Vaughn Palmer: Secrecy over details of new speculation tax almost rivals HST hubbub

Source: Vancouver Sun – VAUGHN PALMER

VICTORIA — Six months after the New Democrats announced a new tax on real estate speculation, they continue to withhold key details about the rationale for the measure and how it would actually be applied.

On budget day, Feb. 20, Finance Minister Carole James made only brief mention of the tax that would raise half a billion dollars over three years from residential properties deliberately left vacant by “foreign and domestic speculators.”

The ministry later put out a bare bones fact sheet on the tax, which it later revised in response to a public backlash over the targeting of recreational properties owned by British Columbians.

The changes reduced the area of coverage for the tax and scaled down the rates to be paid by British Columbians and other Canadians. Strangely, the ministry did not revise the revenue projection, suggesting that the initial number was no more than a guess.

Beyond that meagre foray into public disclosure, the New Democrats have yet to produce the enabling legislation and regulations for the tax, never mind any analysis or policy backup.

Such lack of detail is uncommon for the introduction of a major tax in B.C. When I asked a New Democrat for a precedent for B.C. taxpayers being left this much in the dark for this long, all the person could think of was the harmonized sales tax.

Great example. And how did that work out?

Supposedly, the enabling legislation for the speculation tax will be tabled when the house sits Oct. 1.  In the interim, British Columbians are left to guess precisely how and why the tax would apply to them. For, notwithstanding the NDP’s linking of the tax to “foreign speculation,” more than 60 per cent of those captured will be British Columbians with secondary properties in the Lower Mainland, southern Vancouver Island and the Okanagan.

After airing his concerns with Premier John Horgan in early April, the mayor followed up with a five-page letter and 24-pages of documentation, detailing the “potentially devastating effects of this tax” on West Kelowna.

Among other things, the submission challenged the Ministry of Finance to commission a study on the economic impact of the tax on West Kelowna and the other communities in its sights.

Though the West Kelowna submission was more detailed than anything the finance ministry has made public in justification of the tax, the provincial response was confined to a single paragraph.

“We want to assure you that your letter has been shared with Premier Horgan for his review and consideration,” it read. “We have also provided a copy of your letter to Carole James, Minister of Finance. Please be assured that West Kelowna’s feedback and concerns will be included in any of our government’s upcoming discussions on tax.”

Also off-putting was the provincial government response to the city’s application, under Freedom of Information legislation, for documentation on the rationale for the speculation tax as well as “all information used to determine that West Kelowna should be included.”

Back came a letter from the provincial official in charge of fielding the request asking for more time, according to a story last week in the Kelowna Daily Courier.

“Both requests are quite lengthy,” explained FOI analyst Chelsea Fern. She estimated there were more than 1,700 pages of materials to be reviewed before anything could be released.

If the speculation tax is indeed backed up by 1,700 pages of documentation, it would under-cut impressions that the thing was a back-of-the-envelope exercise.

Still, I expect anything revealing will be withheld on grounds of cabinet confidentiality — in contrast to the NDP’s insistence that the previous B.C. Liberal government free up confidential cabinet material on money-laundering.

Mayor Findlater did agree to an extension of 30 business days, albeit grudgingly.

“I want it in the public domain, the continued stonewalling of the provincial government regarding West Kelowna’s request for information on how we got ourselves into the speculation tax,” he said.

“They just seem to be totally willing to not be forthcoming, offering a litany of excuses.”

Nor were Premier John Horgan or Finance Minister James of a mind to disclose more about the rationale for the tax during a media scrum in Nanaimo on Wednesday. Nanaimo is another of the communities captured by the spec tax.

But when the issue came up, the two New Democrats fell back on boiler-plate justifications for the half-baked measure.

The extension on the access-to-information request from West Kelowna means the province won’t be obliged to release anything until Oct. 3.

That lets the New Democrats off the hook on providing any further rationale for the speculation tax before the mid-September convention of the Union of B.C. Municipalities. The tax is targeted by several resolutions on this year’s UBCM agenda, as Jennifer Saltman reported in The Vancouver Sun Wednesday.

The extension also lets the New Democrats off the hook on releasing any part of the reputed 1,700 pages of backup documentation on the tax before the legislature sits on Oct. 1.

By then, half of the budget year will be gone, with no one the wiser about precisely how the speculation tax will work.

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