Speculating about government’s taxation addiction
By Ian Cobb
Governments are addicted to taxation.
They always have been – dating back thousands of years.
Governments tax; taxpayers bitch. Wash, rinse, repeat.
The latest slithering over that tax floor, sticky from tears, comes courtesy the Lower Mainland Government, otherwise known as the NDP/Green Coalition B.C. government.
Seeking to halt the decades old problem of real estate speculation, a ‘Speculation Tax’ is being proposed by Victoria.
“The speculation tax will target foreign and domestic speculators in B.C. These are homeowners who have removed their units from B.C.’s long-term housing stock – meaning they are not owner-occupied or a qualifying long-term rental property.
Satellite families – households with high worldwide income that pay little income tax in B.C. – will also be captured by the tax,” the provincial government stated when it lobbed the idea out a couple of weeks ago.
“The speculation tax will initially apply to the Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and in the municipalities of Kelowna and West Kelowna.
“In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019, the rate will increase to $20 per $1,000 of assessed value.” Yada yada
You may be thinking, phew, at least the Kootenays aren’t included in that! What luck!
Don’t be so sure that once a thick tube of cash chugs annually to Victoria from the targeted areas that the addicts won’t want more.
Like grease-lipped princeps in feast deliriums, they will turn their eyes east to the Kootenays and Columbia-Shuswap and expand the empire to capture even more sweet taxpayer cash to pay for bridges in the Lower Mainland and other general government screw ups and such.
As you all know, our local economies are nicely bolstered by the steady arrival of second home owning Albertans, and folks from elsewhere. These people in many occasions become full-time residents and have over the decades become a part of life in our own particular slices of Rocky/Purcell Mountain heaven.
Local governments have expressed concerns about this proposed tax, from the District of Invermere, which is about 30% second homes, and Regional District of East Kootenay. Electoral Area F is about 65% second homes. It also has an annual property tax roll on par with the City of Cranbrook’s.
An attempt to solve an out-of-control problem in the Lower Mainland could easily become a major economic disaster in the land beyond Hope once a government that traditionally cares nary a sniff about said area needs to feed its addiction. When government needs more money, and governments always need more money because that is how professional government people deal with mistakes etc., by demanding more money from their employers, do you not think some cubicle dwelling, head-set wearing lower level bean counter will do some math for a desperate deputy minister one day down the road?
Considering this government’s current relationship with Alberta, one pauses even longer to think.
While the Lower Mainland Government would likely brush aside Invermere’s and the RDEK’s concerns for obvious reasons, perhaps it will hear West Kelowna Mayor Doug Findlater who is the latest voice to express contempt for the proposed tax.
“We’re very concerned about the overall economic impact. We are fundamentally concerned this would push property values below the amount of equity people have in their homes. It’s a potential financial crisis,” said Findlater, adding, “There is clearly a crisis in confidence about the future over what the province may do.”
May more mayors and councils start speaking out. We should all be speaking out because these kinds of things can snowball.
Canadians started paying income tax in 1917 to help pay for the staggering costs of the Great War. One century later, that tax has become Ottawa’s favourite cash hose; so much for a temporary tax.
A provincial example of a tax that went too far is the Property Transfer Tax, which hit the books with a slobbery thud in 1987, with a goal to combat tax speculation and wealth. It now brings in almost $1 billion a year to provincial coffers as it spread province-wide, from Vancouver where the concept was needed. The Socred tax was fine to the BC NDP and the BC Liberals after.
Finance Minister Carole James says the tax is a work in progress and more details are to come in the spring with legislation expected by the fall.
We have one request honourable minister; apply your remedy to a mostly Vancouver and Vancouver Island problem with focus and commitment to duty to the entire province of B.C. And that would mean by not constantly penalizing the rest of the province for the endless Lower Mainland/Vancouver Island over-development mess that your various ministries have allowed to occur for a myriad of political and silly reasons.
Swear to us; promise us that you won’t expand the Speculation Tax and maybe we can start talking again.