A Sooke business continues to face challenges expanding as the federal government upholds a ban on foreign purchases of Canadian housing.

Michael Thornton, founder and developer of Sooke Point Ocean Cottage Resort, acquired the property in 1996 and has been attempting to turn it into a world-class resort ever since.

He began selling vacation cottages in 2014. Now, he says the Prohibition on the Purchase of Residential Property by Non-Canadians Act is hindering the future of the business he envisioned almost 30 years ago.

B次元官网网址淭o make money and put it into amenities and do expansion, you need that extra velocity, that extra profitability, if you will, per square foot that you can reinvest,B次元官网网址� Thornton said, emphasizing the importance of selling to foreign buyers.

B次元官网网址淭hat was all stripped away without advance notice from the federal government a little more than two years ago.B次元官网网址�

The act, originally introduced in early 2023, prohibits non-Canadians from purchasing real estate in Canada, directly or indirectly. In 2024, the government granted a two-year extension, cementing the ban until Jan. 1, 2027.

The ban does not impact any of Thornton's current business with foreign purchasers who entered into agreements prior to its introduction, or any business with Canadian purchasers. However, it is making it more difficult for Thornton to expand and build amenities he once envisioned for the resort, considering that originally foreign buyers made up a third of his revenue.

"We built a show cottage in 2013 and started doing pre-sales in 2014. We sold over $50 million worth of pre-sales, about a third of which were to foreign purchasers," said Thornton, who explained foreign purchasers would buy the cottages often only staying at them a few weeks of the year, leaving them to be managed by a separate rental management company B次元官网网址� True Key Hotels and Resorts. Thornton planned to invest in new amenities for the resort, eventually including a hotel, which he is currently unable to construct without foreign investment. 

Today, SookePoint Ocean Cottages has about 70 cottages and suites that have been delivered to owners, with another 20 on the way along with yacht suites, but now developing further is a challenge. 

B次元官网网址淭he issue stems from an inaccurate definition within the act, which has unintentionally misclassified destination resort properties within Census Metropolitan Areas as B次元官网网址榬esidential,B次元官网网址� even when zoning explicitly designates them for tourism and resort use,B次元官网网址� Thornton said in a press release.

He further asserted that since his property maintains a Class 6 B次元官网网址楤usinessB次元官网网址� designation, it should be exempt, especially given the economic support he says it could bring from tourism, by constructing a hotel. In a statement from Geoff Koehler of the Ministry of Housing, Infrastructure and Communities explained that the properties were considered recreational and therefore fall under the actB次元官网网址檚 jurisdiction.

B次元官网网址淐anada is in the midst of one of the most impactful housing crises this country has ever faced,B次元官网网址� Koehler stated.

B次元官网网址淭he prohibition reduces the impact of foreign ownership demand and is just one of a series of concrete measures taken by the federal government to address CanadaB次元官网网址檚 housing shortage. It ensures more homes are used for Canadians to live in, not as a speculative asset class for foreign investors.B次元官网网址�

Thornton, however, did not intend to sell dwellings for long-term use in cottage or a potential hotel. But given the resortB次元官网网址檚 isolation in East Sooke, there are no surrounding amenities available for guests, requiring Thornton to provide kitchens and more home-like features to attract buyers. This has contributed to his classification as a recreational property, meaning his cottages fall under VictoriaB次元官网网址檚 CMA and are impacted by the ban.

B次元官网网址淭he way they have defined what is residential and what is a dwelling unit catches destination resorts that are not meant to be residential,B次元官网网址� Thornton said.

B次元官网网址淓ven if we want to pre-sell our hotel suites, the bylaw absolutely prohibits stays other than for short-term use.B次元官网网址�

Meanwhile, businesses in areas outside CanadaB次元官网网址檚 CMAs, in places like Banff, Whistler and Mont-Tremblant, have not been impacted.

B次元官网网址淭heyB次元官网网址檙e basically putting us out of business B次元官网网址� or trying to. TheyB次元官网网址檙e seriously putting us on life support, and there seems to be no concern at all,B次元官网网址� Thornton said.

B次元官网网址淲e have been unable to build a restaurant, a wedding facility or a spa. We're not operating the way we planned. We donB次元官网网址檛 have the money to do the things we planned because the federal government has chained us up and prevented that.B次元官网网址�