Commercial Heritage Properties Incentive Fund

CHPIF Notice Posted on the Historic Places Initiative website:

Please note that the Fund is now fully subscribed. Consequently, we cannot accept new applications. If you are interested in the program, we would be pleased to hear from you. You can contact us at 819-934-2818. Please consult our website regularly for updates on the program.

FAQ

Who can apply for CHPIF?

Eligible recipients for the Commercial Heritage Properties Incentive Fund must

  • be a taxable Canadian corporation (as defined for purposes of the Income Tax Act) that is not controlled, directly or indirectly by a tax-exempt entity
  • own the historic property for which the contribution is provided. An applicant leasing an historic building from any entity will be considered to own the building if at least 20 years remains on the lease as of the date of application to the program

For the purposes of the program, an historic property could be:

  • a historic place formally recognized within a provincial/territorial/federal jurisdiction and listed individually on the Canadian Register of Historic Places OR
  • a property located within a larger listed historic place (such as a district) and that has been explicitly identified as a “Contributing Property” at the time of official recognition by the appropriate authority within a jurisdiction. (This part of the definition will be adjusted in the next CHPIF call for applications)

The Canadian Register of Historic Places will be online in early 2004. Until this date, please contact your federal/provincial/territorial registrar to determine how to have your historic property listed or to determine if your property is a ‘contributing property’ within a larger historic place. A complete list of Registrars can be found online at the end of this document.

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What is a ‘Contributing Property’?

For the purposes of the CHPIF, a Contributing Property is defined as an immovable asset such as a building or a landscape, that is part of a larger historic place and that contributes to the heritage value (reasons for formal recognition) of the larger historic place.

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What qualifies as a “long-term lease”?

An applicant leasing an historic property will be considered to own the property if at least 20 years remains on the lease as of the date of application to the program.

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Who is NOT eligible to apply for funding?

It should be noted that individuals, government agencies, churches, charities, pension funds, and not-for-profit organizations will not be eligible for financial assistance under the CHPIF, even if they own an historic property as defined above.

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What types of projects are eligible for funding?

Projects should meet all the following criteria:

  • The project must involve the rehabilitation for commercial use of an historic property owned/leased by an eligible recipient.
  • The building must be put to commercial use in a business, or made available for such a use, immediately following its rehabilitation (or within a reasonable amount of time – under 6 months).
  • For purposes of the program, commercial use will include any use that is being used primarily or has been acquired for use primarily (more than 50%) in the business of the owner or of another person that contributes directly or indirectly to the purposes specified in the articles of incorporation of the owner. This includes, where appropriate, the use of historic buildings as residential rental properties or bed and breakfast establishments, if owned by a taxable Canadian corporation.
  • “Made available for commercial use” means that the owner is actively seeking to put the building to use in its own business or to lease or rent the building for a suitable use by another person.
  • The rehabilitation project must be of substantial magnitude; that is either (1) at least 50% of the most recent depreciated cost base of the property for federal income tax purposes or (2) in the case of a leased property, at least equal to five years net rent at the current rate at the time of application
  • A Certification Agent, accredited by the program, must certify the project to be consistent with the Standards and Guidelines for the Conservation of Historic Places in Canada. .
  • After receipt of a complete application package, a Certification Agent will be assigned to eligible applicants. The Certification Agent will be responsible for the review/assessment of the project/proposal and for its pre-certification. Pre-certification of rehabilitation plans will be a requirement for the application to be accepted. If a project is later on selected and approved for funding, certification of the completed work will be a requirement for payment of the contribution. In the course of a selected project, if modifications to the plans become necessary, these modifications will also need to be pre-certified before their implementation.
  • The recipient must agree to meet the requirements of the Canadian Environmental Assessment Act.

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How do I get my property listed on CRHP?

To be listed on the Canadian Register:

  • a property must meet the Canadian Register’s definition of “historic place” “

A structure, building, group of buildings, district, landscape, archaeological site or other place in Canada that has been formally recognized for its heritage value within a provincial/territorial/federal jurisdiction.”

For the purposes of the program, an historic property could be:

  • an historic place formally recognized within a provincial/territorial/federal jurisdiction and listed individually on the Canadian Register of Historic Places OR
  • a property located within a larger listed historic place (such as a district) and that has been explicitly identified as a “Contributing Property” at the time of official recognition by the appropriate authority within a jurisdiction. (This part of the definition will be adjusted in the next CHPIF call for applications)
  • The Canadian Register of Historic Places will be online in early 2004. Until this date, please contact your federal/provincial/territorial registrar to determine how to have your historic property listed or to determine if your property is a ‘contributing property’ within a larger historic place. A complete list of Registrars can be found online at the end of this document.

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Am I listed on the Canadian Register of Historic Buildings?

  • Applicants should consult the federal registrar (in case of National Historic Sites or Heritage Railway Stations) or their provincial/territorial registrar for municipal/provincial/territorial designations to ensure that their property is listed on the Canadian Register or to determine if their property is a ‘contributing property’ within a larger historic place.
  • A complete list of Registrars can be found online at the end of this document.

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Is the CHPIF available for condominiums?

No, the CHPIF cannot be used by an individual condominium owner. Eligibility rules require that the property be owned by a taxable Canadian corporation (as defined for purposes of the Income Tax Act).

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If rehabilitated, can an owner apply "After the fact"?

No, selection of eligible projects and their approval must be done by the Minister of Canadian Heritage prior to rehabilitation and cannot be retroactive.

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Can the contribution be used in conjunction with other credits?

Yes, this is possible. The Program will require applicants to disclose in the application all committed and potential sources of funding for a proposed project. If the project is approved, a similar disclosure will be required prior to payment of the contribution. It is expected that in virtually all cases there will be a substantial private sector involvement in the cost and risk of the project and that total government assistance will only be a fraction of the overall cost. In the event that Total Government Assistance for the same purpose exceeds 100% of eligible costs, the contribution under the program will be reduced on a pro-rated basis, using total assistance received. Total Government Assistance shall mean; (a) all government (federal, provincial, territorial and municipal) grants and assistance related to the project; and (b) any other government contribution (in cash or in kind) received. Any overpayments, unexpected balances, or disallowed contribution amounts are considered debts to the Crown and must be returned to the Government of Canada by the recipient.

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What are the eligible costs with this contribution program?

  • Professional fees, including: conservation planning, architecture, engineering, site surveying, environmental assessment, financing and feasibility fees, and legal services.
  • Approval fees including permits (Municipal fees and taxes related to project approval and development)
  • All construction costs related to the envelope and interior rehabilitation of the historic property that are specifically linked to the rehabilitation project, e.g., walls, partition, floors, ceilings, permanent covering, components of central air conditioning or heating systems, plumbing, electrical wiring and lighting fixtures, chimneys, stairs, escalators, elevators, sprinkler systems, fire escapes, improvement/replacement of sewer/septic system, signage attached to the building.
  • Landscaping and archaeological costs if related to features that are character-defining elements and contributes to the heritage value of the property.
  • Interest payments on loans for construction costs during the period of construction.

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What are some examples of ineligible costs?

  • Costs of acquiring the property.
  • Fees or costs not directly associated with rehabilitation of the historic property.
  • Demolition, removal or dismantlement of a building.
  • Removal or dismantlement of a part of a building, unless specifically required as part of the planned conservation work.
  • Additions to or enlargement of the historic property.
  • Non-construction costs such as those related to movable equipment, interior appliances, furniture, non-permanent carpeting or cabinets, etc.
  • Outdoor construction or improvement costs (e.g. paving of parking lots or sidewalks, addition of decks or terraces, installation of signage or outdoor lighting remote from the building, fencing, etc.).
  • Costs representing any profit mark-ups by an entity not dealing at arm’s length with the corporation claiming the program benefits would be ineligible
  • Overhead expenses in excess of 10% of total eligible project costs.

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What are overhead expenses?

Corporate overhead expenditures for the purpose of the CHPI Fund must be reasonable and attributable to the historic rehabilitation project.

Corporate overhead expenses include:
Administration, management and financing expenses of the qualifying corporation; salary, wages or other remuneration or related benefits paid in respect of a person employed by the qualifying corporation whose duties were not all or substantially all (90% or more) directed towards rehabilitation activities; upkeep or maintenance, taxes, and insurance expenses of the qualifying corporation; rental or leasing of property other than property used by the qualifying corporation for the purpose of historic rehabilitation activities; compensation for the performance of a service for the benefit of the qualifying corporation by any person who was connected with the qualifying corporation; or the acquisition of any materials, parts or supplies from any person who was connected with the qualifying corporation.

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What is the maximum amount payable under CHPIF?

The Program will cover 20% of total eligible costs, up to a maximum of $1,000,000 based on a Class C estimate of eligible costs. There is also a notion of ‘maximum per recipient’, which means the maximum amount that any one recipient is entitled to over the life of the current program (which is three years). The maximum per recipient is $1 million dollars, which can be spread over a number of projects and years; however, it cannot exceed $1 million for any one recipient in total.

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When is the final contribution payment made?

Once a project has been selected for funding, a contribution agreement will be signed by the owner and the Minister to identify the amount of the contribution and the conditions. One of the conditions will be to complete the project as pre-certified by Parks Canada. The final contribution will then be made at the end of the project once the project is completed and certified as meeting the pre-certified rehabilitation plan by a certification agent accredited by Parks Canada. The amount paid will be the lesser of the amount shown in the Contribution Agreement or 20% of expenses actually incurred and eligible under the program, based on statements provided by the applicant and subject to verification by audit.

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What activities would result in a need for recovery of funding?

Contribution agreements will include a requirement that certain types of transaction intended to avoid eligibility rules will render expenses ineligible and contributions subject to recovery. Specifically, all or part of the contribution could be considered a debt to the Crown if within five years of completion of rehabilitation the building is:

  • Sold to an entity that would not have been eligible to receive financial assistance under the program, such as an individual, a tax exempt organization, or a government agency; OR
  • Substantially or wholly leased on a long-term basis (over 20 years) to an entity that would not have been eligible to receive financial assistance under the program, such as an individual, a tax exempt organization, or a government agency; OR
  • Demolished or substantially degraded with respect to its historic character; OR
  • Not put into commercial use or made available for such purposes immediately (or within a reasonable amount of time – under 6 months)

The contribution payment will establish the right of the Minister to audit the accounts and records of the recipient to ensure that the funds provided were used for the purposes intended. Audits may be undertaken by employees of the Department of Canadian Heritage, Parks Canada Agency or their representatives, with the expenses related to these audits assumed by Parks Canada Agency. The recipient will account for all sums expended and will keep appropriate accounts and records, including invoices, cancelled cheques and other source documents related to the rehabilitation work for which the contribution is provided and the commercial use to which the building is put. The contribution would also be subject to recovery if there was found to be evidence of fraud or gross misrepresentation of facts in the original application or any subsequent amendments or in cases or overpayment, unexpected balances or disallowed contribution amounts.

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