Good afternoon.
Mr. Chairman, distinguished committee members, thank you very much for this opportunity to present our recommendations. The Heritage Canada Foundation is a national non-governmental charitable entity created as Canada's national trust. We believe that historic places are the cornerstones of community and identity, and we help Canadians protect the places that matter to them by sharing information and by engaging and inspiring the public.
I'm here today to tell you that the rehabilitation of historic buildings and sites represents an important opportunity to stimulate private investment and create green new jobs, with much less negative environmental impact than many other stimulus measures. An added benefit is more liveable neighbourhoods and greater tourism potential.
There are a couple of important realities to consider. Ten years into the future, as much as 90% of Canada's building stock will consist of buildings already built before today. Buildings are responsible for 30% of Canada's greenhouse gas emissions and offer the single most important opportunity to achieve significant greenhouse gas reductions. Forward-thinking stewardship and investment today in these buildings, including heritage buildings, will be crucial to Canada's economic and environmental sustainability. Measures that encourage rehabilitation and energy upgrading of existing buildings, including heritage buildings, will create green new jobs.
Rehabilitation is extremely labour intensive--66% more labour intensive than new construction. And these are skilled jobs for the competitive workforce of tomorrow. Further, rehabilitation projects and the jobs they create have been shown to increase tax revenue at all levels and to have a positive ripple effect in surrounding areas. I encourage you to think of places such as Fort Macleod, Alberta; downtown Picton, Ontario; Edmonton's Old Strathcona district; or Toronto's Distillery District—all historic areas that are generating great revenue.
Measures that encourage rehabilitation and energy upgrading of existing buildings will also have important environmental benefits. The greenest building is the one already built. New construction, no matter how green, cannot compete with the environmental imperative of wisely using the buildings we already have. Yet the current federal tax regime and funding programs do not encourage rehabilitation of existing buildings, let alone of heritage buildings. For example, owners of income-producing properties, including houses and apartment buildings, can earn a tax deduction by demolishing them. We actually need the opposite; we need measures that would assist and reward businesses and citizens who show leadership in reusing existing buildings.
Accordingly, our first recommendation is to build on the home renovation tax credit, introduced as an economic stimulus in the 2009 budget, by introducing a more substantial rehabilitation tax credit.
Rehabilitation tax credits have been hugely successful in the United States for over 30 years. In fact, the U.S. historic tax credit program was introduced as an economic stimulus measure in 1976 and has since leveraged over $25 billion in private investment and created an average of 45 new jobs per rehab project. Currently there's a bill before the U.S. Congress to offer an additional 10% in tax credits for heritage projects that also increase the building's energy efficiency.
There's broad support in Canada for these kinds of measures, notably from the Federation of Canadian Municipalities and the Royal Architectural Institute of Canada. The cost of such a program to the government can be managed through such eligibility criteria as limiting it to properties on the Canadian Register of Historic Places, or by setting ceilings for the available tax credit per property owner. That's our first recommendation.
Our second recommendation is to build on the success of the funding provided to the National Historic Sites of Canada cost-sharing program, also an economic stimulus included in the 2009 budget.
National historic sites contribute to tourism in over 400 communities across Canada. The renewal of the cost-sharing program has already stimulated private investment in a number of sites that will yield visitor spending and spinoff economic activity, sites such as the Walker Theatre in Winnipeg and the Rosamond Woollen Mill in Almonte.
There has already been a strong demand for the modest amount of funding available. Only $20 million total in stimulus funding is available for this program over the next four years, but as of August, Parks Canada had already received applications totalling twice that amount. If all the current applications were funded, they would stimulate an impressive $180 million in rehabilitation work, five times the funding invested by government.
For this measure, we're recommending an increase of at least $10 million to $20 million per year to the budget for the cost-sharing program, to build on the success of this stimulus measure.
In closing, let me thank you in advance for considering our two recommendations, both of which represent proven approaches to leveraging private sector investment and making heritage and older buildings the cornerstones of a sustainable future.
Thank you.