August 3, 2016

Real Estate Tax — Charter Implications

Sean Rehagg in the Globe and Mail writes that BC’s new tax on property purchased by foreign nationals is illegal.  The illegality is based on a Charter Right as extended by our courts. Whether the illegality applies to such taxes applied on non-resident purchasers is not clear to me.

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.

Mr. Rehagg notes Canada’s (and BC’s) tradition of discrimination, and links it to this new tax:

While the new 15-per-cent B.C. levy applies to foreign nationals, we all know the aim of the legislation is narrower: curtailing real estate investment by Chinese foreign investors. In this context, what is striking about the levy is how closely it parallels other attempts to restrict Chinese participation in the B.C. and Canadian economies..

. . . .  In light of this history, it is imperative that we be cautious about policies that target people on the basis of national origin or citizenship status. The message sent by the new B.C. tax legislation – about who is welcome to participate in our economy and in our communities – matters.

Sean Rehaag is an associate professor, Osgoode Hall Law School, York University.

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  1. York University discriminates against foreign students by charging them higher tuition. How is that legal?
    Anyway, I’m seeing a lot of “experts” weighing in on the legality of this tax. These people are staking their academic reputations on the line by writing these articles. For their sake, they’d better be correct or else they will lose a lot of professional credibility.

  2. It’s this kind of out of touch nonsense that gives academics a bad name. If indeed the Charter applies (which I don’t think it does) it is time to start reeling it back. It was not intended to harm Canadians.

  3. Perhaps our constitution is flawed ?
    We allow discrimination by race within the country, but do not allow different taxation schemes for non-Canadians ?
    The constitution is for Canadians, is it not. Are first “nations” Canadian ? Or are they Canadian when it suits them and “indigenous” when they prefer to be treated special ? Why do we allow such discrimination in the 21st century ? Apartheid, made in Canada ! I always thought everyone is equal. Apparently not.
    Foreigners pay more tuition at UBC and no one blinks an eye, but they pay higher property taxes and now it is unconstitutional ? really ?

    1. “Are first “nations” Canadian ?”
      Have you had a conversation with any First Nations people to determine what they think and feel on the topic? Perhaps that’s a good starting point.

      1. you bet. Opinions differ ! Many enjoy the dual status, especially that off free education and healthcare and low to no taxes ! Some don’t care, and some are too mentally ill to even utter an opinion.

  4. An interesting interpretation on the Charter of Rights and Freedoms. Thomas is the only commentor I’ve seen who’s at least acknowledged the possibility that Mr. Rehagg’s interpretation might be legally sound. And if so, would that not be an issue with the Constitution itself?
    Still, how can PEI (or is it Newfoundland) have had an even stricter foreign purchase laws on the books that are considered constitutional? And the issue of higher student tuition for foreign-born students is an easy counter-argument.
    Any law students or practitioners out there who can expand upon this? Is the new tax under threat of being ruled unconstitutional? Or is Mr. Rehagg’s interpretation easily brushed off on the basis of precedent? Preferably someone who’s not frothing-convinced that the Chinese are the cause of all the world’s problems. Actual, legal opinions would be more constructive and interesting.

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