[Canada] Canadian Politics Redux

[Malthus]

Anyway, what's with the BC Gov. imposing a foreign ownership tax on real estate? Are they overreacting to a non-problem, or is this something of significance?

[Grey Fox]

It has made Vancouver unaffordable, it's a real problem.

[Monoriu]

Anyway, what's with the BC Gov. imposing a foreign ownership tax on real estate? Are they overreacting to a non-problem, or is this something of significance?

It is a message to the Chinese immigrants that they better shop elsewhere   Actually Hong Kong has done something similar. 

[Valmy]

Anyway, what's with the BC Gov. imposing a foreign ownership tax on real estate? Are they overreacting to a non-problem, or is this something of significance?

Well if you are a foreigner buying up property in Vancouver you are probably one of the world's elite. Might as well get some extra tax revenue from the world's fattest fat cats.

[Jacob]

Anyway, what's with the BC Gov. imposing a foreign ownership tax on real estate? Are they overreacting to a non-problem, or is this something of significance?

Affordability is a real problem. Is foreign ownership the cause? "Common sense" is convinced that yes, it's all about the foreign ownership, but the actual data at hand is much less clear.

As for this particular measure, even if foreign ownership is indeed the driver of the affordability problem (as opposed to low interest rates, demand outstripping supply for a variety of reason, or any other factors) I am sceptical that this particular tax is going to have much of an impact.

[Monoriu]

Hong Kong's experience suggests that such a tax may dampen market sentiments, but isn't very useful in the face of market fundamentals.  That includes land availability, interest rates, the state of the economy, and very importantly, what's going on in China.  I have read reports that there is capital outflow going on in China due to a slowing economy, expectations of further declines in the RMB exchange rate, and fears about instability.  That capital has to go somewhere. 

[crazy canuck]

Its all politics.  The City of Vancouver (governed by a pro NDP council) produced a policy that they wanted to impose a tax on "vacant" property.  The thinking was that foreign buyers are reducing the supply of available property by purchasing but not using - notwithstanding a report of the UBC Sauder School of Business that the percentage of vacant properties has not changed over the last three decades and that one should expect a certain percentage as people move between properties.  In order to enact the tax Vancouver Council needed the province to amend the Vancouver Charter to give them that power.  The political game was it was too late for the legislature to do anything about it before it adjourned for the summer.  So the provincial government called the NDP bluff and recalled the legislature for a rare summer sitting.  But the province went one more.  Rather than just granting the NDP wish to give Vancouver the power to enact the tax the provincial government enacted its own tax as well.  No doubt to blunt any NDP assertion that the province only reacts to NDP demands on this issue.

There is a provincial election just around the corner after all...

I am not sure there is any particularly well thought out public policy by either side of the political spectrum on this.  Foreign buyers are a convenient target for a serious problem.  I suppose, at the very least we will get some additional tax revenue.  But I am doubtful this will have any impact on housing prices.

[Malthus]

Its all politics.  The City of Vancouver (governed by a pro NDP council) produced a policy that they wanted to impose a tax on "vacant" property.  The thinking was that foreign buyers are reducing the supply of available property by purchasing but not using - notwithstanding a report of the UBC Sauder School of Business that the percentage of vacant properties has not changed over the last three decades and that one should expect a certain percentage as people move between properties.  In order to enact the tax Vancouver Council needed the province to amend the Vancouver Charter to give them that power.  The political game was it was too late for the legislature to do anything about it before it adjourned for the summer.  So the provincial government called the NDP bluff and recalled the legislature for a rare summer sitting.  But the province went one more.  Rather than just granting the NDP wish to give Vancouver the power to enact the tax the provincial government enacted its own tax as well.  No doubt to blunt any NDP assertion that the province only reacts to NDP demands on this issue.

There is a provincial election just around the corner after all...

I am not sure there is any particularly well thought out public policy by either side of the political spectrum on this.  Foreign buyers are a convenient target for a serious problem.  I suppose, at the very least we will get some additional tax revenue.  But I am doubtful this will have any impact on housing prices.

Heh, thanks for that - it is always better to get the local report, as otherwise it is impossible to figure out what is really going on.

Here, people are wondering mostly whether the imposition of the tax will create an uptick in foreign buying in Toronto.

[Grey Fox]

There is an uptick in foreign buying in Montreal but most seem to believe that it is because of affordability compare to Toronto & Vancouver.

[crazy canuck]

The new tax starts today.  But the big problem is that it is retroactive in effect.  It does not apply to contracts entered into today forward but rather all deals that close today forward.  Lots of unintended  consequences and horror stories because of that.  The purported target of the tax was wealthy Chinese nationals.  But there are large numbers of immigrants and foreign workers who are not wealthy that are being significantly affected.  Also Canadian citizens are about to be impacted as deals they thought they had collapse putting their own offers to purchase their next property in doubt.  Its going to be a few months before the retroactive effect runs its course.

[mongers]

Oh dear, now he appears to be channelling Putin :

Canada family encounters shirtless PM Trudeau while hiking
3 August 2016

A Canadian family on holiday stumbled upon a shirtless Prime Minister Justin Trudeau while hiking in Quebec's Gatineau Park.

The Godby family spotted Mr Trudeau last week as the prime minister and his family emerged from a cave.

After some hesitation, the Godbys struck up conversation with the Trudeaus and a selfie was taken.

"It was just like, 'Wow, that's crazy! We just met the PM,'" Jim Godby of Peterborough told the Toronto Star.

The Trudeaus had been exploring the Lusk Cave, a marble cavern with a waist-high stream running through it.

The famous cave is in the centre of the vast national park, which is about 50km northwest of Ottawa.

"When you step out your front door, you never know what adventures await," Mr Godby later wrote in a Facebook post about the encounter.

http://www.bbc.com/news/world-us-canada-36965923

[dps]

Oh dear, now he appears to be channelling Putin :

Canada family encounters shirtless PM Trudeau while hiking
3 August 2016

A Canadian family on holiday stumbled upon a shirtless Prime Minister Justin Trudeau while hiking in Quebec's Gatineau Park.

The Godby family spotted Mr Trudeau last week as the prime minister and his family emerged from a cave.

After some hesitation, the Godbys struck up conversation with the Trudeaus and a selfie was taken.

"It was just like, 'Wow, that's crazy! We just met the PM,'" Jim Godby of Peterborough told the Toronto Star.

The Trudeaus had been exploring the Lusk Cave, a marble cavern with a waist-high stream running through it.

The famous cave is in the centre of the vast national park, which is about 50km northwest of Ottawa.

"When you step out your front door, you never know what adventures await," Mr Godby later wrote in a Facebook post about the encounter.

http://www.bbc.com/news/world-us-canada-36965923

I just watched a video review of Waterworld, and Trudeau in that pic looks disturbingly like the pedophile in the movie.

Being beside a kid doesn't help.

[Monoriu]

OMG.  Ella-Grace Trudeau will visit Hong Kong soon.  Too bad she doesn't have the title of a real princess but she is close enough. 



Justin will come along.

[Valmy]

And Viper says that Quebec isn't royalist 

[Malthus]

It's time to take a leaf from Trump's book and build a wall across the Canadian border, folks - in one day, we were invaded by 1,500 illegal American border-crossers! 

http://www.msn.com/en-ca/news/canada/us-partiers-wash-up-in-canada-blown-across-lake-st-clair/ar-BBvUSyJ