Mr. Speaker, it gives me great pleasure to speak on Bill C-93. As a background to this legislation, the purpose of the 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 of determination by the Canadian Cultural Property Export Review Board of the fair market value of certified cultural properties.
Going back a little, in December 1991 the responsibility for determining the fair market value of cultural property donated to designated Canadian museums, art galleries and libraries was transferred from Revenue Canada Taxation to the review board. The review board assumed this new responsibility at a meeting which was held sometime in January 1992.
There was no provision for appeal of review board decisions included in the legislative amendment despite the fact that the right of appeal existed when this responsibility was with Revenue Canada.
Donors and custodial institutions expressed serious concern about the lack of an appeal mechanism. As a result the Department of Canadian Heritage, in co-operation with the review board, 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 a legislative amendment should be prepared to establish the right of appeal to the Tax Court of Canada.
The bill gives a donor or a custodial institution the right to request that the review board reconsider its initial determination of fair market value. If after receiving a redetermination from the board the donor is still not satisfied, he or she may take the second step of appealing the board decision to the Tax Court of Canada.
There are a number of items in the legislation I would like to share with my colleagues. The Cultural Property Export and Import Act provides tax benefits to encourage donations to public institutions of objects and collections of outstanding significance and national importance.
It 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 of Canada will benefit through the receipt of donations of cultural property as a result of the tax credits.
Cultural property valued at approximately $60 million is donated to Canadian institutions each year. The fair market value of cultural property certified by the review board as a result of the legislation will become eligible for a tax credit of 17 per cent on the first $200 and 29 per cent on the balance if it is over $200.
The donor can claim the fair market value of the gift up to the total amount of his or her net income, and there is no tax payable on any capital gain resulting from the gift. There is a cap and the cap is the total income of the individual on an annual basis.
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. To that end the government has taken action.
The establishment of an appeal should be viewed as a reinstatement of the right of appeal that was lost when the responsibility for determining fair market value was transferred to the review board back in 1991. The amendments will ensure that donors who disagree with determinations of the review board will have the right of appeal to the court and 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 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 Canadian heritage.
Bill C-93 has dealt with all the concerns in communities and all wishes of different art galleries, museums, libraries and similar institutions. All those concerns have been studied and legislation that responds to them in a positive way has been brought forward.
It is a perfect example that the government is willing to listen to the concerns of the people, that the government is willing to take action, and that the government has taken action on an issue of national importance and of great concern to the art community of Canada.
I congratulate all those who have made representations to the Department of Canadian Heritage, my colleagues in the House of Commons, the committees and the administration through direct communication. I also thank all those who worked tirelessly to ensure the legislation would come before the House in a timely fashion.
I am sure my colleagues on both sides of the House will stand to speak in support of the great initiative taken by the department of heritage. We truly believe that if somebody is willing to do good and give to a national institution such as a gallery, a library or a museum, the individual deserves the right to be recognized and to be given an incentive.
This is why we made provision in the legislation to give a tax credit for any Canadian citizen, or for that matter a landed immigrant in Canada, who might have something of national significance to give as a gift to the crown. The individual will be given a tax credit of up to 17 per cent if the gift is worth less than $200 and up to 29 per cent of his or her annual income. I think that is fair. I call on people from coast to coast to coast who might have valuable items to consider giving them to museums and so forth.
Some of my colleagues might have some points to make. This would be a most opportune time to put their points on the table so that we can deal with the legislation in a timely manner.