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Many important wildlife habitats are found on private properties such as cottages, woodlots, ranches and farms. The people who own these lands play an important role in protecting such habitats by limiting certain activities and practices, and by encouraging restoration and stewardship. But what happens if they can no longer care for their property, or it passes out of their hands?

Since 1995, Environment Canada's Ecological Gifts Program (EGP) has enabled individual and corporate landowners to protect their cherished pieces of nature forever by donating ecologically sensitive lands to environmental charities or government bodies. An "ecogift" can be a donation of land or a partial interest in land - such as a conservation easement, covenant or servitude. In addition to the peace of mind of knowing that the land will be managed by the recipient according to mutually agreed-upon conservation goals and objectives, donors are also eligible to receive attractive income tax benefits for their donations. Ecogifts have a 0% capital gains inclusion taxation rate.

An increasing number of conservation-minded Canadian landowners are taking part in the Ecological Gifts Program each year. Each donation complements other habitat conservation efforts across the country.

The following information is described in more detail on the EGP website.

What is an 'ecogift'?

What are the tax benefits?

Who can receive an ecogift?

Options - Conservation Covenants, Easements & Servitudes

How are donations made?

What is an 'ecogift'?

An ecogift is a donation of land or an interest in land - such as a conservation easement, covenant or servitude - that has been certified as "ecologically sensitive" according to specific national and provincial criteria. Generally speaking, ecologically sensitive lands are areas or sites that currently, or could in the future, significantly contribute to the conservation of Canada's biodiversity and environmental heritage.

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David Denning

What are the tax benefits?

Most donors who participate in the Ecological Gifts Program do not do so for financial reasons. However, as an incentive to donate - and to assist those who could not otherwise afford to participate - private and corporate landowners who donate property through the Program qualify for special income tax benefits.

The Income Tax Act provides favourable income tax treatment for gifts of ecologically sensitive land and interests in ecologically sensitive land. This favourable treatment includes the provision of a tax credit or deduction to donors and a reduction in the taxable capital gain realized on the disposition of the property. Corporate donors may deduct the amount of their gift directly from their taxable income, while the value of an individual's gift is converted to a non-refundable tax credit. Any unused portion of the credit or deduction may be carried forward for up to five years, and 0 percent of the capital gain is taxed instead of the usual 50 per cent.

Donors are strongly advised to obtain independent tax advice when considering making an ecogift, to ensure that all tax implications are clearly understood.

Please see the tax scenarios prepared by EGP.

Please also see information about split receipting for donations of land. 

Who can receive an ecogift?

Landowners can donate gifts of ecologically sensitive land to environmental charities approved by the Minister of the Environment, as well as to federal, provincial, territorial and municipal governments. Collectively, these organizations are referred to as eligible recipients.

There are more than 190 eligible recipients across Canada, including land trusts and nature conservation groups. Other charities may request approval by writing to the Ecological Gifts Program National Secretariat and proving that they have registered charity status and that at least one of their purposes includes "the conservation and protection of Canada's environmental heritage." For more information on how to become an approved environmental charity, read the relevant section in The Canadian Ecological Gifts Program Handbook 2005.

Recipients of ecogifts are responsible for maintaining the biodiversity and environmental heritage values of the property in perpetuity. They may also help in other ways - such as by providing an initial assessment of the property's ecological sensitivity, arranging for an appraisal of the ecogift's fair market value, and coordinating the necessary applications.

Options - Conservation Covenants, Easements & Servitudes

Although many ecogifts are outright donations of land with no conditions attached, there are options available that allow donors and recipients to tailor their arrangements to suit their particular needs.

For example, approximately half of all ecogift donations to date have been "partial interests in land" known as conservation easements, covenants or servitudes. These partial interests are legal agreements that protect a property's conservation value by permanently placing terms and conditions on its use. For example, the agreement may prevent the land from being subdivided into smaller lots, protect trees from being cut, or limit the construction of any buildings to a particular area. Under the terms of these agreements, which are determined by the donor, the donor continues to own the land and may live on it, sell it, or pass it on to heirs. The recipient ensures that the restrictions put on the property are followed in perpetuity, regardless of who owns the land.

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Debbie Kelsall

How are donations made?

In order for donors to receive the tax benefits associated with the Ecological Gifts Program, Environment Canada or a designated authority must certify that the land is ecologically sensitive and that the recipient is approved to receive the gift. Environment Canada must also certify the fair market value of the donation.

This is a straight forward but multiple-step process, so donors are encouraged to initiate their donation early in the calendar year if they wish to use the resulting tax benefits the same year. Potential donors should seek independent financial and legal advice before proceeding with an ecogift donation, to ensure that the implications are clearly understood.

Landowners usually take the following steps to donate their land:

  • Arrange your donation. Select and contact an eligible recipient to discuss your land, conservation goals and donation options.
  • Prepare and file information on ecological sensitivity.
  • Apply for certification of the value of the donation. The donor must submit 3 copies of an independent appraisal of the fair market value of the donation to Environment Canada, along with a signed application form.
  • Finalize the donation. If the donor agrees with the fair market value that Environment Canada is prepared to certify, the donation should be completed (i.e. the title to the land should be transferred to the recipient or the conservation easement, covenant or servitude registered). Once Environment Canada has evidence that the transfer to the recipient has occurred, a Statement of Fair Market Value will be sent to the donor. It is at this point that the recipient will issue the official donation receipt.

For a more detailed description of the donation process, including eco-sensitivity criteria and guidelines for appraisals, please consult The Canadian Ecological Gifts Program Handbook 2005 and/or visit the EGP website.

use this one EcoGifts English for GiveGreenCanada JUN 2011.ppt8.26 MB