Mr. Speaker, we have seen an example of the shallowness of the debate by the Reform Party. When people look back on the Reform record they will find Spanish eyes on the turbot, green eyes on unity and closed eyes on the cultural industry at large.
The Cultural Property Export and Import Act ensures the preservation in Canada of our heritage in movable cultural property. Through the combined provisions of export controls, grants and tax incentives for donations to designated Canadian custodial institutions, the legislation has been highly successful in enriching the collections of public institutions and thereby providing Canadians access to their heritage.
The legislation also established the Canadian Cultural Property Export Review Board and defined its mandate. From 1977 to 1991, the Board's mandate was to hear appeals in the case of denied export permits and to determine whether the cultural property given or sold to designated institutions met the criteria of "outstanding significance and national importance" contained in the legislation.
In 1991, the Cultural Property Export and Import Act and the Income Tax Act were amended in order to transfer responsibility for determining the fair market value of certificated cultural property from Revenue Canada to the Review Board.
There was no provision, however, for appeal of decisions by the Review Board, and the right to appeal under the Income Tax Act was lost.
The need for an appeal process was identified and acknowledged in 1993 following widespread consultation with custodial institutions, donors of cultural property, dealers in art and antiques and members of the review board. The museum community is convinced that an appeal is necessary to ensure that donors will be confident their donations will receive a fair hearing.
By establishing the right of appeal, potential donors will be assured that if they are dissatisfied with a review board determination they will have recourse to the Tax Court of Canada. With the concurrence of the Tax Court of Canada the appeal to the tax court has been made retroactive to January 1992, thereby providing all donors who have made a gift since the right to appeal was lost and who wish to pursue an appeal with both the opportunity and the legal right to do so.
The bill also covers situations in which donors may ask the Review Board to reconsider its initial decision. The increase in the number of situations in which the Review Board may redetermine the value of a gift will provide donors not wanting to spend the money involved in an appeal to the Tax Court of Canada with an opportunity for a new hearing on the circumstances surrounding the gift and the determination of its value by the Board. This approach will mean that most of the applications for appeal will be handled directly by the Review Board, eliminating the need for court proceedings and thus making the process accessible to all.
It will also ensure that any disagreement on fair market value is discussed by experts in this highly specialized field. Applications for redetermination made to the Review Board will be studied in depth by members of the Board and other experts as necessary.
The provision for two appeal processes is also cost efficient because it is anticipated that the majority of appeals will be resolved directly between the donor and the review board and will not necessitate a formal appeal to the Tax Court of Canada. In a time when we are all concerned with reducing government spending, the ability to resolve differences of opinion about fair market value with an existing organization, the review board, whose members serve on a part time basis, will result in savings of both time and money.
The review board is an agency operating at arm's length from the Department of Canadian Heritage and it is resolutely in favour of establishing a procedure whereby one could appeal its determinations regarding fair market value. The review board is made up of specialists in museology, collectors or traders, who are well aware of the difficulties custodial institutions and donors of cultural property have encountered because there was no appeal procedure. The determination of the fair market value is currently done and will continue to be done by individuals who are skilled in various areas relating to cultural property and very active on the markets where this property is sold.
The determination of the fair market value of any object and particularly cultural property involves an element of subjectivity that can lead to disagreement. These disagreements occurred when the responsibility for determining fair market value resided with Revenue Canada. There have been disagreements among the experts in the time since the review board has assumed this responsibility. This debate is both healthy and inevitable when dealing with often unique material. An open and transparent process at the time the review board determines and if necessary redetermines the fair market value of cultural property is essential.
The right to pursue the matter in the courts if no resolution can be found is consistent with both the Canadian legal system and the concept of natural justice.
The staff of designated institutions argued that the absence of any appeal procedure caused the number of donations made by collectors to drop. All designated institutions would therefore welcome the implementation of such a procedure, since it would foster an increase in donations while at the same time eliminating the potential for tension in dealings between donors, custodial institutions and the review board.
Donors of cultural property have also reacted positively to the introduction of the bill, as they believe that it removes a major deterrent to donating. Any perceived denials of natural justice have been resolved, as donors will now be able to appeal to the tax court if they disagree with the review board's determination of fair market value.
There is also strong professional support for these amendments in the communities that are most affected by the availability of tax credits for donations of cultural property. The Canadian Museum Association and the Canadian Art Museum Directors Association have expressed strong support for the bill and the establishment of an appeal process. Both associations, whose members include museums and art gallery personnel from across Canada, have issued policy statements in support of the establishment of an appeal process.
These amendments to the Cultural Property Export and Import Act to create an appeal process to the Tax Court of Canada of decisions of the review board should not be viewed as a shift in government policy, nor should they be interpreted to be a reflection on the work or credibility of the Canadian Cultural Property Export Review Board. Instead the bill must be recognized for what it is: the reinstatement of a right to appeal that was lost in 1991 when responsibility for determining the fair market value of certified cultural property was transferred from Revenue Canada to the Canadian Cultural Property Export Review Board.
The amendments to the Cultural Property Export and Import Act, the Income Tax Act and the Tax Court of Canada Act contained in the bill will ensure the continued preservation of our heritage in movable cultural property. The appeal process will ensure continued confidence in the donation system and will in turn lead to an increase in donations to museums, art galleries, archives and libraries.
This bill also ensures that there will be public confidence in the fairness of the procedures of the review board and that there is no denial of natural justice. Furthermore, a right of appeal that was lost in 1991 when responsibility for determining fair market value was transferred to the review board will be restored.
These amendments will also remove any obstacles, real or perceived, to making donations to Canadian custodial institutions. Through these donations all Canadians will benefit, as we will be ensured of the continued preservation and access to Canada's heritage in movable cultural property.