Recently, the B.C. Minister of Finance previewed two budget proposals ostensibly designed to address the cost of owning or renting residential property in British Columbia. The stated targets were Canadians resident in other provinces who own vacation homes in B.C., and “foreigners” who live abroad for most of the year whose properties in B.C. stand empty for most of the year. These proposals created a storm of protest from a range of stakeholders.
The stakeholders directly affected include: resident and non-resident owners, people looking for affordable housing, realtors, tradesmen who build and renovate homes, and people providing a broad range of retail products and services.
In my opinion, these proposals will not only fail to achieve their stated purposes, they are likely to have negative consequences that outweigh whatever benefit was sought. The market is both dynamic and sophisticated, making it difficult to predict the outcomes of changes in government policy. However, here are some probably consequences:
It will discourage investment in new housing by both B.C. residents and those from neighbouring provinces; will make rental properties scarcer and more expensive; will have a negative impact on the local economy, including job losses in services and construction; will lower the revenue the governments will receive from income, sales and municipal taxation; and will exacerbate tensions between provinces caused by pre-existing conflicts over cross-border pipelines and other matters. It will dash the hopes and dreams of many people who in good faith decided to live, at least part-time, in B.C.
The rhetoric justifying these proposals paints a largely false picture of new residents to B.C. They are portrayed as “speculators” taking advantage of rising property values to “gouge” long-term residents. In reality, our temporary visitors from other provinces provide a net financial benefit to the provincial treasury.
Dr. John Hogarth