On the governments “Speculation Tax”
Over the last few months, I’ve been contacted by numerous constituents concerning the BC Government’s proposed “Speculation Tax”. Constituents who have contacted my office would have received an email outlining my views on this proposed measure. As the BC Green critic and spokesperson on the demand side of the affordability file, I felt it was instructive for me to make these views more readily available. Below I reproduce the contents of the email constituents would have received.
A group will be hosting a town hall on the speculation tax at the Dave Dunnet theatre at Oak Bay Secondary School from 19:00 to 21:00 on Thursday, June 28th. I look forward to hearing your views on the issue.
Text of Email
Thank you for writing to me about the government’s proposed speculation tax.
The speculation tax will be proposed in legislation that is to be brought forward in the fall.
In accordance with our Confidence and Supply Agreement, government consults with our Caucus on many matters. All input we provide government is aimed at producing evidence-based public policy that will deliver outcomes that are in the best interests of the province as a whole.
The BC Greens have indicated to government that we do not support the speculation tax because 1) it doesn’t address speculation; 2) there are too many unforeseen consequences; 3) it is administratively burdensome.
The speculation tax targets two distinct issues. The first is vacant properties. The second are satellite families — families who pay little or no taxes here in Canada.
The BC Greens recommended several alternate approaches to government on how to better deal with the housing crisis. First, we suggested that government introduce enabling legislation to allow local governments to implement a vacancy tax if they felt it was necessary for their communities. Victoria, for example, has asked for the powers to introduce such a tax. Enabling the ability of local governments to introduce a vacancy tax is relatively straightforward. The legislative language already exists in the Vancouver Charter.
Three benefits of this approach are that any monies raised would remain in the affected community, its implementation would be highly focused, and the issue of double taxation in the Vancouver area would be addressed. Should vacancy or rental shortage issues no longer be a problem, local governments could also respond rapidly without the need for provincial legislation.
Another recommendation of the BC Greens was to introduce a New Zealand-style ban on foreign purchases in the secondary housing market unless trade agreements prohibit this. New Zealand, for example, excluded Australia in its offshore buyer ban due to existing agreements.
In addition, we recommended the closure of the bare trust loophole and the introduction of a flipping tax – a tax levied on people who flip properties, buying and selling them in a short timeframe for significant profits.
The information that we provided government regarding the speculation tax was that it should be as targeted as possible in addressing speculative activity in the housing market. We also communicated that government should work to minimize unintended consequences on people and activity we don’t want to target, without fundamentally undermining the impact of the tax.
The BC Green caucus also articulated a number of problems with the proposed speculation tax. We pointed out that it made no sense to have a vacancy tax applied to strata units that had “no rental” clauses in their rules.
In areas that are disproportionately home to vacation property owners (e.g. Cultus Lake prior to its exemption), the local economies are dependent on seasonal visitors and part-time residents. Therefore, implementing this tax would have negative consequences on these economies that likely outweigh the benefits. This remains a problem with the proposed inclusion of Kelowna and West Kelowna in the Speculation Tax.
We noted that in some areas covered there is no substantive rental market (e.g. islands with no ferry service). And we continue to remain concerned that Canadians from different provinces will be treated differently. We remain committed to the notion that all Canadians should be treated equally.
We look forward to seeing the government’s legislation in the Fall. We remain committed to our shared goal of taking action to address the housing affordability crisis.
I hope this helps to clarify my position and the actions I am taking on this tax. There is so much uncertainty still out there on this speculation tax and it is not something the BC Greens would have proposed.
Best wishes,
Andrew
8 Comments
Mr. Weaver, I trust that I can take you for your word on this outrageous tax grab on fellow Canadians, cloaked in the term “speculation tax”. This legislation will do nothing to address the issue of low cost housing availability for the communities affected. It is a violation of the property rights of Canadians, and would allow Government to try to influence how private property is otherwise used for the benefit and enjoyment of the owner in our society. What a terrible precedent in a free country. The action raises concerns that are far more prevalent in less democratic parts of the world.
I look forward to refusal to support this Tax in the Legislature this fall.
Best wishes, Dean Smtih
Mr Weaver – you can stop this nonsense. Stand up and raise a point of order and cite Rule 18 of the BC legislature’s Standing Orders when and if a tax that penalizes property owners whose principal residence is located elsewhere is brought to the table. A tax with these criteria negatively financially impacts not only many Canadians but also many of your MLA peers. Do the right thing. Ask that your vote be dismissed from the count. Point out that many other MLAs votes should also be dismissed. This dismissing is the right thing to do to ensure this ridiculous tax is thrown out of the bc legislature!
The “name” is clearly a red herring and there is no evidence it will address speculation. Call it what it is: Discrimination Tax. B.C. will set the precedent of discriminating against Canadians and start a turf war where other provinces can apply other discriminatory tax against BC residents. Is this the Canada we want?
Do the right thing Mr Weaver. Ask to be dismissed from the vote. Then ask that all your peers who own a bc property that is not their principle residence – ask these MLAs to have their votes disallowed. The tax will fail when all eligible votes counted!!
I totally oppose the so-called speculation tax. This impulse will have serious unintended consequences if not checked immediately. It fails totally to address the issue of speculation and instead would damage markets and economic growth irreparably. Were the government to proceed with this simplistic effort to stem speculation it would pay an undeniable political price. I would be happy to expand on these views should wish this. I own property in your constituency and would be pleased to meet with you at your convenience. Regards David Scorgie
The NDP would naturally like to reduce bureaucrat duties by painting with a large brush. Sometimes a large brush just makes a mess. Andrew is on the money, the regulation should be put in the hand of the government closest to the situation.
The speculation tax is no more and no less than a new Banana Republic tax.The supremacist socialists of the NDP want money to use in order to buy voters and create extra services for the one who , because of poverty, think they are protected by the NDP. And if we look at the way pollution is fought in the Communist Latin-American countries that our progressive Communists want to imitate, like Venezuela , Cuba and the rest of the communist paradises available to follow,We will be dismayed if that is going to be our future,created on the back of the working Canadians to favor the parasitic politicians whose preoccupation is to find excuses to grab more of the middle class taxpayers, money , because money will never be enough …
My property is in Kelowna and your email is factual and perfectly logical. The sad thing is that the government is not. This isn’t about properties/speculation etc. If it was, it would not have been proposed in the first place. This is just a tax grab that has been given a “name”. Unless the suggestions we give provide them with an alternate source of revenue they will do nothing.