Former premier Mike Harcourt is recommending the B.C. government reconsider both the controversial school tax increase on homes worth more than $3 million and the speculation tax.
Harcourt, speaking to reporters before a Global Issues Dialogue lunch in Victoria, said solving B.C.’s housing crisis is complex and governments shouldn’t be afraid to address public concerns.
“You have to increase supply, you have to speed up the process and the taxing has to be fair,” Harcourt said. “I think it is being cast too broad. I think some form of speculative tax I don’t have a problem with. But I think this needs a famous second look.”
The speculation tax was introduced by the provincial government in February in an attempt to stop homeowners from using properties solely as investments.
Those who live outside of Canada and do not pay taxes here will pay two per cent on the assessed value of their homes starting in 2019 if the property remains empty. Canadians who do not live in B.C. will pay a tax of one per cent starting next year. British Columbians who own multiple homes and keep them empty will pay 0.5 per cent tax.
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The tax will apply to Metro Vancouver, the Capital Regional District (excluding the Gulf Islands and Juan de Fuca), Kelowna, West Kelowna, Nanaimo-Lantzville, Abbotsford, Chilliwack and Mission.
Former Saskatchewan premier Brad Wall, who was speaking at the same lunch as Harcourt, said the speculation tax has led people in his province to move away from buying properties in B.C.
“I have lots of people in Swift Current, Saskatchewan that have property in lots of the targeted areas of the speculation tax and they don’t feel very welcome anymore,” Wall said. “One of them told me to him B.C. means ‘Bring Cash’ and I am not sure that is the brand any jurisdiction wants no matter who the government is.”
But Finance Minister Carole James says her government’s goal is not to make the province a playground for people outside of B.C., but rather a place that has affordable homes for people who want to live and work here. At the same time the province it introduced the speculation tax, it also increased the foreign home buyers tax and expanded its boundaries.
“There are no questions there are people who have benefited from the status quo,” James said. “What we as a government are focused on is putting together an affordability plan for British Columbians, for people who live here.”
But local mayors are worried that the tax may chase developers away. Langford Mayor Stew Young said he is deeply concerned that organizers pulled out of a major golf event at Bear Mountain Resort because there was limited room for success to sell properties at the resort once the tax was introduced.
“My point is we are having problems right now because I have lost a lot of big events that were going to come, the PGA five-year contracts,” said Young.
“They said if I can’t sell to Americans, I can’t sell to Albertans or Torontonians, they pulled.”
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