Can we tax our way out of the housing crisis? B.C. premier defends measures to curb frenzy
There are challenges and trade-offs any government must face with ‘a runaway housing market,’ says Horgan
Nothing in life is certain except death and taxes, so the famous saying goes — and at least one of those certainties is increasingly being seen as a way out of Vancouver's housing crisis.
Since taking office, B.C. Premier John Horgan has introduced a speculation tax, increased the rate and scope of the foreign buyers tax and implemented an additional school tax.
Horgan talked housing with Stephen Quinn, the host of CBC's The Early Edition, to defend his government's measures.
How sympathetic are you to the owners of those homes valued at more than $3 million and $4 million, facing the school tax, who say the tax is unfair?
They are certainly entitled to that opinion. They've been expressing that very loudly.
It is our view that the tax will be a modest tax relative to the paper value of the homes that are in question. For seniors, there are opportunities for deferral. For others, there are opportunities as well.
Should people have to defer their taxes — should a homeowner have to go into debt to pay their taxes?
Someone with a $3 million home is being asked to pay a little bit more on their property tax to go towards education [with the school tax] and that is something we believe can be managed over time by the owner of that home.
A group of homeowners has hired a lawyer to prepare a class action lawsuit challenging your government's speculation tax on second homes. What will it take for you to reconsider the speculation tax?
The speculation tax will not come into play until next year, Jan.1.
Minister Carole James has been consulting and she will be ensuring that we are taking the best steps possible to minimize the impact on people but to maximize the benefit at the same time.
These are challenges and trade-offs that governments make all the time and we are working through that.
Your house is a shelter, yes, but it also doubles as an investment. Is it possible or even desirable to end the commodification of housing?
There has been a significant windfall on the housing side, that is undeniable.
We're looking to see if those homeowners can give a bit of that back, so that we can invest in the services that people deserve and expect from government.
When you talk to those homeowners, they say, "look, this is my savings vehicle. What's next, government, are you going to go into my RRSP and take my money out of there?"
Not at all.
We have to go back to the premise of our action and that was a crisis in the housing sector.
Our attempt to address that has caused the status quo to be unearthed or upended but that is often what has to happen to see the change that will correct what has been a runaway housing market.
To hear the rest of the interview, click on the audio link below:
This interview aired on The Early Edition on June 5 and has been edited for clarity and structure.