Mr. Speaker, it is my pleasure to rise and speak in support of the act to amend the Cultural Property Export and Import Act, the Income Tax Act and the Tax Court of Canada Act.
The opposition to the bill and the thrust of the amendment to the bill would undermine cultural institutions from coast to coast. Culture is the one legacy that the past leaves to the present and the present prepares to leave to the future.
By establishing the incentives that are inherent in this bill it will encourage people in this country who have items of great significance nationally, of great significance regionally or great significance locally to donate those items to art galleries, museums and heritage buildings that may be in any town, city or county.
The purpose of this bill is to amend the Cultural Property Export and Import Act, with consequential amendments to the Income Tax Act and the Tax Court of Canada Act, to establish an appeal determinations by the Canadian Cultural Property Export Review Board of the fair market value of certified cultural property.
In December 1991 the responsibility for determining the fair market value of cultural property donated to the designated Canadian museums, art galleries and libraries and significant heritage buildings transferred from Revenue Canada Taxation to the review board and the review board assumed this responsibility at its meeting held in January 1992. No provision for appeal of the review board decisions was included in the legislative amendments despite the fact that the right of appeal had existed when this responsibility was withdrawn from Revenue Canada. Donors and custodial institutions expressed serious concerns about the lack of an appeal process that is inherent to have built into any program like this where value is to be judged.
The Department of Canadian Heritage in co-operation with the review board then undertook a series of consultations with the community about the need for an appeal process. As a result of these consultations, it was agreed that the legislative amendments should be prepared to establish the right of appeal to the Tax Court of Canada.
This bill establishes two processes. The first gives the donor or recipient institution the right to request that the review board consider its initial determination of fair market value. If after receiving a determination from the board the donor is not satisfied, he or she may take the second step of appealing the board's decision to the Tax Court of Canada.
There are key messages inherent in this bill. I will review some of them at this time. The cultural property export and import tax provides tax benefits to encourage donations to public institutions of objects and collections that are of outstanding significance and national importance. This support is the only program of the Government of Canada that provides financial support through tax credits for donations to museums, art galleries, archives and libraries.
Museums, art galleries, archives and libraries in every province and territory in Canada benefit through the receipt of donations of cultural property as a result of these tax credits. Cultural property valued at approximately $60 million is donated to Canadian
institutions each year. A significant amount of real property is donated to public institutions.
The fair market value of cultural property certified by the review board is eligible as a tax credit at 17 per cent for the first $200 and 29 per cent on the balance over $200. The donor can claim the fair market value of the gift up to the total amount of his or her net income. There is no tax payable on any capital gain resulting from this gift.
Because a donor receives a tax credit, the amount of money realized as a result of the donation is approximately 50 per cent of the fair market value. The donor does not therefore receive a tax refund equivalent to the fair market value of the gift.
Donors, museums, art galleries and professional associations have been lobbying for the right to appeal review board decisions as it was perceived that the lack of an appeal was a denial of natural justice. In most cases where there is arbitration the laws of natural justice in this country must be seen to be in action. Due process must be seen to be in action.
The establishment of appeal should be viewed as a reinstatement of the right of appeal that was lost when the responsibility for determining the fair market value was returned to the review board in 1991.
These amendments will ensure that donors who disagree with determinations of the review board will have the right of appeal to the courts and that they will not be denied natural justice. The announcement of the establishment of an appeal process was received positively by donors, museums, art dealers and the media. These legislative amendments therefore enjoy a high level of public support.
The amendments are technical in nature and respond to strong concerns expressed by the heritage community. Their passage into law should be seen as part of the ongoing commitment of the Government of Canada to ensure the preservation of Canada's cultural heritage.
As I said before and would like to stress again, the era of a country is known by the culture it passes on to another. We must bring those significant items that demonstrated the culture of that era into a place of safekeeping so that they can be studied, viewed and appreciated by people in future eras.
Throughout history works of art have been prized by civilizations as expressed by the cultures that created them. They are regularly protected, conserved and displayed as both symbols and concrete examples of the history of a particular society or cultural group. We see this now as our natives in this country seek to preserve items of their cultural heritage which have great meaning to them. Other groups in our society are seeking now to preserve items of cultural heritage that will have great meaning to future generations.
All nations define themselves in the present by events of the past. It is therefore vitally important to preserve our nation's history and heritage.
Canada passed the Cultural Property Export and Import Act to provide cultural patrimony and preserve in Canada significant examples of the nation's cultural, historic and scientific heritage in movable cultural property. As a means to protect its cultural property, Canada adopted unique combinations of export controls and tax incentives for making gifts to the designated public institutions and incorporated these in legislation by establishing the articles that flowed from that act.
May I speak from some personal experience. Last Sunday I attended a cultural heritage event. I stood in for the minister of culture at a ceremony for a plaque commemorating a historic building of significant architectural importance. Its interior was significant; it was the most outstanding example of fresco painting in three dimension in Canada. I was pleased to be there as were all the people of that community. It is not a sophisticated metropolitan community but the town of Baden of approximately 2,000 people.
People gathered in great numbers to celebrate the historic recognition of Castle Kilbride. Significant artefacts that belonged to that castle from the early 19th century were donated. People brought them back and these items were of significant value because they were owned by a man of considerable wealth. They returned them to this heritage building and museum so that the people of that community would see the architecture and painting of significance to Canadian history and how life was lived in that building.
I live in a town where there are a number of buildings of architectural significance that will be declared heritage buildings. There is not just the culture of significant and exciting designs but there is also the finest English speaking repertoire theatre in North America, the Stratford Festival Theatre and its three stages. We go down the trail and recognize great writing, great playwriting and performances in Stratford, which by the way is playing to its best year in history.
Canadians will look back on those significant events which developed their culture, developed their appreciation for fine architecture, developed their appreciation for fine art, which were developed in Canada by Canadians, for Canadians today and for Canadians tomorrow.