It’s been almost a year since the speculation and vacancy tax took effect in several municipalities across the province.
And Kelowna Mayor Colin Basran is still not a fan.
“From our position in Kelowna, it hasn’t gone well,” he said.
Basran, along with West Kelowna Mayor Gord Milsom and mayors from other affected municipalities, met with B.C. Finance Minister Carole James on Sept. 12 to discuss the tax. The speculation and vacancy tax is meant to target vacant properties and properties owned by real estate speculators, and its revenue is intended to support affordable housing directly.
According to Basran, the majority of the mayors at the meeting spoke out against the tax. He cited one of his major issues as the “arbitrary nature” in which the tax is being imposed on municipalities.
“How were we selected? Why were some selected while others weren’t?” said Basran. “There is no policy that states which municipalities should have this and which shouldn’t. We don’t know any of these criteria.”
The Mayor said the tax has stopped or delayed housing projects, resulting in a loss of jobs. He cited a Canadian Home Builders’ Association of the Central Okanagan report, which put the job loss at a 22 per cent reduction in jobs related to residential construction in Kelowna.
In total, the tax raised $115 million in its first year and around $2 million of that came from Kelowna.
Despite the revenue being promised to come back to each community, Basran said there’s still no means or planned method for that money to re-enter Kelowna.
“We do not yet know how (the money will come back to Kelowna),” said Basran. “So, we’re waiting on how we’re going to receive that $2 million and when.”
The city’s marketability as a place to retire has also taken a blow due to the tax, according to the mayor.
“We rely on our prairie friends to come and visit, to invest in our community and to one day want to retire here,” he said. “And now they’re saying ‘well, because of this speculation tax we’ll just find somewhere else where we don’t have to pay it.’
“It has hurt our reputation as a place to retire and a place to invest as well.”
Instead of the speculation tax, Basran said he would prefer a transactional tax, which would target real estate speculators and not those with summer homes or those planning to retire in the community.
The finance minister took the feedback of the mayors on the tax and if any changes are to be made, they will likely be done before the end of 2019.
One of the mayors’ main wishes for the tax was to implement an opt-in/opt-out system so municipalities can choose whether or not they’d like to participate.
“Now, we just wait,” said Basran. “We’ll see if she took away any other feedback and will make any changes.”
West Kelowna Mayor Gord Milsom will give his comments on the issue to the Capital News at a later date.