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No consideration of strategies to protect private land would be complete without an examination of the tax consequences of each tool, which can have dramatic consequences for the landowner or the conservation group.
This summary of the tax implications of the legal tools has been prepared by Marc Denhez. 273 It is based on a longer work, You Can't Give It Away: Tax Aspects of Ecologically Sensitive Lands prepared by Mr. Denhez under contract to the Canadian Wetlands Conservation Task Force and published as a Sustaining Wetlands Issues Paper No. 1992-4. 274 That report recommends changes to the federal Income Tax Act and provincial taxing statutes to encourage landowners to take steps to conserve privately owned land. We recommend that readers get the whole report, which is available free.
This is a very general summary of possible tax consequences, designed to alert the reader to the possibility of taxation issues rather than to provide detailed tax advice. A lawyer's assessment of the details of a proposed transaction is essential.
Bibliographic references relevant to this chapter are included in the general bibliography.
The Income Tax Act affects every donation of land to government or a charity. It also affects many other transactions that relate to the setting aside of ecologically sensitive lands for posterity. Two areas are of particular significance to this endeavour: the tax treatment of gifts, and the tax treatment of protective measures other than gifts (notably conservation covenants/easements).
Obviously, a Canadian who is committed to the protection of his or her property is free to donate it to the public sector or to a charity. Donations tend to fall into two main categories. There are donations to the Crown (i.e. the federal or provincial government), and donations to municipalities and registered charitable organizations. 275 These two categories, and the distinction between them, are summarized in Table 1.
In addition, the Income Tax Act distinguishes between donations made by individuals, and those made by corporations. Donations by individuals give rise to a tax credit, whereas those by corporations give rise to a deduction from taxable income. The relevant sections of the Income Tax Act are ss.110 and 118.1; detailed explanations of these positions can be found in several publications, notably Canadian Taxation of Charities and Donations. 276
The philanthropic tendencies of Canadians (and occasional lack thereof) have been monitored in a number of studies. Although it is not the purpose of this report to analyze those tendencies, one may nevertheless observe that donations of cultural property (e.g. art or archival material) are substantially more prevalent than donations of real estate. Part of the reason is that in addition to the sections referred to above, the Income Tax Act also provides a distinct tax treatment to donations of "certified cultural property". As explained later, these donations are exempt from capital gains. That feature can be important, particularly in any donation of investment property such as woodlots, farm property, or real estate held for speculative purposes.
[Table]
Table 1: Gifts of Real Estate
The Income Tax Act provides for a legal fiction whereby any donation is considered a disposition at fair market value. In other words, when a person donates a million-dollar wetland complex, he or she is deemed to receive one million dollars in proceeds (Drache 1990). The consequences of this legal fiction can be substantial. This deemed income has no tax consequences so long as the property in question was not investment property. For example, if it was property which was not intended to produce income (i.e. all or part of one's personal residence), then the fictitious proceeds of disposition do not normally enter one's taxable income. The situation is different if the donated property was "capital property" (i.e. property used or potentially intended to produce income). This would be the case of farm property or real estate held for speculative purposes. When property held for investment purposes is disposed of, the profit on disposition can be construed as "capital gains". The amount of the capital gain is subject to some complex mathematics, depending upon the improvements that may have been made to the property and other factors.
For example, let us take the case of some wooded land held for speculative purposes since 1971 (the taxation of capital gains came into existence at that time). Let us further suppose that the land was then valued at $100,000, and would today be valued at $1,000,000. Broadly speaking, the donation of this land would trigger a $900,000 deemed capital gain. Since 75% of capital gains are assimilated to normal taxable income, they are taxed as such.
At best, "deemed capital gains" encroach upon a taxpayer's normal capital gains exemption. Individuals have a normal capital gains exemption of $100,000 (i.e. the first $100,000 of capital gains is not taxable). In the case of capital gains which occurred on a "qualifying farm property", the relevant exemption is $500,000. This means that if a person makes a gift of capital property to charity, the deemed capital gain may not trigger immediate capital gains tax; on the other hand for every dollar of deemed capital gain resulting from the gift, there could be a resulting increase in taxable capital gains elsewhere in the philanthropist's estate, if that philanthropist is reasonably wealthy and has significant holdings of stocks and bonds aside from his or her landholdings.
The situation is worse for corporations: they have no capital gains exemptions. It therefore follows that any deemed capital gains invariably produce deemed capital gains tax.
As a quid pro quo to a bona fide donation to governments or charities, the donor can receive a receipt from the donee, and this receipt can be used to offset taxable income, either in the form of a tax credit (for individuals) or a deduction (for corporations). However, there are ceilings on the extent to which these receipts can be used. In the case of a donation to the Crown (federal or provincial), the usable portion of a receipt cannot exceed the donor's taxable income in any one year; in other words, the donor cannot use his or her receipt to put oneself in a loss position. Any unused portion of the receipt can be carried forward for up to five subsequent years; but in each such year, the usable portion of the receipt is again limited to the taxpayer's taxable income in that year. In other words, a donation to the Crown can be used to offset 100% of the donor's taxable income for a maximum period of six years.
It also follows that if the value of the gift were larger than the donor's income over those six years, the balance would "go to waste". For example, let us envisage a male farmer who was making $50,000 in the year of his retirement and anticipated making $20,000 per year in subsequent years, the following would be the limit of the usable tax receipt in the event that he wished to donate the farm to the Ministry of Agriculture. Leaving aside the capital gains factor for a moment, his usable receipt would cover $50,000 for the year of the donation, and $20,000 for each of the five subsequent years, for a maximum $110,000. If the farm were worth more than $110,000 at the time he made the donation, the extra amount would be unusable for tax receipt purposes.
In the case of donations to charity or to a municipality, the ceilings are substantially lower. In these cases, the donor's receipt cannot offset more than 20% of his or her taxable income in the year of the donation; the unused portion can be carried forward for five subsequent years, but in each subsequent year the usable portion is again limited to 20% of the taxpayer's income in that year. For example, if we were to return to the scenario of the retiring farmer, who earns $50,000 in the year of the donation and $20,000 per year thereafter, his usable tax receipt (leaving aside capital gains) would be limited to $10,000 in the year of the donation, and $4,000 for each of the five subsequent years; in other words, the total usable receipt would be $30,000.
The above scenario illustrates that in the case of investment property, substantial taxes can be triggered by a donation, but there are limits on the extent to which these extra taxes can be offset by the tax receipts involved.
This leads to some unusual scenarios. In the case of property not held for investment purposes, the donor can use his or her tax receipt subject to the applicable ceilings; but for donations of investment property (including most potential donations of significant real estate holdings), the donor could actually find himself or herself with a prospective tax liability (resulting from capital gains) which may actually exceed the receipts claimable. In other words, the taxable capital gains resulting from donations may not only erode the value of the receipts, but may even exceed them. As a result, the philanthropist would be fiscally penalized for the gift.
The Income Tax Act has therefore introduced a further legal fiction to mitigate this effect. The donor may "elect" to down-value the gift, so that the deemed proceeds of disposition do not give rise to so high a deemed capital gain. 277 In other words, the Act legalizes the conscious misrepresentation of the value of a gift, in order to assure that the donor will not be penalized for making the donation to the government or to charity. The result is a fairly elaborate accounting process whereby the donor's advisors attempt to determine an optimal figure which will produce the maximum usable receipt in relation to the lowest capital gain. That calculation will also be affected by the extent to which the donor can still use his or her capital gains exemptions, which are usually $100,000 for individuals and $500,000 for farm operations.
In many cases, nonetheless, the donor's prospective tax benefit will not represent a mathematical equivalent or quid pro quo for the value of the donation.
Predictably, this situation has led to varied attempts to define ways in which donors could get a tax treatment more closely related to the actual value of their donations. Another technique exists at the Heritage Canada Foundation and the Nature Conservancy of Canada. These two organizations have specific contracts with the Government of Canada which entitle them to receive property "in trust for the Crown". It follows that when a gift of real property is made to the Heritage Canada Foundation "in trust for the Crown", this gift can receive the same tax treatment as a gift to the Crown (i.e. a higher ceiling on deductibility), despite the fact that the Heritage Canada Foundation is a non-governmental registered charity. 278 The Nature Conservancy of Canada> has a comparable agreement for donations of land abutting national parks. Other organizations have sought to do likewise; however, unless they can produce an actual contract indicating that they can receive property in trust or as an agent of the Crown, this tax treatment will be unavailable. That is what one organization learned when it thought that it had received property in the capacity of agent of the Crown, only to see its anticipated tax treatment disallowed by the courts (on application by Revenue Canada) when it failed to produce documentary evidence of its relationship with the Crown. 279
There is a role for private contracts in developing controls on worthwhile landscapes, ecologically sensitive areas or heritage property. If a proprietor is willing to subject his or her property to controls on tampering, it is possible to sign a private agreement with him or her to that effect. This contract allows the property owner to commit himself or herself (and his or her heirs and assigns) to the protection of the property without actually relinquishing title to it. Wildlife Habitat Canada> has produced a publication which gives an admirable profile of this device (Trombetti and Cox 1990).
Most agreements are simple contracts: they bind the signatories, but they do not bind anyone else. 280 Fortunately, a special form of agreement is possible to deal with that problem; called an "easement" or "restrictive covenant", it binds future owners as well as the present owner. Restrictive covenants and easements are specific species of contracts in Anglo-Canadian Common Law which have been recognized as distinct from other contracts, ever since the Middle Ages. 281
As noted above, most agreements do not bind future owners. That is where both easements and restrictive covenants have a crucial characteristic which distinguishes them from other contracts: both can bind future owners. Valid easements and covenants are considered "registrable interests", i.e. contracts which can be registered at the local land titles office. That constitutes "notice to the world", and binds future owners, whether they have acquired title by purchase, inheritance or otherwise. It is this ability to bind future owners which makes easements and restrictive covenants interesting, and which these two kinds of contracts have in common.
The Common Law almost never refers to ownership as a "whole" from which component parts are removed, but rather as a loose (and ill-defined) composite of a spectrum of various rights ... or, less charitably, what Oliver Cromwell described as "an ungodly jumble" (Megarry 1975). One may say that the Civil Law looks on ownership as a single forest, but ignores the trees, whereas the Common Law looks on it as a number of trees, but disregards the forest. The significance of calling ownership a "bundle of rights" is simple. If part of those rights are removed (e.g. by restrictive covenant or easement), then one has (by definition) lost part of one's ownership.
This loss can be appraised economically. In fact, it is trite to observe that this is done in property tax assessment every day, in every jurisdiction in Canada. Registered easements and restrictive covenants play a role in every province and territory's assessment statute: assessors are indeed directed to take them into account in computing the municipal tax base. 282
That then gives rise to the following question: if disposal of a part of one's property rights can have a certifiable value for other legal purposes, why can't it receive comparable treatment under the Income Tax Act? In other words, if an altruistic individual enters into a registered restrictive covenant or easement with a government or a registered charity, why can't the value of that transaction be professionally appraised, and give rise to a tax receipt accordingly?
Faced with this question in the United States, the courts dealt with the issues by saying that the questions to be asked under general principles were: (1) Is there a transfer of something of value? (2) Is the transfer a gift with the requisite donative intent? (3) Is the transfer to an organization, contributions to which qualify for the deduction? 283
If the answer to all three questions was affirmative, the IRS concluded that tax deductibility was unavoidable on legal principle.
Revenue Canada has now followed suit in its position by writing in correspondence with the Island Nature Trust> of Prince Edward Island on July 13th, 1990:
A restrictive covenant ... is a mechanism for the legal long term or permanent protection of ... sites. A private landowner may register a restrictive covenant against his land ... The rights forfeited generally include the right to subdivide or to develop the property for any commercial activities ... The restriction of land use normally devalues the property. The restrictive covenant could therefore be assigned a value equal to the difference between the property's value before the restrictive covenant is registered against the land and the property's value after the restrictive covenant is registered against the land. Our comments regarding your questions are as follows: Subsection 248(1) of the Income Tax Act defines property to include a right of any kind whatever. Since a restrictive covenant registered against land is a right it would be considered a property. Consequently a donation of a restrictive covenant registered against the land to Her Majesty or to a registered charity could be considered a gift for purposes of section 118.1 or 110.1 of the Income Tax Act ... A registered charity may issue receipts respecting donated restrictive covenants providing the donation qualifies as a gift. For example, if the donor were to receive services or any valuable consideration in exchange for the restrictive covenant there would be no gift for purposes of the Income Tax Act. The individual would have a disposition equal to the value of the gift. The value must be determined by a person competent and qualified to evaluate the restrictive covenant.
A final question which has yet to be determined is the effect of "deemed capital gains" when a covenant or easement is "donated". If the tax system acknowledges that a portion of one's property rights has been disposed of (for receipt purposes), doesn't it follow that capital gains could accrue on that portion?
In theory, the granting of a covenant or easement would give rise to a deemed capital gain, with accompanying deemed capital gains tax. The problem is in the mathematics: what is the profit margin on a disposition of an easement? In theory, a capital gain is calculated as follows:
(deemed proceeds of disposition) minus (cost base) = capital gain
When donating a "partial interest in property" (e.g. an easement), the owner can calculate his/her deemed "proceeds of disposition" (i.e. the Fair Market Value of the easement, as attested in the receipt); but how does he or she produce a figure for the "cost", so that he or she can deduce the "profit"?
The Income Tax Act insists that the taxpayer must declare a capital gain... but doesn't say how. Michael Atlas, in Canadian Taxation of Real Estate (Atlas 1989), refers to the "granting of easements and other partial dispositions" as a "disposition of a part of a taxpayer's interest in a particular property (which) will require a determination of the... capital cost attributable to the part that was disposed of by the taxpayer... In order to determine the capital gain or loss arising from the disposition. In this regard s.43 specifically contemplates this determination. The section states that it must be 'such portion... of the whole property as may reasonably be regarded as attributable to that part' - and does not offer much meaningful guidance. Further, even Revenue Canada's Interpretation Bulletin on this subject (IT-264R) fails to provide any additional insight on this issue." 284
Atlas (1989) goes on to conclude that "with the exception of relatively rare situations where there are specific cost elements attributable to the part disposed of, some form of arbitrary, but reasonable allocation will be necessary."
If a qualified appraiser delivered a professional opinion evaluating a conservation covenant/easement at a given value for receipt purposes and Revenue Canada accepted that figure, Revenue Canada would also be expected to take the same figure as the "proceeds of disposition". The "proceeds of disposition", however, are not the deemed capital gain: the deemed capital gain is the proceeds of disposition minus whatever value would be attached to that portion of the "bundle of rights" originally, before the capital gain occurred. The practical problem is simple: it is impossible to define the profit margin on the "disposition" of a covenant/easement because there is no "cost of acquisition" for the easement which the taxpayer can refer back to in computing his "profit". Although it is feasible to appraise the covenant/easement at the time of disposition, it is impossible to appraise what it might have been worth at the time the property was originally acquired (i.e. before the "capital gain" accrued).
However, that has not stopped Revenue Canada. "In the case of amounts received by taxpayers as consideration ... for granting an easement, Revenue Canada has adopted an administrative policy aimed at avoiding the difficulty entailed in determining the (original) cost" (Atlas 1989). The Department will usually accept a "cost" of the easement identical to its "proceeds" (i.e. that the capital gain is zero dollars), provided that:
That leaves a perplexing situation. On one hand, the property-owner may decide to sign covenants/easements on his or her property, but limit them to 20% of the surface in any single transaction. If the property owner does so, he or she benefits from the Revenue Canada policy which is to ignore any claim on deemed capital gain on the easement/covenant. However, if the easement/covenant covers more than 20% of the surface of the property, then no such assurances exist. Under s. 43 of the Act, capital gains (and capital gains tax) are supposed to apply; but there is almost no physical way of computing them accurately. That leaves open the theoretical possibility of nasty surprises.
This possibility, however, is still theoretical: among the limited number of covenant/easement agreements which have been donated in Canada (currently fewer than ten are known), there is no reported instance of Revenue Canada invoking a deemed capital gain. It is entirely unclear whether this is a result of
Other taxes such as the Goods and Services Tax (GST) have an indirect effect upon various philanthropic activities. For example, there are rebates available to municipalities, charities and certain non-profit corporations for the GST which they spend in pursuit of their public purposes.
For example, let us suppose that a municipality or charity undertook to purchase forested land. The transaction would be GST-exempt if the land was "personal-use land". In the publication, A Guide to the Goods and Services Tax, this is described as "real property (owned) by individuals or trusts (all of the beneficiaries of which are individuals), other than capital property which was used by the vendor primarily in the course of a taxable commercial activity, or real property which is sold in the course of a business". 286 This exemption extends to "country properties, non-commercial hobby farms and other non-business land".
Other purchases, such as from a professional speculator or a lumber company, would be subject to GST. "Where an individual sells land that was used in the vendor's business, or sold in the course of a business, tax will apply." 287 The municipality or charity would be required to pay that GST; it would then be eligible for a 50% Revenue Canada rebate for the GST that it had paid. Non-profit corporations which are not registered charities may also be eligible for the 50% Revenue Canada rebate, in the event that 40% of their funding comes from government sources. Provincial governments are constitutionally exempt from the GST; they do not need to pay GST on purchases of such lands.
The system of property taxation in Canada is pivoted on two basic steps:
In some provinces, the property is first assessed, then the mill rate is levied, producing a given amount which may or may not be adequate for the current budgetary requirements of the municipality and/or school board. In other provinces, the same system operates in reverse: a given budget is agreed upon, then the municipality sets a mill rate which (when applied against the assessed property) is calculated to produce precisely the required (budgeted) income.
In virtually every jurisdiction, the basic principle has been to develop assessments which would correspond as closely as possible to market value (or a fixed percentage of market value). However, that approach was difficult to apply verbatim to ecologically sensitive lands. Most notably, "wastelands" have traditionally received very low assessments; these lands included wetlands. However, those values could fluctuate if appraisers treated the lands as "recreational".
Furthermore, the system of "market value assessment" also witnessed various statutory exemptions. Provincial assessment legislation could:
In some cases, the provinces' legislation would include a penalty provision for owners who converted their land after having enjoyed a preferential tax treatment for several years. In other words, if an owner was paying less-than-normal property taxes because his or her land had a special use, and he or she then discontinued that use, the property taxes would then return to normal levels retroactively. This is sometimes called a "clawback".
In addition, there are standard formulas applicable to covenants and easements.
The generally accepted definition of Fair Market Value, for assessment purposes, is the price which would be paid on the open market between a willing seller and a willing buyer. It is against that standard that all subsequent devices can be compared.
In daily practice, the projected market value which the typical appraiser will attribute to a property will usually be an amalgam of three sets of figures. 288 These "three approaches to the process of appraising real estate" 289 are called:
The sales-price approach includes a comparison with other turnovers of property, including turnovers in which there has been a change of use; this is overwhelmingly the largest contributor to the figure used for evaluation of wilderness areas. By comparison, figures generated by what the property may have cost, or (alternatively) by capitalizing the property's net income, tend to be very modest for such properties.
Because normal appraisal practices incorporate all three approaches, it is a departure from the norm for property to be assessed exclusively on the basis of a single one, such as the income approach. Some assessment statutes have done so for decades, as a self-conscious preference which is provided to a given kind of property that may have high sale value but low income (e.g. farmland in some provinces). In some other provinces, there is a modified version of the sale-price approach; the legislation takes account of comparable sales, but excludes those associated with conversions. This again constitutes a preference, and is sometimes applied to farmland: assessed value is calculated with reference to sales from one farmer to another, but not between farmers and developers.
Traditionally, once the appraisal of property had been done, the mill rate was computed on a certain percentage of that assessed figure. However, throughout most of Canada a practice developed whereby certain classes of properties were assessed at a different percentage of value than other classes of property; the mill rate might, for example, be computed on a different percentage when dealing with residential property as opposed to commercial property, etc. This system of preferences has sometimes been called "differential assessment".
The basic legislation governing property taxes is the Assessment Act, the Municipal Act, the Taxation (Rural Area) Act, and the School Act. 290
The value of property is generally assessed by its Fair Market Value.
Some kinds of properties have a different assessment basis than Fair Market Value.
Farmland is assessed on the basis of "prescribed tables of values per acre based on the capability of the land to grow field crops". 291 There is also a system of differential assessment.
Farm woodlots are assessed on capitalized income, other timberland on timber productivity.
There is no special assessment category for wilderness or other ecologically significant land in B.C. which is not owned by a charity.
There is a system for differential assessment for farm lands, so that farms are taxed on a figure which is a lower percentage of Fair Market Value than other classes of property.
Lumber areas in British Columbia are classified as Unmanaged Forest Lands or Managed Forest Lands 292, with a system of differential assessment. Neither category applies, however, if the "highest and best use" of the land is other than the "growing and harvesting of trees". The assessments themselves are based on forestry use. Open timberland is taxed at a lower percentage of Fair Market Value than residential, commercial, etc. properties; and managed timberland is taxed at a lower percentage of Fair Market Value than open timberland.
Golf courses can take advantage of an assessment freeze, but if they convert from use as a golf course they must pay all the taxes which would have been assessed retroactively.
All lands of charities outside municipal boundaries enjoy an absolute tax exemption. Within municipalities, such an exemption is granted at the option of the municipal council, provided that the land is to be used for park or recreation purposes. These provisions would apply to a conservation group which had a charitable tax number.
If a property is subject to a covenant or an easement, there may be a reduction in the assessed value of the property according to the actual impact of the covenant or easement.
Property tax laws are not currently structured to encourage the conservation of privately owned lands.
If (a) the conservation group is incorporated, and (b) has a charitable tax number, it will be able to avoid property tax outside a municipality, and may be able to avoid property tax inside a municipality. This will be helpful if a conservation group has:
If the conservation group holds a covenant or easement (including a restrictive covenant, common law easement, heritage conservation covenant, section 215 covenant, or statutory right of way), or a profit à prendre, its interest in the property is not taxable. The property would be taxable in the hands of the owner, subject to a reduction in the property assessment if the covenant or easement diminished the value of the property.
The obligation to pay property tax in a leasehold is on the owner; however, the tenant may be obliged by the lease to pay the taxes.
Property transfer tax is a tax payable on transfer of the title to property. 294 The amount of property transfer tax varies with the value of the property.
Property transfer tax would be payable if a fee simple interest in land is given, bequeathed or sold by a landowner to a conservation group. It would also be payable upon the registration of a life estate or a lease.
No property transfer tax is payable when a common law covenant, common law easement, profit à prendre, heritage conservation covenant, section 215 covenant, statutory building scheme, or statutory right of way is placed on title. And no property transfer tax is payable when an option to purchase or right of first refusal is registered against the property.
The only taxation break for conservation efforts is contained in section 5.2(1) of the Property Transfer Tax Act. Under that section, no property transfer tax is payable if a section 215 covenant for conservation purposes is granted in favour of the Crown, provided that Cabinet approves the registration of the covenant in the first place, and the covenant contains provisions that the covenant will not be discharged or amended without Cabinet approval. This is an extremely narrow tax break, since it requires the tedious steps of obtaining Cabinet approval in the first place, is available only for covenants in favour of the Crown (but not other permitted covenant holders in section 215), and will result in a saving only when the property changes hands.
273. Marc Denhez is a lawyer currently resident in Ottawa, Ontario, and a member of the Bars of Ontario, Quebec and the Northwest Territories.
274. Available free from The Secretariat, North American Wetlands Conservation Council (Canada), Suite 200, 1750 Courtwood Crescent, Ottawa, Ontario K2C 2B5.
275. Only charitable organizations officially registered by Revenue Canada are discussed in this chapter under the heading "Charities".
276. De Boo, Toronto 1990, particularly at ch.12.
277. S. 118.1(6) of the Act.
278. The CCH Canadian Master Tax Guide 1991 notes: "It would appear that a registered charity could be specially empowered to receive gifts in trust for Her Majesty, and such gifts would then be exempt from the 20% limitation. It is understood that this is the case with Heritage Canada Foundation which is a registered charity". See CCH Canadian Ltd. (1991), s. 9185, p. 449.
279. Murdoch v. M.N.R., [1979] C.T.C. 2184, 79 D.T.C. 206.
280. The basic rule, at common law, is that contracts are private agreements which affect only the signatories. This principle is called "privity of contract." Consequently, if an owner agrees to protect his property against destruction and later sells the property, the agreement would usually not be binding upon the future owner, and the property would hence be exposed to whatever the new owner had in mind. Conservationists would find this situation unsatisfactory in the majority of situations.
281. Technically, an "easement" refers to an agreement which allows someone else to do something on one's own land (e.g. a right of passage). A "restrictive covenant", on the other hand, is an agreement whereby someone restricts his own ability to do something on his own land (e.g. agrees not to backfill lands). It follows that the agreements contemplated by the proponents of conservation per se are primarily "restrictive covenants", at least in Anglo-Canadian law. The term "covenant" is also preferable to the term "easement" when one remembers that to some people, "easement" connotes the right of strangers to cross one's property (as in the case of Ontario Hydro), when that may have nothing to do with the proprietor's wishes. In the United States, however, a usage developed whereby protective agreements were lumped together under the name "conservation easements"; and for reasons which are not entirely clear, the Ontario government has also taken to calling them easements. This usage in the United States and Ontario has influenced the language of conservationists throughout Canada.
282. For example, the Assessment Act of Ontario: "Where an easement is appurtenant to any land, it shall be assessed in connection with and as part of the land at the added value it gives to the land as the dominant tenement, and the assessment of the land that, as the servient tenement, is subject to the easement shall be reduced accordingly" (S.8(1)). Furthermore,"a restrictive covenant running with the land shall be deemed to be an easement within the meaning of this section" (S.8(3)). The Municipal Act (Ontario), S.612(3), has similar results. The challenge with this wording, of course, is that it assumes that there is a dominant tenement whose values will increase because of the agreement, and hence counterbalance the decrease affecting the servient tenement.
283. Brenneman & Bates (1984) p. 166.
284. (Atlas 1989) p. 5-3.
285. IT-264R paragraph 2.
286. A Guide to the Goods and Services Act, by Dancey, Resendes, Kesler & Puthon, CCH Canadian, Don Mills, (1991) p. 45.
287. Goods and Services Tax Technical Paper, Finance Canada, 1989, p. 112.
288. In some markets, a fourth set of figures is generated on the basis of the tenant's ability to pay (e.g. certain shopping malls etc.). This approach, however, is not necessarily well-adapted to many Canadian situations, particularly in relation to ecological lands.
289. Hoagland (1955) p. 245.
290. S.B.C. 1979, c. 21; Municipal Act, R.S.B.C. 1979, c. 290; School Act, R.S.B.C. 1979, c. 61; and Taxation (Rural Area) Act, R.S.B.C. 1979, c. 6.
291. Greenwood & Whybrow, 1991.
292. Assessment Act, R.S.B.C. 1979, c. 21, s. 29.
293. THIS SECTION WAS WRITTEN BY BARBARA FINDLAY AND ANN HILLYER.
294. Property Transfer Tax Act, S.B.C. 1987, c. 15.
