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Federal Budget 2014

Heritage Canada The National Trust Submitted Recommendations to the Standing Committee on Finance

In June, the House of Commons Standing Committee on Finance launched its pre-budget consultation process, which will result in a report being tabled in the House of Commons in December 2013. It asked Canadians to share a limited number of priorities for the 2014 Federal Budget. HCNT responded with the following recommendations:

Recommendation #1:

The "Heritage Lighthouse Protection Act" (2010) identified Canada's lighthouses as “an integral part of Canada’s identity, culture and history” and that measures were needed to protect them for posterity. We recommend providing seed money for a national campaign to raise funds for local groups and communities working to preserve the over 450 historic lighthouses that are in the process of being transferred out of federal government ownership. We also recommend federal matching funds be provided to build on the private and corporate donations generated by the campaign.

Federal funding: Please provide a precise indication of how the federal government could fund your recommendation.

The federal government should fund this initiative by reallocating the cost-savings to the Department of Fisheries and Oceans (DFO) for maintenance and capital expenditures on the surplus lighthouses divested to local communities. Many will remain in active service as aids to navigation. This would build on DFO's current $1 million program "Invest to Divest" available for capital upgrades to lighthouses prior to divestiture. Local communities will face huge challenges in protecting and maintaining large and remote lighthouses, making federal support essential.

Intended beneficiaries: Please indicate the groups of individuals, the sector(s) and/or the regions that would benefit by implementation of your recommendation.

Located in every Canadian prov/terr except Alberta and Saskatchewan, lighthouses are typically found in smaller, remote, and often economically challenged communities. The adaptive reuse of lighthouses would have economic, social, and cultural heritage impacts. They would ensure the ongoing tourism potential of these iconic structures and supporting communities. The rehab and ongoing maintenance of lighthouses would provide economic stimulus and skilled jobs. Their reuse, for example, as eco-tourism, special event or research/education facilities would help diversify rural/outport economies.

General impacts: Depending on the nature of your recommendation, please indicate how the standard of living of Canadians would be improved, jobs would be created, people would be trained, etc.

Lighthouses are landmark structures that attract tourism and anchor local, regional and national culture and identity. Governments at all levels and  businesses routinely feature lighthouses in their travel promotion and economic development efforts. Jobs would be created in the travel sector (tours, historic/cultural interpretation, etc) skilled trades (maintaining, upgrading and converting historic properties) and the service sector. The influx of tourism dollars and resulting job creation would improve the standard of living of residents in what are often smaller lighthouse communities.

Recommendation # 2:

Polls repeatedly demonstrate that Canadians see heritage properties as cornerstones of local, regional and national identity. Unfortunately, tax treatment, financing, constructions costs, and return on investment currently discourage heritage rehab by private industry, particularly for Canada's 4,800 commercial heritage properties. We recommend (1) creating an income tax credit for certified rehabilitations on certified heritage properties, and/or (2) creating a new accelerated Capital Cost Allowance (CCA) class for restoration and maintenance costs for certified heritage properties.

Federal funding: Please provide a precise indication of how the federal government could fund your recommendation.

Encourage heritage rehabilitation by reducing costs and increasing ROI. Introduce an income tax credit (e.g. 20%) for certified rehabilitations for certified heritage buildings. Eligible rehab costs could be capital in nature and depreciable as real property, or soft construction costs, but not building or land acquisition costs. Also, create a new CCA class for specified restoration and maintenance costs for heritage buildings. This would leave current CCA rules around “maintenance” and “betterment” in place and provide an accelerated write-off rate for qualifying expenditures.

Intended beneficiaries: Please indicate the groups of individuals, the sector(s) and/or the regions that would benefit by implementation of your recommendation.

Canadian taxpayers, in communities small and large, would benefit through this proven stimulus for private sector rehab of important heritage properties (e.g. US Federal Historic Preservation Tax Incentives). Limited access to financing is the greatest disincentive for rehab projects. Predictable tax savings would help show project viability early on. Expanding heritage rehab would diversify the construction sector and generate a multi-million dollar heritage rehab industry. Canadian studies show a heritage rehab tax credit would generate net federal revenue growth by year two.

General impacts: Depending on the nature of your recommendation, please indicate how the standard of living of Canadians would be improved, jobs would be created, people would be trained, etc.

Studies consistently demonstrate that heritage rehab generates over 20% more jobs than the same investment in new construction. The US tax credit  has leveraged over $62 billion in private investment to preserve 38,000 historic properties (a 5 to 1 ratio of private investment to tax credits). Protecting heritage properties anchors local identity and enhances quality of life in Canadian communities, builds skilled employment, and supports sustainable development. These federal tax credits have widespread support from provincial/territorial governments, 35 municipalities and FCM.

 

 

For more information contact Natalie Bull, Executive Director at HCF at nbull@heritagecanada.org
or tel. 613-237-1066 ext 222 or toll free at 1-866-964-1066.