vast majority of the Carolinian landscape is in private hands, supporting
an intensive mix of agriculture, rural residential, and urban uses. The
ideas and actions of private landowners and industries are critical
elements in the stewardship and restoration of ecological quality in the
Many economists are calling for ways to ensure the marketplace rewards
good environmental practices and that costs of environmental damage are
considered. The real economic contribution of "ecological
services" to our economy is now being recognized, whether for water
quality, energy use reduction, recreation, or other functions. Our
taxation system and the marketplace should be structured to encourage
activities that enhance the environment. Many jurisdictions are now
creating incentives and removing disincentives to good environmental
The importance of shared responsibility for the environment, rather
than governments bearing all responsibility, is being increasingly
recognized. For example, the recent "Managing the Environment"
(Val Gibbons) report examining future directions for the Ontario
government's environmental policies (Executive Resource Group, 2001) notes
that: "the current leading thinking is that our complex environmental
problems require more collective solutions including broader
participation, changes in behaviour, and cooperation among all
stakeholders and across jurisdictions." This report recommended a
"place-based" approach to environmental management, which
recognizes that the natural environment has its own ecological and
biophysical boundaries, and emphasizes geographic convergences of water,
land, and air, particularly within watersheds. It also concluded that:
"Economic instruments also have an important place in the compliance
tool kit. Many jurisdictions in the U.S. and Europe have gone beyond the
pilot or experimentation stage in using economic instruments to increase
Examples of such economic incentives include the agri-environmental
programs in the European Union, which pay income losses and costs for
participating farmers, and now cover 900,000 farms, about 20% of all EU
farmland. Nature protection measures and maintenance of landscapes
associated with these programs have been evaluated as highly positive (DGVI
Ontario has some incentives in place, but could strengthen
their effectiveness. A number of new incentives have been proposed that
have considerable merit and have been successful elsewhere.
Broaden Rural Water Quality Incentives
The significance of degraded water quality within Ontario's rural
landscape has been highlighted by the tragic events in Walkerton and the
subsequent public inquiry. Restoration of water quality in agricultural
areas has received considerable attention as a focus for effective
incentive programs. A recent paper commissioned by the Walkerton Inquiry
(Johns, 2001) concludes that: "Of the instrument strategies compared,
voluntary, cost-share, subsidy-based instruments are the most effective
policy regimes" for agricultural pollution prevention.
Similarly, a background study commissioned in association with the
Gibbons report concluded that: "numerous applications in the U.S.
have demonstrated the potential of economic instruments to manage
watershed pollutant concerns, including agricultural waste"
(International Institute for Sustainable Development, 2000).
In many instances, the kinds of actions taken to improve rural water
quality - creating vegetated buffer strips along streams, planting of
trees and shrubs, excluding livestock access, controlling manure and field
erosion - also help restore biodiversity and habitat connections. Public
investments in these activities generally yield the greatest improvements
in the environment at the lowest cost.
Provincial, federal, and municipal governments could renew and
expand rural water quality programs.
Rural water quality programs are funded through federal Great Lakes
RAPs programs, the provincial Healthy Futures for Ontario Agriculture
Program, and municipal funding, with conservation authorities usually
playing a key role in implementation. Within Carolinian Canada, programs
are currently in place in Essex, Middlesex, Oxford, Waterloo, Brant,
Niagara Peninsula, Hamilton, and Halton. Programs are being developed in
several other areas.
One example of an effective initiative is the Rural Water Quality
Program funded through a $1.5 million commitment by the Region of
Waterloo, along with other partners. This program provides 50% to 75% of
project costs for best management practices identified by farmers through
their Environmental Farm Plan, including such actions as restricting
livestock access to watercourses. Some projects such as stream buffer
strips and fragile agricultural land retirement can receive a performance
incentive for up to three years (see http://www.region.waterloo.on.ca/web/region.nsf/c56
Appropriate and sustained funding in this area is a key need. Even
though 63% of the phosphorus entering Lake Erie now comes from
"non-point" runoff from agriculture and other land uses, only
about 4% of clean-up funds are directed to these sources on the U.S. side
of the basin (Baker, 1996), and the situation is similar in Ontario.
Municipalities with a lower population base do not have the financial
capacity to sustain effective programs on their own.
The provincial Healthy Futures for Ontario Agriculture program, which
provided $22.7 million (as of 2001) for rural water quality projects, is
scheduled to wind up in 2003 (see website http://www.gov.on.ca/OMAFRA/
english/hfoa/update.html). The lack of continuity of previous programs
such as the Clean Up Rural Beaches program has hampered the programs'
effectiveness. A long-term provincial commitment, together with expanded
federal participation, is essential. Increased municipal funding for
agricultural cost-sharing would also be an excellent
"value-for-money" investment for municipalities to improve local
Land Retirement and Private-land Forestry Programs
Many jurisdictions offer financial incentives to farmers to enhance
conservation values on their lands. For example, European countries such
as Greece, Italy and Germany have programs to create farmland
"set-asides," particularly in areas with valued wildlife
habitats (DGVI Commission, 1998). In Australia, federal taxation
incentives are provided to rural landowners who invest in landcare
activities to conserve water or tree-planting (Australia Natural Heritage
Trust, 1999). The Woodland Grant Scheme in England provides payments to
encourage the creation and management of woodlands and forests, with the
level of payment linked to the type of forest being planted, the
agricultural potential of the land, and any agreement for providing public
access (England Rural Development Programme, 2000).
In general, this is a program area that is currently poorly developed
in Ontario, but one that has considerable potential. A number of U.S.
federal and state programs could serve as good models, since conservation
programs for agricultural lands have expanded considerably there over the
past two decades. These include programs to pay farmers to set aside some
of the most sensitive lands, and programs to limit access to many federal
farm program benefits to producers that did not meet conservation program
requirements (Zinn, 2002).
Agriculture and Agri-Food Canada, a federal department, recently
released its Agriculture in Harmony with Nature II Strategy (AAFC, 2001).
Objectives within the Strategy include improving the conservation of
natural biodiversity through research, education and awareness. It also
proposes consultation with farm groups on better links between income
support programs and food safety and environmental objectives, and may
offer important opportunities for progress in this area. The new
Agricultural Policy Framework being developed by the federal and
provincial governments is to seek implementation of these concepts.
A Conservation Reserve Program for Canada
The federal or provincial governments could establish some form
of conservation reserve program for private lands.
A wide range of reserve or set-aside programs are available in the U.S.
to provide incentives for landowners to commit some of their lands to
conservation uses (Vysatova and Greenberg, 2000). A Wetlands Reserve
program purchases either permanent or 30-year conservation easements, or
10-year restoration agreements, to help farmers take agricultural lands
out of production and restore them as wetlands. The Conservation Reserve
program targets land with high erosion rates, riparian zones or other
environmentally sensitive areas, and provides annual payments under a 10
to 15 year agreement based on an approved conservation plan. An
interesting model for Carolinian Canada might be the Environmental Quality
Incentives Program, which provides incentive payment and cost sharing for
conservation practices within defined priority areas, including
"watersheds, regions or areas of special environmental sensitivity or
those having significant soil, water, or related natural resource
In addition to these federal programs, many States also sponsor reserve
programs of some type, and most of these programs are popular with
landowners and fully subscribed. The Reinvest in Minnesota Reserve
Program, for example, has purchased nearly 4000 conservation easements
since 1986 to protect and restore environmentally sensitive lands (see
website http://www.bwsr.state.mn.us ). A joint
federal/state Conservation Reserve Enhancement Program in Ohio targets the
western basin of Lake Erie, and uses a basket of financial incentives to
encourage landowners to enroll for a minimum of 15 years. The program
expects to enlist 67,000 acres over the next 10 years with a mix of
riparian buffers, wetland restoration, hardwood tree planting, and
wildlife habitat creation (see website http://www.fsa.usda
A reserve program on a limited scale was undertaken in Ontario (and
across Canada) from 1990-93 through the Permanent Cover Programs I &
II, involving agreements of up to 15 years signed with Agriculture Canada,
with administration provided by the Ontario Soil and Crop Improvement
Association. About Ontario 1800 farmers participated, with projects to
retire fragile lands, create stream and wetland buffers, and plant trees.
While the program was popular with farmers and considered effective, it
was not further funded (OMNR, 2001).
Ducks Unlimited Canada has developed a proposal for a $103 million
national Conservation Cover Incentive Program which would provide a
similar set of incentives in this country. This program would convert
170,000 ha of Ontario farmland to protected buffers along rivers and
wetlands, essentially by paying farmers to take it out of production. Five
federal departments are currently studying the Ducks Unlimited proposal,
and it has already received support from some provinces (see website http://www.ducks.ca
) Such a federal initiative, perhaps coupled with provincial incentives
targeted at the high-value lands of Carolinian Canada in a similar way to
the Ohio program, could be a major boost towards achieving the Big
A similar proposal called Alternate Land Use Services (ALUS) has been
developed in Manitoba, but is proposed for use across Canada through
provincial Crop Insurance Corporations (Delta Waterfowl and Keystone
Agricultural Producers, 2001). ALUS goes beyond a traditional set-aside
program to provide payment to farmers for the active provision of
ecological services such as endangered species recovery, wildlife or
fisheries habitat enhancement, or water quality improvement. In essence,
it seeks to broaden the range of products that farmers can produce and be
A recent study of the economic justification for retiring marginal
farmland in Ontario showed that gross margins were less than fixed costs
in three of the five fields analyzed (Brethour et al, 2001), suggesting
that set-asides to achieve ecological benefits might be possible with
relatively small levels of incentive.
Support for Private Land Tree-Planting & Links
to Climate Change Strategies
The Province and industry could undertake a significant role in
assisting tree-planting on private lands.
To achieve the Big Picture vision, a massive program of
restoring tree cover to selected parts of the Carolinian Canada landscape
is necessary. Since the late 1800's, the Province has recognized that
planting trees provides benefits to society and to the environment as well
as the private landowner. In the past century, over 1 billion trees have
been planted on private lands in this province, largely through Provincial
and other afforestation programs (OMNR, 2001b).
However, due to expenditure constraints, by the mid-1990s long-standing
Provincial programs such as Agreement Forests, Woodlot Improvement Act
projects, and public tree nurseries were ended. From 1949 to 1993,
provincial programs consistently planted more than 15 million trees/year,
with only a few exceptions at slightly lower levels. Tree-planting peaked
in 1972 at just over 30 million trees. But since 1997, tree-planting has
plummeted to under 4 million trees/year (OMNR, 2001b).
Some conservation authorities continue to sponsor tree-planting
programs, although on a reduced scale. Several private programs, such as
Project Tree Cover, operated during the 1990s, but on a relatively small
While it appears unlikely that the Province would restore its past
programs in this area, it could take several steps to significantly
increase tree-planting rates. Availability of good quality, genetically
appropriate planting stock is one obstacle. A recent review of tree
seedling production by private nurseries concluded that increased
production could be achieved by the establishment of a central agency to
coordinate forecasting of future demand, seed collection, and stock
production and distribution in southern Ontario (OMNR, 2001c). This would
help to overcome the reluctance of nurseries to produce stock for sale in
several years without firm orders. A rolling loan system to help finance
increased production was also suggested, along with quality control
measures, increased public education and marketing, and development of MNR
policies on private land forestry.
The cost of tree-planting is also a major constraint, since nursery
stock is no longer subsidized by government. These costs could be
addressed through several avenues. A part of federal and provincial
spending to meet the Canadian commitment to the Kyoto Protocol could be
directed to assisting private landowners with tree-planting in order to
create future carbon sinks. Industry contributions could also be
significant. Ontario Power Generation has started a program to fund tree
and vegetation planting (http://www.opg.com/envComm/C_planting.asp),
as utility companies in the U.S. have done. Currently dormant mechanisms
such as the Trees Ontario Foundation could be re-activated to act as a
conduit for government and industry contributions to support
Recent surveys of rural landowners show that they would respond to
monetary incentives to encourage them to plant trees, and that owners of
smaller properties are especially interested in entering agreements with
local conservation authorities or other agencies rather than growing trees
on their own (Environics, 2000; 2001a)
Both the federal and provincial governments could selectively
remove tax disincentives for interested private landowners, for example by
allowing the costs of tree-planting and forest management to be deducted
from other income in calculating income tax.
Potential Future Income from Sustainable Forestry
Sustainable forestry could be promoted as a good source of
income in the longer term for rural landowners.
Potential income from sustainable forestry by farm and non-farm
landowners could be a major long-term economic incentive for replanting of
Carolinian forests. Sustainable forest management practices allow both
wildlife benefits and an economic return for landowners. But new tax
incentives may be needed to encourage the long-term investment needed to
achieve this goal.
Agroforestry is one approach which could contribute to increasing tree
cover within selected areas of the Carolinian Canada landscape. This term
includes maple syrup operations, nut tree and Christmas tree plantations,
intercropping systems, farm woodlot management, and a variety of other
similar activities. The Ontario Ministry of Agriculture, Food and Rural
Affairs has a program to encourage agroforestry; more information can be
found in their State of the Industry Report 2001 (see website http://www.gov.on.ca/OMAFRA/english/crops/facts/
Some landowner organizations such as the Ontario Woodlot Owners
Association are acting as a local information resource on sustainable
forestry practices. Other innovative ideas could be explored such as
timber cooperatives to purchase timber rights on private properties and
manage forests sustainably. Forest certification also provides an
opportunity for a competitive advantage to woodland owners. The Eastern
Ontario Model Forest is currently working on a project to test the
feasibility of forest certification for small woodlots in southern Ontario
(Oatway et al., 2000).
In the United States, a series of financial incentive programs are in
place to support sustainable forestry on private non-industrial lands (see
website http://www.pinchot.org/pic/ farmbill/Programs.html).
The Forestry Incentives Program provides up to 65% of the costs of
tree-planting, stand improvement, and site preparation for natural
regeneration. The Forest Stewardship Program provides support for
developing forest stewardship plans, of which nearly 149,000 had been
completed by 1998. The Forest Legacy Program funds the purchase of
conservation easements on private forests. The Urban and Community
Forestry program provides up to 50% funding for urban and community
forestry projects, including some tree planting.
Property Tax Incentives
Southern Ontario currently has three property tax incentive programs. The
Conservation Lands Tax Incentive Program (CLTIP) exempts enrolled
landowners from paying property tax on provincially significant wetlands
and Areas of Natural and Scientific Interest (ANSIs), habitat of
endangered species, and Niagara Escarpment natural areas. The Managed
Forests Tax Incentive Program (MFTIP) reduces property taxes by 75% on
lands managed for forestry according to an approved management plan. The
Farmlands taxation program (FL) also reduces taxes by 75% for any lands
included within a registered farm, including up to 10% of the area as
Farm Land Taxation Program
Few farmers subscribe to the CLTIP because the marginal increase from
75% to 100% tax reduction on a small part of their lands makes little
difference to their overall tax bill. While non-farm landowners are
provided an incentive to conserve natural areas and woodlands, the degree
of incentive for active farmers is much less. Chronic low net farm incomes
create market pressure to have as much land as possible under production.
Concerns have been expressed about the overlap and inter-actions among
the three property tax programs, which causes confusion and hampers their
effectiveness. A joint assessment of how the three property tax programs
interact would be especially valuable, to ensure that the property tax
system provides a real incentive for conservation for both farmers and
rural non-farm landowners and to provide a on-window approach to
applications. One option might be to modify the Farm Land Taxation Program
to provide the 100% tax reduction on forests and other natural habitats on
farms, but with eligibility contingent on completing an Environmental Farm
Plan. This could encourage retention of woodlands and other habitats on
A related concern stems from the shift from a provincial tax rebate
system in the mid-1990s to the current tax reduction or exemption
programs, which has the effect of shifting the cost onto municipalities.
Part of a joint review of the programs could address how municipal
concerns in this area could be fairly addressed.
Conservation Lands Tax Incentive Program
The CLTIP could be broadened to include other categories of
natural lands and to provide increased incentives.
A recent review of the Conservation Lands Tax Incentive Program
recommended that the program should be gradually broadened to incorporate
all natural lands recognized as provincially significant, with extension
to cover significant woodlands as a first step.
The Community Conservation Lands category is a priority to be
reinstated immediately to fully exempt all natural lands and conservation
easements held by land trusts and other conservation charities. Another
possible addition is a category to allow municipalities to designate other
lands at their discretion, so that regional Environmentally Sensitive
Areas could be added if desired. Big Picture core areas and
corridors could also be considered for eligibility for CLTIP applications.
A recent proposal for the Community Conservation Lands which
would reinstate only a few Provincially-significant lands is a backward
step, inadequate and counter-productive to conservation efforts (EBR
Registry Number: PB00E6007).
A serious problem has also been identified with how property
assessments are calculated on properties eligible under both this program
and MFTIP, which has the effect of shifting most of the tax burden onto
the residential portions of properties. This process needs to be modified
to provide a stronger incentive for conservation. Closer coordination
among the three tax incentive programs and with other conservation
programs would also strengthen the effectiveness of the CLTIP in
Carolinian Canada and elsewhere.
Managed Forests Tax Incentive Program
The MFTIP could be modified to encourage greater landowner
participation, forest creation and better incorporate conservation
The Managed Forests Tax Incentive Program has also recently undergone
an internal MNR review, as well as receiving recommendations for changes
from other sources. Several proposed changes should help to encourage
participation, such as extending the life of a management plan to ten
years from the current five years, increasing the amount of open land
(such as rock barrens, beaver ponds) allowed within the plan, and
developing a revised stewardship planning document.
Within the Carolinian Canada region, additional improvements to
specifically encourage tree planting within priority restoration areas and
to provide specific forest management guidelines for Carolinian forests
could be considered. The current size limitation of 10 acres for MFTIP
also needs review, since this makes many Carolinian Canada woodlots
ineligible. One possible approach could be the inclusion of 5 acres of
existing forest and 5 acres of new tree- or vegetation-planting to meet
the 10-acre minimum.
More broadly, under a provincial reforestation initiative, MFTIP could
be used to encourage forest replanting by reconfigured the program to
allow eligibility of expansion of forests to include newly planted areas
under a management plan.
A special category of MFTIP lands oriented primarily to wildlife
conservation and passive recreation could also be developed, with a
simplified stewardship plan required for eligibility.
Incentives for First Nations
Within Carolinian Canada, First Nations control a larger land base than
all existing parks and protected areas combined. While some of this land
has been converted to agriculture and other uses, significant portions of
First Nations lands are ecologically significant, and these often form
potential core areas within the Big Picture vision. However,
First Nations peoples are understandably sensitive about suggestions on
how they should manage their land base, and the future of this legacy of
biodiversity will depend on the wisdom of their decisions.
At this point, it would seem prudent for conservationists to continue
to engage in discussions with individual First Nations about possible
future partnerships or other incentives to assist them in conserving or
restoring biodiversity on their lands. These discussions could include
exploration of ways to support ecotourism or other compatible economic
activities that would provide an economic return from protected natural