The City of Kelowna is still waiting for its money from the speculation tax, according to the mayor.
“The money collected by the provincial government through speculation tax is supposed to be flowing to municipalities to help us with affordable housing,” Mayor Colin Basran said. “And right now, that’s not happening.”
The speculation tax is charged on second homes in certain areas of B.C. that are vacant for more than half the year.
The governing NDP touts the tax for turning empty homes into properties with people living in them.
“It addressed what was, at the time, a critically important issue: overwhelming numbers of vacant properties and offshore investments that were driving up the cost for British Columbians,” Premier John Horgan said earlier this month.
“Those were our objectives. It was not designed to be a revenue driver. It was designed to be a housing initiative, and I think it’s been successful.”
However, the B.C. Liberals continue to slam the speculation tax as a failure.
“It’s misleading. It’s a wealth tax,” housing critic and Kelowna-West MLA Ben Stewart said.
“The mayors and councils were promised that they would have input and how that money was going to be spent in their community,” he added. “And that hasn’t happened at all.”
According to recently-released numbers, the province collected $88 million from the speculation tax across B.C. in 2019.
Approximately $4 million was collected from properties in Kelowna and West Kelowna, the only municipalities in the Okanagan hit by the tax.
However, that same year, the province only spent $2.6 million on new affordable housing projects in the Central Okanagan.
“(The money) is being spent as the BC Housing sees the priorities in the province, not how the communities where the money’s been collected,” Stewart said. “So that’s the disconnect.”
Basran has been an outspoken critic of the speculation tax and has previously asked the government for the opportunity to opt out.
“We’re a little bit frustrated that we had this tax imposed on our community, which we didn’t want,” he said. “And we have yet to see any of that money flow back to help us alleviate the affordable housing and rental situation and to benefit our residents.”
“That money would go a long way towards perhaps the city purchasing property for more affordable housing projects,” Basran added.
While Kelowna has seen a number of affordable housing projects open recently, the mayor said most of those promises were made well before the speculation tax was introduced.
“It should be over and above what is currently being provided for supportive housing,” Basran said.
The province said the speculation tax has helped increase the vacancy rate across B.C. by 7 per cent.
“The 2019 declaration data and reports from organizations like the Canada Mortgage and Housing Corporation show an increasing number of properties are being repurposed as long-term rentals, and this shift is critically important for our urban communities,” Robinson said.
“This change in behaviour, and the tax continuing to capture speculators while exempting almost all British Columbians, shows this tax is working for the people of our province.”
However, according to the latest data released by the Canadian Mortgage and Housing Corporation, in 2019, Kelowna’s vacancy rate increased from 1.9 per cent to 2.7 per cent, which is still a tight market.
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