West Kelowna and the Regional District of Nanaimo are speaking out against B.C.’s proposed speculation tax. The tax was proposed as a way to deal with the ongoing housing affordability crisis.
West Kelowna Mayor Doug Findlater said his city is a growing community that relies on development. He said the levies could slow or “kill” the city’s growth, which would have a negative impact on their infrastructure.
LISTEN: West Kelowna asks for exemption from B.C. speculation tax
“We lack sidewalks and parks in our community,” Findlater told CKNW’s The Simi Sara Show. “It’s a wonderful place to live, but development is helping us straighten out the infrastructure deficit we have, both directly and through providing revenue to the city.”
City Councillor Rusty Ensign said the tax might work for cities in Metro Vancouver but not for the Kelowna region.
WATCH BELOW: West Kelowna wants out of speculation tax. Megan Turcato reports.
“We’re collateral damage here. It’s a tourism market here and it’s second homeowners that come here for tourism that bring all their money with them,” Ensign said. “If there are vacant second homes that are owned by foreign homeowners in Greater Vancouver, that has nothing to do with our situation here.”
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Findlater and the city’s Chief Administrative Officer Jim Zaffino are scheduled to meet with Finance Minister Carole James next Wednesday, but the city is hoping Premier John Horgan will also be in attendance.
Ensign said this will be a joint effort with the City of Kelowna, but the city’s Mayor Colin Basran has yet to comment.
WATCH: Will new B.C. budget real estate taxes cool Okanagan market?
Vancouver Island communities also want out
Meanwhile, multiple communities from the Regional District of Nanaimo have also joined West Kelowna in raising their concerns about the tax.
Parksville Mayor Mark Lefebvre said his city also wants out. He said tourism plays a significant role in their local economy, noting the community is home to many shared ownership and timeshare resorts.
“These properties are broadly marketed and sold to users as a vacation home as part of the year and placed in short-term rental pools when they are not used by their owners,” Lefebvre said.
Lefebvre said the speculation tax has had a ripple effect on the construction and real estate industry, as many Albertans have been scared off and are pulling out of pre-sale arrangements.
“They don’t want to be involved until they hear the end of where this speculation tax is going to go,” Lefebvre said. “So we’ve convinced them to ask for an extension while we have written to the minister and Premier.”
The Regional District of Nanaimo is also requesting a meeting with the finance minister to ask about excluding homes located in recreational zones.
Finance Minister responds to concerns
But James says people’s concerns are not going unheard. She said the provincial government is listening to all the advice people are putting forward, including Kelowna.
“We actually had conversations already in our office with people from West Kelowna, we’ve reached out to Kelowna as well,” James said. “We are taking that into consideration.”
But she said she is also paying attention to Kelowna residents who are concerned about the city’s vacancy rate.
“If you take a look at the vacancy rate in Kelowna, it’s at 0.02 per cent,” James said. “That is a struggle for people to be able to live in Kelowna, for workers to live and work in their community.”
The Finance Minister added that the details of who will have to pay the tax and who will be exempt from it will not be released until later this spring. The tax is expected to be in effect this fall.
Despite the minister previously saying the tax would not impact British Columbians, she later said people who own vacation or secondary homes in Metro Vancouver, the Fraser Valley, Victoria, the Capital Regional District, Kelowna and West Kelowna may be affected.
Both the Fraser Valley and Victoria say they are not concerned about the proposed tax. Victoria’s Mayor Lisa Helps said her city explicitly called for the tax and will not back out.
Mission Mayor Randy Hawes says there aren’t too many vacation-type homes in the Valley, so he doesn’t know how much money the province will actually make from it.
“If we begin to hear a lot of concerns, then certainly we would be writing to the government asking for some rethinking, but to date haven’t heard anything,” he said.
“There’s a lot of vacation-type homes in Harrison and some in Cultus Lake, but generally speaking people don’t buy vacation-type housing in Misson or Chilliwack or Abbotsford.”
Hawes says, right now, one of the main concerns for mayors in the Valley is homelessness.