Today the Attorney General released his long awaited report containing recommendations for the upcoming fall referendum on proportional representation. Our spokesperson on proportional representation, Sonia Furstenau, issued a media release (reproduced below) in response to the report.

Media Release

B.C. Green Caucus statement on Attorney General’s proportional representation recommendations
For immediate release
May 30, 2018

VICTORIA, B.C. – Sonia Furstenau, B.C. Green Party spokesperson for electoral reform, responded to the Attorney General’s report and recommendations on B.C.’s upcoming proportional representation referendum.

“I look forward to the Attorney General’s recommendations being finalized by cabinet. It’s time to get started on this important conversation about the future of our democracy,” said Furstenau.

“I am pleased that the AG took advice from a wide range of voices who participated in this consultation process and that his recommendations reflect the concerns and desires of the whole province. Going forward is that voters receive good quality, factual information and a healthy, vibrant debate about their electoral process.

“The B.C. Greens support proportional representation because it leads to more democratic outcomes. Too many people feel they have to vote strategically against whichever party they don’t want. Proportional representation gives voters the chance to vote for what they actually want, so they can vote out of hope, not fear.

“Proportional representation also requires parties to work together to put policy ahead of politics. Under First Past the Post in B.C., parties have received 100% of the power with as little as 39% of the vote and do not have to consult or collaborate with anyone. This leaves voters feeling like their government does not represent their interests and puts political parties into an adversarial, zero-sum situation where they become more focused on tearing each other down than working on solutions to the challenges and opportunities we all face.”

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Today the BC Green and BC NDP caucuses celebrated the one year anniversary of the signing of our historic Confidence and Supply Agreement.

The Premier and I took the opportunity to celebrate the event at the offices of Alacrity Foundation in Victoria. This was a fitting venue since Alacrity represents a stellar example of innovation in the new economy.

Alacrity has helped bring over $225 million to B.C.’s technology ecosystem through its investor readiness program and on April 19, 2018, the Province announced that it was investing more than $711,000 over the next three years in the Alacrity Foundation of B.C.’s Cleantech Scale-Up program.

Below I reproduce the brief remarks I gave at the event as well as our joint press release.

My remarks

I am delighted to be here to celebrate the one year anniversary of the announcement that we had reached a Confidence and Supply Agreement with the BC NDP.

The 2017 election was historic for our Party. We doubled our popular vote count and tripled our seat count.

When the results came in as a minority government, we felt an enormous weight on our shoulders. We took our decision very seriously.

In the end, we decided BC needed a change. It was clear that most British Columbians wanted things to be done differently.

There was a clear desire for bolder, forward-looking policies on a range of important issues:

affordability;
environmental protection;
investments like child care and public education that will give our children the best possible future.

CASA is the result of two distinct parties coming together around shared values.

Ultimately we want the same thing:

to improve the health and wellbeing of British Columbians;
to make government more responsive to the challenges and opportunities they face in their everyday lives;
and to set our province up for success.

There have been ups and downs in the first year, but like any relationship our Agreement has required us to work through our issues and come together to find solutions that we can both support.

This is a special opportunity – under majority governments, a party can get 100% of the power with as little as 39% of the vote and push through its agenda without having to consult or collaborate with any other parties.

This has often left British Columbians feeling disconnected and like their government is not listening to their concerns. In just the first year since signing our agreement, we have worked together to:

ban big money;
reform the lobbying industry;
make historic investments in childcare and public education;
advance key elements of the BC Greens’ economic vision for the province.

And we’re just getting started.

Right now, I am hard at work with Minister Heyman to develop a climate plan that puts a bold vision for BC’s economy centred around innovation at its core.

We have a unique opportunity to make BC a leader again in climate action.

While climate change poses significant risks and challenges, there are opportunities to be had as the world transitions to the low carbon economy.

But the benefits will only flow to those who are leaders – not the last adopters.

BC was once a leader in climate action, providing an example to the world that a strong economy and bold climate action are perfectly compatible.

I am looking forward to unveiling our plan to make BC a leader once again.

There are challenges that lie ahead, but I am deeply encouraged by our ability to come together to work through our differences.

John and I both know that there is more at stake than the future of our two parties – we are united in our love of this province and we want to set it up for the best possible future.

Our caucus remains committed to doing everything we can to work collaboratively to advance more solutions so that we can deliver on our shared commitments to the people of BC

Thank you.

Joint Media Release

In what can only be described as a desperate attempt to save face, the Federal Government announced today that it would use taxpayer money to buy Trans Mountain’s Canadian assets which include the existing pipeline from Alberta to the Burnaby refinery.

Below I reproduced the media statement that we released in response to this action.

Media Statement

Weaver: Federal government decision to buy Trans Mountain a betrayal
For immediate release
May 29, 2018

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, issued the following statement in response to the federal government’s decision to buy the Trans Mountain Pipeline.

“This is a betrayal by a government who ran on a hopeful vision for a better future,” said Weaver.

“A government that promised to end fossil fuel subsidies and to champion the clean economy should not be spending billions of dollars of taxpayer money to buy out a fossil fuel expansion project. We should be investing in growth industries that are clearly where the world is heading. Investing in this pipeline is like investing in the horse and buggy industry at the advent of the car.

“This is a deeply troubling decision on many levels. Canada stands to sacrifice its international reputation, irreplaceable iconic species like the Southern resident Killer Whales, and its commitments to meet its Paris Climate targets and to reconcile with Indigenous people – all while putting enormous risk on Canadian taxpayers.

“It is clear that the world is transitioning away from fossil fuels. The cost of renewable energy continues to fall – solar and wind are already cheaper than coal in many jurisdictions. Last week, a report by Aurora Energy Research projected the adoption of electric vehicles could wipe out $19 trillion in oil revenue. You don’t build infrastructure like this for the next few years – this is built to last for the next 40-50. This is not the infrastructure we need in 10 years and certainly not what we need in 40.”

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Media contact
Jillian Oliver, Press Secretary
+1 778-650-0597 | jillian.oliver@leg.bc.ca

Over the last year or so I have twice (February 2017 and October 2017) introduced a bill to protect agricultural from continuing to be subject to speculative investment activity.

Today during budget estimates for the Ministry of Finance I asked the Minister why her government had neither applied the foreign buyers tax nor the speculation tax to land in the ALR. In particular, I sought answers to why her government is not stepping in to stop prime farmland being carved up and converted into mega mansions.

Below I reproduce the video and text of our exchange.

Video of Exchange

Text of Exchange

A. Weaver: I just have a couple of questions in two areas to finish my estimates questions to the Finance Minister. The first is in the area of ALR protection. The ALR was left unprotected from the measures announced in the budget to cool the market for the residential real estate sector, which has encouraged speculation in ALR. My first question is: why didn’t the foreign buyer tax and the speculation tax apply to the ALR? And why was, for example, foreign ownership not restricted to the ALR, like has been done in areas across Canada, including Alberta, Saskatchewan, Manitoba, Quebec and PEI?

Hon. C. James: Thank you to the member for the question. I think there are two pieces I just want to focus on.

I think the first one is…. As the member will know, there’s a comprehensive policy review going on with the Minister of Agriculture right now in looking at a whole range of issues related to agricultural land. We’re doing our policy work — side by side, I guess, is the best way to describe it — along with the work that’s being done in the Agriculture Ministry. So we don’t want to either get ahead or be duplicating work that’s going on.

As the member will know, there was a large consultation done, and so people were giving their feedback. To look at further work that needs to be done around the agricultural land, we’re doing that policy review, as I said, along with the Agriculture Minister.

But I think it’s important to note that both the foreign buyers tax and the speculation tax do apply to houses, to the residential property that’s on agricultural land. I know the member’s speaking about a broader base when it comes to the agricultural land, but in fact, those taxes do apply to the class 1 residential housing that is on agricultural land if they’re in the areas that are covered by those taxes.

A. Weaver: Yes indeed, I was concerned about the broad, bare land of agricultural land that can be purchased that does not have a foreign buyers tax. Then Richmond council can be approached, and that land could then have a mega-mansion put on it, which was the subject of the concern being expressed here.

In the budget, the minister stated that she’d be changing the tax treatment of residential property in the ALR in order to close property tax loopholes. My question is then: how are you changing property tax treatment, and when can we expect to see this done?

Hon. C. James: We’re looking at the changes. These are draft changes to the School Act to exclude ALR properties that are in the residential property class from the 50 percent land exemption. We’re going through that process right now, again, as I said, in tandem with the work that’s going on in the Agriculture Ministry. This would require changes, so we certainly hope it’ll come by the fall.

A. Weaver: Again, the review. We’ve been talking about the review, and the Minister of Agriculture is indeed undertaking such a review. But in fact, we’re not waiting for the results of the review before changing the tax treatment on residential property.

We know what’s happening in an ongoing fashion in Richmond is that the speculation and mega-mansions are devouring ALR there. For example, last year, Richmond lost 50 farms due to mega-mansions. We can’t, frankly, afford to wait a year to see more action.

Why are we not taking immediate steps now to impose the foreign buyers tax and the speculation tax on the ALR land? What is stopping the minister from doing that?

Hon. C. James: I certainly appreciate the urgency of this issue. I appreciate the examples that have come forward, particularly in Richmond, as the member mentions. They are issues right now and challenges right now. But there is, as I said, the comprehensive review going on. We need to make sure that…. Many of these changes have to happen through different acts, not through one act.

For example, the changes to the school tax related to the school tax on agricultural land also have to be changes to the Assessment Act. Again, we don’t want to piecemeal it. We want to make sure that the changes that we make are really going to make a difference. That’s why we’re working together with the Agriculture Ministry.

There is an opportunity, hopefully, in the fall to bring forward those changes, to have coordinated with the feedback that people gave and to be able to make a comprehensive change that will prevent the kinds of examples that the member has raised.

It’s been more than four years now since I started calling on government to close the bare trust loophole which is being exploited to provide cover for anonymous real estate transactions as well as to avoid paying property transfer and, potentially, capital gains taxes.

A bare trust is a legal entity that allows for the separation of beneficial and legal ownership. The beneficial owner of a property is the person or persons who make all the decisions concerning such things as rent, repairs, management, sale etc.; they are also the person or persons who receive all the revenue from and arrange financing for the property. The trustee of the bare trust has no substantive decision-making capacity as they simply act upon the instructions of the beneficial owner. Typically the trustee is a corporation that has no other purpose but to act as a trustee for the bare trust and for which the beneficial owner owns all the shares.

Now here’s the loophole. Suppose you own a home or apartment building that you want to dispose of. If you simply transferred title, like most of us do when we sell a home, the purchaser would have to pay the property transfer tax.

But if instead the property is in a bare trust where the trustee is a company, then you will pay no tax. All you have to do is sell your shares in the company for 1$ (the company has no assets anyway), and sell the “beneficial ownership” rights of the property to a third party via a “bare trust agreement” which is not registered at the Land Title Office.  Since no change in title occurs, no tax is paid.

Today during budget estimates for the Ministry of Finance I asked the Minister once more as to what the hold up is. While I appreciate that government is now collecting data on beneficial owners and sharing that data with the Canadian Revenue Agency (thereby potentially giving the CRA the ability to crack down on capital gains evasion), she is still resistant to do what Ontario did ages ago and apply the property tax to transfer of beneficial ownership rather that to transfer of title.

Below I reproduce the video and text of our exchange.

Video of Exchange

Text of Exchange

A. Weaver: I’d like to pivot to the issue of beneficial ownership and bare trust, a key issue and aspect of both the B.C. NDP and B.C. Green election campaigns. As the minister will know, I’ve been calling on government — both past government and present government — to close this loophole for years now.

In this budget, we’ve taken some steps, which I recognize, requesting more information about beneficial ownership on property transfer tax forms, as well as establishing a beneficial ownership registry. But we need to do more than this, frankly, and rather than just collecting information on the beneficial ownership, we need to take steps to actually close the loophole — as was done decades ago in Ontario in direct response to seeing some shenanigans occurring in the real estate sector.

We know that the market has already discounted this, and the market had expected government to announce that the measures would have been taken in their budget.

I have two questions in this regard, and then I’ll conclude. What information are we currently collecting about beneficial ownership on PTT forms — that’s property transfer tax forms — and what additional information are we collecting now? When do these changes come into effect, and what are the purposes of collecting this additional information? What do you expect the impacts to be from gathering this information?

Hon. C. James: Thank you for the question. This is an issue that the member has been raising for a while, and it’s certainly a piece that we’re keen on moving on. I think there are some lessons to be learned from the Ontario example, where Ontario, again, didn’t do the collecting of the information and so had some challenges when it came to implementing the tax that they’re looking at.

We will be starting, as the member has said, with changes coming in the fall on information that’s collected. The best way probably to describe it is it’ll basically be look-through rules, so it will provide an opportunity for us to look at the owners of the land, regardless of what structure they’ve put in place. All that information will be held by the Ministry of Finance.

We will be bringing in, as well, information-sharing rules that will be put in place, particularly with the CRA, so we have the immediate opportunity to be able to look at tax loopholes or tax fraud if it’s there. That’ll give us a chance to be able to do that. Then, when we have the information, that gives us the next step to be able to look at. Whether it’s Ontario or other jurisdictions or other ideas and approaches, it’ll give us an idea of the challenges and the ability to be able to determine further action.

A. Weaver: To be fair, I frankly don’t think that’s good enough. We are, right now, proposing a speculation tax, which is causing chaos in the real estate sector because we don’t have information, and we’re making exemptions as we move along.

We have a clear understanding of what the bare trust loophole is being used for in the residential property. We know you don’t have to go and collect data to know exactly what’s going on. Talk to realtors. Talk to commercial developers. Talk to bankers. Talk to accountants.

We know that properties are being purchased in trust. Those shares are owned by a corporation, and those corporation shares are flipped and switched. We know that that’s happening with offshore companies as well, and we know that that is fuelling the speculation that we truly want to deal with in the housing market.

The spec tax is not dealing with speculation. The spec tax is a paper wealth tax. Whereas a measure that we could take to actually deal with speculation, a measure that was dealt with in Ontario…. I’m told it was dealt with in Ontario precisely because of concerns about money laundering that was happening at the time in the housing market there in Ontario. The tax went on to the beneficial ownership transfer.

It is critical, because you buy at home, a mega-home, and you buy it for, say, $2 million in a trust, and you can flip that five times. You can launder money in this flipping, and there is no record. You’re collecting information, sure. But there’s property transfer tax avoidance, which should be there to discourage this behaviour.

Now, the bare trust existed…. There are reasons historically why it was important to have these properties in trust, particularly in commercial properties. But it is being abused in the residential market.

I’ll conclude, then, by saying I don’t think it’s appropriate not to close a loophole now. I think we have a measure to truly deal with speculation right now. The Attorney General, the member for Vancouver–Point Grey in opposition, pointed this out. The government said they would do it. They campaigned on doing it. Here we are a year later. We’re collecting data about hypothetically doing it down the road while implementing, at the same time, a speculation tax that is actually not dealing with speculation.

So it’s a plea. Why is the minister not standing up and closing this loophole that is being exploited right now in British Columbia and is leading to speculation — instead, taking the steps to introduce a tax that doesn’t actually deal with speculation but instead conflates two issues? One is the issue of satellite families; the other, the issue of vacancy.

Hon. C. James: I appreciate the member’s urgency around this. We feel the same urgency, but we also want to make sure, as I said, that we provide the opportunity to really get at what we need to get at and to get at the individuals we need to get at. I think, as the member has described well, there is all kinds of discussion out there. There are all kinds of people talking about examples that they know of where people who are very sophisticated at tax planning are utilizing these opportunities.

What we’re doing first is figuring out who owns what. That’s a critical piece because right now there isn’t a registry in place. There isn’t an example in place that gives us that. The work we’re doing right now will help us to do that. It’ll help us to build a registry to determine who’s incorporating where. It’ll require people, when they incorporate, to actually register that. So again, we’ll have a tracking around where things have occurred, where people are utilizing the opportunity to be able to avoid paying the correct taxes.

Then the next step, obviously, is to take action. But this will still give us the opportunity to share that information with the CRA and go after existing taxes that are not being paid. I don’t want the member to believe that this does nothing. In fact, it provides us with the opportunity to share that information with the CRA to be able to deal with taxes that aren’t being paid now or opportunities that people are trying to utilize to not pay taxes now. This will give us a chance to do that by the fall.

Further steps then can come after we’ve got the registry in place and we have the opportunity to address it.