CCPERB Perturbed Fair Market Value in the Canadian Cultural Property Export Review Board’s 2020 Guide for Monetary Appraisals

Changes in how the Canadian Cultural Property Export Review Board (CCPERB) interprets “fair market value” have undermined archives’ ability to acquire certified cultural property. In November 2020, CCPERB approved the revised Guide for Monetary Appraisals (the Guide) that changed the methodology used to justify the appraised fair market value of archival fonds. CCPERB’s new approach to monetary appraisal is not in keeping with the intent and spirit of the Canadian cultural property program established 40 years ago, and it has already had a deleterious effect on archives’ ability to preserve important collections. The Canadian cultural property program has played an important role in preserving Canada’s documentary heritage. In 1977, Canada passed a comprehensive piece of legislation, the Cultural Property Export and Import Act (CPEIA), to implement its obligations under UNESCO’s 1970 Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property. While CPEIA was introduced both to preserve Canadian national heritage and to protect the legitimate interests of foreign states in preserving their cultural property heritage, the legislation also created new tax incentives to offset the negative impact that might result from the introduction of export controls on cultural property. Indeed, one core intent of creating and passing CPEIA was to design a tax structure that would encourage donations to cultural institutions in order to stop the flight and encourage the preservation of Canadian cultural property. In support of these goals, the Honourable James Hugh Faulkner, Secretary of State, made the following comments after the second reading of the Act in the House of Commons Debates, 30th Parliament, first session, on February 7, 1975: The advantage of making a gift of certified cultural property, as opposed to a regular gift in kind, is that there is no capital gain included in the donor’s income for a capital gain that arises upon gifting cultural property to a designated institution. Therefore, a donor can avoid capital gains tax. Further, the tax receipt for certified cultural property can be used to offset 100 percent of the donor’s taxable income. For regular gifts in kind that are not cultural property, the charitable tax receipt can be used to offset only up to 75 percent of the donor’s income. At the centre of this statutory scheme is the Canadian Cultural Property Export Review Board, an independent administrative tribunal that reports to the minister of Canadian heritage. The board’s secretariat is part of the Administrative Tribunals Support Service of Canada. CCPERB’s roles, set out in section 20 of the CPEIA, are to certify cultural property for income tax purposes, review export permit applications that have been refused, and determine fair cash offers to purchase cultural property for refused export permits. CCPERB is also responsible for determining the fair market value of certified cultural property for income tax purposes under section 32 of CPEIA. The board meets four times a year to certify cultural property for income tax purposes and to review appeals of refused export permits. Through the cultural property program, many Canadian archives have been able to acquire private records of individuals and corporations of such “outstanding significance” that the donors have earned tax credits for the fair market value of their donated certified Canadian cultural property. Over the decades, hundreds of archival donations have been appraised, placing a fair monetary value on unique documents that have immense research or cultural value. Some of these certified cultural property gifts include the Hudson’s Bay Company Archives; the photograph collection of the Canadian National Railways; manuscript drafts of Canadian literary giants; the records of fine and small …