Findlater to press James for exemption
West Kelowna mayor meeting with B.C. finance minister today
West Kelowna Mayor Doug Findlater heads into a meeting today with provincial Finance Minister Carole James with a mix of high hopes and low expectations.
Hope that he can persuade James to exempt West Kelowna from the controversial new speculation tax.
But little expectation that she would make such a decision any time soon.
“I think we’ve got a uniquely strong case to make for an exemption from the tax, because we’re a young municipality that’s still trying to move toward urban standards,” Findlater said Tuesday.
Taxation revenue from the development industry is particularly crucial to funding new infrastructure projects in West Kelowna because the 10-year-old municipality doesn’t have deep financial reserves, Findlater said.
But the speculation tax is causing deep concern in the development sector, Findlater said, with one project already in “very difficult straits” and others at risk of being cancelled.
The speculation tax would apply to properties owned by people who do not pay income tax in B.C. in a bid to improve housing affordability and moderate the real estate market.
And it will apply to the out-of-province owners of residential properties that are left vacant for most of the year. Developers routinely count on such purchasers to ensure the financial viability of their projects, with the buyers using the residences as a vacation home or a future retirement residence.
West Kelowna finance officials estimate the tax will apply to about 600 properties, with the owners collectively paying $10 million in new taxes to the provincial government, or an average of $17,000 apiece.
In one week, the City of West Kelowna received 220 letters from people opposed to the speculation tax. Many were from Albertans who said they would sell their property rather than pay the tax.
“It upsets me that we are creating a border between us and the rest of the country, especially Alberta,” Coun. Carol Zanon said last week. “The message is, ‘Stay away from here.’ As a Canadian, I resent that terribly.”
Last week, council agreed to send Findlater and West Kelowna city manager Jim Zaffino to Victoria to try to get a meeting with Premier John Horgan to discuss the speculation tax. Horgan passed the request to James, who included the speculation tax in her provincial budget in February.
James said last week she is reviewing the tax, which would cost some homeowners $5 for every $1,000 of their property’s assessed value this year and increase to $20 for every $1,000 of assessed value in 2019.
“I want to stay focused on the reason we’re doing this, which is for affordability,” she said. “When you have in Kelowna a 0.2 per cent vacancy rate, that causes all kinds of problems.”
While Findlater said he’ll do his best to convince James to exempt West Kelowna from the tax, he’s under no illusion such a decision would come immediately after their meeting.
“These things always take time,” he said, “but we’ve got to put the case forward and hope for the best.”