible to do so. My colleague has put forward this bill to do exactly that, which I am proud to support.

To conclude, I hope all members will think hard about the significant cultural and economic benefits that this bill could have to their communities and throughout the country.