It has been sharply reduced, the coverage area has been narrowed and the exemptions have been expanded. But the B.C. Liberal opposition is still mounting a big offensive against the NDP’s speculation tax, saying it’s subtracting housing starts as fast as the NDP is trying to increase them.
Cabinet ministers on Tuesday stressed how acute the housing crisis is, and announced with due fanfare measures to increase the supply of housing. On Wednesday, the Liberals devoted much of question period to accusations that the measures are actually shrinking it.
Liberal Leader Andrew Wilkinson listed several major projects that he said are stalled or at risk because of the speculation tax. “Over a billion dollars of shrinkage in the B.C. economy in less than nine weeks, all because of the finance minister’s aggressive tax agenda and the premier’s inability to admit an error and back off on the speculation tax.”
With Saanich this week joining the list of municipalities that want out of the speculation-tax coverage area, the question was whether the province would exempt any local government that asks.
That’s not going to happen. Finance Minister Carole James confirmed that her retreat last month is the only one planned.
Wilkinson said it was a defining moment for the government when it pursues an affordability agenda to create more housing, while more than 1,000 housing units are cancelled. James isn’t normally the subject of verbal attacks, but Wilkinson piled on: “The finance minister has just made a bit of a fool of herself.”
Subject to verification, his numbers look a bit inflated. Some developers have complained about the tax and mused about putting some projects on pause. There’s scant evidence yet of developers irrevocably cancelling major projects.
What’s more likely is that some are taking a time-out to assess the impact of the new version of the tax. One local official said the speculation tax is much more likely to have an impact on higher-end homes than on rentals.
James drew the political lines around the tax, saying she recognized some have benefited from speculation.
“I recognize that there are people who don’t want things to change because they have done very well. But we are standing up for the families of B.C.”
The other theme is that they were driven to drastic measures by the Liberals’ failure to do much of anything as the housing problems intensified.
Wilkinson said she was taking a “pig-headed approach” and was “happy to continue blundering around in the marketplace destroying jobs and wiping out housing units. ”
It’s clear both sides are firmly camped in opposing positions. The NDP is tying the tax to a well-intentioned effort to do something about the housing crisis. The Liberals are isolating it from the overall housing thrust and saying it’s a job-killing attack on investors.
The highlight of the exchanges came when Liberal MLA Ralph Sultan, the elder statesman of the legislature, cited NDP MLA Bowinn Ma’s recent tweet about the speculation tax: “If you’re not pissing off somebody, you’re not doing anything important.”
Sultan, likely the only MLA who can get away with reading those words into the record, asked the housing minister: “Does she, too, feel it’s important … to be pissing off British Columbians with these half-baked taxes?”
The answer was inconclusive, just like the tax itself.
The first version rattled nearly everyone who owns more than one home. In five specified regions, people who own homes there but don’t pay taxes in B.C. and/or left them vacant would pay a punishing new annual tax.
Unrest brewed for more than a month before James backed down. Some prime cottage-country communities were exempted. B.C. citizens were exempted from future hikes in the rate, and made eligible for a grant to cover much of what’s left of the tax. And Canadians outside of B.C. were granted similar relief from future hikes.
The speculation tax will be fully revealed in legislation this fall, but as described now, it’s a shadow of its former self. Still, its lasting impact is the clear message sent to investors from elsewhere — you’re not currently welcome in the housing market. The government will defend that message, but the Liberals want to capitalize on the damage that ensues.
