Third Session, 41st Parliament

(2018) OFFICIAL REPORT

OF DEBATES

(HANSARD)

Thursday, October 18, 2018

Afternoon Sitting

Issue No. 162

ISSN 1499-2175

The HTML transcript is provided for informational purposes only.

The PDF transcript remains the official digital version.

CONTENTS

Routine Business

Introductions by Members

Orders of the Day

Second Reading of Bills

Bill 45 — Budget Measures Implementation (Speculation and Vacancy Tax) Act, 2018

Hon. C. James

S. Bond

N. Letnick

N. Simons

B. Stewart

A. Weaver

R. Coleman

Point of Privilege (Reservation of Right)

A. Weaver

Second Reading of Bills

Bill 45 — Budget Measures Implementation (Speculation and Vacancy

Tax) Act, 2018 (continued)

S. Thomson

S. Chandra Herbert

A. Olsen

J. Thornthwaite

THURSDAY, OCTOBER 18, 2018

The House met at 1:31 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

A. Weaver: To great fanfare, we celebrated the retirement of Libby Sorenson a few

months ago in this Legislature. Today it gives me great pleasure to welcome

her back in her new sessional role. I suppose she started a few days ago,

but today was the first time I’ve seen her.

Libby, I hope you enjoyed your summer break, and it’s wonderful to

have you back. It’s great to have you back in the House.

Would the House please welcome her with the same enthusiasm as we

wished her in her very short retirement a few months ago.

Orders of the Day

Hon. M. Farnworth: I call second reading debate of Bill 45.

Second Reading of Bills

BILL 45 — BUDGET MEASURES

IMPLEMENTATION (SPECULATION

AND VACANCY TAX) ACT, 2018

Hon. C. James: I move that Bill 45 be read a second time now.

This bill enacts the Budget Measures Implementation (Speculation

and Vacancy Tax) Act, 2018.

I’m so pleased to have the opportunity to stand in this chamber

and talk about Bill 45. As members in this House know, there’s been much

discussion about this bill, and I’m certain there will be much more

discussion to come over the next number of weeks as we debate this

legislation. People will recognize, as I go through my notes, that I

will speak about the bill as presented, and I will speak at the very end

about some discussions that took place today so that members are up to

date on that as well.

I’m so proud to speak to Bill 45 because it truly takes critical

steps in tackling one of the biggest challenges faced by people in

British Columbia. There isn’t a day that goes by that we — I’m sure all

members of this House — don’t hear from constituents or hear from the

public about people who are struggling to be able to buy a home, rent a

home, find a home.

We’ve seen the crisis grow and grow over the last number of years.

It began in the Lower Mainland but has expanded across to urban settings

and across to other parts of British Columbia. We saw, under the former

government, outside money flow into cities and suburbs, and houses

really became commodities — commodities to invest in, instead of homes

for people to live in.

Housing prices became completely disconnected from anyone’s local

income, and rental crises spiked while vacancy rates dropped to near

zero. We have a crisis, and “crisis” is not too strong a word to

describe the situation we face when it comes to housing in British

Columbia.

[L. Reid in the chair.]

Working and middle-class British Columbians can’t even imagine,

can’t even dream, of affording a home. Families are working harder. I’ve

talked to people who talk about good salaries, two working parents in

the family, and are still not able to find a home or an affordable place

to be able to rent.

[1:35 p.m.]

We have workers who are leaving our urban areas — and our

province, in fact — looking for places where they can afford a home.

Businesses can’t find the workers that they need to keep the economy

going. I’m sure others, again, have heard the same stories that I’ve

heard in our urban settings where you have businesses. I talked to a

restaurant the other day that’s looking at closing down on Mondays and

Tuesdays now because of staff, because they can’t find staff to work in

their restaurant. What does the staff tell them? They can’t find an

affordable place to live. They’re not able to live in the community that

they need to work in.

That has a huge impact on not only the individuals in the

community but, in fact, on the businesses and, therefore, on our

economy. If employers are recruiting people to work in their

businesses…. Again, I’ve heard this story often. They find someone who

is a perfect fit for a unique position in their company. Then the person

says that they’re keen to come, and they take a look at the real estate

page. When they take a look at the real estate page for one of those

urban settings, they decide that they can go somewhere else, make a fair

wage and not pay as much when it comes to housing. So I think, when you

take a look at the impact of affordable housing, the impact of

affordable housing is there, certainly for businesses and certainly for

our economy.

I also just want to mention the story that was in the Globe

and Mail earlier this week that talked about Jesse Kirkpatrick

and Jackie Myerion. This couple was living in a two-bedroom basement

suite in Surrey with their young children when they were given a month’s

notice that they had to move, vacate the property, so that the

landlord’s family could use the property, which the landlord is able to

do. The landlord was doing the right thing in giving them notice. But

Mr. Kirkpatrick said: “We were looking daily for houses to have a place

to live. I stopped working just so I could spend time trying to do that,

but we couldn’t find anything at all.”

This family ended up living with their children in a tent in an

East Vancouver park. This was a story from last week. They told the kids

they were camping, to try and convince the kids that it was nothing to

worry about, so the kids didn’t panic about living outside and being in

a situation like that. That’s why, again, I have to say that a crisis is

not too strong a word to describe the situation we’re faced with in

British Columbia.

Two weeks ago I was at an event in Vancouver, hosted by the Metro

Vancouver Alliance. It’s a group of organizations — social groups,

labour, faith groups — that come together to talk about issues that they

believe are important for their communities. One of the issues they

raised, of course, was housing and the crisis that we face in housing.

One of the young women at the event stood up and talked about what it

was like to have to move three times in a time period of nine months and

what that did to her life, to have to upend herself, to have to find

another place, the stress of going through and finding another

place.

She also talked about the fact that she stayed in a dangerous

situation with a roommate who, from her perspective, was a challenge and

created a dangerous situation. She didn’t have a choice but to stay in

that situation because she couldn’t find a place to rent. This was

someone who was working, who had the salary and couldn’t find a place

that she could afford.

I met two young women who are going to nursing school here in my

community. They’re living in a third-story suite in a house that’s been

renovated. The two nurses told me and showed me, in fact, and it was

obvious going up to say hello to them, that you went up a staircase to

the third floor that had no railings, missing parts of the staircase —

obviously a dangerous situation. We got to the apartment. They talked

about the challenges that they had in the apartment, the things that

needed fixing — plumbing, electrical.

They told me that they didn’t raise the issues with their landlord

because they were absolutely terrified that they were actually going to

be evicted and, therefore, wouldn’t be able to find a place to live.

Those are two people who are training to be nurses at a time when we

know we need employees in our province, and housing is the biggest

impact.

There is no question, in bringing forward this legislation, that

there is a crisis that needs to be addressed. There were opportunities

for the former government to act. There were opportunities to be able to

move on many of these pieces, but that didn’t happen. They let a

speculative real estate market drive up the prices, heat up the market

and cause the kind of crisis we see now.

[1:40 p.m.]

That approach is over. As a government, we have a responsibility

to act. A government is supposed to act on behalf of the people of

British Columbia. The people of British Columbia said housing is the

critical issue that needs to be addressed, and we are going to act as a

government.

We believe that the people who live and work in B.C. should be

able to find and afford a place to live. It’s a basic, basic agreement

with the people of British Columbia. That’s why we’re making the

single-largest investment in affordable housing in B.C.’s history: $7

billion over ten years. It’s why we increased and expanded the foreign

buyers tax, and it’s why we’re moving forward with the speculation and

vacancy tax.

We’re seeing some early, positive signs that the market is

starting to moderate, but this crisis isn’t going to be fixed overnight.

It’s early signs, and it’s not going to be fixed if we don’t continue on

with our 30-point plan to address the housing crisis.

The speculation and vacancy tax is a key piece of the work we’re

doing to make sure that homes are there for people, not simply for

parking money. It imposes a 2 percent tax on the properties of foreign

owners and satellite families to tackle speculation and offshore money.

It also creates a strong incentive for out-of-province speculators and

people who are sitting on empty vacant homes to put those homes on the

rental market or to sell them to add to the stock.

The tax also provides, through the revenue that comes in, a fund

to be able to build affordable housing initiatives in the areas that are

impacted by the housing crisis. Because when it comes to choosing

between supporting British Columbians struggling to afford a home and

real estate speculators, our government is going to choose British

Columbians each and every time.

Our government is standing up for the vast majority of British

Columbians who have been calling for action because they know the status

quo isn’t working.

I’d now like to take a moment to just walk through the details of

Bill 45 and the speculation tax. The bill contains 12 parts. Parts 1 to

4 set out the main components of the tax, including the geographic area,

tax rates, exemptions and tax credits.

Part 1 of the bill sets out

definitions and special rules for the

tax and specifies that the tax takes effect in 2018. It also sets out

that the tax will apply in B.C.’s core urban centres that are currently

experiencing near zero vacancy rates. This includes municipalities in

the capital regional district and most of Metro Vancouver. The tax also

applies to Abbotsford, Chilliwack, Mission, Kelowna, West Kelowna,

Nanaimo and Lantzville.

These sections also create look-through rules, which ensure that

the tax treatment of corporations, trusts and partnerships generally

depend on the individual who controls or benefits from the property that

these entities own.

Part 2 of the bill applies the speculation and vacancy tax to

owners of residential property in the specified areas that I listed. In

the bill that’s tabled, the tax is calculated as an owner’s share of the

property multiplied by the assessed value and by a tax rate of 0.5

percent, 1 percent or 2 percent, depending on the owner. For example, a

foreign owner who is subject to the 2 percent tax rate and owns 50

percent of a $1 million property will be subject to an annual tax of

$10,000 from 2018 on.

Madame Speaker, this bill is designed to ensure that the vast

majority of British Columbians do not pay the tax. In fact, the

estimation is that more than 99 percent of British Columbians will be

exempt.

Part 3 details exemptions related to principal residence. It also

exempts owners who rent out their home for at least six months per year,

in increments of one month or longer. In 2018 the six-month requirement

is reduced to three months.

The tax also exempts owners when they experience hardships. For

example, people who are hospitalized, people going through a divorce,

people whose homes have been damaged by fire or flood. They don’t pay

the tax.

Our government is committed to increasing the available housing

for British Columbians. That’s why there are also comprehensive

exemptions for property development and those who develop or renovate

residential properties. This approach will ensure that most B.C.

residents who live in their homes and owners who rent out their homes

long term will not have to pay the speculation and vacancy tax. Only

foreign owners, satellite families and owners who keep their homes

vacant in urban areas will pay this tax.

[1:45 p.m.]

Part 4 of the bill provides tax credits to help offset the

speculation tax for certain owners. B.C. residents who are Canadian

citizens or permanent residents and are not satellite families can

receive a tax credit of up to $2,000, which effectively exempts B.C.

residents on the value of a single vacant property up to

$400,000.

Part 4 also provides tax credits to foreign owners, satellite

families and other Canadians based on their household B.C. income. The

credit ensures that taxpayers who contribute their fair share through

our income tax system will not have to pay the speculation and vacancy

tax on their principal residence.

The remaining parts of the bill, parts 5 through 12, deal with

administration and enforcement. Homeowners will file an annual tax

declaration which will help tax administrators demonstrate whether

owners need to pay the tax. The declaration will be done by March 31

each year, after which taxpayers will receive a notice of assessment if

they owe taxes. The taxes are due on July 2 of each year.

The administrative provisions give powers to administrators to

conduct audits to ensure the tax is being complied with. The

administration and enforcement scheme will ensure that the tax is easy

to comply with for B.C. residents who own their own home, and it also

provides tax administrators with the tools they need to ensure the tax

can be collected from foreign owners, satellite families and people who

leave their houses vacant.

The bill also contains provisions for people who choose to

willfully or recklessly disregard the act. These provisions are very

similar to offence provisions in other tax statutes, such as the

property transfer tax.

Now, as I mentioned at the beginning, Bill 45 is a critical step

for the people of British Columbia and for the future of our province.

As some people may have heard today, we’ve been talking to our Third

Party partners about our shared commitment to tackling the housing

crisis. While we certainly do not always agree on specific policy

proposals, we do agree, as partners, that urgent action is needed to

make housing more affordable.

As was announced earlier today, the government has reached an

agreement with our partners in the Third Party to support the

speculation and vacancy tax legislation. The Third Party will be tabling

three amendments which will be supported by the government.

The first amendment will speak to formalizing a meeting with B.C.

mayors in the affected areas annually to review the tax and listen to

feedback from the local communities. The Third Party, as you know,

wanted to allow municipalities to opt out, but that certainly wasn’t

acceptable when you’re looking at dealing with the crisis in this

province. Instead, we’ve actually come to a compromise. This measure

strengthens our ability to make sure the tax is focused on the

communities that face the greatest affordability challenges.

The second amendment will introduce a legislative requirement that

the funds raised for affordable housing will be used to build homes in

the taxable areas. There already is a

section in the bill that speaks to

the resources and the revenue going into the housing affordability fund.

This will make sure that the people of these areas will be able to see

the benefits of the tax in their own communities when they see new,

affordable housing projects coming on line. And as these communities are

the communities that are the least affordable and have the lowest

vacancy rates, to be able to build new housing projects in those

communities just makes good sense.

The third amendment that will be tabled means that the tax rate

for Canadian non-residents of British Columbia who are not part of a

satellite family will be set to 0.5 percent. While we certainly strongly

support the intent of the first two amendments, government believes —

and we have been very clear about this — that this third amendment

actually lessens the protections against out-of-province speculation

investment. However, this is a change that was important to the Third

Party, and we’re committed, as people will know, to working

collaboratively with them to ensure that this vital piece of legislation

comes into force.

Why do we care about that? We care because housing affordability —

I’ll say it again — is at a crisis point. People in this province are

calling for solutions. They want to ensure that they can afford a home

in the communities where they live and work. I’ll say it again, that as

a government and, in fact, as a Legislature, we have a responsibility to

act on the critical piece that British Columbians are struggling

with.

[1:50 p.m.]

That’s our job. Our job is to serve the people of British

Columbia, and the people of British Columbia have spoken very clearly to

say housing is a crisis. They want their government to act, and we are

going to act.

This is a common value. We ran on a platform of addressing

affordable housing and the speculation tax. We came into government

making a commitment to a speculation tax and addressing affordable

housing. We have an agreement, the confidence and supply agreement, with

the Third Party that speaks to addressing affordable housing. So this is

a shared value that I’m very proud, in the second reading of this bill,

to say is going to be put into action. And we will act decisively to

tackle the housing crisis. We will continue to work on our 30-point

plan, and we will continue to bring balance back to the housing

market.

S. Bond: I’m delighted to be able to rise in the Legislature today. I have

to admit that we would have been delighted to rise in the Legislature

today and debate Bill 40, which is actually one that has a very

significant impact on British Columbians. It’s actually related to

proportional representation, but it became apparent very late yesterday

afternoon that the government had other intentions in mind. Now the

mystery becomes clearer as we stand in the Legislature today.

We shift the agenda. We’re going to talk about the speculation

tax. I want to begin by recognizing that I have a healthy respect for

the Minister of Finance. We’ve spent a long time together, though on

opposite sides of this House in this place.

But I want to lay out our view of the speculation tax. I have to

say, we’re going to take a very different perspective than the Minister

of Finance has taken.

I don’t for a moment doubt her sincerity…

Interjections.

Deputy Speaker: Members.

S. Bond: …in talking about people in British Columbia who are struggling to

find a place to live that’s affordable.

I will, however, correct the record. When the minister stands and

suggests that the previous government didn’t actually respond to the

housing situation, nothing could be further from the truth. We had a

significant investment, one of the most advanced plans led by members on

this side of the House. So to stand in the House and say that, I’m not

sure how she can do that with a straight face.

The most disappointing part of what happened today…. The minister

talked about wanting to make changes that were important to the Third

Party. For months in British Columbia, whether through texts, phone

calls, petitions, through resolutions at the Union of B.C.

Municipalities, through elected officials day after day after day asking

this minister to consider making changes to a tax policy that has

already had an impact in British Columbia…. The minister didn’t mention

that part.

Well, interestingly enough…. The members can thump the

desks.

Interjection.

S. Bond: He might want to go home and talk about housing starts in his part

of British Columbia and the amount of investment that has been driven

out of this province based on the speculation that this minister

created.

You know, the minister sits and smiles. Let’s talk about this tax

policy of this minister.

Interjections.

Deputy Speaker: Members.

S. Bond: From the moment she introduced the speculation tax, the first

thing we saw was change after change after change. Somebody was

captured, and then they weren’t.

And then the maps were drawn. Not one simple formula that could

explain to British Columbians how their communities are in or out. Now

they’re out again.

[1:55 p.m.]

Yet miraculously overnight — apparently just in the last few

hours…. I would certainly hope that’s the case because this minister

offered us a briefing yesterday and not one word about potential changes

— not one answer to our concerns about the very things that she stood in

the rose garden today and announced with the Leader of the Third

Party.

Let’s talk about the Leader of the Third Party. The minister

started to talk about credibility. This is a government that is sitting

on the government benches because there are three members sitting on the

end of those benches. There’s an agreement between the members of the

Green Party and the members of the government, and we know that today is

all about making sure that they hold on to the three members on the end

of the bench.

This minister was more interested and more concerned about

“changes that are important to the Third Party” than changes that have

been asked for, demanded and called for by hard-working British

Columbians and by elected leaders across this province. Their views

didn’t matter. In fact, that minister walked out of the Union of B.C.

Municipalities meeting and said, “Nope, no changes for you.” Yet after a

few hours sitting in a room with the leader of the Green Party,

miraculously, we have an announcement in the rose garden.

Let’s be clear. What the leader of the Green Party did was let

down all of the people who were counting on him when he stood up and

said, “I’m opposed to this tax,” and then it was: “Well, maybe I’m not

really opposed to it. I just want a few changes.” What he got today is

an embarrassment.

The minister can stand on that side of the Legislature and tout

the great collaboration that took place. The minister knows full well

that the leader of the Green Party and she have a secretariat. It’s

called the $1 million secretariat because we, the taxpayers of British

Columbia, are paying $1 million so that with this agreement between the

two parties they can have briefings and updates and discuss

issues.

Yet an issue that the leader of the Green Party has been standing

up day after day after day and reassuring British Columbians, “I’m going

to go to the House and fight for you….” Instead, all he got were some

minor concessions that do not address the concerns of mayors that he

sold out to make sure that he gets to keep his seat on that side of the

House, despite having a $1 million secretariat to actually deal with

these issues over the last number of months.

Let’s actually talk about what the minister stood in the rose

garden and announced today. Remember, this is after we’ve seen boundary

changes. We’re not sure how or why, and I’ll get to that a little bit

later, but for a while, there were municipalities that were in — and

then, amazingly, they were out.

Let’s look specifically, and we will, at which ones were taken

out. This minister stands up and says she’s proud of this tax. I have

never….

Interjections.

S. Bond: Well, keep on thumping, because there are a lot of British

Columbians who are out there today who have no idea that in the

minister’s definition they were the speculators she was

targeting.

Let’s talk about the basic flaw. And we recognize that, I assume

now, we’re going to see…. I don’t know. Perhaps the minister is going to

table a new bill that reflects these. Or, better yet, I’m assuming that

probably the leader of the Green Party will come in and then

ceremonially make his amendments. But let’s be clear. The changes that

were announced today do not address the concerns of elected officials,

of hard-working British Columbians, who woke up one morning and found

out that this minister and this government considered them

speculators.

[2:00 p.m.]

We have been clear from the beginning of this minister’s

introduction of this so-called speculation tax that she has chosen to

tax the wrong people. She is taxing British Columbians. And while we see

some minor adjustments today, I can only imagine how the mayors are

feeling right about now, after all the work they did and after all the

promises made by the leader of the Green Party.

Let me quote from the press release. “The first amendment will

create an annual meeting between the Minister of Finance and the mayors

in the affected areas to review the tax and relevant performance

measures.”

We all know that that’s simply not good enough for those mayors,

for those communities. They wanted an opt-out clause. That’s what the

leader of the Green Party said he was going to fight for.

In the press release today, what did they get? An annual meeting.

I’m sure they will be excited to learn that they’re going to have

another chance to go and make their case to this Minister of Finance,

where she can simply look at them once again and say: “Nope, sorry.

You’re in.”

The second amendment, actually, is a very interesting one. Now

we’re going to see the money that British Columbians are going to be

taxed for…. Because it is British Columbians. We know that the majority

of people paying the speculation tax are actually British Columbians. We

now find out that because of the discussion and the changes wanted by

the leader of the Green Party, those dollars are going to go back to

those communities.

You know, I hope the leader of the Green Party, before he signed

off on the press release, got the numbers from the Minister of Finance.

If I were in his position, I’d want to be sure that any of that

revenue…. Yes, it will be targeted, according to the press release, and

we’ll wait and see. But I’d want to be sure that somehow it is going to

be incremental investment in those communities.

Let’s face it, the minister stood up and touted her numbers. Let’s

just watch and see. Are we going to see that money swapped out for the

other money that has been planned for investment? There are no details,

no rules — nothing. Just: “Trust me, we’re going to change it

up.”

Let’s look at the third piece. I must admit, we’re glad to see

that the tax rate for Canadians and permanent residents who reside

outside of British Columbia and who are not satellite families…. They’re

going to get their tax reduced to 0.5 percent. Isn’t that

wonderful?

The people who didn’t actually…. Isn’t it ironic that there is not

one reference in this press release to the fact that the target audience

for this speculation tax is actually British Columbians? People who have

worked and invested…. You can imagine some of the letters and stories

that we’ve been hearing from people who had no idea that the family

cabin that they inherited suddenly makes them a speculator. Let’s call

it what it is.

Interjection.

Deputy Speaker: Member.

S. Bond: This leader of the Green Party stood up and told a bunch of

British Columbians, a bunch of leaders across the province, that he was

going to Victoria and fight for them. Well, today we see the results of

that.

Basically, he managed to get a meeting for mayors. Mayors are way

past the point of wanting a meeting. They are upset that without any

legitimate consultation, their communities are being impacted. Make no

mistake about it, Minister. I’ll start reading the list of investors

that have already decided to put their projects on hold and leave the

province. The damage has already been done.

Today we see little tweaks. “Okay. We’re going to fix it now,

because ‘the minister wants changes that are important to the Third

Party.’” Well, it’s about time that the minister started thinking about

changes that are important to British Columbians.

On this side of the House, along with many British Columbians,

we’re actually still left wondering how the government came up with the

name for this bill. Everyone in this House would agree that we need to

deal with speculators. But I think most people would also expect that a

tax called the speculation tax — in some way, some shape, some form —

would actually address speculation.

[2:05 p.m.]

As the opposition has said from the moment the Finance Minister

announced her speculation tax, we fundamentally disagree that this tax

measure actually targets speculators. In fact, it is a tax on

hard-working British Columbians.

To get a better understanding of the minister’s definition of

speculation, I did my homework. I reviewed what the Finance Minister

said when she mentioned the speculation tax back in February of this

year during the tabling of her first full budget. Let’s look at what the

minister said then: “The tax will apply to property owners who don’t pay

income tax here, including those who leave units vacant. This will

penalize people parking their capital in our housing market simply to

speculate, driving up prices and removing rental stock.”

Let me repeat the first sentence. “The tax will apply to property

owners who don’t pay income tax here….” Well, I would respectfully

suggest that what should have been announced in the rose garden today

was a complete reversal of a half-baked tax policy. In fact, the biggest

target is hard-working British Columbians — hardly considered

speculators by this side of the House.

To the average British Columbian, this definition sounds as though

the government, with the speculation tax, is going to focus on foreign

speculators, non-residents. I can assure you that when the other side of

the House did their testing of the name “speculation tax,” of course

British Columbians would look at that title and think, “A speculation

tax — that’s a great idea. Let’s go for it,” until they read the fine

print. They were the speculators that this very minister was going to

target.

She said it wouldn’t be people who actually earned a living in

British Columbia. I’m not sure what happened between that and the bill

that was tabled, but it is all about British Columbians. And not only

that. When I was doing my home work, I looked, and guess who backed up

the Finance Minister. The Premier. He said and reassured everyone that

this tax would target property investors from out of the province. So

now we have the Finance Minister and the Premier agreeing that this

won’t touch British Columbians, that this is for people who live outside

of the province and outside of our country.

Well, guess what. Here are the Premier’s precise words. Listen

carefully. And I actually agree with them. Listen to this. “If you pay

tax in British Columbia, you are not speculating from outside of B.C. If

you have a home in Vancouver and a home in Penticton that you visit in

the summer or to ski in the winter, that would not fall in with the

out-of-province speculation tax.”

So we have the Finance Minister and the Premier assuring British

Columbians that if they had a cabin in Penticton and a home in

Vancouver, they would not be captured. Today the bill that’s been tabled

is all about those very people that this minister and that Premier

promised would not be captured. The key words are “out of province.”

British Columbians took the Premier and Finance Minister, took her

words, at face value. But we soon discovered that wasn’t the

case.

It took us — and I always have a great deal of respect for my

colleague, my co-critic — a lot of work in estimates. But after an

extended discussion in estimates and asking a whole lot of questions, we

discovered the details. Almost two-thirds of those expected to pay the

new speculation tax, we discovered, were British Columbians, the very

people the Premier and the minister promised would not be

captured.

[2:10 p.m.]

Despite explicit comments from the Finance Minister and from the

Premier, approximately 20,000 of the 32,000 homes that will be impacted

are owned by British Columbians, not people who don’t live and work in

our province but hard-working, tax-paying British Columbians.

You can imagine how shocked we were, not to mention the thousands

of British Columbians who suddenly found themselves being called

speculators and facing significant tax bills. They said it wouldn’t

include people who lived and worked in British Columbia, and now we see

in Bill 45, in black and white — at least this version of it — that that

isn’t true.

We’ve heard from many of those British Columbians, and I want to

be sure that this minister hears over and over again how upset people

are. The minister said one thing; the Premier said one thing, and they

did something completely differently. In fact, the only place this bill

even remotely relates to speculation, to legitimate speculators, is in

the title, and even that has changed.

We’ve seen policy on the fly, people asking for changes, changes

being made that are inexplicable, a lack of modelling. No one can

actually explain how on earth the communities that are on the list got

on the list and how the communities that aren’t on the list are not on

the list — some that are not on the list anymore. But I’ll speak to

that.

We now actually see a bill that includes the word “vacancy.” That

would lead us to believe we have a speculation and now a vacancy tax. I

very much look forward to the minister’s explanation of how the name

change evolved — probably more of those changes that are important to

the Third Party.

What’s even more puzzling is the fact that it appears the tax

regime might actually exempt speculation in some circumstances. I can

hardly wait to have this discussion in committee.

Again, we’ve had the benefit of a half-hour briefing that we

certainly appreciated. The minister is always ready to do that, and it

is always appreciated, but I look forward to more clarification and

verification.

Since we’ve had our half-hour briefing, since the bill was

introduced, the very large bill that it was — we’re good; we’re adept;

we can go through those things — we’ve seen announcements today that

change the intent of the bill, and we want to certainly clarify some of

the numbers and things that we’ve seen once we have the chance to do

that.

This tax potentially exempts speculators. It builds in a one-year

exemption on newly purchased properties. Think about that for a moment.

It’s possible that the bill actually permits someone to buy a property,

wait for the price to rise and sell it within a year. Some people might

call that flipping. Others might call it a wise investment. But almost

everyone would agree, on the surface at least — and we look forward to

further clarity — it appears to be speculation, pure and simple. So

again, we’ll look forward to a fulsome explanation when we reach

committee stage.

But I guess we shouldn’t be surprised. Having a speculation tax

that doesn’t deal with speculators fits the pattern that has emerged

with this minister and government. We have an education tax that has

nothing to do with education. We have a health tax that was a complete

surprise and transfers the cost of MSP premiums directly to employers in

British Columbia, and we’re certainly going to have a lot of time to

discuss that in the days ahead as we begin to deal with the

EHT.

To the minister’s comments about impact: we can tell you that this

has certainly already had an impact and that the damage has already been

done. Families have seen home ownership dreams move further away as more

than $1 billion in housing investments have been cancelled or postponed

since this minister announced her speculation tax — projects sidelined,

no homes built, wages lost.

This bill, and I agree with the minister, isn’t about numbers and

formulas. It’s about people. The sad

part is that it’s mostly about

British Columbians.

Let’s look at some specifics. Here are the details that you were

eager to hear. Macdonald Developments cancelled 600 new homes in

Langford and 110 lots in Kelowna worth a total of $500 million since

this minister introduced her speculation tax. Belmont Properties has put

on hold 600 market and rental properties in Victoria since this minister

introduced her speculation tax.

[2:15 p.m.]

Housing starts, the sign of a strong economy and new housing on

the way, are dropping. The supply is going down. They’ve gone down 43

percent year over year.

The minister can laugh. She and her friends can snicker over

there. But she can’t deny that there has been an impact in British

Columbia before the bill is even passed. It’s probably a good thing,

because now we have a different bill, or we have different amendments.

We’re never sure what’s going to happen.

Housing starts in Vancouver are down 42 percent, and it’s not just

that. When you look at the implications of the changes that have been

made, every single day, we seem to see a change. We have to wonder. We

have to ask a broader question. We have to start asking hard questions

about the credibility of the budget in totality.

Based on our calculations — and we’ve only known this for the last

couple of hours — the minister has dropped the tax revenues on this tax

alone by 70 percent. Housing starts are 17 percent lower than what this

government forecast, and based on their numbers, that’s about a $340

million hole.

I haven’t even begun to calculate the impact of the minister’s

budgets on plummeting sales. But I can hardly wait. I know that my

colleague and co-critic is working, as we speak, to look at those

numbers, and we’re going to ask some pretty tough questions, not just

about the speculation tax but about the credibility of this budget

overall.

Municipal leaders whose communities are impacted by the tax are

calling on this government to rethink their half-baked tax and look at

the consequences. They asked the minister directly. In fact, they

thought they had some cooperation with the leader of the Green Party,

and we’re already hearing about how they feel about what happened today

in the rose garden.

They’ve asked the minister to consult in a meaningful way. What

did they get? The minister tabled Bill 45, determined to press on. After

the rose garden announcement today, what did they get? The promise of an

annual meeting.

Here’s just a sample of what the mayors were saying. Kelowna mayor

Colin Basran: “It’s the uncertainty that’s raising a lot of concerns.

It’s damaging our economy, because when people don’t know, they’ll just

sit and wait, and that’s not a good thing.” Go ahead and laugh and pound

the desks. That’s the mayor of the city of Kelowna. Here’s what else he

said. “This proposed tax will not have the desired outcome and will have

negative impacts on our communities.”

West Kelowna mayor Doug Findlater: “We’re fundamentally concerned

this would push property values below the amount of equity people have

in their homes. It’s a potential financial crisis.” Speaking of crisis,

Mayor Findlater went on to say: “If they go through with the speculation

tax, the only people who will be able to afford really expensive places

are the really wealthy, who would buy them up at a fire sale

price.”

Langford mayor Stew Young said: “This is a direct job killer.”

Bill Veenhof of the Nanaimo regional district said the speculation tax

“should be eliminated altogether.”

Right here in the capital regional district, they are opposed. Yet

it took a meeting this morning, apparently, with the Leader of the Third

Party so the Finance Minister could deal with changes that are important

to the leader of the Green Party. What on earth does the Finance

Minister have to say to those highly respected, locally elected

officials, who have been asking her for months to listen, to consult

and, most importantly, to back off the tax grab?

The quotes go on and on, but I want to be clear. The government

has literally drawn circles on a map. They have fixed the boundaries.

The Premier’s community of Juan de Fuca was exempted from the tax after

much outcry. The Gulf Islands were exempted after protests from the

Member for Saanich North and the Islands. The member from Oak Bay was

worried about having to pay the speculation tax. Miraculously, his area

was exempt as well. In and out.

I can assure you, while we certainly witnessed the event in the

rose garden today, it simply doesn’t go far enough. We’re going to

continue to ask tough questions. We’re going to continue to speak on

behalf of those mayors and those communities who’ve been asking this

minister to listen, to make a difference, to pay attention to their

concerns.

[2:20 p.m.]

We’re also going to be asking some questions of the leader of the

Green Party about what happened to all the promises he made to people to

come to this House and fight on their behalf.

I can assure the minister that the tweaks made today are not good

enough. It is absolutely our intention…. We will be making an amendment

ourselves in the days ahead that will actually listen to the mayors,

listen to the communities and show them that at least someone in this

House is prepared to stand up and fight on their behalf.

N. Letnick: Quite a challenge to follow such a great speech that we heard from

the member from Prince George, and every word that she said was true.

Congratulations to the member from Prince George on delivering a great

speech. I’m also going to be speaking — and no surprise to the members

opposite — against the proposed tax, including the proposed amendments

that I’ve heard, but I’ll deal with the tax itself.

Obviously, we’ve had many opportunities in this House and out in

the community to talk about the title, the title being speculation tax.

This is not a tax on speculators, especially after the last change. This

is really a tax on vacant properties that British Columbians and

Canadians have decided to invest in, whether they lived in Alberta or in

other provinces — perhaps bought something in the areas that are being

targeted by this tax and other areas that haven’t been yet targeted by

this tax but may be at a corner in the future.

The government is seeing an opportunity to help build their war

chest to fight on all the issues that they have in their budget. As they

see declining revenues, this is just one piece of revenue that they

can’t afford to lose. So they’re tweaking it. They’re trying to find a

new way to make sure that we have the transfer of wealth from the rich

to the poor. It’s just another opportunity for them to see if there are

any dollars out there that they can grab and re-channel to a different

location.

Obviously, it’s having an impact. It’s had an impact ever since

the spec tax was proposed. We’ve had meetings in Kelowna, in the area of

the Central Okanagan. I’m sure we’ve had meetings…. Other MLAs will talk

about meetings in their particular constituencies. We had a meeting of

about 40 people right off the bat, of all kinds of groups: non-profit

groups, development groups. Government people were invited.

They were unified in their opposition to the spec tax, not because

we’re opposed to taxing speculators and reducing the amount of

speculation in the housing market. But we were opposed to this tax

because it wasn’t a spec tax, unlike what is being proposed by the

Leader of the Official Opposition as a true spec tax. It was a vacancy

tax, and it still is a vacancy tax.

Here’s the challenge. In the short term, it actually might work in

dropping the cost of housing. It will scare off people who currently

have second homes, whether they’re British Columbians or from outside

British Columbia, and say, “Well, I don’t want to rent my home. I never

planned on buying this home for rental. I plan to buy it so I can move

in during the summers and then maybe retire in it. I come from

Vancouver. I want to go to the Okanagan,” or, “I want to go to Nanaimo

during the summers,” or maybe: “I want to go skiing in the

winters.”

Whatever it is, that’s their choice. They’ve worked hard for their

money. Why should we, as government, be telling them where they can or

cannot spend those hard-earned dollars? Quite a difference in philosophy

between the free enterprise and the socialists across the

aisle.

But you know what? At the end of the day, all these people came to

the conclusion: “We have to work with government. We have to find a way

to get them to see the light. We have to see if we can make the changes

necessary so we can get a true spec tax.”

I quite honestly thought the project was doomed to failure. I can

tell you now that I got up at that meeting at the end, and I said:

“Yeah, we should do everything we can. But given the history of this

government since they’ve been elected, I don’t think we’re going to be

successful in getting them to make the changes we want them to so it

becomes a true speculation tax.” I said: “Really, at the end of the day,

the only way you going to be able to change the spec tax is to change

the government.”

[2:25 p.m.]

I will send the message out again to all the people of Kelowna.

You want to get rid of the spec tax? Get rid of the government. That’s

really the only way you’re going to get rid of the spec tax.

The mayors have asked for the opportunity to opt out. The Leader

of the Third Party has said he will go to bat for these people, all

across the province. I’m not disappointed in the Leader of the Third

Party. Quite frankly, I was not expecting anything more than what he’s

done today. He’s been consistent throughout his year and a bit in his

role, consistently going out there and bashing the government for this

thing or that thing — doing a good job, I must admit, on some occasions,

of really sticking it to the government. But at the end of the day, the

tail goes between his legs, and he votes with the government

anyway.

For all those people out there that really had some high hopes for

the Green Party and the Leader of the Third Party for anything in the

future, hopefully right now all those illusions are cast aside and they

can see the true colours of the Leader of the Third Party.

What do we need to do here? Well, obviously we need to make sure

that we look at both the income and the expense side of owning a home in

British Columbia. What the government is doing with the spec tax is

trying to reduce what the cost of housing is by taking that wealth away

from people who have invested in these homes and saying: “Nope, we’re

going to force you to sell your homes at bargain basement prices and see

a reduction in the cost of homes.”

That’s specifically what the Finance Minister said she wanted to

achieve — I’m not making it up; these are things that the Finance

Minister said — and unfortunately, she’s been successful. We are seeing

a drop in the cost of these homes because people are putting them on the

market. The problem with that is that it’s a short-term solution. In the

short term, that will reduce the cost of homes, for sure, but who in

their right mind is now going to get out there and build supply? For

whom?

Nobody is going to come forward from Alberta. A lot of people in

our province come from outside of the province. People from Alberta

aren’t going to come in and invest their money now in the Okanagan, in

the Kootenays, in Nanaimo or in Parksville or other places. Why would

they? Even if it’s not covered by the spec tax, the fear of this

government’s legislation is pretty clear: “We will re-evaluate who is

covered and who is not covered.”

Obviously they have done that already by exempting the Leader of

the Third Party’s second home from this list. How did that happen? I’m

sure we’re going to get into that question a little later. Who’s going

to be buying these homes? Short term, for sure, but in the long term,

why would suppliers be supplying?

We’ve already seen that across the province. On project after

project after project, in different parts of our province, they have

said: “I’m going to wait and see what happens with the spec tax. Maybe

my business plan doesn’t work anymore — my business plan of having

people buy some of the units at the higher-end prices to help subsidize

what the lower-end prices cost.”

It’s quite simple economics. The opposition gets it, but the

government doesn’t get it. In the long term, we’re actually going to be

hurting the people we’re trying to help. We’re going to be hurting

people’s opportunity to buy in the supply of housing. If you want to

help people get into affordable housing, help them get into it. Don’t

hurt the people that are building the housing in the first

place.

You look at the member for Langley East. For many, many years, he

led the former government’s policies on affordable housing and housing

in general, and hardly got any questions from the opposition at the

time, the now government. Why was that? It’s because he was doing a

great job. He and the government of the day, for the last 16 years — I’m

really proud of that track record — were building a lot of affordable

housing.

They also had policies, before I got there and since I got there,

on helping people get into the market — different policies, different

ways of helping people get into their first homes, so that they could

work in the market and get up to the larger homes that they required for

their families. That’s the right approach. Help people get into their

first houses. Help people with their economy, so that they can afford

it. Make sure they have the right education. Make sure they get

good-paying jobs. Make sure British Columbia’s economy is going strong,

so that people can afford to buy the homes that they want to buy in

British Columbia.

It’s not to tell people: “Well, you know what? If you have a home

that’s empty for four months of the year, we’re going to force you to

rent it.” Who in their right mind now, with the rules changing in ways

favouring people in rentals, is going to want to get into the rental

market for four months. They can’t ask the person who came in, in the

first place: “Well, you know what? It’s time for you to leave now,

because I want to take over the house.” That’s not going to work

anymore.

Why would somebody want to take a chance in putting somebody in

their home that, at the end of a few months, says: “You know what? I’m

not leaving. Too bad for you”? If you want to go skiing, or if you’ll

need that second home in the Okanagan that you were planning to retire

into — sorry, you’re going to have to change your plans.

[2:30 p.m.]

Who’s going to be buying these units? Who’s going to be building

these units?

Madame Speaker, I’m telling you right now, it’s already happened.

We’ve already seen a drop in developers’ proposed units that are coming

on stream. We’ve seen people back out of building units. I’m sure my

colleagues from other parts of the province are going to be talking

about some specifics. A true spec tax would not do that. A true spec tax

would basically target those people who are speculating in the housing

market. I think we have consensus on both sides of the House. We would

like to see something focused on them.

I go back to the story that I heard quite some time ago

regarding…. These guys were going to a restaurant, and the restaurant

bills were getting a little higher. It was about five or six friends.

One of the guys said: “Okay. I’ll tell you what. Rather than us not

coming to the restaurant anymore, I’m going to pay a little more. I’m

going to pay a little more because I can afford to pay a little more.”

So they agreed; they would actually start paying based on how much they

could afford.

[R. Chouhan in the chair.]

After a few months, the bills got higher and higher, and then the

other five guys got together and said: “You know what? I don’t think

Joe’s paying enough. We’re going to make Joe pay even more.” And you

know what happened to Joe? Joe stopped going, and the other five guys

were stuck paying way more than if they’d just kept Joe paying what he

was paying.

That’s the fallacy of this whole spec tax — thinking that we’re

going to get the Joes and the Janes of the world to pay more so they can

lose equity on their homes, so somebody else can get it for a bargain

basement price, and that will help people who’re trying to get into the

market down the road. That’s just a fallacy of this whole system. The

best way to make sure that we fix the problem is by getting rid of the

spec tax altogether. But that’s not going to happen.

It’s not going to happen because the Green Party, I think, made it

very clear in their platform that they have full intentions, if they

ever had a chance, to tax the financial gains on personal private

residences. It says in their platform that the policy is to make sure

that if people have a personal financial gain — I think it was over

$750,000 — we should tax that. Never in our province’s history, as far

as I know, have we taxed personal financial capital assets like that on

principal residences. To think that the Green Party, which is actually

left of left, is going to come forward and say to the NDP, “Hey, you

better stop taxing people with wealth, because that’s wrong policy,” is

totally wrong. That would not have happened.

I was pretty clear that the members of the Green Party were out

there shooting off their mouths saying how well they’re going to stop

this tax, but at the end of the day, they would just basically cave, and

that’s exactly what happened. But they didn’t cave until actually they

got their house out of the spec tax areas, which is really curious. I

think British Columbians should be up in arms over that

itself.

Mr. Speaker, I’m going to stop now. I need to go. But I would just

say to you and to all British Columbians that this spec tax is wrong.

What the mayors have asked for I think is reasonable. They should be

listened to, they should be respected, and they should be heard by the

members of this House. Hopefully, as we go through committee stage,

we’ll have members of this House support all the amendments. How’s that?

Let’s agree to that. Let’s support all the amendments that are proposed,

especially the ones that take this tax and throw it out the

door.

N. Simons: It’s an honour, as always, to stand and speak on legislation

that’s before the House. This particular piece of legislation is

designed to address a crisis that has developed over the last number of

years because of the inaction of the member who just spoke and his

colleagues.

We are in a crisis. We are trying to emerge from a crisis. That’s

a crisis that maybe you don’t see. Maybe the members of the opposition

don’t see that crisis because they don’t want to admit to having been

part of its creation over the last 16 years. And if that’s the reason

for this vehement defense of their indefensible position, maybe I can

understand it. But when have they offered an opportunity to find ways

out of this crisis? When have they actually mentioned the interests of

individual British Columbians? I’ve never heard them talk about that

until today, until they had an issue with our efforts to address a

problem that they created, in large part.

[2:35 p.m.]

I think this is one of many routes towards addressing the crisis.

It’s the Speculation and Vacancy Tax Act, and yes, the name includes the

Vacancy Tax Act.

So far, what I’ve heard opposition members critical of is the fact

that they don’t like some aspects of this particular piece of

legislation. I sat on that side for 12 years. I remember finding things

to criticize. In fact, yes, we often did, because government gave us a

big target. In this particular case, I think that their particular

vehemence is due to the fact that they are a little bit defensive on the

fact that this is an issue we’re trying to address that they failed to

address.

Obviously, the goal is to have an impact on the housing market

that results in better opportunities for British Columbians to be able

to live in an affordable place, with the ability to live in a

comfortable way. This is what we hope for all British Columbians. I

believe that this particular aspect of a 30-point plan — I would remind

people, a 30-point plan — is just one more element of our overall

strategy. For one, I believe that this is going to go a long way towards

addressing key issues that we’ve been raising over the last number of

years.

I’m pleased to say, as well, that despite opposition’s

temperature, this is a step that government’s taken that is largely

supported by British Columbians. There seems to be a great deal of

support. I’m just looking at polling. I’ll be glad to enlighten my

friends opposite about the support that it seems to have among British

Columbians.

Let’s see now. The Angus Reid Institute. They quote 88 percent

support speculation tax; 81 percent of B.C. Liberal voters support the

speculation tax in Metro Vancouver.

I’m not the pollster. I’m reading the polling results. So if there

are some methodological issues that they want to raise with the polling

companies, they can do that, but I don’t know why else they’d be

questioning these polling results.

Angus Reid Institute, May: 45 percent say it’s a very good idea,

and 30 percent say it’s a good idea. That showed 62 percent of B.C.

Liberal voters supporting it.

Well, they may have knocked on the door recently or rung a

doorbell or a gate bell and found out that person doesn’t particularly

like the idea, but that’s understandable. Not everyone’s going to like

every aspect of every piece of legislation that’s put in this House.

They seem to have found something that they can complain

about.

How about this one? A Mustel poll: 77 percent support measures to

curb speculation, and there’s large, 63 percent, support in the business

community.

I don’t want to put words in everybody’s mouth. People are going

to have differences of opinion and, actually, different strengths of

those opinions. There might be some people, who we’ve heard already,

that hate every aspect of it, including the title. I’m not sure if

they’ve engaged in any discussions around putting forward amendments,

but that’s their responsibility. That’s their role. I expect if they

want to see changes, they should put forward some amendments.

This is a government that recognizes that in order to govern for

the people of the province, sometimes compromises have to be made.

Sometimes re-evaluations have to be undertaken. When, in anybody’s life,

is the idea that you can’t change your mind on something that really

determines everything that you do? We need to think and need to reflect

and need to review decisions we make. Sometimes those result in better

actions and better ways forward.

The criticisms that I’ve heard mostly are around the fact that

we’ve made some changes. But at the same time, members from opposition

criticize those changes. They say, on the one hand, that we’re not

listening, and on the other hand, that we’ve listened too much and we’ve

made changes based on what we’ve heard.

I don’t get that. That’s what I had a problem with, with the

original response to the Finance Minister’s introduction of this at

second reading. You can’t really have it both ways. Either we listened

and we responded, or what? We responded. We obviously were listening to

the people in communities. We were listening to elected officials around

the province.

[2:40 p.m.]

We were listening to the people who had their views made well

known at the Union of B.C. Municipalities meeting. That is why our

government decided to make some changes and to make it clearer, to show

where the exemptions were.

The other criticism was that there was uncertainty in this

legislation. Now you have it. You have a nice thick piece of legislation

before you, and you can go through it. The uncertainty should be

dissipating as we speak. It should be dissipating as you go through

those number of pages where we have, in fact, outlined the details of

this speculation tax.

The uncertainty is over. The legislation was originally announced

to this place many months ago, and I’m pleased to say that now that we

have this legislation before you and that it has the support of parties

that were elected with 57 percent, I believe, of the population, that’s

a good thing. It’s a good thing that we listened. We’ve listened to the

people of this province, and we’ve listened to our colleagues who were

elected in the ridings they represent — the Third Party, the Green

Party, the party that sees some common ground with the elected

government.

You know, that is ultimately a good thing when we can come

together and can find compromises. I didn’t like, necessarily, the

characterizations of the Leader of the Third Party. I don’t believe it’s

fair. I think when you do compromise, you don’t always win everything

you want, and you don’t always lose everything. So when you find

compromise, it means give and take, ladies and gentlemen. It means some

give and take.

We had 16 years here. I say that just because it’s a period of

time that’s identified, 16 years, when you had 100 percent of the power

on this side of the House and no interest whatsoever in what the

opposition thought. I sat there for 12 years, and I know the

frustration. I can read it in your faces. I recognize that. Here you see

a government that actually knows how to talk to other people and knows

how to find compromise. I sat over there when this side of the House had

no interest in compromise whatsoever. Absolutely none. None. Zero. One

hundred percent of the power and no interest in compromise, no interest

in discussion, no interest in finding common ground.

Anything is better than that. Anything is better than that. What

we have now is we have some compromise, we have some discussion, and we

have some interesting debates. And you know what? We come up with

legislation that’s nuanced. It’s not all or nothing, the way the

previous government liked to do it. Winners and losers. Well, we know

where the losers were. You know what? We’re trying to address the impact

of a government that gave little consideration to those people that I’m

interested and we are interested in supporting. That’s the people of

British Columbia.

Now, I know that my colleagues across the way who find it

necessary to speak, as I like to sometimes…. They will have an

opportunity to speak, and I would love to hear their views on this. And

I’m hoping that they might even have views that are somewhat different

from their colleagues. But so far, all they’re doing is toeing a party

line and saying exactly what their talking points tell them

to.

In my view, we’re elected as individual MLAs, elected as private

members, and we have a responsibility to reflect the interests of our

communities. And my community recognizes that we have a crisis. We have

had a crisis for a while now.

We have people not just living in tents where you can see them,

where the people from the urban communities are all upset. They can see

tents at the side of the highway. I understand that. It’s a shame in a

province of this wealth that we see that. But we’ve had people living in

the bush on the Sunshine Coast, out in the back. You don’t know where

they are. They’ve got tarpaulins, they’ve got little heat, they’ve got

little access to services, and they’ve been there for a

while.

The member from Kelowna seems to be interested in those people who

are living homeless in the shelters, in the woods, in their cars, in

run-down trailers, in campgrounds — people who have been left out of the

all-or-nothing government that existed before we took over. I’m pleased

to be able to say, on behalf of those people, we’re doing something

about it.

We’re addressing this crisis that they created. They might be

kicking and screaming and whining and chirping, but we are addressing

the issue. We’re addressing it in many different ways, and this is just

one of those ways. And I’m proud to belong to a government caucus that

is actually interested in addressing the inequalities that were created

over these many years.

[2:45 p.m.]

I think that what we have before us is entirely supportable

legislation, and I’m pleased that representatives of our party met with

representatives of the Third Party.

They mock a system of finding resolution. They mock the idea that

we have a structure in which disputes can be resolved. Now, that tells

us more about their character than it does about finding good ways to

find good policy for people of the province. I’m not going to take that

personally. Obviously, we have a good system in place because we have

the ability to influence policy and make good legislation for the people

of the province. That’s by cooperating.

We have an opportunity to do that with members of the official

opposition. They might think, because of previous history, that the

opposition has absolutely no power. That’s just because of the way they

ran things when they were in government. The opposition should stand up

and put forward proposals.

So far, I think they want to change the name of the bill. They

want to take out the word “speculation.” Well, put forward an amendment

on the title. Why not put forward an amendment on the title and say: “We

want to call it something else?” Fine. I’d be interested in hearing that

debate. I would prefer to talk about substantive things, but so far, we

haven’t heard any of that.

The news that we’ve come to an agreement and that we’ve seen a way

through to ensure that this particular initiative on the part of

government will be passed by this Legislature on behalf of the people of

this province is, I think, good news. It’s not unexpected that the

opposition would characterize it negatively. That is their role. Their

job is to ask questions.

It shouldn’t be a threat — that they’re going to ask questions,

that they’re going to ask tough questions of the minister in third

reading. That is their responsibility. I expect them to do that. I would

expect better questions in question period, too, but that’s just because

I’ve had 12 years in opposition and a little bit more experience in

that.

But the questions that you come here with are important because

then it’s on the record.

Interjection.

N. Simons: I have no interest in going back, as much as it’s a very kind

invitation. I must say I’m sure it was offered in graciousness, but no,

the view from here is slightly better. The sun comes in at a different

angle, and I have enjoyed it so far.

I think the opposition should see this as an example of how, when

elected officials work together and they find some compromise and they

find some way past difficult aspects of legislation, that’s a good

thing. I think it’s entirely possible that in the future, we might not

have the same ability to get to a resolution. But so far, with civility

and with good communication, with a structure that allows for disputes

to be resolved — those are all good elements of a good democracy, in my

opinion. It’s not a winner-take-all system. It’s not, “We win; you

lose,” or: “This is the way it goes, our way or the highway.” This is

about compromise.

As you know, the legislation we’ve introduced is an effort to

address the situation in the housing market and turn empty properties

into homes. I do believe, as well, because of the overwhelming support

in British Columbia, that there are many British Columbians who agree

that we need to have access for rent and that we need to have access to

affordable housing. People are sometimes, despite what they say,

prepared to contribute to ensure that our society is one where people

are looked after. If they knew individuals were suffering

without….

If they had 80-year-old people coming to their offices and saying

that they can’t find a place to live, maybe they’d be more likely to

accept some suggestions of the government or even support some of the

initiatives that the government is taking. Maybe if they had homeless

people knocking on their doors, they would see this differently. For a

long time, we’ve seen a province that has not addressed poverty

reduction. They didn’t address child care issues. They didn’t address

the homelessness crisis. We’re dealing with a lot of things in this

province. And the fact that they didn’t, shouldn’t mean that it’s too

late to do something.

We’re doing something now, and in my view, they should be

supportive of it. However, I’m a realist as well. Sometimes opposition

needs to be oppositional in order to feel important, and I have nothing

against that. I remember that feeling. I remember asking questions in

this House. I remember voting against legislation. Usually it was

legislation that I definitely wanted to vote against.

[2:50 p.m.]

However, I would never have voted against legislation that was

aimed at improving the lives of British Columbians. I never voted

against legislation that was tabled in order to address a crisis in our

society. I didn’t vote against legislation that was well-thought-out,

widely supported and entirely with an objective to address a

crisis.

Now, the other thing that I’ve heard from the opposition is that

it seems with the changes that we made…. They don’t want to characterize

it as us listening and making changes. They want to characterize it as

us unable to land on the exact legislation immediately.

Well, these are the same people who criticize us for saying we

need a plan to reduce poverty. “Why do you need a plan?” they say. “You

don’t need a plan.” You just hope jobs keep coming. That’s their plan.

That’s not a plan.

We have plans for all aspects of British Columbia. We have

expectations, I should say, that our province will be a place where

people can find a place to live, not in squalor and not in abject

poverty, where they want to work and where they can find a place to

work. Unfortunately, in my constituency, just to be specific, it’s very,

very difficult to find a place to live. It’s a difficulty that has

grown, and it’s grown over the last number of years.

What we’re trying to do now is address that by making it possible

to promote the building of houses and homes where people can afford to

live. I think that’s an admirable goal. It’s one that I support. It’s

one that the Third Party supports. I’m sure that in the heart of hearts

of members of the opposition, it’s one that they support too.

They may have differences of opinion with respect to specific

aspects of the legislation, and I encourage, support and applaud any

efforts they make to bring in amendments. If those amendments are

brought in with the right spirit and with the hopes and expectations

that they will improve this legislation, then that’s the job of the

opposition members to do so.

In third reading, when we hear the pointed questions and the tough

questions that are without malice and individual insult, I think we’re

prepared to listen. We’ll answer the questions, and we hope and expect

that those questions will be tough. That’s the role of opposition, and

the role of government is to implement good policy that will address the

issues that British Columbians want them to address. That’s what we’re

doing with this legislation today.

With that, Mr. Speaker, I thank you very much for the

opportunity.

B. Stewart: I rise today to speak on a very important piece of legislation,

Bill 45, called the Speculation and Vacancy Tax — recently renamed. You

know, on this side of the House, we’re left wondering just how the

government or the people that do the marketing have come up with this

name, because it doesn’t really seem to address the terminology of what

speculation is all about, whether it’s the stock market or people buying

commodities and whatever.

There are speculators in those types of things that invest in the

future upside, and sometimes they get caught in the downside. Those are

truly the speculators that we as government do want to make certain we

try and control.

We’re sadly disappointed with this bill, because it actually fails

to deal with the real terminology about speculation. This tax exempts

speculators, and it bakes in even a one-year exemption on newly

purchased properties. So buying a property, with this new piece of

legislation should it go through, waiting for the prices to rise and

selling within a year would be exempt, and you wouldn’t have to pay any

speculation tax. We call that, or some people call that, flipping.

Others call it a wise investment.

I want to go back. The members are talking about the cycle of what

the economy is like.

[2:55 p.m.]

Over 45 years ago, there was a new Premier in town, and he went on

to create all sorts of things that are still legacies we have today —

government auto insurance, the agricultural land reserve and many other

things. As we heard in his memorial and in remarks earlier this year, a

remarkable number of pieces of legislation were passed during that

period of time. That was leading into the ’70s when, I can remember, as

a young employee working in the financial services and banking industry,

inflation running at over 10 percent. Although we weren’t making very

much money, the fact is that prices were rising at an astronomical rate.

The bottom line is that we were just happy to find a place to rent and

be able to afford it, share it with friends. I know that lots of that

goes on today.

The point about it is that it’s funny how we can go from an

economy that was growing at more than double-digit inflationary growth….

Interest rates were comfortably at 10 percent for first mortgages —

there are a few that might remember that — and second mortgages were

maybe around 12 or 13 percent.

We got to 1980-81, and all of a sudden we had things like the

national energy program. We had nationalization, really, of the oil

industry in Alberta. We had this complete slowdown in the economy, and

there we were in British Columbia, fighting this expectation that wages

should go up every year by 8 or 10 percent. You look back at the

contracts that were done with government employees, etc., and it seems

staggering today. Here they are negotiating at zero, 2 percent, and it

all seems very much in balance. But sometimes these cycles take time to

work out.

We got through the ’80s into that time when Expo 86 was here. We

were pretty proud as British Columbians: come to us, come and invest

here and do these things. In those days, we didn’t even yet have a

foreign trade office. It was actually opened in that period of time in

Japan, in Tokyo, by former Premier Bennett.

Anyway, I think about the fact that we keep talking about what’s

happened in the period of time that our government was in power. Well,

think about when your government was in power 27 years ago. What

happened? You had ten years of running the economy and stuff like that.

We had similar issues. We had crises in terms of housing, the fact that

your average expenditures, on an annualized basis, were running at more

than $4 billion on operating costs before paying for any capital

improvements and stuff like that.

Governments have to adjust to what cyclical kinds of challenges

are out there. I think that reality…. The speaker previous mentioned the

member for Langley East. I can remember when he told us about the B.C.

Housing projects, and I thought: “Jeez, do we need to be spending this

type of money?” He’d stand up at cabinet, and he’d be looking for more

money in this empire, if you want to call it that, and built all sorts

of projects. But clearly, it just wasn’t fast enough.

As the economy grew over those years that we took over, we

balanced the budget. We created confidence, a place where people wanted

to come and invest. We had the opportunity for all sorts of people to

come here. We heard the other day about the fact that a million new

British Columbians had come to this province in that period of time.

That’s a million new people. We’re just under about 4.8 million in the

province today. Think about all the houses that are needed, the services

and all those things. It’s a challenge. But to say that this crisis was

caused by inept government policies is dead wrong.

In February, there was this announcement, a budget. In the period

of time that I served, I know Finance ministers that worked…. We worked

very carefully to make certain that we were…. We didn’t want to upset or

destabilize the marketplace when we were making changes. As a matter of

fact, when I first got elected, we’d just come through the 2008

financial crisis.

Everybody here remembers — right? — Bear Stearns, Lehman Bros.,

movies. We were coming out of that, and the fact was that nobody knew

where the bottom was. The American economy — we didn’t know whether it

was stable. Housing starts had plummeted from, literally, the

seven-digit numbers in the U.S. down to the low six-digit numbers. It

was a tough time for the forest sector. Commodity prices were down, and

frankly, we didn’t know where the bottom was in that.

[3:00 p.m.]

The difference was that when we made announcements about the

budget — Finance ministers, cabinet, the Premier — we were all very

careful about making certain that we didn’t upset the market and that

when we made an announcement, it was intentional. It was either to make

certain we did something to slow things down….

Take the foreign buyer tax. It wasn’t something that we introduced

and let percolate for a year or two and just kind of bring it on. It was

talked about by many people. But at the end of the day, it was something

that we brought in because we knew that there was the perception…. Maybe

it hasn’t proven to be as huge a number, but the bottom line is that

foreign buyers were investing here, and the perception was that they

were making housing prices unaffordable. Supply is probably more to the

answer.

I think that one of the things that’s flawed about Bill 45, and,

really, going back to the budget, is here we have an impact that has

been levelled on all communities in British Columbia by the fact of this

slow, almost torturous kind of not knowing what the rules are going to

be. What does it mean?

It’s happened in communities. Radium, Invermere, Cranbrook, Fernie

— all of those bordering communities are sitting here in limbo wondering

about what it is. What is this tax going to really do? Now, it’s not

that the Finance Minister didn’t come out with the earliest kind of

statement about the targeted communities and her justification about

vacancy rates and the fact that there was this huge issue or crisis on

housing. I’m not certain that that isn’t a case that shouldn’t be

addressed.

However, I think that the approach has not only really decimated

many of the communities, and I know I’m from one of them…. But the fact

that one of the things that didn’t really happen in this time…. And I

know that the Finance Minister said earlier today that she’s met with

the communities, but listening and actually coming to what is considered

to be consensus is different than just giving lip service and continuing

to plod along with a plan. Frankly, the early warning signs were out on

this bill from the get-go.

The fact is…. I mean, literally, the city of West Kelowna, which

pushed back immediately when this came out, provided me with literally

hundreds and hundreds of letters from people that own property in the

city of West Kelowna. My office was flooded with thousands of emails and

letters. I’m going to read a couple of comments from people all around.

I’m not going to read all the thousands. You don’t have to worry. That

would, I’m sure, keep us here well into next week.

Then I presented a petition that was signed by over 15,000

Canadians that had their comments. I have hundreds of pages of their

comments here. But more importantly, the real essence of this and what

was happening was that in the community where we’re trying to build….

The city of West Kelowna was only just over ten years old at the time

this tax was announced. It’s trying to build its

infrastructure.

We’ve got affordable housing projects that, essentially, were put

on hold because of the fact that there was this huge amount of

uncertainty. It’s not just because of the fact that they couldn’t do the

math. They just didn’t know if the people that had been buying in the

past would continue to buy or what would happen on the

market.

We have many projects throughout our area, but not just in my

riding or the MLAs for Kelowna-Mission or Kelowna–Lake Country.

Vernon-Monashee — a huge development. I was there last Friday night

looking at hundreds of empty, stalled homes. Basically, they’ve stopped

construction in that riding because of the fact that the buyers that

were there…. It’s about the uncertainty.

This goes back to…. When you go to sell a product — I have a bit

of experience in selling a retail-type product — it takes time to build

confidence and the fact that people believe in your product. They

understand that you’re stable and the fact that…. I’ve always said that

I want to be consistent in quality, make certain that the value is there

and make certain that people feel that they’re valued, in terms of what

it is that we’re producing.

[3:05 p.m.]

I think that that was the wrong message when this came out. How do

we adjust that? That’s something that I don’t think we’ve done here

today with some suggested, proposed amendments that are coming

up.

I do think that one of the things that was quite striking….

Initially, the group that came and talked to us was the developers. They

were obviously on the front lines. They’ve got projects in for rezoning.

They’ve got projects that are either under construction or some of them

that were already at completion.

The community, the MP, mayors, the development community came

together and had face-to-face meetings in the very early stages of this,

and of course, we couldn’t really do anything. I mean, we attempted to

try to get certainty around this, and what ended up happening is that we

have a community that is now facing not just the fact that the buildings

have stopped, but they were finishing up projects that were already in

the pipeline.

Now, what’s happened is that those people, the people that do the

foundations, the framing…. The comments that I hear from the development

community…. You know, I had a call from somebody the other day that does

this particular specialized plasterwork, and he says: “When have you

ever had a call from one of them that’s available, if you want to call

it?” I don’t know if that really is creating affordable housing or

supply, but certainly, it’s put a lot of people, and it’s going to put

more people, out of work.

We saw the numbers recently, the end of September. The stats in

Vancouver, across the province, were over 40 percent of a reduced number

of housing starts from September 2017 to now. In most cases, that is a

crisis. In the Okanagan, the number is 60 percent — 60 percent less new

housing starts.

That’s how come, when we got to UBCM, all of the mayors and

councils — maybe they were kind of a little bit uncertain when it first

came out. They certainly didn’t want to give up on affordable housing

projects. I know that they work hard to make certain that they come up

with the right criteria, the property to make certain that the

government and B.C. Housing are continuing to be interested in helping

solve a problem that does exist across many communities.

But the situation now is that we haven’t really created more

supply. We didn’t turn our attention to the type of product that we were

actually looking for.

Maybe one of the things that we do want to address is the length

of time that development actually takes to get to market. I see the

minister nodding over there, and I know I was the minister, and I think

that it’s the right thing to do. I don’t think that people that are

trying to build and bring on supply should be held hostage to the

bureaucracy that many of the local governments have formed around. The

reality is that there are some good examples of local government that is

really very purposeful in trying to get that done. But that still

doesn’t answer the questions about the uncertainty.

Now, when this first came out, the members for Kelowna–Lake

Country and Kelowna-Mission and myself had a town hall meeting, which

was to try and inform people with the available information about what

was happening and how this was going to work out. We had a professional

accountant. We had somebody from the development community. This panel

of experts, as we called them, were the ones that were there to present

what they knew about how the speculation tax was going to be

implemented, how the tax credit is supposedly going to work.

Even after reading the bill a couple of times last night, I’m not

convinced that I understand how these credits work and the cap, etc.

Anyway, I intend on making certain that I better understand that. But

the more important thing about it is that it’s not understandable to the

average British Columbian that is trying to make some sort of

decision.

Now, the confusion with the title, as I mentioned earlier, is that

it’s labelled a speculation tax. I don’t really think that this bill

addresses speculation. It certainly puts fear into people that are

building homes that they’re going to have this inordinate amount of tax

that they’re going to have to pay when it comes to having a home, maybe,

in the Lower Mainland and one in the Okanagan. They’re going to be faced

with this incredible extra surcharge, if you want to call it

that.

I think that what’s important is that British Columbians have been

confused. They like the name, as the member for Powell River–Sunshine

Coast said. They support that, but the problem is that they don’t know

what they’re supporting. The reality is that this is not really

addressing the issue if we want to address speculation.

[3:10 p.m.]

This eight-month period, this gap in time, has cost the province,

I’m sure, hundreds of millions of dollars in forgone tax revenue because

of the fact that it was ill-thought-out. Maybe, with some proper

consultation, we could have got to an answer sooner about speculation

and not disrupted the housing market. Whether it was going to stay the

same, go down or not, the bottom line is it certainly wouldn’t be down

60 percent in West Kelowna and Kelowna.

I think that that lack of information has now started to manifest

itself with real facts. We’ve got UBCM. We had a number of motions that

local governments brought forward. You know how that process works with

UBCM. Hundreds of motions go forward, but they don’t all get adopted.

They don’t get on to the floor.

We’ve got quotes from resolutions. This is about local

governments. A lot of these are not necessarily the ones…. Here’s East

Kootenay regional district: “Non-resident property owners invest in our

communities financially, are active community members, some coming here

for generations, and many eventually become full-time residents.” Of

course, many are the affected ones.

So far, what ended up happening is that, you know…. There are

exemptions that came out in March, and those exemptions were…. I don’t

know the rationale behind it. I don’t know if there was a consultation,

but there was an exemption about the Gulf Islands, where lots of people

have summer homes or whatever, and a little adjustment around

Parksville. Certainly in Juan de Fuca there was an adjustment, and on

the Saanich Peninsula — or the margins, anyways.

What I do think is that it really goes to the point that a more

fulsome consultation on this type of tax bill should have been done long

before February, and we should have had a chance to plug into that so

that we could have made certain that British Columbia’s economy wasn’t

impacted — families that are now going to be out of work because housing

starts have dramatically dropped.

As some of the local government officials said at UBCM, “This is a

direct job killer.” That’s Langford mayor Stew Young, who I think many

of you would know.

“This is not just a housing issue; it’s tied directly to our

economy.” That’s Oak Bay mayor Nils Jensen. This is kind of leading up

to UBCM.

Mayor Findlater in West Kelowna, who has been not so quiet on this

matter, says it’s a potential financial crisis.

“It should be eliminated altogether,” Nanaimo regional district

chair Bill Veenhof says.

“People who picked up a modest place on the lake 20 years ago and

kept it in the family are not going to be able to afford to keep them.”

That’s again Mayor Doug Findlater.

“It’s the uncertainty that’s raising a lot of concerns and is

damaging our economy. When people don’t know, they just sit and wait,

and that’s not a good thing.” That’s Colin Basran, the mayor of

Kelowna.

“I believe that this tax is a form of domestic piracy.” That’s a

little bit more edgy, but that’s from the UDI chair, Kevin Edgecombe, in

Kelowna.

I think that what’s important is these resolutions that were

brought forward. Of course, the minister was there, as was all of

cabinet and the NDP caucus as well as the Greens.

UBCM resolution C11 was brought forward by East Kootenay regional

district “to allow local governments to opt in or out of the tax.” These

are all past resolutions, by the way. I won’t go into all of the other

stuff.

From the LMLGA executive, resolution C12, to “delay the

introduction of the speculation tax in municipalities that request it”

and “allow local governments to address such problems without resorting

to a one-size-fits-all approach that the speculation tax

embodies.”

Resolution C13, brought forward by the capital regional district

“to allow municipalities to opt out of this new housing speculation

tax.”

We also have C14, Nanaimo regional district: “…not implement the

proposed speculation tax in the regional district of

Nanaimo.”

C29, brought forward by Langford says: “Therefore,

be it resolved

that the city of Langford calls on the B.C. government to allow

municipalities to opt out of this new housing speculation

tax.”

[3:15 p.m.]

I think that it’s pretty clear that the mayors and councils went

unanimously, not seven months after this was first introduced, because

their communities were reeling from the impact of the uncertainty. The

bottom line is that we are not…. Well, of course, we have certainty that

we know what the bill today. We don’t know, necessarily, the amendments,

which I know will be forthcoming. However, how do we get to the fact

that communities that have…?

I know West Kelowna disputes the fact that the numbers that the

Ministry of Finance is using for its vacancy rate are incorrect. I know

that when this happened, there were almost 1,000 new units under

construction right near my constituency office. Some of them are still

unoccupied. Very reasonable rents. I checked on it at the time, and it

was square footage between 600 and maybe 1,200 square feet and a cost

that was affordable — just over $1,000 a month, up to about $1,700. I’m

quite certain it’s a reasonable starting point, considering that I have

a couple of hundred employees in the area, and I know what the wages are

like in the area.

We talk about some the first things that we heard when this tax

was announced. This was within days of the tax coming out, and I had

letters in my office, as did my colleagues in Kelowna.

Mullins Design Group: “In the last two months, I had 12 clients

cease their plans. That equates to an estimated $20 million to $25

million out of my small firm.”

McKinley Beach is a huge, I believe, 800-lot subdivision just

north of Kelowna, obviously in an area that is not downtown in the

highest-rent area. But it is where there is a combination of affordable

homes. “We have already been forced to indefinitely to postpone the

development of a townhouse project. This impacts hundreds of employees

and is a direct result of the concern and fear of the unknown of this

undefined speculations tax.”

Staburn Group, right in my own riding: “We are part of a group

that own a large acreage at Goat Peak. We have worked for over a decade

to get this comprehensive plan passed. It is a project exceeding 1,000

new housing units. We were about to submit a rezoning subdivision

application for the first phase of over 100 lots, with roads and

servicing costs estimated to be over $8 million. We have now stopped all

engineering, planning and design work, and put the whole thing on the

shelf until a change by the government. Ten to 15 professionals

immediately impacted, hundreds more person-years of employment on

construction, the largest housing project ever in West

Kelowna.”

And many others. LedMac in Kelowna, a $250 million investment.

Wesbild up in Vernon, $7 million — that’s the one with the empty

foundations I was just up at on Saturday. Macdonald developments in

Langford, 600 new homes and 110 lots in Kelowna, on pause. Belmont

Properties, almost 600 market and rental properties — rental properties

— on hold. Westcorp — I just confirmed this yesterday with the head of

it that a $230 million hotel project, a mixed-use hotel project, in

Kelowna is still on hold. They’re not going ahead.

The development community has been devastated by this. The

building community, the contractors, the families, British Columbia

families, are the ones that are going to feel this. They’re the ones

that are going to be paying this bill. It is not going to be the

speculators, as the government has suggested.

Interjections.

Deputy Speaker: Members. Members, let’s have one speech at a time,

please.

The member for Kelowna West will continue.

B. Stewart: Okay. I know that time is running out. The bottom line is…. You

know what? I’m sure the member in Nanaimo…. I’m sure that many of the

people, although it’s not as active as maybe some of these communities,

will be feeling…. Perhaps they’ll have that opportunity to finish those

developments up in Nanaimo when we get this all sorted out.

[3:20 p.m.]

Here’s an email that I got recently from somebody that was quoted

the other day. It’s a big group. They’re building a lot of affordable

housing in the Kelowna area. Randy Shier, the president of Mission

Group:

“Here’s an email from an Aqua supporter from out of province that I

thought you’d like to read.

“‘Congratulations on moving things forward. I thought I’d just send

you a quick note regarding the recently announced speculation tax and

its impact for those of us who are non-B.C. residents. We have been

interested in your development and were considering purchasing a condo

for retirement down the road. The recent B.C. government announcement

has caused us to pause and reconsider allocating investment into Kelowna

and understanding the magnitude of the tax.’”

A second one here, from David Paisley:

“I’m a West Kelowna resident. I retired to B.C. after a long career

in Calgary, and as you’re aware, Albertans have been long been valuable

tourists and investors in this region. The unintended consequences of

this ill-conceived speculation tax are enormous, and will do little to

solve the problem of housing affordability in the regions it is

targeting. In fact, thousands of Albertans have invested in the region

with the long-term intent as a future retirement or family recreation

property. These are not flippers who have distorted the market in

Vancouver or other major centres.”

Those are just a couple of, some of, the ones that I think it is

important that we hear from.

As many of you would know, the mayor — who is not running again in

West Kelowna but has done a tremendous amount of work with his chief

administrative officer, Jim Zaffino — has published a number of issues

and updates on speculation tax and the impact that they’re feeling in

West Kelowna. It’s a small community. It represents under 40,000

residents. It neighbours Westbank First Nation, where there are another

10,000 residents.

Between the two of them, there are vast tracts of undeveloped land

— ALR lands, etc. — so infrastructure is a big deal to these

communities. No one model fits all communities. One of the things they

tout in this particular plan…. They’ve done exhaustive research. They

came up with recommendations for the Finance Minister to look at — other

speculation tax models, to reconsider the one that was being

proposed.

Part of that, that they were talking about, was the fact that

future tax revenues that they’re going to have to forego are going to

impede the capital plans that they’ve already put in place. Some of them

are under construction. There’s an over $40 million water treatment

plant that is in limbo right now because, all of a sudden, the tax base

is not certain as to how it’s going to move ahead.

I want to just conclude my remarks….

Deputy Speaker: Thank you, Member.

B. Stewart: That’s it? Thank you.

A. Weaver: Please let me start by acknowledging the remarks, and thoughtful

remarks they were, from the member for Kelowna West. I hope to be

addressing some of the concerns he raised in the process of him

outlining some of the issues from his particular riding and some of the

concerns he received, which were similar to some that I received. I also

want to acknowledge the talk from the member for Powell River–Sunshine

Coast who also brought some important information to this

debate.

In this debate, I’ll say to start that I’m the designated speaker

on this issue. I’m not going to be too long, but I will probably go just

beyond the half-hour mark. I’m going to outline my comments in a number

of ways, in a format that starts with a broad introduction to what I

would argue is a crisis here in terms of affordability in British

Columbia. I’ll follow that up with a little bit of a discussion about

how the speculation tax was rolled out.

I think my comments will jibe with some of the comments made by

the member for Kelowna West. In particular, I’ll highlight some

statements made in the messaging early on and some of the subsequent

changes that occurred leading up to the actual legislation being

introduced. Then I’ll move, in my address, to discuss some of the

concerns I’ve raised consistently, such as treating Canadians equally,

as well as the concerns I’ve had with respect to meaningful consultation

with local governments.

[3:25 p.m.]

Some of the concerns I’ve had are with the ability of some strata,

for example, or some districts, that have no rental, secondary suite or

tourist commercial zoning. So you can’t actually, even if you wanted to,

rent out your unit because of existing laws, legislation or

bylaws.

Then I’ll talk a little bit about some of the

land-under-development issue, an issue that I spent a good deal of time

on, as the member for Kelowna West raised, specifically with respect to

the uncertainty that this created in the development sector. Some of the

other issues I raised were the impacts on British Columbians who,

frankly, aren’t speculators. I’ll go through a number of personal

stories. I’ll then move towards the whole issue of reaching this

agreement with respect to amendments that I’ll be putting forward with

government, and trying to address how those came about, to provide a

public record of the process.

Then finally, I’ll conclude with what I believe is critical: the

need for ongoing monitoring of what’s actually being implemented, to

ensure that we are not, as legislators, overly interfering in the market

but rather that we ensure the purpose of this tax. This, fundamentally,

is to recognize that leaving homes vacant in a market with zero

vacancies creates a social externality that should be internalized,

somehow, to those leaving the properties vacant, until such time as

vacancy rates improve.

To the introduction of the housing crisis: without any doubt in my

mind, there are a number of communities where affordability has reached

crisis proportions. Those are, predominantly, the urban centres in our

province, in particular, the regions of Victoria and Kelowna — Vancouver

is the poster child of this issue — and Nanaimo. This is a crisis facing

an entire generation of millennials, who literally cannot find a place

to rent, who literally cannot afford a place to purchase, who are

struggling to actually live anywhere near where they can

work.

We’re seeing a generation starting to move away. We just had a

community move into Oak Bay — the tent community, just yesterday — of

homeless people in Victoria who cannot get a place to live. This is an

issue that’s moving around the province. We’ve got, in talking to

business, a crisis in terms of attracting and retaining highly skilled

workers. If you talk to those in the tech sector, the single biggest

issue for the tech sector is the attraction and retention of highly

skilled workers. They cannot pay the salaries that other jurisdictions

are paying, yet the cost of living has gone through the roof.

This isn’t a problem in parts of British Columbia. There’s no

doubt that for some parts of British Columbia, this isn’t an issue, but

certainly, in some of our urban issues, affordability has reached crisis

levels.

We know the offshore money that has been flowing into our market —

both in terms of speculation as well as through some nefarious

activities that the Attorney General has been looking at — needs to be

dealt with, but I’ve always argued that in doing so, in trying to treat

the issue of foreign capital coming into British Columbia, we need to be

sure that we protect Canadians and British Columbians.

Now the government’s approach was to introduce some­thing called a

speculation tax, initially. It’s now changed, and I’m actually pleased

with the change of the name. I think it’s far more appropriate. It’s now

called the speculation and vacancy tax. The vacancy component is

critical, because the speculation component, in my view, largely applies

to the offshore money.

We wouldn’t have done this. I’ve already pointed out that the

approach of our party would have been to bring in place a New

Zealand–style approach — to actually say: “You know what? If you want to

own property in our jurisdiction, you must be paying taxes here.” This

is what New Zealand does, this is what Australia has done, and this is

what many European countries do.

The idea here, of course, is that we are not living in a free

market for investment in real estate and land. You and I cannot buy a

home in New Zealand. We cannot buy a home in Denmark. We cannot buy a

home on the coast of Mexico. We cannot buy a home in Australia. The idea

here, of course, is that these other jurisdictions have recognized that

when there are small, local population centres and seven billion people

in the world, the influence of external capital on small domestic

markets can be profound. This happened in British Columbia.

[3:30 p.m.]

Our approach was to be different from what was the government’s

approach. We wanted to initiate that ban on foreign purchase. When I say

“foreign,” it doesn’t matter what passport you own. It means where

you’re living and paying taxes.

Now, we’re not government. There are three B.C. Green MLAs in this

Legislature that got elected by 17 percent of the popular vote in

British Columbia. We recognize that in not forming government, we are

not able to actually initiate a ban, New Zealand–style, on foreign

capital flow. But we’ve certainly supported, and I have certainly

supported all the way through, government’s efforts to deal with some of

the aspects of foreign money coming in, whether it be through dealing

with money laundering, through the foreign buyer tax and, more

importantly, dealing with the issue of satellite families.

Satellite families are defined in this legislation. We’ll be

exploring that further at committee stage. These are families — where

you might have one person in the family working elsewhere, paying all

their taxes elsewhere — living in, say, Point Grey or Oak Bay or

Vancouver-Quilchena in a $5 million home and declaring taxable income of

$20, accessing our health care system, accessing our social services,

accessing our education system but paying taxes in other jurisdictions

which are not declared here in British Columbia.

To me, this so-called satellite family is actually…. Again, the

cost of them actually being part of our society and living in these

homes is not being internalized. The taxes are paid elsewhere, but the

benefits are collected here. The government’s approach here — I

wholeheartedly, and I have done so since day one…. This is dealing with

the so-called satellite family.

Over the months, I’ve pointed out numerous concerns to government.

This decision we came to today to introduce three amendments was not

something that was taken lightly. I saw this legislation for the first

time when it was introduced. Life has been such a blur with these…. It’s

like burning the midnight oil. It could have been yesterday or the day

before now. It’s just been one big, long blur, in terms of

negotiation.

When it was first introduced, I saw this, and I was pleased with

some of the additions. One of these critical additions was identified by

the member for Kelowna West. As the member for Kelowna West pointed out,

when government first introduced this speculation tax, I would argue the

details had not been thought through.

One of those critical details was: what about development of land?

What about, if you have accumulated some land and you’re going to build

townhouses and condos to sell to British Columbians, to Canadians, and

in doing so, you’re waiting for permits, waiting to actually ensure that

you get construction built? It takes a few years. That is not

speculation.

I am absolutely thrilled that after meeting with the UDI,

developers in Vancouver, Kelowna and all across B.C. and bringing these

concerns directly to government, our government listened, and government

has actually included in here exemption, during the development of land,

of a speculation tax. That was critical.

I suspect that some, but not all, of the correspondence the member

for Kelowna West had with respect to uncertainty and construction on

hold is a direct consequence of the uncertainty. We have now seen

certainty.

I agree with the member for West Kelowna. It would’ve been awfully

nice if, when the tax was first implemented or announced back in March,

that certainty had been given to the market.

[L. Reid in the chair.]

I, like the member for Kelowna West, believe that market

uncertainty is not a good thing, because you have projects going on

hold. You have projects potentially walking. You have people then

speculating on the uncertainty. So I completely agree there. But I am

pleased that this has been dealt with.

Not all the concerns have been dealt with. Not everything has been

addressed. I spent, after seeing this bill come out — I’ll come to some

of the things that have been addressed — many, many hours. My staff

spent many, many hours trying to actually get to a fundamental position

where we could actually support the overarching structure of this bill,

recognizing that there’s still work that needs to be done. I’ll also

identify some of those things, and there is time to fix some of these

things.

In my view, good government works when people work together. I

recognize that it’s a much more difficult position for official

opposition, and I recognized that when this government now was in

opposition. It’s more difficult for official opposition to actually

constructively work with government because of the setup we have in our

legislative structure.

[3:35 p.m.]

As a small third party, we have a duty and a responsibility to

British Columbians to be responsible with the so-called power, the

so-called influence that we have. That duty and responsibility is to

ensure that we listen and communicate our concerns and do what we can,

through collaboration and compromise, to come to a situation, to come to

development of good legislation, to policy that we think tempers some of

what was introduced and reflects some of the concerns, but not all, that

allows us to support the policy moving forward — with the recognition

that this is not what we would have done.

What happened with the speculation tax and the budget rollout?

Again, the member for Kelowna West articulated this quite well. When it

was first announced, nobody knew the details. I didn’t know the details.

The member for Kelowna West didn’t know the details. In fact, government

suggested to the media — the Premier suggested — that British Columbians

were fully exempt from the tax. I thought they were fully exempt from

the tax. In fact, my constituency office sent out an email assuring my

constituents and those who contacted me that British Columbians were

exempt from the tax, based on the information I received directly from

listening to the Premier.

Well, you can imagine I was a little bit surprised when I read

Vaughn Palmer’s

article pointing out that I was sending out incorrect

information. He was right, and I acknowledged he was right. He was right

in that an information bulletin had been put out that was inconsistent

with the messaging and the language that had been said by government.

This is not good for certainty.

This was, quite frankly, from my perspective, somewhat

embarrassing. I don’t like to send out wrong information. We did our

best to correct it, to do that, and, at that point, realized that we

were going to have to spend a lot of time on this file.

We started pushing government to fix some things. We recognized

that the issue of the housing crisis is not a rural issue. It is largely

an urban issue. So in the act, you’ll see that, for example, we pushed

to get some of these islands out. There were islands in the Nanaimo

regional district — which was excluded — that had no electricity and no

power and no rental market which were included because of what was done

in the metrics to determine it. They were used, basically, over broad,

regional districts instead of over urban areas.

What we were able to do was to get government to focus this

initially on the urban areas, where there is more of a problem. Some

areas, like Saltspring Island, do have rental issues. However, it’s a

very complex issue there, as well, and ongoing work with the rental task

force, I understand. My good colleague here from Saanich North and the

Islands will be discussing that, I’m sure, when he speaks to this bill.

There are issues that still need to be worked out.

In March, government announced a few changes that it had made.

These included reducing the rates for British Columbians and Canadians,

and ensuring, in particular, that the tax didn’t apply to rural and

vacation areas. One of the issues, again…. This was very relevant to the

member for Chilliwack-Kent. Cultus Lake, in the initial version, was

included. I think Harrison Hot Springs may have been included as

well.

Again, these we pointed out. We directly took the emails from your

constituents — I’m sure you probably did as well — do not pass go, to

government, saying: “How does it make sense for Cultus Lake, which is

not an urban centre, for Harrison Hot Springs, to actually be included

in a speculation tax, when their markets are quite different from, say,

South Surrey or Tsawwassen or Burnaby or Nanaimo or

Victoria?”

So government did remove much of the rural aspects and focused on

the urban. That was signalled out in March.

Even since then, I pointed out that I’m struggling, because the

speculation tax was first introduced in the budget. I’ve heard scores

and scores of stories of individual cases, over the last eight months or

so, of people who’ve asked: “Am I included? Am I not included? Am I

here? Am I not there? What does this mean?”

This took a lot of work, honestly. It took a lot of work to try to

put together a detailed understanding of the complexity of this issue,

of the complexity of what government was trying to accomplish with the

introduction of a tax that essentially says that we want to create an

internalization of that externality associated with leaving vacant

property in areas that have low vacancy rates.

[3:40 p.m.]

Many of these examples were brought forward. Many, many meetings

were had. But the issue, of course, was that we didn’t know to what

extent government was listening. We didn’t know to what extent

government was listening until this bill was actually introduced,

sometime in the last 72 hours, which have been a complete blur to me

based on the fact that…. When was it?

Interjection.

A. Weaver: Tuesday, thank you. This was introduced on Tuesday.

When this came out, I was, as I mentioned, glad to see that

government had listened — in many, but not all, examples. For example,

there were exemptions for people who obviously should not be hit, where

being hit with the tax would cause significant financial hardship. Some

of the specific cases I raised to government were included. For example,

people that own a second home in a city because they need medical

treatment. There are people in British Columbia who have to go and own a

home in a particular area because they’re required for medical reasons

to come and report periodically to that area. They have been

exempted.

People who have secondary suites. For example, if you are in the

community of Kelowna West and you live in Alberta and use your home in

the summer but you have a secondary suite on your property, that

secondary suite would grant exemption for the entire property. This

isn’t without its own problems. For example, in the district of Oak Bay,

where I am from, or where I represent, rather, the district does not

allow secondary suites. So there are some issues there that we still

need to canvass.

Government listened in terms of examples brought forward about

couples who own two homes. One home is where one spouse works; one home

is where the other spouse works. They don’t work in the same city, but

they’re still together. It seemed outrageous to penalize married or

partners who happen to come together and formally, you know, take vows

and commit to marriage — to penalize them because they had two

properties, one of which was being used by one spouse and one by the

other. Government listened.

The issue of strata properties, areas zoned as tourist commercial,

where you can’t rent out places. Again, government listened. Lands that

are vacant or under development. Again, government listened. I’m pleased

that the UDI, whom I met with numerous times on this file…. Anne

McMullin recently said that when they saw the legislation, they were

pleased that government committed today that they will exempt lands

under development from this tax. So the UDI is actually pleased. This is

a very, very important exemption, because we cannot address

affordability if we start passing on a speculation tax to purchasers of

condos and townhouses which were actually being built for affordability

purposes. It’s a good government lesson there.

There are still issues to deal with. Let me go through a few

personal stories first, because I think it’s important to get a sense of

some of the issues that I’m going to canvass more extensively in

committee stage. Committee stage, as is known in this House, is critical

for us to get

interpretation of this legislation for broader

application. There are some real subtleties as to how this tax will be

introduced that government obviously has yet to capture.

In a briefing we had on the introduction of the tax plus some

hours in 72…. Again, it’s been a blur. I was asking some of the issues

directly in the briefing. It’s clear that government has attempted a

commonsense approach not to harm people who are not speculating.

However, there are going to be examples that have yet to be dealt with.

I can think of one example that needs to be discussed where, for no

reason other than you’ve actually got a house that’s old, your house

happens to be built on two city lots. In terms of the registration of

your city lots, you have one house, but there are two lots. It doesn’t

make a lot of sense to pay a spec tax because 100 years ago the lot

zoning was the way it was. So there are some oddities there where we

have to look out.

I don’t know to what extent there are other jurisdictions out

there where boundaries of actual lots span multiple zones. For example,

there are houses in Oak Bay that have some of their property in Oak Bay

and part of the property in Victoria. Now, to what extent does that

exist in the province of British Columbia on the edges of the areas

covered? I’m sure there are properties in Nanaimo, in the CRD, in

Kelowna West and elsewhere where most of the property is in the

contained area but some of it isn’t.

[3:45 p.m.]

These are issues that government may have not yet thought through

and hopefully will be canvassed during committee stage to get some

clarification.

I’ve had people who own a house, a strata building that doesn’t

allow rentals, contact me. I’ve had people who’ve invested in Victoria,

in places that are zoned tourist commercial — specifically designed for

short-term rentals. The zoning actually requires short-term rentals and

doesn’t allow long-term rentals.

Again, this was partly dealt with in this legislation, essentially

by saying that in the affected years 2018 and 2019, these areas —

tourist commercial–type zoning or stratas with no rental clause — are

not going to be subject. I still have issues there with respect to

secondary suites in municipalities that don’t allow secondary suites

officially to be zoned. Can you officially declare a secondary suite

when, officially, you’re not allowed to have one? There are issues there

that I hope to canvass.

I’m hoping that my good friend from the riding of Vancouver–West

End and also