This blog is brought to you courtesy of my recent visit to the Keith McLean Wetlands, just outside Rondeau Provincial Park, where these lovely Blue Winged Teal have been hanging out this spring. Read on to learn about Mr. McLean’s awesome estate gift.
As many of you will know, I’m an avid photographer, and May is the best time of the year here in Ontario for bird photography. Above our heads, one of the world’s greatest migrations is taking place. Billions of migratory birds started moving north in March and April, and the peak will hit in the first two weeks of May.
This year, I’m looking forward to going down to Point Pelee National Park for the first time since the pandemic hit. have booked off Monday to Wednesday for the next couple of weeks as vacation, hoping to see as many lovely species as I can photograph.
During the last few years, I’ve had to restrict my birding excursions, as staying at Pelee was impossible with the lockdowns closing all cabin rentals during the last two years. Fortunately one of Ontario’s other great birding sites, Rondeau Provincial Park is only a short drive from my home. I was delighted to discover last spring that just outside of Rondeau lies another amazing birding area – the Keith McLean Conservation Area. Mr. McLean passed away in 2012, and donated his farm in-kind to the St. Clair Conservation Authority. The property is a huge 135 hectares, and has several ponds that serve as staging areas for migrating waterfowl. The surrounding lands are often resting stops for many other migratory species as well. It has become one of my favourite spots. It is also a testament to the one of the more intriguing kinds of donations: the gift-in-kind.
Giving land in-kind
The McLean property is an excellent example of what can happen when ecologically sensitive property is gifted in-kind. Mr. McLean (or his estate, if done at death), would have received a tax receipt for the fair market value of his land. Normally, for this kind of donation, most land trusts or conservation authorities would hire an independent assessor to determine the value of the property in order to issue a receipt.
On top of this tax receipt, Mr. McLean would have also received a 100% waiver of the capital gains tax payable on this property. This tax waiver is only available if you donate an ecologically sensitive property to a qualified organization (usually a conservation authority or land trust) who is on the CRA list of approved organizations to accept this kind of gift. Interestingly—unless you are in Quebec which has special rules— a gift of this kind doesn’t have to involve giving up all rights of the property. In some cases it can be the gifting of conservation easements or other more complicated gifts that qualify as well.
For gifts made during the donor’s lifetime the timeframe to use the tax receipt for an ecologically sensitive gift is ten years, not the usual five year window that most charitable gifts have. This allows you to take full advantage of some of our crazy property prices that currently exist across Canada. Additionally, this type of gift can be applied against 100% of your taxable income in a given year while alive, unlike all other donations that max out at 75% of your income.
It is important to note that the government has some stringent requirements on the use of the land in order to meet the criteria. In particular, a federal tax equal to 50% of the value of the land may be imposed on a charity if they dispose of some or all of the property without first consulting the Minister of the Environment for approval. For example, the government does not want a gift of ecologically sensitive land to be sold off to developers. According to Ecological gifts program: overview – Canada.ca, transfers or sales of land after it is donated that maintain the spirit of the original gifts (such as to another land trust or conservation agency) will most likely be approved.
If you think you want to donate ecologically sensitive land, remember that just because you think it is ecologically sensitive, that doesn’t mean your preferred charity may agree, or be in a position to receive the land. In my experience, most land trust or conservation authorities also want the original owners to donate extra funds to help with the maintenance and upkeep of a property, and many organizations may have this as a requirement. I find that open, honest conversations on behalf of all parties are what make this kind of gift work.
Also, one important catch to remember: getting the land certified as ecologically sensitive property can take some time. If the gift is made prior to the Environment Ministry’s certification, it is possible you might have to pay the capital gains on the property in one year, and then refile to receive the tax back the following year.
Another “gift with benefits”
Similarly, another type of gift that can be made with similar rules is the gift of culturally sensitive property, which usually includes artwork, historical artefacts, some scientific or technological objects, musical instruments and audiovisual collections.
Like gifts of land, CRA maintains a list of approved organizations that can accept this type of gift (Designated organizations – Movable Cultural Property – Canada.ca) , allowing the donor to have the preferential tax treatment. An assessment must be done by the Canadian Cultural Property Export Review Board (About the Certification of Cultural Property | CCPERB (ccperb-cceebc.gc.ca)), and the receiving organization must be approved to handle that “class” of donation (ie, a textiles museum likely isn’t qualified to receive your vintage telescope as a gift). Needless to say, this type of gift requires forethought, time, planning and a lot of discussion prior to the gift being made.
So my bird photographs could be a gift too…
As nice as it would be to have my photography classed as culturally-sensitive artwork, I suspect I’m not going to be recognized as a cultural icon in Canada anytime soon. Still, there’s something poetic about creating photographs at the McLean Wetlands, and knowing that the same in-kind donation process used to gift the land, could maybe, possibly, however unlikely end up being used on my photographs in the future. It seems like a full circle of gifts that keep on giving.
I for one, am delighted at Keith McLean’s gift. I hope you get a chance to see it yourself one day, and enjoy the beautiful location, wildlife and spirit behind this generous donation.