The BC Government today released the interim report  of the B.C. Minister of Agriculture’s Advisory Committee for Revitalizing the Agricultural Land Reserve and the Agricultural Land Commission. As noted in the accompanying press release, the committee identified 13 recommendations for legislative and regulatory change, and four recommendations for action to protect the ALR. It also identified 14 key issues that are still under consideration for its final report.

Our caucus issued the press release reproduced below welcoming the report and urging the government to act quickly on the recommendations to limit house size on ALR land and to return the entire ALR to a single zone.

Media release

B.C. Greens welcome ALR report, urge government to act on house size restrictions and zone change
For immediate release
August 8, 2018

VICTORIA, B.C. – The B.C. Green caucus welcomed the Ministry of Agriculture Advisory Committee’s agricultural land reserve (ALR) revitalization report released today. The Caucus emphasized that the government should act quickly to adopt the recommendations to limit house size on ALR land and to return the entire ALR to a single zone.

“The ALR is crucial to supporting B.C. agriculture, farmers and our local food security,” said Adam Olsen, B.C. Greens spokesperson for agriculture.

“It has been increasingly under threat due to the preponderance of mega mansions, stemming from speculation in our real estate market. This is driving up prices at a time when the industry is facing a demographic crisis and young farmers are struggling to afford to buy land. I am pleased to that the committee recommends that the province limit house size on the ALR and I urge the government to swiftly adopt this recommendation.”

B.C. Greens leader Andrew Weaver added that the government should also adopt the committee’s recommendation to return the ALR to a unified zone.

“The previous B.C. Liberal introduced the zone changes in 2014, which opened up precious farmland to oil and gas exploration, among other non-agricultural industrial activity,” Weaver said.

“That was a short-sighted decision made at a time when we should have instead been investing in the sustainable industries of the future. As the world shifts to the low carbon economy, it is essential that we take every opportunity to support economic development, especially in rural communities, in sectors that will sustain us in the long-term. I thank the committee, especially Chair Vicki Huntington, for their excellent work on this report. We are reviewing the other recommendations in detail and look forward to working with government to advance legislation that will ensure a strong, revitalized ALR so that British Columbians can benefit from a thriving agricultural sector for generations to come.”

-30-

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

Today the government announced that it was taking steps to collect data to ensure transparency of ownership of properties purchased through a corporation or a trust. As I note in the media release below, improving data collection and transparency is a good first step, but the province should proceed with applying property transfer tax to the transfer of beneficial ownership. Doing so would plug a loophole that lets corporations and wealthy individuals avoid paying BC’s property transfer tax.

It’s been almost five years since I began urging government to close this so-called bare trust loophole as was done in Ontario many years ago. Doing so is one of the most important steps government can take to crack down on speculative activity in the housing market.

Finally, and coincidentally, Great Britain announced similar measures today for offshore buyers. But in the UK case, stiff penalties and even jail sentences are being proposed if people “fail to register or attempt to file false information“.

Media Release

New property transfer data requirements show it’s time to close bare trust loophole: Weaver
For immediate release
July 25, 2018

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, says the government’s move to collect information on beneficial ownership of properties underscores the immediate need to close the bare trust loophole. Bare trusts allow for the transfer of beneficial ownership within trusts. Since no title change occurs, no property transfer tax (PTT) is paid.

“This data collection is a good first step, but the province should proceed with applying property transfer tax to the transfer of beneficial ownership,” said Weaver.

“Speculation is a major driver of the housing affordability crisis. The bare trust loophole incentivizes speculation. Preventing individuals and corporations from using it to avoid paying taxes is low-hanging fruit and should be dealt with immediately. Applying the PTT to beneficial ownership has been done in Ontario and is what is needed to close this loophole once and for all.”

Weaver has called for the closure of the bare trust loophole since 2015. The government first announced its intention to collect additional data on beneficial ownership in the February provincial budget. Today, it announced that it will begin the data collection on September 17, 2018.

-30-

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

The BC Government today released Peter German’s long awaited report on money laundering in Lower Mainland casinos.

The report, entitled Dirty Money: An Independent Review of Money Laundering in Lower Mainland Casinos conducted for the Attorney General of British Columbia, demonstrates systemic failure within the previous government to adapt our laws and regulations to changing realities.

Below is the media release we issued in response to the report’s release.

Media Release

Weaver: German report demonstrates need for systemic change, investigation into links with real estate sector
For immediate release
June 26, 2018

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, welcomed Dr. Peter German’s independent review of money laundering in Lower Mainland casinos. Weaver says that German’s finding that large-scale transnational money laundering has been occurring in our casinos, and that B.C.’s laws and regulations have not kept pace with changing realities, demonstrates the need for wholesale policy change.

“Dr. German’s report demonstrates systemic failure within the previous government to adapt our laws and regulations to changing realities,” said Weaver.

“We have seen significant growth and change, both in B.C. and globally, since many of our laws and regulations were first developed. Outdated policies have left our province vulnerable to exploitation as transnational criminal entities have become increasingly more sophisticated.

“It is encouraging to hear that recent government actions have led to a significant reduction in suspicious activity in B.C. casinos, and I am pleased that the Attorney General has accepted the recommendations. What is most important now is that government provide clear timelines for implementing the recommendations and is transparent with regards to progress. In particular, the recommendation that the Province undertake research into allegations of organized crime penetration of the real estate industry should be at the top of government’s agenda. British Columbians are looking for answers as to why our housing market spiralled out of control so quickly and if we are to develop effective solutions we must undertake a thorough investigation of this issue.

“Government cannot be asleep at the switch amidst such significant threats. Going forward, government must be significantly more proactive in modernizing our laws and regulations so that we are not faced with such a crisis again.”

-30-

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

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

The BC Government announced today that it plans to create a publicly accessible beneficial ownership registry in an attempt to ensure transparency as to who owns property in British Columbia.

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.

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), the government is still not doing what Ontario did ages ago. That is, to apply the property tax to transfer of beneficial ownership rather that to transfer of title.

This is perhaps the single most effective measure the government could take to clamp down on speculation in BC’s real estate sector.

Below is the press release I issued following the government’s announcement.

Media Release

Andrew Weaver statement on beneficial ownership registry white paper
For immediate release
20 June 2018

VICTORIA, B.C. – Today Andrew Weaver responded to government’s release of proposed legislation to create a beneficial ownership registry.

“Government should match its data collection and transparency efforts with decisive action and immediately close the bare trust loophole,” said Weaver.

“I welcome the collection of more information on who truly owns property in B.C. For far too long, individuals and corporations with the means to navigate the holes in our legal system have been able to shield their identities from tax collection and law enforcement officials. However, it is critical that in addition to collecting more data, government acts decisively to actually crack down on people who use beneficial ownership structures in order to avoid paying taxes.

“Right now, speculators are able to use the bare trust loophole to avoid paying millions of dollars in taxes. This is a loophole so big you could drive a bus through it. Government can close it by simply applying the property transfer tax to the transfer of beneficial ownership. By doing so, government can truly crack down on speculation, tackle tax avoidance and free up huge sums of money that the province can spend on housing affordability.

“I will continue to push government on the urgent need to close the bare trust loophole.”

-30-

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