On the botched rollout of BC NDP’s Speculation and Vacancy Tax
Residents across the Lower Mainland, the Capital Regional District, Nanaimo and 
Kelowna/West Kelowna are beginning to receive letters from the BC NDP government concerning the Speculation and Vacancy Tax. To the surprise of most, every property owner registered on title will have to fill in a declaration to claim exemption from the tax. Widespread concern has emerged that this form of “negative billing” will lead to myriad problems. I agree.
Anyone following BC politics will know that the BC NDP’s Speculation and Vacancy Tax has been, and continues to be, extremely controversial. Shortly after signalling, in February 2018, their intent to introduce tax legislation later in the Fall, it became abundantly clear to me that the BC NDP hadn’t thought the tax measure through. I was very critical of the lack of details and the fact that the tax’s interpretation by the Minister of Finance seemed to be changing on a near daily basis.
I was unconvinced that the BC NDP knew what outcome they were trying to achieve with their tax measure. I arranged for briefings; I met with the Minister of Finance where I outlined my many concerns; I posed questions to her in the legislature (e.g. in Question Period); I met with numerous stakeholders. And I personally responded to many hundreds of emails from around British Columbia.
The BC Green efforts started to pay off. In late March government released a second intentions paper outlining a series of thresholds, exemptions and refinements to the geography of affected areas. While I was supportive of these changes, there was still much work that needed to be done.
And so I arranged for more briefings; I again met with the Minister of Finance to once more outline my ongoing concerns; I posed questions to her in the legislature (e.g in Budget Estimates); I met with numerous other stakeholders. And I personally responded to many more hundreds of emails from around British Columbia.
On June 27 I published online an email that I had started to send out to people about my ongoing concerns over the Speculation Tax. Over the summer I once more arranged for more briefings; I met with the Minister of Finance; I met with numerous other stakeholders. And I personally responded to many more hundreds of emails from around British Columbia.
When the BC NDP finally introduced Bill 45: Budget Measures Implementation (Speculation and Vacancy Tax) on October 16, 2018, I acknowledged that they’d gone a long way towards addressing many of the unforeseen negative consequences that I’d raised with them. Yet there were still several key aspects of the bill that caused my BC Green Caucus colleagues and I to reiterate our ongoing concerns.
Prior to the introduction of the Bill, the BC NDP told our caucus that they viewed Bill 45 as a confidence measure. They argued that it arose from a flagship “budgetary policy” announced as part of the 2018 budget. Our position was that our Confidence and Supply Agreement was very clear:
“While individual bills, including budget bills, will not be treated or designated as matters of confidence, the overall budgetary policy of the Government, including moving to the committee of supply, will be treated as matters of confidence“
As you might imagine, a number of (at times difficult) meetings followed with the BC NDP. Concurrently, my caucus colleagues and I united behind the notion that the only way the BC NDP would secure our collective votes was if, and only if, they supported three further amendments (which were subsequently drafted by Legislative Drafters). These amendments ensured that:
- Mayors from affected municipalities would be part of an annual review process with the Minister of Finance that required the Minister to provide metrics that justified keeping the speculation tax in place in their community;
- revenue raised by the tax would be used for housing initiatives within the region it came from;
- the speculation and vacancy tax rate for all Canadians was the same – this brought the rate for non BC-resident Canadians down from 2.0% to 0.5%.
The amended Speculation and Vacancy tax bill eventually passed in the BC Legislature, but not before I was able to ensure that the Minister provide further clarification on record as to its intent.
At this point it’s important to note that the BC Greens take the enormous responsibility British Columbians have granted us very seriously. Our role in the BC Legislature is to ensure stability, yet accountability. And we did just that. We ensured that the BC NDP government did not fall in their declared confidence measure while at the same time working tirelessly to ensure that many of the unforeseen consequences of the poorly-thought-through Speculation and Vacancy Tax were mitigated.
Several times in our meetings with the Minister and/or her staff, or during the briefings with the Ministry, I raised concerns and questions about government’s proposed negative billing during the implementation of the tax (the BC Liberals were apparently asleep at the wheel and didn’t realize this was involved with its implementation). I suggested that some people might get confused and pay the tax even though they didn’t need to. My concerns were dismissed as I was told that the process was going to be easy and transparent, like what is already in place for people claiming the Homeowner Grant.
Sadly, this has not turned out to be the case and the processes to claim a Homeowner Grant and declare an exemption from the Speculation and Vacancy Tax remain separate. And so, while I am not surprised by the public reaction to the rollout of this tax, I am surprised that the BC NDP hadn’t anticipated this.
The BC Greens remain of the opinion that the BC NDP’s Speculation and Vacancy tax is bad public policy.
We believe that a better way forward would be to enable all local governments (not just Vancouver) to introduce vacancy taxes if they felt it was in their community’s interest. At the same time, a speculation tax could be applied exclusively to properties owned by offshore individuals and entities, the Bare Trust loophole could be closed as was done in Ontario, and a flipping tax could be applied when the same property is sold multiple times in a short time period.
The BC Greens understand the importance of tempering exuberance in the out of control housing market. In fact, we specifically called for a New Zealand-style ban on off-shore purchases as per our call for bold action. We also outlined numerous other measures that could be implemented.
Moving forward, our caucus will continue to ensure stability, transparency and accountability in the BC Legislature.
11 Comments
Your opinion and justification for supporting this very foolish legislation is that if you had not supported it an election would be the result and probably an NDP majority government without you to keep their toes to the fire. Well sir you may have underestimated the anger and wrath of the BC taxpayers. If you had stood your ground they would have backed down, If not, you would have displayed the kind of character missing in Victoria which just might have given you and your party the boost to REAL PARTY STATUS. you so badly need.
You Blew It.
Andrew, regardless of all of the self-serving semantics in your letter you are the one person who could’ve stopped this disastrous legislation. All the rest is academic mumbo-jumbo and hypocrisy. Your voters are not stupid, but you treat them in a condescending manner with this type of dribbel. Can you imagine areas like Florida in Southern California and acting similar legislation? They encourage people to spend six months a year in their vacation destinations in the believe that it stimulates the economy. We are small outpost on the western shores of the Pacific Ocean whose small politicians are isolated from the reality of the rest of the world.
Ron Button
The way the Bank of Canada dealt with interest rates made a difference on the entire housing market.
The speculation tax is rubbish policy and it’s super disappointing you supported it for the sake of power over the interest of the people.
Same old story, different political color.
I agree with Dennis Grant. The Greens voted in favor of the Speculation tax for fear of loosing their position of power. Hypocrisy I would suggest. Too afraid to bring down the house and let the public decide.
Your Green Party did not do their job at all on this speculation tax. We are all guilty and have to prove it so that we are not taxed is like a communist state. If you don’t agree with it then don’t support them , and they will fix it or face an election . I for one like many others have lost confidence in the Green Party , since they can’t stand up for what is right!
This speculation tax won’t solve the problems, as it penalizes long term residents, who’s house values rose amidst the money laundering scheme. A better idea would be to amend the purchase tax, and stop foreign ownership. Purchase tax should be scaled so that high valued home sales pay more, 2-5%, $500,000 or less are at .5%, and first time buyers 0.
Repeat, rapid house sales(flipping) should be taxed at double on sales within 1 yr, on vendor, not purchaser.
Tax higher rate to purchasers that offer above list, to prevent bidding wars.
Tax landlords that “renovict”, if they raise rents beyond 5%, or don’t allow tenants back in. This should prevent crazy speculation, and make sure the ones causing these problems, pay accordingly.
Mr. Weaver – you had my support in the last election since I wanted to have an independent (and I had hoped – thoughtful) voice in the Legislative Assembly.
Notwithstanding your explanation – if you had told the NDP you would NOT vote for the tax – they would have withdrawn it. They didn’t want an election, nobody did at the time.
I am not affected by the tax – but it is the worst tax in BC’s history from a fairness point of view. Your support reflects badly on your party.
Can we consider this declaration by homeowners is a means of enhancing B.C.’s gov’t ownership database?
Mr. Eby’s previous life with privacy commission would have vigorously opposed this move.
We don”t need a “New Zealand Approach” .
We need to hammer this issue down like a country that leads. Canada should be the example to follow.
We need to start by getting to the bottom of the estimated 2 biilion dollar money laundering scandal that has taken place right under our nose. Our Law enforcement/BC prosecutors are looking absolutely incompetent here and you damn well know we want to hear some answers.
Accountability or chaos.
Thanks for explaining what happened. I agree with you, and I think that the whole approach to dealing with a housing shortage by penalizing some, and exempting others based on location is unfair. I hope you will keep up the pressure on the NDP to eliminate this horrible taxation fiasco . My wife and I are considering divorce over this tax because we can’t afford it, since our retirement income is tied up in a real estate inheritance, and to sell would mean a big loss through new capital gains tax rules.
Think of some solutions instead of opposition games.
New Zaaland obviously got the solutions.
Ask them to help out bc housing regulations.