In the Ministry of Finance budget estimates today I had the opportunity to question the Finance Minister on the recently announced employers’ health tax. This tax is being proposed to replace revenue that will be lost due to the elimination of the regressive MSP premium.

Below I reproduce the text and video of our exchanges.

Text of Exchange

A. Weaver: I have six short questions to pose to the minister on this theme that’s being raised by the member for Prince George–Valemount and the member for Surrey–White Rock.

The minister has chosen to eliminate MSP premiums, which, of course, we support, because we, frankly, also had it in our platform. But she has chosen a way to do this which is through a payroll tax. Again, we support the government’s intention of doing it. It’s not what we would have done. We recognize we can agree to disagree.

Our approach would have been to mirror more what was done in Ontario, through the creation of a health care premium that was progressive and actually person-based, which would allow people to still recognize that there is a cost to health care. They’re see it on their pay stub, etc.

Again, I recognize that government had different priorities or ideas here. But with that said, I’d I like to ask a couple of questions, because there is definitely some concern out there within the employers of non-profit, local government, school board sectors, as well as small business and other business.

Some of it is not well grounded. I have some troubles with some of the estimated property tax increases that I’ve been seeing coming from municipalities, which suggests to me there’s a property tax gouge that’s going on there that actually is not representative of how much the real cost would be for their employees to….

With that said, I have a couple of questions. They’re with a focus on the MSP Task Force. The MSP Task Force was due to give its final report to the minister just a few weeks after the budget. My first question is: why did the minister make the significant decision that she did with respect to the payroll tax prior to the MSP Task Force reporting in?

Hon. C. James: Thank you to the member for the question. I think, as has been described, I received an interim report, and the member asks why we didn’t wait for the final report.

In fact, in putting together the budget, when we were taking a look at both the challenges and opportunities that were there, one of the challenges, as I mentioned earlier, that I was faced with that was not expected to be in this kind of severe situation was the issue of ICBC and the deficit at ICBC. So when we took a look at building the budget, we felt that this was the time to make the decision around both the ICBC issue and moving towards the MSP.

The other thing that was very clear — a task force certainly raised this issue as well — was the urgency for people to know that MSP premiums were going. That was a very clear message.

There were seniors groups and other organizations that had come forward to talk about the urgency of finding a time to let us know when they were going to be eliminated. “We know you say you’re going to do it by the end of your term, but we really are interested in making sure that we know a date so that we know it’s going to be gone, so that we have the time to plan but also that we know that commitment is there.” So it was also taking into account the urgency of people who really wanted to know.

It was the possibility, then, of looking at our three-year budget term and being able to do the planning that was necessary.

The member mentioned the issue of not-for-profits and school districts. I think, as the member knows, those issues are still being discussed. We’re gathering data, and I think it again points out…. We talk about getting information in government. I think we’ve had this conversation on a whole range of issues, mostly in housing.

It’s pretty obvious, across the board, that more information is needed for groups and organizations, like not-for-profits, to be able to gather the data that’s needed around everybody’s individual circumstances. So we’re finalizing that, and I certainly hope by summertime to have those issues resolved.

A. Weaver: Thank you for the answer. Through you, hon. Chair, to the speaker, to the minister. It’s the end of Thursday afternoon, and I think we’re all tired, especially the minister.

My question, then, is…. If, as alluded to there, there was a budgetary shortfall because of ICBC, surely that would have been realized early in the term of the government. My question: why did the government not then simply go to the task force and ask them to expedite their review so that they could provide the minister the recommendations that she needed prior to her making a decision, in light of the fact that I understand that no such request was actually given?

Hon. C. James: In discussions with the task force and their discussion about the pieces they were continuing to work on, they’re continuing to work on a number of pieces that they wanted time to complete and that, certainly from my perspective, I felt were worthwhile. So I did ask them to continue to do a final report. I felt that that was worth looking at. There are, obviously, future budgets to come, and there may be some really good ideas and good approaches that might be worth looking at and considering. That’s why we got an interim report from them and why I asked them to complete the final report.

On the ICBC, I have to say that the situation was deteriorating much more rapidly than I think anybody imagined, certainly more than the minister of ICBC imagined and certainly more than I, as Finance Minister, imagined. That created a real challenge when it came to the budgeting.

A. Weaver: To the minister, then, on this final report, I have two questions that I’ll put into one here. In the budget, and just now, the minister stated that the task force would still complete their final report and that she was looking forward to receiving it.

My questions, in one, here are: what did the minister direct the task force to look at for their final report, given that she’d already made a decision to implement the employer health tax? Secondly, has she received the final report? If so, when will she release it?

Hon. C. James: The task force, in the discussion we had around the interim report, said that they were still working on a few pieces. I know, certainly, that one of these is an issue that has come up, around the Select Standing Committee on Finance, for a number of years, which is the issue of a tax on sugary drinks. That was one of the pieces that they were interested in finalizing some work on. As I said to them: “Finish up the work that you’re doing, and bring it forward as your final report.”

The other piece that they were wanting to look at and that they’d started some work on but wanted some more time to look at was the issue of the homeowner grant: was there an opportunity, with the homeowner grant, to look at some more progressive kinds of changes to the homeowner grant? Again, I said, I certainly expected that that would be interesting to be able to review. So that’s another piece that’s coming.

I expect to receive…. I’m hoping to receive their final report shortly. Yes, it certainly will be public, once I receive it as minister.

A. Weaver: Thank you to the minister for a very helpful response. It actually dealt with one of my further questions, which was with respect to the issue of taxing sugary drinks, which I know the MSP Task Force had talked about considering in their interim report. I look forward to them providing more information in the forthcoming report and to see how the government responds to that.

My final question, then, is again with respect to the MSP Task Force. In the report, they specifically said, “We are leaning towards a combination of a personal income tax surcharge, a small payroll tax and additional ideas.” The additional ideas, as was mentioned, were like a sugary drink tax…. They said: “A payroll tax would reduce the competitiveness of B.C. businesses at a time when they are facing several competitiveness challenges.” This concern about the competitiveness of businesses partly informed why the task force was not leaning towards exclusively a payroll tax but towards a combination of measures to make up the revenues.

My question finally to the minister, why did she choose to implement a payroll tax, rather than go the route recommended by the MSP Task Force, which would have spread the burden of the tax across a variety of areas?

Hon. C. James: We had a little bit of discussion on this earlier, but I think it’s important to state again, as the member mentions, that the task force recommended looking at personal income tax and a payroll tax, as well as other measures that they’re still going to bring forward.

On the personal income tax, as the member knows, as government, we made a change, in September’s budget, on the high-income earners — on the income over $150,000 — and had taken away the tax break that the previous government had given. We felt we had already impacted and made a difference around the personal income tax. That was a piece that we had already moved on, in the September budget.

The other piece that’s important to recognize is that we aren’t actually recouping all of the MSP revenue with the payroll tax. We aren’t actually collecting the magnitude of the MSP. The MSP is at $2.6 billion. We’re bringing in $1.9 billion on the payroll tax. I think that’s another important piece to recognize and to look at when we’re looking at a payroll tax. It’s not actually looking at recouping all of the resources that were there, so we felt it was reasonable to do it as an employers health tax.

Video of Exchange

In the Ministry of Finance budget estimates yesterday I had the opportunity to question the Finance Minister on a number of topics concerning the recently proposed speculation tax.

Below I reproduce the text and video of our exchanges.

Text of exchange

A. Weaver: I have a number of questions, just to follow up on this theme. I thank the members for Prince George–Valemount and Surrey–White Rock for canvassing this issue. A couple of these questions have been addressed, but I’d like to develop the narrative just very briefly.

I’ll start off by saying I understand the issue that the minister is addressing. The housing market has got out of control through wanton speculation. I do understand that it is the government’s prerogative to choose the means and ways to deal with it.

The approach the government has taken is not the approach we would have taken. Nevertheless, we agree to disagree on this, and we do support government’s effort. I will say that our approach would have been to actually address taxation after sale of a property, when people had the ability to pay, as opposed to upfront with respect to a paper value.

With that said, I also want to thank and commend the minister for listening to the concerns that we’ve brought to her from a number of areas and issues. I just want to canvass two more of these areas and see what she says.

The first question to the minister is this. With respect to the intention of the speculation tax, is the intention of the speculation tax to reduce the number of homes being left empty by encouraging people to sell or rent, or is it to generate revenue?

Hon. C. James: I think the member has hit on a very important point. I would be thrilled if we saw all of these properties become rental properties and some people not having to pay the tax, because that would be, in fact, the achievement of providing more housing in these communities that have an almost zero vacancy rate.

I think, as I said earlier, we have been conservative in our numbers when it comes to the tax revenue coming in, because we don’t expect that everyone will look at renting their places out. But we have been conservative in those numbers for precisely that reason, because the hope and the encouragement is that people will actually utilize their empty, vacant properties to be able to increase the supply of housing in communities.

A. Weaver: The follow-up question, then, is with respect to the budget. The question is: why is the government anticipating flat revenues, then, from the speculation tax? Shouldn’t they be expecting a diminishing amount over time if the speculation tax were to take the effects that the government is hoping it would take?

Hon. C. James: Thank you to the member for the question.

I think it’s important to note, and we’ve talked about this on other taxes, that it’s important to be able to see behavioral change to be able to build into the budget. I expect that there will be adjustments after the tax is in place and after we start seeing behaviour.

If adjustments need to be made in the budget, the adjustments will be made in the budget. But we certainly expect that there are more vacant homes that are going to be not rented out that will continue to bring in tax revenue. But adjustments that need to occur can occur, and that’s why we build improvements in the budget, as we go along.

A. Weaver: I’d like to switch, then, to land that’s proposed to be under development.

Now, I’ve heard a number of concern. I’ve met with a number of developers, both here in Victoria and Vancouver and other areas, with respect to the problem that could arise if the speculation tax is applied to undeveloped land. The scenario you might imagine is a builder acquires some land, is now waiting — in some cases, a couple of years — for a permitting process to go through with the local municipality. The speculation tax starts to get involved.

The actual builder or developer has to face one of two choices. Do they pay this up front, and then that, ultimately, would be passed along to the buyer — which actually goes against government’s mission and mandate to try to create affordable housing — or do they walk away from the project because it’s just not worth the hassle.

My question with this is: will the speculation tax, as implemented, be dealt with in a way similar to the way that Vancouver has addressed the vacancy tax, by ensuring that developers aren’t liable to pay the tax in specific cases where land is being collected and put in a process for development?

Hon. C. James: Thanks to the member.

We certainly have been engaged in those discussions. I think the member points out the Vancouver model. I think one of the discussions…. We’ve been working with UDI, we’ve been working with the Canadian Home Builders Association, the urban land initiative — there are a number of groups that we’ve been working with — to look at exactly the kinds of challenges that the member raised.

There are different development timelines in different communities. Some require an upfront consultation with the community before the development permit is even issued. Others require the development permit and then out to do the consultation. So we’re looking at all of that as part of the implementation. There will be an answer shortly.

We’re working with those groups to make sure that we capture all of those kinds of examples that the member raised.

A. Weaver: I have two final questions. The last one on this topic is that one of the key things, of course, in the industry is uncertainty. Uncertainty creates turmoil in businesses. I know some examples of projects that are on hold because of this uncertainty.

My question is: when can developers expect certainty on whether or not they will be subject to this tax?

Hon. C. James: Thank you to the member for the question.

We certainly recognize that. People are eager to know all of the final details. We want to make sure we finish up these consultations and take into account all of the examples. So “soon” is what I would say. I certainly hope before the summer that we’ll have all of this wrapped up and have the details out.

A. Weaver: Thank you to the minister for the answer. My final question is with respect to secondary suites. Now, I’m not sure whether these are covered or not, so my question is: if the intention of the speculation tax is to actually reduce the number of homes being left empty, are these situations included now, or is there a way of exempting them from the speculation tax?

Let us suppose that I am somebody who lives in Victoria or Vancouver and I have a secondary home in Kelowna and that secondary home stands vacant. But now I put a secondary suite in that secondary home, and I recognize there’s an opportunity — an opportunity for income, safety for my house because I’ve got now somebody living in that secondary suite, and also I might perhaps eliminate the speculation tax.

Would a person who is subject to the speculation tax be exempt from the speculation tax if they were to create a secondary suite in their house that would not otherwise have existed were there not the speculation tax in place?

Hon. C. James: Certainly, it’s consistent with the intent, which is to make sure that people are renting their places out, so that would apply. They would be renting their place out.

Video of Exchange

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.”

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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.