Mr. Speaker, it is a pleasure to rise today in this House on behalf of my constituents of Kingston and the Islands to speak in support of Bill C-323, an act to amend the Income Tax Act. I will begin by thanking my colleague for York—Simcoe for putting forward this substantive and very timely legislation.
My speech today will focus on three themes. First, I will address the importance of preserving heritage buildings. Second, I will draw from my experiences as a municipal politician to explain why I believe there is a desperate need for financial incentives to encourage heritage restoration. Third, I will speak to the economic benefits associated with the restoration of historically designated buildings.
In his opening remarks during the first hour of debate, the sponsor of the bill talked about the sense of awe he feels when walking through historic sites. While we may come from different parts of the province and indeed different sides of this House, I can say that I share his sense of awe when I visit one of the many historic properties in my riding of Kingston and the Islands.
These buildings tell a story about who we are and where we came from. They impart important lessons from the past and remind us about the challenges we have overcome and the accomplishments we have had in this country. In short, they highlight and bring to life those special moments in our history that are worth remembering.
I have often said in this House that I am proud to represent Canada's first capital, which has firmly etched its place in our country's history. Kingston's rich history and culture endures and is kept alive by our treasured heritage properties. To give members some perspective, about 120 buildings in Kingston belong on the national register of historic places, and more than 1,000 are listed on the city's municipal register and designated under the Ontario Heritage Act. These include nationally important historic sites, such as the Kingston Penitentiary, the original CN station, and the Nine Mile Point lighthouse on Simcoe Island.
This brings me to the second focal point of my speech, which is the need for real incentives to restore and maintain heritage properties.
Growing up in Kingston, I was fortunate to learn from a young age to appreciate the historic value of built heritage. It was later on as mayor that I gained a deeper understanding of the challenges associated with owning or acquiring a heritage building. The reality is that many of our most prominent historical buildings are facing an uncertain future, and I would like to talk about a few examples to illustrate what I mean.
The outer station in Kingston is a designated historical site that was built by the Grand Trunk Railway in 1856, 11 years before Confederation, to serve as a halfway point between Montreal and Toronto. It holds a special role in our history and was used by Canada's first prime minister, Sir John A. Macdonald, in his travels between Kingston and this place during the early formative years of our country. Among other notable individuals, King George VI famously arrived there on a visit to Kingston in 1939. The station was closed in 1974, and despite its historical importance, it now sits derelict and in ruins. This is what is known as demolition by neglect, a reality that, unfortunately, is far too common. After years of deterioration, the city has estimated that it would cost nearly $4 million for CN, the current owners, to repair this building and clean up the contamination of the land.
Another perfect example of a challenging situation in my riding is that of the Nine Mile Point lighthouse, which was erected on the western tip of Simcoe Island in 1833 to guide vessels navigating the northeastern waters of Lake Ontario. As the oldest lighthouse on the Canadian side of the Great Lakes, and possibly in the entire Great Lakes, it is now retired from its operational duties and has appropriately been nominated for designation under the Heritage Lighthouse Protection Act. The problem is that any potential new owner of this historic lighthouse might be responsible for the significant cost of maintaining this property and remediating it appropriately, as required by federal and provincial laws.
Restoration in both cases has definite community support, but the projects present a significant undertaking, and I am concerned that right now we do not have adequate incentives to encourage anyone to take them on.
Bill C-323 proposes a modest 20% tax credit for rehabilitation work done on designated historic buildings and a three-year accelerated write-off period for spending on these buildings. This would give interested parties the incentive to take on these projects.
These measures would increase the confidence of current and future owners of historic properties, encouraging them to rehabilitate and reuse historically significant buildings and avoid the grim alternatives of demolition or demolition by neglect.
This incentive is also a win-win in situations where the federal government is trying to divest of a building that no longer has an operational use. Nine Mile Point Lighthouse, Kingston Penitentiary, and Outer Station are all examples of federally owned properties, or those owned by a crown corporation, that are considered surplus and are no longer operational. While the federal government will not outright demolish these historic properties, it is also not required to do anything to preserve them.
The options are to let them remain as a liability on the federal government's balance sheet, in which case they will slowly deteriorate over time because the federal government is not required to repair them, as a third party would, or find a way to transfer them to an interested party who will actually invest in rehabilitation.
The tax credit proposed in Bill C-323 would make the second option more feasible. It would make it less likely that federal properties will be demolished by neglect, which is exactly what has happened in the case of the Outer Station in my riding.
When we talk about heritage properties, we often think about a few particularly special landmarks. I have just named a few that stand out in my community, and I am sure every member could do the same for their own ridings. However, we have to remember that built heritage also includes homes owned by private landowners, who face high costs to maintain their properties over time. As the member for Kootenay—Columbia noted in his speech during the last hour of debate, owners of historic buildings typically incur an additional 21% in costs, so it seems fair and appropriate to offset those costs with a 20% tax credit .
I will now move to my third and final theme, which is the economic benefit of the tax credit. To estimate the financial impact of this bill, we can look to the United States, which has had a historic tax credit program since 1981. The program has been a resounding success at stimulating economic growth and creating jobs.
So far, over $23 billion in federal credits have generated more than $28 billion in additional tax revenue and leveraged over $120 billion in private investment; 2.4 million jobs have been created, and tens of thousands of historic properties have benefited.
In Canada, a pilot program was launched in 2003 that yielded equally promising results. Over the five-year pilot project, $21.5 million in federal contributions supported 49 projects and leveraged $177 million or more than eight times more in private sector investment.
We should make policies based on the best evidence, and in this case, the evidence is very clear. lncentivizing heritage rehabilitation not only serves an important public goal but also stimulates exactly the kind of economic activity we need right now. It will generate considerable private investment and will create well-paying jobs in construction, skilled trades, and many other fields.
In light of Canada's 150th birthday, I cannot imagine a more appropriate time to be having this discussion. The experience of visiting a historic site can teach us much more about our past than reading a textbook, and we should not deprive future generations of this opportunity. If we do nothing, we risk losing these national treasures to demolition or demolition by neglect, which unfortunately is happening right now in my community.
We need to positively reward the goodwill of Canadians who are acting in the public interest by preserving our built heritage. To ensure our heritage buildings can be enjoyed by current and future generations, we need to get serious about rehabilitation, and we must act now before it becomes too costly or impossible to do so. My colleague has put forward this bill to do exactly that, which I am proud to support.
To conclude, I hope all members will think hard about the significant cultural and economic benefits that this bill could have to their communities and throughout the country.