Caillebotte painting reveals imbalance in federal export system

Last month the Art Gallery of Ontario unveiled its latest acquisition: a handsome painting called Iris bleus, jardin du Petit Gennevilliers by the French impressionist Gustave Caillebotte. It is neatly positioned between two other works by the same artist, both on loan from private collections, in a room that includes big hitters from the art world, including Monet, Degas and Cézanne. Most visitors could be forgiven for walking right past the little Caillebotte without giving it much notice.

Yet this very piece has caused quite a stir in the Canadian cultural scene over the past year. It was first bought at a Toronto auction back in November 2016 by a foreign buyer, who quickly sought to export the work to Britain. But an export permit was deferred by the Canadian Cultural Property Export Review Board on the basis that the work was of outstanding significance and of “national importance.” It was the application of this last term that irked the would-be exporter. The work was French, after all, and had been held in a private collection and barely seen in public since arriving in Canada in 1960. The exporter took the review board to court and won at first instance. On appeal, however,

the board’s original decision was reinstated, which opened the door for the AGO to buy the work this summer. And so it might seem that all our systems are in good working order.

But what the Caillebotte case helped show was that some of the rules governing Canada’s cultural sector are woefully out of date. The cultural property export law was developed in the 1970s as a reaction to the then-recent sale of two great Canadian art collections to American buyers, the Van Horne collection from Montreal and a collection of over 200 works of First Nation subjects by Paul Kane. As a result, great works of art headed permanently out of Canada would henceforth be metaphorically “held at the border” by the review board for up to six months to see if a Canadian institution could afford to acquire them and keep them in the country. It’s what some call “saving art for the nation.”

Every year, only seven or eight cultural objects are refused export permits on the basis of “national importance” by the Export Review Board. But this number is dwarfed in comparison with applications to the board for tax certification. By this second procedure, donors who “gift” artworks to museums may benefit from an incredibly generous tax writeoff, which can be used to offset up to 100 per cent of a donor’s net income. In a given year, the board might deem up to 8,000 cultural objects or collections to be of national importance for tax certification, thus leading to tax credits that can reach over $100 million in total. What was originally an offshoot of the export process has effectively become the main attraction.

In June, eligibility for tax certification was made even easier. As a result of the Caillebotte controversy, the latest federal budget removed the “national importance” standard for the board to apply when assessing tax applications (but not, strangely, for export applications). This means that donors looking to avail themselves of the tax break now have to show only that their works are of “outstanding significance” for reasons related to history or national life, esthetic qualities or value for study, not necessarily that they are of great importance to the country.

The Caillebotte matter has helped shine a light on the relative antiquity of our cultural export review law, which has morphed into a tax-break entitlement procedure. This may be a good outcome for many of the country’s leading museums, which claim that without tax credits they wouldn’t be able to attract top-notch art donations. But if that’s so, should it not be part of an open process of discussion and reflection — and clearly laid out in legislation that’s been voted on by Parliament? As it stands, the so-called “Export Review Board” makes over 99 per cent of its determinations for the purposes of tax credits. Surely that wasn’t the initial intention of Parliament in the 1970s.

Perhaps this modest painting has done us all a favour by pushing a much-needed update of our cultural heritage laws higher up the federal agenda. The only question is, will the current (or next) government care to listen?

THIS VERY PIECE HAS CAUSED QUITE A STIR IN THE CANADIAN CULTURAL SCENE OVER THE PAST YEAR.