Ron Seymour sees B.C. NDP’s speculation tax as attack on real estate developers

Amonth before the 2009 provincial election, reality caught up to then NDP Leader Carole James in the form of an inconvenient question. She was asked by a reporter from the Globe and Mail whether she had any business or private-sector experience. “No,” she said softly. Since she’s been an NDP MLA ever since then, and hasn’t veered anywhere near the real world of commerce and business, it was a mystery why she was named Finance Minister after the NDP took power last year.

It was basically a reward appointment, for hanging around so long and taking two election beatings for the team.

And vengeance for those beatings, the ignoblest motive of all, perhaps underpins James’ spectacular attack on the real estate and development industry with her so-called speculation tax.

It’s hard to see what other basis there would be for a tax that’s being widely condemned as discriminatory against other Canadians, misguided in its conception and botched in its roll-out, and certain to cause considerable economic harm.

On Feb. 20, Kelowna city council approved plans for the city’s tallest building, a 33-storey tower at the base of Queensway. It would have 174 hotel rooms and 49 luxury residences, and has received enthusiastic praise from the downtown business community as a key project toward downtown’s revitalization.

Earlier that same day, the speculation tax, which targets mostly other Canadians who have vacation properties or second homes in desirable areas like Kelowna and West Kelowna, was announced in the provincial budget.

The tax has thrown the future of the Queensway project into uncertainty.

“We are quite concerned, yes,” Gail Temple, a vice-president of Edmonton-based Westcorp said this week. “We know that some of the buyers will be purchasing a second home, one they will potentially retire to, or use parttime.

“And yes, this tax will cause those buyers to back away,” Temple said. “We will have to seriously assess the impacts to our our project. A government move like this was nothing any of us could have foreseen, and we also believe the impacts are far beyond what the government realizes.

“We are extremely concerned about what this tax has done to confidence regarding investment in British Columbia, period,” Temple said.

Maybe some people don’t care that a tall building, consisting of a first-class hotel and luxurious condos marketed to rich people, is suddenly at a tipping point.

Maybe they don’t care about the construction and permanent jobs such a project would create, or the economic spinoffs, or the considerable new tax revenue the City of Kelowna would draw for a variety of municipal purposes.

There’s nothing particularly wrong with an individual citizen being indifferent to economic development. But it’s beyond shocking that the provincial Ministry of Finance would display such an attitude.

Jim Zaffino, the chief administrative officer of West Kelowna, where the speculation tax will also apply, said this week he doubts the NDP did even the most rudimentary calculation of the economic harm the speculation tax will cause.

He and West Kelowna Mayor Doug Findlater will try to get a meeting with Premier John Horgan in the next two weeks to ask their city be exempted from the speculation tax. Good luck to them.

Horgan not only isn’t showing signs of changing course, he’s talking up Carole James speculation tax as bold and brave.

Most of us recall the ’90s in B.C. as a lost decade under NDP mismanagement, with the province having the only economy in North America to experience a recession.

British Columbia had the lowest growth rate of any Canadian province, and average personal income went from $1,000 above the national average in 1990 to $3,000 below it by 2000.

Between 1992 and 2000, Kelowna home prices rose only about two per cent a year, below general inflation.

If Carole James and the NDP want to again flatline real estate values, history suggests they don’t have to take any especially harmful actions against the construction and development industry. They just have to stay in power. Ron Seymour is a Daily Courier reporter. Phone: 250-470-0750. Email: ron.seymour@ok.bc.ca