A Saanich councillor wants the provincial government to exclude Saanich from the provincial speculation tax.
“It’s less about creating affordable housing, and more about a tax grab,” said Coun. Leif Wergeland after filing a notice of motion that calls on Saanich to send a letter seeking the municipality’s exclusion from the tax.
It requires B.C. residents to pay a tax of 0.5 per cent on second or vacation homes valued at $400,000 or above if their owners do not rent them out for at least six months of the year, for periods of at least 30 days. Homes under $400,000 will be exempt in order to ensure that most cabins are not caught in the tax, according to Finance Minister Carole James.
Canadians from outside the province will have to pay 0.5 per cent this year and one per cent thereafter. Non-Canadian residents will have to pay 0.5 per cent this year and two per cent thereafter, as under the initial iteration of the tax, which enjoys some support among social scientists.
B.C. income taxpayers who are paying the 0.5 per cent annual tax will still be eligible for a credit to offset their speculation tax bill, and the provincial government has said that 99 per cent of residents will not pay the tax.
It is not clear how many Saanich residents are subject to the speculation tax by virtue of owning a second home in Saanich or elsewhere. It is equally unknown how many Saanich homes are second or vacation homes.
Wergeland said the actual number is irrelevant. What is at stake is the principle of the provincial government punishing individuals for failing to rent out their homes, said Wergeland, who described the tax as a form of provincial downloading. Canadians who have worked hard to have a second home, or contractors who are refurbishing a home for the purpose of selling it, are not speculators, he said.
The tax is punishing successful individuals, when it should be valuing them, said Wergeland. “I would say good on them [for having a second home],” said Wergeland, who would not be subject to the tax.
Wergeland also said he considers the tax a roadblock to innovation that could ripple through the economy, in questioning the economic management skills of the provincial government.
“I don’t think they [the government] understand the value of development,” he said.
Council will consider Wergeland’s notice of motion at its next regular meeting.
So what odds does Wergeland give his initiative? He said he would not have filed the notice if he did not think it had a chance to secure passage.
Wergeland’s motion is the latest regional critique of the speculation tax. Sidney and Langford have already voiced their opposition. If Saanich were to join this chorus, it could sent a powerful signal as provincewide efforts to scrap the tax are gaining steam as a coalition of affected communities and industries have joined forces to lobby the provincial government, and more importantly, public opinion.
Ultimately, Wergeland believes the provincial government will scrap the tax.
“I’d be surprised if they didn’t,” he said.