Tiny new legislative tweak may have prevented Leibovitz debacle

If a two-word change announced in last week's federal budget had been made six years ago, a collection of Annie Leibovitz's work might be on display at the Art Gallery of Nova Scotia by now.

Instead, the collection of more than 2,000 prints is in storage, awaiting the resolution of a saga involving tax credits, copyright and a debate over whether Leibovitz's art is of "national importance" to Canada.

The 2019 federal budget quietly announced that proposed legislative amendments will remove the requirement that a donated work of art be deemed of national importance in order for the donor to qualify for tax incentives.

That stipulation was one of the main barriers to the Leibovitz collection being displayed at the AGNS.

Gallery spokesperson Colin Stinson said staff are still figuring out what the change could mean for the gallery.

Anything that makes the process of getting art certified for donor tax incentives "a little bit friendlier" for institutions is good, he said.

But Stinson said it's "impossible to say" whether the proposed change would have allowed the Leibovitz exhibit to proceed more smoothly had it been introduced earlier.

Decision 'mind-bogglingly inexplicable'

In 2013, the Mintz family of Toronto purchased the collection from Leibovitz for $4.75 million US, and two days later donated it to the AGNS.

The gallery tried to have the collection certified at a value of $20 million, which could have led to a tax benefit for the Mintzes worth double what they had paid.

The Mintzes only paid Leibovitz about half of the $4.75 million purchase price, with the second half contingent upon the works receiving certification by the Canadian Cultural Property Export Review Board.

But the board denied that certification, saying the collection was not "of such a degree of national importance that its loss to Canada would significantly diminish the national heritage."

After receiving the board's first denial in the fall of 2013, Ray Cronin, then-director of the gallery, left a phone message for a review board adviser saying the decision seemed so "frankly mind-bogglingly inexplicable and unwarranted or unsupportable that I am just at a loss."

According to notes of the telephone conversation in documents obtained by CBC News in 2017, Cronin pleaded his case in a followup conversation with the adviser and suggested if the news got out to the media, there would be a "circus."

Cronin sought clarification on what exactly "national importance" meant, and was told that factors include provenance, the impact of the creator, authenticity, condition, rarity, uniqueness and representativeness. The possibilities that the collection could have educational use, help increase the gallery's visitor numbers or go on tour would not affect national importance, the board told Cronin.

Toronto arts lawyer Aaron Milrad said the board's decision was surprising to many.

"We in the art world just shook our heads at that. I mean, here's the most important photographer of her kind in the world," he said. "I think because it was a tax deal there was a negative connotation to it, and the board felt that they had to be very strict on it."

A CBC investigation found the board was indeed concerned the donation was a tax grab. But in correspondence with the gallery, the board continued to use "national importance" as part of the reason for rejecting certification.

The gallery's second effort to certify the works was partly successful; the review board certified 762 of the prints, valued at a total of $1.65 million. The remainder were once again rejected as they did not meet the criteria of "outstanding significance and national importance."

When that decision came down, Cronin left another testy voice mail with the review board adviser, suggesting the board was "playing a very interesting and unethical game with this Leibovitz decision."

"It's so apparent that there is absolutely no intention of them actually looking at this in any rational way and that they hold the professional opinions of myself and my staff in utter contempt," he said, later apologizing in the message for "running off a little bit at the mouth."

While a judicial review of the board's rejection was filed, it was later abandoned and two subsequent efforts to have the work certified also failed.

In 2014, the federal government closed a loophole in the Income Tax Act that allowed for valuations far above a recent purchase price, eliminating the possibility of receiving a tax credit higher than what the donor paid.

Negotiations on Leibovitz exhibit ongoing

The changes proposed in the federal budget are unlikely to help the AGNS move ahead with the Leibovitz exhibit now, though. If the amendments pass, they will only apply to donations made on or after Budget Day.

While the AGNS owns the photographs, Leibovitz has the copyright to them, and it has been suggested that she can determine if, when and how they are exhibited.

A spokesperson for the provincial Culture and Heritage Department said discussions between the AGNS and Leibovitz's team are ongoing and that sharing the collection remains a priority.

Change prompted by court decision

The proposed changes mentioned in the budget were prompted by another high-profile case that turned on the issue of national importance.

In 2016, a painting by French artist Gustave Caillebotte was sold by Canadian auction house Heffel to a British gallery, but in order to send the painting, Heffel needed an export permit from the Canadian Cultural Property Export Review Board.

When the board refused to issue the permit, Heffel sued and in 2018, the Federal Court ruled that the board couldn't prevent the export because the painting wasn't considered of national importance to Canada.

That decision, which has since been appealed by the attorney general, threw museums and art galleries into turmoil, as both exports and donations were subject to the "national importance" caveat. Institutions worried there would be a chill on donations if they couldn't get them certified under the more narrow definition of national importance contained in the ruling.

The appeal is still pending.