Title: Conservation covenants: Long-term protection for private forestland
Publication Type: Journal Article
Year of Publication: 2002
Authors: Black S
Journal: Ecoforestry
Volume: 17
Issue: 3
Start Page: 19
Pagination: 24
Date Published: 01/2002

Owners of private forest land are faced with a number of important decisions when it comes to management of their forests. Do you manage for commercial timber production, firewood and building materials, for personal use, or leave the forest to its natural processes?

One decision that is probably not given enough thought, is what to do with your land when you are no longer the owner. You can’t own your land forever; you can’t take it with you. What options do you have? This is probably the most important decision you will ever make regarding your land.


Merve Wilkinson, Wildwood’s long-time steward and ecoforestry pioneer, had to go through this process. What was going to happen to Wildwood when he could no longer look after it? Fortunately, Merve and the rest of us can rest at relative ease knowing that Wildwood’s future is safer with every donation supporting its purchase by The Land Conservancy of BC, in partnership with the Ecoforestry Institute. However, with just under a year to go, $550,000 is still needed to permanently secure Wildwood’s future.

This is one illustration of how difficult and costly it may be to protect privately held forestland. Saltspring Island and Cortes Island, along with many other BC communities, have their own examples of what can happen to privately owned forestland when it falls into the hands of an owner who is more interested in short-term profit than long-term sustainability.

Thankfully, there are a variety of long-term stewardship options available to the owners of private land. These include land acquisitions (via donation or sale), stewardship agreements, leasing arrangements and conservation covenants. This article will focus on conservation covenants, and how they can be used to ensure that ecologically responsible forest management is practiced long after you no longer own your forested land. Some BC examples of conservation covenants being applied on private
forestland will also be presented.


Although BC has far less privately owned forestland than our American neighbours, we can look at their situation to see what the future might bring. This is particularly important given the current climate and willingness of the government to sell off Crown land at an alarming rate. In the Spring 2002 edition of Ecoforestry, Constance Best and Laurie Wayburn described the need for increased conservation on privately held forestland in the US. In their article, Best and Wayburn state that the final figures from the 1997 National Resource Inventory show that 10 million acres of private forestland were lost to development between 1982 and 1997, and that the rate of loss is increasing. They note that a “growing suite of tools is available to expand the success of conservation efforts . . . . Some, such as conservation easements, are well established and simply need to be expanded in their use.”[1] The same may be said of conservation covenants here in British Columbia.[2]

It is, however, important to note that there are other options available to landowners. These include but are not limited to the donation of land (including donations under the Ecological Gifts Program), purchase of land (used to secure the future of Wildwood and to save the forests of Saltspring Island), restrictive covenants (a common-law tool that protects environmental values on one parcel of land to the benefit of an adjacent parcel of land), profit à prendre (another common-law tool that provides for the transfer of private land resource harvesting rights from the landowner to another person or organization), and long-term leases. I will not go into more detail on them, other than to say that they could serve as subject matter for a future article.

What is a conservation covenant?

In 1994, an amendment to the BC Land Title Act permitted non-government conservation organizations, such as land trusts, to hold conservation covenants. A conservation covenant is actually a simple concept. It is a voluntary, written, and legally binding agreement between a landowner and a conservation agency.[3] The agreement outlines how the landowner promises to protect the land in specific ways. These promises are attached to the title of the land and stay with the land forever, regardless of who owns the land. These agreements are flexible and can be tailored to almost any situation, including private forestland that is being managed according to the
principles of ecoforestry.


How does this translate into practice? Suppose you own a small woodlot that you have been managing on the principles of ecoforestry and sustainability. Your management practices have allowed you to harvest a small amount of high-quality wood year after year while still maintaining a fully functioning forest ecosystem, complete with a wide variety of flora and fauna. You begin to be haunted by nightmares of skidders and logging trucks hauling out the last remaining logs, leaving nothing but a swath of destruction. If you cannot afford to donate your land for conservation purposes, and you do not want to sell your land, you feel powerless to the whims of future landowners. Thanks to conservation covenants, you can be in control of your land’s destiny.

After learning more about conservation covenants, you decide that they are the right tools for you. You will need to find the appropriate agency, probably a land trust, to help implement your plan. With their help, you can begin the process of drafting your covenant. Covenants are adaptable and flexible and can be tailored to almost any situation. The covenant can allow you to define where timber harvesting is not permitted, where it is permitted, what values are to be protected, etc. Any terms, which you and the land trust agree upon, can be included in the covenant. The decisive factor is that all of the promises you make apply not only to you but also to every future landowner.

When the covenant is completed and everyone is happy with it, it will be filed with the Land Title Office and will become permanently attached to the land’s title. The organizations you entered into the covenant with are called “covenant holders.”[4] The covenant holders are responsible for annual monitoring of your property, to ensure that the agreement is not being violated. This means that at least once a year, representatives from the organizations holding your covenant will visit the landowner and walk around the property, making sure that none of the promises in the covenant have been broken. If violations are discovered, the covenant holders have a number of enforcement options available to them. These include anything from dispute resolution to court action.

Potential tax benefits and implications


When you donate a conservation covenant to a registered charity, such as The Land Conservancy of BC, you might be eligible for a tax receipt. This tax receipt will be for the amount that the covenant is worth. In order to figure out what the covenant is worth, you will need the help of a professional appraiser who is certified by the Appraisal Institute of Canada. The appraiser will determine the current fair market value of your property, with and without the covenant.[5] The difference between the before and after value of the land is the value assigned to the covenant. Upon registration of the covenant, you would be eligible for a charitable tax receipt based on the
appraised value of the covenant. Your covenant donation could qualify as an Ecological Gift if you have your land certified as being ecologically significant and submit the appraisal to Environment Canada for review and approval.[6] Ecological Gifts may receive better tax treatment and may result in higher tax savings for the donor.


Conservation covenants can also play an important role in estate and financial planning. For example, covenants can help minimize your exposure to capital gains taxes, particularly if you have owned your land for a long period of time and it has increased in value. When you sell or otherwise transfer ownership of your land (perhaps to your children as a gift or under your will), you will have to pay capital gains taxes on the difference between your purchase price and the current fair market value. These capital gains can be significant and can result in a high tax burden.[7] In some situations, covenants can be used to reduce the landowner’s exposure to capital gains taxes (and potentially other taxes). Anyone seriously considering a conservation covenant for their land should consult with a tax professional and a lawyer. Every situation is different; these professionals, along with the organizations that will hold your covenant, will be able to work with you to get the most benefit possible from your covenant donation.


Examples of covenants being applied to forested land in BC


The use of conservation covenants to protect private forest lands and ensure responsible forest management is relatively new in BC.
There are, however, a number of examples starting to emerge. Since I am familiar with some examples on Cortes Island, I will use
these to illustrate how covenants are being applied to protect private forestland. After witnessing the destruction of some significant private forest lands, Cortes Islanders started to look for a proactive solution to this problem. One of the first covenants on Cortes Island was the Linnaea Farm covenant, held by TLC and the Quadra Island Conservancy and Stewardship Society (QICSS).

The Linnaea Farm Society worked with TLC and QICSS to register a covenant protecting the diverse 315-acre property. The covenant was tailored to allow agriculture and residential use in specified zones, non-commercial forest harvesting for farm and resident steward use was permitted in another zone, and absolute protection of the forest was provided for in another zone. This covenant protects the ecological integrity of the farm while allowing for a mixture of agricultural, educational, residential and recreational uses to continue on the land.

Another Cortes Island covenant was registered by Greggor and Amy Robertson on a 72-acre forested parcel of land they own. This covenant, which is held by TLC and the Silva Forest Foundation, provides for two zones, with different levels of protection. The Protected Area encompasses approximately 40 acres.

The intent of the covenant with respect to the Protected Area is to:

• Maintain and protect biological diversity, including genetic, species and ecosystem diversity in the forest stands;
• Maintain, protect and restore natural composition, structures, and functions in the forest, including local landscape patterns, large living trees, large standing dead trees, large fallen dead trees, forest soils and water quality, quantity and timing of flow;
• Utilize natural processes of change and natural functioning of forests;
• Protect and restore old-growth forest attributes; and
• Prevent any occupation or use of the Protected Area that will significantly impair or interfere with maintaining or restoring the natural integrity of ecosystems.

Specific restrictions regarding activities in the Protected Area are spelled out in the covenant. The covenant also requires that the owners do a Management Plan that “will explain how the purpose of the covenant will be achieved, and will detail uses and the types of activities for the Protected Area for a 50-year period.” The covenant and Management Plan also apply to the remainder of the property but without significant restrictions on forest and land use. The covenant does, however, call for a “healthy functioning” forest ecosystem to be maintained on the remainder of the property, thereby preventing clear cutting or other unsustainable practices.

The last example of conservation covenants being used to protect Cortes Island forests is perhaps the most interesting. Weyerhaeuser Canada (originally MacMillan Bloedel) owns approximately one quarter of the private land on Cortes Island. A few years ago, Weyerhaeuser sold two parcels of land to a private logger, who proceeded to clear-cut these two parcels. Most of the Cortes Island
community was outraged. Weyerhaeuser also received a lot of bad publicity and many complaints.

Over the last couple of years, the Cortes Ecoforestry Society and others have been working with Weyerhaeuser to ensure that this does not happen again. To its credit, Weyerhaeuser has registered conservation covenants, held by The Nature Trust of BC, on two land parcels it currently has on the market, with a third covenant about to be registered and potentially, others in the works. These covenants provide for mandatory stream and wetland setbacks/buffers, viewscape protection along public roads and waterways, protection for important habitat areas, and other basic protective measures. In terms of on-the-ground protection, these covenants protect between 20 percent and 40 percent of the forested land base on each of the properties they are registered against.[8] It is also interesting to note that any future landowner wishing to log these properties will be required to prepare and submit a Forest Management Plan, prepared by a Registered Professional Forester to The Nature Trust prior to any logging. The covenants also require that the Forest Management Plan provide for 20 percent of the harvestable forest to be left for old-growth recruitment, wildlife trees, snags, etc., and that a reforestation plan be prepared. Residential use of the land is permitted under these covenants.[9]

Charles Smith, from Weyerhaeuser’s property division, says that these covenants are being done because of the special circumstances on the island and to avoid the problems of the past. Weyerhaeuser has used covenants before, primarily to protect special areas such as fish habitat. According to Weyerhaeuser, the jury is still out on these covenants.[10] It is important to note that these covenants are a significant step in the right direction. Many people hope that Weyerhaeuser will continue this practice. As indicated by Charles Smith, this will depend on how these first trial covenants work.

These examples from Cortes Island provide a brief illustration of how covenants can be applied to protect private forest lands. Covenants are also being used in other parts of the province to protect private forests. Other examples can be found on Saltspring Island, Galiano Island, and the Interior.

Conclusion


As landowners become aware of what conservation covenants are and how they can be used, I believe
that we will see them being applied more and more to privately held forestland. They offer current
landowners the ability to define what future owners will be permitted to do and not do on their land. This is important for those landowners that have made a commitment to practice ecoforestry. Forest management is a long-term exercise and should be thought of as lasting over the tenure-ship of many landowners. One of the most effective ways to ensure that your management vision lasts
beyond you and your time as the steward of your land is via a covenant.


The decision to enter into a conservation covenant should not be taken lightly. This agreement will be binding on all future landowners. It may impact the value of your land. It may have certain tax advantages and possibly tax implications. Your local land trust will be able to help you understand what is involved in the process of drafting and registering a covenant. I must also state that any landowner considering a conservation covenant will be required to get advice from a lawyer and a tax professional before the covenant can be registered. This is important and will help you understand what you are getting yourself into.


If you are interested in learning more about these agreements or other stewardship options, please refer to the resources and websites listed below, or contact The Land Conservancy of BC or your local land trust.

Shawn Black works for the Land Conservancy of BC and is based in Penticton, BC. Before joining TLC in 2000, he lived and worked on Cortes Island, serving four years as a director with the Linnaea Farm Society. TLC is a membership-based land trust that protects areas of environmental significance. It works to protect areas of scientific, ecological, historical, cultural, scenic or compatible recreational value. Operating independently of government, TLC is modeled after the National Trust of Britain.

Footnotes


[1] Best, Constance and Laurie Wayburn, “America’s private forests: The need for increased conservation,” Ecoforestry, Volume 17, Number 1, Spring 2002, pg 30-34.

[2] In other jurisdictions such as Alberta and the US, conservation covenants are known as conservation easements.


[3] Conservation covenants can only be held by organizations designated by the Minister of Sustainable Resource Development.

[4] A covenant can be held by one organization. However, having two covenant holders provides greater certainty and strength to the covenant, as there will be two organizations responsible for defending the covenant against any violations.


[5] Conservation covenants are usually valued using a Before and After methodology.


[6] Environment Canada has guidelines to help determine what land is ecologically significant. In addition to certifying the land as being ecologically significant and getting the appraisal approved by Environment Canada, the donation can only be made to an organization designated to receive ecological gifts. Environment Canada maintains a list of these organizations.

[7] There are specific exemptions or rules that may reduce or defer your taxable capital gains. A tax or estate planning professional will be able to help you determine if you are eligible for any of these exemptions.

[8] Personal communication with Carrie Saxifrage, Director with the Cortes Ecoforestry Society.


[9] Personal communication with Marian Adair, Habitat Ecologist, The Nature Trust of BC.


[10] Personal communication with Charles Smith, Weyerhaeuser Canada. 
Structures like snags and wildlife 
trees are important to forest
 health and functioning. 
Conservation covenants can
 provide permanent protection for 
these features, while allowing for
 ecological sustainable forest
 management.
 http://ecoforestry.ca/jrnl_articles/17-3-Black.htm Page 3 / 4

Originally published in Ecoforestry 17(3):19-24

Further reading and resources

TLC, The Land Conservancy of BC website: www.conservancy.bc.ca

Cortes Ecoforestry Society website: www.cortesecoforestry.org

Land Trust Alliance of BC website: www.landtrustalliance.bc.ca


“Greening Your Title: A Guide to Best Practices for Conservation Covenants,” by Ann Hillyer and Judy Atkins, West Coast Environmental Law, 2000.

“Giving It Away: Tax Implications of Gifts to Protect Private Land,” by Ann Hillyer and Judy Atkins, West Coast Environmental Law, 2000.

Stewardship Series: “Stewardship Options For Private Landowners in BC,” by Briony Penn, 1996

“Leaving a Living Legacy: Using Conservation Covenants in BC,” by William J. Andrews and David Loukidelis, West Coast Environmental Law Research Foundation, 1996.

Ecological Gifts Program website: www.cws-scf.ec.gc.ca/ecogifts/

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