31 Jan (The Globe and Mail) Trump ban drives Christy Clark to refine BC foreign buyer’s tax
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The B.C. business community spent six months lobbying for changes to the province’s foreign home buyer’s tax, but it was the actions of U.S. President Donald Trump that propelled Premier Christy Clark to promise amendments.
The B.C. government introduced a 15-per-cent property transfer tax on purchases of residential real estate in Metro Vancouver by non-Canadians last July in a bid to cool Metro Vancouver’s overheated real estate market.
The measure was aimed at foreign individuals and entities that were pouring $1-billion a month into residential real estate in the region, but business leaders immediately called for exemptions on behalf of skilled professionals coming to the province for work.
The lobbying, in particular by technology industry leaders, was sustained but it was only on Sunday, reacting to President Trump’s executive order temporarily blocking entry by citizens of seven Muslim-majority countries, that the B.C. Premier announced her government is preparing an amendment to the tax to make her province more welcoming for those facing closed doors in the United States.
The regulations required to amend the tax are still being drafted, but Ms. Clark got ahead of the details and announced that she wants to bring “the best and the brightest” to this province: “We’re going to lift the foreign owners’ tax on people who have work permits, who are paying taxes and living in British Columbia, as a way to encourage more people to come.”
An aide to Ms. Clark said the changes have been in the works for weeks, calculated to take advantage of the changing economic landscape as a result of the November U.S. election.
One of the fastest-growing segments of B.C.’s economy is the tech industry and the government expects that President Trump, who clashed with Silicon Valley executives during the campaign, could drive opportunity north of the border.
That looked more likely on the weekend, after leaders from top U.S. tech companies – including Apple Inc., Google Inc. and Facebook Inc. – denounced the suspension of the U.S. refugee program and the halting of arrivals from select Muslim-majority countries.
Bill Tam, head of the B.C. Tech Association, said this is a good time for Canada – and British Columbia – to roll out the welcome mat.
“The conditions for growing the technology sector – and the knowledge-based industries more broadly – relies on a jurisdiction’s ability to say it is a fantastic place for people to pursue the breakthroughs and careers they are looking for,” Mr. Tam said in an interview.
“The rhetoric we have seen recently [in the U.S.] has cast a pall on one of the more attractive jurisdictions for that to happen. As a consequence, certainly Canada and British Columbia stand to benefit from a positioning exercise that allows us to attract more people to be part of our tech ecosystem.”
Last August, senior economists Jock Finlayson and Ken Peacock of the Business Council of B.C. warned that the new property tax on foreign buyers would make it even harder to lure outside talent to take jobs in the lower mainland. “Over time, sky-high housing costs threaten to precipitate a gradual hollowing out of corporate Vancouver,” they wrote.
On Monday, Mr. Finlayson said the tax was a concern to more than just the tech sector. “As soon as the tax was announced, we began to hear from some of our members who were worried it would hamper efforts to recruit global talent to companies and academic institutions in Greater Vancouver,” he said.
He said it is too early to measure whether the policies of the Trump administration will translate into opportunities to expand British Columbia’s tech sector. “But it’s an opportunity worth pursuing, not only for those with the qualifications to take mid-level and senior positions in B.C. technology companies, but also for academic researchers, senior-level executives, and perhaps even medical specialists with hard-to-find expertise.”