U.S group repatriates Canadian wildlands
Jul 17, 2018 07:29AM ● Published by Editor
This photo was taken during a recent trip that American Friends Program Co-ordinator Sandra Tassel and her husband co-founder of Am Friends Craig Lee made with Lake Superior Watershed Conservancy board members Richard Wells and Gary McGuffin, two LSWC staff, Peter Greve, water trail experience development co-ordinator, and Holly Drew, communications and marketing co-ordinator. Photo Provided
By Sara McCleary of Sault This Week - Monday, July 16, 2018
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.”
As a cross-border organization with special tax status in Canada and the US, American Friends gives American owners of Canadian lands an alternative to selling their property or passing along the property to heirs who might not be able to afford the land’s upkeep — both of which result in hefty Canadian tax bills.
Instead, landowners can work with American Friends to donate their land for conservation. It might sound complicated, but the process is fairly straightforward.
When a landowner approaches American Friends and indicates a desire to donate property for conservation, American Friends will identify a Canadian conservation partner, such as the Lake Superior Watershed Conservancy, that has indicated the property is a priority for conservation and the conservancy can manage the land.
With that in place, the landowner will donate property to American Friends — a tax-deductible donation, not subject to Canadian Capital gains taxes. The tax incentives typically offset the significant costs of making the gift.
Ultimately, American Friends will transfer title of the land to the Canadian conservation partner, thereby repatriating ownership.
While the process is simple to explain, it’s anything but simple to accomplish and takes time.
“The Canadian tax system is very different than the American one,” said Tassel. “It’s such a narrow field of tax and law that most lawyers haven’t focused on how to solve the issue for these clients.”
That’s why American Friends bridges that gap and helps to ensure preservation of these Canadian lands.
American Friends recently transferred title of Gargantua Islands, off the coast of Lake Superior Provincial Park, to the Lake Superior Watershed Conservancy after two years of work to obtain the title to the archipelago from the American owners. Now, LSWC will maintain the land as a nature reserve.
American Friends can also structure an easement on a property if the landowner doesn’t want to fully transfer the ownership.
The conservation easement would establish a legal agreement between the landowner and the local land trust that would permanently limit the use or development of the land in order to protect it.
For example, an owner might agree not to construct any more buildings on the land. Because that agreement would follow the land when it was sold or transferred, the property’s value would decrease, but Tassel explained the agreement could still have tax benefits.
“The difference between what the land could have been sold for versus its worth now (after the easement) — that becomes a charitable gift,” she explained.
Limiting the market value also decreases Canadian capital gains.
But relatively few American owners of Canadian lands know about American Friends and how it can help with both conservation and estate planning, so Tassel focuses on outreach and getting the information to landowners.
This summer American Friends and its Canadian partners pans to hold about a dozen informational events — including a recent one organized by LSWC in Batchewana Bay attended by about 25 American landowners.
“The events are a way for the local land trust to make new friends and for the landowners to self-identify that they’re interested in conservation,” said Tassel.
The events are not fundraisers, but simply fun, informational events that help inform the landowners of their options.
Tassel also travels directly to landowners to make sure they know about American Friends and what it does.
“Right now, we need to do introductory work,” she said.
“In the Lake Superior region, property owners come from a lot of different parts of the U.S., so the way to talk to them really only comes up at their cottages in the summers.”
To facilitate those trips, American Friends welcomes donations from anyone interested in conservation of Canadian lands.
The organization decided at the start to rely only on the fees it receives for its services and any monetary donations, rather than outright fundraising efforts, Tassel said. The donations are key to getting the group’s message out.
She and American Friends hope to expand its focus to develop partnerships with government agencies and First Nations communities in order to facilitate repatriation of indigenous lands appropriate for conservation.
To date, American Friends is working with 19 land trusts in five provinces across Canada, and has completed 25 land transactions priced at about $16 million.
It has helped to conserve 3,000 acres of valuable Canadian land.