'Speculation Tax' Open Letter to Adam Olsen, MLA Salt Spring Island

Dear Adam,

Several of the recent tax provisions in the NDP’s budget have significant negative impacts on your constituents and perhaps more importantly, on the long term economic health of this riding.

Notably, the new “speculation” tax has significant economic implications for markets like Salt Spring, where it’s not uncommon for pre-retirement folks to buy here and move gradually over time, or for out of province people to own recreational property, for summer or seasonal use etc. Many individuals who will be affected by this tax have owned property here for a long time.

The details of the legislation for this tax won’t be unveiled until fall, which in itself has created unnecessary and unprecedented uncertainty not only for people directly affected by this, but by ALL residents of communities where this is set to roll out.

If this tax is as Ms. James described, it is a manifestly short-term tax grab with long term serious implications for both individuals’ financial health and the economies of the communities where this tax is being applied. Moreover, it is unlikely to meet its stated objectives of 1. Curbing speculation, and 2. providing more affordable housing, or reducing prices.

Beyond even all that, I find it incredibly distasteful, isolationist and protectionist — for a provincial government to introduce measures that penalize other Canadians, non-BC taxpayers in this way. 2% of assessed value is huge, representing an additional $10,000 a year in taxes for a home or cottage assessed at what would today be a modest $500,000.

The Minister appeared to concede that the tax was not based on available data or an analysis of its broader impact. What will this do to small economies like ours going forward, where these supposedly non-contributing “non-residents” currently pour loads of money into our economies, hiring contractors and trades, buying groceries, spending money in restaurants, marinas, shops, art galleries etc.? How is that not a valid and meaningful contribution to an economy like ours, even though they don’t pay income tax to the province? They contribute mightily to our well-being here, and they most certainly pay property tax!

This is absolutely mis-named a “speculation” tax. The degree of “speculative” activity in our region is very small. Our regional real estate prices in 2017 were moderately ahead of 2016 prices and have only recently recovered to pre-2008 crisis levels; we have not seen the massive run-up in prices that Vancouver has seen. This does not suggest speculation is rampant. Indeed, it’s quite the opposite.

How fast will a BC-Government imposed recession be upon us here, given the impact of all of these new taxes?

In fairness and with a view to the long term economic health of my community (and your constituents), this tax should be eliminated altogether.

I believe you can look beyond the short term and see the impact in the medium and longer term within your own riding, and on all the ‘regular’ folks who either help to create or depend on a healthy local economy.

Susan de Stein, MBA
Realtor, Pemberton Holmes
Salt Spring Island BC

March 8, 2018 8:47 AM