Thank you.
The Heritage Canada Foundation, HCF, was created as a national trust in 1973. It's an independent, membership-based charitable organization and has a public mandate to promote the rehabilitation and sustainable reuse of historic buildings.
Over the past 30 years, Canada has lost 20% of its pre-1920s historic buildings to demolition. This is lamentable. But why should we retain and rehabilitate Canada's historic places in the first place? There are many socio-economic benefits. As Professor Pacey mentioned this morning, these iconic places define our communities and attract tourist dollars. What's more, their rehabilitation generates twice the jobs of new construction, and it is also a proven catalyst for the revitalization of depressed urban areas.
There are also many environmental benefits. Reviving old buildings reduces greenhouse gases. A recent Canadian study showed that rehabs use a third of the energy of new construction. Rehabilitation also supports sustainability by recycling, and it keeps demolition waste away from the landfills.
Unfortunately these days, there are many financial disincentives that stand in the way of preserving these historic places. The federal tax system contains disincentives of its own. The Income Tax Act is unclear on which types of rehabilitation work are repair and maintenance—a deductible current expense—and what must be capitalized and depreciated. This discourages rehabilitation. Moreover, GST rebates for substantial renovations and new housing are not currently applicable to heritage buildings.
So what can be done to tip the balance in favour of preservation? Over the past year, HCF has been listening to heritage property developers, municipal planners, and grassroots heritage advocates. They have all told us that federal financial incentives would be powerful tools to help Canadians preserve their historic places. This spring, city councils from six major centres, including St. John's, Vancouver, Kitchener, the Region of Waterloo, Winnipeg, and Toronto, passed council resolutions calling for these kinds of financial incentives for heritage.
At HCF's annual conference in October, six prominent heritage property developers from across the country said that fiscal measures would greatly help them reuse buildings as well. All these groups have seen how effective federal initiatives such as the ecological gifts program have been in the conservation of ecologically significant land. They all believe similar strides could be made with historic buildings if the right tools are put in place.
Federal financial incentives to help preserve these places could take many forms, including measures for taxable corporations. As Professor Pacey mentioned this morning, the United States has a 20% tax credit for rehabilitation of historic properties, and it has been very successful for the past 30 years, with over 32,000 buildings rehabilitated. All told, $5 billion in federal tax credits have leveraged $36 billion in private investment.
The Canadian government's own commercial heritage properties incentive fund, also known as CHPIF, showed that financial measures could be just as successful here in Canada. The program was instrumental in resurrecting sixteen major properties. Two projects, the historic Leader Building in Regina and the Union Bank Tower in Winnipeg, had sat empty for over a decade. In downtown Saint John, New Brunswick, the CenterBeam Place project resurrected an entire block of deteriorating 19th century buildings—and I hope you have a chance to look at John F. Irving's article in the magazine I sent around.
These and other CHPIF projects have roughly the same five-to-one ratio of private-to-public funding. CHPIF funding tips the balance and makes these cost-effective for private companies to undertake.
Other kinds of financial incentives could also benefit non-profit groups that are rehabilitating historic buildings. Earlier this year, the federal government undertook an initiative with the Nature Conservancy of Canada to purchase and preserve ecologically sensitive land. The federal government's $225 million contribution will be matched by private donations. A similar national endowment fund of this type for heritage buildings would stimulate partnerships in heritage preservation.
In summary, our three recommendations are that the federal government introduce a federal rehabilitation tax incentive or comparable measure for taxable corporations, that it ensure existing tax measures accommodate the rehabilitation of historic buildings, and that it promote private–public partnerships for historic places by providing seed funding for a national heritage conservation endowment fund. With these, the federal government could be a powerful catalyst by putting in place key tools to help Canadians protect and invest in the heritage we all cherish.
Thank you.