A once-in-a-generation case has caused major ripples in the Canadian museum world. And we’re not talking about the attempted sale of a Chagall by the National Gallery of Canada this spring. No, this was an actual court case, before the Federal Court of Canada, to determine whether the Canadian Cultural Property Export Review Board (the Review Board) reached an unreasonable decision in its finding that a painting by Gustave Caillebotte, Iris bleus (1892), could be deemed of “national importance” to Canada.

Gustave Caillebotte’s Iris bleus (1892), the work at the centre of the export dispute in Canada.

The Review Board is the national body which decides on exports of cultural objects from Canada. An initial application for an export permit had been brought by the auction house that oversaw the painting’s 2016 sale for $678,500 on behalf of the buyer, a commercial gallery from London. The permit was deferred for six months, a process that allows Canadian institutions a chance to buy the work and keep it in the country (similar to the system that operates in the UK) and the auction house, Heffel Gallery Ltd, challenged the decision in judicial review. Meanwhile, one of Canada’s leading institutions, the Art Gallery of Ontario, had put in an offer to buy the piece at the $678,500 price.

Judicial reviews of cultural property export decisions are like hens’ teeth. In fact, this part of Canada’s Cultural Property Export and Import Act (CPEIA) had never been brought before the courts in over 40 years of the Act’s existence. In other countries, this is rare too: there has only been one attempted judicial review of the UK’s export licensing system, and that occurred over twenty years ago in a case involving the attempted export of Canova’s Three Graces by the Getty Trust (a challenge that was doomed right from the start).

Judicial review is generally not an easy thing to undertake. It invites the courts of a country to examine, and perhaps even quash or stay (annul) a decision made by an administrative body. These administrative bodies are organs of the state, often creatures of statute, and usually run things pretty smoothly without interference from the courts. That is more or less what had been happening with the Canadian Review Board. Chugging along, hearing about six or seven reviews a year. Minding its own business, keeping to itself. But there are always exceptions. And this happened to be one of them.

The decision of the Federal Court in judicial review has rocked the boat pretty rigorously. Firstly, the judge found that the Board’s interpretation of “national importance”, based on the Board’s own guidelines from 2015, was unreasonable. Secondly, the application of the national importance criterion to the Caillebotte was found unreasonable too.

In regards to exporting works of art from Canada, the first branch of the analysis considers a work’s “outstanding significance” for the purposes of history, aesthetics or a particular area of study (similar to the UK’s Waverley criteria). However, when Canada passed the CPEIA in the 1970s, it decided to include a second branch, that of “national importance”. Here then are the two branches, as found at s 11 of the CPEIA, which an object must fall within in order to trigger the export control system:

11.(1) […]

(a)  whether [the] object is of outstanding significance by reason of its close association with Canadian history or national life, its aesthetic qualities, or its value in the study of the arts or sciences; and

(b)  whether the object is of such a degree of national importance that its loss to Canada would significantly diminish the national heritage.

[Emphasis added]

According to the judge, in order to qualify under the second branch (b), a work must show “a direct connection to the cultural heritage that is particular to Canada” (para 30 of the decision). The 2015 guidelines had referred to Canada being a “diverse country with a multitude of cultural traditions”. They had defined “national heritage” to include international works “that reflect Canada’s cultural diversity or that enrich Canadians’ understanding of different cultures, civilizations, time periods, and their own place in history and the world”.

For the judge, this was simply too much. National importance meant Canadian national importance. And the Caillebotte, a work that came to Canada in the 1960s but had never been on public display and had no demonstrable link to any Canadian artists or artistic movement, would not cut it. Reference was made to the purpose of the CPEIA and the debates in Parliament ahead of its enactment, which indicated that a higher standard was required by statute even if the subsequent practice by the Review Board has tended to favour a somewhat lower threshold.

That’s all well and good for exports. But the unusual feature of the Canadian legislation is that the criteria for export controls are the same as those for certifying cultural property for individual tax deductions. So the judge’s conclusion on “national importance” regarding the export of the Caillebotte would have a knock-on effect on the way the Review Board would henceforth certify works for tax purposes. This means that tax deductions for those looking to donate art to Canadian institutions will be unavailable if the works don’t meet the new national importance definition provided by the Federal Court.

That will inevitably affect the philanthropic scene in Canada, a point that has been raised with the Minister of Canadian Heritage by directors of eight leading Canadian museums. If tax certification by the Board is restricted, then these institutions (and others) will find it that much harder to attract important donations of foreign works, be they by Monet, Manet or indeed Caillebotte. Just to give a sense of the proportions, the Review Board usually considers somewhere between 400 and 500 objects for tax certification in a given year (with the total value usually in the hundreds of millions), while the number of attempted exports it normally reviews is less than ten. Too bad this considerably wider impact did not seem to have been brought to the judge’s attention during the hearing in May.

In any event, the Attorney General has given notice that it will be appealing the decision. So undoubtedly the practical ramifications of the decision will be raised further before the Federal Court of Appeal sometime later this year (or next), which may have an impact on any purposive interpretation of s 11(1)(b) of the CPEIA – though this cannot be guaranteed.

The problem in all this is that the little ecosystem of cultural property exports and certification has been upset by judicial interference. This tranquil world must now be reinterpreted in light of the decision. This should have been expected. Some will say that courts should always defer to administrative boards when it comes to the boards’ specialised expertise and the interpretation of their own governing statutes. But the judge’s decision on “national importance” seems on its face to be quite sound. It would take an especially motivated Court of Appeal to overturn it.

The answer to the Board’s newfound challenges, as well as to the legitimate concerns of the eight museum directors, may not in the end lie in judicial appeal, but in amending the words of the CPEIA itself. This could be done through the (relatively uncontroversial) removal of s. 11(1)(b) of the Act, as well as any references thereto. Most would probably agree that controls should extend to all outstanding works currently in the country, regardless of place of origin or connection to a particularly Canadian cultural heritage. If not – if a more free market approach is to be preferred – then this should probably be a debate had in Parliament, not by lawyers in court. The ultimate decision should be a public one, not that of a single judge – or even three on appeal.