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An analysis of heritage property legislation : balancing the public interest with protection for the… Orr, Stewart Douglas 1986

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AN ANALYSIS OF HERITAGE PROPERTY LEGISLATION: BALANCING THE PUBLIC INTEREST WITH PROTECTION FOR THE PROPERTY OWNER By STEWART DOUGLAS ORR B.A., The University of Regina, 1981 LI.B., The University of Saskatchewan, 1984 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS i n THE FACULTY OF GRADUATE STUDIES (The Graduate Programme i n Law) F a c u l t y o f L a w We accept t h i s thesis as conforming to the ^ required/Standard THE UNIVERSITY OF BRITISH COLUMBIA August, 1986 c Stewart Douglas Orr, 1986 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t of the requirements f o r an advanced degree a t the U n i v e r s i t y o f B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and study. I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e copying of t h i s t h e s i s f o r s c h o l a r l y purposes may be granted by the head of my department or by h i s or her r e p r e s e n t a t i v e s . I t i s understood t h a t copying or p u b l i c a t i o n o f t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be allowed without my w r i t t e n p e r m i s s i o n . Department of Law  The University of B r i t i s h Columbia 1956 Main Mall Vancouver, Canada V6T 1Y3 Date August 15, 1986 -6 (3/81) i i ABSTRACT In the l a s t two decades, Canadian provinces have enacted l e g i s l a t i o n designed to protect buildings with a r c h i t e c t u r a l or h i s t o r i c a l s i g n i f i c a n c e . The l e g i s l a t i o n t y p i c a l l y proj-h i b i t s a private owner of one of these designated heritage properties from demolishing or a l t e r i n g the structure without approval from a governmental body. This r e s t r i c t i o n invariably a f f e c t s the property r i g h t s of the owner and thus, c o n f l i c t i s l i k e l y to develop. To avoid c o n f l i c t s , the ultimate goal of any heritage property statute should be to s t r i k e a balance between protection of the public's desire to preserve the building and the protection of the owner's basic rights i n the property to use i t as he wishes. Thus f a r , Canadian heritage statutes have had l i t t l e success i n achieving t h i s balance because no l o g i c a l l y designed form of protection for the property owner has been presented. This thesis analysises i n d e t a i l one of these statutes, B r i t i s h Columbia's Heritage Conser- vation Act i n order to formulate recommendations fo r a second generation of Canadian heritage l e g i s l a t i o n that would better balance the competing interests of the public's r i g h t to preserve the building and the owner's r i g h t to u t i l i z e his property i n any manner he wishes. The f i r s t part of t h i s thesis analyses the Heritage Conser-vation Act's protective measures f o r buildings and compares them to the provisions of the Alberta, Saskatchewan and Ontario heritage statutes. To be e f f e c t i v e , the statute must s a t i s f y several requirements, notably interim control, demolition pro-i i i h i b i t i o n , maintenance standards and strong enforcement provisions. The thesis also analyses the r e l a t i o n s h i p of heritage powers to a municipality's zoning powers. This part entailed researching primary l e g a l materials including statutes, by-laws and l i t i -gation. Examples of current situations i n the City of Vancouver are also included. The second part of the thesis concerns the protection of the owner. The current system i n B r i t i s h Columbia i s to impose compensation f o r any decrease i n the value of the property caused by the heritage r e s t r i c t i o n . The analysis demonstrates that t h i s system has been a f a i l u r e and thus, alternatives are examined i n order to recommend one that i s inexpensive to a municipality or government yet provides s i g n i f i c a n t protection to the property owner. The thesis analyses six alternatives, namely expropriation, revolving funds, transfer of development ri g h t s , property tax r e l i e f , the consideration of the economic consequences of designation and income tax incentives. The thesis examines the effectiveness of these alternative methods in other j u r i s d i c t i o n s and t h e i r adaptability to the present law of B r i t i s h Columbia. Research f o r t h i s section concerned more secondary l e g a l materials, especially law journal a r t i c l e s and textbooks by American experts i n the f i e l d of h i s t o r i c preservation law. The general conclusion of the thesis i s that the present system i s i n e f f e c t i v e i n balancing the two competing i n t e r e s t s . The Heritage Conservation Act's protective measures fo r the building might be adequate, i f used, but contain obvious flaws iv that need to be remedied. The greatest defect i n the statute i s i t s mandatory compensation provisions which act as a great deterrent to heritage protection. These provisions should be replaced with a form of property tax r e l i e f whereby a property owner w i l l be at least p a r t i a l l y compensated and provided i n -centives to r e h a b i l i t a t e the property. This programme should be accompanied by the r i g h t f o r the owner to seek de-designation or further compensation upon proof that the heritage r e s t r i c t i o n creates an unreasonable economic hardship. With t h i s scheme, the c o n f l i c t s currently surrounding heritage protection could be eliminated. Supervisor: Professor E.C.E. Todd V TABLE OF CONTENTS I . INTRODUCTION 1 I I . PROTECTION OF THE PROPERTY 4 A. H i s t o r y 4 B. I n t e r p r e t a t i o n 9 C. Reasons f o r D e s i g n a t i o n 13 D. Mechanics o f D e s i g n a t i o n 16 1. P r o v i n c i a l D e s i g n a t i o n 16 2. M u n i c i p a l H e r i t a g e D e s i g n a t i o n 16 E. G e n e r a l I s s u e s 19 1. I n t e r i m C o n t r o l 20 2. C o n t r o l o f D e m o l i t i o n and A l t e r a t i o n 21 3. Maintenance 26 4. R e l a x a t i o n o f B u i l d i n g Codes 29 5. Zoning Powers f o r P r e s e r v a t i o n 30 6. Enforcement 36 F. R a i l w a y s 39 I I I . PROTECTION FOR THE PROPERTY OWNER 45 A. P r o c e d u r a l F a i r n e s s 45 B. C u r r e n t P r o t e c t i o n i n B r i t i s h Columbia 48 C. Compensation 52 1. Reasons f o r Compensation 52 a) The P r i v a t e Owner Pays f o r the P u b l i c B e n e f i t 52 b) D e s i g n a t i o n i s D i s c r i m i n a t o r y 54 c) Maintenance 55 d) Q u a s i - E x p r o p r i a t i o n 56 v i 2. Reasons A g a i n s t Compensation 58 a) D e s i g n a t i o n S h o u l d Not Be T r e a t e d D i f f e r e n t l y from Other Governmental R e g u l a t i o n s 58 b) F o r e s e e a b i l i t y 60 c) M o r a l i t y 62 d) P r a c t i c a l U n c e r t a i n t y 62 e) Compensation A c t s as a D e t e r r e n t t o D e s i g n a t i o n 63 D. A l t e r n a t e Forms o f Compensation 69 1. Purchase and E x p r o p r i a t i o n 71 2. R e v o l v i n g Funds Scheme 74 3. T r a n s f e r o f Development R i g h t s 80 a) T.D.R'i) Use i n Vancouver 81 b) The New Y o r k C i t y E x p e r i e n c e 82 c ) The Chicago P l a n 88 d) Problems w i t h T.D.R. Schemes 91 e) A p p l i c a t i o n t o B r i t i s h Columbia 94 4. P r o p e r t y Tax R e l i e f 96 a) Exemption o r Abatement o f the Tax 97 b) Assessment Adjustments 99 i ) F r o z e n Assessments 100 i i ) Assessment on A c t u a l Use 104 c) C o n c l u s i o n 109 5. C o n s i d e r a t i o n o f t h e Economic Consequences o f D e s i g n a t i o n 112 6. Income Tax I n c e n t i v e s 118 a) The D e d u c t i b i l i t y o f R e n o v a t i o n Costs...120 b) Treatment o f D e m o l i t i o n 125 v i i c ) P r e s e r v a t i o n Easements as C h a r i t a b l e D e d u c t i o n s 128 d) C o n c l u s i o n 129 7. G r a n t s 131 IV. RECOMMENDATIONS AND CONCLUSION 133 F o o t n o t e s 137 B i b l i o g r a p h y 160 1 I . INTRODUCTION Heritage p r o p e r t i e s are b u i l d i n g s or s t r u c t u r e s t h a t have s p e c i a l h i s t o r i c a l or a r c h i t e c t u r a l s i g n i f i c a n c e f o r a community or p r o v i n c e . The p r e s e r v a t i o n of these s t r u c t u r e s i s a worth-while a c t i v i t y because they act as evidence of our past and f o r the most p a r t , remain u s e f u l components of our p r e s e n t . They serve as l i v i n g museums to educate us on our communities. As s t a t e d i n the U n i t e d S t a t e s Supreme Court, governmental bodies enact h i s t o r i c p r e s e r v a t i o n laws to support! the widely shared b e l i e f t h a t s t r u c t u r e s with s p e c i a l h i s t o r i c a l , c u l t u r a l or a r c h i t e c t u r a l s i g n i f i c a n c e enhance the q u a l i t y of l i f e f o r a l l . The b u i l d i n g s and workman-s h i p r e p r e s e n t l e s s o n s of the past and embody p r e c i o u s f e a t u r e s of our h e r i t a g e and serve as examples f o r today.1 2 One commentator i n d i c a t e d t h a t h e r i t a g e p r e s e r v a t i o n p r o v i d e s the p u b l i c with a "sense of p l a c e " thus s t r e n g t h e n i n g l o c a l community t i e s . On a l a r g e s c a l e , p r e s e r v a t i o n may i n c i d e n t a l l y improve the economy by i n c r e a s i n g employment and t o u r i s m . C l e a r l y , the p u b l i c b e n e f i t s from the p r e s e r v a t i o n of these s i g n i f i c a n t s t r u c t u r e s and t h e r e f o r e laws have been enacted to p r o t e c t them and the c o n t r i b u t i o n s they have made to our communities' past and p r e s e n t . Because our country i s so young and our h i s t o r y so r e l a t i v e l y b r i e f , i t has only been i n the l a s t two decades t h a t Canadian j u r i s d i c t i o n s have enacted l e g i s l a t i o n to preserve h e r i t a g e p r o p e r t i e s . T y p i c a l l y , these h e r i t a g e s t a t u t e s provide f o r the d e s i g n a t i o n of s i g n i f i c a n t p r o p e r t i e s and then p r o h i b i t a l l a l t e r a t i o n s or d e m o l i t i o n of t h a t property u n l e s s the d e s i g n a t i n g body approves. T h i s l e a d s to the fundamental 2 c o n f l i c t i n l e g i s l a t i n g h e r i t a g e p r o t e c t i o n . Measures t h a t p r o t e c t the p u b l i c ' s i n t e r e s t by p r e s e r v i n g h e r i t a g e s t r u c t u r e s n e c e s s a r i l y r e s t r i c t the r i g h t s of the p r i v a t e owner to use and enjoy h i s property as he p l e a s e s and to enjoy maximum p r o f i t s . Thus, to be t r u l y e f f e c t i v e and f a i r , a h e r i t a g e s t a t u t e must s u i t a b l y balance the p r o t e c t i o n of the property with p r o t e c t i o n f o r the pro p e r t y owner from the f r e q u e n t l y c o n s i d e r a b l e burdens of the h e r i t a g e r e s t r i c t i o n s . Thus f a r , Canadian h e r i t a g e property laws have g i v e n reasonably safe p r o t e c t i o n to the property but l i t t l e success has been achieved i n b a l a n c i n g t h i s p r o t e c t i o n to the p u b l i c i n t e r e s t with compensation or other forms of p r o t e c t i o n f o r the property owner. T h i s t h e s i s w i l l examine the f a i l u r e o f B r i t i s h Columbia's •5 h e r i t a g e s t a t u t e , the Heritage Conservation Act , i n a c h i e v i n g t h i s balance, and, by a n a l y s i n g other h e r i t a g e s t a t u t e s , attempt to formulate recommendations t h a t would l e a d to a b e t t e r balance between the c o n f l i c t i n g i n t e r e s t s . Since most h e r i t a g e p r o t e c t i o n i s done at the m u n i c i p a l l e v e l , t h i s t h e s i s w i l l emphasize the r o l e and powers of B r i t i s h Columbia m u n i c i p a l i t i e s i n h e r i t a g e p r e s e r v a t i o n . The C i t y of Vancouver's He r i t a g e By-Law and r e l a t e d powers w i l l r e c e i v e s p e c i a l emphasis because of t h e i r a v a i l a b i l i t y . To c l a r i f y some of the terminology I w i l l use i n t h i s t h e s i s , " h e r i t a g e " , as d e f i n e d by the s t a t u t e s , has a very broad meaning. G e n e r a l l y , h e r i t a g e means " i n h e r i t e d from the p a s t " ^ . A ."heritage p r o p e r t y " means any s i g n i f i c a n t property worthy of p r o t e c t i o n whether or not i t has a c t u a l l y been 3 f o r m a l l y designated and thus p r o t e c t e d by a.governmental body. American commentators use the word "landmark" which can be used i n t e r c h a n g e a b l y with h e r i t a g e p r o p e r t y . Heritage property l e g i s l a t i o n i s a r e l a t i v e l y r e c e n t development i n Canadian l e g a l systems and thus l i t t l e a n a l y s i s has been made i n determining the f a i r n e s s and e f f e c t of these s t a t u t e s . Perhaps now t h a t these s t a t u t e s have been used and t e s t e d f o r s e v e r a l y e a r s , i t i s time to comprehensively analyse t h e i r e f f e c t i n order to determine more e f f i c i e n t and f a i r measures f o r a second g e n e r a t i o n of h e r i t a g e s t a t u t e s . 4 I I . PROTECTION OF THE PROPERTY A.„History c Before the enactment of the H e r i t a g e C o n s e r v a t i o n Act , B r i t i s h Columbia r e l i e d on a v a r i e t y of s t a t u t e s to p r o t e c t h i s t o r i c s i t e s . The p r o v i n c i a l government was gi v e n d e s i g -n a t i o n powers under two d i f f e r e n t A r c h a e o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n A c t s . The f i r s t , enacted i n 1960, was r e -7 p l a c e d i n 1972 by a more comprehensive s t a t u t e . D e s i g n a t i o n by the P r o v i n c i a l S e c r e t a r y p r o t e c t e d a s i t e from d e s t r u c t i o n or a l t e r a t i o n without a permit. In 1973, a l l m u n i c i p a l i t i e s governed by the M u n i c i p a l  Act were g i v e n the power to designate b u i l d i n g s and s t r u c t u r e s of h i s t o r i c or c u l t u r a l s i g n i f i c a n c e . The d e s i g n a t i n g by-law was e f f e c t i v e only w i t h the approval of the p r o v i n c i a l c a b i n e t . D e s i g n a t i o n p r o t e c t e d the s t r u c t u r e from d e m o l i t i o n or the 9 a l t e r a t i o n of i t s fa c a d e . The Vancouver Ch a r t e r was amended i n 1974 to provide s i m i l a r powers f o r the Vancouver C i t y C o u n c i l . The C h a r t e r amendment had two advantages over the M u n i c i p a l A c t . F i r s t l y , the Vancouver C o u n c i l d i d not r e q u i r e 1 o the approval of the p r o v i n c i a l government . More im p o r t a n t l y , Vancouver was g i v e n the power to r e f u s e any a p p l i c a t i o n f o r a d e m o l i t i o n permit f o r up to n i n e t y days pending the enactment 11 of a h e r i t a g e d e s i g n a t i o n by-law . A property owner could only demand compensation i f c o u n c i l d i d not designate h i s 12 property a f t e r w i t h h o l d i n g a d e m o l i t i o n permit.. . Using these powers, the C i t y o f Vancouver enacted i t s Heritage 5 By-Law under which over f i f t y structures have been designated . Other municipalities had less success. The Municipal Act provisions 4 did not protect a building u n t i l a by-law was adopted by council and then approved by the p r o v i n c i a l govern-ment. In the interim, the owner could apply for and receive a demolition permit and destroy the structure to avoid the burdens of designation. The municipality's i n a b i l i t y to with-hold the demolition permit made the powers severely inadequate. The City of V i c t o r i a discovered soon after completing a survey of potential heritage properties that there was an increase i n the number of demolition permit applications involving many of the four hundred l i s t e d properties. To avoid the burdens of owning and maintaining a protected property, private owners were demolishing t h e i r structures to insure t h e i r land would be available f o r future development. Council was forced to react by using an extraordinary power. Under s. 290 of the -It; Municipal Act , a municipality, where i t finds i t s powers are inadequate to deal with an emergency, may declare that an emergency exists and exercise any powers necessary to deal e f f e c t i v e l y with the emergency. This declaration of an emer-gency must be made by a by-law passed by a two thirds majority. The only l i m i t a t i o n on the powers used during the emergency 16 i s that they must be under p r o v i n c i a l j u r i s d i c t i o n . V i c t o r i a City Council declared an emergency existed because of an "alarming increase i n the number of buildings having h i s t o r i c a l 17 value being demolished." To contain the emergency, council gave i t s e l f the power to revoke a l l e x i s t i n g demolition permits 6 and to refuse any demolition or building permit applications pending the passing of designation by-laws. The use of the emergency power was extremely rare and thus i t was challenged i n court by the owner of one of the l i s t e d properties. In E & J Murphy Ltd. v. The Corporation of the 18 City of V i c t o r i a , Mr. Justice Macdonald held that the use of the emergency power was e n t i r e l y v a l i d because the existence of an emergency was to be determined solely by c o uncil. The determination was not colourable because there was ample e v i -dence available to prove that the c i t y ' s designation powers were i n e f f e c t i v e . The purpose of the emergency by-law was to provide time f o r council to preserve the structures by formal designation. There was no bad f a i t h because the preservation of these structures was i n the public i n t e r e s t . The land-owner's argument that the by-flaw was discriminatory was rejected because the by-law was of general application and thus did not operate to the s p e c i a l detriment of the Appellant and a small number of others. Presumably, because four hundred landowners were affected, the by-law could be considered to be of general 19 • • a p p l i c a t i o n . Furthermore, cases imply that discrimination w i l l only ex i s t where bad f a i t h or an improper purpose can be shown. In the present case, the court found that preservation was i n the public inte r e s t and therefore not an improper motive. This action by the V i c t o r i a Council was the only time the Municipal Act's emergency power was successfully implemented. It may have shocked the p r o v i n c i a l government into passing new 7 l e g i s l a t i o n w i t h more powers f o r m u n i c i p a l i t i e s because l e s s t h a n one y e a r l a t e r , the H e r i t a g e C o n s e r v a t i o n A c t (HCA) was 20 p r o c l a i m e d . S e c t i o n 2 o f the A c t s t a t e d i t s purpose was " t o encourage and f a c i l i t a t e t he p r o t e c t i o n and c o n s e r v a t i o n o f h e r i t a g e p r o p e r t y i n the p r o v i n c e . " T h i s a c t p r o v i d e d the f i r s t comprehensive h e r i t a g e p r o t e c t i o n l e g i s l a t i o n i n the p r o v i n c e as d e s i g n a t i o n powers f o r b o t h the p r o v i n c i a l government and a l l m u n i c i p a l i t i e s were i n c l u d e d i n the same a c t . The 21 A r c h a e o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n A c t as w e l l as the h e r i t a g e p r o v i s i o n s o f s. 7 H A o f the M u n i c i p a l A c t and 23 s. 564A o f the Vancouver C h a r t e r ^ were r e p e a l e d . The H e r i t a g e C o n s e r v a t i o n A c t * ^ p r o v i d e s no t r a n s i t i o n r u l e s . T h i s causes some u n c e r t a i n t y as t o the s t a t u s o f d e s i g -n a t i o n s made under p r e v i o u s s t a t u t e s . When the second A r c h a e -25 o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n A c t J was e n a c t e d , i t i n c l u d e d a s e c t i o n t h a t e x p r e s s l y i n d i c a t e d t h a t d e s i g n a t i o n s and p e r m i t s made under the f o r m e r a c t would c o n t i n u e t o be v a l i d and would be e n f o r c e a b l e by the p r o v i s i o n s o f the new a c t . The HCA does n ot i n c l u d e a s i m i l a r p r o v i s i o n . I n s t e a d , the s i t u a t i o n appears t o be governed by the I n t e r p r e t a t i o n nf. A c t . S e c t i o n 36 s t a t e s : (1) Where an enactment ( t h e "former enactment") i s r e p e a l e d and a n o t h e r enactment ( t h e "new enactment") i s s u b s t i t u t e d f o r i t , . . . a l l r e g u l a t i o n s made under the f o r m e r enactment r e m a i n i n f o r c e and s h a l l be deemed to have been made under the new enactment, i n so f a r as they are n o t i n c o n s i s t e n t w i t h the new enactment, u n t i l they a re r e p e a l e d o r o t h e r s made i n t h e i r p l a c e . . . . A " r e g u l a t i o n " would i n c l u d e a d e s i g n a t i n g by-law o r a p r o -27 v i n c i a l d e s i g n a t i n g o r d e r . S i n c e the purpose o f the r e p e a l e d 8 h e r i t a g e enactments was the same as the purpose o f the HCA and the means o f d e s i g n a t i o n and enforcement a re s i m i l a r , the d e s i g n a t i n g o r d e r s and by-laws from the p r e v i o u s p r o v i s i o n s s h o u l d be c o n s i s t a n t w i t h the HOA and thus remain v a l i d . An a d m i n i s t r a t i v e board has t a k e n the o p p o s i t e view. The Assessment A p p e a l Board c o n c l u d e d t h a t a d e s i g n a t i o n under the o r i g i n a l A r c h a e o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n A c t was i n c o n s i s t e n t w i t h the HCA and thus no l o n g e r v a l i d . I n E s t a t e s Investment L t d . v. The A s s e s s o r f o r A r e a #09 - Van-29 couver , t h e Board was concerned w i t h the assessment o f p r o p e r t y i n the Gastown d i s t r i c t o f Vancouver. The a r e a had been d e s i g n a t e d as a h i s t o r i c s i t e under the fo r m e r a c t i n 1971. When the second A r c h a e o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n "50 A c t ^ was passed i n 1972, the t r a n s i t i o n r u l e s i n s u r e d t h a t the d e s i g n a t i o n remained v a l i d but because the HCA was passed w i t h no t r a n s i t i o n r u l e s , t he Board c o n c l u d e d t h a t the p r e v i o u s d e s i g n a t i o n was i n c o n s i s t e n t w i t h the new a c t f o r s e v e r a l r e a s o n s . F i r s t l y , the d e s i g n a t i o n was made by the P r o v i n c i a l S e c r e t a r y ; c u r r e n t d e s i g n a t i o n s were t o be made by the L i e u -t e n a n t - G o v e r n o r i n C o u n c i l . S e c o n d l y , under the o l d system, an owner c o u l d a l t e r o r d e m o l i s h the s t r u c t u r e w i t h a p e r m i t ; the new system r e q u i r e d p e r m i t s o r the a p p r o v a l o f c o u n c i l . T h i r d l y , the p r e v i o u s s t a t u t e p r o v i d e d f o r g e n e r a l d e s i g n a t i o n by the p r o v i n c e ; the new s t a t u t e s e t up a d u a l system whereby b o t h p r o v i n c i a l and m u n i c i p a l h e r i t a g e s i t e s were c r e a t e d . I n the Board's o p i n i o n , t h i s p r o v i d e d a veto t o one j u r i s d i c t i o n so t h a t i f b o t h had d e s i g n a t e d a s t r u c t u r e , d e m o l i t i o n was o n l y 9 a v a i l a b l e i f b o t h agreed t o i t . T h i s f i n a l r e a s o n has no l e g i t i m a c y . I n f i n d i n g t h i s new d u a l system o f p r o t e c t i o n i n the H e r i t a g e C o n s e r v a t i o n A c t , the Board n e g l e c t e d to n o t i c e t h a t a d u a l system had e x i s t e d w i t h the A r c h a e o l o g i c a l and H i s t o r i c S i t e s P r o t e c t i o n 31 A c t f and the two o t h e r enactments, s. 7 H A o f the M u n i c i p a l A c t ^ 2 and s. 564A of the Vancouver C h a r t e r ^ . The l a t t e r two s t a t u t e s p r o v i d e d the m u n i c i p a l d e s i g n a t i o n power c o n s i s t e n t w i t h the power g i v e n under s. 11 o f the HCA and the f o r m e r s t a t u t e p r o v i d e d the p r o v i n c i a l power. The d i f f e r e n c e i n the p r o v i n c i a l d e s i g n a t i n g b o d i e s between the two a c t s d i d not p r o -v i d e an i n c o n s i s t e n c y i n c a p a b l e o f b e i n g a d m i n i s t e r e d under the new a c t . The a l t e r a t i o n and d e m o l i t i o n a p p r o v a l systems were n e a r l y i d e n t i c a l under the two systems. The owner o f a p r o -v i n c i a l l y d e s i g n a t e d s t r u c t u r e c o n t i n u e d t o r e q u i r e a p e r m i t from a government m i n i s t e r and the owner o f a m u n i c i p a l h e r i t a g e s i t e c o n t i n u e d t o r e q u i r e a p p r o v a l o f c o u n c i l as under both s s . 7 H A and 564A. No i n c o n s i s t e n c i e s e x i s t e d . D e s i g n a t i o n s under the p r e v i o u s enactments remain v a l i d . B. I n t e r p r e t a t i o n D e l e g a t e d powers, l i k e t hose o f m u n i c i p a l i t i e s , are g e n e r a l l y i n t e r p r e t e d n a r r o w l y and l i t e r a l l y by c o u r t s . The 34 E & J Murphy L t d . case i s c l e a r l y an e x c e p t i o n . H e r i t a g e p r o p e r t y l a w s , because they d e a l w i t h p r i v a t e p r o p e r t y r i g h t s , are l i k e l y t o be i n t e r p r e t e d very s t r i c t l y . J u s t such an approach was t a k e n by the Supreme Court o f 10 Canada i n Trustees of St. Peterls Evangelical Church v. The Corporation of the City of Ottawa . The case demonstrated exactly how s t r i c t the powers w i l l be interpreted. The case involved Ottawa's l a s t remaining residence from an early 19th Century upper-class r e s i d e n t i a l area. The landowner, a church organization, purchased the home with the intention of demoi l i s h i n g i t and expanding i t s parking l o t . Council refused to issue a demolition permit. Instead, i t invoked the powers of 36 s. 29 of the Ontario Heritage Act designating the structure as a heritage property. The designation protected the structure because no alter a t i o n s could occur without the written consent 37 of council . Soon a f t e r s the designation, the church applied to council f o r consent to demolish under s. 34 of the Act. This section gave council ninety days to consider the a p p l i -cation. When council refused the application, the Act auto-matically prohibited any demolition or any work to occur f o r the next 180 days. When the 180 days expired, the owner would be allowed to demolish the building. Under s. 34 (2 ) , council was required to give notice to the owners of i t s re-fu s a l within ninety days of the application being received. Without giving notice, the council was "deemed to have consented to the application." Council never gave formal notice but the church knew at a l l times that t h e i r application had been re-fused. The c i t y ' s actions had been highly publicized and the owners were present at the council meeting. Soon a f t e r the ninety-day period expired,?,,the c i t y attempted to serve the church leaders with notice of t h e i r r e f u s a l . The service was 11 refused. Very early the next morning, the church began demo-l i t i o n of the structure. The 180-day period had c l e a r l y not expired. The c i t y then sought damages and an injunction to stop the demolition. In response, the church applied for j u d i c i a l review of the o r i g i n a l designating by-law. In both the Ontario High Court^aaand the Court of Appeal , the c i t y was successful because both courts held that the word "deemed" i n s. 34 meant "deemed u n t i l the contrary i s proved." Since council could prove that i t did not consent to the application and thus the owners of the building knew of the r e f u s a l , the contrary could be proven. On further a p p e a l ^ , the Supreme Court found that the Act was remedial and thus should be construed i n a purposive manner. Mr. Justice Mclntyre indicated that since the Act was enacted to provide f o r the conservation and protection of Ontario's heritage, the Legislature must have intended to give munic-i p a l i t i e s wide powers to i n t e r f e r e with i n d i v i d u a l property r i g h t s . But the preservation purpose of the statute should not have been accomplished by t o t a l l y disregarding certain provisions of the Act. The scheme of the Act,in allowing the municipality only 180 days to protect the building beyond desig-nation, made i t evident that the cost of preservation was to be borne by the community and not at the cost of the i n d i v i d u a l property owner. The Act provided a detailed scheme of procedure to govern the exercise of the municipal powers and, i f followed, the procedure would achieve the goals of the statute and, at the same time, protect the property owner. These provisions 12 had to be g i v e n e f f e c t . To h o l d otherwise would have allowed the c i t y to h o l d the landowner i n suspension o f h i s r i g h t s f o r l o n g e r than the Act contemplated. The Court ordered the c i t y to de-designate the s t r u c t u r e . Mr. J u s t i c e Estey d i s s e n t e d p r e f e r r i n g a l a r g e , l i b e r a l i n t e r p r e t a t i o n as s p e c i f i e d by the O n t a r i o I n t e r p r e t a t i o n  Act . Estey took a very s t r o n g purposive approach. He i n d i -cated t h a t the g o a l of the Act would only be accomplished with a l i b e r a l c o n s t r u c t i o n e q u a t i n g a c t u a l knowledge wi t h formal n o t i c e . Estey f o l l o w e d the two p r e v i o u s d e c i s i o n s i n the case and found "deemed" to equal "deemed c o n c l u s i v e l y " or "deemed u n t i l the c o n t r a r y i s proved." For a u t h o r i t y , he f o l l o w e d Hickey v. S t a l k e r ^ 2 i n which Mr. J u s t i c e Middleton o f the O n t a r i o Court of Appeal found t h a t such an i n t e r p r e t a t i o n would save the l e g i s l a t i o n from being u n j u s t and absurd. F o l l o w i n g t h i s p r i n c i p l e , Mr. J u s t i c e C a r t w r i g h t of the Supreme Court s t a t e d : In many cases, which can e a s i l y be imagined, to construe the word "deemed" . . . as " h e l d c o n c l u s i v e l y " would be to impute the L e g i s l a t u r e the i n t e n t i o n of r e q u i r i n g the c o u r t to h o l d to be f a c t something d i r e c t l y c o n t r a r y to the true f a c t . . ..43 In the present case, c o u n c i l d i d e v e r y t h i n g but consent to the d e m o l i t i o n . Because they had f u l l knowledge of the events and a c t i v e l y p a r t i c i p a t e d i n the process, the property owners were adequately p r o t e c t e d . T h e r e f o r e , i t would have been ab-surd to deem the l a c k of n o t i c e as consent. One commentator c r i t i c i z e d the m a j o r i t y ' s d e c i s i o n be-cause of i t s s t r i c t approach to the i n t e r p r e t a t i o n of the 13 h e r i t a g e s t a t u t e . R i c h a r d s ^ found t h a t the emphasis on pro-t e c t i n g the p r i v a t e property r i g h t s o f i n d i v i d u a l s was inappro-p r i a t e u n l e s s the m u n i c i p a l i t y ' s p r o c e d u r a l mistake a c t u a l l y p r e j u d i c e d the enjoyment of those r i g h t s . Since the church had complete knowledge of the c i t y ' s i n t e n t i o n and a c t i o n s , i t was not p r e j u d i c e d by the l a c k o f fo r m a l n o t i c e . I cannot agree w i t h t h i s c r i t i c i s m . Courts should con-t i n u e the t r a d i t i o n o f s t r i c t l y i n t e r p r e t i n g the powers of m u n i c i p a l i t i e s e s p e c i a l l y when they i n v o l v e property r i g h t s o f i n d i v i d u a l s . T h i s s t r i c t i n t e r p r e t a t i o n i s important f o r the j u s t implementation o f h e r i t a g e p r o t e c t i o n laws. I t must be remembered t h a t h e r i t a g e p r o t e c t i o n laws have a dua l purpose. F i r s t l y , the law should p r o t e c t s i g n i f i c a n t s t r u c t u r e s i n our communities from d e m o l i t i o n . And secondly, the law should provide adequate p r o t e c t i o n f o r the owners of these s t r u c t u r e s because a d e s i g n a t i o n by-law d r a s t i c a l l y i n t e r f e r e s with the owner's property r i g h t s whether the by-law merely suspends the r i g h t to demolish the b u i l d i n g f o r a short p e r i o d or preserves the b u i l d i n g i n p e r p e t u i t y . To i n s u r e , t h e owner r e c e i v e s a l l the p r o t e c t i o n to which he i s e n t i t l e d , the pro-c e d u r a l r u l e s l a i d down i n the e n a b l i n g s t a t u t e s must be s t r i c t l y f o l l o w e d . C. Reasons f o r D e s i g n a t i o n The Her i t a g e C o n s e r v a t i o n Act allows the p r o v i n c i a l government and m u n i c i p a l c o u n c i l s to designate p r o p e r t i e s with h e r i t a g e v a l u e . But l i t t l e guidance i s g i v e n i n what makes a p r o p e r t y worthy o f d e s i g n a t i o n . " H e r i t a g e " i s d e f i n e d i n s. 1 o f the A c t as b e i n g "Of h i s t o r i c , a r c h i t e c t u r a l , a r c h a e -o l o g i c a l , p a l a e o n t o l o g i c a l , o r s c e n i c s i g n i f i c a n c e t o the p r o v i n c e o r a m u n i c i p a l i t y , as the case may be." T h i s d e f i -n i t i o n i s c l e a r l y w i d e r t h a t t h a t used inssome o t h e r p r o v i n c e s ^ and i n the p r e v i o u s m u n i c i p a l h e r i t a g e d e s i g n a t i o n powers o f t h i s p r o v i n c e . S e c t i o n 564A o f the Vancouver C h a r t e r ^ and 4.8 s e c t i o n 714A o f the M u n i c i p a l A c t ^ a l l o w e d d e s i g n a t i o n o f p r o p e r t i e s t h a t were e v i d e n c e o f the m u n i c i p a l i t y J s h i s t o r y , c u l t u r e , and h e r i t a g e . There was no power t o d e s i g n a t e " s c e n i c " s t r u c t u r e s . T h i s a d d i t i o n p r o v i d e s the power t o d e s i g -nate a e s t h e t i c a l l y p l e a s i n g p r o p e r t y t h a t may have no h i s t o r i c o r a r c h i t e c t u r a l s i g n i f i c a n c e . More s p e c i f i c and d e t a i l e d s t a n d a r d s f o r d e s i g n a t i o n would p r o v i d e an i n d i v i d u a l w i t h more c e r t a i n t y as t o the p o t e n t i a l r e s t r i c t i o n o f h i s p r o p e r t y . More d e t a i l would a l s o i n s u r e t h a t o n l y the t r u l y s i g n i f i c a n t s t r u c t u r e s are p r o t e c t e d . An example o f more s p e c i f i c s t a n d a r d s i s the d e f i n i t i o n o f " h i s t o r i c and c u l t u r a l s i g n i f i c a n c e " used by the C i t y o f S e a t t l e . To be d e s i g n a t e d , a b u i l d i n g must have: s i g n i f i c a n t c h a r a c t e r , i n t e r e s t o r v a l u e as p a r t o f the development, h e r i t a g e o r c u l t u r a l c h a r a c t e r i s t i c s o f the C i t y , s t a t e o r n a t i o n , o r i s a s s o c i a t e d w i t h the l i f e o f a p e r s o n s i g n i f i c a n t i n the p a s t o r an h i s t o r i c event w i t h a s i g n i f i c a n t e f f e c t on s o c i e t y . 4 9 50 A c c o r d i n g t o Duerkson^ , such d e t a i l i s p r e f e r a b l e o v e r a d e f i n i t i o n such as " H i s t o r i c a l i n c l u d e s a l l o f the p a s t " which was used by the C i t y o f D a l l a s . D e s i g n a t i o n s f o l l o w i n g t h i s 51 s t a n d a r d were r u l e d i n v a l i d because o f the vagueness . I n 15 Canada, the Ontario Municipal Board invalidated a by-law that prescribed buildings had to conform to a "heritage concept" because the phrase was undefined and so vague that i t did not C O provide any guidance whatsoever to interpretation . Despite wide d i s c r e t i o n i n B r i t i s h Columbia to determine exactly what a heritage structure i s , the suf f i c i e n c y of the reasons f o r designation cannot be questioned by a court. In Murray v. The Corporation of the Township of Richmond^, the owner of a designated property applied to have the designating by-law quashed because there was no evidence of any h i s t o r i c a l significance of the s i t e . Mr. Justice Gould of the Supreme Court found that so long as there i s some evidence of heritage significance, the Court could not substitute i t s own opinion as to whether the evidence was s u f f i c i e n t . Council had some evidence because i t acted on the advice of i t s Recreational Department^. B r i t i s h Columbia mu n i c i p a l i t i e s are not required to provide (55 reasons f o r designation. Other provinces, notably Ontario , 56 57 Nova Scotia-^ , and Saskatchewan^ , require the municipality%to provide written reasons f o r the designation. This would prevent the legitimate use of the designation power f o r some reason other than preservation such as to stop an unpopular develop-ment. Stated reasons would also provide evidence that careful research was undertaken to determine that the building was trul y s i g n i f i c a n t . Designation because of "windshield surveys" could thus be deterred. 16 D. The Mechanics of Designation 1. P r o v i n c i a l Designation 58 The Heritage Conservation Act provides that heritage s i t e s may be designated by either a municipality or the pro-v i n c i a l government. Part 2 of the Act deals with p r o v i n c i a l heritage conservation. Under s. 4(1), the Lieutenant-Governor in Council may designate land as a p r o v i n c i a l heritage s i t e or personal property as a heritage object. Unlike other provinces, there i s no requirement i n B r i t i s h Columbia to r e g i s t e r the designation against the property's t i t l e . Section 6 prohibits a l l persons from destroying or a l t e r i n g a p r o v i n c i a l heritage s i t e . The building may only be altered or demolished with a permit issued by the Minister i n charge of administer-59 ing the Act or his delegate . Part 2 also includes several special provisions with respect to archaeological s i t e s . 2. Municipal Heritage Designation Most heritage protection occurs at the municipal l e v e l . 61 Municipal designation i s governed by Part 3 of the Act Section 11 provides the power fo r municipalities to designate structures within t h e i r boundaries. The Act provides a f a i r l y detailed procedure f o r municipalities to follow. Council must give a property owner notice of i t s intention to consider designation. Notice must be delivered by registered mail at least ten days before the by-law w i l l be considered. Ten days may be inadequate time for an owner to prepare an argument 17 a g a i n s t d e s i g n a t i o n . Ten days n o t i c e i s much l e s s than CO property owners r e c e i v e i n other j u r i s d i c t i o n s . To i n s u r e t h a t a l l i n t e r e s t e d p a r t i e s know of the i n t e n t i o n to d e s i g -nate, c o u n c i l i s a l s o r e q u i r e d to twice p u b l i s h a n o t i c e i n a newspaper of g e n e r a l c i r c u l a t i o n w i t h i n the m u n i c i p a l i t y . Once designated, the s t r u c t u r e can only be demolished or i t s e x t e r i o r a l t e r e d with the approval of c o u n c i l by way of a r e s o l u t i o n ^ . S e c t i o n 15(1) p r o v i d e s t h a t c o u n c i l may estab-l i s h a h e r i t a g e a d v i s o r y committee to provide advice on h e r i t a g e matters. The committee i s to be p u r e l y a d v i s o r y as i t does not have d e s i g n a t i o n powers. The C i t y o f Vancouver de s i g n a t e s m u n i c i p a l h e r i t a g e s i t e s w ith i t s Heritage By-Law No. 4837. The by-law was f i r s t enacted i n 1974 under c o u n c i l ' s p r e v i o u s powers under the Vancouver Charter but because of t r a n s i t i o n r u l e s d i s c u s s e d 66 e a r l i e r , the by-law and d e s i g n a t i o n s under i t should remain v a l i d and be a d m i n i s t e r e d under the Heritage Conservation  A c t . Since 1974, f i f t y b u i l d i n g s have been designated and p r o t e c t e d from d e m o l i t i o n . The by-law's p r o h i b i t i o n s c l o s e l y f o l l o w the p r o t e c t i v e powers g i v e n under the HCA but the by-law may exceed the m u n i c i p a l i t y * s j j u r i s d i c t i o n i n other a r e a s . S e v e r a l of the b u i l d i n g s designated are owned by e i t h e r the f e d e r a l or pro-v i n c i a l Crown. The C i t y has no j u r i s d i c t i o n over f e d e r a l l y -owned b u i l d i n g s such as the F e d e r a l B u i l d i n g i n the S i n c l a i r 67 Centre . The h e r i t a g e by-law would a l s o have no a p p l i c a t i o n over f e d e r a l l y r e g u l a t e d s t r u c t u r e s such as the Canadian 18 National Railway Station S i m i l a r l y , the designation of buildings owned by the pr o v i n c i a l Grown are i n e f f e c t i v e . The old P r o v i n c i a l Court House was designated by the City i n 1974. Section 14(1) of 6 9 the Interpretation Act binds enactments on the p r o v i n c i a l Crown unless the enactment s p e c i f i c a l l y provides otherwise. The Heritage Conservation Act does not s p e c i f i c a l l y exclude the Crown from i t s operation. But s. 14(2) of the Interpre-tat i o n Act exempts the Crown from provisions with respect to "the use or development of land, or i n the planning, con-struction, a l t e r a t i o n , servicing, maintenance or use of im-provements . . .." Clearly, a heritage r e s t r i c t i o n i s just such an enactment. Of a l l the p r o v i n c i a l heritage statutes 70 71 i n Canada, only the Saskatchewan' and Nova Scotia' Heritage Property Acts s p e c i f i c a l l y bind the p r o v i n c i a l Crown by municipal heritage designations. One provision of Vancouver's Heritage By-Law may be i n v a l i d because of improper delegation. In 1976, the by-law was amended to add a second schedule of designated buildings. The amendment reads: Those parts of buildings or structures more p a r t i c u l a r l y described i n Schedule B to t h i s by-law are hereby desig-nated as Heritage buildings or structures as the case may be provided that approval i s hereby granted to any a l t e r a t i o n to the whole or any part thereof where the proposed a l t e r a t i o n has been referred to the Vancouver Heritage Advisory Committee f o r a report and subsequent thereto a v a l i d development permit i s issued authorizing the same. Six months l a t e r , s i x building facades were placed on Schedule 72 B by council. The Heritage Conservation Act' prohibits 19 a l t e r a t i o n of the facade without the p r i o r approval of council by resolution. The by-law amendment presumes that merely by designating the structure, approval i s granted automatically so that the owner may make any a l t e r a t i o n s so long as the development permit board eventually approves i t . In e f f e c t , the council has delegated to the board i t s powers to approve or r e j e c t intended a l t e r a t i o n s to a designated structure when i t was given no such power to delegate. The delegation to the development permit board of t h i s power i s not the same as approval by council by r e s o l u t i o n . Improper delegation 7*5 makes that portion of the by-law i n v a l i d . E. General Issues To be t r u l y e f f e c t i v e i n the protection of s i g n i f i c a n t buildings, a heritage statute must address several issues including interim control, demolition control and enforcement. The Heritage Conservation Act i n B r i t i s h Columbia i s one of the simplest and shortest heritage statutes i n Canada. To determine i t s effectiveness,inaprotecting heritage properties, I w i l l compare i t s provisions with the protective measures in other Canadian statutes. Primarily, I w i l l compare the HCA with the Alberta, Saskatchewan and Ontario l e g i s l a t i o n . The Alberta H i s t o r i c a l Resources Act*^ and the Saskatchewan Heritage 75 Property Act are probably the most comprehensive and detailed Canadian Heritage statutes. The Ontario Heritage Act i s a useful comparison because i t takes a d i f f e r e n t approach in attempting to protect the structure. 20 1. Interim Control To be e f f e c t i v e , a heritage protection statute must protect a structure before as well as a f t e r the formal desig-nation process takes place. The City of V i c t o r i a discovered that a lack of interim control powers made t h e i r protective measures t o t a l l y inadequate. Upon a mere rumour of council considering designation, property owners were l e v e l l i n g t h e i r buildings i n order to keep the property free f o r future development. Since designation at that time was a f a i r l y lengthy process requiring approval by a p r o v i n c i a l minister, property owners had a great deal of time to demolish t h e i r 77 structures i n order to avoid the heritage r e s t r i c t i o n s . The interim protection measures of the Heritage Conser-vation Act were drafted to remedy t h i s problem. Section H of the Act gives the municipality the power to ignore demolition permits and other regulations so that i t may order a building cannot be altered or destroyed f o r a period of up to t h i r t y days. This i s to give the c i t y an opportunity to assess the potential heritage value of the building. The c i t y can pro-h i b i t demolition or a l t e r a t i o n f o r a further sixty days once a designating by-law i s introduced. The freeze on demolition ends when council r e j e c t s the by-law or at. the end of the sixty-day period i f the by-law i s never adopted. The freeze, using both these provisions, can l a s t f o r no longer than ninety days. This system i s s i m i l a r with one exception to 78 that included i n the Vancouver Charter provisions. Under 21 the Vancouver Charter, council was l i a b l e f o r compensation i f the building was not designated during the freeze. Sub-section 14(2) of the HCA removes t h i s l i a b i l i t y f o r compensation by deeming the action not to i n j u r i o u s l y a f f e c t the property. The removal of t h i s l i a b i l i t y should have made the section much more a t t r a c t i v e f o r municipalities to use. The B r i t i s h Columbia interim protection measures are some of the most e f f e c t i v e i n Canada. Only Saskatchewan provides a longer period, sixty days, i n which demolition can be frozen to allow a survey or consideration of the heritage value of a •7Q Q Q O - I property . In both Alberta and Ontario , demolition can-not be prohibited u n t i l the municipality serves the owner with notice of an intention to designate. The B r i t i s h Columbia provision requires no notice to be e f f e c t i v e and thus can be implemented much more quickly providing greater protection. 2. Control of Demolition and A l t e r a t i o n The control and p r o h i b i t i o n of the demolition of the heritage structure i s the most v i t a l component of an e f f e c t i v e heritage power. Without t h i s control, the protection afforded to a designated structure w i l l be useless. In B r i t i s h Columbia, p r o v i n c i a l l y designated properties cannot be demolished or altered unless the owner obtains 82 p r i o r written consent from the minister i n charge . This approval process i s easier than the actual designation process which requires approval by the entire cabinet. Other provinces 1 give the designating body control over demolition requests so 22 that e f f e c t i v e l y de-designation i s required f o r a building to be demolished. Ontario provides no powers f o r p r o v i n c i a l designation. Municipally designated structures can only be demolished with the p r i o r approval of the municipal council that desig-nated the property 8^. A resolution and not a by-law i s the form council s h a l l use so that i t does not need to follow the same procedure i t followed i n designation. But once desig-nated, the building i s protected from demolition and only an action by council can remove that protection. In Ontario, the municipal council does not necessarily 85 control demolition. Under the Ontario Heritage Act , muni-c i p a l councils have the power to designate heritage properties. But designation only e f f e c t i v e l y protects the structure i f the owner does not object. Under ss. 32 and 33 of the Act, an owner of a designated property may apply to the municipal council to have the designating by-law repealed or to obtain consent f o r a l t e r a t i o n of;the building i n a manner " l i k e l y to aff e c t the reason f o r designation." This w i l l set i n motion a review process but eventually council's decision not to repeal or to refuse consent w i l l be f i n a l . But, i f the owner wishes to demolish or remove the structure, council cannot block i t i n d e f i n i t e l y . The r i g h t to demolish a structure i s easier to obtain than the r i g h t to make a l t e r a t i o n s . Under s. 34, the owner i s e n t i t l e d to apply to council f o r consent to demolish h i s property. Upon receiving the owner's appli-*^ .-cation, council i s given ninety days to consent or refuse. 23 Notice of the decision must be given to the owner within 86 those ninety days . I f council refuses to approve the application, the owner i s automatically prohibited from demolishing or removing the structure f o r a period of 180 days from the date of council!s r e f u s a l . Once that 180-day period expires and the owner has not volunteered to extend that period, he may proceed to demolish or remove the struc-ture. Council has no power to withhold the demolition permit afte r that 180-day period. Therefore, an owner of a desig-nated structure may acquire the r i g h t to demolish his struc-ture merely by making application and waiting f o r a maximum of 270 days. The section provides an incentive to demolish a designated structure and thus provides poor protection f o r heritage buildings i n Ontario belonging to private owners unsympathetic to heritage conservation. Under such circum-stances, an Ontario municipality's only options would be to expropriate the structure, as was recommended to council i n 87 the St. Peter's case , or negotiate some compromise with the owner to save the structure. In Re College Street Centre and 88 the City of Toronto , an owner of a building designated under the Ontario statute was denied the r i g h t to destroy an important section of the building only because he had previously agreed under a development agreement with the c i t y to protect the heritage components of the building. In Saskatchewan, the protection afforded a structure through municipal designation may be eliminated by the pro-v i n c i a l government. A recent amendment to the Heritage 24 P r o p e r t y A c t s t a t e s : 7 1 . 1 ( 1 ) . I f the m i n i s t e r i s o f the o p i n i o n t h a t a d e s i g -n a t i o n o r i n t e n d e d d e s i g n a t i o n o f any r e a l p r o p e r t y as P r o v i n c i a l H e r i t a g e o r M u n i c i p a l H e r i t a g e P r o p e r t y would p r e c l u d e p r o c e e d i n g w i t h a development p r o j e c t t h a t i s o f major s i g n i f i c a n c e t o and b e n e f i t f o r the people o f Saskatchewan, he may, by o r d e r , exempt t h a t r e a l p r o p e r t y from such d e s i g n a t i o n . 8 9 I t i s very i m p o r t a n t t h a t a t r u l y worthy s t r u c t u r e i s p r o t e c t e d from major redevelopment such as the type c o n t e m p l a t e d by t h i s s e c t i o n . The veto power by a p r o v i n c i a l m i n i s t e r removes the p r o t e c t i o n from the m u n i c i p a l by-law. The amendment e f f e c t i v e l y d i l u t e s the o t h e r w i s e a t t r a c t i v e p r o t e c t i v e measures o f the Saskatchewan a c t and makes any d e s i g n a t i o n under the A c t un^.. c e r t a i n . One a r e a i n which the powers o f B r i t i s h C olumbia muni-c i p a l i t i e s are i n e f f e c t i v e i s i n p r o t e c t i o n o f the i n t e r i o r s o f d e s i g n a t e d b u i l d i n g s . S e c t i o n 12 o f the HCA o n l y p r o h i b i t s p ersons from a l t e r i n g t h e e x t e r i o r o f the d e s i g n a t e d b u i l d i n g . I n t e r i o r s may be a l t e r e d w i t h o u t a p p r o v a l by c o u n c i l . The r a t i o n a l e f o r t h i s ^ m u s t be t h a t p r e s e r v a t i o n i s o n l y f o r the p u b l i c and s i n c e the p u b l i c would o n l y n o r m a l l y see the e x t e r i o r s o f s t r u c t u r e s , o n l y the e x t e r i o r s need be p r e s e r v e d . T h i s i s u s u a l l y t r u e but f r e q u e n t l y the i n t e r i o r s o f h e r i t a g e s t r u c t u r e s are as v a l u a b l e as the e x t e r i o r s . B u i l d i n g s l i k e the Orpheum Thea t r e i n Vancouver are d e s i g n a t e d e n t i r e l y because o f t h e i r i n t e r i o r f e a t u r e s . Other d e s i g n a t e d b u i l d i n g s such as the f o r m e r Canadian P a c i f i c R a i l w a y S t a t i o n have i n -t e r i o r f e a t u r e s t h a t s h o u l d be p r o t e c t e d . C o n t r o l o v e r a l t e r a t i o n s o f the i n t e r i o r may be n e c e s s a r y t o i n s u r e im-25 portant heritage features are preserved. For example, preservationists have greatly c r i t i c i z e d the modernization and r e h a b i l i t a t i o n of the i n t e r i o r of Vancouver's old Court House, now the Vancouver Art Gallery, because much of the 90 o r i g i n a l features were abandoned . Even i f the municipal designation of the provincially-owned building could have been e f f e c t i v e , council would have had no control over t h i s i n t e r i o r work. Munic i p a l i t i e s i n other provinces have control over i n t e r i o r heritage space. Designation protects the entire building^ . This approach also presents problems because where the i n t e r i o r i s not s i g n i f i c a n t or does not contain special features, the owner i s l i k e l y to be deterred from renovating and r e h a b i l i t a t i n g his i n t e r i o r space because of the requirement that every change be approved by the desig-nating body. For example, the Saskatchewan statute requires that detailed plans be presented before council may approve 92 of any renovations . This would add time and expense to the renovation process not suffered by other property owners. The City of Winnipeg has developed a scheme whereby buildings are c l a s s i f i e d as to the extent of r e s t r i c t i o n s necessary to 93 protect them. The Winnipeg by-law divides heritage properties into four grades. F i r s t Grade buildings are those i n which the entire structure, including the i n t e r i o r , i s worthy of protection. Renovations of any part of the structure could only be made with p r i o r approval of council. With Second Grade structures, only the exterior and sp e c i f i e d elements 26 of the i n t e r i o r are r e s t r i c t e d by d e s i g n a t i o n . D e s i g n a t i o n of T h i r d Grade b u i l d i n g s only r e g u l a t e s the e x t e r i o r of the s t r u c t u r e . F o u r t h Grade b u i l d i n g s r e c e i v e the l e a s t p r o t e c t i o n because d e s i g n a t i o n only r e s t r i c t s the d e m o l i t i o n or removal of the s t r u c t u r e . Renovations to any p a r t of the b u i l d i n g s do not r e q u i r e p r i o r approval by the d e s i g n a t i n g body. T h i s system i s designed to provide necessary p r o t e c t i o n f o r t r u l y worthy h e r i t a g e f e a t u r e s without unduly h i n d e r i n g r e n o v a t i o n s necessary f o r the r e h a b i l i t a t i o n of the s t r u c t u r e . B r i t i s h Columbia m u n i c i p a l i t i e s should be g i v e n the power to c o n t r o l i n t e r i o r s of d e s i g n a t e d s t r u c t u r e s but t h a t c o n t r o l should be l i m i t e d to i n t e r i o r f e a t u r e s s p e c i f i c a l l y d e t a i l e d i n the d e s i g n a t i n g by-law. To f u r t h e r r e s t r i c t t h i s power, i n t e r i o r f e a t u r e s should only be p r o t e c t e d i f they form p a r t of the s t r u c t u r e g e n e r a l l y open to the p u b l i c and thus a v a i l a b l e f o r the p u b l i c to view. T h i s would i n s u r e t h a t a l t e r a t i o n s and r e n o v a t i o n s of o t h e r areas of the b u i l d i n g t h a t may be necessary f o r the r e h a b i l i t a t i o n of the s t r u c t u r e w i l l not be hindered by r e g u l a t i o n nor by a time-consuming process f o r o b t a i n i n g c o u n c i l ' s a p p r o v a l . 3. Maintenance P r e s e r v a t i o n i s an on-going p r o c e s s . Once the b u i l d i n g i s d esignated and p r o t e c t e d from d e m o l i t i o n , the p r e s e r v a t i o n * i s t ' s concern continues because i n order to remain a v a l u a b l e a s s e t to the community, the property must be p r o p e r l y main-t a i n e d . The maintenance of a h e r i t a g e property may r e q u i r e 27 special attention to insure that old materials and s i g n i f i c a n t features do not deteriorate. A municipality could insure that proper maintenance continues i f i t had the power to impose affirmative maintenance standards on the owner. By doing so, the problem of "demolition by neglect" could be e l i m i n a t e d ^ . This problem occurs when an owner of a designated or a poten^i t i a l l y designated structure neglects the maintenance of his property. The building deteriorates and becomes so unattractive that the public w i l l be less sympathetic to i t s protection. There w i l l thus be much less p o l i t i c a l pressure on council to protect the structure through designation. Such circumstances occurred i n the City of Vancouver i n 1977. At that time, the ci;ty council refused to designate what was then the c i t y ' s oldest standing school. A major reason f o r the ref u s a l was the school's owners had l e f t the building vacant and had seriously neglected to maintain the structure so that i t had become an unattractive and dilapidated eyesore that the majority 95 of the public wished removed . When the designation was denied, the owners demolished the structure and replaced i t with a parking l o t . Thus, a p o t e n t i a l l y worthy structure was demolished by neglect. B r i t i s h Columbia municipalities have no powers to impose maintenance controls on private owners unless the structure becomes a danger to the public or i s "so dilapidated or unclean 96 as to be offensive to the community." At that time, council may order the structure be removed or dealt with i n some other way. I f the owner does nothing, the municipality may enter 28 the property and e f f e c t the order i t s e l f with the owner being l i a b l e f o r a l l costs or auction o f f the structure. It i s l i k e l y that such an order would override a heritage designation because of i t s involvement with public safety. The Ontario 97 act^' s p e c i f i c a l l y indicates that the designation may be ignored where the property i s i n an unsafe condition. At the very l e a s t , the existence of an unsafe structure would po-l i t i c a l l y force council to de-designate. Neither the Heritage  Conservation Act nor the two municipal enabling acts provide any powers f o r council to impose maintenance standards before the structure reaches a dilapidated state. Very few Canadian heritage statutes provide powers to impose minimum maintenance standards on private heritage QQ property owners. In Alberta, the H i s t o r i c a l Resources Act gives the p r o v i n c i a l government the power to make regulations concerning the standards of maintenance and signs on a l l pro-v i n c i a l l y designated heritage properties. No sim i l a r power i s given to mu n i c i p a l i t i e s . Saskatchewan allows municipalities and the p r o v i n c i a l government to order a landmark owner to make s p e c i f i c repairs i f he has not observed "accepted main^ tenance of operation procedures" and where the in t e g r i t y of qq the structure i s endangered . I f the owner ignores the order, the municipality may do the work i t s e l f . It then acquires an interest i n the land f o r which i t may r e g i s t e r a caveat against t i t l e ^ 0 0 . Trie i n t e r e s t w i l l remain u n t i l the owner pays the municipality f o r a l l costs of the maintenance work. Under the present law, B r i t i s h Columbia municipalities 29 would have to impose maintenance standards through r e s t r i c t i v e agreements with the owner. S e c t i o n 27 of the HCA empowers a m u n i c i p a l i t y to enter easements or covenants t h a t w i l l . r u n with the l a n d . T h i s may be a b e t t e r approach than a g e n e r a l power to impose maintenance standards because the covenant would provide g r e a t e r f l e x i b i l i t y i n t h a t standards c o u l d be s p e c i a l i z e d f o r each i n d i v i d u a l p r o p e r t y . However, covenants w i l l only work where the owner agrees to them. The best s o l u t i o n would be f o r the L e g i s l a t u r e to give the m u n i c i p a l i t i e s the power to impose maintenance standards on h e r i t a g e p r o p e r t i e s and, to allow g r e a t e r f l e x i b i l i t y , to a l s o g i v e c o u n c i l the power to delegate the c r e a t i o n and enforcement of the standards 101 to an a d m i n i s t r a t i v e o f f i c i a l or a committee of experts . 4. R e l a x a t i o n of B u i l d i n g Codes One d e t e r r e n t to r e s t o r a t i o n i s t h a t the development w i l l have to comply with b u i l d i n g codes. I t may be e x h o r b i t a n t l y expensive or i m p o s s i b l e to upgrade o l d e r b u i l d i n g s to the 102 l e v e l s r e q u i r e d by m u n i c i p a l b u i l d i n g codes. Duerkson gave the example of a p r e s e r v a t i o n being s e v e r e l y delayed because a stairway was two inches too narrow, thus v i o l a t i n g a modern b u i l d i n g code. To i n s u r e t h a t the b u i l d i n g code requirements do not unduly i n t e r f e r e with r e h a b i l i t a t i o n p r o j e c t s , some h e r i t a g e s t a t u t e s provide f o r r e l a x a t i o n of the r e g u l a t i o n s f o r designated p r o p e r t i e s . The A l b e r t a H i s t o r i c a l Resources  Act p r o v i d e s t h a t the p r o v i n c i a l m i n i s t e r may exempt a pro-v i n c i a l l y d esignated s t r u c t u r e from b u i l d i n g codes where the 30 enforcement of the r e g u l a t i o n would "prevent or s e r i o u s l y h i n d e r the p r e s e r v a t i o n , r e s t o r a t i o n , or use of the s i t e . " In Saskatchewan, the Heritage Property Act p r o v i d e s the Lieutenant-Governor i n C o u n c i l may exempt e i t h e r a p r o v i n c i a l l y or m u n i c i p a l l y designated h e r i t a g e s i t e from b u i l d i n g codes The Heritage C o n s e r v a t i o n Act does not provide a s i m i l a r power. Vancouver has the power to r e l a x zoning r e g u l a t i o n s and"by-laws p r e s c r i b i n g requirements f o r b u i l d i n g s " i f t h e i r 105 enforcement would r e s u l t i n "unnecessary h a r d s h i p " . The c i t y ' s Zoning and Development By-Law No. 3575 p r o v i d e s f o r r e l a x a t i o n of the zoning r e g u l a t i o n s but not n e c e s s a r i l y of the b u i l d i n g codes f o r r e s t o r a t i o n works on h e r i t a g e s i t e s . Muni-106 c i p a l i t i e s governed by the M u n i c i p a l Act have no such f l e x i b i l i t y . 5. Zoning Powers Zoning and l a n d use powers may a s s i s t m u n i c i p a l i t i e s i n h e r i t a g e c o n s e r v a t i o n . Zoning powers may be p a r t i c u l a r l y h e l p f u l i n p r o t e c t i n g the surrounding a r e a to i n s u r e t h a t new development does not s e r i o u s l y i n t e r f e r e with the i n t e g r i t y of a h e r i t a g e 107 s t r u c t u r e . Under s. 963 of the M u n i c i p a l Act , B r i t i s h Columbia m u n i c i p a l i t i e s are empowered to r e g u l a t e the use of l a n d by c r e a t i n g zones. Among the powers important to h e r i t a g e c o n s e r v a t i o n , m u n i c i p a l i t i e s may r e g u l a t e the s i z e and s i t i n g of b u i l d i n g s w i t h i n each zone. Obvi o u s l y , i f the zoning i s set so t h a t the a l l o w a b l e s i z e of a b u i l d i n g i s the same as the s i z e of the e x i s t i n g h e r i t a g e s t r u c t u r e , there would be l e s s i n c e n t i v e 31 f o r a developer to demolish and r e p l a c e the s t r u c t u r e . The M u n i c i p a l Act a l s o g i v e s powers over the s i z e and form of s i g n s 108 w i t h i n each zone . Powers i n other p r o v i n c e s are wider. In A l b e r t a , m u n i c i p a l i t i e s may s p e c i f i c a l l y r e g u l a t e such f e a t u r e s as"the design, c h a r a c t e r and appearance of b u i l d i n g s " , l a n d -10°/ scaping, fences and the a l t e r a t i o n of b u i l d i n g s . B r i t i s h Columbia m u n i c i p a l i t i e s have f u r t h e r powers under 110 the development permit p r o v i s i o n s of the M u n i c i p a l Act . Through the permit system, c o u n c i l may r e g u l a t e the e x t e r i o r design and f i n i s h of b u i l d i n g s , l a n d s c a p i n g and other f a c t o r s a f f e c t i n g the c h a r a c t e r of development i n an a r e a . However, these powers are s e v e r e l y l i m i t e d i n t h a t the permit system can only be i n t r o d u c e d to l a n d t h a t was s p e c i f i e d i n the o f f i c i a l community p l a n as a d e s i g n a t e d h e r i t a g e s i t e under the Heritage Conservation Act, an approved r e v i t a l i z a t i o n a r e a or an area r e q u i r i n g g u i d e l i n e s f o r the form and c h a r a c t e r of development w i t h i n i t ^ ^ A . The o b j e c t i v e s of t h i s s p e c i a l treatment and the g u i d e l i n e s f o r development must be i n c l u d e d i n the o f f i c i a l 110B p l a n . T h i s development permit system p r o v i d e s l i t t l e f l e x i b i l i t y i n the c o n t r o l of development nei g h b o u r i n g or i n v o l v i n g a h e r i t a g e s t r u c t u r e . A caveat a p p l i e s to the d i r e c t use of the zoning powers f o r h e r i t a g e c o n s e r v a t i o n . The zoning powers must be used f o r a p l a n n i n g purpose. F r e q u e n t l y , an e n a b l i n g power w i l l l i s t the purposes f o r which the zoning powers may be used. For example, the C i t y of Winnipeg Act s p e c i f i c a l l y r e c o g n i z e s t h a t h e r i t a g e p r e s e r v a t i o n i s a p l a n n i n g purpose because c o u n c i l must c o n s i d e r : 32 the preservation, protection and enhancement of areas of land, buildings, structures and s i t e s of h i s t o r i c a l , archaeological, geological, a r c h i t e c t u r a l , environmental, or scenic s i g n i f i c a n c e . 1 1 1 New amendments to the Municipal Act may make heritage preser-1 i 1 A vation a v a l i d planning purpose i n B r i t i s h Columbia . A municipal council may designate areas f o r the protection of heritage s i t e s designated under the HCA but the protection of undesignated heritage properties i s not made a planning purpose. The Vancouver Charter does not have a si m i l a r section. J u r i s d i c t i o n s where heritage conservation i s not spe-c i f i c a l l y made a planning purpose are l i k e l y governed by The 112 City of Edmonton v. Tegon Developments . The Tegon case indicated that heritage conservation was not an appropriate planning purpose unless s p e c i f i c a l l y expressed to be in the enabling l e g i s l a t i o n . The fa c t s of the case are the City of Edmonton passed a res o l u t i o n that attempted to r e s t r i c t demo-l i t i o n and any development that would detract from the preser-vation of the h i s t o r i c Old Strathcona D i s t r i c t . Following the resolution, development permit applications could be rejected on the basis of 2"lack of harmony" with buildings of the early 1900's. Buildings could only be erected i f the facade and design were sympathetic to surrounding buildings and to the period architecture of the d i s t r i c t . The permit issuing o f f i c e r had to consider above a l l the poten t i a l f o r preser-vation of the area's architecture by restoration or replace-ment. The c i t y r e l i e d on i t s zoning and development control powers as authority to make the resolution. Those 33 powers gave council the right to make rulessrespecting the use of land or "any special aspects of s p e c i f i c kinds of develop-ment." J Mr. Justice Moir of the Alberta Court of Appeal found t h i s resolution was not concerned with "this purpose. Instead, the resolution's purpose was expressly stated to be to preserve the h i s t o r i c a l structures pending designation under the Alberta 114 H i s t o r i c a l Resources Act and to e n t i t l e the c i t y to grants from two heritage foundations. The zoning power given the c i t y could only be exercised f o r the purpose f o r which i t was given. Preservation of h i s t o r i c s i t e s was not a purpose of the land use law. As a creature of statute, municipalities must exercise t h e i r powers only f o r the purpose f o r which they were given. The Old Strathcona Resolution was declared i n v a l i d . At the Supreme 115 Court of Canada, Moir's decision was affirmed. . If heritage conservation i s not a v a l i d planning purpose, then the City of Vancouver's H i s t o r i c a l Area zoning regulations are l i k e l y u l t r a v i r e s . The c i t y ' s Zoning and Development By-Law no. 3575 created two H i s t o r i c Area (HA) D i s t r i c t s i n China-town (HA - 1 ) and Gastown (HA-2). A t h i r d HA D i s t r i c t has been approved f o r the Yaletown area . The D i s t r i c t Schedule of the by-law states the intent of the HA-2 D i s t r i c t i s as follows: Gastown i s the s i t e of the old Granville Townsite and i t i s from t h i s area that the City of Vancouver developed and grew. This D i s t r i c t Schedule i s designed to recognize the area's special status and to ensure the maintenance of Gastown's "turn of the century" h i s t o r i c a l and a r c h i t e c t u r a l character. The Chinatown Schedule has a s i m i l a r intent. Both schedules give height, size and use regulations f o r buildings i n the 117 d i s t r i c t , a s authorized by s. 565 of the Vancouver Charter '. 34 But what the Charter does not authorize i s the need f o r approval of a l l proposed alt e r a t i o n s or exterior changes to the building. Clearly, t h i s need for approval i s the same as a heritage r e s t r i c t i o n . Since the a l t e r a t i o n r e s t r i c t i o n infringes on the property owner's r i g h t s , the power to r e s t r i c t must be very expressly given by the Legislature. There i s no clear power given in the Vancouver Charter to control alterations in t h i s manner. Section 5 6 5(d) allows the c i t y to regulate the "ex-ternal design of buildings to_ be erected within the designated 118 d i s t r i c t s or zones." The words, "to be erected" l i m i t the regulation to new construction and exclude design changes to buildings already erected. Section 565A allows council to regulate "development" through a permit system. Section 5 5 9 defines development as"a change i n the use of any land or building, including the carrying-out of any construction . . .." 119 "Construction" includes a l t e r a t i o n and demolition so that external a l t e r a t i o n may be regulated by development permits. However, the intent of the HA D i s t r i c t s i n Vancouver i s expressly given as preservation of the area's character as a h i s t o r i c s i t e . This i s the same purpose that the courts ruled i n v a l i d for the exercise of zoning and development permit powers in the Tegon 120 case . Therefore, without the express l e g i s l a t i v e recog-n i t i o n of preservation as a purpose of zoning powers, the HA D i s t r i c t regulation governing alterations may be i n v a l i d . Clearly, the Legislature intended a municipality's preservation powers should be l i m i t e d to those given i n the Heritage Conser-vation Act. 35 One advantage the City of Vancouver has over other municipalities i s that i t may relax i t s zoning regulations in certain cases. Section 565A(e) of the Charter provides the power to relax a zoning by-law where i t s l i t e r a l enforce-ment would r e s u l t i n "unnecessary hardship." The only re-s t r i c t i o n i s that the relaxation must not allow multiple occupancy structures i n one-family dwelling zones. The power to relax may be h e l p f u l to heritage preservation i n that greater f l e x i b i l i t y i n the use of the building may encourage i t s preservation. The City of Vancouver appears to have recognized t h i s because the Zoning and Development By-Law delegates to the Development Permit Board and the Director of Planning the r i g h t to make zoning relaxations for heritage preservation. The power to delegate i s given i s s. 565A(e). Sections 3.2.5 and 3.2.6 of the by-law give the power to relax the by-law's regulations where the " l i t e r a l enforcement would not allow the restoration and renovation of s i t e s with a r c h i t e c t u r a l , h i s t o r i c a l or c u l t u r a l merit." The Heritage Advisory Committee must support any proposed conservation work. It i s arguable whether the prevention of restoration i s an "unnecessary hardship" as required under the Charter. Proof of economic hardship may be necessary to obtain a relaxation. The permit board has d i s c r e t i o n to refuse or approve with conditions a development permit a p p l i -cation where the development may adversely a f f e c t s i g n i f i c a n t buildings with possible heritage value on the s i t e or i n the 121 surrounding area . Mu n i c i p a l i t i e s governed by the Municipal 36 Act do not have the same powers. Relaxation of zoning regulations would have to be implemented through development variance permits or the Board of Variance system. Only "minor 123 variances" would be available under these two systems 6. Enforcement Penalties f o r offences under the Heritage Conservation Act are c l e a r l y inadequate and are a major reason f o r the statutels ineffectiveness. Section 29 of the Act makes i t an offence to contravene the Act. Section 4 of the Offence 124-Act s p e c i f i e s that the penalty f o r an offence i s a fine up to two thousand d o l l a r s or imprisonment f o r a maximum of six months or both. Two thousand d o l l a r s i s c l e a r l y an inadequate penalty when dealing with properties worth m i l l i o n s of d o l l a r s . An offence under the City of Vancouver's Heritage By-Law i s even less onerous. The offender i s only l i a b l e f o r a fine of not more than f i v e hundred d o l l a r s and not less than four 125 hundred d o l l a r s . With such inadequate penalties, a land-owner may simply demolish a structure on his property to keep the property free f o r future development knowing he w i l l only be l i a b l e f o r a fin e of a few hundred d o l l a r s . Recently, a h i s t o r i c school house i n the municipality of Langley was demolished to make way f o r a new subdivision. The building had not yet been designated under the Heritage Conservation  Act but because the demolition was without a permit, the developer may be l i a b l e f o r a maximum f i n e of one thousand 126 d o l l a r s . Had the building been designated, the maximum 37 f i n e would have not been much more providing l i t t l e deterrent to developers of valuable property. Other Canadian heritage statutes provide much more onerous 127 penalties. The Alberta H i s t o r i c a l Resources Act provides for a penalty of up to f i f t y thousand d o l l a r s and prison for one year. The Ontario act provides an i d e n t i c a l penalty f o r corporate offenders but individuals are only l i a b l e f or a 128 maximum fine of ten thousand d o l l a r s . Saskatchewan has the s t i f f e s t penalty and perhaps the only one that t r u l y deters developers from i l l e g a l demolition. Corporations are 129 l i a b l e f o r a maximum penalty of 250,000 do l l a r s . Individuals can be fined up to f i v e thousand d o l l a r s and imprisoned f o r 130 131 six months . Only the statutes of Prince Edward Island , 132 Newfoundland , and Manitoba's badly outdated H i s t o r i c Sites and Objects Act which s p e c i f i e s a maximum fine of one hundred 1 3,5 do l l a r s , provide penalties less than the Heritage Conser-vation Act. A more useful :;.and onerous penalty i s the c i v i l remedy contained i n section 28 of the HCA. When a person a l t e r s designated property i l l e g a l l y , council or the p r o v i n c i a l minister may order that person to restore property to i t s condition p r i o r to the a l t e r a t i o n . I f the person does not comply with the order, council i t s e l f may restore the property and the offender w i l l be l i a b l e f or a l l reasonable costs of 134. 135 the restoration. Ontario ^ and Saskatchewan ^ empower municipalities to sue f o r damages of a l l restoration costs incurred because of an i l l e g a l a l t e r a t i o n . A sim i l a r section 38 i n Alberta applies to only p r o v i n c i a l l y designated struc-136 tures ' . This remedy i s only of assistance where the offence was the a l t e r a t i o n of a designated structure, not i t s demo* l i t i o n . Presumably, once a building i s demolished, i t i s gone forever. The r i g h t to inspect a designated heritage or potential heritage property i s necessary for the enforcement of heritage r e s t r i c t i o n s . The HCA gives the p r o v i n c i a l government the power to investigate and survey potential heritage s i t e s or designated s i t e s that are i n the opinion of the minister 137 l i k e l y to be altered, damaged or become dilapidated . 138 Municipal councils have the power under the Municipal Act to authorize inspections of properties to determine i f i t s by-laws are being followed. The City of Vancouver derives i t s building inspection powers from s. 306(h) of the Vancouver 139 Charter J J . Members of the public have no standing to force the pro v i n c i a l government to designate a s i t e . In 1981, the pro v i n c i a l Environment Minister was advised by his advisory committee that the main building of the C.P.R. Roundhouse i n Vancouver should be designated. Before the minister made a decision on designation, the building's owners began demo-l i s h i n g the Roundhouse's a n c i l l a r y buildings. A group of private individuals sued f o r an injunction to r e s t r a i n any further demolition u n t i l the minister decided whether of not to designate. In Friends of the Roundhouse Society v. B.C. Place L t d . 1 ^ 0 , Mr. Justice Hinds held that the group 39 had no s t a n d i n g . M e r e l y because a group o f c i t i z e n s r e q u e s t e d the m i n i s t e r t o form an o p i n i o n on the s i t e d i d not g i v e i t the r i g h t t o p r e s e r v e those b u i l d i n g s . There would be a s i m i l a r r e s u l t w i t h m u n i c i p a l d e s i g -n a t i o n powers. I t i s o n l y once a by-law i s a c t u a l l y passed t h a t a t a x p a y e r o r i n t e r e s t e d groups may have s t a n d i n g t o c h a l l e n g e the by-law 4 . T h i s would be h e l p f u l i f c o u n c i l e v e r a t t e m p t s t o d e - d e s i g n a t e a s t r u c t u r e . F. R a i l w a y P r o p e r t i e s A problem p e c u l i a r t o Canadian h e r i t a g e l e g i s l a t i o n i s the e x c l u s i o n o f a l l r a i l w a y p r o p e r t i e s from the p r o v i n c i a l p r o t e c t i v e measures. R a i l w a y s are an i m p o r t a n t p a r t o f our n a t i o n ' s h e r i t a g e , e s p e c i a l l y i n Western Canada where the r r a i l w a y was the l e a d i n g i n s t r u m e n t o f s e t t l e m e n t . The r a i l w a y s t a t i o n was f r e q u e n t l y the most prominent and b u s i e s t s t r u c t u r e i n Canadian towns and c i t i e s d u r i n g the f i r s t h a l f o f t h i s c e n t u r y . I n many communities, the r a i l w a y s t a t i o n i s the most i m p o r t a n t h e r i t a g e s t r u c t u r e r e m a i n i n g 4 . Y e t i t s p r o t e c t i o n by the m u n i c i p a l i t y i s i m p o s s i b l e . C o n s t i t u t i o n a l problems e x c l u d e r a i l w a y p r o p e r t i e s from any h e r i t a g e p r o t e c t i o n l e g i s l a t i o n . Under the C o n s t i t u t i o n A c t , 1867, r a i l w a y s are e x c l u d e d from p r o v i n c i a l j u r i s d i c t i o n and t h u s s. 91(29) makes them a f e d e r a l j u r i s d i c t i o n . The j u r i s d i c t i o n e xtends o v e r a l l p r o p e r t y n e c e s s a r y f o r the o p e r a t i o n o f the r a i l w a y . Thus p r o v i n c i a l h e r i t a g e laws have no e f f e c t on r a i l w a y s t a t i o n s . 40 This i s so even where the station i s no longer i n use. The lack of protection has led to the destructioncof many Canadian railway stations of heritage value. Since 1969, seventy-five stations have been demolished despite p r o v i n c i a l designations and strong objections from municipalities ^  . The c o n f l i c t has reached the courts i n a few cases. Canadian P a c i f i c v. Saskatchewan Heritage Property Review 14-4-Board et a l . ^  made i t clear that municipalities are power-less to protect heritage railway stations. The p l a i n t i f f , Canadian P a c i f i c Railways, planned to remove i t s station at Kerrobert, Saskatchewan and demolish i t . The land would then be used by the company f o r railway storage. The Kerrobert council attempted to block the move by passing a by-law desig-nating the station as a municipal heritage property. The heritage value of the structure was not i n doubt because the station had existed f o r seventy-one years. The designation would normally have prevented the station's removal without council's approval. Council made i t clear that when asked i t would not give i t s approval. Canadian P a c i f i c applied to the court seeking a declaration that the municipality did not have the power to designate the station as heritage property. Mr. Justice Matheson f i r s t examined the railway power "141 of the federal Parliament. Using the Railway Act d e f i n i t i o n the power was widely defined as being over a l l stations, properties and works connected with the railway. But to con^i tinue under that federal j u r i s d i c t i o n , the property had to remain an es s e n t i a l part of the transportation system. Hotels 4 1 and quarries owned by railways have been held not to be essen t i a l to the system and thus had no immunity from pro-14-6 v i n c i a l and municipal laws . In the present case, the station had been closed and out of operation for at least a year so that i t could not be c l a s s i f i e d as es s e n t i a l to the system. However, Canadian P a c i f i c claimed the building had to be removed to make room for operating equipment, to provide parking space for Canadian P a c i f i c and private vehicles. Even though the municipality argued that other property could easily have been used f o r these purposes, the Court found that the property was not just a convenience to the railway company but an e s s e n t i a l part of the transportation operation. The Court further found i t could not interfere with the r a i l -way's bonafide decision that property was required to maintain 147 i t s operations . Therefore, because the property was a federal j u r i s d i c t i o n , the municipality had no power to desig-nate and protect i t under p r o v i n c i a l l e g i s l a t i o n . Canadian P a c i f i c ' s most infamous c o n f l i c t with p r o v i n c i a l heritage l e g i s l a t i o n occurred i n the City of Toronto when i t demolished the suburban West Toronto Station. The station c l e a r l y was worthy of protection as a heritage s i t e . The company proceeded with demolition without a municipal demo-l i t i o n order and i n defiance of a stop work order issued under the Ontario Building Code. The company was prosecuted by the c i t y f o r the i l l e g a l demolition. The company was found not g u i l t y i n P r o v i n c i a l Court because the station sat on land 14-i owned by the railway and was thus under federal j u r i s d i c t i o n 42 The station had been boarded up and vacant f o r over three years so that an argument was c l e a r l y available indicating that the station was no longer immune from p r o v i n c i a l l e g i s -l a t i o n . Unfortunately, I have not been able to discover whether or not the argument was actually made. It was therefore l e f t up to federal law to punish Canadian 149 P a c i f i c . Under the federal Railway Act , any proposed deviation, change or a l t e r a t i o n i n the railway must be submitted to the Canadian Transport Commission (CTC) f o r approval. Since the d e f i n i t i o n of railway includes stations, such approval would have been necessary f o r demolishing and removing one of the system's stations. Canadian P a c i f i c did not obtain CTC approval before demolishing the West Toronto Station. The CTC held a public inquiry at which Canadian P a c i f i c argued that the Railway Act no longer applied to the building because i t had not been a "st a t i o n " f or three years. I r o n i -c a l l y , t h i s i s the counter-argument to what was l i k e l y t h e i r p o sition i n arguing immunity from p r o v i n c i a l l e g i s l a t i o n because of i t s status as a railway. The CTC rejected the argument and recommended that the Attorney-General of Canada i n s t i t u t e proceedings against Canadian P a c i f i c f o r the i l l e g a l demolition of the s t a t i o n . Canadian P a c i f i c challenged the right of the CTC to make such a recommendation but the Federal 150 Court of Appeal upheld the commission's r i g h t . leave to 151 appeal was denied by the Supreme Court . Criminal proceedings 152 by,the federal Crown are now pending . This section of the Railway Act i s the only protection 43 that heritage railway stations have. It i s c l e a r l y inadequate protection i n that i t s purpose i s to regulate the workings of the railway system and not to protect worthy buildings. The Commission i s not equipped to judge the a r c h i t e c t u r a l merits and heritage value of a railway station to a community. Thus, i t i s l i k e l y that approval to demolish would be given without consideration of the building's heritage value. The federal government has v i r t u a l l y no powers to pro-tect s i g n i f i c a n t buildings under i t s j u r i s d i c t i o n . The federal 153 heritage l e g i s l a t i o n i s the H i s t o r i c Sites and Monuments Act The only means of protection the Act provides i s the power to purchase h i s t o r i c places and preserve them as museums. The federal government does not have the funds to purchase every railway station worthy of preservation. Furthermore, use as a museum i s an unproductive and unnecessary condition. Heritage buildings are more valuable to the public when they are re-h a b i l i t a t e d into active commercial centres. Maintaining the property i n private hands yet protecting i t by designation would be preferable to the present federal system. There are cogent policy reasons f o r enacting protective l e g i s l a t i o n that would place a burden on railway companies to preserve i t s stations f o r the public benefit. The leading American case, Penn Central Transportation Co. v. The City of 154. New York J ^ dealt with the burden of landmark designation on a railway terminal building. In the New York Court of Appeal, Mr. Justice B r e i t e l indicated that r a i l r o a d s , because of government subsidies, should have a duty to the public to 44 allow preservation of t h e i r buildings. Without government granted monopolies, subsidies, and expropriation powers, the railway company would never have been i n a p o s i t i o n to own the land and build the s t a t i o n . It has received i t s l i v e l i -hood from society and therefore the public has a r i g h t to have that s t a t i o n preserved f o r i t s benefit. Railway companies l i k e Canadian P a c i f i c thus have a duty to preserve t h e i r stations and therefore, an appropriate, l e g i s l a t e d imposition of that duty should be enacted. Several l e g i s l a t i v e proposals have been made but never 154-A adopted. A persistent Private Members B i l l was inadequate in i t s d e t a i l s but was schematically a t t r a c t i v e . The power to designate would have been given to the H i s t o r i c Sites and Monuments Board as constituted under the federal a c t 1 ^ 4 ^ . Presumably, t h i s board would have more expertise than the CTC i n determining the heritage value of railway stations. -] t54.fi To avoid the Constitutional problems of interdelegation , Parliament should give the power to t h i s f ederal board instead of empowering e x i s t i n g p r o v i n c i a l bodies with powers to desig-nate railway stations. 45 I I I . PROTECTION FOR THE PROPERTY OWNER Protection of the buildings and structures of our past by designation has been the focus of heritage l e g i s l a t i o n thus f a r . The analysis i n Part II demonstrates that the r e s u l t s of t h i s goal have attained some success. For example, the Heritage Conservation Act***^ i f used, could provide adequate protection f o r designated structures. Butito be e f f e c t i v e , heritage l e g i s l a t i o n must balance t h i s protection with protection f o r the property owner from the burden of designation. This burden can be harsh. The owner no longer has the right to use his property as he wishes. He must main-t a i n his property exactly as i t stands even i f that no longer provides a p r o f i t a b l e use. Clearly the owner must be protected from the consequences of the designation or the arbitrary use of the heritage powers against his land but l i t t l e thought and e f f o r t have been put into providing t h i s protection in heritage l e g i s l a t i o n . The protection that has been used i s either procedural fairness or compensation. The effectiveness of these forms of protection, the proper means of t h e i r imple-mentation and t h e i r success i n achieving a balance with the protective measures fo r the building w i l l be examined i n t h i s part. A. Procedural Fairness Most p r o v i n c i a l statutes provide protection to the owner with a statutory r i g h t to a public hearing and a right to appeal the designation. For example, i n Alberta, the 46 owner of a potential P r o v i n c i a l Heritage Resource i s given the r i g h t to object to the pending designation and i s e n t i t l e d 155 to a hearing before the H i s t o r i c Sites Board ^ . The Board must provide a report f o r the minister before he can determine i f the property should be designated. There i s no sim i l a r statutory r i g h t of objection f o r the owner of property desig-nated by a municipality i n Alberta. In Saskatchewan, the 156 Heritage Property Act p provides the pre-designation right to object and a public hearing before a p r o v i n c i a l l y appointed watchdog committee for both p r o v i n c i a l and municipal desig-nations. The Act also provides the ri g h t to appeal a desig-157 nating by-law ' . The owner, on appeal, i s allowed to apply ye a r l y j t o the municipal council or the p r o v i n c i a l cabinet f o r a new hearing. :. In B r i t i s h Columbia, there i s no r i g h t to appeal nor any statutory r i g h t to a public hearing before designation. Section 11(2) of the Heritage Conservation Act states an owner must be n o t i f i e d before designation and be given instructions on how he may object but t h i s does not cl e a r l y give a r i g h t 158 to a hearing. Cases such as Christmas v. City of Edmonton can be used as authority f o r the proposition that a municipality can pass a by-law without giving those affected a r i g h t to address the issue. However, the common law duty to act f a i r l y and the rules of natural j u s t i c e may impose, i n the absence of l e g i s l a t i o n , a r i g h t to a public hearing. According to -ICQ Makuch , a municipality i s under a common law duty to follow certain procedures when i t acts j u d i c i a l l y and when right s 47 are affected. The duty requires the municipality give notice of i t s actions and hold a hearing. This duty i s not imposed when the power to be exercised i s l e g i s l a t i v e . The Supreme Court of Canada, i n Wiswell v. Greater 160 Winnipeg , held t h i s duty to act f a i r l y demanded council hold a public hearing before rezoning an i n d i v i d u a l parcel of land. The Court found rezoning was a q u a s i - j u d i c i a l function because i t involved a c o n f l i c t between private i n d i v i d u a l s . However, many rezoning situations or heritage designations do not involve a c o n f l i c t between private individuals but instead between the private i n d i v i d u a l and council. Thus, i t can be argued that these are l e g i s l a t i v e powers and are not subject to the rules of natural j u s t i c e . However, the Supreme Court subsequently expanded the d e f i n i t i o n of q u a s i - j u d i c i a l power to being one which involved an adversarial s i t u a t i o n between a private owner and council because i n e f f e c t the council i s acting as the judge of i t s own actions. In Homex Realty and 161 Development Ltd. v. V i l l a g e of Wyoming , an owner was not given notice or an opportunity to be heard before council passed a by-law de-registering a subdivision plan of his land, thus r e s t r i c t i n g his r i g h t s to convey the property. Mr. Justice Estey held that wherever a statute authorizes an interference with property r i g h t s , the Court w i l l require the municipality give the subject an opportunity to be heard. Mr. Justice Dickson (as he then was) dissented i n the f i n a l r e s u l t but agreed that the duty of fairness applied. He indicated the r i g h t to fairness did not depend on the c l a s s i f i c a t i o n of the 48 power or the need f o r competing i n t e r e s t s . Furthermore, i t was irrelevant that the by-law might be i n the public interest because so long as i t operated to the detriment of a p a r t i c u l a r i n d i v i d u a l , there was a r i g h t to a hearing. Clearly, heritage designation powers are analogous to the q u a s i - j u d i c i a l power i n Homex. Designation i s an interference with the property r i g h t s of the owner and can lead to an adversarial c o n f l i c t between a reluctant owner and an un-sympathetic council. Therefore, municipalities are obliged to afford a hearing to an owner before designation. Although not s t a t u t o r i l y required, the City of Vancouver always holds a public meeting to consider the merits of desig-162 nating a structure before passing a by-law . This s a t i s f i e s the duty to act f a i r l y and gives the owner the opportunity to present his circumstances and publicize the p o t e n t i a l l y harmful ef f e c t s of designation on his property. To insure that hearings are held i n a l l municipalities and the owner knows of his right to a hearing, i t would be more e f f e c t i v e to make the right statutory. There i s no statutory r i g h t to appeal the designation i n B r i t i s h Columbia. The designating by-law would however be challengeable under the setting aside provisions of the Municipal A c t 1 6 ^ and the J u d i c i a l Review Procedure A c t 1 6 4 . BV Current Protection i n B r i t i s h Columbia C II i The second form of protection i s to compensate the owner whose property has decreased i n value due to the r e s t r i c t i o n s 49 p l a c e d on the p r o p e r t y by the h e r i t a g e d e s i g n a t i o n . T h i s i s the o n l y s t a t u t o r y p r o t e c t i o n g i v e n to the owner by the B r i t i s h Columbia l e g i s l a t i o n . Most p r o v i n c i a l h e r i t a g e s t a t u t e s d e a l w i t h the problem by making a compensation award d i s c r e t i o n a r y 165 by the d e s i g n a t i n g body . The p r a c t i c a l e f f e c t o f such a p r o v i s i o n i s w i t h l i m i t e d funds a v a i l a b l e to m u n i c i p a l i t i e s and o t h e r g o v e r n i n g b o d i e s , any compensation award w i l l be s m a l l . However, B r i t i s h Columbia and A l b e r t a make compen-s a t i o n mandatory where a h e r i t a g e d e s i g n a t i o n d i m i n i s h e s the v a l u e o f the p r o p e r t y . 167 The H e r i t a g e C o n s e r v a t i o n A c t c l e a r l y makes compen-s a t i o n mandatory where a p r o v i n c i a l h e r i t a g e s i t e i s d e s i g -n a t e d by the c a b i n e t under s. 4 ( 1 ) . S e c t i o n 4 ( 2 ) s t a t e s : Where d e s i g n a t i o n under s u b s e c t i o n ( 1 ) ( a ) d e c r e a s e s the economic v a l u e o f l a n d , the m i n i s t e r s h a l l pay t o the owner o f the l a n d an amount t o be d e t e r m i n e d by o r d e r o f the L i e u t e n a n t - G o v e r n o r i n C o u n c i l (emphasis added). The l e g i s l a t i v e i n t e n t i s l e s s c l e a r i n p r o v i d i n g g u i d e l i n e s o r i m p a r t i a l i t y i n s e t t i n g the amount o f t h a t compensation. S u b s e c t i o n (3) deems the amount d e t e r m i n e d by the c a b i n e t ' s o r d e r t o be s u f f i c i e n t compensation f o r any l o s s . There ••i. appears t o be no a p p e a l f o r an owner u n s a t i s f i e d w i t h the amount g i v e n . T h e r e f o r e , the p a r t y w i t h the l i a b i l i t y has t o t a l f r e e -dom t o s e t the amount o f i t s l i a b i l i t y . T h i s u n i l a t e r a l d e t e r m i n a t i o n c o u l d c r e a t e an i n e q u i t y . A more e q u i t a b l e method t o s e t t i n g the amount o f compensation p a y a b l e would be 168 t o f o l l o w the p r o v i s i o n s o f the E x p r o p r i a t i o n A c t . Under t h a t A c t , a p r o p e r t y owner d i s p u t i n g the amount o f f e r e d as 50 compensation may have hi s dispute s e t t l e d by either a r b i -16 Q t r a t i o n or by a jury's verdict The l i a b i l i t y f o r compensation i s less clear when a municipality designates a heritage s i t e . * Section 11(4) of the Heritage Conservation Act provides that a municipal council "may" provide compensation to an owner where designation re-duces the property value of the land. The compensation may be by grant, loan, tax r e l i e f or some other form. Section 11(5) deems the compensation given, i f any, by the municipality to be f u l l r e s t i t u t i o n f o r any l o s s . The use of the word "may" instead of " s h a l l " , as used i n s. 4 ( 2 ) , implies the compen-sation i s discretionary. Although the heritage l e g i s l a t i o n appears not to make compensation mandatory, l i a b i l i t y probably i s created when the designation i n j u r i o u s l y affects the property. Section 544(1) 170 of the Municipal Act states: The council s h a l l make to owners, occupiers or other persons interested i n r e a l property . . . i n j u r i o u s l y affected by the exercise of any of i t s powers, due cog compensation f o r any damages . . . necessarily r e s u l t i n g from the exercise of those powers beyond any advantage which the claimant may derive from the contemplated work. Where the claim f o r compensation i s not agreed upon, i t w i l l 171 be determined by a r b i t r a t i o n . Presumably, designation of a municipal heritage s i t e would be an exercise of one of the municipality's powers thus creating the l i a b i l i t y f o r any decrease i n the property value. T r a d i t i o n a l l y , injurious a f f e c t i o n has been linked with damage to land caused by a damaging public work on or expro-51 p r i a t i o n of the adjoining property. Over one hundred years ago, the House of Lords gave examples including loosening of the foundation, obstructing l i g h t s or drains or making the 172 land inaccessible . However, i t now appears that mere government regulation without physical interference i s an injurious a f f e c t i o n . For example, i n the 1950's, the Aero-17*5 nautics Act s p e c i f i c a l l y included damage caused by zoning regulations made under the Act as compensable injurious a f f e c t i o n to affected property. In B r i t i s h Columbia, the Court of Appeal in Tener v. The Queen i n Right of B r i t i s h C o l u m b i a 1 f o u n d the denial of a permit f o r e x p l o i t i n g an established mineral claim which diminished the value of the property i n t e r e s t constituted an injurious a f f e c t i o n f o r which compensation was payable. The decision was subsequently appealed to the Supreme Court of Canada where the Court came to a s i m i l a r r e s u l t but 175 with d i f f e r e n t reasoning . 176 Municipal Act provides that damages are available "beyond any advantage which the claimant may derive from the contemplated work." The word "work" may imply a physical under-taking i s necessary. Yet, the word "work" i s f a r removed i n the subsection from the phrase imposing l i a b i l i t y so that l i a b i l i t y may e x i s t without a "work". Furthermore, one commen-177 tator suggested that s. 544(1) applies to a l l acts of the municipality. Only an express provision w i l l remove the compen-sation requirement as i n s. 972. That section expressly denies compensation f o r a zoning change unless the property i s zoned exclusively f o r public use. Zoning f o r public use i s 52 merely regulatory and requires no physical "work" yet can constitute an injurious a f f e c t i o n . Furthermore, section H(2) of the Heritage Conservation Act deems property not to be taken or i n j u r i o u s l y affected when a temporary delay of work has been ordered while council considers the heritage significance of the 178 property . This implies that a permanent r e s t r i c t i o n to the use of the property through designation by the municipality w i l l make i t l i a b l e for compensation when the property value i s decreased by the action. In Vancouver, municipal o f f i c i a l s treat the designation provisions as imposing a mandatory l i a -179 b i l i t y for compensation on the c i t y . C. Compensation There i s considerable debate as to the necessity of compen-sation and i t s effectiveness i n protecting the landowner. Authorities have suggested several reasons f o r and against the use of compensation i n protecting heritage property owners. This section w i l l survey those reasons. 1. Reasons for Compensation a) The Private Owner Pays f o r the Public Benefit The most common and obvious argument raised i n favour of compensation i s based on the p r i n c i p l e of the user pays. That i s , the party which benefits from a governmental act should pay for those benefits. The purpose of heritage designation i s to preserve structures f o r the enjoyment and education of the public. I t i s the public which benefits from preservation 53 yet the burden of providing that benefit i s placed firmly upon 180 the proprietor instead of on the public. According to Denhez , the public as user of the heritage values of the structure has a r e s p o n s i b i l i t y to pay f o r i t . Clearly, the burden on the proprietor upon designation 181 can be great. Costonis l i s t e d several burdens. F i r s t l y , the owner loses the opportunity to redevelop the s i t e to a more pro f i t a b l e use. He loses any added value the land may have i f i t could be assembled with surrounding properties. Secondly, the owner could lose income i f he i s unable to pro-vide the same quality of i n t e r i o r space as provided by competing landowners who may increase the e f f i c i e n c y of t h e i r structures through r e l a t i v e l y unrestricted renovations. Thirdly, i f a building i s l i s t e d as a heritage property, the owner could have d i f f i c u l t y i n obtaining financing because of the r e s t r i c t i o n s placed on the property. A lender may decide that there are too many circumstances beyond his control. And fourthly, the owner may discover that the r e s t r i c t i o n s make i t impossible to operate the building at a p r o f i t as i t continues to age. In actual monetary terms, the burden can be great. Tudor Manor, a small apartment block i n Vancouver's West End, was recently considered for designation. Its owner estimated that i t would cost at least three m i l l i o n d o l l a r s to renovate the structure i n order to preserve i t s heritage value and to provide a po t e n t i a l l y 18? p r o f i t a b l e use . With the public providing compensation, much of t h i s burden could be a l l e v i a t e d . 54 b) D e s i g n a t i o n i s D i s c r i m i n a t o r y A second argument i s that d e s i g n a t i o n l e a d s to a d i s c r i m i n a -183 t o r y l o s s . A c c o r d i n g to Denhez , the d e s i g n a t i o n s i n g l e s out c e r t a i n p r o p e r t i e s and d e p r i v e s the owner of p a r t of the develop-ment p o t e n t i a l while h i s neighbours are not so d e p r i v e d . Such a l o s s i n t e r f e r e s with the p r i v a t e property r i g h t s and thus demands compensation. T h i s i s e s p e c i a l l y t r u e where the zoning f o r the area p r o v i d e s much g r e a t e r development than what the r e s t r i c t e d h e r i t a g e s t r u c t u r e h o l d s . Mr. J u s t i c e Renquist of the U n i t e d S t a t e s Supreme Court l a b e l l e d landmark d e s i g n a t i o n as d i s c r i m i n a t o r y because i t p e n a l i z e d an owner f o r doing too 184-good a job of d e s i g n i n g h i s b u i l d i n g . Th i s argument i s not p e r s u a s i v e because d e s i g n a t i o n can be l i k e n e d to d i s c r i m i n a t o r y zoning where compensation i s not a v a i l a b l e . A p r i n c i p l e o f zoning law i s t h a t i t i s to apply over a l a r g e area. But f r e q u e n t l y , a p a r t i c u l a r i n d i v i d u a l p a r c e l of l a n d i s rezoned d i f f e r e n t l y from i t s neighbours. T h i s i s c a l l e d s p o t - z o n i n g . The Supreme Court of Canada h e l d 185 i n Town of Scarborough v. Bondi t h a t spot zoning, although d i s c r i m i n a t o r y i s a p e r f e c t l y v a l i d e x e r c i s e of power by a m u n i c i p a l i t y . But Bondi may be d i s t i n g u i s h a b l e from a h e r i t a g e d e s i g n a t i o n s i t u a t i o n i n t h a t the spot zoning was allowed because i t merely c o r r e c t e d an anomoly to conform to the g e n e r a l s t a n -dards of a neighbourhood. D e s i g n a t i o n p r o v i d e s a standard f o r the property much d i f f e r e n t from the g e n e r a l standards of the neighbourhood. T h i s makes i t s d i s c r i m i n a t o r y e f f e c t g r e a t e r than t h a t of zoning so t h a t compensation may be i n ord e r . 55 In the Penn Central Railway case , Mr. Justice Brennan, writing for the majority, indicated that h i s t o r i c landmark designation could not be discriminatory so long as i t i s part of a comprehensive plan. The problem with t h i s statement i s that although some c i t i e s have studied or inventoried heritage 187 properties to form a comprehensive plan , most designations are the r e s u l t of a worthy structure being threatened with demolition. L i t t l e studying or planning has occurred before t h i s threat i s made known to the designating body. In such cases, designation has a discriminatory e f f e c t . c) Maintenance The preservation of a building w i l l involve on-going costs and positive action from the owner well a f t e r designation because the maintenance of an older building w i l l be more time-consuming and more expensive. Municipal approval of any alterations may also be time-consuming and thus persuade an owner to forego needed repairs i n order to avoid the bureau-c r a t i c measures. The maintenance of landmarks i s frequently neglected so that the building becomes so run-down that i t i s demolished by neglect. Should affirmative maintenance standards 188 be imposed , further expenses would be added to the land-owner's burden. Compensation would a l l e v i a t e that burden and perhaps encourage the r e h a b i l i t a t i o n and s e l f - s u f f i c i e n c y of the structure. 189 A similar argument for compensation given by Denhez J i s that the p o s s i b i l i t y of compensation may influence the owners 5 6 of undesignated, potential heritage properties to allow t h e i r structures to remain standing. At present, the fear of the effects of designation has led many owners to demolish t h e i r buildings to keep the properties free f o r future development. Such conditions led the City of V i c t o r i a to use emergency powers to protect buildings pending investigation and the 190 passing of new l e g i s l a t i o n ^ . Denhez states that the greater the prospective loss l i k e l y to be sustained with designation, the faster the rate of demolition. With compensation, the losses would diminish and the incentive to demolish would be limited. d) Quasi-Expropriation An argument can be made that property ownership involves a bundle of rights and when one of those rights i s taken away by a governmental authority, i t i s an expropriation that demands compensation. Using the d e f i n i t i o n o f i a leading 191 American authority , a l e g a l t i t l e to r e a l estate i s not unitary or a "monolithic r i g h t " but i s rather a bundle of i n d i v i d u a l rights each one of which may be separated and trans-ferred to someone el s e . In lands with uses other that a g r i -culture or mining, the r i g h t to develop the lands frequently becomes the most valuable component among the many right s of ownership. According to one commentator, "the essence of 192 property i s i t s p o t e n t i a l f o r p r o f i t a b l e use." Heritage designation removes that p o t e n t i a l . The designation forces an owner to preserve his building and thusbremoves his r i g h t to 57 develop the property i n any other way. Therefore, a very valuable interest i n that property has been taken by govern-ment . 193 According to La Ferme F i l i b e r Ltee. v. The Queen J J , an expropriation necessarily requires the transfer of property or rights from one party to the other. The Crown therefore must acquire something belonging to the private owner. Heritage designation meets t h i s requirement because, i n e f f e c t , the Crown receives a servitude much l i k e a conservation easement. In the United States, a taking of property occurs "when inroads are made upon an owner's use of the property to an extent that, as 194 between private parties, a servitude has been acquired." 195 Canada, unlike the United States , has no c o n s t i t u t i o n a l protection of property r i g h t s . Yet t h i s American d e f i n i t i o n may s t i l l be relevant because Canadian law presumes a r i g h t to compensation where an inte r e s t i s expropriated. A statute must very expressly provide no compensation i s available i n such 196 circumstances . Therefore, when development righ t s are removed by governmental action, an inroad i s made on the use of the property as i f the authorities had acquired a servitude. Although zoning provisions frequently expressly preclude compen-197 sation ., designation statutes rarely do. Therefore, consist-tency i n our law demands a r i g h t to compensation be presumed when t h i s interest i s taken. 58 2. Reasons Against Compensation a) Designation Should Not Be Treated D i f f e r e n t l y from Other  Governmental Regulations A strong argument raised against awarding compensation i s that heritage regulation should not be treated any d i f f e r e n t l y from other regulation by government. The detrimental e f f e c t of other statutes and regulations does not create a l i a b i l i t y 198 for compensation. Denhez uses the example of government action forcing a change i n the value of the Canadian d o l l a r . The government could never afford to compensate a l l losers each time the do l l a r ' s value decreased. One obvious way i n which the heritage regulation d i f f e r s from most governmental regulation i s that i t deals with land. Real property has always been given special status i n the English common law system. The ownership and possession of land shaped English law with the development of feudalism. 199 Land's importance was derived from i t s permanence . It pro-vided a l l sustenance and a suitably firm base f o r the i n s t i -tutions of government and wealth. Courts have consistently interpreted regulation of land so as to interfere as l i t t l e as possible with the owner's right to enjoy his property and use i t as he wishes. The Supreme Court of Canada indicated that an owner has a prima f a c i e r i g h t to u t i l i z e his property i n what-ever manner he deems f i t subject only to the rights of the surrounding landowners 2*^. But i n a more recent c a s e 2 ^ \ Madame Justice Wilson indicated that the paramount consideration 59 given to private property r i g h t s has eroded so that when in c o n f l i c t with the public i n t e r e s t , the public interest w i l l p r e v a i l . Yet, I submit that surely when the prima f a c i e right i s removed i n order to cater to the public interest, the rights taken away are valuable and sp e c i a l enough considering the h i s t o r i c a l importance of r e a l property that the owner should be compensated. Real property rig h t s continue to deserve paramount treatment. Therefore, an argument based on the lack of compen-sation f o r regulation of non-real property possessions should not be given much weight. A more appropriate comparison would be to land use law. Zoning laws regulate the type of use an owner may make of his land just as heritage conservation regulations do. Compensation i s almost never payable f o r a change i n zoning even where the 202 change i s discriminatory . However, there i s c l e a r l y a difference i n the purposes of zoning and heritage laws which may imply the l a t t e r deserves sp e c i a l treatment. In the New York Court of Appeal decision i n Penn Central Railway Co. v. 203 New York City , Mr. Justice B r e i t e l found that zoning operates to advance a comprehensive plan and i s usually applied over a r e l a t i v e l y large area where owners are equally burdened by the r e s t r i c t i o n s on the use of t h e i r land and equally benefitted by the implementation of the comprehensive plan. Property owners acting i n d i v i d u a l l y could not achieve the same benefits. But heritage designations are not designed to further a general plan. The burden of the r e s t r i c t i o n s i s placed on a single land owner. He w i l l probably not benefit from the l i m i t a t i o n 60 but h i s n e i g h b o u r s w i l l . T h i s d i s c r i m i n a t o r y e f f e c t r e q u i r e s t h a t h e r i t a g e r e g u l a t i o n s be t r e a t e d d i f f e r e n t l y from down z o n i n g . Another r e a s o n why the s t a t u t e s h o u l d be t r e a t e d d i f f e r e n t l y i s t h a t the B r i t i s h C olumbia L e g i s l a t u r e , i n e n a c t i n g the mandatory compensation s e c t i o n 2 0 4 , has e x p r e s s e d i t s i n t e n t i o n t h a t h e r i t a g e r e g u l a t i o n i s more onerous a r e s t r i c t i o n and s h o u l d t h e r e f o r e be t r e a t e d d i f f e r e n t l y . I n comparison, the L e g i s l a t u r e has e x p r e s s l y d e n i e d compensation f o r down z o n i n g under s. 972(1) o f the M u n i c i p a l A c t 2 0 5 . b) F o r e s e e a b i l i t y I t i s argued t h a t an owner who pu r c h a s e s a unique p r o p e r t y w i t h the v i e w t o r e d e v e l o p i t i s t a k i n g a r i s k t h a t the h e r i t a g e l e g i s l a t i o n w i l l f r u s t r a t e h i s p l a n s . A r e s t r i c t i o n on the use o f the p r o p e r t y s h o u l d be f o r e s e e a b l e . A prud e n t p u r c h a s e r would make i n q u i r i e s c o n c e r n i n g j t h e p o s s i b i l i t y o f d e s i g n a t i o n and a s s e s s the a r c h i t e c t u r a l and h i s t o r i c a l s i g -n i f i c a n c e o f the s t r u c t u r e b e f o r e b u y i n g . I f a r i s k o f d e s i g -n a t i o n e x i s t s , he i s f o r e w a r n e d . J u d i c i a l n o t i c e o f t h i s argument was made by Mr. J u s t i c e K e r n i n 900 G-. S t r e e t A s s o c i a t e s v. Department o f Housing and 207 Community Development . A d e v e l o p e r p u r c h a s e d a c e n t u r y o l d b u i l d i n g w i t h the i n t e n t i o n o f d e m o l i s h i n g i t and r e d e v e l o p i n g . The p r o p e r t y was l i s t e d on the N a t i o n a l R e g i s t e r o f H i s t o r i c P r o p e r t i e s so a d e m o l i t i o n p e r m i t a p p l i c a t i o n was d e n i e d . The c o u r t , i n r e v i e w i n g the d e n i a l , f o u n d i t was n o t a p p r o p r i a t e t o 61 consider the developer's expectation of p r o f i t s before the council imposed the landmark r e s t r i c t i o n s because i t was cl e a r l y foreseeable that there would be problems i n attempting to re-develop the property. The court considered that the property was already l i s t e d as a landmark when the developer purchased i t ; he knew the previous owner had had d i f f i c u l t y in obtaining a demolition permit; and the ci t y had publicized i t s e f f o r t s to enact a stringent h i s t o r i c preservation statute. These factors c l e a r l y influenced the developer's r e a l i s t i c expec-tations f o r the use of the property. The purchase of land was purely speculative anyway so that the owner could not complain about the heritage r e s t r i c t i o n s . Clearly, the amount of knowledge of the r i s k s to redevelop-ment i n thi s case make i t an extreme case. The fo r e s e e a b i l i t y argument i s less cogent when dealing with property that was undesignated when purchased. The general lack of awareness of heritage values i n our society implies that a prospective purchaser i s unlikely to assess the h i s t o r i c a l value of a property before purchasing i t f o r redevelopment. Even i f the property has been designated, notice to a prospective purchaser may be inadequate because i n t h i s province there i s no require-ment that a designation be registered against the t i t l e i n the land t i t l e o f f i c e . Only a r e s t r i c t i v e covenant need be r e g i -stered. Therefore, f o r e s e e a b i l i t y may be an inadequate argument against compensation. 62 c) Morality 208 Denhez gives one argument based on morality. Because architecture i s considered an art form, the destruction of a worthy piece of architecture should acquire the same sanctions as the destruction of any work of a r t . Society does not compensate people f o r r e s t r a i n i n g from a n t i - s o c i a l behavior l i k e destroying art so i t should not be obligated to pay people to r e s t r a i n them from demolishing worthy architecture. The Quebec C i v i l Code s p e c i f i c a l l y states that a l l property 209 values are subject to "public order and good morals." This 210 p r i n c i p l e i s also i m p l i c i t i n our common law system . The p r i n c i p l e implies that the property rights of an owner should be subject to an obligation not to engage i n demolition which has a n t i - s o c i a l e f f e c t s . Unfortunately, because society does not presently have a great awareness of heritage values, i t does not treasure architecture as much as i t does the con-ventional art forms so the moral shame i s not strong enough for t h i s argument to be persuasive!' d) P r a c t i c a l Uncertainty A common argument against awarding compensation i s that i t would be impossible to accurately determine the extent of a l o s s , i f any,to the property owner. Up to t h i s point, the arguments have assumed that designation reduces the value of the property. This assumption i s not always v a l i d . Designation can increase the value of the property. This i s most obvious where an entire d i s t r i c t i s designated, thus insuring a certainty 63 in the surrounding aesthetics and bringing in the l u c r a t i v e tourist'trade. Gastown in Vancouver and Bastion Square in 211 V i c t o r i a are t h i s province's best examples of t h i s occurrence Status of being a heritage property can alone increase i t s value. For example, designation i s often valuable f o r r e s i -dential buildings because owners and tenants are often w i l l i n g to pay a premium f o r the special status. Several factors can combine to decrease or increase the value of designated proper-212 ty . They are the type and use of the property, the maintenance costs of facade upkeep, and the potential l e f t f o r a l t e r a t i o n . It may take years a f t e r designation to determine the r e a l e f f e c t on value. The quantum of compensation would be equally uncertain. This could be solved by the use of a r b i t r a t i o n as used in expropriation. A p r o v i n c i a l o f f i c i a l has suggested that i f compensation awarded i n a r b i t r a t i o n i s too high, a municipality 213 could then de-designate . This approach may lead to certainty in protecting the property owner but the danger of de-desig-nation of the property i s too great a r i s k . e ) Compensation Acts as a Deterrent to Designate - I f ffThe f i f t h and most persuasive argument against mandatory compensation i s that i t may defeat the purpose of heritage property l e g i s l a t i o n by deterring municipalities from desig-nating worthy structures f o r fear they would be l i a b l e f o r large amounts of compensation. One reason l e g i s l a t u r e s impose compensation i s to force municipalities to p r i o r i z e t h e i r 64 c o s t s . With l i m i t e d r e s o u r c e s , a m u n i c i p a l i t y i s f o r c e d to determine i f the p o t e n t i a l l y l a r g e c o s t o f d e s i g n a t i o n t h r o u g h compensation would be b e t t e r spent on some o t h e r , more p o p u l a r m u n i c i p a l p r o j e c t . D e s i g n a t i o n and the p r o t e c t i o n o f h e r i t a g e s t r u c t u r e s becomes a low p r i o r i t y i n cash-poor m u n i c i p a l i t i e s and t h u s a v a i l a b l e p r o t e c t i v e measures i n v o l v i n g compensation a r e . a v o i d e d and the h e r i t a g e b u i l d i n g s are l o s t . B r i t i s h Columbia i s a f o r c e f u l example o f the d e t e r r e n c e v a l u e o f compensation. The g o a l o f p r i o r i z i n g c o s t s has succeeded as the t h r e a t o f l i a b i l i t y has f o r c e d m u n i c i p a l i t i e s to i g n o r e the H e r i t a g e C o n s e r v a t i o n A c t p r o v i s i o n s so t h a t worthy b u i l d i n g s may be d e s t r o y e d much to the p u b l i c ' s d e t r i m e n t . E f f e c t i v e l y , the mandatory compensation p r o v i s i o n s have made the H e r i t a g e C o n s e r v a t i o n A c t v i r t u a l l y u s e l e s s i n p r o t e c t i n g 214-h e r i t a g e p r o p e r t i e s . One w r i t e r n o t e d i r o n i c a l l y , "The law i n t e n d e d to promote c o n s e r v a t i o n o f the c i t y ' s a r c h i t e c t u r a l c h a r a c t e r has become an impediment to d o i n g s o . " D e s i g n a t i o n s d i s a p p e a r as m u n i c i p a l governments b a l k a t the p r o s p e c t o f h a v i n g t o pay f o r i t when t h e r e i s l i t t l e money a v a i l a b l e i n the p u b l i c c o f f e r s . Vancouver i s an ex-c e l l e n t example o f t h i s . B e f o r e the H e r i t a g e C o n s e r v a t i o n A c t was passed i n 1977, the Vancouver C i t y C o u n c i l d e s i g n a t e d f i f t y -two s t r u c t u r e s under i t s H e r i t a g e By-Law No. 4837 d u r i n g a f i v e y e a r p e r i o d . At l e a s t t h i r t y - f o u r o f those b u i l d i n g s d e s i g n a t e d were owned p r i v a t e l y . The H e r i t a g e C o n s e r v a t i o n A c t w i t h i t s mandatory compensation,came i n t o f o r c e on September 22, 1977. S i n c e t h e n , the C i t y o f Vancouver has o n l y used i t s d e s i g n a t i o n 65 powers f i v e times . Pour of those buildings were c i t y -owned at the time of designation. The f i f t h building was the Canadian National Railway station which i s under federal j u r i s -d i c t i o n and therefore unaffected by municipal regulation. Therefore, none of these designations involved an unsympathetic private owner and there was thus never any question of compen-sation. Since 1977, there has been one highly publicized attempt to designate a private building. The f a i l u r e of the action can be d i r e c t l y attributed to the threat of the l i a b i l i t y to compen-sate the owner for the r e s u l t i n g decrease i n the property value. City Council i n November of 1977 considered designating the city'-s oldest standing school, King George School, as a heritage property. The building occupied an entire block of downtown re a l estate so that a heritage r e s t r i c t i o n wouldfehave severely reduced the value of the land. The necessity to maintain a large, older building would have made redevelopment of the block impossible. The building's owners threatened to launch a m u l t i - m i l l i o n d o l l a r lawsuit against the ci t y should the 216 council vote to protect the structure. Press reports i n d i -cated that t h i s threat influenced City Council into voting against designation. Soon aft e r , the building was demolished and replaced by a parking l o t . Since then, the c i t y ' s policy i s to avoid designation i f 217 possible. In a report of the Heritage Advisory Committee , the chairman indicated that the threat of f i n a n c i a l l i a b i l i t y has made the "present l e g i s l a t i o n and designation unusable 66 and poor t o o l s t o a c c o m p l i s h the g o a l o f h e r i t a g e c o n s e r -218 v a t i o n . " Thus, the C i t y o f Vancouver c o m p l e t e l y by-passes the p r o v i s i o n s o f the H e r i t a g e C o n s e r v a t i o n A c t and i n s t e a d p r o t e c t s worthy b u i l d i n g s , i f a t a l l p o s s i b l e , by s i m p l y n e g o t i a t i n g w i t h p r i v a t e owners. S i n c e d e s i g n a t i o n by the c i t y i s known t o be too e x p e n s i v e , i t p r o v i d e s a very i n e f -f e c t i v e b a r g a i n i n g t o o l . I n s t e a d , the c i t y must g i v e away z o n i n g bonuses and development r i g h t s t r a n s f e r s as b a r g a i n i n g t o o l s . A r e c e n t example o f p r o t e c t i o n by n e g o t i a t i o n i n Vancouver has been the Tudor Manor e p i s o d e . Tudor Manor i s a f i f t y - e i g h t y e a r o l d , t h r e e s t o r y apartment b l o c k i n the c i t y ' s West End. I t s a r c h i t e c t u r a l s i g n i f i c a n c e i s l i m i t e d but i t s l o c a t i o n and d i v e r s i t y from s u r r o u n d i n g h i g h - r i s e s make i t a landmark t o most Vancouver r e s i d e n t s . Had the c i t y d e s i g n a t e d the s t r u c t u r e , w h i c h i t n e v e r c o n s i d e r e d , i t might have been l i a b l e f o r a c o n s i d e r a b l e amount o f compensation. An a c c u r a t e assessment o f the decrease i n the p r o p e r t y v a l u e by the d e s i g n a t i o n i s n o t a v a i l a b l e but the owner e s t i m a t e d i t would c o s t a t l e a s t t h r e e m i l l i o n d o l l a r s t o m a i n t a i n the s t r u c t u r e i n such a way t h a t the s t r u c t u r e would be e c o n o m i c a l l y 219 v i a b l e and s t i l l r e m a i n w i t h i n the h e r i t a g e r e s t r i c t i o n Under the e x i s t i n g z o n i n g , the owner c o u l d d e m o l i s h the s t r u c -220 t u r e and b u i l d a s i x s t o r y b u i l d i n g . To p r e s e r v e the f a c a d e o f the b u i l d i n g and i t s f o r m a l garden, the c i t y had t o a l l o w the d e v e l o p e r s to b u i l d b e h i n d i t a h i g h - r i s e o f over t w i c e the s i z e o f what the e x i s t i n g z o n i n g a l l o w s . The z o n i n g bonus was the c i t y ' s o n l y o p t i o n i n p r o t e c t i n g the facade because the 67 compensation requirement had made the HCA impossible to im-221 plement The greatest problem with protection by negotiation i s that i t only works i f the owner compromises. The City of Vancouver attempted to preserve the O r i l l i a , a turn-of-the-century wooden structure i n the c i t y ' s downtown. Council offered to increase the allowable zoning on the s i t e i f the owner would r e t a i n the facade. The owner rejected the o f f e r and since the c i t y would not designate, the building was 222 demolished Alberta municipalities are also l i a b l e to compensate 223 upon designation . A s i m i l a r deterring e f f e c t i s also evident. The l i a b i l i t y to compensate has certainly provided an argument for antagonistic private owners. In S l a t t e r & the Bank of 224 Montreal v. City of Edmonton , the private owner of a building the c i t y designated, argued in an action to overturn the desig-nation that the cost to the c i t y in compensating him for the loss would be so great that i t would not be i n the public i n -terest for the c i t y to proceed with designation. The argument was rejected by the Court which held the matter of the cost and the benefit to the public was best determined by council. However, the building's designation was subsequently rescinded when the building's owners sought compensation of seventy-five 225 m i l l i o n d o l l a r s . Clearly, the fact that compensation deters designation and the protection of heritage structures forms a very per-suasive argument against mandatory compensation. The necessary 68 balance between protecting the public's interest and protecting the property owner has not been obtained as the balance i s t i l t e d completely i n the property owner's favour. So long as municipalities avoid designation because of the l i a b i l i t y , the property owner can be confident that the use of his property w i l l be unrestricted by heritage regulation or, at the very least, he w i l l receive a valuable zoning bo_.nus i n return f o r voluntary preservation. Direct compensation therefore defeats the protective purpose of heritage property l e g i s l a t i o n . There are several al t e r n a t i v e s . Designation could be available only where the owner consents. In the United States, the Reagan administration has amended the National H i s t o r i c Preservation Act of 1966 to allow National Register l i s t i n g and protection only where the ? ?6 owner agrees . Once again, the landmark owner i s f u l l y protected and the building receives no protection. In Ontario, an owner has a s i m i l a r power over the preservation of his structure. I f he applies for approval to demolish the struc-ture, the very most council can do i s delay the demolition f o r PP7 270 days '. The delay system i s designed to force the parties to reach a compromise. Although th i s type of system has been praised for f o r c i n g the public to become aware of and active in the preservation of the structure, i t ultimately provides inadequate protection f o r a worthy building owned by a party t o t a l l y unsympathetic to i t s preservation. A very simple solution to t h i s compensation problem would be to l e g i s l a t e that no compensation i s ever necessary with 69 designation. But c l e a r l y , designation places too much of a burden on the private property owner and to provide no compen-sation would be u n f a i r . Compensation would a l l e v i a t e the burden of preserving the structure f o r the public's benefit and provide an incentive to properly maintain and r e h a b i l i t a t e the structure. Thus, compensation i s necessary but the present system i s inadequate and destructive. To solve t h i s contra-d i c t i o n , I propose to eliminate d i r e c t compensation for desig-nation and instead implement an alternative form of compen-sation that would be less onerous on the municipality yet protect the owner from the burdens of designation. D. Alternative Forms of Compensation Various forms of compensation or alternative forms of protection f o r the property owner have been implemented across North America. American h i s t o r i c preservation laws are par-t i c u l a r l y h e l p f u l because, f o r many years, compensation f o r designation was thought to be c o n s t i t u t i o n a l l y required. The United States Constitution divides governmental powers into 2 police and eminent domain powers. The police power i s defined as being in furtherance of public health, safety, moral and general welfare while the eminent domain function of govern-ment i s to acquire private interests i n property without the owner's consent. A person affected by a police power has no right to compensation. But a property owner affected by the eminent domain power i s e n t i t l e d to due process under the law by being compensated f o r the property interest taken. Both 70 powers may only be exercised to advance a proper governmental purpose. In 1974, Professor Costonis wrote that i f the governmental r e s t r i c t i o n reduces the income pote n t i a l of the affected property to such an extent that i t prevents the owner from earning a reasonable return, i t w i l l require compensation 230 as a use of the eminent domain power . Since landmark desig-nations have a tendency to greatly reduce the income potential of affected properties, many American municipalities assumed i t was an eminent domain power and thus enacted ordinances that provided compensation, either d i r e c t l y or through inno-vative incentives. In 1978, the United States Supreme Court addressed the 231 issue i n Penn Central Transportation Co. v. New York City and held that landmark ordinances involved a police power. Manhattan's Grand Central Station was designated by the c i t y as a landmark and protected from demolition and any inappro-priate a l t e r a t i o n s . The c i t y refused to approve the terminal owner's plans to b u i l d a f i f t y story o f f i c e complex above the e x i s t i n g building f o r c i n g the owner to challenge the consti-t u t i o n a l i t y of the landmark designation. Mr. Justice Brennan found that h i s t o r i c preservation was c l e a r l y for the benefit of the public and because i t did not actually i n t e r f e r e with the present use of the terminal, there was no economic hard-ship. The ordinance was therefore a v a l i d exercise of the c i t y ' s police power and thus no compensation was required. This decision did not completely clear up the issue 232 because several commentators noted that Brennan appeared 71 influenced by the fact that the ordinance provided compensation with the right to transfer the unused development rig h t s of the structure. Thus, the severity of the property r e s t r i c t i o n was reduced s u f f i c i e n t l y by the compensation to make i t a police 233 power. Although some c i t i e s , notably Chicago , used the Penn Central decision as authority to immediately cut o f f compensation for designation, other c i t i e s have assumed that even though designation may be a v a l i d exercise of the police power, compensation may insure i t w i l l continue to be i n t e r -preted as a police power. Thus, American c i t i e s continue to provide innovative incentives and methods to protect the land-owner's property rights upon designation. 1. Purchase and Expropriation The most obvious scheme that would insure the public would be able to see and enjoy a structure and at the same time provide f o r f u l l compensation to the owner would be for the public body to purchase or expropriate the structure. With the structure owned by the public body, i t s preservation would be assured. For a governmental body to expropriate property, i t must be given the power to do so very expressly and that power i s 234 sometimes l i m i t e d to s p e c i f i c purposes ^ . For example, the City of Edmonton expropriated an old hotel using powers given 235 i t by the Alberta Housing Act to expropriate land for housing r e h a b i l i t a t i o n s When evidence showed that the ci t y expropriated primarily to preserve the heritage value of the structure, the Alberta Court of Queen's Bench quashed the expropriating by-law 72 because the c i t y o n l y had the power t o e x p r o p r i a t e when the o b j e c t i v e was a h o u s i n g r e h a b i l i t a t i o n programme . Only the h e r i t a g e s t a t u t e s o f O n t a r i o and Nova S c o t i a g i v e m u n i c i p a l i t i e s the e x p r e s s power t o e x p r o p r i a t e f o r h e r i t a g e p r e s e r v a t i o n . The Saskatchewan a c t had a s i m i l a r 2 3 9 p r o v i s i o n t h a t was r e p e a l e d i n 1982 . The m u n i c i p a l i t i e s o f most p r o v i n c e s would have to r e l y on e x p r o p r i a t i o n powers i n more g e n e r a l e n a b l i n g s t a t u t e s 2 ^ . I n B r i t i s h C olumbia, i t i s u n c l e a r whether a l l m u n i c i -p a l i t i e s have the power t o e x p r o p r i a t e f o r the purpose o f p r e s e r v a t i o n . The C i t y o f Vancouver has s u f f i c i e n t power. S e c t i o n 532 o f the Vancouver C h a r t e r 4 g i v e s the c i t y the power to e x p r o p r i a t e wherever the c i t y e x e r c i s e d any o f i t s powers t o a c q u i r e r e a l p r o p e r t y but f a i l s t o come to an agreement w i t h the owner. One o f the powers under which the c i t y may a c q u i r e p r o p e r t y i s s e c t i o n 13(d) o f the H e r i t a g e C o n s e r v a t i o n A c t . The e x p r o p r i a t i o n o f h e r i t a g e p r o p e r t y i s thus an a v a i l a b l e o p t i o n t o the c i t y . 24.2 M u n i c i p a l i t i e s governed by the M u n i c i p a l A c t have no such o p t i o n . The M u n i c i p a l A c t does not p r o v i d e a g e n e r a l e x p r o p r i a t i n g power. I n s t e a d e x p r o p r i a t i o n powers are g i v e n f o r s p e c i f i c purposes o n l y . S e c t i o n 680 o f the A c t p r o v i d e s a p o s s i b l e power f o r which h e r i t a g e p r o p e r t y may be e x p r o -p r i a t e d . The s e c t i o n empowers a m u n i c i p a l i t y t o e x p r o p r i a t e p r o p e r t y f o r " p l e a s u r e , r e c r e a t i o n o r community uses o f the p u b l i c , i n c l u d i n g . . . (a) museum . . .." T h i s s e c t i o n would l i k e l y l i m i t e x p r o p r i a t i o n t o b u i l d i n g s t h a t w i l l have a 73 special use a f t e r a c q u i s i t i o n . Section 530 of the Act provides the power to expropriate property the c i t y wishes to develop f o r r e s i d e n t i a l or commercial use. This could allow a muni-c i p a l i t y to acquire worthy property f o r r e h a b i l i t a t i o n f o r a non-community use. Certainly, a power to expropriate for the express purpose of heritage conservation would provide a more useful power f o r a municipality than reliance on these more general powers. Even i f B r i t i s h Columbia municipalities had an express power to expropriate s p e c i f i c a l l y f o r heritage preservation, i t would not solve the problems created by the HCA's mandatory compensation provisions. I f municipalities currently avoid designation because of an i n a b i l i t y to compensate f o r the decrease i n the property's value, they w i l l r e f r a i n completely from protection by expropriation due to i t s s i g n i f i c a n t l y greater costs. No municipality could ever afford to purchase a l l worthy structures within i t s j u r i s d i c t i o n . The f i n a n c i a l burden on the municipality would continue after a c q u i s i t i o n with the cost of maintenance and r e s t o r a t i o n . The municipality would also suffer f i n a n c i a l l y with the removal of the property from 24-3 the tax r o l l s ^ . The United States Supreme Court mentioned a further problem i n that public ownership of buildings often r e s u l t s i n preservation as museums rather than "economically productive features of the urban s c e n e . " 2 4 4 Mr. Justice B r e i t e l of the New York Court of Appeal indicated that c i t i e s might desire to preserve landmarks through compulsory purchase powers i n affluent times but never when the c i t y i s i n f i n a n c i a l d istress 74 or i f a less expensive alternative for preservation i s 245 available . Therefore, expropriation or purchase i s not a feas i b l e alternative so long as less expensive methods are available. The subsequent methods surveyed w i l l demonstrate that such alternatives are available. 2. Revolving Funds Scheme A va r i a t i o n of purchase or expropriation would be to set up a revolving fund. From the fund, money could be used to purchase h i s t o r i c buildings i n danger of demolition. The properties would then be sold to a buyer sympathetic to the need to protect the heritage building. The proceeds of t h i s sale would go into the revolving fund and could be used to purchase other structures f o r a s i m i l a r resale. The fund can be administered by a public body, or more l i k e l y , by a charitable foundation. A large cash outlay to s t a r t the fund and make the f i r s t purchase i s necessary but t h e o r e t i c a l l y , t h i s money should be recovered,, almost e n t i r e l y with each resale so that no further funds should be necessary. L i t t l e public money i s ultimately spent; the building i s preserved and the building's owner i s protected by being bought out and suitably compensated. The.subsequent purchaser w i l l know exactly what his burdens as a heritage property owner are before he commits himself so that special protection f o r him i s not necessary. To best implement such a scheme, the administering body should i d e a l l y be given two powers. F i r s t l y , the power to expropriate would provide a l a s t resort to save a structure 75 where negotiations with an owner f a i l . The threat of expropri-ation would also provide an important bargaining tool i n insuring the price paid f o r buildings remains reasonable. The lack of clear expropriating powers fo r heritage preser-vation has been discussed in the previous section. Secondly, the power to enter r e s t r i c t i v e covenants with the purchasers i s i n t e g r a l to the success of a revolving funds scheme. In r e s e l l i n g the property, the purchaser must promise to preserve the i n t e g r i t y of the structure and maintain i t to spec i f i e d standards. To make t h i s covenant tr u l y e f f e c t i v e , i t must bind future owners should the property be sold again. Under the common law, a r e s t r i c t i v e covenant could only run with the land and bind future owners i f the party with whom the owner contracts owns land that d i r e c t l y benefits from the covenant. Parties who did not own such land could not have enforced the covenant against subsequent owners because t h e i r r i g h t under the covenant was held i n gross. This common law rule developed because before land r e g i s t r y systems were implemented, r i g h t s i n gross could e a s i l y become l o s t creating 246 uncertainty of t i t l e | Since the introduction of land r e g i s t r y and the Torrens land t i t l e systems, Canadian l e g i s l a t u r e s have been able to reform the law and allow covenants i n gross inocertain c i r -cumstances. In B r i t i s h Columbia, s. 27 of the Heritage Conser- vation Act provides that the p r o v i n c i a l Crown, a municipal council or the B r i t i s h Columbia Heritage T r u s t 2 ^ may enforce an easement or covenant against the owner even i f i t does not 76 benefit land owned by the covenantee. A l l provinces now have l e g i s l a t i o n allowing easements or covenants i n gross . A l l statutes provide the covenant may be assignable and enforceable by the assignee. Although B r i t i s h Columbia l i m i t s the power to covenant to governments, municipalities and the government foundation, some provinces allow the covenant to be entered 24.9 into by private organizations and some private c i t i z e n s . Although t h i s may expand the potential protection by allowing private interests to make covenants, care should be taken to insure that the covenantee i s serious, r e l a t i v e l y permanent and ready to enforce. Therefore, a government o f f i c i a l should have to approve the private covenantees before the covenant i s e f f e c t i v e . One of the most successful revolving funds schemes in 250 North America has been the Galveston, Texas programme . The c i t y had a large concentration of 19th Century buildings known as the Strand. The City Council had previously t r i e d to pre-serve the structures through designation but b i t t e r opposition from existing landowners made i t p o l i t i c a l l y impossible. The c i t y then turned to a private foundation to preserve the area without designation. Funds were donated by l o c a l businesses and national foundations to s t a r t up the programme. The f i r s t buildings purchased were resold at a lower price to r e f l e c t the e f f e c t of a r e s t r i c t i v e covenant on the value of the property and also to b u i l d momentum by speeding up sales and 251 restoration a c t i v i t y i n the area . The deed r e s t r i c t i o n s p e c i f i e d that the building could not be destroyed or altered 77 without the foundation's approval. S p e c i f i c points included cleaning and repointing of brick, replacing f i r e escapes with i n t e r i o r f i r e s t a i r s , restoringccast iron, and r e s t r i c t i n g 252 the number and size of signs J . The agreement to purchase also contained undertakings to restore the exterior i n accordance with the foundation's own s p e c i f i c a t i o n s . The contract s p e c i f i e d the minimum investment the new owner was required to make i n the restoration and a deadline f o r i t s completion. Should t h i s undertaking be breached, the foun-dation could c o l l e c t liquidated damages or enforce s p e c i f i c 253 performance . The main purpose of t h i s undertaking was to insure the new owner did not speculate. For i t s part, the foundation promised to encourage and control the restoration of the area. The p r a c t i c a l problem with protection by r e s t r i c t i v e covenant i s that an owner must consent. To obtain such consent, a municipality may have to give up a great deal. The Galveston example i l l u s t r a t e s t h i s . In purchasing the foundation's property, an owner was faced with very stringent undertakings that must have severely reduced the property's value. There-fore, the foundation had to reduce the resale price considerably from the amount i t o r i g i n a l l y paid so that the fund would always have involved a d e f i c i t . The sum that originated the fund would never be recovered. The foundation also attempted to obtain deed r e s t r i c t i o n s from e x i s t i n g owners but was not 254 surprisingly unsuccessful . The only consideration offered 78 by.the foundation was the promise to encourage and control the preservation of the area which would be i n s u f f i c i e n t consider-ation f o r a private property owner facing r e s t r i c t i o n s on the property's use. As the area began to r e h a b i l i t a t e , the property values increased meaning the foundation had to make greater expen-ditures to purchase properties. At t h i s point, the r e s e l l prices would c l e a r l y have been higher r e f l e c t i n g the increased popularity of the area so that the r e s t r i c t i o n s and undertakings would have been considered less of a burden. But i t also meant that the foundation was outbid i n purchases by private developers and thus i t l o s t control over the aesthetics of the structures. For example, the foundation was outbid in attempts to purchase a valuable art deco t r a i n s t a t i o n . It then had to rely on a massive expression of public sentiment to force the building's owners to renege on th e i r deal to s e l l to a demo-l i t i o n firm. Public sentiment was a very v o l a t i l e substance making i t an unreliable tool f o r preservation. The foundation could hotehave r e l i e d on i t to save other buildings f o r which i t was outbid. To always be successful, the foundation needed some sort of bargaining power to wield. Designation or expropri-ation powers could have provided that bargaining powers. One of the reasons the Galveston programme succeeded was the fact that several incentives were available to purchasers. The reduced purchase price was the most obvious but purchasers were also e n t i t l e d to very a t t r a c t i v e financing from l o c a l banks2''-'. It i s doubtful that t h i s could be repl i c a t e d else-79 where. The United States income tax provisions with generous deductions f o r expenses f o r the renovation of heritage properties also made the foundation's properties much more a t t r a c t i v e to 256 prospective purchasers ' . In setting up a s i m i l a r programme in B r i t i s h Columbia, municipalities have the power under s. 269 of the Municipal 257 Act J to grant a sum to an organization that could originate 258 the revolving fund . A l t e r n a t i v e l y , i f a municipality wishes to implement and administer a revolving fund scheme i t s e l f , i t has the a b i l i t y to acquire and dispose of land f o r heritage conservation under s. 13(d) of the HCA. Proceeds of the resale 259 would go into a s p e c i a l fund J or applied to the debt incurred 260 for the purchase of any r e a l property by the municipality implying the fund would not necessarily be self-perpetuating. More express powers to set aside a special fund s p e c i f i c a l l y f o r the purchase and sale of heritage properties would be necessary to successfully set up a self-perpetuating fund. In conclusion, the revolving funds scheme i s impractical. To be successful, the scheme would be expensive so that i t s theoretic goal of recovering a l l money o r i g i n a l l y spent i s u n r e a l i s t i c . Since incentives l i k e inexpensive financing and generous income tax deductions are not available i n Canada, heritage properties with stringent r e s t r i c t i v e covenants would not be a t t r a c t i v e to purchasers. Because i t w i l l only work with the e x i s t i n g owner's consent, the method gives him plenty of protection but the protection to the building i s inadequate and necessarily made variable by the whims of the owner. 80 3. Transfer of Development Rights Development righ t s are the amount of f l o o r area that may be developed on a given parcel of land. Heritage struc-tures are frequently much smaller than the size authorized by the zoning. Therefore, these structures possess unused de-velopment r i g h t s . Heritage r e s t r i c t i o n s prevent the owners of these buildings to exploit these unused and po t e n t i a l l y p r o f i t a b l e r i g h t s . To compensate the owner f o r the heritage r e s t r i c t i o n , many c i t i e s allow him to transfer his unused development rights to other properties unencumbered by the heritage r e s t r i c t i o n s . Since heritage structures are often located i n the densely developed commercial cores of c i t i e s , t h e i r unused development rights can be in demand and quite valuable. Thus, the transfer of these rights should adequately compensate an owner f o r the burden of heritage designation at 261 no cost to a municipality. As Gostonis describes i t , the transfer of development r i g h t s (known as TDR) s h i f t s preser-vation costs from the c i t y and landmark owner to the downtown development process. Integral to understanding the TDR system i s acceptance that property involves a bundle of ea s i l y distinguishable rights instead of a unitary concept of ownership. According to Richards , among the common law rights i s the right to build upwards following the maxim cujus est solum, ejus est  usque ad coelum 2^. U n t i l about a century ago, t h i s right was limited by construction technology but once s t e e l skeleton 81 construction was perfected, buildings of tremendous height were possible. When zoning laws were implemented, the right to build upwards was r e s t r i c t e d by certain height regulations. Presumably, the ejus est usque ad coelum maxim may be modified to provide an owner with a i r rights that have been defined to be the right to "the inclusive use and control of a desig-nated space within delineated boundaries." These a i r rights might be separated from the other interests i n the property and transferred to someone else. There i s much l e g a l precedent for t h i s bundle of rights theory. Mineral rights are commonly 265 separated from surface rights in B r i t i s h Columbia . Govern-ments and u t i l i t i e s frequently acquire less than fee simple rights by expropriating rights-of-way f o r i n s t a l l i n g u t i l i t y poles . Separating the development or a i r rig h t s would not provide any additional problems. a) TDR Use i n Vancouver The City of Vancouver has used the transfer of development rights in isolated instances. The most important use was the scheme implemented to save Christ Church Cathedral, a desig-nated heritage building, from demolition. The structure sat on one of the most valuable l o t s in downtown Vancouver. The Church's congregation had decided the church was no longer adequate for t h e i r purposes and therefore i t wanted to tear the structure down and replace i t with a combined o f f i c e tower and church. Council refused to approve the plan and instead designated the structure as a heritage s i t e protecting i t from 82 demolition. In December of 1974, the congregation found a solution to survive f i n a n c i a l l y i n the structure".'1. It entered into an agreement with a development company who purchased the unused development rights of the church f o r a sum of twenty-nine m i l l i o n d o l l a r s spread out over 105 years. With the compensation paid f o r the development r i g h t s , the church was able to pay f o r engineering repairs and the ongoing preser-vation of the structure. The church agreed to r e s t r i c t the development of i t s l o t f o r the term of the contract. The development company, with the c i t y ' s approval, was able to transfer these development rights to the adjoining l o t . There therdeveloper was able to build Park Place, the c i t y ' s largest o f f i c e building which i s f a r larger than what the ex i s t i n g zoning would have allowed The most recent TDR scheme implemented i n Vancouver was with the developers of the Price-Waterhouse Tower. In exchange for the promise to bu i l d a large public plaza on one l o t , the developers were e n t i t l e d to transfer the unused development rights from that l o t to the adjoining l o t where a large tower with valuablesviews could be b u i l t larger than the allowable . 268 zoning b) The New York Pity Experience Vancouver has lim i t e d any transfers to l o t s adjoining the transferor property. This i s the system usediin New York City where the continent's most successful TDR scheme has been operating for nearly twenty years. According to Richards, 83 with rapid development i n the 1950's and 1960*s, the c i t y discovered that many older landmarks were being endangered 269 by zoning ordinances which encouraged new o f f i c e buildings Urban economics dictated t a l l buildings were the only f e a s i b l e way to use the l i m i t e d space in Manhattan. Older buildings were too small to compete and thus were destroyed and replaced with towers providing more space, more concentration of f a c i l i t i e s and more prestige. To supplement e x i s t i n g land-mark preservation programmes, the c i t y enacted a TDR ordinance allowing the transfer of a designated landmark's unused de-velopment rights to adjoining properties owned by the same 270 party . Once transferred, the rights were gone forever so that the landmark would always be r e s t r i c t e d to i t s e x i s t i n g density thus removing an incentive to demolish. Under the New York system, the density over the entire neighbourhood would not be increased by the transfer. For example, since the e x i s t i n g zoning of the area would accommodate "X" buildings with "Y" square feet of usable space each, the area's density w i l l remain the same with X - 2 buildings with a density of Y square feet, one building, the designated struc-ture, with Y - Z square feet and one building, on the trans-feree l o t , with Y + Z square feet. Thus, a l g e b r a i c a l l y , Total Density Allowed = X x Y = XY ' ( X - 2 ) ( Y ) + Y - Z + Y + Z = XY - 2Y + Y + Y + (Z - Z) = XY +(2Y - 2Y) + 0 = XY + 0 = XY. The density of the neighbourhood remains constant. The prototype for TDRs i n New York City was the Amster 84 Yard project. The yard consisted of a group of 19th Century brick residences surrounding a courtyard. The buildings had been designated as protected structures. The owner of the adjoining l o t wished to build a forty-two story o f f i c e tower but the zoning density allowance was i n s u f f i c i e n t . The c i t y gave special permission to the landmark owner to s e l l 30,000 square feet of unused f l o o r area r a t i o (PAR) to the developer giving him enough density to build his project. In return, the developer paid a large sum of money of which a portion had to be set aside i n a trust fund to be used f o r the main-tenance of the landmark. The developer was also required to make a number of design concessions so that only colours and materials compatible with the landmarks would be used. Thus, the buildings were protected by the designation and the owner was duly compensated f o r the r e s t r i c t i o n and provided means with which to maintain the buildings at no cost to the munici-p a l i t y 2 7 1 . The requirement that r e s t r i c t e d transfers to adjoining l o t s also owned by the same party forced the c i t y to make unique arrangements i n order to give developers the development right s they desperately wanted. The owner of a l o t adjacent to a court house which was a c i t y owned landmark, wished to build an o f f i c e tower that would exceed the density allowed by the area's zoning ordinance. To accommodate the transfer of the court house's unused development r i g h t s , the c i t y leased the building to the developer f o r seventy-five years and then subleased i t back. The seventy-five year lease made the 85 developer the deemed owner of the court house property and allowed him to transfer the unused development rights to his adjoining property. The developer paid the c i t y three m i l l i o n d o l l a r s for the lease. Inappropriately, nonerof that sum was 272 earmarked for maintenance or restoration of the landmark . The r e s t r i c t i o n allowing transfer only to adjoining and commonly owned properties was eventually thought to be too 2 7 3 l i m i t i n g It did not provide s u f f i c i e n t compensation to the landmark owner because frequently there was no l o t available to accept the transfer and thus the development rights were never u t i l i z e d . The ordinance was therefore amended to allow 274. the transfer to l o t s across the street or contiguous . The owner was e n t i t l e d to transfer the development rights along a series of contiguous l o t s providing he owned them a l l , thus allowing the ultimate transferee l o t to be a c i t y block or farther away from the landmark. This amendment was s p e c i f i c a l l y designed to accommodate the owners of the Grand Central Terminal, a designated landmark. The owners owned much of the land surrounding the terminal. In the subsequent challenge by the owners of the c o n s t i t u t i o n a l i t y of the landmark r e s t r i c t i o n , 275 both the New York Court of Appeal y j and the United States ?7fi Supreme Court found that the TDR scheme adequately compen-sated the owners even though many of the e l i g i b l e transferee l o t s were unavailable for redevelopment because of long term leases. It i s perhaps i r o n i c that a TDR scheme involving the allowable transfer of the terminal's a i r righ t s at.= least p a r t i a l l y contributed to the f a i l u r e of the owner's challenge 86 because i t was p r o f i t s from the sale of a i r rights over the railway's covered tracks i n downtown Manhattan that allowed the company to build such a spectacular and s i g n i f i c a n t 277 terminal building in the early 1900's ''. The New York TDR system was o r i g i n a l l y considered such a success that ways to expand i t s use into other areas were explored. The.;TDR r i g h t was o r i g i n a l l y l i m i t e d to private owners of landmarks but proposals were made to allow the transfer of development righ t s from public buildings without the lease arrangement used i n the court house development. The c i t y made plans to s e l l excess a i r rights above a l l public property except streets and parks which possess no development r i g h t s . The plan has been severely c r i t i c i s e d by Schnidman 27R and Roberts because the vast increase i n available development rights would severely impair t h e i r marketability. The commen-tators also wrote that revenue production alone should not be s u f f i c i e n t to j u s t i f y the transfer of development r i g h t s . Other worthy purposes such^as landmark preservation should be ex-pl o i t e d f i r s t . The New York TDR scheme was not fool-proof i n that i t proved to be inappropriate i n certain circumstances. A plan was proposed that would preserve the brownstone apartment buildings of Manhattan's Upper East Side. The brownstones were not considered landmarks so that designation was not appropriate. Instead, the plan c a l l e d f o r developers to purchase the brownstones' unused development rights and apply them to high-rise developments on the end of each block. The 87 brovmstone a p a r t m e n t c b u i l d i n g s i n the m i d d l e o f the b l o c k would have been saved. The p l a n was b i t t e r l y f o u g h t by E a s t S i d e r e s i d e n t s who f o r c e f u l l y argued t h a t the new development would i n c r e a s e the d e n s i t y and use o f a m e n i t i e s i n an a l r e a d y crowded neighbourhood. I t l a t e r became o b v i o u s t h a t the purpose o f the p l a n was t o encourage c o n s t r u c t i o n and not f o r the p r e s e r -27°) v a t i o n o f the brownstones . The i n c i d e n t i m p l i e s t h a t a TDR scheme w i l l n o t be a c c e p t e d as an a l t e r n a t i v e t o z o n i n g . There must be a worthy purpose such as p r e s e r v a t i o n o f l a n d -marks or open space f o r a TDR scheme t o be p o l i t i c a l l y and p r a c t i c a l l y p o s s i b l e . Another New Y o r k TDR f a i l u r e , the Tudor C i t y P a r k s t r a n s f e r , P R O had such a worthy purpose but was found t o be l e g a l l y i n v a l i d I n o r d e r t o save two much needed p r i v a t e p a r k s , the C i t y C o u n c i l p r o h i b i t e d development on the landss by removing a l l o f t h e i r unused development r i g h t s and a l l o w i n g the owner t o s e l l t hose r i g h t s to d e v e l o p e r s i n a commercial d i s t r i c t . The p r i v a t e p a r k was t o be m a i n t a i n e d out o f the money r e c e i v e d f o r the development r i g h t s . S i n c e the l o t s were l e f t w i t h no r e a s o n a b l e use from which the owner c o u l d make any p r o f i t , the c i t y ' s a c t i o n was tantamount t o r e s e r v i n g p r i v a t e l a n d f o r a p u b l i c purpose w i t h o u t e x p r o p r i a t i o n . The r i g h t t o t r a n s f e r the development r i g h t s was h e l d t o be i n s u f f i c i e n t compensation. The c i t y argued t h a t the v a l u e o f the development r i g h t s i n c r e a s e d because o f t h e i r t r a n s f e r from a r e s i d e n t i a l to 281 commercial a r e a „but the Court found the v a l u e was u n c e r t a i n because o f the dependence on the a v a i l a b i l i t y o f r e c e i v i n g 88 pop parcels and approval of council . The right s were t o t a l l y useless u n t i l an accommodating transferee l o t was found. This TDR scheme was held to be i n v a l i d by the New York Court of Appeal. The United States Constitutional protection of property rights was int e g r a l to thi s decision but a sim i l a r r e s u l t i s l i k e l y in Canada 2*^. Therefore, commentators 2*^ predict that a TDR scheme would be more l i k e l y to be v a l i d i f the New York Landmark Ordinance provisions are followed leaving a reasonable use of the property, a large amount of potential transfer l o t s and l i t t l e room fo r d i s c r e t i o n by municipal authorities to reject the transfer. c) The Chicago Plan In the early 1970*s, Professor Costonis c r i t i c i z e d the New York Landmark TDR scheme as being too limited because of the adjacent l o t r e s t r i c t i o n and the tendency to create i n -tolerable congestion on the two l o t s that could destroy the 285 dimensional scale of the heritage property . To compensate for these l i m i t a t i o n s , Costonis proposed a new TDR plan that provided greater marketability of the development rights and protection for the heritage structure with the use of r e s t r i c t i v e covenants. Costonis's "Chicago Plan" was designed to protect the many examples of early skyscrapers b u i l t in the Loop area of Chicago. The Chicago Plan's chief feature was the creation of a transfer d i s t r i c t . Instead of being li m i t e d to adjoining l o t s with common ownership, the owner of a landmark could 89 transfer his building's unused development rights to l o t s a l l over the c i t y ' s downtown core. This covered the c i t y ' s most valuable land where development rights were l i k e l y to be worth more and be i n demand. The concentration of low r i s e land-marks in the area would have provided l i g h t and a i r parks among pan the new development . By widely dispersing the transferee l o t s , there would have been less chance for congestion i n a small area around the landmark. For an added safeguard against over-crowding and buildings being wildly out of proportion to i t s surroundings, the density increases on the transferee s i t e s would have been held within bulk and height c e i l i n g s . Thus, the unused development rig h t s from one landmark could have been separated and d i s t r i b u t e d among several transferee l o t s within the transfer d i s t r i c t . In return for the ri g h t to transfer the development r i g h t s , the landmark owner was required to accept designation of his property and give a r e s t r i c t i v e covenant to the c i t y insuring the landmark's continued preservation. This preservation r e s t r i c t i o n would have included r e s t r i c t i o n s against demolition and a l t e r a t i o n , maintenance obligations, and a duration clause by which the owner could p e t i t i o n c i t y council when the building 288 f a i l e d to provide a reasonable return The owner who accepted these terms was also e n t i t l e d to a reduction i n property taxes r e f l e c t i n g the preservation encumbrance. This would have presented a great incentive p on because, according to Costonis , property taxes were the largest single item i n the cost of operating a downtown building. 90 The reduced tax y i e l d of the landmarks was to be made up by increased taxes paid by owners of more prof i t a b l e buildings. Thus, the burden of heritage preservation was to be taken away from the public sector. For the owner who refused these terms, the c i t y was to be given the option of expropriating his unused development r i g h t s . To compensate for the expropriation, a development rights bank would have been set up to act s i m i l a r l y to a 290 revolving funds scheme . Once again, an i n i t i a l sum from public funds would have been necessary to i n i t i a t e the bank but that sum would t h e o r e t i c a l l y be recovered when expropriated rights were resold to developers. The start-up sum could also have been obtained from a sale of the unused development rights of a public building. The danger of s e l l i n g public property development righ t s has been examined above. The bank would also have administered the sale of rights voluntarily sold or donated by landmark owners to the c i t y . Costonis o p t i m i s t i c l y predicted the p r o f i t s of the resale of:;the rights would be large enough not only to cover the bank's operating costs but also to subsidize landmark owners who would not have benefitted from the right to s e l l or transfer development r i g h t s . A subsidy would have been available where the heritage structure exhausted substantially a l l of the allowable f l o o r area for the s i t e and thus the sale of the remaining rights would not 2°-1 provide enough money to maintain or restore the structure " . The Chicago Plan was never implemented i n the City of Chicago due to problems with the plan that w i l l be canvassed 91 below . However, a si m i l a r scheme was used successfully 293 by New York City . To preserve the South Street Seaport d i s t r i c t around the Fulton Fish Market, a plan was set up whereby two d i s t r i c t s were created. The f i r s t d i s t r i c t con-tained the structures the ci t y wished to preserve. The buildings were att r a c t i v e but too small to be economically viable. The second d i s t r i c t was the surrounding neighbourhood that was considered ripe f o r intensive redevelopment. The unused development rig h t s from the f i r s t d i s t r i c t were s h i f t e d to a bank. These banked rig h t s could then be transferred to de-velopers in the second d i s t r i c t where larger buildings were b u i l t . The p r o f i t s from the sale of the rights were then used to renovate and maintain the h i s t o r i c buildings. The re s u l t was a successfully r e h a b i l i t a t e d and economically viable h i s t o r i c d i s t r i c t with l i t t l e public money spent and the allowable density i n the two areas combined remaining the same. d)* Problems with TDR Schemes The success of the South Street Seaport TDR project and other plans similar to the Chicago Plan would be dependent on the zoning of the transfer d i s t r i c t . To make the development righ t s marketable, the transfer d i s t r i c t must be underzoned. Therefore, added density to the area from the purchased develop-ment rights would be eas i l y absorbed without creating con-gestion. By underzoning an area, the developer would be forced to buy extra density through the development rig h t s in order 92 to c o n s t r u c t a development with maximim p r o f i t a b i l i t y . There-f o r e , i n implementing such a p l a n , a c i t y c o u n c i l would l i k e l y be f o r c e d to downzone a p r o s p e c t i v e t r a n s f e r d i s t r i c t . Although downzoning i s a p e r f e c t l y v a l i d and non-compensable a c t i o n so long as e x i s t i n g non-conforming uses are allowed to r e m a i n 2 ^ i t i s p o l i t i c a l l y unwise and t h e r e f o r e u n l i k e l y to ever be implemented. A problem with TDR schemes i n g e n e r a l may be the v a l u a t i o n of each r i g h t . The TDR may be a r a t h e r nebulous, f l o a t i n g c r e a t u r e incapable of p r e c i s e v a l u a t i o n . Planners assume t h a t development r i g h t s w i l l be t r a n s f e r r e d on an equal b a s i s of exchange. C l e a r l y , value i s dependent on the l o c a t i o n of the t r a n s f e r e e l o t . A c c o r d i n g to Delaney et a l * J , i f a TDR i s purchased at a constant market value and t r a n s f e r r e d to a l e s s d e s i r a b l e l o c a t i o n , i t s value w i l l l i k e l y never be recouped i n a subsequent purchase p r i c e . But i f the t r a n s f e r e e l o t was i n an expensive, a f f l u e n t area, the TDR may be worth ten times the constant market v a l u e . Furthermore, a development r i g h t from a very d e s i r a b l e property should be worth more than a TDR from wasteland. Delaney suggested t h a t the d i f f e r i n g p o t e n t i a l values of TDRs to v a r i o u s sending and r e c e i v i n g l o t s must be c l o s e l y s c r u t i n i z e d to i n s u r e f a i r n e s s i n a l l o w i n g the l a n d -owners achieve some value from t h e i r r e s t r i c t e d sending p a r c e l s . For example, the owner of a downtown landmark should r e c e i v e more f o r t r a n s f e r r i n g h i s development r i g h t s from h i s prime pi e c e of r e a l e s t a t e than an owner of suburban open l a n d . TDR programmes have only found success i n h i g h d e n s i t y 93 areas. The ri g h t s transferred are more l i k e l y to flow to areas that are already highly congested because of the concen-t r a t i o n of advantages. Only newer and bigger o f f i c e and apartment buildings can absorb the transferred r i g h t s and that w i l l necessarily increase the density of areas that are already congested. Therefore, the price to the public of greater congestion and s t r a i n on amenities may be too great to j u s t i f y a transfer of development rights programme to preserve heritage properties. The value of a TDR i s also dependent on i t s market. Many of the development r i g h t s transferred in New York remained unused f o r many years due to a weak market f o r o f f i c e space. In Vancouver, construction of the o f f i c e building to which Christ Church Cathedral's development rights were transferred was delayed f o r several years and the agreement for the transfer had to be revised to make i t more f e a s i b l e f o r the developer. This shows the ultimate flaw of any TDR scheme. The success of a TDR system w i l l always depend on the market f o r o f f i c e building space or high density r e s i d e n t i a l developments. Where the market f o r o f f i c e space i s soft in a c i t y , developers w i l l not redevelop properties and thus w i l l not need to buy development rights from heritage property owners. As Richards 296 submitted , "No mere loosening of the straight-jacket of administrative controls in favour of an arguably more f l e x i b l e Chicago Plan i s going to remove the market impediment to land-mark preservation through TDR." A programme cannot work unless a builder wants the redevelopment rig h t s regardless of how f a r 94 they may be transferred. Presumably, one of the reasons why the Chicago Plan was never implemented was the fact that there was a ten percent vacancy rate i n commercial space in Chicago when the plan was proposed. A comprehensive TDR system w i l l only work in periods of tremendous growth and thus has l i m i t e d a p p l i c a b i l i t y . This dependency on the f l u c t u a t i n g and frequently depressed market makes a TDR system unreliable i n protecting heritage properties and t h e i r owners. As Richards concludes, a TDR programme should not be necessary where other preservation 297 powers are available . e) Application to B r i t i s h Columbia The above c r i t i c i s m s imply that a TDR scheme has an extremely l i m i t e d use, i f any, but the power to implement such a scheme may be valuable f o r municipalities i n certain cases such as the Christ Church Cathedral scenario. B r i t i s h Columbia municipalities do not appear to have the power to implement a comprehensive transfer d i s t r i c t style TDR system but they can implement a TDR scheme on an i n d i v i d u a l j p r o j e c t basis. In the City of Vancouver, a transfer of development ri g h t s would be possible under powers given the c i t y under pop s. 5 6 5 ( f ) of the Vancouver Charter . This section empowers the c i t y to create zones (known as Comprehensive Development D i s t r i c t s ) f o r which there are no set regulations f o r height and density. A development can only proceed i n such zones i f the City Council and the Director of Planning have approved 299 the detailed plans f o r the project ^ . Such a zone could allow 95 increased density from a transfer of development r i g h t s with c i v i c o f f i c i a l s given the opportunity to insure the design and size of the new project i s compatible with the nearby heritage structure from which the development rights were transferred. Other municipalities i n B r i t i s h Columbia do not have such wide powers. These municipalities may be l i m i t e d to t h e i r zoning power under s. 963 of the Municipal A c t ^ ^ . To transfer development r i g h t s , a municipality would l i k e l y have to create a new zone specifying a greater allowable density. In so doing, the council would be required to hold a public hearing where a l l owners of neighbouring properties and other interested 301 parties must be given the opportunity to be heard O r i g i n a l l y , B r i t i s h Columbia municipalities other than Vancouver, had wider powers to implement TDR projects with the use of land 302 use contracts"^ . These contracts allowed municipalities to negotiate s p e c i f i c d e t a i l s of a p a r t i c u l a r project without being r e s t r i c t e d by the e x i s t i n g zoning. The land use contracts were replaced i n 1979 by development permits. The permits i n t h e i r present state a f t e r recent amendments do not provide the same f l e x i b i l i t y as they must not vary the permitted uses or 303 densities of the land i n the applicable zoning by-law . The only possible use f o r development permits may be a transfer of development r i g h t s within one l o t . Although the permit cannot aff e c t the density on the l o t , i t could vary the dimensions and s i t i n g of the structures on the land. In t h i s way, a developer could be allowed to construct a t a l l e r . 96 building than normally allowed using the unused density and height of a heritage building on the same l o t . The lack of f l e x i b i l i t y i n the allowable density may make the use of development permits i n implementing a TDR scheme severely l i m i t e d . 4. Property Tax R e l i e f Property tax l i a b i l i t y on heritage property i s an important factor in the economic s u r v i v a l and pot e n t i a l r e h a b i l i t a t i o n of the structure. It forms one of the largest single expense items for the landowner and thus, according to l i s t o k i n ^ ^ , i t s extent can either be a catalyst to preservation or, i f great, a deterrent to the building's s u r v i v a l . Much success has been achieved across North America i n encouraging preservation and protecting the owner by providing property tax r e l i e f to h i s t o r i c structures. This r e l i e f can take many forms but the various schemes may be roughly divided into two categories. The pro-grammes either involve an exemption or abatement of property taxes or involve an adjustment of the property's assessed value f o r taxation purposes. B r i t i s h Columbia's Heritage Conservation Act expressly provides that any compensation payable to an owner upon desig-305 nation may be made i n the form of tax r e l i e f . Similar pro-visions are contained i n the heritage statutes of A l b e r t a ^ ^ , Saskatchewan , and Quebec . B r i t i s h Columbia municipalities are however r e s t r i c t e d i n the form i n which t h i s r e l i e f may be provided. 97 a) Exemption or Abatement of the Tax Many heritage properties may already be covered by other statutory exemptions from property tax. These exemptions t y p i c a l l y have nothing to do with the significance of the structure but are granted because of the special t r a i t of the owner. For example, i n B r i t i s h Columbia, church properties are exempted en t i r e l y from taxation under s. 398(h) of the 309 Municipal Act . This would cover the eight church-owned structures designated under the City of Vancouver's Heritage By-Law. Other j u r i s d i c t i o n s exempt properties owned by chari-table i n s t i t u t i o n s . This exemption i s of great importance where non-profit private heritage foundations own heritage buildings. But these exemptions do not apply to privately owned heritage properties. Since property taxes t r a d i t i o n a l l y form the largest source of municipal revenues, municipalities are hesitant to decrease those revenues by extending the exemptions to other property owners. But several American j u r i s d i c t i o n s have implemented innovations that allow some private, profit-seeking owners an exemption from or an abatement of th© property tax. In Connecticut, municipalities are empowered to pass ordinances that w i l l reduce the property tax l i a b i l i t y for owners of heritage properties. But th i s abatement i s only available where the l e v e l of taxation materially threatens 310 the continued existence of the structure and therefore, the measure would not help the t y p i c a l heritage property owner. In North Carolina, municipalities are empowered to defer 98 f i f t y percent of the annual property taxes so long as the landmark continues to qualify f o r l i s t i n g under the National 311 Register . The deferred taxes become payable i f the building i s demolished. This scheme has f a i l e d to encourage preser-vation because i t s penalty provisions have deterred owners 312 from seeking the benefit . The penalty i s very harsh in that the taxes must be paid with interest at a maximum rate of f o r t y - s i x percent. Only an act of God w i l l excuse a^f-demolition from t h i s penalty. 313 A New Mexico statute i s designed to insure that any money saved from the tax r e l i e f w i l l be used to preserve or restore the structure. A privately-owned landmark w i l l be exempt from property taxes but only f o r the amount of expenses incurred f o r approved preservations or maintenance of the building. The landmark owner i s generously protected even when the costs of a major preservation are great because he may carry forward t h i s r i g h t to an exemption for a ten-year period. The state of Maryland has a similar programme involving a tax credit for up to ten percent of the costs of restor-+ • 314 ation-^ . There are two Canadian examples of special tax exemption powers for h i s t o r i c structures. Section 33 of Quebec's Cultural 315 Property Act J provides that any designated property may be exempted from up to h a l f of i t s property taxes but the e l i g i -b i l i t y i s limited to "non-commercial" properties. The City of Winnipeg recently passed a by-law that w i l l exempt desig-316 nated buildings from taxation while renovation occurs; 317 According to one commentator , the by-law i s expected to 99 provide a major incentive to owners of designated structures to r e h a b i l i t a t e t h e i r properties making them economically prof i t a b l e again. Under section 400(2)(a) of the Municipal A c t ^ 1 8 , B r i t i s h Columbia municipalities are given the express power to exempt " h i s t o r i c a l buildings" from taxation but the procedure required to implement the exemption makes i t impractical. Council may activate the exemption by two methods. F i r s t l y , i t may pass a by-law by a two thirds majority but t h i s exemption w i l l only be e f f e c t i v e for one year. This would mean, the exemption would have to be reconsidered yearly thus giving the property owner minimal long-term protection. For exemptions of longer^ periods, council would require approval from both the p r o v i n c i a l 319 Minister of Municipal A f f a i r s and the electors . The expense of holding"-a plebescite would l i k e l y make t h i s option impractical. 320 Commentators have c r i t i c i z e d these exemption programmes because of t h e i r expense. The municipality suffers an absolute loss in the tax base fo r a varying period of time. Since the municipality i s very dependent on property tax schemes, tax exemption may cost too much to j u s t i f y . b) Assessment Adjustments Programmes which have concentrated on the assessment of structures f o r tax purposes have been more popular. The cost to the municipality i s less apparent and the,; programme should r e s u l t in a minimal loss from the e x i s t i n g tax base. Two assessment methods are available to encourage preservation. 100 The assessment may be frozen so that added value from restor-ation and r e h a b i l i t a t i o n w i l l not be taxed or the assessment may be adjusted to better r e f l e c t the r e s t r i c t e d use of a desi nated heritage structure. i ) Frozen Assessments The most successful property tax scheme ever implemented fo r h i s t o r i c preservation in North America i s an Oregon scheme whereby a property's assessment was frozen f o r a fifteen-year 321 period . In order to survive f i n a n c i a l l y , privately-owned landmarks w i l l l i k e l y require extensive renovations and re-? h a b i l i t a t i o n to compete with more modern neighbours. These renovations w i l l add to the value of the building and thus, the assessment w i l l be increased and more property tax w i l l be payable. The increased tax l i a b i l i t y acts as a deterrent to r e h a b i l i t a t e and thus adds a further burden to the owner of the protected property. The Oregon scheme removed t h i s deterrent by freezing the assessment of an e l i g i b l e property before renovations are made. The property was assessed at i t s true cash value i n the f i r s t year of approval. If any renovations were made during the fifteen-year period, these improvements would not be r e f l e c t e d in the assessment which remains constant. For a property to be e l i g i b l e , i t had to have been on the National Register of H i s t o r i c Properties. The owner also had to agree to maintain his building according to established standards of the state preservation o f f i c e r and open i t to 101 the public at l e a s t one day a year . The property would lose the s p e c i a l assessment i f any of these conditions were breached or i f the property was sold to a tax exempt owner^2^. The property would then be subject to a recapture of the increased taxes that would have been payable f o r the year of d i s q u a l i f i c a t i o n . This sum would be multiplied by the number of years that the property was s p e c i a l l y assessed. This penalty was c l e a r l y onerous enough that i t encouraged applicants to s a t i s f y the maintenance and other conditions f o r the f u l l f i f t e e n years. Yet because i t did not involve the harsh interest provisions of the North Carolina recapture scheme^24", the penalty was less of a deterrent to property owners applying fo r the special treatment. One fear about the Oregon scheme was i t could severely l i m i t the tax base of m u n i c i p a l i t i e s . But by freezing the assessments, there was no decrease i n the municipality's e x i s t i n g tax base so that there was no net loss i n revenue. The municipality merely f a i l e d to r e a l i z e on improvements that did not previously e x i s t . The scheme's e f f e c t was minimal i n c i t i e s with large tax bases over which a smaller increase i n assessed value could be spread. For example, i n the City of Portland, a study showed that i f a l l e l i g i b l e properties re-ceived the special assessment, the c i t y would forego revenue "325 on improvements worth 14.5 m i l l i o n d o l l a r s . To make up the added revenue on these improvements, the maximim increase of the tax rate would have been four cents per one thousand d o l l a r s of assessed value. The average homeowner would have paid an 102 extra seventy-five cents i n taxes per year. In smaller m u n i c i p a l i t i e s , the e f f e c t could be much greater. The town of Jacksonville had a p a r t i c u l a r l y unique problem i n that almost a l l of i t s buildings were either situated i n a National Register H i s t o r i c D i s t r i c t or were poten t i a l l y e l i g i b l e f o r designation. I f a l l these properties applied f o r the s p e c i a l assessment, the remaining non-historic property owners would be burdened by increased taxes whenever the municipality required additional funds due to i n f l a t i o n . •2 Of. To solve t h i s problem,aa system of "trending" was introduced A l l structures were physically reassessed every six years i n Oregon. During the interim, assessors would "trend" the properties' values to allow f o r i n f l a t i o n . The properties with frozen assessments were o r i g i n a l l y exempted from t h i s trending but to solve the Jacksonville problem, h i s t o r i c properties'©assessments were to increase to r e f l e c t i n f l a t i o n . Therefore, the o r i g i n a l assessment would increase due to 32 i n f l a t i o n but improvements remained untaxed. Powers suggested that t h i s trending would also further encourage landmark owners to make improvements. It would no longer be worthwhile to obtain the frozen assessment without making improvements because the land would be encumbered f o r f i f t e e n years without re-ceiving any r e a l benefit. The trending would allow the muni-c i p a l i t y ' s tax base to keep up with i n f l a t i o n but any additional increases necessary would have to be borne by the non-historic property owners. The programme was a tremendous success. In the f i r s t 103 four years of the ten years i n which assessments could be frozen, forty percent of a l l e l i g i b l e properties were c e r t i -f i e d ^ 2 8 . By 1980, more landmarks i n Oregon had received property tax r e l i e f than i n a l l other American j u r i s d i c t i o n s 329 330 combined . Powers attributed t h i s success to the fact that.property taxes i n Oregon were quite high making the savings from freezing the assessment quite s i g n i f i c a n t to the property owner. The programme allowed greater cash flow f o r owners so that bank loans were more e a s i l y available f o r r e h a b i l i t a t i o n costs. Furthermore, the straightforward nature of the Oregon law enabled the property owner to know what the property tax would be f o r a considerable period. The programme was also popular because the property owner had r e l a t i v e l y minor burdens i n order to benefit. The programme only had a s l i g h t e f f e c t on tax revenues so the e f f e c t on the municipality was minimal. Unfortunately, B r i t i s h Columbia municipalities have i n s u f f i c i e n t powers to implement a frozen assessment programme. In the late 1970's, the City of V i c t o r i a unsuccessfully imple-mented a s i m i l a r programme. Using the tax r e l i e f section of 331 the Heritage Conservation Act , the c i t y attempted to freeze the assessed values of a l l i t s designated heritage s i t e s . This action was challenged by the B r i t i s h Columbia Assessment Authority which claimed |he by-law interfered with i t s assess-332 333 ment powers"^ | Under the Assessment Authority Act , the province created an independentlauthority to provide uniform assessments throughout the province. Municipalities thus have no assessment power of t h e i r own and are not e n t i t l e d to adjust 104 i n any way the assessments provided by the authority. In the challenge, the Supreme Court of B r i t i s h Columbia found that the "tax r e l i e f " power i n the HCA did not include any power to a l t e r or f i x assessments and thus the assessment authority's power could not be abrogated. The court found that freezing the assessment would not necessarily have the ef f e c t of pro-viding tax r e l i e f . Council's power under the HCA was limi t e d to reducing the amount of tax payable aft e r assessment o r by glying d i r e c t monetary,compensation through a grant or loan. The c i t y was forced to abandon the scheme and has since t r i e d to provide property tax incentives through an informal and less 3*54 comprehensive system of grants"^ . i i ) Assessment on Actual Use Since the use of a heritage property i s r e s t r i c t e d , that r e s t r i c t i o n should be r e f l e c t e d in the property's assessment. In many cases, the e x i s t i n g structure w i l l not be the highest and. best use of the property. Yet, the property may be r-assessed on the basis of the highest and best use even though that use i s impossible due to heritage r e s t r i c t i o n s . According to L i s t o k i n " ^ , t h i s over-assessment can contribute.to f i n a n c i a l pressure that might discourage the property's owner from r e h a b i l i t a t i n g or even maintaining the structure. Some ~ j u r i s d i c t i o n s have implemented formal systems of assessment i n 336 which heritage buildings must be assessed at t h e i r actual use , If the property i s susceptible to a resale f o r a di f f e r e n t purpose that threatens the continued existence of the structure, 105 337 the adjusted assessment w i l l l i k e l y produce a lower tax . The B r i t i s h Columbia Assessment Authority informally considers heritage designation as a factor i n c a l c u l a t i n g the value of a property. Under s. 26(3) of the Assessment 338 Act , an assessor may consider several factors including economic and functional obsolescence. Economic obsolescence 339 has been defined J as being caused by external factors r e s u l t i n g i n a lack of demand f o r a p a r t i c u l a r area. Almy defined functional obsolescence as pertaining to design features of a building that make i t obsolete f o r i t s o r i g i n a l l y intended purpose. The Assessment Authority uses these two factors, especially functional obsolescence, to reduce the assessments of property encumbered by heritage designation. Because t h i s i s done informally, the e f f e c t on heritage properties i s i n -consistent but does provide some r e l i e f i n almost a l l cases fo r designated heritage property owners. The e a r l i e s t cases heard by the Board on t h i s topic involved the Vancouver Club building, a designated structure in a high-rise area^ 4°. The Board categorized the s i t e as c l e a r l y secondary i n r e l a t i o n to i t s neighbours because the designation placed a r e s t r i c t i o n on the development potential of the s i t e . The Board reduced the assessment on the land by seven percent and allowed an additional twelve and a hal f percent i n obsolescence costs f o r the structure. In Art Gallery of Greater V i c t o r i a v. Assessor of Area  02-Capital^'*, the non-profit organization that owned the gallery challenged the assessment that was based on the value 106 of t h e i r land i f subdivided according to the allowable zoning. Since the building on the s i t e had been designated as heritage property, i t could never be demolished so that the property could never be subdivided. Therefore, despite the zoning, the Board found the property's highest and best use would always be as an art gallery and thus the land was valued as one un-subdividable l o t . The most detailed decision on t h i s adjusted assessment was made by the Appeal Board i n M i t c h e l l Holdings v. Assessor 34.2 of Area 09-Vancouver . The case involved the Vancouver Block, a sixty year old building designated by the c i t y as a heritage structure. The assessor had valued the property with-out any reference to i t s heritage r e s t r i c t i o n because the building was already developed to a higher f l o o r space r a t i o than allowed by the current zoning. The assessor also depreci-ated the building less than usual because he assumed the desig-nation would insure the building's existence and thus extend i t s l i f e expectancy. The Board found t h i s approach incorrect because designation could not extend the u t i l i t y of the structure to a l l e v i a t e the physical and functional obsolescence. Furthermore, since the land was completely covered by the building, i t had no u t i l i t y or income generation c a p a b i l i t y beyond that derived from being the s i t e of the building. Once the building f a i l s to be p r o f i t a b l e , the land no longer has u t i l i t y and there w i l l be no return received on the investment of the building. The Board likened t h i s to an expropriation of a " s i g n i f i c a n t portion of the continuing u t i l i t y " of the 107 land. The land thus loses much of i t s own value while a neighbouring property may be made more valuable by the increased scarcity of developable land. This makes the l i f e expectancy of the income earning pot e n t i a l uniform over both land and improvement. The Board indicated that there would remain a contingent value i n that the building might someday be de-designated or be destroyed by f i r e or earthquake. But the Board decided that such a contingency was not a proper component of the actual present value and thus would not be included i n the current assessment. To insure that the building w i l l continue to provide a reasonable rate of return and recapture the investment made i n i t during i t s remaining useful l i f e , usual assessment practices, such as the sale of comparable buildings, had to be set aside. Instead, the value of the building was determined by the present value of an annuity equal to theocurrent net income f o r the remaining useful l i f e at a current inte r e s t rate. This resulted i n an assessment of approximately 400,000 do l l a r s less than the 3.5 m i l l i o n dollars set by the assessor. The Board used Suffredine v. Assessor of Area 21-Nelson^ 4^ as a precedent f o r the use of t h i s income method fo r valuing heritage properties. Comparison with non-heritage properties i s inadequate because they would not be r e s t r i c t e d to t h e i r e x i s t i n g use. Comparison with other heritage s i t e s would be impossible because of the varying sizes of the buildings that they contain. In t h i s case, the assessment of a small frame building was reduced by approximately seven percent to r e f l e c t 108 the r e s t r i c t i o n . In other cases, the Board has been more generous. The assessment of a designated restaurant i n V i c t o r i a was allowed a t h i r t y - f i v e percent reduction i n economic ob-solescence to r e f l e c t the r e s t r i c t i o n ^ 4 , 4 " . Not a l l heritage properties have been given downward adjustments. The Board refused to decrease the assessment of a condominium i n a designated building because r e s i d e n t i a l heritage properties are more l i k e l y to be sold at rates comparable to other non-heritage units and thus the comparable sales methods should be Clearly, the Board w i l l only make allowances f o r heritage property when the property has been formally designated under the Heritage Conservation Act. In Estates Investment Ltd. v. Assessor of Area 09-Vancouver , the Board, as I have suggested, incorrectly found that designations made under a previous act were no longer v a l i d . Therefore, the heritage value of the structure was not considered as part of the assessment. When the heritage r e s t r i c t i o n i s created by r e s t r i c t i v e covenant instead of designation, i t i s unlike l y that the assessment w i l l be adjusted. In Telford v. Assessor of Area H-Surrey-"54-7 White Rock , the Board considered a l o t encumbered by a non-heritage r e s t r i c t i v e covenant and found the assessment could not be adjusted because the owner himself agreed to reduce the u s a b i l i t y and marketability of the l o t . The case followed a Manitoba Court of Appeal d e c i s i o n ^ 4 8 i n which i t was found that the municipality was not obliged to subsidize the property by lowering i t s assessment when the taxpayer created the 109 r e s t r i c t i o n without the municipality's approval. To decide, otherwise would have encouraged owners to devise r e s t r i c t i v e schemes that could u n i l a t e r a l l y lower the value of the property. c) Oonclusion Property tax r e l i e f i s an excellent method of providing compensation and thus protection to the owners of heritage •54.Q buildings. Almy-^ suggested that property tax r e l i e f w i l l work because the group of p o t e n t i a l beneficiaries i s small i n r e l a t i o n to the number of taxpayers generally so that the cost of an additional exemption may be spread t h i n l y among many. However, such a programme i s only advisable where the muni-c i p a l i t y can afford i t . It w i l l not work where a substantial portion of the municipality's tax base i s already exempt as i n university towns, c a p i t a l c i t i e s or where large areas of Crown land are located. Washington, D.C. has been unsuccessful in.! several attempts at implementing property tax r e l i e f f o r preservation because of the concentration of government properties i n the c i t y ^ . Council found i t was p o l i t i c a l l y unwise to erode the c i t y ' s already small property tax base. Property tax r e l i e f may also not work i n smaller towns and c i t i e s where there i s a substantial concentration of h i s t o r i c d i s t r i c t s and buildings that would p o t e n t i a l l y receive tax abatements. In such municipalities, there would be l i t t l e room for growth of the tax base so that non-heritage building owners would be burdened disproportionately. In B r i t i s h Columbia, the City of Nelson has a small population but a large concentration of 110 heritage structures J so that any tax r e l i e f programme for the owners of these structures might be too costly a burden for. the small population of non-heritage property owners. For a tax r e l i e f system to work, a municipality must make sure that the incentive w i l l have a r e a l d o l l a r impact on preservation. The Oregon scheme was successful mostly because property taxes were high i n the state so that any saving was 35 2 s i g n i f i c a n t . But Professor Stipe used an example that showed the system would inadequately protect the owner where the tax rate was small. I f a c i t y has a tax rate of three d o l l a r s per one hundred d o l l a r s of assessed valuation, an owner i s unlikely to repair a slate roof on his V i c t o r i a n mansion when the costs w i l l be 30,000 dol l a r s and his annual tax saving, i f the assessment i s frozen, w i l l be nine hundred d o l l a r s . In such areas, other forms of incentives w i l l have to be used. Property tax r e l i e f does have advantages over other forms 353 of compensation. According to Powers , property tax r e l i e f i s more equitable than income tax incentives where the primary benefit was only f o r owners with large enough incomes to make the deductions. A property tax r e l i e f programme would d i r e c t l y benefit a l l owners of h i s t o r i c a l properties regardless of income. A property tax r e l i e f programme such as freezing the assessments may be better than a simple grant of compensation because i t acts as an incentive to make renovations,and repairs so that the structure may be more competitive and i t s r e s t r i c t i o n s 354-less of a burden to the owner . The owner only receives the benefit i f he has i n fac t made improvements while with a grant, 111 there i s not always a guarantee that the money given w i l l be spent.on preservation. A successful comprehensive tax r e l i e f system w i l l not be possible i n B r i t i s h Columbia without a change i n the law. The current permissive tax exemption powers given to munici-p a l i t i e s may be adequate to provide short-term r e l i e f on a case by case basis. But the powers are impractical and i n -adequate fo r any long-term or comprehensive compensation scheme. Tax exemption probably i s too expensive to implement on a wide basis so that assessment adjustments are a better a l t e r n a t i v e . The current practice of the Assessment Appeal Board i n making heritage designation a v a l i d consideration i n assessment does provide the heritage owner valuable protection against part; of the burden created by designation. But to insure t h i s factor i s treated consistently by assessors, i t may be advisable to expressly state in s. 26 of the Assessment •5155 Act that.heritage r e s t i c t i o n s must be considered i n deter-mining the actual value. To provide s i g n i f i c a n t protection f o r the owner and incentives to r e h a b i l i t a t e , tax r e l i e f must come through freezing the assessments of a l l designated privately-owned 356 structures. The Assessment Authority kvt and the Re Corpor-"557 ation of the City of V i c t o r i a - ^ decision make i t impossible f o r a municipality to implement such a scheme. However, an 358 amendment to the Assessment Act creating a separate class for heritage properties could provide that improvements made 112 to the structures w i l l not be assessed f o r a cert a i n period of time. To insure there w i l l never be a net loss to the tax r o l l , the heritage properties' o r i g i n a l assessment should be subject to trending to keep up with i n f l a t i o n . This would provide protection to the owner while spreading at least a portion of the cost of preservation over a l l other property taxpayers i n the municipality. 5. Consideration of the Economic Consequences of Designation Protection f o r the property owner need not be by compen-sation. The property owner can be protected by consideration of the economic consequences of the designation and by the opportunity to have the building de-designated once the re-s t r i c t i o n s make the building no longer economically viable. This safety valve i s perhaps in d i c a t i v e of American landmark ordinances while Canadian heritage statutes rarely include i t . This i s l i k e l y because of the United States Constitution's 359 recognition of the r i g h t to p r o p e r t y . Section 367A of the City of St. John's A c t ^ 6 0 provides that the City Council must consider the "costs and benefits of 361 preservation" before designating a structure . The wording of the section provides l i t t l e protection f o r the property owner. It i s unclear i f "the costs of preservation" are the costs to the owner, to the c i t y , or to both. The owner has no r i g h t to have his property de-designated upon proof that the property cannot remain viable with the burden of heritage r e s t r i c t i o n s . The Council i s only required to consider costs. 113 It i s not required to make a decision i n a certain way should proof of economic hardship be presented. The section adds l i t t l e protection to requirements i n other provinces that allow an owner to object to a designation and have a public hearingvwhere he may present proof of the economic e f f e c t on •2 C p him expected by the designation"^ American ordinances provide much more comprehensive and clear protection f o r a property owner who i s unable to survive f i n a n c i a l l y because of a designation. The New York City land-363 mark Ordinance jprovides the most detailed protection and has been the subject of a great deal of l i t i g a t i o n . The ordinance allows an owner of a designated property to apply f o r a c e r t i f i c a t e of appropriateness from the landmark commission that would permit him to demolish the structure on. the ground of " i n s u f f i c i e n t r e t u r n " ^ 4 " . The owner i s e n t i t l e d to t h i s c e r t i f i c a t e i f he can e s t a b l i s h the property i s not capable of earning a reasonable return. I f he wants to demolish the structure, he must also show that he seeks the c e r t i f i c a t e i n good f a i t h so that he may construct a new income-producing f a c i l i t y with reasonable promptness. Or he mustishow that he requires the c e r t i f i c a t e f o r the purpose of terminating the e x i s t i n g operation at a l o s s . The same proof i s necessary i f the owner wants to make alt e r a t i o n s which would destroy the i n t e g r i t y of the designated .structure. I f such proof i s presented, the landmark commission i s obliged to make a preliminary finding of i n s u f f i c i e n t return. The commission may then devise a plan whereby the structure would 114 be preserved and made capable of a reasonable return. This plan could include a p a r t i a l or complete tax exemption or the authorization of a l t e r a t i o n s . I f the owner rejects t h i s plan, the c i t y council may condemn or purchase the structure or f i n d a purchaser sympathetic to preservation. I f not, the c i t y must grant the c e r t i f i c a t e , de-designate the structure and allow the proposed work to proceed promptly. Obviously, an important issue involved i n t h i s process i s what constitutes a reasonable return. The New York ordinance defines reasonable return as being "six percent on the current 365 assessed valuation established by the c i t y . " For the purposes of t h i s thesis, s i x percent w i l l be assumed to be reasonable to provide s u f f i c i e n t income for the property owner. Professor Costonis questioned the use of a f i x e d amount as indica t i o n of reasonable return^ . He argued that a f i x e d amount would only work where a rent control scheme imposed a reasonable rate of return on a building. Instead, he submitted that reasonable return should act as a standard of fairness only and not as a measure of value. It should therefore not be subject to precise c a l c u l a t i o n but should be determined by the "community's values". This proposition appears to add vagueness to the process but, i n practice, the judiciary has had l i t t l e trouble i s o l a t i n g reasonable return where no precise •2(1 rj figure i s given. In f a c t , the Supreme Court i n Penn Central never addressed whether or not Grand Central Terminal was indeed returning six percent yearly. The Court found by more sub-jective means that there was a reasonable return. 115 The Washington, D.C. Landmark Ordinance allows de-designation where the r e s t r i c t i o n s have resulted i n "unreasonable economic hardship to the owner." The term i s not defined by the ordinance. In 900 G. Street Associates v. Department of 369 Housing and Community Development , the D i s t r i c t of Columbia Court of Appeal, resorting to American zoning p r i n c i p l e s , defined unreasonable economic hardship as being where no reasonable economic use f o r the property remained. In t h i s case, the owner wanted to demolish the designated building and redevelop the property. But because the building could be rented out i n i t s present state and feeturn a p r o f i t , although much less than what the new development would y i e l d , an economic use was available. The r e s t r i c t i o n of a higher and better use did not constitute an unreasonable economic hardship. The Washington ordinance s p e c i f i c a l l y l i s t s what must be "570 submitted as proof of unreasonable economic hardship-^ . The owner must submit the date of purchase and the amount paid, the assessed value, the taxes, a l l appraisals obtained within^two years of application, the asking price and any offers received where the property has been l i s t e d f o r sale, the annual gross income and operating expenses and any consideration the owner has made as to p r o f i t a b l e adaptive uses f o r the property. Clearly, from a l l these submissions, a court should be able to 371 determine the p r o f i t a b i l i t y of a structure. In 900 G. Street , the Court would only consider t h i s l i s t of f a c t o r s . It refused to consider other things such as expected p r o f i t s from a new development on the property. 116 In New York where the ordinance does not l i s t any necessary submissions, the courts have found much more stringent require-ments for proving economic hardship. There must be substantial evidence of hardship to support a finding of i n s u f f i c i e n t •xno "57"5 return-^ . The Court of Appeal decision i n Penn Central went well beyond the c r i t e r i a followed by the D i s t r i c t of Columbia "574-court i n 900 G-. Street^ . Mr. Justice B r e i t e l considered the f i n a n c i a l e f f e c t of Grand Central Terminal on the surrounding properties owned by the same person. The justice also held that any public incentives granted to the Terminal in the past should also be considered i n determining a reasonable return. The court further held that i f the owner mismanaged his property or f a i l e d to use his best e f f o r t s to obtain a reasonable return, he was not e n t i t l e d to claim an unreasonable economic hardship. Such stringent requirements may make i t impossible f o r an owner to ever prove an economic hardship from desig-nation and thus, the property owner i s given.'little protection. The approach of the Washington, D.C. court and ordinance pro-vide a much more d e f i n i t e and useful means fo r the owner to have the heritage burden a l l e v i a t e d or removed where economic hardship has resulted. Most of the rare instancesswhere courts have found that economic hardship exists under the New York ordinance have been cases involving churches or charitable organizations. The measure of reasonable return i s a l i e n to non-profit organizations and thus they are not covered by the ordinance's economic safety valve. In Trustees of S a i l o r ' s Snug Harbor 117 v. P l a t l r , i t was held that a charitable organization must prove that preservation of the building would seriously i n t e r -fere with the present use of the building and that conversion to a useful purpose would be impossible without excessive costs. The New York Court of Appeal found such a s i t u a t i o n i n Lutheran Church i n America v. New York C i t y ~ ^ . An o f f i c e building owned by the church had been designated under the c i t y ' s landmark ordinance. The church proved that the building's structure was so inadequate f o r i t s purposes that the enforcement' of the landmark r e s t r i c t i o n would r e s u l t i n the end of i t s charitable a c t i v i t i e s . The Court thus forced the c i t y to de-designate the structure allowing the church to build a larger building on the s i t e . This issue i s of importance to Vancouver where eight of the f i f t y - s e v e n structures designated under the Heritage By-Law are owned by church organizations. The economic safety valve could only be adapted for use by B r i t i s h Columbia municipalities with considerable amendments to the statute. A provision s i m i l a r to s. 20 of the Saskatchewan;"; 377 Heritage Property Act^' could be incorporated i n B r i t i s h Columbia by statute. This provision allows an owner to apply to council;to have a designation by-law repealed six months after i t i s passed. Six months should allow a reasonable period to assess the economic e f f e c t of the designation on the property. Like the Saskatchewan provisions, the owner should be allowed to re-apply for de-designation every twelve months. I f the property owner could prove the designation leaves his property without any reasonable economic use, 118 council would have three a l t e r n a t i v e s . The municipality could purchase or expropriate the property. It could devise a plan through which other protective measures could make the ex i s t i n g structure viable. Or i t could repeal the designating by-law. The HOA does not expressly give the power to de-designate a structure but by s. 2 7(4) of the Interpretation Act-^ 8, muni-c i p a l i t i e s already have the power to repeal or amend any by-law i t makes. This would include a by-law o r i g i n a l l y designating a structure. This safety valve, i f properly aimplemented,! could provide excellent protection f o r the property owner when he i s truly burdened excessively by a designation. 6. Income Tax Incentives In the United States, tremendous success has been achieved i n r e h a b i l i t a t i o n of heritage property through incentives b u i l t •57Q into the Internal Revenue Code . Authorities determined that h i s t o r i c preservation was an important national goal that was largely dependent on the use of private funds. Tax consider-ations were known to have an important bearing on whether the private interests were w i l l i n g to maintain and rehabilitate' h i s t o r i c structures or allow them to deteriorate . Experts estimate that the incentives have led to between f i v e hundred m i l l i o n and two b i l l i o n d o l l a r s of private money being used f o r r e h a b i l i t a t i o n of landmarks. The sizes of the projects varied from restoring a small house worth 30,000 d o l l a r s to the twenty-f i v e m i l l i o n d o l l a r restoration of the art deco Chrysler Building in New York Cit y . Oldham estimated that the loss to the Treasury was only twenty-five m i l l i o n d o l l a r s for the f i r s t twelve hundred 119 a p p l i c a t i o n s worth f i v e hundred m i l l i o n d o l l a r s i n C o n -'s Q -1 s t r u c t i o n ^ The Canadian income t a x system p r o v i d e s no s p e c i a l i n -c e n t i v e s t o owners o f h e r i t a g e p r o p e r t i e s . I n many c a s e s , the 382 Income Tax A c t ^ a c t s as a d i s i n c e n t i v e t o p r e s e r v e . I t i s d o u b t f u l t h a t the A c t w i l l soon be changed t o a l l o w g r e a t e r i n c e n t i v e s because the c u r r e n t f i n a n c e m i n i s t e r i s on r e c o r d 383 as b e i n g opposed^ . F u r t h e r m o r e , the p r e s e r v a t i o n o f h e r i t a g e p r o p e r t y i s p r i m a r i l y a p r o v i n c i a l j u r i s d i c t i o n under " P r o p e r t y and C i v i l R i g h t s " ^ 8 4 and t h u s , the f e d e r a l government has l i t t l e i n c e n t i v e t o amend i t s income t a x p r o v i s i o n s for. t h i s p u r p o s e ! Perhaps the g r e a t s u c c e s s o f the American i n c e n t i v e s t h a t boosted the economy as w e l l as p r e s e r v a t i o n e f f o r t s may l e a d t o a change i n the f e d e r a l government's p o l i c y . In combin-a t i o n w i t h o t h e r p r e s e r v a t i o n and compensation programmes, Income Tax A c t amendments c o u l d p r o v i d e a v a l u a b l e i n c e n t i v e f o r owners t o r e n o v a t e t h e i r p r o t e c t e d and p o s s i b l y u n p r o f i t a b l e s t r u c t u r e s t u r n i n g them i n t o v i a b l e , income p r o d u c i n g commodities t h a t would no l o n g e r be a burden t o the owner. The U n i t e d S t a t e s i n c e n t i v e s can be c l a s s i f i e d i n t o t h r e e c a t e g o r i e s . The i n c e n t i v e s d e a l w i t h the d e d u c t i b i l i t y o f the c o s t s o f r e n o v a t i o n , d i s i n c e n t i v e s t o d e m o l i s h and the de-d u c t i b i l i t y o f the v a l u e o f r e s t r i c t i v e covenants as a c h a r i t a b l e c o n t r i b u t i o n . ' I . w i l l examine the c u r r e n t Canadian law i n these t h r e e a r e a s and whether the American amendments are a d a p t a b l e t o our system. 120 a) The De d u c t i b i l i t y of Renovation Posts In general, the owner of a heritage property i s e n t i t l e d to deduct any expenses incurred i n earning income from that property. Since renovations and preservation costs are pre-sumably incurred to improve the structure i n order to increase income from the property, they should l o g i c a l l y be f u l l y deductible. But section 18(1)(b) of the Income Tax Act disallows any deduction f o r : an outlay, loss or replacement of c a p i t a l , a payment on. account of c a p i t a l or an allowance i n respect of depreci-ation, obsolescence or depletion except as expressly permitted by t h i s Part.385 An expense disallowed by the section cannot be deducted from current expenses but are instead added to the c a p i t a l cost.of the property. The only relevant deduction expressly allowed from th i s c a p i t a l account i s depreciation referred to by the Act as the c a p i t a l cost allowance . For a building, the maximum amount of depreciation allowed to be deducted i n one 3 D year i s f i v e percent of the undepreciated value of the property^ or ten percent i f the building i s of frame construction^ ... J Clearly, the a b i l i t y to deduct the entire amount of the expense i n one year, or even over a few years i s greatly advantageous over deducting only f i v e percent of the expense as a c a p i t a l outlay. Whether a renovation expense i s a current expense or a c a p i t a l outlay i s frequently debated by the tax authorities and courts. Some costs are s p e c i f i c a l l y deemed c a p i t a l under the Act. "Soft costs" such as interest on loans and l e g a l 121 expenses incurred during construction or renovation of a building are s p e c i f i c a l l y deemed to be c a p i t a l expenses and added to the c a p i t a l cost of land or the building-^ . Other expenses have been dealt with by the courts. In B r i t i s h Insulated & Helsby Gable Ltd. v. At*ierton^ , the House of Lords formulated the test as follows: When an expenditure i s made, not only once and f o r a l l but with a view to bring into existence an asset or an . advantage f o r the enduring benefit of a trade, I think that there i s very good reason . . . f o r treating such an expenditure as properly attributable not to revenue but to c a p i t a l . Canadian courts have not always found that the costs of repairs and renovations are expenses made with a view to creating a l a s t i n g benefit. Ordinary repair costs have been accepted as 391 a v a l i d l y deductible current expense . So long as the repairs are merely to preserve the usefulness of the building, they are current expenses. But i f they materially increase the value of 392 the building or i t s useful l i f e , they are c a p i t a l outlays . The replacement of worn components such as f l o o r s or walls 393 394 would be a current cost^ even i f i t i s a substantial project < But i f the part i s a separate part i n i t s e l f instead of an int e g r a l part of the larger structure, i t s replacement i s a ca p i t a l outlay. New heating units would be covered by t h i s p r i n c i p l e ^ ^ . S i m i l a r l y , i f the replacement part i s larger or 396 adds greater e f f i c i e n c y , i t w i l l be a c a p i t a l outlay J . A 397 recent case, Shabro Investments held that repairs are not d i s q u a l i f i e d as current expenses merely because they are carried out i n l i g h t of technology not known when the structure was o r i g i n a l l y b u i l t . 122 With a heritage structure, i t i s l i k e l y that any repairs w i l l be major i n that they would be designed to r e h a b i l i t a t e the structure and make i t viable economically. Therefore, the costs of these renovations are l i k e l y to be considered c a p i t a l outlays and thus t h e i r d e d u c t i b i l i t y w i l l be severely •2QQ l i m i t e d . Despite the Levinter decision^ , courts usually f i n d major repairs to be c a p i t a l . In Graham v. The Minister of •zqq National Revenue , the costs of r e h a b i l i t a t i n g a condemned apartment building into an o f f i c e building were held to be a ca p i t a l outlay because the work s i g n i f i c a n t l y added to the value of the structure. Most heritage property restorations would be treated s i m i l a r l y . In NoI 709 v. The Minister of  National R e v e n u e t the Tax Appeal Board dealt with the cost of improving the heating system and i n s t a l l i n g a i r conditioning. These are two projects probable i n any heritage restoration. Even though much of the work was undertaken to comply with new Liquor Board and Hydro Commission regulations, the costs were c a p i t a l outlays. The Americans have changed t h e i r tax code to provide greater deductions f o r renovations and thus the code encourages ownership and renovation of heritage properties. In the United States, renovation costs were dealt with i n three ways. F i r s t l y , section 191 of the Internal Revenue Code allowed r e h a b i l i t a t i o n costs to be amortized over f i v e years instead of regular depreciation. This i s cl e a r l y superior to the Canadian system where such costs may never be completely deducted even aft e r twenty years. The incentive was to cover 123 expensives for renovations that would modernize the structure and make i t competitive with newer b u i l d i n g s 4 ^ 2 . These reno-vations included modern plumbing, e l e c t r i c a l wiring and f i x t u r e s , heating, a i r conditioning, elevators, escalators and other improvements required by building codes. Furniture, carpeting, drapes and officeiequipment were not included. The cost of new additions, parkingglots and surrounding e n t i t i e s were also excluded. The expenses were only deductible as normal depreci-ation. On allowable renovation expenses, there was no monetary l i m i t . The programme's popularity meant that care had to be taken to insure that only owners of s i g n i f i c a n t structures were e l i g i b l e f o r the incentives. To be e l i g i b l e , a building must have been l i s t e d i n the National Register or be located i n a registered h i s t o r i c d i s t r i c t that was c e r t i f i e d by the Secretary of the I n t e r i o r 4 " ^ . A h i s t o r i c d i s t r i c t was c e r t i f i e d i f i t s designating statute contained c r i t e r i a that would "substantially achieve the purpose of preserving and r e h a b i l i t a t i n g buildings of h i s t o r i c s i g n i f i c a n c e . " The statute also had to substantially meet the requirements f o r National Register designation. The National Register was created by the 1966 National H i s t o r i c  Preservation Act4"^4" to designate h i s t o r i c a l l y and a r c h i t e c t u r a l l y s i g n i f i c a n t , privately-owned structures. The d e f i n i t i o n of " s i g n i f i c a n t " i s very general and leads to a subjective decision on i n c l u s i o n 4 ^ . The only protection a property receives from l i s t i n g i s a review process f o r a l l federally-funded undertakings that could a f f e c t the property. 124 The tax r e l i e f was available only where the r e h a b i l i t a t i o n was c e r t i f i e d by the Secretary of the Interi o r as being consistent with the h i s t o r i c character of the p r o p e r t y 4 0 ^ . The buildings had to be income producing as ren t a l housing, o f f i c e buildings or h o t e l s 4 " 0 7 . A long-term lessee, as well as the owner,could claim the deduction. In l i e u of t h i s scheme, a landmark owner could have taken accelerated depreciation of a l l r e h a b i l i t a t i o n c o s t s 4 0 8 . E l i g i b i l i t y was the same as i n section 191. Without accelerated depreciation, the owner would be forced to depreciate on a much longer, s t r a i g h t - l i n e basis. These two programmes were replaced i n 1981 by the Economic  Recovery Tax A c t 4 0 ^ which provided an investment tax cred i t for r e h a b i l i t a t i o n expenditures. Under the programme, up to twenty-five percent of the amount of the investment could be credited against income tax payable. This tax cred i t provided much greater benefit f o r the owner. According to Dworsky , a d o l l a r of tax creditjwas a d o l l a r of taxes saved while the value of a d o l l a r of depreciation depended on the tax bracket of the owner and the e f f e c t of recapture. At best, a d o l l a r of depreciation deduction saved the owner only seventy cents. The e l i g i b i l i t y f o r t h i s programme was broader than the previous two. A "Qualified Rehabilitated Building" had to be one i n which at least seventy-five percent of the e x i s t i n g exterior walls was retained i n the r e h a b i l i t a t i o n process. The building had to be i n service before the beginning of the r e h a b i l i t a t i o n . There was no requirement that the building be e l i g i b l e f o r 125 inclusion i n the National Register or to have been l o c a l l y designated. But designated h i s t o r i c properties were e l i g i b l e f o r an additional f i v e percent i n tax c r e d i t s 4 1 " . The only age requirement f o r other buildings was that at least twenty years must have elapsed since construction of the buildings or the l a s t r e h a b i l i t a t i o n . Non-historic r e s i d e n t i a l r e n t a l properties were excluded. E l i g i b l e r e h a b i l i t a t i o n expenses were any amounts properly chargeable to the c a p i t a l account f o r the property. S p e c i f i c exclusions were costs of a c q u i s i t i o n of the structure, enlarging the structure and any renovations f o r which the s. 191 expense amortization provisions had been 4.12 taken^" . To insure the i n t e g r i t y of a heritage property was not destroyed by the r e h a b i l i t a t i o n , the renovations had to be c e r t i f i e d as appropriate f o r any h i s t o r i c structure using 4-1 *5 the same d e f i n i t i o n used i n s. 191 . b) Treatment of Demolition According to Denhez 4^ 4, the Canadian taxation system!s^ treatment of demolition may actually provide a disincentive f o r preservation. To understand t h i s disincentive, the concept of recapture must f i r s t be explained. When an owner of property over-depreciates his property, the proceeds of a sale of that property are applied against the undepreciated c a p i t a l cost 4.15 and the r e s u l t i s a negative figure . I f t h i s negative figure exists at the end of the taxation year, the amount by which the property was over-depreciated w i l l be "recaptured" 4-16 and considered as income f o r the year . Clearly, a taxpayer 126 wants to avoid t h i s extra taxable income and thus w i l l avoid being.put i n a recapture s i t u a t i o n . Recapture can only occur 4.17 i f there has been some d i s p o s i t i o n of the asset^ . Therefore, one method i n which recapture may be avoided with a building i s 418 to simply destroy the structure. According to Denhez , demo-l i t i o n i s not considered a d i s p o s i t i o n under the Act and there-fore, no recapture w i l l be detected where the o-wner has over-depreciated. The Revenue Department disagrees as one of i t s 419 interpretation b u l l e t i n s indicates that a d i s p o s i t i o n occurs even where a c a p i t a l property i s destroyed and there i s no entitlement to compensation. Even i f there i s a d i s p o s i t i o n , the recapture w i l l be avoided because the "proceeds of the d i s -position" w i l l be considered n i l 4 2 0 . Since the undepreciated c a p i t a l cost of the property can never be less than zero, there w i l l be no recapture detectable and thus no income. In f a c t , i f the taxpayer/owner has no other depreciable property of the same 421 class^" , he w i l l be able to write o f f any remaining amount of the undepreciated c a p i t a l cost as a terminal lo s s . The entire amount of the terminal loss may be deducted from other property and business income as a current expense 4^ 2. Several cases have held that where older buildings have no a t t r a c t i o n to an investor, they have a zero value so that the 42*5 land on which they sitywould be worth more vacant . The zero value of the building when destroyed can avoid a large amount in recapture income. In Audrey Gold Storage v. R . f 2 4 , a re-capture of 262,000 d o l l a r s was avoided by demolishing the structure and consequently, the owners were able to deduct 127 that entire amount as a terminal l o s s . In Emco Ltd. v. The 425 Minister of National Revenue , the Exchequer Court went so f a r as to hold that where land values are increasing, the best and most p r o f i t a b l e use of the property would be to destroy i t s buildings and use i t f o r a parking l o t or to erect a more pr o f i t a b l e structure. Therefore, by l e v e l l i n g a potential heritage building, an owner could not only increase the value of his property by avoiding the r e s t r i c t i o n s of a subsequent designation but also greatly benefit under the tax system with an additional deduction. A solution to t h i s problem i s not evident because of the well established c a p i t a l cost provisions of the Canadian Income  Tax Act. The United States Internal Revenue Code attempted to deal with the problem by providing disincentives to demolish h i s t o r i c structures. Section 167(n) of the Code precluded accelerated depreciation f o r structures b u i l t on the s i t e where a c e r t i f i e d h i s t o r i c structure has been demolished 4 2^. Since the Canadian act does not contain benefits s i m i l a r to the Americans' generous accelerated depreciation provisions f o r new construction, t h i s disincentive to demolition does not solve the current problem. The second American disincentive i s to deny any deductions for demolition expenses and the undepreciated basis of the demolished h i s t o r i c b u i l d i n g 4 2 7 . The demolition costs and undepreciated c a p i t a l cost are added to the c a p i t a l cost.of the land. Currently i n Canada, demolition expenses are l i k e l y attributable to the c a p i t a l cost of the land because they are 128 A 28 incurred to increase the land's value . But the a l l o c a t i o n of the undepreciated c a p i t a l cost of the building to the cost of the land could greatly help preservation e f f o r t s i n Canada because the terminal loss advantage would be removed. Further-more, the Income Tax Act regulations indicate land i s never depreciable so that the undepreciated c a p i t a l cost of the destroyed structure could never be recovered through the tax 4.2°/ systenr . Even i f t h i s plan was implemented, i t would not prevent the avoidance of the recapture and there would thus s t i l l remain a powerful incentive to demolish older and po-t e n t i a l l y worthy structures. c) Preservation Easements as Charitable Deductions The U.S. Code has been amended so as to allow the value of an easement f o r conservation purposes to be v a l i d l y deducted as a charitable expense 4^ 0. The easement must be donated to a c e r t i f i e d heritage organization and be i n perpetuity. The owner must prove that the donation of the covenant reduces the building's market value. This tax deduction appears to be c r u c i a l to the. increase and effectiveness of using conservation easements as a method of heritage preservation i n the United S t a t e s 4 5 1 . In Canada, the Income Tax Act allows the deduction of g i f t s to charitable organizations or tbf? the Crown under s. 110(1)(a) and (b). G i f t s to a Canadian municipality are 532 expressly made deductible^ J . This might include a g i f t of a preservation easement. The only l i m i t a t i o n i s that the g i f t 129 must be proven by an o f f i c i a l r e c e i p t . P r a c t i c a l l y , the value of t h i s g i f t would be very d i f f i c u l t to determine . Subsection 2.2 provides rules f o r assessing the value of tangible c a p i t a l property but i t i s doubtful that an easement would be considered tangible. Regulation 3501(1)(e.1) implies that an appraisal of that market value would be s u f f i c i e n t as evidence of the value f o r the o f f i c i a l r e c e i p t . A second problem would be that e l i g i b i l i t y should be limited to avoid over use and abuse of t h i s deduction. Any c l a r i f i c a t i o n to the Income Tax Act with regard to the v a l i d i t y of the deduction should include rules l i m i t i n g the deduction to owners of designated properties. d) Conclusion The policy of the current federal government i s incentives l i k e those i n the U.S. Internal Revenue Code w i l l not be implemented i n Canada because there are too many differences i n the two taxation systems. The Minister of Finance recently s u g g e s t e d 4 ^ that our system i s fundamentally d i f f e r e n t from the American system because the Canadian taxpayer may ele c t to claim depreciation deductions or carry them forward for deduction at a l a t e r date. In the United States, the deduction must be claimed even i f i t creates a tax loss that w i l l expire. This point may be v a l i d i f an accelerated depreciation scheme i s implemented. But i f renovation expenses are merely considered as current non-capital expenses amortizable over a set period, such as f i v e years, the costs would be completely removed from 130 the depreciation provisions. Tax credits f o r investment would be s i m i l a r l y i s o l a t e d from any depreciation provisions. A more persuasive argument submitted by the government concerns the e l i g i b i l i t y f o r special treatment as heritage 4-35 properties'"^; C r i t e r i a f o r e l i g i b i l i t y i s of v i t a l importance to insure that only bonafide heritage property owners obtain the tax benefits thus l i m i t i n g any loss in revenues caused by the incentive. E l i g i b i l i t y would have to be determined by municipal and p r o v i n c i a l standards. These standards and the number of designations vary greatly among the various j u r i s d i c t i o n s and thus a l l Canadians would not receive equal application under the Income Tax Act. A solution could be to place the onus on the taxpayer to;jprove the worthiness of his structure following very general guidelines that federal o f f i c i a l s could devise. Heritage Canada rejected Wilson's argument because under the American system c e r t i f i c a t i o n of an e l i g i b l e property i s p r a c t i c a l l y approved by state l e v e l o f f i c e r s and there has been no problem with varying s t a n d a r d s 4 ^ . Because of the federal j u r i s d i c t i o n of the income tax system and the multitude of complications already plaguing the Act, the Income Tax Act may be a poor means by which to provide adequate compensation to heritage property owners. However, incentives such as a tax cr e d i t could be implemented fo r heritage property owners without eliminating s i g n i f i c a n t ;' government^revenues. An American commentator indicated that the most valuable r e s u l t of the income tax incentives was the increased awareness and i n t e r e s t i n the preservation of e x i s t i n g 131 structures 4"^ 7. Thus, the r e a l value of a Canadian tax incentive would not be to compensate the owner but to encourage him to become e l i g i b l e f o r the incentive by voluntarily seeking designation without demanding f u l l , d i r e c t compensation from mun i c i p a l i t i e s . This would encourage him to restore his structure providing immediate jobs and once the restoration i s complete, greater economic v i a b i l i t y f o r the structure. 7. Grants Where municipalities have not implemented any other compensation scheme, they frequently provide grants to owners of heritage buildings. Section 1 1 ( 4 ) of the Heritage Conser- -vation Act 4'' 8 provides that municipalities may compensate owners with grants. The Municipal Act further provides that a council may, by by-law, make a grant to "an organization considered by council to be contributing to the general interest and advantage 4.39 of the municipality." The Vancouver Charter includes a power to make grants to "any organization deemed by the Council to.be contributing to the culture, b e a u t i f i c a t i o n , health or welfare of the city.',! 4 4" 0 Presumably, these two sections would include an owner preserving his heritage building f o r the public's benefit. In Vancouver, grants are a major incentive under the c i t y ' s Heritage Conservation Programme 4 4 1. V i c t o r i a uses i t s powers to provide d i r e c t grants i n l i e u of property tax r e l i e f 4 4 2 . Grants are i n f e r i o r to other forms of compen-sation for two reasons. F i r s t l y , they do not necessarily insure that the funds w i l l be used for p r e s e r v a t i o n 4 4 . 532 Secondly, the grants are u n l i k e l y to provide adequate compen-s a t i o n f o r the owner. With l i m i t e d funds, m u n i c i p a l i t i e s can-not a f f o r d to provide l a r g e g r a nts so t h a t a landmark owner w i l l be i n s u f f i c i e n t l y p r o t e c t e d from the burdens of d e s i g -n a t i o n . 133 IV. RECOMMENDATIONS AND CONCLUSION The present system of designation and mandatory compensation under the Heritage Conservation Act has f a i l e d to achieve i t s objectives. The Act seeks to achieve a balance between pro-tection of the public's interest i n maintaining outstanding buildings and protecting the owner's property r i g h t s in that building. But the compensation measure i n s t i t u t e d to provide protection to the owner has been such a massive deterrent to designation that the statute upsets the balance by providing too much protection f o r the owner and none s.t or the building. Thus, municipalities ignore the statute and instead seek protection... by the uncertain means of negotiation with the owner. This negotiation and the use of zoning bonuses and development permits may provide more f l e x i b i l i t y • i n protection than desig-nation but B r i t i s h Columbia municipalities may not have suf-f i c i e n t powers under municipal enabling statutes to provide the f l e x i b i l i t y . And, more importantly, reliance on the owner's consent indicates there w i l l be no safe, d e f i n i t e protection f o r the structure. Thus, major changes must be made to the present law to provide greater protection f o r heritage properties and to replace the HCA's poorly designed compensation measures. The idea behind compensation as protection f o r the property owner i s a worthy and admirable idea but to l i m i t i t s deterrent e f f e c t , a d i f f e r e n t and p o t e n t i a l l y cheaper form of protection must be i n s t i t u t e d . The present system of protecting the buildings through designation might provide adequate protection but improvements 134 could be added. Some features, notably the interim control measures, are excellent and the provision of blanket coverage u n t i l de-designation i s a much more e f f e c t i v e scheme than the Ontario scheme's protection by delay. But municipalities could use greater powers to protect a l l the worthy features of heritage properties. Municipal protection should be expanded to cover the i n t e r i o r s of structures where the p a r t i c u l a r features are commonly seen- by the public and are s p e c i f i c a l l y outlined i n the designation by-law. To insure the heritage property remains a s i g n i f i c a n t structure; the municipality must have the power to impose affirmative maintenance controls on the property owners before the building deteriorates. The municipality should also have the power to relax building code regulations when they act as obstacles to preservation projects. And f i n a l l y , the muni-c i p a l i t y should be given the right to expropriate f o r heritage conservation purposes and thus have a powerful weapon with which to preserve the community's most s i g n i f i c a n t structures when threatened. Such a power must of course be accompanied with the requirement of f u l l and f a i r compensation f o r the owner of the expropriated property. Two other amendments are also needed to provide s u f f i c i e n t protection to heritage properties. F i r s t l y , the Heritage  Conservation Act should require that a designation be registered against t i t l e i n the land t i t l e s o f f i c e . This would provide notice of the heritage r e s t r i c t i o n to a l l who deal with the land. And secondly, there must be a substantial increase i n the Act's penalties. Fines of at least a hundred thousand 135 d o l l a r s w i l l provide much greater deterrents to developers of mult i - m i l l i o n d o l l a r properties. As stated, a better compensation scheme should be imple-mented. This system could not only provide protection f o r the property owner but act as an incentive to the owner to volun-t a r i l y seek designation. This new form of compensation should only be available where the building i s formally designated and thus safely protected. Of the compensation methods surveyed, the one that best meets these requirements i s property tax r e l i e f . The assessments of designated heritage properties should be frozen so that im-provements necessary to r e h a b i l i t a t e the structure w i l l provide a r e l a t i v e l y inexpensive method of compensation yet provide s u f f i c i e n t incentive f o r an owner to r e h a b i l i t a t e his structure and make i t economically viable thus lessening the burden of heritage designation. Although t h i s system would decrease the heritage property owner's expenses, i t would c l e a r l y not compensate(.-the; owner completely where designation decreases the value of the property. Therefore, an additional means of protecting the owner should be available. Methods such as the transfer of development rights and revolving funds have lim i t e d application and thus would not provide comprehensive protection f o r heritage property owners. Instead, a heritage statute should provide an economic safety valve to owners. After designation, the owner should have the statutory r i g h t to a hearing where he can prove the heritage r e s t r i c t i o n even with the property tax r e l i e f has 136 created an economic hardship. An economic hardship would exist where the property does not y i e l d a reasonable return. If the owner can prove economic hardship, the onus w i l l be on council to of f e r further incentives, expropriate the structure i f i t i s t r u l y important to a community, or de-designate. This safety valve thus provides complete protection f o r an owner where he i s severely burdened by the r e s t r i c t i o n . At present, the Heritage Conservation Act's compensation measures are designed to protect the property owner. But i f l o g i c a l l y designed, a compensation provision could go beyond that purpose and give greater strength to preservation of h e r i ^ tage properties and improve the state of the property owner. By acting as an incentive, heritage measures could make desig-nation a t t r a c t i v e to the owner so that i f he seeks the re-s t r i c t i o n voluntarily and r e h a b i l i t a t e s his building, the heritage property w i l l become economically viable. The building w i l l thus become a l i v i n g , functioning part of a community that in c i d e n t a l l y provides aesthetic pleasure and evidence of the community's past. With s i g n i f i c a n t amendments to present l e g i s l a t i o n and the addition of a l o g i c a l l y designed incentive system, the c r u c i a l balance between the owner's property rights and the public's r i g h t to protect the building could be better achieved. In t h i s way, most of the c o n f l i c t s surrounding current heritage preservation attempts could be eliminated and we may a l l begin to enjoy the contributions to the past given us by our b u i l t environment.' 137 F o o t n o t e s 1. Penn C e n t r a l T r a n s p o r t a t i o n Co. v. C i t y o f New Y o r k (1978), 438 U.S. 104 (U.S.S.C.; a f f i r m i n g (1977), 366 N.E. (2d) 1271 (N.Y.C.A.). 2. C.Rose, " P r e s e r v a t i o n and Community: New D i r e c t i o n s i n the Law o f H i s t o r i c P r e s e r v a t i o n " (1981), 33 S t a n . L.R. 473. 3. R.S.B.C. 1979, c. 195. 4. See A. F a l k n e r , Without Our P a s t ? (1977) a t p. 10. 5. R.S.B.C. 1979, c. 165. 6. R.S.B.C. 1960, c. 15. 7. S.B.C. 1972, c. 4. 8. R.S.B.C. 1960, c. 255, s. 7 H A as amended by S.B.C. 1973, c. 59, s. 19. 9. S.B.C. 1953, c 55 as amended by the Vancouver C h a r t e r  Amendment A c t , S.B.C. 1974, c. 104, s. 45. 10. S.B.C. 1953, c 55, s. 564A(1) as amended by S.B.C. 1974, c. 104, s. 45. 11. I b i d , s. 5 6 4 A ( 7 ) ( a ) . 12. I b i d , s. 5 6 4 A ( 7 ) ( b ) . 13. H e r i t a g e By-Law No. 4837 (December 17, 1974). 14. R.S.B.C. 1960, c. 255, s. 7 H A as amended by S.B.C. 1973, c. 59, s. 19. 15. R.S.B.C. 1979, c. 290. 16. See Kent D i s t r i c t v. S t o r g o f f (1962), 41 W.W.R. 301 a t 306 (B.C.S.C.). < 17. C i t y o f V i c t o r i a H e r i t a g e B u i l d i n g s P r o t e c t i o n By-Law 1976 No. 6988 ( J u l y 15, 1976) r e f e r r e d t o i n E & J Murphy L t d . v. C o r p o r a t i o n o f the C i t y o f V i c t o r i a (1976), 1 M.P.L.R. 166 ( B . C . S . C ) . 18. I b i d . 19. Eg., Re Lacewood Development Co. and the C i t y o f H a l i f a x (1975), 58 D.L.R. (3d) 383 (N.S.C.A.). 20. R.S.B.C. 1979, c. 165 p r o c l a i m e d September 22, 1977 by B.C. Reg 402/77. 138 21. S.B.C. 1972, c. 4. 22. R.S.B.C. 1960, c. 255, s. 7 H A as amended by S.B.C. 1973, c 59, s. 19. 23. S.B.C. 1953, c. 55 as amended by S.B.C. 1974, c. 104, s. 45 . 24. R.S.B.C. 1979, c. 165. 25. S.B.C. 1972, c. 4 . 26. R.S.B.C. 1979, c. 306. 27. I b i d , s. 1. 28. R.S.B.C. 1960, c. 15. 29. Assessment A p p e a l Board D e c i s i o n s , May 28, 1981. 30. S.B.C. 1972, c. 4 . 31. I b i d . 32. R.S.B.C. 1960, c. 255, s. 7 H A as amended by S.B.C. 1973, c. 59, s. 19. 33. S.B.C. 1953, c. 55, s. 564A as amended by S.B.C. 1974, c. 104, s. 45 . 34. Supra, note 17. 35. (1982), 20 M.P.L.R. 121 (S.C.C.). 36. R.S.O. 1980, c. 337. 37. I b i d , s. 33. 38. R e p o r t e d a t (19 8 0 ) , 12 M.P.L.R. 241. 39. R e p o r t e d a t (1980), H M.P.L.R. 51. 40. Supra, note 35. 41 . R.S.O. 1980, c. 219, s. 10. 42. (1924) 1 D.L.R. 440. 43 . Gray v. K e r s l a k e , (1958) S.C.R. 3 . 44. R i c h a r d s , "Harsh R e s u l t s f o r M u n i c i p a l i t i e s : S t . P e t e r ' s E v a n g e l i c a l L u t h e r a n Church and C o s t e l l o " ( 1 9 84), 6 S.C.L.R. 401. 45. R.S.B.C. 1979, c. 165, s s . 4, 11. 139 46 . Eg., s. 29 o f the O n t a r i o H e r i t a g e A c t , R.S.O. 1980, c. 337 o n l y a l l o w s d e s i g n a t i o n o f p r o p e r t y o f " h i s t o r i c o r a r c h i t e c t u r a l v a l u e o r i n t e r e s t . " 47. S.B.C. 1953, c. 55, s. 564A as amended by S.B.C. 1974, c. 104, s. 45. 48. R.S.B.C. 1960, c. 255, s. 7 H A as amended by S.B.C. 1973, c. 59,. s. 19. 49 . S e a t t l e , Washington Landmarks Ordinance No. 102229, s. 6 found i n A Handbook on H i s t o r i c P r e s e r v a t i o n Law (Duerkson, ed., 1983; a t p. A37. 50. Duerkson, " L o c a l P r e s e r v a t i o n Law" i n A Handbook on H i s t o r i c  P r e s e r v a t i o n Law (Duerkson, ed., 1983) a t p. 83. 51 . See Texas A n t i q u i t i e s Commission v. D a l l a s Community C o l l e g e  D i s t r i c t ( 1 9 7 7 ) , 554 S.W. T?aT"924 (Texas S . C ) . 52. See D i G r e g o r i o v. Town o f A n c a s t e r (1979), 10 O.M.B.R. 161. 53. (1978), 6 M.P.L.R. 226. 54. See a l s o Manhattan C l u b v. Landmarks P r e s e r v a t i o n Commission  o f the C i t y o f New Y o r k ( 1 9 b b ; , 273 N.Y.S. (2d) 848 (N.Y.S. C.) f o r a s i m i l a r r e s u l t . 55. See the O n t a r i o H e r i t a g e A c t , R.S.O. 1980, c. 337, s. 2 9 ( 4 ) ( b ) : 56. See the H e r i t a g e P r o p e r t y A c t , S.N.S. 1980, c. 8, s. 1 3 ( 2 ) . 57. See the H e r i t a g e P r o p e r t y A c t , S.S. 1979-80, c. H-2.2, s. 12. 58. R.S.B.C. 1979, c 165. 59. I b i d , s. 5. 60. I b i d , s. 6 ( b ) , ( c ) , ( d ) . 61. I b i d , s s . 10-15. 62. For eg., i n Saskatchewan, the Heritage Property Act, S.S. 1979-80, c. H-2.2, s. 11(2) requires t h i r t y days notice. The Alberta H i s t o r i c a l Resources Act, R.S.A. 1980, c. H-8, s. 22(2) requires sixty days notice. 63. R.S.B.C. 1979, c 165, s. 11(2)(b). 64. Ibid, s. 12. 65. S.B.C. 1953, c 55, s. 564A as amended by S.B.C. 1974, c. 104, s. 45. H O 66. See f o o t n o t e s 24-33 and accompanying t e x t . 67. See the C o n s t i t u t i o n A c t , 1867, s. 91 ( 1 A ) ; and Rex, v. Ross, (1326) 4 D.L.R. 894 (N.B.C.A.); Ottawa v.~SHore^&  H o r w i t z C o n s t r u c t i o n (1960), 22 D.L.R. (2d) 247 (Ont. H. C ) ; D e l t a v. A z t e c A v i a t i o n Grout) (1985), 28 M.P.L.R. 215 (B.C.S.C.yT 68. See d i s c u s s i o n on R a i l w a y S t a t i o n D e s i g n a t i o n , i n f r a , p. 39. 69. R.S.B.C. 1979, c. 306, s. 1 4 ( 1 ) . 70. S.S. 1979-80, c. H-2.2, s. 80. 71. S.N.S. 1980, c. 8, s. 25. 72. R.S.B.C. 1979, c. 165, s. 12. 73. See R e g i n a v. P r i d e C l e a n e r s & Dyers L t d . (1965), 49 D.L.R. (2d) 752; and R. v:. Horback (1967), 64 D.L.R. (2d) 17 (B.C. S . C ) . 74. R.S.A. 1980, c. H-8. 75. S.S. 1979-80, c. H-2.2. 76. R.S.O. 1980, c. 337. 77. F o r f a c t s , see E & J Murphy L t d . v. The C o r p o r a t i o n o f the C i t y o f V i c t o r i a , s u p r a , note 17. 78. S.B.C. 1953, c. 55, s. 564A as amended by S.B.C 1974, c. 104, s. 45. 79. S.S. 1979-80, c. H-2.2, s. 2 8 ( 1 ) ( e ) . 80. R.S.A. 1980, c. H-8, s. 2 2 ( 8 ) . 81. R.S.O. 1980, c. 337, s. 2 9 ( 3 ) ( a ) . 82. See the H e r i t a g e C o n s e r v a t i o n A c t , R.S.B.C 1979, c. 165, s. 5 ( 1 ) . 83. Eg., A l b e r t a H i s t o r i c a l R e s ources A c t , R.S.A. 1980, c. H-8, s s . 15, 16; H e r i t a g e P r o p e r t y A c t , S.S. 1979-80, c. H-2.2, s. 44. 84. R.S.B.C 1979, c. 165, s. 12. 85. R.S.O. 1980, c. 337. 86. T h i s n o t i c e p r o v i s i o n must be s t r i c t l y f o l l o w e d . See S t . P e t e r ' s E v a n g e l i c a l L u t h e r a n Church v. The C i t y o f Ottawa, 141 supra, note 35. 87. Ibid. 88. (1984), 12 D.L.R. (4th) 396 (Ont. Div. Ct.). 89. S.S. 1979-80, c. H-2.'2, as amended by S.S. 1983-84, c. 39, s. 20. 90. P e t t i t , "Teetering on the P a c i f i c Rim" (1986), 12:2 Cdn Heritage 14. 91. Eg., Alberta H i s t o r i c a l Resources Act, R.S.A.1980, c. H-8, s. 22(6); Heritage Property Act, S.S. 1979-80, c. H-2.2, s. 23; Ontario Heritage Act, R.S."0. 1980, c. 337, s . 33. 92. Heritage Property Act, S.S. 1979-80, c. H-2.2, s. 23 (3 ) . 93. V/innipeg, Manitoba By-Law no. 1474/77 as amended by By-Law No. 2032/78 as described by Regelous, "Heritage Preservation in Manitoba: The New City of Winnipeg By-Laws" i n Isaac  Pitblado Lectures on Continuing Legal Education, (1980) at p. 209. 94. The term was used by Duerkson, supra, note 50 at pp. 108-112. 95. See "King George School" (1977), 1:4 Heritage West 10; "A Shame and a,Scandal" (1978), 2:1 Heritage West 8. 96. See the Municipal Act, R.S.B.C. 1979, c. 290, s. 936(1). The City of Vancouver has si m i l a r powers under the Vancouver  Charter, S.B.C. 1953, c. 55, s. 306(q) as amended. 97. R.S.O. 1980, c. 337, s. 69(5)(a). 98. R.S.A. 1980, c. H-8, s. 1 9 . 99. S.S. 1979-80, c. H-2.2, ss. 30(1). Amendments (S.S. 1983-84, c. 39, ss. 11, 15) provide that i f an owner objects to the order, he i s e n t i t l e d to a hearing. 100. Ibid, s. 30(2). 101. This could be accomplished i n much the same way the City of Vancouver was allowed to delegate the powers to a municipal o f f i c i a l to set safety inspection standards f o r vehicles. See the Vancouver Charter, S.B.C. 1953, c. 55, s. 3 1 7 ( p ) ( i i ) as amended by S.B.C. 1968, c. 71, s. 15. 102. Supra, note 50 at p. 53. 103. R.S.A. 1980, c. H-8, s. 47(1). 142 104. S.S. 1979-80, c . H-2.2, s . 7 6 . 105. The V a n c o u v e r C h a r t e r , S.B.C. 1953, c . 55, s . 5 6 5 A ( e ) a s amended by S.B.C. 1964, c . 72, s . 18; S.B.C. 1966, c . 69, s . 23; S.B.C. 1978, c . 4 1 , s . 3 1 . 106. R.S.B.C. 1979, c 290. 107. I b i d , a s amended by B i l l 62 ( P r o c l a i m e d D e c . 31, 1 9 8 5 ) . F o r t h e C i t y o f V a n c o u v e r ' s z o n i n g p o w e r s , s e e i n f r a , n o t e s 116TT120 a n d a c c o m p a n y i n g t e x t . 108. I b i d , s . 9 6 7 . 109. See t h e P l a n n i n g A c t , R.S.A. 1980, c . P - 9 , s . 6 9 ( 3 ) . 110. R^S.B.C. 1979, c . 290. s . 976 a s amended by B i l l 62 ( P r o -c l a i m e d D e c . 31, 1 9 8 5 ) . 110A. I b i d , s s . 9 4 5 ( 4 ) , 9 7 6 . 110B. I b i d , s . 9 4 5 ( 4 ) ( f ) , ( g ) . 111. S.M. 1971, c . 105, s . 5 7 3 ( e . 1 ) a s amended by S.M. 1977, c . 64, s . 6 5 . O t h e r M a n i t o b a m u n i c i p a l i t i e s h a v e a s i m i l a r d u t y t o c o n s i d e r p r e s e r v a t i o n u n d e r t h e P l a n n i n g A c t , S.M. 1975, c 29, s . 2 7 ( 4 ) ( v ) . 111A. R.S.B.C. 1979, c 290, s . 945(4) a s amended by B i l l 62 ( P r o c l a i m e d D e c . 31, 1985) . 112. (1979) 1 S.C.R. 98 a f f i r m i n g (1977) , 81 D.L.R. (3d) 543 ( A l t a . C . A . ) . 113. See t h e P l a n n i n g A c t , R.S.A. 1970, c . 276, s . 106. 114. R.S.A. 1980, c . H - 8 . 115. S i m i l a r l y , a n A m e r i c a n c a s e , Rebman v . The C i t y o f S p r i n g - f i e l d (1969) , 250 N.E. (2d) 28"2 h e l d t h a t t h e r e must be e x p r e s s l e g i s l a t i v e r e c o g n i t i o n t h a t p r e s e r v a t i o n a d v a n c e s t h e g e n e r a l w e l f a r e o f a community b e f o r e z o n i n g c a n be u s e d f o r p r e s e r v a t i o n . 116. " Y a l e t o w n R e z o n e d f o r H e r i t a g e " , V a n c o u v e r S u n , May 9, 1986 a t p . A 3 . 117. S.B.C. 1953, c 55 a s amended by S.B.C. 1959, c . 107, s . 20; S.B.C. 1964, c . 2, s . 17. 118. E m p h a s i s a d d e d . 119. See t h e V a n c o u v e r C h a r t e r , S.B.C. 1953, c . 55, s . 304 a s amended by S.B.C. 1963, c . 60, s . 8 . 143 1 2 ° * Supra, note 112. 121. Zoning and Development By-law No. 3575, s. 3.3 . 4(d). 122. R.S.B.C. 1979, c. 290. 123. Ibid, ss. 962(2) , 974. 124. R.S.B.C. 1979, c. 305. 125. Heritage By-law No. 4837, s. 4 (December 17, 1974). 126. See "Schoolhouse Demolition Sparks Row i n Langley", Vancouver Sun, May 21, 1986 at p. A11 . 127. R.S.A. 1980, c. H-8, s. 48 . 128. R.S.O. 1980, c. 337, s. 6 9 . 129. S.S. 1979-80, c. H -2 .2 , s. 7 3 ( l ) ( a ) . 130. Ibid, s. 7 3 ( 1)(b). 131. See the Recreation Development Act, P.E.I.R.S. 1974, c. R-9, s. W. 132. See the H i s t o r i c Objects and Sites Act, S.N. 1973, c. 85, s. 39 . 133. R.S.M. 1970, c. H-70, s. 20. 134. R.S.O. 1980, c. 337, s. 6 9 ( 5 ) . 135. S.S. 1979-80, c. H -2 .2 , s. 7 3 ( 2 ) . 136. R.S.A. 1980, c. H-8, s. 48(3). 137. R.S.B.C. 1979, c 165, s. 7(3). 138. R.S.B.C. 1979, c 290, s. 310. 139. S.B.C. 1953, c. 55, s. 306(h) as amended. 140. Unreported, December 1, 1981 (B.C.S.C. No. 08151.74). 141. To determine whether or not an interested group would have standing, see Re Saanich Inlet Preservation Society and  Cowichan Valley Regional D i s t r i c t (1983) , 147 D.L.R. (3d) 174 (B.C.C.A.); Re Sunshine H i l l s Property Owners Associ». ation and the Municipality of Delta (1977) , 80 D.L.R. (3d) 692 ( B . C . S . C ) ; Association des Proprietaires des Jardins  Tache Inc. et a l v. Les Enterprises Dasken Inc. et a l (1971) , 26 D.L.R. (3d) 79 (S.C.C.). 144 142. The Federation of Canadian Mun i c i p a l i t i e s Resolution No. IX - 9006, "Protection of Heritage Railway Buildings"(1985). 143. See Murphy, "Canada's Train Stations: Destination Oblivion or Protection" (1985), 11:3 Cdn Heritage 28. 144. (1984), 26 M.P.L.R. 245 (Sask. Q.B.). 145. R.S.C. 1970, c. R-2, s. 6(1)(c). 146. Eg., C.P.R. v. A.G.B.C., (1950) 1 W.W.R. 220 (P,C.); C.N.R. v. Nor-Min Supplies Ltd., (1977) 1 S.C.R. 322. 147. See MacFie v. Callander and Oban Railway Company, (1898) A.C. 270 at 287 (H.L.). 148. For fa c t s , see Murphy, supra, note 143. 149. R.S.C. 1970, c. R-2, s. 119. 150. See C.P.R. v. C.T.C, (1985) 1 F.C. 554. 151. Leave to appeal denied February 25, 1985. 152. Supra, note 143. 153. R.S.C. 1970, c. H-6. 154. (1977)^366 N.E. (2d) 1271 affirmed by (1978), 438 U.S. 104 (U.S.S.C.). 154A. See B i l l C-253, 2nd Session, 32nd Parliament, 1983-84. 154B. R.S.C. 1970, c. H-6, ss. 4-6. 154C. For eg., see A.G. Nova Scotia v. A.G. Canada (Inter-delegation Case), (1951) S.C.R. yT. 154D. R.S.B.C. 1979, c. 165. 155. See the Alberta H i s t o r i c a l Resources Act, R.S.A. 1980, c. H-8, s. 16. 156. S.S. 1979-80, c. H-2.2, ss. 13, U , 40, 42. 157. Ibid, ss. 20, 54. 158. (1970), 14 D.L.R. (3d) 228 (Alta. C.A.). 159. S.M. Makuch, Canadian Municipal And Planning Law, (1983) at pp. 267-269~I 160. (1965) S.C.R. 512. H 5 161. (1980), 13 M.P.L.R. 234 (S.C.C.). 162. See "High Rise Tudor Tower Approved" re Dick Building, Vancouver Sun, March 12, 1986 at p. A3; Fenton et a l , Heritage Preservation i n Vancouver, ( 1 9 7 7 ) . 163. R.S.B.C. 1979, c. 290, ss. 3 1 3 - 3 1 9 . 164. R.S.B.C. 1979, c. 209. 165. See f o r eg., Heritage Property Act, S.S. 1979-80, c. H-2.2, ss. 3(1 ) ( j ) ; 28(1)(a); H i s t o r i c Sites and Objects Act, R.S.M. 1970, c. H-70, s. 8(1); Ontario Heritage Act, R.S.O. c. 337, s. 39(1); Heritage Property Act, SI.N.S. 19cT0, c. 8, s. 24(1')(d); H i s t o r i c Objects and Sites Act, R.S.N.' 1973, c. 8 5 , s. TS: 166. Section 24 of the Alberta H i s t o r i c a l Resources Act, R.S.A. 1980, c. H-8 makes compensation mandatory for municipal designation by the p r o v i n c i a l government. 167. R.S.B.C. 1979, c. 165. 168. R.S.B.C. 1979, c. 117. 169. Ibid, s. 23. 170. R.S.B.C. 1979, c. 290. An i d e n t i c a l provision exists f o r the City of Vancouver under the Vancouver Charter, S.B.C. 1953, c. 5 5 , s. 5 4 1 . 171'• See the Municipal Act, R.S.B.C. 1979, c. 290, s. 555; Vancouver Charter, S.B.C. 1953, c. 5 5 , s. 544. 172. See Ricket v. Metropolitan Railway Co., (1867) I.R. 2 H.l. 175. 173. R.S.C. 1970, c. A-3, s. 6(1)(j),(10). 174. (1982), 24 L.C.R. 266 (B.C.C.A.). 175. (1985), 17 D.L.R. (4th) 1. 176. R.S.B.C. 1979, c. 290, s. 544. 177. See Huot, "Compensation f o r Designation" (198C1), 5 Heritage West 15. See also Denhez, "What Price Heritage?" (1981), 21 Plan Canada 5. 178. Further proof of the injurious e f f e c t of a designation comes from other provinces' heritage l e g i s l a t i o n that s p e c i f i c a l l y exclude l i a b i l i t y f or the injurious a f f e c t i o n caused by designation. For eg., see the Heritage Property 146 Act, S.S. 1979-80, c. H-2.2, s. 75. 179. See Vancouver Heritage Advisory Committee, "Towards a Second Century" (1982). See also P e t t i t , "Teetering on the P a c i f i c Rim", supra, note 90. 180. Denhez, supra, note 177. 181. Space A d r i f t : Landmark Preservation and the Marketplace TT974) at p. 10. 182. See "Vancouver Trying to Put a Price on History", Vancouver Sun, November 4, 1985 at p. A18; "Facade Tower Plan Fought", Vancouver Sun, March 4, 1986 at p. A 3 . 183. Supra, note 177. 184. See Penn Central Transportation Co. v. City of New York, supra, note 1. 185. (1959), 18 D.L.R. (2d) 161 (S.C.C.). 186. Supra, note 1. 187. For eg., see Commonwealth H i s t o r i c Resource Management Ltd., L i s t i n g of Potential Heritage Buildings, prepared for the City of Vancouver (1985); City of Regina Planning Department, "A Heritage Program f o r Downtown" (1983). 188. See the discussion on the need f o r maintenance standards, supra, notes 94-101 and accompanying text. 189. "What Price Heritage?", supra, note 177. 190. See E & J Murphy Ltd. v. The Corporation of the City of  V i c t o r i a , supra, note 17. 191. UI-S. v. Causby (1946), 328 U.S. 256. 192. See Marcus, "Mandatory Development Rights and the Taking Clause" (1975), 24 Buff L.R. 77. 193. (1980) F.C. 128 (T.D.). 194. U.S. v. Dickinson ( 1 9 4 7 ) , 331 U.S. 745 at 748. 195. U.S. Const;, Amend. V. 196. See R. v. Tener, supra, note 175; A.G. v. Dekeyser's Royal  HoteT~Ltd., (1920) A.C. 508 at 542. 197. See f o r eg., the Municipal Act, R.S.B.C. 1979, c. 290, s. 972(1) as amended. 147 198. Supra, note 177. 199. J.H. Baker, An Introduction to English Legal History (1979) at p.-TST: 200. See The Pity of Ottawa v. Boyd Builders Ltd., (1965) S.C.R. 408." 201. Hartel Holdings Po. v. Palgary City Council, (1984) 4 W.W.R. 193 (S.P.C.). 202. For eg., see the Municipal Act, R.S.B.C. 1979, c. 290, s. 972(1) as amended by B i l l 62 (Proclaimed Dec. 31, 1985). 203. Supra, note 1. 204. The Heritage Conservation Act, R.S.B.C. 1979, c. 165, ss. 4(2), ! l ( 4 ) . :  205. R.S.B.C. 1979, c. 290 as amended. 206. See Denhez, supra, note 177 among others. 207. (1981), 430 A. (2d) 1387 (D.C.C.A.). 208. Supra, note 177. 209. Code C i v i l de l a Province de Quebec, A r t i c l e 13. 210. See Hartel Holdings, supra, note 201, where Madame Justice Wilson indicates that private property rig h t s are sub-servient where they c o n f l i c t with the public i n t e r e s t . 211. The Heritage Conservation Act does not s p e c i f i c a l l y empower the designation of a h i s t o r i c d i s t r i c t but the d e f i n i t i o n of a heritage s i t e i s broad enough to apply to include areas as well as i n d i v i d u a l buildings. 212. See L i s t o k i n , Landmarks Preservation and the Property  Tax (1982) at pp. 43-44. 213. Huot, supra, note 177. 214. P e t t i t , supra, note 90. 215. Pity of Vancouver By-Laws No. 5291 (Oct. 30, 1979), 5300 (Dec. 4, 1979), 5353 (June 17, 1980), 5354 (June 17, 1980), 5355 (June 17, 1980) amending the Heritage By-Law No. 4837. 216. M. Denhez, Heritage Fights Back (1978) at p. 162. 217. See Vancouver Heritage Advisory Pommittee, "Towards a Second Pentury (1982). 148 218. The C i t y o f V i c t o r i a has a s i m i l a r p o l i c y u s i n g d e s i g n a t i o n o n l y as a " l a s t r e s o r t " and i n the most e x c e p t i o n a l c i r -cumstances. See S t a r k , " I t S t a r t e d i n B a s t i o n Square" (1984) 10:1 Cdn H e r i t a g e 26. 219. "Facade Tower P l a n Foughty, s u p r a , note 182. The c o s t o f m a i n t a i n i n g the f a c a d e a l o n e i s 1.3 m i l l i o n d o l l a r s . 220. "Vancouver T r y i n g t o Put a P r i c e on H i s t o r y " , s u p r a , note ' l 182. 221. C i t y o f Vancouver P l a n n i n g Department R e p o r t t o C o u n c i l on Tudor Manor, r e f e r r e d t o i n "Tudor Manor's F a t e A w a i t e d " , Vancouver Sun, Fe b r u a r y 1, 1986 a t p. A3. A second example o f the c i t y u s i n g a z o n i n g bonus as l e v e r a g e t o p r e s e r v e a h e r i t a g e s t r u c t u r e i s the Model S c h o o l development where the f l o o r space r a t i o f o r the l o t was i n c r e a s e d from 0.75 to 2.0 i n r e t u r n f o r consent t o d e s i g n a t e the s t r u c t u r e . See " S c h o o l Moving Up i n S t a t u s " , Vancouver C o u r i e r , November 27, 1985 a t p. 8: " H e r i t a g e D e s i g n a t i o n Proposed f o r S c h o o l " , Vancouver Sun, November 19, 1985. 222. See P e t t i t , s u p r a , note 90. 223. See A l b e r t a H i s t o r i c a l R e s ources A c t , R.S.A. 1980, c. H-8, s. 24. 224. (1981), 32 A.R. 336 (Q.B.); 225. See Cowan, "How They're S a v i n g A l b e r t a ' s P a s t " , (1984), 10:3 Cdn H e r i t a g e jl.3t 226. N a t i o n a l H i s t o r i c P r e s e r v a t i o n A c t , 16 U.S.C. s. 470 (1976 & s s . 1 0 6 ( a ) ( 6 ) o f 1980 amendments. More f r e q u e n t l y , muni-c i p a l i t i e s implement an i n f o r m a l p o l i c y whereby b u i l d i n g s w i l l n o t be d e s i g n a t e d where the owner o b j e c t s . See f o r eg., the C i t y o f Regina's p o l i c y r e f e r r e d t o i n "150 P r o p e r t i e s i n R e g i n a on H e r i t a g e L i s t " , R e g i n a Leader P o s t , June 10, 1986 a t p. A3. 227: See O n t a r i o H e r i t a g e A c t , R.S.O. 1980, c. 337, s. 34. 228. See Rose, s u p r a , note 2. 229. See C o s t o n i s , s u p r a , note 181 a t p. 14. 230. I b i d . See a l s o C o s t o n i s , '^Development R i g h t s T r a n s f e r : An E x p l o r a t o r y E s s a y " (1973), 83 Y a l e L . J . 75. 231. Supra, note 1. 232. See S i e d e l , "Landmark P r e s e r v a t i o n A f t e r Penn C e n t r a l " (1982), 17 R e a l P r o p , Prob and Tr J . 340; Duerkson, s u p r a , note 50 149 at p. 42; Costonis, "The Disparity Issue: a Context for the Grand Central Terminal Decision" (1977), 91 Harv l.R. 402. 233. See Rose, supra, note 2. 234. See Campbell v. The Municipality of Sydney, (1925) 1 W.W.R. 660. 235. R.S.A. 1970, c. 175, s. 39. 236. See Ritchie v. City of Edmonton (1980), 20 L.C.R. 29 (Alta. Q.B.). 237. See Ontario Heritage Act, R.S.O. 1980, c. 337, s. 36. This expropriation power i s v i t a l to Ontario municipalities who lack the power to i n d e f i n i t e l y prevent the demolition of a designated structure. 238. Heritage Property Act, S.N.S. 1980, c. 8, s. 27(9). 239. Heritage Property Act, S.S. 1979-80, c. H-2.2, s. 26 repealed by S.S. 1983-84, c. 39, s. 10. 240. Eg., The Municipal Government Act, R.S.A. 1980, c. M-26, s. 12 and the Muncipal Expropriation Act, R.S.S. 1978, c. M-27, s. 3 combined with the Heritage Property Act, i b i d , s. 28(1)(g) should be wide to allow municipalities i n Alberta and Saskatchewan to expropriate heritage buildings. 241. S.B.C. 1953, c. 55 as amended by S.B.C. 1958, c. 72, s. 28. 242. RSS.B.C. 1979, c. 290. 243. See Costonis, "The Chicago Plan: Incentive Zoning and the Preservation of Urban Landmarks" (1972), 85 Harv L.R. 574 at 584. 244. Penn Central Transportation Co. v. The City of New York, supra, note 1. 245. Ibid. 23>6. See Netherton, " R e s t r i c t i v e Agreements f o r H i s t o r i c Preser-vation" (1980), 12 Urban Law 54. 247. The Heritage Trust i s a corporation created by ss. 16-26 of the Heritage Conservation Act to "support, encourage and f a c i l i t a t e the conservation, maintenance and restoration of heritage property" in B r i t i s h Columbia. 248. Alberta H i s t o r i c a l Resources Act, R.S.A. 1980, c. H-8, s . 25; Heritage Property Act, S.S. 1979-80, c. H-2.2, s. 59; 150 O n t a r i o H e r i t a g e A c t , R.S.O. 1980, c. 337, s. 3 7 ; H i s t o r i c  S i t e s P r o t e c t i o n A c t , R.S.N.B. 1973, c. H-6 , s. 2.1: ( 1 ) ; H e r i t a g e P r o p e r t y A c t , S.N.S. 1980, c. 8, s. 18; Museum A c t , STP.E.I. 1978, c. 34, s. 10 (1 ) ; H i s t o r i c O b j e c t s and  SrEes A c t , S.N. 1973, c. 85, s. 20A. 249. Eg. A l b e r t a H i s t o r i c a l R e sources A c t , i b i d , s. 2 5 ( 1 ) ( d ) ; H i s t o r i c S i t e s P r o t e c t i o n A c t , R.S.N.B. 1973, c. H-6, s. 2.1 as amended by S.N.B. 1977, c. 27. 250. F o r f a c t s , see B r i n k , " E x p e r i e n c e o f the G a l v e s t o n H i s t o r i c a l F o u n d a t i o n i n U s i n g L e g a l T o o l s t o Support H i s t o r i c P r e s e r v a t i o n " (1980), 12 Urban Law 74. 251. I b i d . 252. G a l v e s t o n H i s t o r i c F o u n d a t i o n , "Proposed Deed Covenants" found in. H i s t o r i c P r e s e r v a t i o n Law (Ro b i n s o n , ed., 1979). 253. B r i n k , s u p r a , note 250. 254. I b i d . 255. I b i d . 256. See the d i s c u s s i o n on Income Tax I n c e n t i v e s , i n f r a , pp. 118 - 1 3 1 . I n " P r i v a t e Land Use C o n t r o l s U s e f u l f o r H i s t o r i c P r e s e r v a t i o n " a t p. 327 o f H i s t o r i c P r e s e r v a t i o n Law (Robinson, ed., 1979), Jahns i m p l i e d t h a t the d e d u c t i b i l i t y o f the v a l u e o f the c o n s e r v a t i o n easements and covenants i s e s s e n t i a l t o the s u c c e s s f u l use o f c o n s e r v a t i o n easements. 257. R.S.B.C. 1979, c. 290. 258. The Vancouver C h a r t e r , S.B.C. 1953, c. 55, s. 2 0 6(j) as amended by S.B.C. 1963, c. 60, s. 4 p r o v i d e s a s i m i l a r power t o the C i t y o f Vancouver. 259. See the M u n i c i p a l A c t , R.S.B.C. 1979, c. 290, P t . V I I I . 260. I b i d , s. 5 3 7 ( 2 ) . 261. See C o s t o n i s , s u p r a , note 181 a t p. x v i . 262. See R i c h a r d s , "The New Yor k P l a n : T r a n s f e r s t o A d j a c e n t P r o p e r t i e s " i n T r a n s f e r o f Development R i g h t s ( J . Rose, ed., 1975) a t p. 123": 263. "Whoever has l a n d p o s s e s s e s a l l space upwards t o an i n d e f i -n i t e e x t e n t . " 264. See Schnidman and R o b e r t s , " M u n i c i p a l A i r R i g h t s : New Y o r k ' a C i t y P r o p o s a l t o S e l l A i r R i g h t s Over P u b l i c B u i l d i n g s and 151 Public Spaces" (1983), 15 Urban Law 347. 265. See the Mineral Act, R.S.B.C. 1979, c. 259. 266. Eg., Saskatchewan Telecommunications Act, R.S.S. 1978, c. S-34, s. 12(2). 267. For d e t a i l s , see Penton et a l , supra, note 162. 268. See "The Moody Gem on a Dreary Corner", Vancouver Sun, February 1, 1986 at p. D 3 . 269. Supra, note 262. 270. New York, N.Y. Zoning Resolution A r t i c l e VII, c. 4, ss. 74-792 (1971). 2 7 1 . For d e t a i l s , see E l i o t and Marcus, "From E u c l i d to Ramapo: New Directions i n Land Development Controls" in Transfer  of Development Rights, (^J.prRose, ed., 1975) at p. 157; Marcus, supra, note 192; Richards, supra, note 262. 272. See Richards, i b i d at p. 135. 273. Costonis, supra, note 181 at p. 5 5 . 274. New York Zoning Resolution A r t i c l e VII, c. 4, s. 74-79 as quoted i n Richards, supra, note 262 at p. 134. 275. Penn Central Transportation Co. v. New York City, supra, note 1. 276. Ibid. 277. See Richards, supra, note 262 at p. 132. 278. Supra, note 264. 279. For d e t a i l s , see Richards, supra, note 262 at pp. 137-140. 280. Fred F. French Investing Co. v. City of New York (1976), 350 N.E. (2d) 381 (N.Y.C.A.). 281. See Marcus, supra, note 192. 282. See Siedel, supra, note 232. 283. See Re Columbia Estates and the D i s t r i c t of Burnaby (1974), 49 D.L.R. (3d) 123 (B.C.S.C77; Re Corporation of the D i s t r i c t  of North Vancouver Zoning By-Law 427T7"[1973) ; 2 W.W.R. 260 (B.C•S.C.)• 152 284. See H o s k i n s , " P o l i c e Power and Compensable T a k i n g s : A landmark D e c i s i o n C l a r i f i e s the R u l e " (1979), 11 Conn L.R. 273; Delaney e t a l , "TDR Redux: A Second G e n e r a t i o n o f P r a c t i c a l L e g a l Concerns" (1983), 15 Urban Law 593; S i e d e l , s u p r a , note 232. 285. See C o s t o n i s , s u p r a , note 181 a t pp. 55-59. 286. I b i d , pp. 48-52. 287. See C o s t o n i s , s u p r a , note 230, p. 86. 288. C o s t o n i s , s u p r a , note 181, pp. 52-54. 289. Supra, note 230, p. 87. 290. C o s t o n i s , s u p r a , note 181, pp. 52-54. 291. I b i d , pp. 53-54. 292. Duerkson, s u p r a , note 50, p. 73. 293. Marcus, supra,:;note 192. 294. See Makuch, s u p r a , note 159, p. 262. 295. Supra, note 284. 296. Supra, note 262. 297. I b i d . 298. S.B.C. 1953, c 55, s. 5 6 5 ( f ) as amended by S.B.C. 1959, c. 107, s. 20; S.B.C. 1964, c. 72, s. 17. 299. I b i d . 300. R.S.B.C. 1979, c. 290 as amended. 301. I b i d , s. 956. 302. I b i d , s. 702A(3). 303. I b i d , s. 9 7 6 ( 3 ) . 304. See L i s t o k i n , s u p r a , note 212, p. x x i i i . 305. R.S.B.C. 1979, c. 165, s. 1 1 ( 4 ) . 306. The A l b e r t a H i s t o r i c a l R e s o u r c e s A c t , R.S.A. 1980, c. H-8, s. 24(4) a l l o w s compensation may be by t a x r e l i e f where the owner a g r e e s . 307. See H e r i t a g e P r o p e r t y A c t , S.S. 1979-80, c. H-2.2, s. 2 8 ( 1 ) ( a ) . 153 308. See the Cultural Property Act, R.S.Q. 1977, c. B-4, s. 33. 309. R.S.B.C. 1979, c. 290. 310. Conn. Gen. Stat. Ann. s. 12-127a. 311. N.C. Gen. Stat. 105-278. 312. SeeSStipe, "State and Local Tax Incentives f o r Hi s t o r i c Preservation" i n Tax Incentives for H i s t o r i c Preservation, Revised Edition (Andrews, ed., 1981) at p. 91/ 313. N.M. Stat. Ann. 18-6-13 (Michie 1978). 3 H . Md. Ann. Code, Art. 81, s. 12G (Supp 1978). 315. R.S.Q. 1977, c. B-4, s. 33. 316. Winnipeg, Man. Taxation By-law referred to i n Krotz, "No Boom Was a Boon" (1985), 11:4 Odn Heritage 22, and i n "Winnipeg Tax Freeze a Boon to Heritage" (1986), 12:2 Cdn Heritage 10. 317. Krotz, i b i d . 318. R.S.B.C. 1979, c 290, s. 400(2)(a). 319. Ibid, s. 400(1). 320. See Lis t o k i n , supra, note 212, p. 170. 321. Or. Rev. Stat. ss. 358.475-.565 (Supp 1977); Or. Laws, c. 514, s. 15 (1975). 322. Ibid, s. 358.480(1). 323. Ibid, s. 358.515. 324. See note 311 and accompanying text. 325. See "Impact of Property Tax Exemptions on the Average Homeowner", submitted by the Budget D i v i s i o n , Bureau of Management and Budget to the Mayor and Commissioners of Portland, Oregon (December 31, 1975), referred to in Powers, "Tax Incentives f o r H i s t o r i c Preservation" (1980), 12 Urban Law 103. 326. B i l l 265, Oregon Le g i s l a t i v e Assembly, 1979, referred to in Powers, i b i d . 327. Ibid, pp. 126-127. 328. Ibid, p. 123. 154 329. See Roddewig, "Preservation Law and Economics" in A Hand-book on Preservation Law, (Duerkson, ed., 1983) at pp. 427, 451-452. 330. See Powers, "State H i s t o r i c Preservation Tax Statutes: Three Case Studies" i n Tax Incentives f o r H i s t o r i c Preser-vation, (Andrews, ed., 1981) at p. 108. 331. R.S.B.C. 1979, c. 165, s. 11(4). 332. Re Corporation of the City of V i c t o r i a (1979), 15 B.C.L.R. 254 (S.C.). 333. R.S.B.C. 1979, c 22. 334. See Vancouver Heritage Advisory Committee, supra, note 179. 335. Supra, note 212. 336. For eg., Cal. Rev. Code s. 439.2 (West Supp 1979); Cal. Pub. Res. Code s. 5031 (West Supp 1979); Washington, D.C. Code Encycl. s. 47-652 (West Supp 1979). 337. See McGee, "State and Local Taxation: Current Practices, Procedures and E f f e c t s " i n Tax Incentives for H i s t o r i c  Preservation (Andrews, ed., 1981), at p. 102. 338. R.S.B.C. 1979, c. 21, s. 26(3) as amended by S.B.C. 1984, c. 11, s. 16. 339. See Almy, "Considerations i n Creating Property Tax R e l i e f f o r H i s t o r i c Preservation? in Tax Incentives f o r H i s t o r i c  Preservation (Andrews, ed., 1981), at p. 125. 340. See Vancouver Club v. Assessor of Area 09-Vancouver, Assessment Appeal Board, Sept. 20, 1978 and June 14, 1979. 341. Assessment Appeal Board, June 12, 1978. 342. Assessment Appeal Board, Oct. 18, 1983. 343. Assessment Appeal Board, July 22, 1981. 344. Captain's Palace Restaurant Inc. v. Assessor of Area 02- Capital, Assessment Appeal Board, July. 30, 1982. 345. Elworthy v. Assessor of Area 02-Capital, Assessment Appeal Board, Sept. 28, 1982. 346. Assessment Appeal Board, May 28, 1981, supra, note 29. 347. Assessment Appeal Board, Aug. 15, 1978. 155 348. C o n s o l i d a t e d S h e l t e r C o r p o r a t i o n v. R u r a l M u n i c i p a l i t y o f  F o r t G a r r y (1968), 49 D.L.R. (2d) 565 (Man. C.A.). 349. Supra, note 339. 350. See S t i p e , s u p r a , note 312. 351. A c c o r d i n g t o " N e l s o n : A P r o p o s a l f o r Urban H e r i t a g e C o n s e r v a t i o n " , s u b m i t t e d by the M i n i s t r y o f P r o v i n c i a l S e c r e t a r y and Government S e r v i c e s , P r o v i n c e o f B r i t i s h Columbia, N e l s o n , d e s p i t e a p o p u l a t i o n o f o n l y 9500 p e o p l e , has the h i g h e s t number o f h e r i t a g e s t r u c t u r e s o f any B r i t i s h Columbia community o t h e r t h a n Vancouver and V i c t o r i a . 352. Supra, note 312. 353. S u p f a , nojbe 325. 354. See S t i p e , s u p r a , note 312. 355. R.S.B.C. 1979, c. 21. 356. R.S.B.C. 1979, e. 22. 357. Supra, note 332. 358. R.S.B.C. 1979, c. 21. 359. U.S. Const., Amend. V, XIV. 360. R.S.N. 1970, c. 40 as amended by S.N. 1975-76, c. 72, s. 9. 361. The Vancouver C h a r t e r ' s h e r i t a g e p r o v i s i o n (S.B.C. 1974, c. 104, s. 4 5 ) , r e p e a l e d by the HCA, had a s i m i l a r p r o v i s i o n . 362. Eg., the H e r i t a g e P r o p e r t y A c t , S.S. 1979-80, c. H-2.2, s s . 13, 14, 40, 42. 363. N.Y.C. Admin. Code, c. 8-A, s. 205-1.0 e t seq (1976). 364. I b i d , s. 207-8.0. 365. I b i d , s. 207-1.0. 366. See C o s t o n i s , s u p r a , note 232. 367. Supra, note 184. 368. H i s t o r i c Landmark and the H i s t o r i c D i s t r i c t P r o t e c t i v e A c t o f 1978, D.C. Code s. 5-821 e t seq. (Supp 1980). 156 369. Supna, note 207. 370. D.G. Code s. 5-824(g) (1980 Supp). 371. Supra, note 207. 372. See Manhattan Club v. Landmark Commission o f New Yo r k  C i t y , s u p r a , note 54. 373. Supra;? note 1. 374. Supra, note 207. 375. (1968), 288 N.Y.S. (2d) 3U (S.C.A.D.). 376. (1974), 316 N.E. (2d) 305 (N.Y.G.A.). 377. S.S. 1979-80, c. H-2/2, s. 20. 378. R.S.B.C. 1979, c. 206, s. 2 7 ( 4 ) . 379. I.R.C. Code, s. 191 as amended by Tax Reform A c t o f 1976; I.R.C. o f 1954, s. 167(d). 380. See Oldham, " F e d e r a l Tax P r o v i s i o n s and the F e d e r a l Frame-work f o r H i s t o r i c P r e s e r v a t i o n " ( 1 9 8 0 ) , 12 Urban Law 66. 381. I b i d . 382. R.S.C. 1952, c. 148 as amended. 383. See " A p p r o v a l W i t h h e l d on Tax P o l i c y : M i c h a e l W i l s o n " (1985), 11:5 Cdn H e r i t a g e 11. 384. The C o n s t i t u t i o n A c t , 1867, s. 9 2 ( 1 3 ) . 385. R.S.C. 1952, c. 148, s. 1 8 ( 1 ) ( b ) . 386. I b i d , s. 2 0 ( 1 ) ( a ) . 387. Income Tax R e g u l a t i o n s , Schedule I I I , C l a s s 3, S.O.R. Cons/78, c. 945. 388. I b i d , C l a s s 6. 389. Income Tax A c t , R.S.C. 1952, c. 148, s. 18(3.1) as added by S.C. 1980-81-82-83, c. 140. 390. (1926), 10 T.C. 188 ( H . L . ) . 391. See Canada Steamship L i n e s v. M.N.R.,(1966)0.T.C.255(Exch.Ct); The Queen v. Shabro I n v e s t m e n t s , TT9~79) C.T.C. 125 (Fed. C.A.). 1 5 7 392. See Montship L i n e s v. M.N.R. ( 1 9 5 4 ) , 5 4 D.T.C. 1 1 5 7 (S.C.C.). See a l s o H a r r i s , Canadian Income T a x a t i o n ( 3 d ed.) 1 9 8 3 ) a t pp. 183-189. 3 9 3 . See Canada Steamships L t d . v. M.N.R., s u p r a , note 3 9 1 . 3 9 4 . See L e v i n t e r v. M.N.R. ( 1 9 5 1 ) . 5 D.T.C. 3 5 9 (Income Tax Appeal B o a r d ) . 3 9 5 . See Canada Steamships L t d . v. M.N.R., s u p r a , note 3 9 1 . 396. See L e v i n t e r v. M.N.R., s u p r a , note 3 9 4 . 3 9 7 . Supra, note 3 9 1 . 3 9 8 . Supra, note 3 9 4 . 3 9 9 . ( 1 9 6 5 ) , 6 5 D.T.C. 6 8 4 (T.A.B.). 400. ( 1 9 6 0 ) , 60 D.T.C. 318 (T.A.B.). 4 0 1 . I;R.C. Code s. 191 (1976) r e p e a l e d by Economic Recovery Tax  A c t , Pub. L. No. 9 7 - 3 4 ; 95 S t a t 2 3 9 (1981). 4 0 2 . See T i e d t , e t a t , " H i s t o r i c P r e s e r v a t i o n P r o v i s i o n s o f the I n t e r n a l Revenue Code" i n H i s t o r i c P r e s e r v a t i o n Law ( R o b i n -son, ed. 1 9 7 9 ) a t p. 3 7 9 . 403. I.R.C. Code s. 191 (a()'(n)(B) ( 1 9 7 6 ) r e p e a l e d by Economic  Recovery Tax A c t , Pub. L. No. 9 7 - 3 4 ; 95 S t a t . 2 3 9 ( 1 9 8 1 ) . 4 0 4 . 16 U.S.C. s. 4 7 0 e t seq. ( 1 9 7 4 & 1982 Supp.). 4 0 5 . 3 6 Code o f F e d e r a l R e g u l a t i o n s s. 60.2 (1981) and see Dworsky e t a t , "An Overview o f F e d e r a l P r e s e r v a t i o n Law" i n A Handbook on P r e s e r v a t i o n s l a w (Duerkson, ed,, 1983) at p. 4 9 . 406. I.R.C. Code s. 1 9 1 ( a ) ( 4 ) ( 1 9 7 6 ) r e p e a l e d by Economic Re-covery Tax A c t , Pub. L. No. 9 7 - 3 4 ; 95 S t a t . 2 3 9 ( 1 9 8 1 ) . 407. See T i e d t , s u p r a , note 4 0 2 . 408. 31.R.C. Code s. 1 6 7 ( o ) (1978) r e p e a l e d by Economic Recovery  Tax A c t , Pub. L. No. 9 7 - 3 4 ; 95 S t a t . 2 3 9 (1981). 4 0 9 . 26VU.S.C. s. 4 8 e t seq. (1981). 4 1 0 . Dworsky, s u p r a , note 405/ 4 1 1 . 26 U.S.C. s. 4 8 ( g ) ( 2 ) ( C ) (1981 Supp). N o n - h i s t o r i c b u i l d i n g s were e l i g i b l e f o r a maximum t a x c r e d i t o f twenty p e r c e n t o f the r e h a b i l i t a t i o n c o s t s . 158 412. I.R.C. Code s. 191 (1976) r e p e a l e d by Economic Recovery  Tax A c t , Pub. L. No. 97-34; 95 S t a t . 238 (1981).'. 413. I b i d , s. 1 9 1 ( a ) ( 4 ) . 414. H e r i t a g e F i g h t s Back, s u p r a , note 216, p. 150. See a l s o Denhez7 P r o t e c t i n g 7he B u i l t Environment (1980). 415. As d e f i n e d by Income Tax A c t , R.S.C.1952, c. 148, s. if3 ( 2 1 ) ( f ) . 416. I b i d , s. 1 3 ( 1 ) . 417. I b i d , s. 1 3 ( 2 1 ) ( f ) ( i i i ) - ( v i i i ) . See a l s o H a r r i s , s u p r a , noTe 391, p. 216. 418. H e r i t a g e F i g h t s Back, s u p r a , note 236, p. 150. 419. IT-460, " D i s p o s i t i o n s - Absence o f C o n s i d e r a t i o n " ( O c t . 6, 1980). 420. F o r eg., see IU v. M a l l o n e y ' s S t u d i o L t d . , (1979) C.T.C. 206 (S.C.C.). 421. W i t h b u i l d i n g s , e i t h e r C l a s s 3 or 6 o f Schedule I I , Income Tax R e g u l a t i o n s , S.O.R. Cons/78, c. 945. 422. Income Tax A c t , R.S.C. 1952, c. 148, s. 20 ( 1 6 ) . 423. See M.N.R. v. Ste e n R e a l t y , (1964) C.T.C. 133 (Exch. C t . ) . 424. (1976) C.T.C. 665 (F.C.T.D.). 425. (1968) C.T.C. 457 (Exch. C t . ) . 426. I.R.C. Code s. 167(n) (1976) r e p e a l e d by Economic Recovery  Tax A c t , Pub. L. No. 97-34; 95 S t a t . 238 (1981). 427. I.R.C. Code s. 280B (1976). The s e c t i o n remained i n e f f e c t under the Economic Recovery Tax A c t , s. 21 2 ( d ) . 428. Eg., see Cooper B l o c k L t d . v. M.N.R. (1963), 33 Tax A.B.C. 62. 429. Income Tax R e g u l a t i o n 1102(2). 430. I.R.C. Code s. 1 7 0 ( f ) ( 3 ) ( B ) (1980). 431. See Dworsky, s u p r a , note44'05, pp. 485-499; Jahns, s u p r a , note256. 432. Income Tax A c t , R.S.C. 1952, c. 148, s. 1 1 0 ( 1 ) ( a ) ( i v ) . G i f t s t o a m u n i c i p a l i t y , l i k e those t o c h a r i t a b l e o r g a n i -159 z a t i o n , are l i m i t e d t o twenty p e r c e n t o f the t a x p a y e r ' s income w i t h p r o v i s i o n s t o c a r r y the d e d u c t i o n f o r w a r d , T h i s l i m i t a t i o n does not a p p l y t o g i f t s made t o the f e d e r a l or p r o v i n c i a l Crown under s. 1 1 0 ( 1 ) ( b ) . 4 3 3 . See Dworsky, s u p r a , note 405, pp. 4 8 5 - 4 9 9 . 4 3 4 . See " A p p r o v a l W i t h h e l d on Tax P o l i c y " , s u p r a , note 3 8 3 . 4 3 5 . I b i d . 4 3 6 . I b i d . 4 3 7 . See Oldham, s u p r a , note 380, pp. 6 6 - 6 7 . 4 3 8 . R.S.B.C. 1979, c. 165. 4 3 9 . R.S.B.C. 1979, c. 290, s. 2 6 9 ( n ) . 440. S.B.C. 1953, c 5 5 , s. 2 0 6 ( j ) as amended by S.B.C. 1963, c. 60, s. 4. 4 4 1 . See "Value i n Those O l d B o a r d s " , Vancouver C o u r i e r , Nov. 27, 1985, p. 10. 442. See S t a r k , s u p r a , note 218. 4 4 3 . 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