Until now, Canadian land trusts faced a major barrier to protecting many unique and significant natural areas across Canada. Because these lands are owned by Americans, an income tax barrier existed which discouraged protection. Americans who wished to protect land in Canada were required to pay often hefty Canadian capital gains tax on their conservation gift. In response, a new U.S. charity, AFoCLT, was formed by land conservation leaders on both sides of the border to provide the legal mechanism and structure required to make such ‘cross-border’ land conservation possible, but until today, the tax barrier remained.
Through the leadership of Canada’s Finance Minister Jim Flaherty, changes made to the Income Tax Act regulations remove the capital gains tax on cross-border gifts of land to the AFoCLT. This regulatory change was announced by Minister Flaherty and representatives of the AFoCLT at Thickson’s Woods Nature Reserve, near Whitby, Ontario.
The Minister acknowledged the critical role of land trusts in Canadian conservation, and the importance of the service provided by AFoCLT. Minister Flaherty said, “Land trusts are an important and highly effective way to protect our environment and our government recognizes the valuable contribution that land trusts make to conservation in Canada.” He added, “We believe that this regulatory amendment gives our valued conservation partners more tools to help us in meeting Canada’s conservation commitments and goals.”
With the longstanding tax barrier now overcome, Bonnie Sutherland, a founder of AFoCLT, officially launched the organization’s national “Cross-Border Land Conservation Program.” This program is poised to open the door for Canadian land trusts to protect even more of Canada’s natural legacy—lands they were unable to protect previously because of the tax barrier. These lands include unique and significant conservation lands, from pristine coastal lands in Nova Scotia and British Columbia to idyllic lakeshores and old growth forests in Ontario.
In announcing the program launch, Sutherland noted, “American Friends can now work together with Canadian land trusts to protect even more of Canada’s unique natural legacy, for the benefit or our natural environment and for the benefit of all Canadians. American landowners can become active partners in conservation on their own lands, and receive the same tax benefits as Canadian donors.” Asked about the significance of the tax regulation change and the cross-border program launch, Sutherland noted, “Today’s announcements will have an immediate and significant impact on conservation in Canada.”
Minister Flaherty applauded the work of the AFoCLT and added, “The American Friends of Canadian Land Trusts is providing a critical service that will benefit conservation in Canada and ultimately all Canadians through its contribution to protecting Canada’s natural heritage.”
Margo Sheppard, Chair of the Canadian Land Trust Alliance, foresees an increased pace and scale for land conservation across Canada with this significant tax impediment removed. She noted, “Land Trusts from coast to coast applaud the groundbreaking work of American Friends, and we enthusiastically welcome their new program. We look forward to protecting what were for so long unattainable conservation lands.”