Letter: Kelowna candidates speak on B.C.’s planned speculation tax

Letter: Kelowna candidates speak on B.C.’s planned speculation tax

Candidates were surveyed

Candidates for political office in Kelowna were surveyed on their impressions of the planned speculation tax. Bob Schewe is clear on what he likes and doesn’t like. He doesn’t like the tax-grabbing NDP government. He approves of property speculation – it’s “their business,” he says of the speculators, implying it’s none of ours. And he has no problem with the idea of the City of Kelowna attempting to obstruct the provincial government on this issue. The former bylaw officer has until now appeared to be a very strict law-and-order type. His survey response may change the minds of some voters.

Colin Basran’s carefully worded survey response mentions housing affordability and homelessness, but somehow fails to mention the elephant in the room: housing availability. A low rate of availability is obviously related to homelessness, and a low rate of availability is exactly what’s led to the speculation tax, which taxes the owners of vacant homes, encouraging them to put them on the rental market.

Many critics of the tax have taken issue with its name. Basran said in his survey response that the tax doesn’t actually address speculation in real estate. But the B.C. government’s definition of “speculation” seems to fit. According to the Ministry of Finance Tax Information Sheet, “when a property owner holds onto vacant homes and benefits from rising property value, that is speculation. This behaviour is taking homes out of the housing market, driving vacancy rates lower, and making it harder for British Columbians to find a place to live.”

True, the planned speculation tax doesn’t address all forms of speculation – for instance, it doesn’t address rapid speculative resale, the highly profitable ‘flipping’ activity that’s so well liked by wealthy investors and the real estate industry. But it clearly does address the type of commodity investment that involves hanging onto an empty home until market conditions are auspicious for high-profit resale.

Back in March, Basran said that rather than a vacancy-based speculation tax, a flipping tax would have a greater impact on stopping the rise in property prices. The Capital News noted at the time that the approach was also supported by the Union of B.C. Municipalities. But Basran – himself a former real estate agent – doesn’t appear to be chasing a flipping tax. He was at the annual UBCM meeting in Whistler a few weeks ago. He’s on record only for having led another charge against the speculation tax.

In his survey response, Basran called for a full economic analysis of the speculation tax and for using “good data before pushing through policy.” It begs the question: what data did he use in order to conclude that “already, vital sectors of Kelowna’s economy – particularly construction and tourism – are suffering” from the planned but not-yet-implemented tax? It’s not a moot question. How can you measure the results of something that does not yet exist?

What does exist is the data generated by the Central Okanagan Economic Development Commission’s 2017 survey of 200 Kelowna businesses. The survey found that over 90 per cent of respondents had trouble attracting and retaining labour due to the tight rental market. What we know is that the low rental vacancy rate has had a significant negative effect on the local economy.

In addition, there’s the Canadian Mortgage and Housing Commission data that shows a 0.2 per cent rental vacancy rate for the primary rental market in Kelowna, and the 2016 census data that shows that 23 per cent of Kelowna’s downtown homes and 17 per cent of Lower Mission homes were vacant. What we know is that homes should not sit empty while people need homes to live in.

Basran touts the UBCM report ‘A Home for Everyone’ as providing “well-researched, data-based recommendations to manage actual speculative housing activity, rather than simply taxing homes that are vacant or used occasionally.” True enough, the report recommends that the provincial and federal governments introduce fiscal and taxation tools to encourage the use of residential property to provide housing, and discourage speculation, flipping, commodity investment and other “market distortions” that contribute toward high housing costs. Moreover, it recommends that local governments regulate short-term rentals to discourage that particular type of speculative demand.

But the report also draws attention to a 2017 UBCM resolution that called on the B.C. government to allow local governments to introduce a surtax on vacant residential properties to encourage occupancy. In 2018, the loudest voice sat the UBCM meeting were not against a vacancy tax per se. Instead, they wanted local governments to be able to collect the levy and use the revenues for non-market housing.

Lastly, Basran said in his survey response that “council has limited ability to affect change related to land-use and the development approval processing” in order to ensure housing affordability and prevent homelessness. But his hands are not tied in relation to an initiative called for in the UBCM report, and approved earlier this year by the provincial government, to allow municipalities to require some or all units of new residential buildings to be devoted to long-term rentals. This is called rental tenure zoning, and when I brought up the possibility of adopting it for use at a recent council meeting, Basran made no reply, while Coun. Gail Given shoved it off as a possibility that might only be considered long down the road.

The renters of Kelowna need better answers than any so far given. Unfortunately, Bobby Kennedy’s tirade breaks no new ground. As an opponent of the speculation tax, he says “this initiative put forward by the NDP government is an example of how government often disregards what is truly best for the citizens and our province in order to carry out political agendas that benefit their party first, and foremost, regardless of the cost to the people.”

Kennedy clearly hasn’t done his homework. An attachment to the City of Kelowna’s March 19 report on the speculation tax repeated the findings of an Insights West poll showing that 75 per cent of those who voted for the BC Liberals in 2017 were in favour of the tax, while 79 per cent of those who voted Green and 90 per cent of those who voted NDP were also in favour. 85 per cent of renters and 82 per cent of homeowners were in favour of the speculation tax. In other words, the tax meets the political agenda of most British Columbians, regardless of who they vote for or whether they rent or own.

Speaking of home ownership, Kennedy said it’s “something people should be celebrated for and not punished. If someone is fortunate enough to buy multiple properties, then not only do I respect their position as an investor, I respect their position as someone who can provide shelter to the many people who just simply are not in the position to be a homeowner.” For what it’s worth, the theory he espouses seems to be about righteous and benevolent capitalists and those who have failed to take the right “steps,” ending up in a helpless heap.

As the UBCM meeting was underway in Whistler, finance minister Carole James did not equivocate on the speculation tax. “There’s a housing crisis in British Columbia,” she said. “The public wants us to address it. It’s going ahead.” Despite this bold assertion, and despite the previous efforts of himself and other local opponents to get it off the table, Tom Dyas thinks Kelowna has not been heard. He thinks if he is mayor, he will be heard, and that’s because, he said in his survey response, he has friends in high places: “Over the years of my involvement, I have built many strong relationships with both provincial and federal government policy makers and politicians. I have earned the respect and trust required to effect change by leveraging these relationships.” Get ready for force, Victoria and Ottawa, should this strongman be elected to office.

My analysis of the responses of the mayoral candidates will shed light on many of the responses of the council candidates. Amarjit Singh Lalli’s stands apart from others in how it considers the effects of the tax. “It is doing very little for affordability,” he said, despite the tax having not yet been implemented. He also insists that “housing starts are down 29 per cent.” Statistics at Canada Mortgage and Housing Corporation show that housing starts in August were slightly higher at 307 than they were the previous August when there were 298. The year-to-date housing starts for 2018 are certainly lower than YTD-2017, but that may be because time was invested in completing builds. Adding upstarts and completions, YTD-2018 has seen 2,404, whereas YTD-2017 saw 2,364. I would argue that candidates for office should not need to be told that accuracy matters.

Loyal Wooldridge’s response is unique in how it points out that the city “isn’t actually responsible for providing housing.” Strictly speaking, he’s right. No one expects the city to take money out of the policing or public infrastructure budgets, for example, in order to build affordable housing. That said, Wooldridge might want to look at pages 34-39 of ‘A Home for Everyone,’ which describe how local governments have created regional growth strategies, official community plans, and neighbourhood level plans that incorporate concrete affordable housing strategies by using the large array of tools available to them.

His response also stands out for how it asks us to feel “sad” about how the speculation tax targets vacancy and assets, causing rich investors with multiple homes to cash out of the market because they refuse to consider paying tax on their empty homes. It’s not likely that the renters of Kelowna or the vast majority of British Columbians would experience crocodile tears over the probable effectiveness of the proposed tax.

Brad Sieben’s response stands out for how it considers Andrew Weaver an ally in the battle to axe the tax: “advocating to sympathetic MLAs (including Green Party leader Andrew Weaver) with vigour must be continued. Good progress was made at (recent) UBCM and some hope was provided in the commentary from Weaver.” True, Weaver does not think British Columbians and other Canadians who “happen to have a second place” should be taxed. He huffs and puffs about how the tax is “a vacancy tax — it is not a speculation tax,” but he doesn’t mind taxing vacancy as long as local governments craft the legislation and the revenues go toward non-market housing.

And that’s a wrap.

Dianne Varga


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Seniors in the Interior Health region can book their COVID-19 vaccinations starting Monday, March 8, 2021 at 7 a.m. (File photo)
Seniors in Interior Heath region can book COVID-19 shots starting Monday

Starting March 8 the vaccination call centre will be open 7 a.m. to 7 p.m. daily

Kelowna General Hospital (File photo)
Second COVID-19 outbreak declared at Kelowna General Hospital

One patient and one staff member on Unit have tested positive for the virus.

Fire ripped through a mobile home on Boucherie Road in West Kelowna on March. 6. (Phil McLachlan - West Kelowna News)
‘My whole life just went up in smoke’; Fire consumes West Kelowna mobile home

RCMP confirmed that there were no injuries due to the fire

A COVID-19 exposure has been confirmed at Pearson Road Elementary in Rutland Saturday, March 6, 2021. (Barry Gerding - Black Press Media)
COVID-19 exposures at Kelowna elementary school

Interior Health confirms virus exposures at Pearson Road Elementary

A render of the proposed expansion at Kelowna Christian School. (City of Kelowna)
City of Kelowna staff support major expansion of local school

Expansion would increase the size of Kelowna Christian School by roughly 3,540 square metres

The James C Richardson Pipe Band marches in a Remembrance Day parade on Nov. 11, 2019 in Chilliwack. Wednesday, March 10 is International Bagpipe Day. (Jenna Hauck/ Chilliwack Progress file)
Unofficial holidays: Here’s what people are celebrating for the week of March 7 to 13

International Bagpipe Day, Wash Your Nose Day and Kidney Day are all coming up this week

Multiple people were injured at a Vernon home following an early-morning break-in Saturday, March 6, 2021. (Black Press file photo)
Multiple people left injured following break-and-enter in Vernon

Police believe the early-morning break-in was targeted and not a threat to the general public

Victoria man Brett Andersen is asking for people’s help to secure him one of eight free tickets to the moon. (Screenshot/@brettandersen Instagram)
Victoria man wants your help securing a free ticket to the moon

Japanese billionaire offering eight people a trip to the moon

The Conservation Officers Service is warning aquarium users after invasive and potentially destructive mussels were found in moss balls from a pet store. (BC Conservation Officers Service/Facebook)
Aquarium users in B.C. warned after invasive mussels found at pet store

Conservation officers were told the mussels were found in a moss ball from a Terrace pet store.

A Coldstream resident who found an owl struggling on her property in March 2021 is now spreading awareness of about the knock-on effects of rodent poisoning. (Kathy Renaud photo)
Okanagan owl ‘fighting for her life’ after ingesting rat poison

Coldstream resident warns against the use of rodenticide due to risk of secondary poisoning in raptors

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Donald Alan Sweet was once an all star CFL kicker who played for the Montreal Alouettes and Montreal Concordes over a 13-year career. Photo courtesy of Mission RCMP.
Ex-B.C. teacher who was CFL kicker charged with assault, sexual crimes against former students

Donald Sweet taught in Mission School District for 10 years, investigators seek further witnesses

Most Read