TAX REVOLT
Lawsuit puts sovereignty on trial
Canadian sovereignty is on trial in a lawsuit against B.C.’s 20 per cent tax on foreign buyers of residential homes.
Jing Li — a Chinese citizen and international student who launched her case after using her family’s money to buy a townhouse in Langley in 2016 — in effect challenges what some believe is Canada’s sovereign right to impose a targeted tax on foreign nationals with a B.C. surtax similar to many in other provinces and countries.
Arguing the tax illegally discriminates against people on the basis of their national origin, Li maintains in her claim it makes her feel “I am not wanted in Canada. … I feel that this anger has been directed toward people like me and other Asian nationals, due to unfair biases and stereotypes which the tax has further reinforced.”
In this era of globalization and free trade, in which transnational corporations and libertarians often call for “open borders,” it is not fashionable to stand up for national sovereignty. Cultural liberals and even business leaders often characterize the concept as thinly disguised racism.
But some Canadians maintain it’s ethical to impose taxes and regulations that apply to people who are not citizens or permanent residents (that is people who Canada has formally allowed to begin the immigration process).
They say the sovereign nation remains the key structure through which a people can create a democratic community.
A B.C. Supreme Court judge will hear Li’s lawsuit in open court beginning June 25. In the meantime UBC professors Nathanael Lauster and Henry Yu are among those providing affidavits on behalf of Li, whose lawyer is Luciana Brasil, a specialist in classaction suits.
The B.C. government, in response to being sued, has obtained affidavits from, among others, UBC geography professor David Ley and SFU’s Andy Yan.
Should foreign nationals have the same rights and privileges as Canadian citizens and permanent residents, especially in regards to property?
Lauster strongly argues against B.C.’s foreign-buyers tax, saying it reflects the kind of anti-Chinese sentiment that has become a “moral panic,” leading to “blaming the foreigner.”
British Columbians have scapegoated Chinese buyers, Lauster says. “There are clear indications that the inception and implementation of the foreign-buyer tax has reflected and invoked xenophobic, racist and specifically Sinophobic tendencies and sentiments.”
Lauster, an American who writes about his process of immigrating to Canada, maintains foreign students, temporary workers and other non-permanent residents are unfairly impeded by the foreign-buyers tax, particularly because many eventually apply to become immigrants.
The foreign-buyers tax has evoked a “Yellow Peril” discourse, Lauster says, with modern-day “folk devils.” The “social epidemic” manifests itself in anonymous comments about media articles and on Twitter. “Chinese immigrants and home buyers have been the primary targets of rhetoric. A variety of historically rooted stereotypes and biases have been perpetuated targeting Chinese home buyers and immigrants.”
For some reason the affidavit of Henry Yu, a UBC historian who specializes in documenting discrimination against ethnic Chinese, is not available to the public. Li’s lawyer did not reply to questions about it. Judging from the responses to Yu’s affidavit, however, it is similar to Lauster’s in arguing the tax demonstrates Canadians’ racism.
Andy Yan, who heads SFU’s City Program, counters in his affidavit that Yu and Lauster ignore “the globalization and hyper-commodification of housing,” which has hammered cities such as London, New York and Sydney and led to, for instance, 23 per cent of Coquitlam’s new condos being bought by foreign nationals.
Yan maintains Yu and Lauster are also blind to the “agency” of minority groups in B.C., where ChineseCanadians have been leading activists supporting the tax on foreign buyers. There are now 470,000 ethnic Chinese in Metro Vancouver. Asians make up two of three immigrants to Canada.
An Angus Reid poll found 89 per cent of the city’s ethnic Chinese support the foreign-buyers tax. Even the then-Chinese consul general in Vancouver, Liu Fei, said, “The Chinese government would have no hesitation in stepping in and regulating (house) price increases like this, unlike governments here.”
Indeed, China has a range of restrictions on foreign buyers. And Yan’s affidavit makes it clear that jurisdictions throughout the world limit the purchasing power of foreign nationals.
Yan says Yu and Lauster should not have ignored curbs on foreign buyers in Prince Edward Island, Ontario, Manitoba, Singapore, Hong Kong, Britain, Australia and the U.S. He could have added Denmark, Mexico, France, Switzerland and others.
In his affidavit, David Ley, author of Millionaire Migrants, says a key tactic of pro-growth real-estate advocates has been to claim that opponents of rapid expansion are xenophobic.
Developers first began playing the racism card in Vancouver and Los Angeles in the 1990s, Ley says. He notes Bob Rennie, a famed condo marketer and former chief of fundraising for the B.C. Liberal Party, has alleged racism is “a huge undercurrent” in the housing debate.
Ley accepts Lauster and Yu’s analyses of B.C.’s discriminatory history up to the repeal of the immigration act in 1947. But he laments neither acknowledge how attitudes have changed.
“Unlike in the colonial period, there is no ethno-racial divide that neatly separates, homogenizes and penalizes people of East Asian origin,” Ley says.
“There is significant resistance within Vancouver’s Chinese-Canadian community to inflationary pressures in the property market primed by foreign capital, dispelling innuendoes that such resistance is inherited from old racist attitudes held by white Canadians.”
We will find out later this month where this case goes. If the judge declares the foreignbuyers tax is illegal, a massive class-action suit is sure to follow. Li’s lawyer did not reply to questions about who has so far been paying for the lawsuit’s substantial costs.
Meanwhile, those of us who continue to value national sovereignty will think about how, even though the liberalleft is often distracted by identity politics related to ethnicity, the nation-state remains the key structure to protect the common good of passport holders and permanent residents.
Defenders of sovereignty may also consider Nobel Prize economist Joseph Stiglitz, who says globalization will only benefit most members of a nation if it puts strong social-protection measures in place. That includes rules to protect Canadians from outof-control housing costs.
Should foreign nationals have the same rights and privileges as Canadian citizens and permanent residents, especially in regards to property?