Environment Committee on Oct. 3rd, 2017

[David Brown]

Tax policy in general in the U.S. has a real impact on what gets saved and what gets torn down. You can think about things like local property tax abatements, which have worked in many communities, and about trying to remove those barriers for rehabilitation that communities have set up inadvertently, many times looking at outdated planning models from the 1960s and 1970s.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

I have one last point.

[The Chair, Liberal, Deb Schulte]

You have only a few seconds.

[Mike Bossio, Liberal, Hastings—Lennox and Addington, ON]

I saw your advertisement for “Vote Your Main Street”, with a $2-million prize. I have a few communities up here that would love to jump on that. Is there any chance you'll bring that up to Canada?

[The Chair, Liberal, Deb Schulte]

We have to do our own, Mike. That's what we're doing today.

Colleagues, I'm looking at the clock. We have a bit more time, but I know that Mr. Eisenberg doesn't and he might have to leave. If the committee is interested, I could give us all a little bit more time, maybe one more round.

I am seeing general agreement.

So if I add six minutes to your three, you now have nine.

Mr. Eisenberg, please feel free to leave if you have to.

We'll do another round for each party, beginning with Mr. Stetski.

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

Thank you, Madam Chair.

I have three questions for you, Mr. Eisenberg, if I can. We're looking at Bill C-323, which is looking at providing tax credits for private residences to encourage preservation of heritage. Tax credits always cost the government money. One of the things I've been thinking about is whether we should potentially cap the amount an individual can claim for a tax credit. It could be $50,000, it could be $100,000, or perhaps you could have it linked to income testing. I'm curious as to whether a person who is a millionaire and who owns a million-dollar heritage home actually needs a tax credit.

I'm interested in your view on, first, that concept of tax credits, and second, who it should apply to.

[Robert Eisenberg]

I have to be frank with you. This is not an area of expertise for me. We don't do any residential development whatsoever, and it would just be one person's opinion, and I don't think it would be very helpful to you. I'd love to weigh in, but you are looking for expert testimony, I'm sure.

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

Okay.

[The Chair, Liberal, Deb Schulte]

Your opinion is welcome because you're in the business, and even though you're not doing residential, you've been in the business for a very long time, so we'll take your individual opinion in that context, anything you might want to share.

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

I suppose we could add to it whether.... And I think I know the answer to this. Would you like to see something like that for commercial properties as well?

[Robert Eisenberg]

Sure.

My partner and I are peculiar; we're not particularly ambitious folks. We've managed to build a reasonably sized company in spite of ourselves, not because of. We restore things just because, frankly, we love doing it. But there are many historical elements, for example, the Toronto carpet factory. This is a 317,000 square foot complex with over 140 businesses. We have a chimney that is preserved that has absolutely no commercial value to us whatsoever. We spent over $150,000 restoring this chimney. It would have cost us $50,000 to demolish it. I mentioned this earlier during this session. I don't think most developers would do that.

A neighbour across the road has a building that has a crenellated parapet wall at the top of the building. With that crenellated, it's much cheaper for him just to tear that down, and I'm sure he will when the time comes.

There are all kinds of things like that where they would make a huge difference. We had historical windows in one of our buildings, and we had to find somebody who could do the carpentry because we had these dowels that acted as mullions. They were very carefully turned by lathe, and there was nobody to do that. We spent months trying to find somebody to do it. Again, that's what we've chosen to do with our lives, and I don't think most of our competitors do that kind of thing.

Absolutely, it would make a huge difference, of course.

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

I have quick question for each of you. Then, if I have time, I'll come back again to Mr. Eisenberg.

What's the number one thing the federal government can do in Canada to help preserve our heritage?

I'll start with you, Mr. Eisenberg.

[Robert Eisenberg]

I mentioned that, with our environmental heritage, there are a couple of very small things the government could do that would have huge impact, and one is to speak to Revenue Canada to discourage them from attacking environmental groups whose sole purpose is to protect our environmental heritage. That would make a huge difference.

I didn't expand on what has happened in the municipalities by making it illegal for campaign donations from corporations and unions. It had changed the landscape entirely. Previously, it was very difficult for somebody for whom environmental heritage was the primary goal to get elected. It's very expensive to get elected, and in most of our municipalities, people were getting elected with developer dollars. That's no longer happening, and it's a huge difference. A very small effort by the federal government had a huge impact.

With regard to us, unfortunately, I have to be honest with you, the greatest risk in our business is not marketing, it's not leasing, it's not financing, and it's not even construction cost overruns, although God know we've never built a project without huge construction cost overruns. It's what the municipality will do to us in the middle of the process. The fact that there are not defined rules and regulations that apply to the renovation of older buildings is a huge disincentive to renovating them. It is much more difficult to renovate an older building than it is to build a new one, no question, and that's more or less because of zoning bylaws.

From the federal government's point of view, of course, the things that Mr. Brown has talked about would be huge, but I have to be honest with you again. We've managed to do very well without any federal grants; nevertheless, it would encourage many people to come into the business who probably are not in the business right now.

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

Just to clarify, Bill C-323 just talks about heritage properties, so I guess at some point we'll get into a discussion about private residences versus commercial, if we go there.

Mr. Archambault, I'll ask you the same question. What is the number one thing that we could recommend to help heritage in Canada from your perspective?

[Jacques Archambault]

I will answer in French.

The first thing to do would be to support private owners or the organizations that already protect heritage buildings. That would automatically create a multiplier effect. That is the base that strives to conserve those buildings for the benefit of society. By encouraging and supporting them, there would be a multiplier effect.

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

I'll ask that question to Mr. Brown.

What do you think is the most important thing that has happened—you can quote your own organization if you want—to save heritage resources in the United States?

[David Brown]

I think it's finding ways to incentivize and put heritage first instead of, as Mr. Eisenberg said, making it easier for new development. We'd like to see—and we've had some success with this, but we certainly have a ways to go—making reuse the default and making demolition the option of last resort.

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

Thank you.

[The Chair, Liberal, Deb Schulte]

Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

I'll go back to Mr. Archambault.

You mentioned that in the last three years there have been very few grants available for you to undertake your activities. Were you referring to federal grants or local and provincial grants?

[Jacques Archambault]

I was referring to all levels of government. In recent years, at the provincial level, there have been a lot of budget cuts across the board. A number of organizations used to receive a grant of less than $10,000, but it was eliminated. At the municipal level, in light of the new heritage legislation, the resource expertise was not transferred. The provincial grants for the maintenance of buildings considered municipal were scrapped five years ago.

The municipalities don't have a lot of money for heritage. In cases where there was some money available for that, the percentage of assistance went down from 40% to 25% or 20% for a heritage building.

Let me talk about something else. As I pointed out earlier, there are artisan-caretakers who take care of the heritage homes and do the conservation. They have been with us for 20 or 25 years because of their craft. Unfortunately, they no longer have the right to work on our buildings because they don't have competency cards in construction. As a result, we have to pay two to three times more to preserve the buildings. First, we lose grants, and second, we have to pay more for the services of our craftsmen.

I'm going to give you an example. There is a bridge not far from us. The government took four years to renovate it, and we lost all the rental income during those four years and even afterwards. This will soon be the case for another building. As I said, it's been a double whammy for the past three or four years, and now we have to think about getting rid of buildings.

[Ed Fast, Conservative, Abbotsford, BC]

You also mentioned that regulations are inhibiting, perhaps strangling, your ability to undertake heritage protection activities. Can you be specific as to where those regulations are taking place? Are they at the local, provincial, or federal level?

[Jacques Archambault]

They are to the benefit of municipal and provincial governments.

At the federal level, we have to be careful with the old mills. The safety standards and the work done at the mills fall under federal jurisdiction by virtue of the Canada Labour Code and the Employment Equity Act. This is another level of regulation that must be taken into account with our miller when it comes to mills across Quebec. For at least five years, heritage conservation regulations have become tighter and tighter in terms of the people we can hire. We now have to deal with professionals who cost us more.

Finally, Quebec deals with construction. This concerns our craftsmen, who do not have their licence as contractors in the construction sector in Quebec.

[Ed Fast, Conservative, Abbotsford, BC]

You also mentioned that you rent out former prime minister Sir John A. Macdonald's residence. Do you rent it out for commercial purposes or is this for lodging?

[Jacques Archambault]

I would like to point out that the Quebec Building Act gives homeowners a certain amount of flexibility, but that property organizations such as ours are de facto in the commercial category. We do not live in the houses. That is another regulation, which is stricter.

The Sir John A. Macdonald House is rented as a bed and breakfast for two months in the summer. Since Sir John A. Macdonald lived there, we wanted to keep people there so that we could keep the heritage alive. You can even sleep in Sir John A. Macdonald's bed if you want. It is not big, but it is always available.