During the election last year, all three provincial parties agreed housing was not affordable in the province. With the NDP in government, they announced a 30-point housing plan which promises $6.6 billion over 10 years to build 114,000 affordable homes through partnerships and build 14,000 affordable rental units for individuals, working families and seniors. New taxes on speculation have also been introduced, which the government says will bring in $200 million annually, but it is not without controversy.

When asked if the funds from the speculation tax would go directly to affordable housing, Michael Prince, a professor of social policy at the University of Victoria, said government revenue is not typically routed like that.

B次元官网网址淰ery few tax measures are ever earmarked for particular functions,B次元官网网址� said Prince. B次元官网网址淎s a casual outsider, you might be led to believe that this money will be directly plowed into housing initiatives, but legally this goes into the Consolidated Revenue Fund: the general piggy bank.B次元官网网址�

Given the new investments in housing, child care and health care, Prince said the money has to come from somewhere.

RELATED:

During last yearB次元官网网址檚 election campaign, Prince said people expected some sort of action from both the NDP and the Greens on the issue, but they were surprised by that taxB次元官网网址檚 effect not just on foreign buyers, but on Canadians as well. Critics have called it a B次元官网网址渃abin tax,B次元官网网址� since it affected some Gulf Islanders that only live there part-time. On Monday, B.C. finance minister Carole James announced changes to the speculation tax, exempting rural cabins and certain areas like the Gulf Islands, and reserving the two per cent tax for foreign buyers while introducing a one per cent rate for out-of-province owners and 0.5 per cent rate for British Columbians.

MondayB次元官网网址檚 announcement stressed that B次元官网网址渙ver 99 per cent of British Columbians will not pay the speculation tax.B次元官网网址�

In a March 26 news release, B.C. finance minister Carole James said, B次元官网网址淲e are going after speculators who are clearly taking advantage of the market, leaving homes vacant and driving up prices.B次元官网网址�

B次元官网网址淚 think you could argue that theyB次元官网网址檙e now closer to the original intent,B次元官网网址� said Prince.

Prince said earlier consultation or details ahead of time would have been helpful, but officials who create the tax are in a dilemma. He said officials tend to keep future tax measures secret, particularly business taxes, so B次元官网网址渘o one gets insider knowledge, or benefits ahead of time from a planned tax change.B次元官网网址� Detailed consultations would make secrecy difficult, B次元官网网址渟o governments in a way trap themselves into getting a reaction sometimes.B次元官网网址�

Ken Peacock, chief economist and vice-president of the Business Council of British Columbia, said speculators are just one part of the problem. He thinks the government tried to slow the rise of home prices, and maybe even level them off, but by using the tax to change public behaviour and raise revenue, the government has placed themselves in B次元官网网址渁 tricky situation.B次元官网网址�

B次元官网网址淏.C. is a desirable place to live. [There are] land constraints in the Lower Mainland, steady inflows of immigration, inter-provincial migration. Add that all up, and thereB次元官网网址檚 a fair amount of demand B次元官网网址� The fundamental is that there is excess demand over supply in the housing which will drive up prices over time.B次元官网网址�

Peacock said if the goal was to improve equity between children and their parents on housing affordability (known as intergenerational equity), the tax doesnB次元官网网址檛 do much because for first-time homebuyers or young renters, a hypothetical five-per-cent price decrease is insignificant since a home is sometimes out of reach by hundreds of thousands of dollars. Prince said older people with money tied up in housing donB次元官网网址檛 want to see prices drop too far.

The province has allowed some exemptions for the speculatorB次元官网网址檚 tax. For example, if a home is rented out for at least six months out of the year starting in 2019, the tax does not apply. But Peacock believes it wonB次元官网网址檛 do much to increase the housing stock for prospective long-term residents because they likely wonB次元官网网址檛 want to move every six months.

B次元官网网址淚t captures everybody who has an investment property and rents it out, so they had to pick a threshold and it sounds like they picked six months.B次元官网网址�

If the tax only affected foreign buyers, said Prince, it would be a politically palatable way to raise that revenue.

B次元官网网址淓veryoneB次元官网网址檚 for a tax that affects somebody else,B次元官网网址� he said. But British Columbians who live part-time in vacation homes do not see themselves as speculators, B次元官网网址渟o the governmentB次元官网网址檚 learned that they could have defined this more narrowly and avoided this grief.B次元官网网址�

Prince said if an election were this month, this would be B次元官网网址渁 headache,B次元官网网址� but if the NDP survive this and govern until 2019, B次元官网网址渢his is one of those issues I think that could fade in peopleB次元官网网址檚 memories if they handle it well from here on in.B次元官网网址�

Prince said the Clark government, and to a lesser extent the Horgan government, has been using language that prioritizes housing for British Columbians who live and work in the province, rather than a commodity.

B次元官网网址淚 think there has been a clear shift in the rhetoric, how close it is to reality IB次元官网网址檓 not absolutely sure, to be honest,B次元官网网址� said Prince. B次元官网网址淭here is a sense that in some parts of the province that people have neighbours who theyB次元官网网址檝e never met, whom theyB次元官网网址檝e never seen, whoB次元官网网址檝e never moved in. Fairly or not, they attribute that to this unaffordability issue.B次元官网网址�

reporter@peninsulanewsreview.com
Like us on and follow us on