REALpac - A 40 Year Retrospective
In March of 2010, the Real Property Association of Canada ("REALpac") celebrated its 40th Anniversary as a trade organization representing the interests of the public and institutional real estate industry in Canada. REALpac was formerly known as the Canadian Institute of Public Real Estate Companies ("CIPREC") throughout the 70's, 80's, and 90's, and from 2000 to 2004 was known as the Canadian Institute of Public and Private Real Estate Companies ("CIPPREC"). In early 2005, CIPPREC further evolved and changed its name to the Real Property Association of Canada.
I recently had the opportunity to look back at some of the annual reports with some fascinating observations. The Association started when the CEO's of 13 large developers got together in early 1970 to develop a joint submission on the federal government's 'White Paper on Taxation'. After that success, they decided having a common association to more formally represent them made sense. In 1970, the goals of CIPREC were:
- To formulate standards of conduct and practice for the industry in order that it might best serve the interests of their shareholders, lenders and the Canadian public;
- To carry out programs to advance government, financial, trade and community relations and to stimulate mutual communications; and,
- To make suggestions and submissions regarding legislation, regulations and policies to the executive and legislative branches of federal, provincial and municipal governments, the securities regulatory bodies and stock exchanges, all on matters affecting the industry.
While many of those founding father companies have fallen away or changed hands, several remain alive, but in altered form, including the Cadillac Development Corporation Limited, Cambridge Leaseholds, Markborough Properties, and Richard Costain (Canada) Limited. By 1972, the then 21 Member Companies had combined assets of $2.5 Billion, a total that many of today's REALpac members would exceed individually.
CIPREC's legislative agenda for 1972 included submissions regarding the Competition Act
, the Investment Companies Act
and the Foreign Takeovers Review Act
. CIPREC also formed a joint CICA - CIPREC committee to investigate current value accounting for public real estate companies. It is amazing how these issues keep resurfacing. In the CIPREC 1972 Annual Report, Ken Rotenberg, then the President of CIPREC and CEO of Y&R Properties Limited, said:
"The real opportunity here is to professionalize the management of real estate development - an industry that is, by its very nature, intrinsically intuitive".
CEO, Y&R Properties Limited
By 1980, CIPREC membership had grown to 33 companies, with total assets exceeding $14 Billion. Issues on the legislative front then included provincial rent controls, which followed in the wake of the anti-inflation measures of the federal government; the discontinuation of the MURB and ARP programs to encourage rental housing production; and of all things, energy conservation. An interesting comment from
Grant Duff, then the President of CIPREC and also the President of Costain Limited, was that:
"It is not widely known that energy consumption in this sector [real estate] significantly exceeds that for the automotive industry. During the year, CIPREC has been involved in discussions with all levels of government with respect to energy conservation in commercial buildings and has recently established a special committee for this purpose."
President, Costain Limited
The industry was focused on energy conservation 30 years ago, and still is today.
By 1990, CIPREC membership had grown to 40 companies and total member assets exceeded $70 Billion. CIPREC was battling during 1989 the federal Large Corporations Tax, a capital tax that REALpac and others have now obtained the elimination of. In 1990 CIPREC was focused on transitional mechanisms for the new Goods & Services Tax and particularly the use of clearance certificates for the purchase and sale of commercial properties. In Ontario, CIPREC was fighting the Commercial Concentration Tax, the introduction of development charges, and the OntarioTrespass to Property Act.
By the year 2000, CIPREC with one "p" had changed its name to the Canadian Institute of Public and Private Real Estate Companies ("CIPPREC") with two "p's" to reflect both the public and private nature of its members, but its legislative agenda remained traditional; batting the Competition Bureau over low thresholds and high pre-notification fees, seeking capital gains deferral on like-kind exchanges, working with the provincial governments on property tax reform, including initial capping and the introduction of "claw backs", the elimination of the 'Business Education Tax', seeking Real Estate and Business Broker Act reform, and seeking REIT limited liability in various provinces across Canada. We were also working with Revenue Canada on permitting REIT distribution reinvestment plans.
Now back to the future...
Today, REALpac is Canada's premier industry association for investment real property leaders and 2010 was another strong year for REALpac. In 2010 the 81 Members of REALpac currently owned in excess of $180 Billion CAD in real estate assets located in the major centres across Canada. Membership, which is comprised of the largest owners, developers, and managers of commercial real estate in Canada, includes real estate investment trusts (REITs), publicly traded and large private companies, banks, brokerages, crown corporations, investment dealers, lenders, life companies, and pension funds. Assets include retail, office, industrial, hotel, multi-residential (apartments), and seniors housing.
The announcement of proposed REIT amending legislation on December 16, 2010 capped another strong year of industry representation which included submissions internationally, federally, provincially and locally on issues including the International Accounting Standards Board ("IASB") and the Financial Accounting Standards Board accounting changes ("FASB"), the U.S.Foreign Investment Real Property Tax Act ("FIRPTA") rules, the European Union's proposed Alternative Investment Fund Managers ("AIFM") directive, high commercial property taxation in certain Canadian cities, further relaxation of the REIT rules, capital gains deferral, brownfields,Real Estate and Business Brokers Act reform, HST implementation, energy deregulation and incentives, and others.
Attendance at our REALpac committees has been extremely strong, representing high member engagement and perceived value. We continue with industry leading initiatives in research, education, and professional training and will endeavor to stay ahead of industry needs as we approach what we hope will be the second full year of recovery from the recession of 2008/2009. Once again, we have our members to thank for their continued support and participation, which in turn enables us to act in the best interests of the entire industry and as one voice. For 40 years, REALpac has represented the industry on critical issues responsibly, professionally, effectively, and efficiently. We will do the same for 2011 and well into the future.
For further information refer to our most recent Annual Report.