Heffel Gallery decision is good news for museums building public art collections

The case made its way to court after Iris bleus sold to an international commercial gallery at Toronto’s Heffel Gallery auction in November 2016. Heffel needed an export permit to send the painting to its new owner. The Canadian Cultural Property Export Review Board refused to grant Heffel an export permit and Heffel applied to the Federal Court for a judicial review of the board’s decision.

The crux of the issue was whether Canadian-held, internationally created artwork could be of such national importance that its sale to an international gallery or collector would be prohibited under the Cultural Property Export and Import Act.

Under the act, owners and/or collectors are not permitted to sell pieces subject to the act’s control list to international buyers if they are both of “outstanding significance” and “national importance.” In Heffel’s case, everyone agreed that Iris Bleus was a painting of outstanding significance based on its esthetic qualities and relative rarity in the art world. But Heffel challenged the board’s decision that it was nationally important. Heffel’s position on the judicial review application was that the board’s interpretation of national importance was too broad and unreasonable because it would include works not necessarily created in Canada or by Canadian artists.

Heffel was initially successful. The Federal Court agreed that the board’s interpretation of national importance, which concluded that the loss of Iris bleus as a “highly desirable example of Impressionist landscape” would “significantly diminish [Canada’s] national heritage,” was too broad. The Federal Court quashed the board’s decision and sent it back to a differently constituted panel of the board to be decided again. The Federal Court of Appeal disagreed.

The Federal Court of Appeal in Heffel held that nationally important does not always mean Canadian-made. Although Canada won its case on administrative law principles, Justice Richard Boivin endorsed the board’s interpretation of national importance, which includes internationally created artwork that “reflects Canada’s cultural diversity” or that “enrich[es] Canadians’ understanding of different cultures, civilizations, time periods, and their own place in history and the world.”

The Federal Court of Appeal’s interpretation of national importance expands the makeup of the Canadian art world beyond the artist equivalent of CanCon and encourages public collectors to expand their view of this country’s culture.

Heffel’s loss in this case may ultimately be a win for Canada’s museums and galleries. When the board refuses to grant an export permit, it can impose a six-month delay period during which Canadian museums and galleries can bid on the item or ask the board to determine a fair price for purchase. If the owner refuses sale to a Canadian bidder, they must wait for two years until attempting to export the item again.

With the new interpretation of “national importance,” Canadian galleries may have the opportunity to retain works of art or culture that reach a broader and more diverse audience.

The Cultural Property Export and Import Act also works hand in hand with provisions of Canada’s Income Tax Act, incentivizing taxpayers to dispose of cultural property to institutional and public authorities under the same “outstanding significance” and “national importance” framework.

Now, with the board’s interpretation of national importance upheld by the Federal Court of Appeal, public art institutions may look to offer tax credits for internationally created works of art and curate exhibits that reflect Canada’s diverse cultural makeup.

— With notes from Sarah Spitz