CRA confirms that the s. 207.31 recapture tax on sales of ecological lands applies even if no deduction was claimed

S. 207.31 provides inter alia for the payment by a municipality of a 50% tax on the fair market value of ecologically sensitive land, now disposed of by it without authorization of Environment Canada, which previously had been donated to it under the s. 110.1 or 118.1 ecological gift rules. CRA confirmed that this tax would apply even if the (corporate) donor had not claimed a s. 110(1)(d) deduction for the gift, stating that s. 207.31’s purpose is “to ensure the long term protection of ecologically sensitive land,” i.e., even ignoring the literal words, its purpose is regulatory rather than protecting the fisc.

Neal Armstrong. Summary of 4 April 2016 Memo 2016-0625241I7 Tr under s. 207.31.