Ian takes a quote from Sandy Garossino’s critique on real estate and race in the National Observer:
Little could be more symptomatic of Vancouver’s real estate derangement syndrome than journalist Ian Young’s report that the Canada Revenue Agency is nervous about being labeled racist over tax fraud investigations in Vancouver. Even our tax auditors are twitchy about checking on home buyers in Shaughnessy who claim tax credits for the working poor.
Gord Price: The leadership of this city, province and country has been exceedingly reluctant to address the interconnected dilemma of real estate, housing affordability, foreign capital and race – because initially they saw the problem as isolated to the affluent neighbourhoods of Vancouver, because they didn’t want to be seen to cause a crash in values, because they had justifiable fear of exacerbating racial animosity just under the surface and mainly because they really didn’t know what to do.
But they ran out the clock. The problem is just too big to ignore – and others (ironically many Chinese-Canadians) were providing too much documentation and data that couldn’t be ignored. Now there is a limited time left before the issue is fully politicized (likely the provincial election in May) – and they must have some response sufficient to convince a cynical and angry electorate that they are taking action that will make a difference.
Even if they’re not and it doesn’t.
In response to this related article I sent the below to David Eby, MLA for Vancouver-Point Grey and cc’d our finance minister Mike DeJong and our Premier Christy Clark.
http://vancouversun.com/business/real-estate/examine-links-between-income-tax-and-real-estate-title-david-eby)
As an immigrant myself the abuse of our Canadian generosity makes me sick. Canada needs some immigration, but not nearly as much as we bring in today. We need to insist on language training. Many folks speak little even after a decade here. Why do we need to give land & passports away for free or almost free? Are we this desperate? As I said elsewhere, we tax incomes far too high (50%+ if you count CPP on the high end) and somehow we think that is appropriate, yet we tax NOTHING on real estate gains on a $2M home that went to $4M ? Of course it makes sense for the affluent immigrant family to have the wife own the home and the husband declare income abroad to minimize their taxes and mooch off society. There are thousands, likely tens of thousands of such situations in MetroVan. After 4 years here they might go elsewhere to keep their Canadian passport and collect ESL or education for free for the kids, and healthcare for themselves when they are old, or their parents. As you point out David, this makes no sense.
The policy that used to work 20-30 years ago is the no-tax system on personal residences and the graduated tax on incomes when house gains where far more modest due to the high price of money. Today money is cheap. 2% for a mortgage, soon sub 2%. As such, we ought to lower income taxes, say to 15% federally and 10% provincially to a 25% top rate. We should then significantly increase PST, say to 12%, and property taxes, say triple. If you like a big BMW, great, but you pay more PST on it. You love a big fat $5M house ? Great. You pay far higher property taxes on it. We should also consider capping the “no taxes on your primary house gains” to say $1M or $2M for a couple on a life time basis. Anything above that is taxed at the maximum income tax rate. That to me is sustainable and fair, not the free loader system we have today. This would monetize our immigration policy and destination for foreign (both legal and often illegal) cash far far better. Not this 1970’s type “tax the rich” income tax system as the rich today have big homes here and incomes elsewhere.
Hon. Christy Clark & Hon. Mike DeJong: please note !
Yours Kindly,
Canada needs some immigration, but not nearly as much as we bring in today.
That is patent nonsense, Thomas.
Both sets of my grandparents emigrated from Eastern and Western Europe between 1902 and 1921. One set were non-English speakers, and their homesteading lives were particularly backbreaking and life-shortening. Twenty-one children survived to child-rearing years between both sets. Now, after four generations who have gone on to marry, procreate and earn a living, there are over 500 progeny representing every continent on Earth (with the possible exception of Antarctica) who have collectively generated hundreds of millions in GDP activity and tens of millions in tax revenue to support our social programs and uphold our economy.
This story continues today, with the exception that our ageing society, which is not replacing itself and therefore will negatively affect the economy, needs immigration now more than ever. An average person will pay something like $500,000 in all the myriad forms of taxes by the end of their life, and the vast majority therein pay their way, even beyond the miserly help they may receive when they first arrive. And one cannot ignore the fact that the toilet cleaners and cabbies of today are mostly immigrants who take the jobs we won’t. Its not the first generation of immigrants that benefits the most, but their full-blown Canadian kids and grandkids who have and will continue contribute far more than they take for generations.
The rest is just a lot of opinionated noise.
Oh yes the good old days of high growth, 8+ productive kids and 12% interest rates in a vast land.
Today we constrain ourselves by limiting oil, LNG and even normal resource investments seeking social licenses, first “nation” approval and appeasing of the climate gods in the form of CO2 surcharges and higher energy prices. Interest rates are now sub 2% or heading negative, and growth is meager. Not every immigrant contributes to growth. Many are. Many are not. We should be more choosy. Far more !
If you look at the rise of Trump, Brexit or the rise of anti-immigrant parties all over Europe you will appreciate the fact that not everyone loves massive immigration, especially those that do not care to integrate, or worse, UNLIKE your great-grand parents pre-internet, pre-air travel and pre-TV where integration was easier and connection to the homeland easily severed due to distance. Today far too many immigrate as a “Canadian of convenience” to collect ESL, education, healthcare and a tax free home while not paying any income taxes, then a second, third or fourth passport elsewhere, or to merely continue their lifestyle from XYZ hinterland, or worse, trying to force their weird religion or life style practices onto others. We should be more choosy. Far more !
Good to finally see the 15% surcharge on foreigners buying homes in MetroVan. A great way to monetize our brand. Victoria home owners rejoice as money will move there first, then to rest of Vancouver Island and Sunshine Coast, then Kelowna and rest of Okanagan. Unclear to me why this 15% is not BC wide and only for Metrovan ?