Dear Editor,
When our premier, Christy Clark, was first elected, almost immediately she traveled to Asia to seek foreign investment.
A good decision and really only what every other previous premier had done. It was also politically popular because it showed foreign investment boosted the economy and jobs.
In 1988, my government tackled the archaic Land Titles Fee program; it was also viewed as a means of diverting some of the tax burden from the middle income earner to property by using much of the proceeds to lowering the PST.
It was much maligned by the opposition, both NDP and Liberal. At the introduction of a Bill to establish the “Property Transfer Tax,” we also reduced the sales tax by 15 per cent, with the promise to lower it further after we knew better what revenues were produced.
It was always my view that the middle and lower income earners, in relative terms, paid the most tax.
In the next election, the NDP was elected government, they suddenly embraced the Property Transfer Tax, but now also increased the sales tax.
The following election saw the government changed again, now to the Liberals. They now loved the revenue from the transfer tax, but again increased the sales tax even further. For a variety of reasons, none the least of which was “quantitative easing,” the printing of money with nothing to back it, offshore investors, especially those from Asia, sought to buy property, especially on the west coast in B.C.
Dollars poured in, property values increased dramatically, building boomed, more jobs than people, B.C. now again led Canada economically.
A problem developed. Too many young people loved the “night-life” and wanted to live in Downtown Vancouver but found themselves unable to compete with what Asians were able and willing to pay.
Despite pressure from the NDP opposition, the Liberals wisely resisted and some argued that starting in the Fraser Valley, or elsewhere in B.C., until able to afford the higher city prices, was not a bad place to begin.
The pressure continued and increased, an election was nearing, the Liberals caved and introduced an unprecedented and very hefty “Foreign Buyers Tax” of 15 per cent on the value of the property.
It has now been a month; home sales in Metro Vancouver have plunged, soon construction jobs will begin to suffer and our reputation of being a friendly place to invest may be shattered and could well become a lasting legacy.
The young B.C. voters still can’t afford a Metro Vancouver home and with all the present rules, regulations and delays it is not likely to change.
I can recommend the real long term solution:
In the early ‘80s, as the Minister for Municipal Affairs & Transit, I introduced the “Planning Act.”
It made its way right to the legislature where, as expected, the NDP opposition, regional districts and some municipal bureaucrats, and even some special interests, like big developers, mounted their protests.
Their main complaint was the requirement for municipalities and regional districts to develop a five-year plan that clearly delineated lands available for development.
The plans were subject to provincial approval and possible amendments. An application from a person or developer had to be dealt with in 60 days.
If approval or disapproval was not granted within 60 days, the application was automatically approved and subject only to an appeal to the Ministry of Municipal Affairs.
It was considered by the ministry that a person wanting to build or buy a home, would save many dollars and time and that it would quickly respond to a housing shortage.
The protests by special interests grew and Premier Bennett and my cabinet colleagues decided to pull the Bill; old timers may recall me calling them “gutless.”
Reintroducing the Bill, or one similar, instead of cutting foreign investment and jobs, is the best solution.
Keep in mind, the time will come when another premier, another time, will travel to Asia to entice foreign investment and find the welcome mat gone.
Keep in mind, the hefty 15 per cent tax may appear to be popular for a time, but the time will fade quickly. Interfering with the “free market” tends to backfire very quickly.
Bill Vander Zalm
Former Premier, Richmond MLA
