The Federal Department of Canadian Heritage a few years ago did a “Summative Evaluation of the Movable Cultural Property Program” in which it discusses the program, its relevance and concerns about the program.  While there is no doubt that many institutions benefit from the Movable Cultural Property Program it also appears that there have been some significant problems with the program.  The Vancouver Sun has written a number of articles highlighting concerns about the valuations of certain statues, which have been followed up by others.

The Vancouver Sun articles are at:

Vancouver-held sculptures found not to be Michelangelo’s but expected to sell for tidy sum

Blockbuster donation of ‘Michelangelo’ sculptures turns into multi-million-dollar bust: Sotheby’s says tiny terracotta sculptures are worth $200,000 to $300,000, a fraction of their appraised value

The CBC also had a piece: Why did ‘Michelangelo Models’ cost Canadians millions in tax credits?

The Contentious World of Art Appraisal: Michelangelo, Van der Schardt and the Canadian Cultural Property Export Review Board, from the Center for Art Law

You can read the Canadian Heritage report at:

I have taken certain excerpts from the report and reproduced them below. 

“Some very significant collections are now available to the public as a result of the program. Archival material that might have been destroyed has been preserved. Several respondents noted that there is a very limited secondary market for archival material so the existence of the tax credits in particular have encouraged owners to donate the materials rather than destroying it. With the larger collection arising from the donations/sale of certified cultural property, more exhibitions can be held and educational programs mounted. As a number of key informant interviewees and survey respondents noted, institutions have become very dependent on the donations they receive this way to build their collections. Few institutions have a significant acquisition budget.

The primary complaint with certification was the process institutions had to go through to obtain it. Several interviewees noted that the program is extremely beneficial for well-to-do donors and while the institution does build up its collection, it also needs to find the funds to underwrite the ongoing costs of ownership (maintenance, insurance, storage, conservation, research so that the works can be properly exhibited, publication, etc.). No federal programs provide ongoing operating support for permanent collections. Provincial and territorial governments, however, have programs in place to contribute funds for some ongoing support.

The tax provision is of limited or no value to creators of the work or potential donors who may have a relatively low income. These individuals would rather receive cash rather than a tax credit. About two-thirds of donors who responded to the survey indicated that a significant financial benefit was generated from their donation/sale of objects to designated institutions while for over a quarter of respondents, it did not. Just over half of donors indicated that they would have donated/sold the object(s) to a designated institution regardless of the tax incentives while a similar number indicated that the tax incentives for donations/sales were always or often an important factor in deciding to donate/sell cultural property. Over 90 percent of donors would recommend the MCPP’s tax incentives to a friend, neighbour, business associate or family member.
4.2.3 Unintended Impacts
Key informants and survey respondents identified a wide variety of perceived unintended impacts, both positive and negative, of the program.

Examples of perceived positive benefits cited included:
It established the quality of the designated institution’s professional standards in programming, staffing and facility. Further, it ensures a high level of ongoing care of the collection, and the institution’s operations. These features confer a status of best professional practice that can be levered to reassure donors of the credibility and standards of the receiving institution; to persuade both private and institutional collectors to lend works to exhibitions; to establish positive relations with donors and potential donors; and for grant applications. (This was identified by 20 percent of institutional respondents who cited positive benefits and by several of the key informants.)
Generated national and international awareness of the breadth and quality of the collection and facilitated the loan of important works from abroad and/or generated interested for temporary loans from abroad.
The institution was better informed of current issues and legislation regarding cultural heritage property.
Enables Canadian researchers to have ready access to cultural property in other countries for research without suspicion that the cultural property from those countries will be illicitly imported to Canada.
Improved financial performance of the institution.
Increased institutional profile as a result of the cultural property donated which lead to increased donor and government funding and/or encouraged donations from others.
Greater scrutiny now of non-cultural property gifts as a result of the requirements for accepting certified cultural property.

Examples of perceived unintended negative impacts that were identified include:
Difficulty in acquiring cultural property consistent with the vision of the institution. Institutions are acquiring donated objects which may or may not be consistent with its own vision. Just over a third of institutional respondents to the survey indicated that they had felt inappropriate pressure at times from a potential donor/seller to apply for certification of objects that they might not otherwise wish to have in the collection.
Lost sales by export permit applicants. Reasons included potential buyers found something else to buy in the intervening period and cancelled the sale, and reluctance on the part of international buyers to purchase cultural property in Canada as they may not be able to export it from Canada.
The growing burden on institutions for the care and conservation of donated materials, and the lack of financial support available for this.
Individuals acquiring cultural property solely for the tax benefits that would be available if they donated it.
Inflated valuations of cultural property. However, most respondants did not share this perspective. In responses to the surveys, almost 80 percent of donors indicated that they disagreed or strongly disagreed that fair market values determined by the CCPERB are sometimes too high. Approximately a third agreed or strongly agreed that the fair market values are sometime too low while almost half disagreed. Three quarters of institutional respondents to the survey indicated that fair market values determined by the CCPERB are usually about right. Less than five percent thought that the values were occasionally too high.
Several respondants voiced concerns about perceived misuse of the program:
Would be exporters claiming that they have an offer from a foreign buyer and use this to pressure Canadian institutions to acquire the object at that price.
Limited discriminating analysis to assess whether all that is being donated is in fact of outstanding significance and national importance. This is particularly the case with audio-visual archival material where out-takes, and extra negatives are also donated. Production houses may be cleaning out their shelves to obtain a tax credit for material that was already paid for by grants, contributions or tax credits.
These concerns were voiced despite mechanisms that are in place, either through program guidelines or within the legislation, to mitigate against potential misuse. For example, the fair cash offer process defined in the legislation is intended to ensure that a fair price is offered and received when Canadian institutions seek to acquire objects threatened with export from Canada.”