Land Protection Program – Frequently Asked Questions
"We heard about GBLT over 12 years ago from our neighbour on Bone Island, Fred Schneider. With encouragement from Chris Baines, we produced annual Shakespearian plays at our cottage as fund raisers for GBLT. Over the years we became involved in GBLT activities, and of course, the aims of GBLT became very important to us to preserve our communal legacy of Georgian Bay as much as possible. Following the example of the Schneider's adjacent property, we thought that granting a conservation easement on over 70% of our land would re-inforce our commitment to the Land Trust while maintaining unrestricted use of enough of our property for our family's enjoyment. While fundraising is important, the conservation easement is a permanent physical sign of our belief in the aims of GBLT."
How long does the land transaction process take?
The amount of time it takes to complete a land transaction varies significantly from property to property. It depends on a number of factors, including the location of the property, the time of year when the transaction is initiated, the size of the property, the ownership of the property and the stewardship requirements. It also depends on whether the property goes through the Ecological Gifts Program (see below). Under some circumstances, the process can take 6 months or less but typically the process takes a year and on occasion can take multiple years from start to finish.
What is the Ecological Gifts Program?
The Ecological Gifts Program is a program administered by Environment Canada that provides a number of benefits to landowners, including additional financial benefits and some added security to landowners regarding future use of the property. As a qualified recipient, the GBLT is one of several organizations that can work with the program. The main requirements to have a property accepted as part of the program are certification of the property as Ecologically Significant and a review of the appraisal by their Appraisal Review Board. For more information about the program visit their website at www.ec.gc.ca/pde-egp. Their website includes a number of helpful resources for landowners.
What’s the difference between a fee simple donation and a conservation easement?
Two of the most common tools used in land donations are the fee simple donation and the conservation easement. The fee simple donation is a transfer of title from the landowner to the GBLT and includes a tax receipt for the landowner based on the full Fair Market Value. Once completed, the land is owned by the GBLT and the GBLT is responsible for the ongoing care and protection. Given that the property has been transferred to the GBLT, the landowner is no longer responsible for property tax and the GBLT is able to apply for property tax exemption under the Conservation Land Tax Incentive Program.
A conservation easement is a legal agreement registered to the title of a property and therefore stays with the property even after change in ownership. A conservation easement will typically have a term of 999 years, essentially in perpetuity. The easement includes a number of restrictions, which are created to help protect the property’s special features. The easement donor receives a tax receipt for the Fair Market Value of the easement, the difference between the value of the property with and without the easement. Given that the ownership stays with the landowner, it is the landowner’s responsibility to continue the care and protection in accordance with the easement including the property tax. Given that the value of the property has been reduced as a result of the restrictions, the landowner is able to make a request for reconsideration with the Municipal Property Assessment Corporation (MPAC) to reduce the assessment and therefore reduce the property tax. The GBLT is responsible for regularly monitoring the property to ensure that the restrictions are being upheld and often will assist landowners with stewardship activities when requested by the landowner.
Can an easement be rescinded by a landowner or subsequent landowner and if so, what are the consequences?
On signing the parties will typically have included a term to say that the conservation easement agreement will last forever. Some older agreements may have set the term of the agreement at 999 years. In any event, the conservation easement is a legal agreement or contract that can only be amended, replaced or rescinded if the landowner and the land trust both agree in writing to amend, replace or rescind it.
There are powerful arguments against the amendment or release of a conservation easement agreement.
First, the land trust is a charitable organization with a mandate and obligation to protect the natural heritage features under its control. The land trust is also obliged to act in the public interest to take care with the assets under its control, including the conservation easements it holds. If the land trust were to abandon those obligations it would risk losing its charitable status and might be subject to legal claims that it had acted outside of its corporate authority.
Second, where the conservation easement is entered into under the authority of the Ontario Conservation Land Act, as most land trust easements are, then it cannot be amended or released without the consent of the Provincial Minister of Natural Resources.
Finally, if the conservation easement was treated for tax purposes as an Ecological gift under the Federal Income Tax Act, then the land trust cannot change the use of the land or dispose of, or release, the conservation easement without the authorization of the Federal Minister of the Environment. Failure to obtain that authorization could expose the land trust to a tax equal to one half the value of the land.
Will I be able to continue to use the property after the donation?
The simple answer is yes! If you donate a conservation easement, the ownership of the property will remain with you so you are welcome to use the property as long as your activities are in alignment with the restrictions set out in the easement. It will also be up to you to manage use by others, again ensuring that their use is in accordance with the restrictions.
For fee simple donations, where the GBLT becomes the owner, use of the property will depend on the main features that are being protected. If the property has a history of use and use is not seen to significantly impact environmental features, the GBLT will allow low-impact, non-consumptive use. This provides the public with the opportunity to quietly enjoy and appreciate a natural area, part of the GBLT’s mandate, while ensuring its continued protection. Where the conservation features are especially sensitive and/or there is unusually high threats to the protection of the property, the GBLT will consider limiting or in some cases, prohibiting use, which is determined during the management planning process within one year of completing the transaction.
How will the property be used under the GBLT’s ownership?
The primary purpose of the GBLT’s properties is to protect their natural and cultural values. A secondary goal is to promote the appreciation of the area through experiences that are low impact, non-consumptive, and respect the natural features. Where existing use of a property is in compliance with the GBLT’s use policy, the use will be allowed to continue, subject to regular review by the local volunteer stewards, staff, Stewardship Chair and committee, and if necessary, the Board of Directors. For properties where use is limited or doesn’t currently exist, the GBLT will not promote or introduce new uses unless uses are identified that could provide a beneficial contribution to the GBLT’s land protection and stewardship programs.
How does the GBLT determine the value of properties?
The Fair Market Value (FMV) of each property transferred to GBLT is determined through a written appraisal report prepared by a qualified appraiser.
To maintain an arms length relationship from the appraisal results, the GBLT requires landowners to complete appraisals for properties they intend to donate. However, the GBLT can provide contact information for appraisers in the area that have the proper accreditation.
To ensure consistency and quality the GBLT requires that all appraisals follow the guidelines outlined by Environment Canada for the Ecological Gifts program. Those guidelines include the use of an accredited appraiser (AACI), use of the Appraisal Institute of Canada’s definition of FMV, an arms length process and a full narrative report. In addition, the appraised FMV must be current within 90 days of the transfer of the property. We require the application of those stringent guidelines for appraisals regardless of whether the property is actually being treated as an Ecological Gift.
Properties that do go through the Ecological Gifts program are subject to an additional level of scrutiny. Specifically, the appraisal of an Ecological Gift property is reviewed by Environment Canada’s appraisal review panel and if accepted, the panel provides a written Notice of Determination for the FMV which the donor may rely upon.
For a copy of the guidelines for appraisals, contact the GBLT office or visit the Ecological Gifts website at www.ec.gc.ca/pde-egp.
What expenses can I expect to encounter during the property donation process?
There are a number of steps, as outlined in the “Process for Property Transactions” information sheet that will result in expenses for the landowner, although typically these are offset by the financial benefit of the tax receipt and capital gain tax relief provided as part of the donation. The first expense is the appraisal, which the landowner is responsible for commissioning and paying for. The cost of the appraisal varies depending on the complexity of the property and can range from $2,000-$10,000 more or less. In addition, the landowner is responsible for covering the legal cost of the transaction including title insurance for the property, whether it is the transfer of title or the registration of an easement. This cost can vary between $500 and $1,500. Finally, landowners are also asked to consider making a donation to the GBLT to cover the staff and related hard costs associated with completing the various steps including the ecological inventory, the review and approval process with the GBLT, where applicable, the Ecological Gifts program process, and the final transfer. These costs also vary on the complexity of the transaction but can range from $2,000 to $6,000 more or less.
How do I know that GBLT will be around to take care of my property over the long-term?
Although it’s impossible for us to predict what could happen in the future, the GBLT has made many efforts to ensure that no matter what happens, there are safeguards in place that allow the GBLT to continue to own and steward its properties for conservation.
This includes a Stewardship Program supported by a network of volunteers that work together in teams to regularly monitor, educate and enforce the rules regarding property use. Having the support of volunteers keeps the community engaged in the GBLT’s efforts and keeps the cost of stewardship reasonable so it can remain affordable now and in the future.
In addition, the GBLT holds and continues to grow a number of Stewardship Endowment Funds, capital funds that are invested conservatively so they can provide consistent and reliable sources of annual revenue exclusively available to support the costs of owning and managing lands for conservation.
What happens to donated land if the GBLT is struggling financially or no longer exists in the future?
Although the GBLT is actively working to ensure it continues to be in a position to actively own and steward its properties, it has considered how the lands protected from its efforts will continue to be protected in their natural state in the event that the GBLT no longer exists.
As mentioned above, Stewardship Endowment Funds are in place, and continue to grow, to ensure that a reliable source of income is available for the annual stewardship costs of its properties. These funds protect the capital and the interest is exclusively for stewardship of properties.
In the event that it ever became necessary to dissolve the GBLT or to transfer ownership of its properties, then under Canadian law, its charitable assets, including land, would be transferred to another eligible Canadian charitable organization with similar objectives for the protection of our natural heritage. That general legal obligation is reiterated in the federal letters patent, which created and now govern the activities of the GBLT.
In addition, most of the properties donated to the GBLT qualify as gifts of “ecologically sensitive land”. Under the Income Tax Act of Canada those ecological gifts are protected from unauthorized changes of use or disposition. Changes of use or disposition that are not authorized by the Federal Minister of the Environment could subject the GBLT to a federal tax equal to 50% of Fair Market Value of the property.
The GBLT is also a member of several umbrella organizations supporting the larger land trust community – including the Ontario Land Trust Alliance, the Canadian Land Trust Alliance, and the Land Trust Alliance based in the United States of America. These organizations exist to support the continued success and viability of their members and would play an important role in the event that one member had to dispose of properties, including identifying other members that could take on the ownership and stewardship of the properties.
Finally, at a local level, the GBLT actively makes applications and seeks municipal zoning to reflect the ongoing public interest in the long-term protection of the GBLT properties in their natural condition.
Will the GBLT ever sell the property that I donate?
The purpose of the GBLT, as stated in its mission, is to preserve properties that are ecologically, geologically and historically significant. As a result, the GBLT is committed to the continued conservation of all its properties through its ownership and stewardship. The only circumstance where the GBLT will consider the sale of a property is if the landowner who donates the property requests or provides permission to the GBLT to do so in order to raise funds to support other programs or activities.
If you have additional questions, not answered in this FAQ please contact our office at 416-440-1519
The Georgian Bay Land Trust seeks to preserve the unique archipelago and the adjacent water bodies which lie along the eastern shore and North Channel of Georgian Bay that are of ecological, geological and historical importance, and to promote the appreciation of this special area.