October 18, 2018 5:32 pm
Updated: October 18, 2018 7:44 pm

B.C. government gets Green support for speculation tax after dropping rate for Canadians from outside B.C.

WATCH: Finance Minister Carole James and BC Green Party leader Andrew Weaver announce they have reached a deal over the new speculation tax.

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B.C.’s minority NDP government has reached a deal with the B.C. Green Party regarding the province’s new speculation tax.

The government has agreed to hold an annual meeting between the provincial finance minister and municipalities affected by the tax, to direct revenue raised by the tax to social housing projects in some communities, and to apply a lower tax rate to all Canadian permanent residents, and not just permanent residents of B.C.

The amendments were sought by the B.C. Green Party.

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In return, Green Party leader Andrew Weaver is dropping his demand to allow municipalities to opt out of the tax if they want to.

“We are in the midst of a housing crisis and we need to act. Once the legislation is amended, the Green caucus has committed its support in passing the bill so that we can tackle out-of-province speculation in B.C.’s housing market and help turn empty properties into homes for people,” said Finance Minister Carole James.”Both sides are showing compromise in order to put housing solutions for British Columbians first.”

READ MORE: B.C. government introduces legislation to bring in speculation tax, employer health tax

The first amendment will create an annual meeting between the Minister of Finance and mayors in the affected areas to review the tax and relevant performance measures.

The second amendment will direct revenue raised by the tax to affordable housing projects in Nanaimo-Lantzville, the Capital Regional District, Metro Vancouver, the Fraser Valley and Kelowna-West Kelowna. The province says this will ensure residents of those areas will be able to see the benefits of the tax in their own communities.

WATCH HERE: NDP government introduces speculation tax legislation

The biggest change to the speculation tax legislation will be a change that will permanently set the tax rate for Canadian citizens and permanent residents who reside outside of British Columbia, and who are not satellite families, at 0.5 per cent. The original legislation would have required Albertans and other Canadians who owned homes that remained empty in B.C. to pay a 1.0 per cent tax each year on the assessed value of the home.

WATCH: ‘This is tax policy that’s just melting away like a snowman in July’: BC Liberal leader Andrew Weaver on speculation tax

The change could bring $30 million less into the provincial coffers each year.

“While we strongly support the intent of the first two amendments, we are of the view that the third amendment lessens protections against out-of-province speculative investment,” James said. “We believe it is fair to ask those who do not pay income tax in B.C. to pay their fair share, but in the spirit of compromise we will support this amendment.”

Weaver originally told reporters in September that he would put forward an amendment to allow mayors to choose if they wanted the tax applied to their municipality. The Green Party will now formally introduce the amendments with the expectation governments MLAs will support them.

READ MORE: Kelowna, Okanagan real estate board still opposing speculation tax

“One of my key issues with this tax is that it was a blunt instrument applied to communities with unique circumstances. My amendments to include local governments in an annual meeting to review the tax and to dedicate any funds raised from this tax to affordable housing in their communities, strike a far better balance,”  Weaver said.

“Another key concern of mine was that Canadians should be treated equally. We are one country and even if they don’t pay income tax in B.C., Canadians pay federal taxes that benefit our communities.

Liberal leader Andrew Wilkinson says the Liberals will not support the tax, even with the amendments.

“The NDP tax program is falling apart and Andrew Weaver has produced nothing after the usual bombastic huffing and puffing,” Wilkinson said.

© 2018 Global News, a division of Corus Entertainment Inc.

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