Today in the BC Legislature I had the opportunity to further question the Minister of Finance in Budget Estimates with respect to whether or not she would consider stepping in to rectify numerous problems that have arisen from the impending ban on limited dual-agency transactions in the real estate sector. The BC NDP inherited this problem from the BC Liberals’ “sledgehammer” approach to dealing with what was largely a Metro Vancouver issue. There are profound consequences for rural BC if this ban goes ahead.

After a series of exchanges with the Minister, I became more and more reassured that she was aware of the impending crisis and is willing to step in.Below I reproduce the video and text of our exchange.

Video of Exchange

Text of Exchange

A. Weaver: I’d like to carry on the line of questioning that my colleague from Cariboo-Chilcotin has been pursuing.

I’ve got several letters here from various organizations, but first, I’d like to comment upon and seek your response to the statement that you’ve made. I do recognize, right off the bat, that this is legislation that government has inherited. It was brought forward as an amendment to the Real Estate Services Act by the former government. That amendment was put in, in the lead-up to, and following, some rather newsworthy issues that were occurring in Vancouver. The office of the superintendent of real estate was created through these legislative changes, and that office has put forward some measures which some would describe as a sledgehammer response to issues that arose in Metro Vancouver.

Now, there have been unforeseen consequences of this. According to section 89.2 of the Real Estate Services Act, the minister has regulatory power on all aspects of what the superintendent of real estate can do. So I would argue that, in fact, it is within the minister’s jurisdictional and legal right now to pass regulatory powers to limit the ability of the office of the superintendent, according to section 89.2 of the Real Estate Services Act, with respect to his or her jurisdiction in terms of licensing or requirements at this particular time.

Perhaps the minister could comment, and I will get back to some specific examples of why this is an important issue right now.

Hon. C. James: Thank you for raising the issue. The member is quite right. There are regulatory powers that exist around authority of the superintendent, as the member has mentioned, in the area of jurisdiction.

I think it’s important to note in this legislation, though, where the legislation identifies the superintendent as independent, that those regulatory powers also have to be balanced with the independence that is also in the legislation — so in taking a look at due process, whether due process was followed in bringing forward the rule; in taking a look at the discussion, the consultations, the work that was done around the consultations.

Remember that this recommendation around dual agency came forward as a central recommendation in 2016 from the independent advisory council. They brought this forward. They, again, did consultation. The superintendent’s office, again, lengthened the consultation.

I certainly, as I’ve said, have passed along the concerns. I think there are concerns there. But when I look at the balance of due process and balancing regulatory powers with the independence of the office, I did not see the ability to be able to utilize regulations in this specific case.

A. Weaver: With respect to the statement about the Independent Advisory Group, I understand that 28 recommendations were done. I would like to quote from a letter I received from the B.C. Northern Real Estate Board, which was copied to my colleague from Cariboo-Chilcotin. The letter says this:

“We are writing to request your support in our call to government for a review of the ban on limited dual agency. The ban was instituted, along with 28 recommendations from the Independent Advisory Group, after a limited review, no consultation with small communities and based on no empirical evidence.  It is important to remember that the IAG began its less than 15 weeks of work in response to a ‘shadow-flipping issue in the Lower Mainland.'”

I come back to this. This is a very real concern that has been outlined and addressed by the member for Cariboo-Chilcotin that I would describe solely as a sledgehammer response to issues that were arising in Metro Vancouver. As the member for Cariboo-Chilcotin pointed out, there was limited, if any, representation from rural B.C. on the IAG.

Again, coming back to the issue at hand here, I understand that the minister has inherited this office from the prior government. I understand that the 28 recommendations came from the IAG. The problem therein comes in exactly with that consultation process, as well as with the recommendations and their implementation.

Just today, May 15, 2018, one month prior to the full implementation, finally rules have been put up on a website. I received an email from a couple of realtors in Parksville today in this regard. They haven’t even had the instructions, the guidelines, about how they’re supposed to implement these. There are brokers who are profoundly troubled about the legal liability they are taking on, by what can only be perceived as a half-baked list of recommendation follow-throughs, to implement these on a timeline that is just not possible, when there are no educational tools available.

I’ll quote this right here. It says: “Today, one month prior to the scheduled rule implementation, the new forms and corresponding rules, interpretations, were finally emphasized, made available to licensees on the RECBC knowledge-base website. It’s notable that significant errors in the information required RECBC to retract and amend the information.” This is one month before it’s supposed to be implemented.

The error noted wasn’t typographical or grammatical but a clear misrepresentation of the rules. If there are troubles with the understanding of the rules with RECBC and the superintendent’s office and realtors in B.C. are trying to implement these in a month — one month —we’ve got a problem. I think it’s a duty and responsibility that the minister recognize that she has the regulatory powers under section 89.2.

Again, I ask the minister, knowing that she has alluded to the consultation process, knowing that there are profound flaws with that, including the inability of realtors to get information on the topic until today, which was then retracted, is the minister willing to step in and use her regulatory powers or to insist that the independent office actually delay the implementation of its regulations — in particular, a limitation on dual agencies — now as opposed to waiting until disaster ensues on June the 15?

Hon. C. James: Thanks to the member. I think it’s just important to unpack a little bit of the issues that the member raises, because certainly I’ve heard those concerns and heard those specific issues as well.

I think it’s important to note that information has been posted since January. They’re continuing to post. Today it was the new forms that were posted. So it’s not that no information had gone out. Today they had the new forms go up. There have been previous postings that have been happening since January.

I think when the recommendation came forward — and the member, I’m sure, will remember this, as we both were part of that discussion — as the member had said earlier, it was in reaction to making sure that there was consumer protection in place.

Then concerns, as the member has rightly pointed out, were raised about representation for all of British Columbia. That’s why you see the exception there for rural and remote communities so there is an opportunity for rural and remote communities to have an exception to this rule if there isn’t proper representation.

Again, I come back to the issue of balancing the independence with the regulation. When there was process, when there was consultation, all of the real estate boards, all the regional boards were consulted through this process.That includes the Northern Real Estate Board and other real estate boards. The Real Estate Council, which is the body that licenses real estate agents — their own organization — has given written confirmation that they believe that everyone will be up and ready to go on the 15th of June.

Again, that reassurance has been given. So given all of that, from my perspective as minister, I think there was due process. It doesn’t mean that there aren’t concerns that have still been raised. That’s part of why, as I said, I’m making sure that I go through the review so that if there’s clarification around who is responsible for what, we’re able to look at that.

If there are still concerns after the implementation date, if people feel that the exception isn’t working, those will be concerns that I’ll continue to raise as well.

A. Weaver: I have two final questions. This is with respect to follow up on the issue.

Again, I’m quoting from a letter that I received today, in fact, from the Real Estate Alliance of B.C. This letter is referring to a response that they got on May 14, which was yesterday, from the office of the superintendent of real estate. The office of the superintendent said this: “Licensees should not wait until June 15, 2018, or council’s new course to prepare for the approaching implementation date. OSRE encourages licensees to take proactive steps to educate themselves” — in bold — “and determine what, if any, business practice changes are necessary to comply with the rules.”

The superintendent is confident that the industry can and will adapt in a positive manner to the new rules. Well, that’s not very reassuring, because this is the counter-argument that is given. The assumption that licensees — these are realtors on the street — will be able to educate themselves and understand how to comply with the rule when it takes effect is unrealistic and unreasonable.

There are changes to the rule interpretations that are ongoing — daily, in some cases. Questions posed to regulators regarding the new rules have yet to be answered. The mandatory education course on compliance under the new rules has not yet been launched, nor will licensees have access to the education prior to the effective date of the rule implementation. The forms have just been made available to licensees on May 15.

We have a real problem here. We have an office of the superintendent of real estate that is implementing these new regulations, which are being applied in response to dealing with shadow flipping in Vancouver, frankly.

We’re having consequences across B.C. — one last question on limited dual agency in a second — we have realtors on the street who can’t get questions answered. We have the brokers who have a fiduciary responsibility, who are unable to train their realtors, because they can’t get answers. We’ve got the Real Estate Council not knowing who is on first base in the office of the superintendent, and we have rules changing on a daily basis.

Forms came out today, and apparently, one had to be retracted. This is a gong show, hon. Chair. And we cannot expect one of our…. I think it’s something like 30 percent of our GDP is in this broad sector. We cannot afford, as an economy, to have this uncertainty continue in the real estate sector, particularly in light of the fact that there are issues like speculation tax, employers tax, which I’m sure we’re going to canvass more thoroughly.

My question, again — the final question on this topic — to the minister is this. Will she, in recognition that there is chaos out there in terms of education, exercise her right under section 89.2 of the Real Estate Services Act to step in and ensure that the implementation date is deferred so that a proper consultation and due diligence can be done to ensure that licensees are actually educated across British Columbia.

Hon. C. James: I come back again to due process because I think that’s really the critical piece here when we’re taking a look at new rules coming in or we’re looking at changes and the ability to use regulations to override the independence. That’s really the balance that is required when you take a look at the legislation — the ability to set regulations but to be balanced off with the legislation that makes it very clear that the superintendent’s office is independent.

The Real Estate Council, as I said, is the governing body for all real estate agents in the province, rural and urban. They cover everybody. They are the professional body for real estate agents — have assured us and assured the superintendent’s office that agents will be prepared. That is the assurance that they have provided. They are the body that governs the real estate agents.

The rule was announced in November 2017. So the rule was announced. I recognize, as the member raised, that there continue to be questions raised. But the information continued to go out.

I think, just in case anyone’s wondering what the dual agency is…. I realize we haven’t really talked about what the dual agency rule is. This is related to not allowing a real estate agent to represent both sides, as a consumer protection issue.

This isn’t a rule that changes practice for most agents or most communities, because you basically are saying to someone, “This is a practice that you can’t do,” and then the exception provides an opportunity in those communities where there are few real estate agents — or remote communities — the ability to get the exception. Someone can then look at representing both sides. So that opportunity is there.

I think the last piece I just want to touch on is the personal responsibility for real estate agents, who are professionals and who do have a responsibility to inform themselves.

Do I believe that we need to make sure that the information continues to be out there? Will I continue to raise concerns that I hear, just as the member has done, with both the superintendent and the council? Yes, I will. But in weighing the due process with the ability to use regulations to override the independence — I do not see the ability to be able to do that.

A. Weaver: My final question — and I’ll come back to that again — is…. Clearly I disagree with the minister on this. And clearly, just to follow up on the limited dual agency….

The limited dual agency serves very useful purposes in many cases. In rural B.C., it’s very important for those educated buyers who want to go directly to the listing agent. They know that they can negotiate a better price because there’s only one side of a commission that has to be negotiated.

Sometimes, for example, a realtor might have a slew of clients that they’re working with. They get a listing. What’s happening right now is that one of their clients….

Let’s suppose that I’m a realtor — let’s pick: in Comox — and I listed a house and had 15 clients who were going to come to that house. Then one of my people want to buy that house. Well, I go and find my other friend to be a realtor with them, and I now have to get off of both sides of this because I’m in a conflict because that was originally my client. Now I’ve assigned that client over to someone else, but I’m still the listing agent. I can’t even be the listing agent for that house.

There are many, many problems that have arisen from this application. I recognize, again, that the government has inherited this mess from the previous government. And as it played out…. I don’t, frankly, think the previous government had thought it was going to play out the way it has, either. But we have a situation now where they have an impending deadline that’s going to likely lead to chaos.

I know, again, that the minister is setting up a review process. Why this is important is that there is a recognition that there can be potential conflicts of interest that arise in limited dual agencies. This is why, for example, in the province of Alberta, they’ve created something called a transactional agency, where they’ve created a different type of response for dealing with limited dual agencies in the case of potential conflicts. The review that B.C. is doing might, for example, come and recommend an approach like this.

The problem with not delaying is that if the B.C. review says, “We can see that it’s better to follow this transactional agency approach like they do in Alberta,” we’ve already gone and switched the whole system in B.C., and now we’re going to switch it back. This is chaos upon chaos. Surely the prudent response would be to pick up the phone or use regulatory powers under section 89.2 and say to the office of the superintendent: “Until such time as this review has been completed, we will recognize the potential conflict that may arise in limited dual agencies. There are solutions on the table. We don’t want to fix it twice. So let us delay the application of limited dual agency until, say, the fall, at which point we’ll re-look at it then.”

My question to you is: will the minister consider either picking up the phone and suggesting a delay on this or using what she seems reluctant to do — regulatory powers under section 89.2?

Hon. C. James: I just want to clarify one piece because this, again, comes to the details of the dual-agency rule that’s in place. Because of the consultation that occurred, because of the discussion that has been going on since November when the rule came out, there actually is a clarification. The example that the member used — where someone is selling a place, they’re representing it, they had a former client, the person came — that they would have to exclude themselves from both those sales is actually not accurate. With the rule clarified, they do have an ability…. Where both parties agree that they understand that that’s there, the person can continue to represent one of the parties. They don’t actually have to exclude themselves from that sale completely. I just wanted to make sure that people are aware of that. That is an important piece.

Again, when I take a look at that rule clarification, when I take a look at the exception that’s been put in place for dual agency in remote and rural communities, it’s hard not to say that there was a consultation process and exceptions made because of that consultation process — therefore, listening to the concerns that were raised to be put in here.

I think the other piece, just to clarify for the member, is that the review that’s going on is not a review of the rules. Right now the superintendent, according to the legislation, has the ability to set those rules. The review that’s going on is to clarify roles and responsibilities. Who is responsible for what? Where are there problems in place? Where does that need to be addressed? So the review wouldn’t, in fact, touch the rules one way or the other because that’s not part of the review process. It’s a review around roles and responsibilities — clarification there.

A. Weaver: I just wanted to thank the minister for her comments. I recognize that there were some…. This is part of the problem, actually. There’ve been numerous changes. Things are changing on the fly. With respect to the upcoming review, we must not forget section 89.2. Ultimately, neither of these other bodies has the rules. Ultimately, the rules fall squarely in the jurisdiction of the minister, who has regulatory power to say what they can and cannot do, in terms of the rules. I think that the minister needs to own some of these rules because they are within her regulatory power. I hope that we see that happen in the months ahead.

Following the recent decision of Richmond Council to continue the status quo and allow mega mansions on ALR is their municipality, the BC Green caucus released a media release (reproduced below) calling on government to protect our rapidly depleting farmland.

Media Release

B.C. Green Caucus calls on province to take immediate action to stymie speculation on farmland
For immediate release
May 15, 2018

VICTORIA, B.C. – The B.C. Green Party caucus is calling on the provincial government to take immediate action to stymie speculation on ALR land. The Caucus says the vote at Richmond council last night demonstrates why provincial action is needed.

“Mega mansions on ALR land are imperiling our food security, destroying agricultural land and driving up prices well beyond the reach of young farmers,” said Andrew Weaver, leader of the B.C. Green Party.

“The provincial government has a number of tools at its disposal that it should immediately use to address the issue of speculation on ALR land. These include restricting foreign ownership of ALR land, applying the speculation tax and foreign buyers tax to the ALR or creating legally binding house size limits. It should use at least one of these immediately to prevent the loss of any more farmland.”

Adam Olsen, MLA for Saanich North and the Islands and a former Saanich Councillor, added that local governments have been asking the province to take action for years.

“This decision at Richmond Council will drive the price of ALR in their community sky high, it will impact the rest of the province and demonstrates the need for action at the provincial level. When I was a Central Saanich Councillor, we knew 10 years ago we needed to take action on limiting house size and location on ALR land, we called on the government of the day to act. We were not alone and rather than take action the Province has buried this issue in consultation only further increasing pressure on the cost of farmland. The issue of speculation driving up land prices is well-documented and its solutions are clear. Delaying action only causes the issue to spiral further out of control: Last year, Richmond alone lost 50 farms due to the construction of mega-mansions on farmland. I urge the Minister in the strongest terms to recognize to take immediate action before any more farmland is lost.”

-30-

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

Kathy Tomlinson from the Globe and Mail recently uncovered a system of speculation and insider trading that is fuelling the red-hot condo market in Vancouver and crowding out ordinary buyers. I sought to explore this further in Question Period today. In particular, I asked the Minister of Finance what she was doing to clamp down on this egregious behaviour.

I was very pleased with her response.

In my supplemental question, I asked the minister if she would consider stepping in to rectify a problem that has arisen from the upcoming ban on limited dual-agency transactions in the real estate sector. The BC NDP inherited this problem from the BC Liberals’ “sledgehammer” approach to dealing with what was largely a Metro Vancouver issue. There are profound consequences for rural BC if this ban goes ahead.

I remain optimistic that the Minister is aware of the problem and is sympathetic to taking action prior to the June 15 deadline. I will raise this issue again during Ministry of Finance estimates.

Below I reproduce the video and text of our exchange.

Video of Exchange

Question

A. Weaver: Kathy Tomlinson from the Globe and Mail recently uncovered a system of speculation and insider trading that is fuelling the red-hot condo market in Vancouver and crowding out ordinary buyers. A few select realtors and industry insiders are getting preferential access to new condos under construction, and some individuals are flipping the right to purchase these condos multiple times prior to anyone actually moving in, a process that artificially drives up the prices for the eventual homeowner.

Industry insiders and speculators shouldn’t be granted preferential bidding rights on new condo units. Ordinary British Columbians and young families trying to get their foot in the door should have the same access.

My question to the Minister of Finance is this. What is your ministry doing to end this egregious practice and to stop the preferential treatment of industry insiders over regular British Columbians? And will you end preferential treatment and require that developers market their condo developments at the same time and at the same price to everyone?

Answer

Hon. C. James: Thank you to the Leader of the Third Party for the question, and thank you for pointing out one more area that has to be addressed in the housing crisis that we are facing in British Columbia. I’m sure the member, as we all do in this House, hears the stories, the heartbreaking stories, every single day of people trying to get into the market. Then to hear about this kind of action — the insider flipping of presale condos — is very troubling. It’s very troubling, I’m sure, to everyone. It’s certainly troubling that that legacy has been left, and it is something we’re taking action on.

We have regulatory authorities, right now, investigating those reports. The member can be assured that this is a top priority for our government. We’re also taking action to actually clean up this mess. I think one of the things, and I’ve mentioned this before…. One of the real challenges is that the old government collected no information, so there is very little information to be able to take a look and get to the investigation piece.

We are doing that. We are taking action to actually require information on presale condos, on flipping of condos, to be gathered by developers. It’ll shine a light on this sector. It’ll ensure that we can share that information, then, with the tax authorities so that people are paying their fair share of taxes.

Then the one other piece I just want to mention to the member is that we’ve also initiated a review of the real estate regulatory system to also ensure a level playing field. It was a system left to us by the old government. They put a structure in place that clearly needs some work. There are questions raised about who has what authority, where that authority sits. So we’re going to be looking at the roles, the responsibilities, clarifying the issue of education to ensure consumer protection, which is the primary issue in this example and so many other examples in the housing crisis.

Supplementary Question

A. Weaver: Thank you to the minister for that very constructive response.

As the ministry knows, much of the dubious behaviour in the real estate sector has taken place in the overheated Vancouver real estate market. I think we can all agree that it’s essential to put in place new rules to end these abuses and to protect consumers, and I’m thankful that the minister is taking steps in this regard.

Yet it’s also crucial that any new rules don’t impact businesses and communities in smaller communities across British Columbia. Scores of realtors and brokers from smaller communities across rural B.C. have contacted me with serious concerns about the government’s plan to ban limited dual-agency transactions. In many small towns in rural regions, the new rule may be unworkable for small businesses. It will have a profound negative impact on consumers as well.

I’m worried, frankly, that this government inherited a sledgehammer response to reform from the B.C. Liberals that could have serious unintended consequences for realtors and consumers in rural B.C.

My question to the Minister of Finance is this. Will the minister consider delaying the implementation of the ban on limited dual-agency to enable a task force to review the effects of the proposed changes on small communities and to provide a way forward that protects consumers and doesn’t harm people in rural B.C.?

Answer

Hon. C. James: Thank you for the question, and thank you for raising the issue. I’ve certainly heard the concerns directly, but I know members on all sides of the House have heard those concerns in their communities as well and heard the concerns from realtors.

Just to be clear, the office of the superintendent is an independent regulator. And as the member said, they’ve introduced new rules banning dual agency designed to protect the public that are effective June 1. As I’ve said, I’ve certainly heard those concerns. I’ve met with the superintendent. I’ve met with the real estate board to raise those concerns, to make sure that they are well aware of them.

We want to make sure that the regulators are working as effectively as possible. As I mentioned, we’re also doing a review of the regulators themselves. But my expectations are clear. Consumers have to be protected, and all consumers should have the right to representation whether they live in rural B.C. or whether they live in urban B.C., whether they live in a small community or whether they live in a large community. I made that very clear to the superintendent and to the real estate board.

Today in the legislature we debated, at second reading, Bill 25: Real Estate Development Marketing Amendment Act.

This bill amends the Real Estate Development Marketing Act to require developers to collect and store information on pre-sale condo assignments. This will enable government to track pre-sales and to tackle tax evasion. In particular, the bill proposes a number of changes that will:

1. require real estate developers to collect and report information on pre-sale condo assignments;
2. require developers to include terms in their contracts to inform buyers of the new collection and reporting requirements;
3. ensure that information will be reported to the provincial administrator designated under the Property Transfer Tax Act;
4. ensure that information will be shared with the Federal government to enable collection of capital gains taxes;
5. increase administrative penalties and offences substantially.

Below I reproduce the text and video of my speech.

Video of Speech

Text of Speech

A. Weaver: I rise to take my place in second reading on Bill 25, Real Estate Development Marketing Amendment Act. This bill amends the Real Estate Development Marketing Act. It requires developers to collect and store information on pre-sale condo assignments, which will enable the government to track pre-sales and to tackle tax evasion.

To start, I wish to thank the minister for bringing in such legislation. It is timely, and it addresses a very important issue. Also, to the member for Prince George–Valemount, I appreciated her careful analysis of the bill and look forward to her questioning at committee stage, where I too share some of the concerns she raised. Overall, my colleagues and I in the Green caucus down here do support this bill and the intentions.

You know, I’ve heard many a story from British Columbians frustrated with watching their condos or townhouses in their developments being sold multiple times without people actually moving in and questioning who is actually buying and who is actually selling and, in fact, raising the question as to whether taxes are being collected during the process. But more importantly, asking the question: how is this allowed in the province of British Columbia?

While this bill amends the Real Estate Development Marketing Act and makes a number of changes, it doesn’t, as the member for Prince George–Valemount said, actually get to the fundamental essence of why people are flipping and how we put in place measures to disincentivize that flipping. One of the things we could talk about — I won’t now, but perhaps in future bills brought forward — is the introduction of something like a flipping tax, a tax that actually targets people who are buying and selling on a rapid time frame with no intention of actually moving in.

Or we could talk about the potential problems that we see in British Columbia where certain developments are marketed offshore at prices that are below what you could buy them for onshore. In fact, I’ve got stories and articles of properties that are marketed offshore something to the tune of 20 percent below the price you could get them for here.

The purpose to do so, of course, is that you could get lots of mass pre-sales done all at once and then these…. Who knows who ends up? They could very quickly and very rapidly be flipped multiple times for a short-term gain, and only if the person doing the flipping actually decides to declare, in Canadian income, that this is a capital gains would they actually pay tax.

So the bill requires real estate developers to collect and report information on pre-sale condo assignments. Developers now will have to include terms in their contracts to inform buyers of new collection and reporting requirements. The information will be reported to the provincial administrator designated under the property transfer tax, and information will be shared with the federal government to enable collection of capital gains. Increased administrative penalties and offences are also being incorporated in this bill.

This is actually one of several bills that the government has brought forward since the fall which is designed to get Revenue Canada — CRA — more information on which they could actually enforce existing legislation. So I do thank and commend the minister for bringing in yet another piece of legislation that ensures that information is present for CRA to actually get taxes when taxes are owed.

Most of the bill is contained in a major section, which is section 4. It creates a new component of the act with provisions for the requirements of developers. That will be the subject of the most extensive canvassing, I suspect, during the committee stage.

You know, I’ve gone over a bunch of the media’s reporting on this to see what reaction we got from various stakeholders. It’s interesting that…. To say this is uncontentious would be a very fair statement. A diverse number of business leaders as well as developers have stepped in. For example, Anne McMullin, as we know, the CEO of the Urban Development Institute, an institute that represents a collective of developers, particularly in the Vancouver region — or she represents, at least.

She said her real estate lobby group supports the measures that are brought forward by the minister, although in fact, she characterized this as a small problem — 3 percent. I would argue that we might not know what the percentage is if we’re not collecting the data, so I would suggest that that would be an estimate. That was reported in the new Vancouver Star, the Toronto Star version of the paper that’s emerging in Vancouver.

She says the following: “We had been talking about this before the budget: if you really want to address speculation, this is where you had to address it.” That’s a pretty strong statement — in fact, endorsement — for the legislation here.

Another in a Castanet article coming out of the Okanagan. Cameron Muir, who’s a chief economist of the B.C. Real Estate Association, also said that compiling data to track presale condominium sales is a long overdue move — again, some high praise for this bill from a relatively well-connected individual in this particular industry.

Again, there’s Steve Saretsky. He’s quoted in the Vancouver Sun. He’s a Vancouver real estate agent who suggests it would bring more transparency to that part of the market, which currently lacks it.

Another Vancouver realtor, a fellow called Rick Clarke, in the same Vancouver Sun article, argued that they should do this. “A lot of people are not reporting and not paying tax and making big capital gains.” He further went on to say that there’s “a select group of agents” that have tight relationships with developers who rely on them for being able to sell chunks of presale condo units, describing one “known for just having signed 51 contracts in a half-hour.”

So, hon. Speaker, this is a very fine piece of legislation designed to provide government and, in particular, taxation agencies information in which to ensure that existing taxation laws are enforced. It’s very timely, particularly in light of some of the more nefarious, almost, incidences that are coming to light from investigative reporting by such journalists as Kathy Tomlinson in the Globe and Mail, who highlights some of the oddities that are happening in certain segments in the Vancouver real estate market.

One thing I would caution, though, is that as we continue to take steps to address what could only be described as an out-of-control real estate sector or housing market in Metro Vancouver, we be careful not to hit this whole province with that same sledgehammer that’s hitting there in Vancouver.

For example, there’s no question that this is important information that needs to be shared across the province, so implementing this from north to south, east to west is not a big deal. But there are other issues where previous governments, for example, brought in measures targeted specifically on limiting dual agencies. That was a direct response to problems that were out of control in Vancouver, but it had unforeseen consequences in rural parts of British Columbia, where you may have very small offices or you may have one broker in the whole town now facing strife and troubles, not knowing how to actually represent clients, both buyers and sellers, when there’s not the capacity.

So as we move forward in dealing with these issues in the housing market, it’s important to recognize that not always does one size fit all. In this particular case, I think it’s clear that reporting is a good thing. I think that it’s critical that people pay taxes when they should pay taxes. As we move forward let’s hope that we start to look even more closely at the concept of flipping and discouraging that through means possible.

Again, I thank the minister for introducing this bill. We are proud to support this bill, and I thank the member for Prince George–Valemount who brought in very fine comments that we’ll look forward to seeing explored further in committee stage.

Earlier this month I was very critical, of the government’s ill thought through attempts to curb speculation in the housing market. In fact, I was entirely unsure as to what outcomes the government was seeking with the introduction of their so-called “speculation tax”. To the government’s credit, the Minister of Finance declared that she was willing to listen to British Columbians and make adjustments to her proposed policies. This was the opening that we were looking for.

Over the last few weeks we worked hard to solicit, listen to, and respond to the concerns of British Columbians about this tax. We brought these concerns directly to the table with the NDP and worked closely with them to identify and offer solutions to many of the unforeseen consequences that had arisen. In particular,

• We wanted to ensure the tax did not unfairly impact British Columbians, including people with vacation homes, who are not speculating in our market.
• We wanted to ensure the tax did not apply to rural or vacation areas, where there are many part-time residents and they are significant to the local economy.
• We wanted to ensure that this tax truly targets speculators – people who park their money in our real estate market as if it’s the stock market – and that it effectively deals with satellite families and offshore money.
• We wanted to ensure adequate flexibility for rentals, allowing people to avoid the tax by renting their home out part of the year, and stay there the other part of the year.
• We wanted to ensure that people who can’t rent their place out, through restrictive zoning or strata bylaws, aren’t hit with the tax.
• We wanted to ensure that the tax actually reduces speculation, and does not provide a revenue windfall for government.

Yesterday Carole James, the Minister of Finance, announced revisions to the proposed speculation tax that will be introduced this fall. While the BC Greens would have taken much more aggressive action focused largely on foreign capital through a New Zealand style offshore buyers ban, as well as targetting speculation through a flipping tax and closing the bare trust loophole on residential sales, the government’s proposed changes go a long way to dealing with a number of concerns with the tax.

Below I reproduce the Media Statement that we released in response to the proposed government changes.

Media Release

B.C. Green Caucus responds to government’s speculation tax changes
For immediate release
March 26, 2018

VICTORIA, B.C. – Andrew Weaver, leader of the B.C. Green Party, issued the following statement in response to the government’s announced changes to the speculation tax.

“It’s a positive sign that this government is willing to listen to British Columbians and to make adjustments to policies,” said Weaver.

“In a minority government, we have an opportunity to do things differently by collaborating to improve public policy. We worked hard to champion British Columbians’ concerns and bring forth evidence-based solutions to this policy’s shortcomings. We agree with the B.C. NDP that we need to take action to address speculation in our real estate market. However, we have been clear that we needed to see changes to this tax in order to support the forthcoming legislation. In particular, the government’s policy must target speculation and empty homes in our urban centres without undue adverse effects on rural areas and on British Columbians who aren’t speculators.

“These changes go a long way to dealing with our initial concerns with the tax – they make it much more targeted and limit the effects on British Columbians with vacation homes. We look forward to the full details of the legislation to ensure it truly limits unintended consequences. We will continue to advocate for bolder policies to address speculation, including a flipping tax, the closing of the bare trust loophole and a New Zealand-style ban on foreign capital.”

Adam Olsen, MLA for Saanich North and the Islands added that he was pleased that many of his constituents’ concerns were addressed.

“I heard from many concerned Gulf Islanders who were worried about how the speculation tax might impact them and we kept pressure on the government to address these issues,” said Olsen.

“I’m glad that the government has recognized that this tax doesn’t make sense for rural areas like the Gulf Islands. The diversity of concerns in my riding demonstrates the need for a nuanced approach to the housing crisis. We have serious housing challenges in the Gulf Islands that need to be addressed, while recognizing that seasonal residents are valuable members of the community who contribute to the local economy. I will continue to work closely with the communities in my riding to bring locally-appropriate solutions to the table.”

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