West Kelowna councillors demand exemption from B.C.'s speculation tax

Angry city councillors in West Kelowna have voted to lobby the B.C. government to exempt the Okanagan city from the speculation tax, calling the tax 'unconstitutional.'

Council votes to lobby B.C. government on what one councillor deems 'unconstitutional' tax

West Kelowna is among B.C. cities that would be subject to the speculation tax announced in the 2018 budget. (City of West Kelowna)

Councillors in West Kelowna. B.C., are irate about the speculation tax announced by the B.C. government in the 2018 budget and demand that the Okanagan city be exempt.

West Kelowna Mayor Doug Findlater says homeowners and developers are so concerned about the tax, they are sending letters to city hall at a rate of one an hour.

"The letters are very compelling reading ... some of them, their lives are being altered by this," said Findlater.

"Their lives are going in a different direction. Their retirement plans are going up in smoke."

West Kelowna Mayor Doug Findlater, seen here in 2014, says out-of-province homeowners in his city deserve to be heard. (CBC)

The speculation tax is aimed at non-B.C. residents who own a second home in certain B.C. cities, including West Kelowna.

Finance Minister Carole James says the government announced the tax to address rapidly rising house prices, but staff in the Okanagan city say the tax could do more harm than good to the local economy.

'Scared off a lot of developers'

"This tax assumes that if you're asset rich, you're revenue rich, and that may not be the case," said chief administrative officer Jim Zaffino to CBC Radio West host Sarah Penton.

"I can see that there will be some foreclosures if this continues."

On Tuesday, Zaffino presented a staff report on the possible effects of the speculation tax to West Kelowna city council.

"Just the news that this may happen or is going to happen has scared off a lot of developers," he said.

He said the recently announced tax — which is still short on details — could lead to increased rental costs, property tax increases, reduced property values and a loss of tourism revenue and job opportunities.

The concern echoes that of nearby Kelowna where Mayor Colin Basran has said the tax could have "dire unintended consequences."

The B.C. NDP government announced te speculation tax in its 2018-2019 budget to address the rapid rise in house prices in certain cities. (Rafferty Baker/CBC)

One after another, local councillors expressed their concern during the West Kelowna council meeting Tuesday.

 "Anger and frustration are certainly paramount in my emotions since we discovered this two weeks ago," said councillor Rick de Jong.

"If you're a resident in West Kelowna or Kelowna and don't think this is going to have a negative impact on you, I beg to disagree. It will."

Staff said the proposed tax penalizes British Columbians and Canadians. 

"If this proposed tax is not unconstitutional, it certainly should be because it's absolutely wrong to pick on people just because they're a resident of some other province," said councillor Duane Ophus.

During Question Period on Tuesday, the finance minister addressed recent criticism saying such a tax is necessary.

"We are supporting affordability ... we are going to make sure that we address the housing crisis that the other side completely ignored," said James.

Councillors in West Kelowna voted unanimously to seek exemption. Mayor Findlater hopes to meet with Premier John Horgan within the next two weeks. 

With files from CBC's Radio West, Sarah Penton and Josh Pagé.

About the Author

Jaimie Kehler

Jaimie Kehler is a web writer, producer and broadcaster based in Kelowna, B.C. She has also worked for CBC News in Toronto and Ottawa. To contact her with a story, email jaimie.kehler@cbc.ca.