BC Government Will Ensure That This Never Happens Again

Angel Faced

It was only a couple of years ago that our cherub like Premier apologized for almost a century of Chinese discrimination. A few short days ago she announced B.C.’s now infamous 15% Property Purchase tax to be levied on foreign nationals. The not so secret target – mainland Chinese!

Watch Her Lips

The Apology

Today we express our sorrow and regret for historical provincial government practices that were once considered appropriate. While the governments which passed these laws and policies acted in a manner that was lawful at the time, today this racist discrimination is seen by British Columbians – represented by all members of the legislative assembly – as unacceptable and intolerable. We believe this formal apology is required to ensure that closure can be reached on this dark period in our province’s history. The legislative assembly’s apology today signifies our deepest regret for the hardship and suffering our past provincial governments imposed on Chinese Canadians. The entire Legislative Assembly acknowledges the perseverance of Chinese Canadians that was demonstrated with grace and dignity throughout our history while being oppressed by unfair and discriminatory historical laws. Moreover, we acknowledge the overwhelming contribution by Chinese Canadians to British Columbia’s culture, history and economic prosperity. On behalf of the Province of British Columbia, and on behalf of the entire legislative assembly, we sincerely apologize for the provincial government’s historical wrongs. We are sorry for the discriminatory legislation and racist policies enacted by past provincial governments. We will ensure that this never happens again. (emphasis mine)

Source:

Is The Stain of Discrimination Different This Time?

As a Realtor® I’m aware that problems exist in the Vancouver real estate market place. I’ve seen some crazy stuff and recognize that nothing is ever perfect but this debacle is an ill considered doozy. The problem as claimed, points to off shore Chinese for whom the claim holds, have driven Vancouver Real Estate prices higher. A number of people in various disciplines have shouted potential proof that the off shore Chinese have driven Vancouver’s real estate prices to new locally unaffordable highs.

An often quoted number claims that 7% of the home purchases were made by off shore Chinese. I often wonder and I’m sure you have too – who bought the remaining 93% of Vancouver homes? Did the home buyers who comprised that 93% have any influence on Vancouver home prices? It is an outstanding question one for which the proclaimers have no consensus.

Others claim foreign purchase volumes higher than 7%. The claim is based on localized – ‘neighbourhood’ data. A data set so small that it does not offer overall consensus and can be dismissed as little more than cocktail conversation or a preparation for political stumping but certainly not global truth. Within this claim is rationalized methodology which included the science of determining name variants as confirmation that some buyers were foreign nationals. I suspect that this methodology is in need of an evidentiary disclaimer!

“We Will Ensure That This Never Happens Again”

Discrimination

Our government’s policies should be directed to help people however, this particular tax policy is very flawed and is wrong. At its base it is premised on discrimination.

We know this truth! Targeting people on the basis of their origin or citizenship is bad. If the buck stops at Ms. Clarke’s door she most certainly has not as she proudly proclaimed, ensured that it didn’t happen again.

Sean Rehaag an associate professor at Osgoode Hall Law school and York University clarified how wrong this form of tax is.
The Charter of Rights and Freedoms forbids governments from discriminating on the basis of a list of prohibited grounds, including national origin. Canadian courts have extended those prohibited grounds to include citizenship status. The new B.C. tax, which took effect Tuesday on properties in Metro Vancouver, is not restricted to people living outside Canada. It applies to anyone who is not a citizen or a permanent resident. It taxes people, including residents of British Columbia, differently depending on their citizenship status. There is little question that a tax applying exclusively to a group defined by one of the Charter’s prohibited grounds would constitute discrimination. The Charter includes a provision that renders measures lawful that would otherwise be unconstitutional if they are reasonable limits that can be justified in a free and democratic society. But to benefit from this provision, the government must show, among other things, that there are no other ways to achieve the intended policy objective that would do less to infringe people’s rights. It is unlikely that the B.C. government could meet this test in this case. Many other policies could accomplish similar ends without discriminating against foreign nationals, such as residency requirements, which have long been used in Prince Edward Island and Saskatchewan.

Another Apology

I’m not sure who does the research at provincial levels but I’m of the opinion that the team that determined this tax policy was in the best interest of B.C. and its citizens got it wrong. So wrong in fact, that I anticipate that very soon we can expect our Premier Christy Clarke to be delivering another humble apology for making this discriminatory tax lawful.

Better Way

As American politics are currently at that forefront I offer a tag line borrowed from the Democrats who claim that “Together we are Stronger”. The 15% Property Purchase tax like the Mexican wall proposed by Trump is untenable at its most base level. As noted in the Premier’s video preamble the Chinese did help make Canada stronger. I would like to believe that the current Chinese inflow could and should be given the time and opportunity to move Canada forward as a nation in a positive manner. I remain eternally hopeful that the Powers who make laws figure out a better way to make that work an inclusive manner.

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

When Life Moves You - contact Larry:

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

canuck Says:
August 4th, 2016 at 7:51 am

9 out of 10 supported this tax. It’s not discriminatory, it just so happens that a large portion of our offshore buyers are from the same Country, that isn’t our fault or something we can control.

In another poll, 82% of over 9000 polled wanted to see prices in Vancouver decline. It’s clear that something needed to happen. Would you have preferred that they did something that made it harder for locals to get in (shortened amortization, raised down payment minimums etc..), rather than target wealthy non-residents?

August 4th, 2016 at 8:11 am

@canuck
“it’s not discriminatory, it just so happens”:
That’s bullshit and you know it! It is exactly that.
By definition discrimination means:
“the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.”

Are locals upset – sure. Is this the way to deal with the issue – not in my opinion.
There are better alternatives:
“other policies could accomplish similar ends without discriminating against foreign nationals, such as residency requirements.”
Long version – if you want what Canada affords you as a stable society (secure place to park your money by buying expensive homes) you must live and work here (like the previous Chinese generations) and become part of the Canadian fabric.

James Rider Says:
August 4th, 2016 at 8:21 am

The government of HK and Singapore did exactly the same thing..its a very common form of macro-prudential policy. its not that unusual at all.

canuck Says:
August 4th, 2016 at 8:34 am

“Long version – if you want what Canada affords you as a stable society (secure place to park your money by buying expensive homes) you must live and work here (like the previous Chinese generations) and become part of the Canadian fabric.”

How is this any different from what they are doing?

“Foreigners who plan on spending less than six months a year in Canada can keep a home here without having to apply for residency. Those who buy a property and plan on living in it longer than that have to immigrate to the country and apply for permanent residency.”

The tax does not apply to PR applicants

canuck Says:
August 4th, 2016 at 8:40 am

And it’s not bullshit, China and other Countries also charge a non-resident tax on residential properties.

If you truly believe it’s discrimination then you must believe China, Australia, London, New Zealand, PEI and all our Universities that charge higher tuition are discriminating.

canuck Says:
August 4th, 2016 at 8:56 am

Even if it was discrimination, it’s not as though we don’t discriminate all the time. Why don’t we allow Canadian citizenship to the 7.4 billion people on the planet? Why don’t we allow all of these people access to our healthcare? Why can’t my parents who live in the States open an account at Vancity? I could go on and on

Certain types of discrimination are illegal and immoral, applying a non-resident tax on residential properties isn’t one of these.

August 4th, 2016 at 8:59 am

@canuck
not disputing what is being done elsewhere
Bottom line – the definition equals action taken?

August 4th, 2016 at 9:06 am

@canuck
“it’s not as though we don’t discriminate all the time”

Slippery slope – Does not make it right?

canuck Says:
August 4th, 2016 at 9:16 am

“Slippery slope – Does not make it right?”

That’s weak Larry. It wasn’t wrong to begin with, as I clearly pointed out.

canuck Says:
August 4th, 2016 at 9:18 am

You choose to get all “doesn’t make it right”, when it applies to real estate?

C’mon

August 4th, 2016 at 9:44 am

@canuck
“wasn’t wrong”

matter of opinion

August 4th, 2016 at 9:46 am

@canuck
“You choose to get all “doesn’t make it right”, when it applies to real estate?”

Actually I do. Sorry if that doesn’t fit your viewpoint.

canuck Says:
August 4th, 2016 at 9:54 am

Your viewpoints are obviously based on your vested interest.

No need to apologize, you should just be more upfront about it.

August 4th, 2016 at 10:03 am

@canuck
the only thing obvious about this discussion is that my vested interest is to conduct business without discrimination.
For that I do not apologize!
Thanks for your time and interest.

dave Says:
August 4th, 2016 at 10:42 am

By definition discrimination means:
“the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.”

disagree on this, as it is not based on race….
but citizenship.
right now may be mostly Chinese, but 5 years down the road it may change? who knows

I still think Crusty is kinda hot, but the Cherub comment is perfect …..

Dave

Kevin Says:
August 4th, 2016 at 11:50 am

So you think it’s discrimatory to tax non-resident foreigners for using our property market as a casino or as a repository for questionable funds?

How about when a non-resident, non-citizen uses our medical system? Come to Canada for your free heart transplant! Surely we should allow them the same free access as our residents and citizens, otherwise we are being discriminatory against the world’s sick people.

Sorry Larry, you are wrong on this one.

August 4th, 2016 at 1:43 pm

@kevin,
“So you think it’s discrimatory to tax non-resident foreigners for using our property market as a casino or as a repository for questionable funds?”

Did I say that?
I believe my point is that there are better ways to accomplish this objective in a manner that is more beneficial to BC and Canada. The Osgood Lawyer suggests this as well.

Rambo Says:
August 4th, 2016 at 2:47 pm

“By definition discrimination means:
“the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.””

There is a HUGE difference between prejudicial treatment based on race, age, sex vs based on citizenship/residency. It is reasonable to change your residency when moving to another place to live, while the same cannot be said for age, sex, and race.

For that matter, do you think it is equally unjust to charge foreign students more tuition??

Kevin Says:
August 4th, 2016 at 4:36 pm

The evidence of money laundering and speculation involving foreign money is undeniable and it hurts local permanent residents and citizens who have to bid against the big influxes when buying homes.

If you think it’s okay for non-resident foreigners to enjoy using our real estate for parking money or for money laundering or just for pure speculation, regardless of the damage to the dreams of residents, then surely you can have no objection to them taking advantage of our other benefits – like our taxpayer funded health care.

If not, why not?

August 4th, 2016 at 5:57 pm

@Kevin
same answer as before

August 4th, 2016 at 5:59 pm

@Rambo
“do you think it is equally unjust to charge foreign students more tuition?”

Another question for Ms. Clarke methinks.

Leo Says:
August 4th, 2016 at 7:54 pm

Here’s the thing, given your vested interest (and no, it isn’t in being non-discriminatory) it’s tough to take any argument you make here seriously.

As others have pointed out, the issue here is not race. The fact that it is mostly Chinese buyers is incidental.
What if it was mostly German buyers and they had driven the price up to the same level? Do you honestly think that people wouldn’t still be just as upset?

Several years ago the talk was also about HAM. This time the A stood for alternately American or Albertan. People were just as concerned about the impact on affordability for locals as they are now.

The argument that this tax is racist is a weak attempt to deflect from the issue.

Unlike your claim, there is no alternative. Either it is effective and prevents the chinese buyer from buying (and is thus discriminatory in your view) or it is not effective, in which case why bother?

August 4th, 2016 at 8:58 pm

@Leo
I presume you read this part:
“The Charter includes a provision that renders measures lawful that would otherwise be unconstitutional if they are reasonable limits that can be justified in a free and democratic society. But to benefit from this provision, the government must show, among other things, that there are no other ways to achieve the intended policy objective that would do less to infringe people’s rights. It is unlikely that the B.C. government could meet this test in this case. Many other policies could accomplish similar ends without discriminating against foreign nationals, such as residency requirements, which have long been used in Prince Edward Island and Saskatchewan.”

Leo Says:
August 4th, 2016 at 9:37 pm

The problem in Vancouver is not absentee owners, the problem is foreign capital driving up prices. So no, residence requirements wouldn’t solve the problem and have massive unintended outcomes as well.

Also not sure why you are OK with discriminating against non-residents..

August 4th, 2016 at 9:42 pm

@leo
enlighten everyone – what are those massive unintended consequences you speak of?

Bbcoq Says:
August 5th, 2016 at 9:14 am

When Vancouver specials in “affordable” places like Poco, Surrey, North Delta etc. are over a million dollars the government had todo something.
Did they do the right thing? Probably not but they’re damned ift hey did and damned if they didn’t. Let’s be honest, they are clumsy and hamfisted and not afraid to break several eggs sto make the omelette they want-this premier tore up a labour contract without looking at the damage it would do and we still have this unresolved situation today, with unintended consequences. I would not bet on this government getting the fix right, anytime soon.

harper Says:
August 5th, 2016 at 9:49 am

Isn’t the practice of selling permanent Canadian residency/citizenships to only wealthy non-citizens discriminating against those less fortunate?

Leo Says:
August 5th, 2016 at 10:49 am

> what are those massive unintended consequences you speak of?

PEI needs strict controls because it’s a strictly limited and very small supply of houses. They can’t afford to have non-residents buying up vacation property and leaving it empty.

Greater Vancouver is not like that. But imposing residency requirements would kill a lot of business by people running rentals, vacation homes, etc.
You are not going to find anyone that has actually researched the issue that will recommend residency requirements for a big city like Vancouver. Sean Haag studies refugee law, and doesn’t seem to know much about the housing market or the issues this tax is trying to address.

chris Says:
August 5th, 2016 at 11:58 am

There are a lot of restrictions in place for foreign nationals. Say international students pay higher tuition. Or there is a restriction in application to medical schools for foreign students.

Would you classify these policies as discriminatory?

Rambo Says:
August 5th, 2016 at 12:10 pm

“@Rambo
“do you think it is equally unjust to charge foreign students more tuition?”

Another question for Ms. Clarke methinks.”

But I want to know what YOU think about my question, Larry.

August 5th, 2016 at 2:35 pm

@rambo
re your question – what I think about this issue is of no consequence – I don’t have the power to change it.

August 5th, 2016 at 2:36 pm

@leo
tell Sean Haag that.

canuck Says:
August 6th, 2016 at 8:28 am

“what I think about this issue is of no consequence – I don’t have the power to change it.”

you don’t have the power to change the new 15% tax either, but that didn’t stop you from giving your opinion on it.

Rambo Says:
August 7th, 2016 at 8:09 am

“re your question – what I think about this issue is of no consequence – I don’t have the power to change it.”

For that matter, what you think of the foreign tax, and Vancouver real estate is of no consequence either! We come on here to discuss and debate, and to hear and learn other opinions and points of view. So could you just take a moment and share your thoughts on my question, which apparently some others here have also asked?

ted Says:
August 7th, 2016 at 11:42 am

Larry, the 15% tax will most likely be struck down by the SCC, but it will take a few years to go through the court system. Those paying the legal bills to reach this final conclusion will be the folks who have a vested interest in ensuring that the gravy train for them continues uninterrupted, and damn the consequences to regular, hard working folks that can’t afford $5 + million homes and Mclarens for their kiddies,filled with uncashed GST rebate cheques.
Rant over, Tell me, you imply that there are better ways to stop this madness and give the working family a chance to house themselves without paying 80% of their take home pay to do so.You have always impressed me with your sense of fairness, and your very informative comments plus stats etc. without hype.or BS. So, give it your best shot.What are your recommendations?

dave Says:
August 8th, 2016 at 11:13 am

Larry, since the new tax kicked in, are you noticing anything different, besides seasonal slowdown?
thanks…

Purr purr jones Says:
August 8th, 2016 at 7:45 pm
August 9th, 2016 at 8:35 am

@dave

I believe the month end stats confirms that generally the sales were off

August 9th, 2016 at 8:38 am

@ted,
better ways – if you follow the press you are starting to see cracks appearing. Sadly little is said about increasing wages.

JimE Says:
August 14th, 2016 at 10:10 pm

Why does everybody that is getting fat off foreign money cry racism anytime their is a threat to their cash cow?
All you really care about is how much money you make, even if it leads to the destruction of the Vancouver everybody once fell in love with. Treason?

dumb Says:
August 20th, 2016 at 2:36 pm

Sorry, but as a Chinese, with a mainland Chinese wife, we both applaud this tax.

Also, as a high income earner, I could sue the government for singling me out for paying higher taxes too. Governments have always had the right to apply taxes to certain classes of people. This is no different. It’s also an appropriate regulation mechanism. The US stock market is highly regulated. Why not RE?

Don’t talk to me about the head tax. My grandfather when he came over in the 20s paid the head tax. Stop using it to justify this. This has nothing to do with discrimination and everything to do with not selling canada out.. Did you see the stories of Americans who have to pay the tax too?

Atomix Says:
August 22nd, 2016 at 7:19 am

As you stated… by definition discrimination means:
“the unjust or prejudicial treatment of different categories of people or things, especially on the grounds of race, age, or sex.”

Note that the race, gender or age of a person has no effect on this tax. Only the country that they reside in. You stated that there are other ways to do this, including residency requirements. That’s exactly what this is: A residency requirement.

An in any case, is it really unjust? As real estate has been turned into a commodity as of late, this is similar to a withholding tax. If a Canadian holds a US equity and sells it, they pay US withholding tax on the gains.

Now, I don’t agree with the tax in general, but it’s not racist or sexist or ageist, that’s for sure.

Fortune500 Says:
August 24th, 2016 at 10:47 pm

I too have always come here for a fairly balanced view of the situation from the real estate interest side of things, but this feels more like an emotional response to a severe change to personal business/finances than a truly balanced argument.

What I find interesting is that many realtors in Vancouver, when questioned on the Wile E Coyote-like nature of the housing market, argue that wages just need to catch up, or that more should be done to raise local wages to meet these price levels. This is absurd. Have you seen how truly detached income is to prices? Do you realize a healthy market is 3-5 times income?

Yes, it would be wonderful, but unless Vancouver goes back in time and concentrates on becoming the next Silicon Valley or something other than a multimillionaire resort town, this is simply dreaming. Remove the multimillionaires coming from outside and the show is up (unless they truly are a fraction of the market as we keep hearing, in which case … no worries!)

All of the talented young working professionals I know have already relocated to the US, Alberta, Gulf, etc. Boomers are now left with the paradise created. Empty beautiful, new, soulless. Eventually the bottom falls out.

Let’s hope we can learn from this embarrassing period in Canadian history. And I mean embarrassing in terms of how born and raised Vancouverites (regardless of race) were so thoroughly ignored in all of this, not the rich money foreign buyer from Tianjin, Tehran, or Timuktu

dave Says:
August 31st, 2016 at 10:52 am

be interesting to see the numbers tomorrow??

Al Says:
September 1st, 2016 at 3:11 am

This was a quick fix tax, and sure its not perfect, but it will have the desired effect.

What I find interesting is all the folks crying foul over this tax are the same folks who said foreign purchasers are just a small portion of the market. If they were/are such a small portion then it shouldn’t impact the other 93% right? Or is it that the 7% of foreign purchasers were so hyped up by the RE industry that it scared the locals into fearing they would be priced out for ever. Was that ethical?

Sure there are alternative ways to tackle the issue but in my opinion it would require a complete transformation of our tax system. Away from income taxes and towards higher property taxes. Then the “holding costs” of RE would deter those that just park money here. There wasn’t enough time to do such a wholesale tax reform. This tax is already several years too late in my opinion.

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