Knowledge is the Power Behind Protection

By Alison Howson, Executive Director of the Ontario Land Trust Alliance

Conservation is all about people. Our activities threaten habitat for all species. On the other hand, our passion for nature provides the inspiration for preservation. We are cause and cure. Land trusts provide knowledge and support to people who are inspired to act on behalf of nature, and future generations.

The Ontario Land Trust Alliance (OLTA) strengthens land conservation in Ontario by building and supporting a strong land trust community. We ensure that conservation organizations have the knowledge and tools to be effective.

Three years ago, OLTA and American Friends launched the Cross-border Conservation Training Program (CCTP) to increase land trusts’ capacity to protect ecologically significant, and potentially threatened, properties owned by US taxpayers. In recognition of the potential land protection outcomes, the Ontario Trillium Foundation provided the key funding. The McLean Foundation also invested in the CCTP. We are extremely grateful for this support which brought our project to life.

Educating landowners  from the US about differences between our two countries’ capital gains tax regimes is a critical conservation strategy. In Canada, capital gains results from almost all transfers of appreciated real estate; including bequests. Under the US system which uses an estate tax instead, only the very wealthiest Americans have to worry. As a consequence, Americans often don’t make any special estate arrangements for their Canadian property; opting to “…just give it to the kids.”

The Canadian tax on such a gift can be as much as 25% of the property’s appreciation. Where property values have escalated sharply, the tax quickly adds up to six figures. Unless the current owners set aside funds, their heirs may have to sell some or all of the property for development in order to pay the tax.

This is why OLTA and American Friends are helping Canadian land trusts provide guidance and support to US landowners and their professional advisors.

Happily there are tax incentives in both the US and Canada to promote permanent protection of Canada’s natural heritage. Unfortunately, this fact is not widely known. Through the CCTP, OLTA and American Friends are providing materials to share this information with US owners of priority parcels in Ontario. Tax benefits can make it financially feasible for US owners to act on their passion to protect their favorite places. We are proud to report that CCTP has created innovative new tools, built land trust capacity and helped advance the protection of thousands of acres of environmentally sensitive lands owned by US taxpayers.

Beauvais Point, on Wolfe Island, is a perfect example. Located in the Thousand Islands region of the St. Lawrence River, very close to where it originates in Lake Ontario, Wolfe Island’s forests have almost all been cut to create farmland. The majority of the shore is divided into second home lots for vacationers who can swiftly reach Wolfe Island via a short ferry trip.

Thanks to the multi-generational stewardship of the MacLean family, Beauvais Point is the exception, with an impressive forest, on rich, dark soil. Visitors are struck by the unusually lofty canopy height of the straight, tall shagbark hickories and maples. The extensive waterfront is mostly natural. These features protect habitat for migratory birds and rare plants, and maintain the clear water and clean river bottom that species like small and largemouth bass and muskellunge require for reproduction.

Burton (Mackie) MacLean and his wife Charlotte, who live in Pennsylvania, were searching for a realistic way to pass Beauvais Point to their adult children and ensure that their large crew of grandchildren would be able to experience the river, the woods, and the company of their extended family. To achieve that vision, they needed a conservation approach to reduce Canadian taxes and produce a US income deduction. The CCTP helped make that possible.

Last year, Mackie and Charlotte donated perpetual conservation easement to American Friends in a transaction facilitated by Thousand Islands Watershed Land Trust (TIWLT). Beauvais Point cannot be subdivided and new structures are allowed only in the areas around existing buildings. A CCTP workshop for landowners, hosted by TIWLT, helped inform the MacLeans of their options. The CCTP also provided essential funds for transaction costs associated with the easement gift.

This year, as part of the CCTP program, the MacLeans welcomed dozens of other American landowners to Beauvais Point to share their story, and showed off the natural features of the property to inspire other families to follow their lead.

Together, OLTA and American Friends look forward to all the important future land conservation in Ontario that is resulting from our program and partnerships.

 

 

AF Featured in Sault This Week: U.S. Group Repatriates Canadian Wild Lands

By Sara McCleary

Living in a border town surrounded by abundant natural lands, Saultites know Americans frequently cross the bridge to come enjoy the Canadian wilderness.

They also know those Americans often own land here in Canada, sometimes with the land having been passed down generation after generation.

Because many of those American-owned lands are important to conservation efforts in Canada, a unique American charity works to help American landowners transfer their properties to Canadian conservation groups to preserve the lands’ wildlife and natural habitats — and without having to pay hefty Canadian tax bills.

American Friends of Canadian Land Trusts has operated since 2007 with the goal of protecting Canada’s natural heritage by helping American owners of Canadian lands navigate their way through the complicated legal and tax requirements that come with being cross-border landowners.

“They often don’t know that they’re Canadian taxpayers and they can’t just give the land to their kids,” Sandra Tassel, American Friends program co-ordinator, told Sault This Week.

“We’ve had people come, ready to donate their property, and find out they have a whopping tax bill because they didn’t know they had to pay capital gains in Canada when they got it from their parents.”

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American Friends’ Case for Support

American Friends of Canadian Land Trusts (American Friends) has a focused purpose and unique role – protecting ecologically important land in Canada owned by conservation-minded Americans, in collaboration with Canadian conservation organizations.

American Friends is protecting land all across Canada, from Prince Edward Island to British Columbia. Canada’s spectacular natural lands – seacoasts, forests, prairies, lakes, rivers, and islands – provide important ecological, economic, recreational, cultural, social and scenic benefits. These landscapes are defined by nature rather than political boundaries. Canada’s treasured landscapes, particularly those within a day’s drive of population centers in the US and Canada, are increasingly threatened. Demographics are causing big ownership shifts; as aging landowners sell their highly appreciated properties the new owners of these expensive properties are using them more intensively.

US taxpayers own a significant percentage of those priority conservation lands, for example:

  • 25% of Nova Scotia’s coast is owned by non-Canadians, most of whom are US taxpayers
  • In parts of Lake Huron’s ecologically-significant Georgian Bay, Americans own up to 80% of the properties
  • Americans own as much as 30% of private land in the beautiful Southern Gulf Islands in British Columbia

Land protection professionals identify protection of American-owned lands as critical for conservation success in many parts of Canada. Before the creation of American Friends in 2007, they found US and Canadian tax laws to be nearly insurmountable barriers to donations of land or conservation easements from US taxpayers.

American Friends removed those tax and legal barriers, encouraging and facilitating “cross-border conservation” – Canadian land protected by US property owners.

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St. John Point, a 64-acre waterfront property on Mayne Island, is going to be a new regional park in the Southern Gulf Islands of British Columbia, thanks to a unique collaboration.

American Friends Mentioned in CBC News Article “New Regional Park Coming to B.C.’s Mayne Island”

Conservationists, local governments and Southern Gulf Island residents are celebrating a new regional park.

Their successful fundraising campaign has allowed for the purchase of 26 hectares on Mayne Island known as St. John Point.

“Together we have assured the protection of this magnificent stretch of Coastal Douglas Fir landscape and over two kilometres of coastline,” said Malcolm Inglis, president of the Mayne Island Conservancy, in a news release.

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Cross-border Conservation Training Program

Recognizing that American-owned lands are key conservation properties in many land trust catchment areas in Ontario, the Ontario Trillium Foundation has provided funding over three years to American Friends and Ontario Land Trust Alliance to launch the Cross-border Conservation Training Program (CCTP) in 2016.

The goal is to increase the collective capacity of Ontario conservation organizations to be successful at “cross-border conservation” – to secure high-priority conservation properties owned wholly or partly by US taxpayers – and to bring more funding to support such work. We envision offering training opportunities in the form of workshops and one-on-one mentoring. CCTP also has funds for mapping, communications resources, and a small grants program to assist OLTA members with the costs of initiating cross-border conservation gifts.

Rainy Lake Conservancy, Georgian Bay Land Trust, Lake Superior Watershed Conservancy, Magnetawan Watershed Land Trust and The Bruce Trail Conservancy have all partnered with AF to secure one or more of these cross-border conservation gifts.  In Ontario, 12 cross-border gifts combine to protect over 800 acres since 2011.  US income tax benefits made these gifts financially feasible for the owners, many of whom have passed their Canadian properties down through generations. The total appraised value of these gifts is over $6 million USD.

The Old Man Creek Preserve was saved from subdivision and development by an American who acquired the land and donated it to American Friends of Canadian Land Trusts in a transaction facilitated by the Magnetawan Watershed Land Trust.

Conservation organizations can help develop the program by completing this short, online survey.

Professional advisors and conservationists can gain more information and become involved by contacting:

Sandra Tassel, American Friends Program Coordinator, or Kristen Callow, OLTA Program Officer.

Little Annapolis Lake

US Enhanced Conservation Easement Tax Incentive

Big news for conservation
Last week the US Congress gave a wonderful year end gift to preservation advocates, protection-oriented landowners and anyone who values natural, wild places. In a bi-partisan vote that reflects Americans’ interest in conservation, irrespective of their other political leanings, both the House and Senate voted to make the “Enhanced Conservation Easement Tax Incentive” permanent and retroactive to the beginning of 2015.

Here’s what that means to American Friends, its partners and US taxpayers who own ecologically-sensitive land, including in Canada.

What is the Conservation Tax Deduction?
The US conservation tax deduction allows a landowner to claim a federal income tax deduction for the value of a donated conservation easement that meets requirements of a qualified conservation contribution — similar to other charitable donations. The value of the conservation easement is generally calculated by determining the difference in property value before and after the conservation easement is registered on title. The landowner donated that amount by restricting the potential future uses of the protected land.

Without the enhanced incentive a landowner could only deduct the value of a conservation easement, up to 30% of his or her adjusted gross income (AGI), for up to six years. (The year of the gift, plus five years of carry forward.)

These former limits meant that taxpayers without high taxable incomes might not be able to fully utilize the charitable deduction associated with an easement gift. It was a serious disincentive for people of more modest means to donate conservation easements, especially in areas where property values have appreciated substantially and/or when a landowner wanted to preserve their land’s natural character by eliminating most or all development. The more future development the landowner foregoes the higher the appraised value of the easement, hence the tax incentive conundrum which has been addressed by the new legislation.

What is the Enhanced Incentive and How Does it Work?
The enhanced incentive raises both the AGI limit and the length of time over which donor can use the tax deductions. These modifications can make a big difference in the financial bottom-line produced by donating a conservation easement.

Landowners with modest incomes, or who donate conservation easements that are very valuable, will now be able to fully use their deductions and reduce their tax burden. Farmers and ranchers are eligible for even higher deduction allowances.

The specifics of the enhanced deduction:

  • Raises the maximum deduction a donor can take for donating a qualified conservation easement from 30% of their adjusted gross income (AGI) in any year to 50%.
  • Allows qualified farmers and ranchers to deduct up to 100% of their AGI.
  • Increases the number of years over which a donor can take deductions from a donation of a qualified conservation easement from 6 to 16 years.

The newly-approved incentives mean that voluntary land conservation will be even more attractive to US taxpayers who own ecologically important land in Canada; especially those who want to keep their land in their families and therefore need to reduce their Canadian capital gains. Donating a conservation easement to American Friends will decrease the current value of their land, making it less expensive to transfer the property to the next generation. The enhanced tax benefits will greatly improve the overall bottom-line by allowing donors to reduce their US taxes more significantly.

This change will help American Friends, its Canadian partners and the families from the US who are seeking a financially realistic way to retain the natural qualities of their properties. The incentive further leverages philanthropic and government funding to save Canada’s healthy watersheds, wildlife habitat, scenic views, recreational resources and economies based on cottage tourism, hunting and fishing.

Please contact Sandra Tassel, Program Coordinator, for more information about this exciting news. Phone (360) 515-7171 or info@afoclt.org

Canadian-American Cross-Border Conservation Success

Drache Aptowitzer LLP, recognized as one of Canada’s foremost experts in the law related to charities and non-profit organizations, recently published a story about a conservation donation in Georgian Bay, Ontario. The Georgian Bay Land Trust (GBLT) had an opportunity to protect an undeveloped island featuring undisturbed stands of White Pine and Red Oak, open rock barrens and coastal meadow marsh, ideal habitat for rare species.

Read the full story