Living/Working February 17, 2017

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Restaurant closures ring White Rock alarm bells

A string of shutdowns along Marine Drive has residents worried about the area’s future
White Rock city Coun. David Chesney: real estate prices have put pressure on Marine Drive’s restaurant scene | Photo: Rob Kruyt

A string of restaurant closures along Marine Drive in White Rock in the past few months has the city looking to roll out an ambitious plan to revitalize the commercial hub.

City of White Rock Coun. David Chesney said as many as six restaurants, including the Sandpiper Pub and Pearl Bistro & Oyster Bar, have closed down recently. He said there are a number of contributing factors to the closures, but many local residents see land ownership as the main culprit.

Residential real estate has boomed in White Rock for decades as the average price for a detached home has risen to $1.49 million this year from $294,739 at the start of 2000. 

“I’m under the impression from what some people have told me that a lot of the commercial property along the waterfront has been bought by offshore investors,” said Chesney. “So they don’t care if it sits empty or it falls apart.”

White Rock Mayor Wayne Baldwin said the city is looking into why the Marine Drive restaurants have closed. He said an initial investigation was done in the wake of media reports about the first closure, in which the restaurant owner claimed his monthly rent had been increased by $500.

Baldwin said the property tax rate for that parcel of land had actually decreased in 2016 by $1,000.

“[The property owner] obviously is not giving [the restaurant owner] a break or reducing his rent as a reduction in property taxes,” said Baldwin. “So that’s an indicator that what Coun. Chesney is saying is probably true.”

Janet Wait is the owner of Jan’s on the Beach on Marine Drive close to the White Rock Pier. She agreed with Chesney’s assessment and noted that one of the strip’s long-standing restaurants has been vacant for a while.

“There are some overseas landlords that have raised the rents lately, but there are also some local landlords doing it too.”

Farnaz Farrokhi, the City of White Rock’s manager of communications and government relations, said $15 million will be spent this year on infrastructure to make the area more “attractive, inviting and accessible.”

The White Rock Business Improvement Association and the city have also struck a task force to look into the issue. A special meeting with the White Rock Chamber of Commerce has been set for February 28 to allow area businesses to voice their concerns over the closures.

“What White Rock is experiencing is not just a White Rock matter. It’s happening all across Metro Vancouver,” Farrokhi said. “Robson Street in downtown Vancouver is another example.”

The city plans to spend the infrastructure money on three main projects:

•a $4.5 million Memorial Park upgrade;

•a $9 million initiative to add 300 parking stalls close to the waterfront; and

•a plan to reintroduce free trolley service to the waterfront during the summer.

South Surrey-White Rock MP Dianne Watts pointed to a number of reasons for the restaurant closures.

She said the recent cold and snowy weather has exacerbated what is a cyclical issue. Watts added that parking has been an issue during summer months and noted that White Rock’s tax base is very small because the city only has approximately 20,000 people, and virtually all of its restaurants are along Marine Drive.

“It’s a very finite amount of land there,” she said. “And I know mayor and council have been working on balancing that out between residential and commercial.”

Fraser Valley Real Estate Board (FVREB) statistics show January was a return to the white-hot market for most of the region with South Surrey and White Rock leading the way, as sales rose above the 10-year average because of an intake of new inventory. Of the 976 sales processed in January across the region, 212 were townhouses and 276 were apartments, representing half of the market activity. This was coupled with 2,178 new listings in January, a massive 162% increase from December of last year.

Meanwhile commercial and industrial real estate, which the FVREB does not track, appears to be getting lost in the shuffle.

Commercial industrial business licences issued by the City of Surrey appear to have peaked in 2014, when 939 permits were issued. That number dropped in 2015 to 709, the city’s lowest total in five years.

news@biv.com

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Infographic: RRSP tax tips

The March 1 deadline is just around the corner. Should you contribute to an RRSP? Here are some tips from CPABC.

Infographic source: CPABC

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Top picks for JFL Northwest 2017

The comedy fest runs February 16-25
Comedian Jim Gaffigan | Photo: Miro Vrlik Photography / Shutterstock, Inc.

The second annual JFL NorthWest festival is underway. Here are some of the can’t-miss acts for comedy fans.

Fortune Feimster

An alumna of LA’s famed Groundlings improv/sketch troupe (see also: Will Ferrell, Paul Reubens, the core cast of Bridesmaids), the North Carolina native rose to prominence as a regular Chelesa Lately panelist, reliably spouting outrageous R-rated observations as offhandedly as if she were ordering from a dinner menu.

Feb. 17, Biltmore Cabaret, 6pm

Jim Gaffigan

One of only 10 stand-ups to sell out Madison Square Garden, Gaffigan has, alongside Louis CK, made is acceptable again to joke at length about fatherhood after the myriad crimes – real and alleged; comic and otherwise – of Bill Cosby. Case in point: his bestselling non-fiction book, Dad is Fat.

Feb. 24, Queen Elizabeth Theatre, 7pm and 9:30pm

Moshe Kasher

If all comedy is borne of darkness, this Bay Area transplant excels better than most — his memoir is titled Kasher in the Rye: The True Tale of a White Boy from Oakland Who Became a Drug Addict, Criminal, Mental Patient, and Then Turned 16, a fitting companion to his debut album, Everyone You Know is Going to Die, and Then You Are! Arguably JFL’s best kept secret.

Feb. 18, Rio Theatre, 7pm

Trevor Noah

Stepping into the role vacated by Jon Stewart simultaneously catapulted this South Africa native to overnight fame and gave him very large shoes to fill. But the latter-day Daily Show host has obviously abetted himself well; the program continues to thrive, while Noah simultaneously draws acclaim for stand-up, the forum in which his career began.

Feb. 25, Queen Elizabeth Theatre, 7pm and 9:30pm

Tom Segura

Having graduated in larger cities from clubs to theatres, Segura’s popularity is blossoming thanks to his two Netflix specials (the most recent of which, Mostly Stories, is tremendous) and the podcast Your Mom’s House, which he records with his wife and fellow comedian, Christina Pazsitzky.

Feb. 25, Vogue Theatre, 6pm

Sarah Silverman

Ricky Gervais confessed to being rendered speechless when he saw Silverman’s 2005 concert film, Jesus is Magic – he had never heard a comic go where she did. It was indeed a game-changer for no-holds-barred stand-up, and although Silverman has mellowed slightly since then, she still knows how to push buttons in ways that provoke conversation even among those who don’t follow comedy. This is a compliment.

Feb. 25, Queen Elizabeth Theatre, 6pm

Sunday Service

This Vancouver improv five-piece has been holding down a Sunday night residency at the Fox for years, so this performance’s relationship to JFL is a mere formality. But if you haven’t seen them before, consider this your opportunity to be introduced. Few local comedic talents are able to consistently fill a room every week – they’re clearly doing something right.

Feb. 19, Fox Cabaret, 7:30pm

• Times listed are when doors open. Visit JFLNorthwest.com for tickets and the full festival line-up.

Westender

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Housing has helped attract population growth in B.C. regions

The first wave of data from the 2016 Canadian census has been released and it’s confirmed that within Canada, the West is indeed the best.

Well, if not best, at least the fastest-growing.

Compared with the national growth rate of 5% between 2011 and 2016 – the fastest pace of G7 countries over this period – the provinces and territories west of the Canadian Shield all grew faster, led by Nunavut at 13% followed by Alberta at 12%. This latter fact will no doubt surprise some, given the economic turmoil Alberta has endured over the past couple of years. That said, intercensal estimates from Statistics Canada indicate immigration to Alberta has remained strong through the tough times, with Alberta’s higher rate of natural increase buttressing its migration-led growth.

Here in B.C. our population growth outpaced the national average, at 5.6% in the five years leading up to 2016. This compares with the 7% growth that was seen in the preceding five years. Within the province, B.C.’s largest regions all grew faster than the provincial average and added the largest number of people: combined, the Greater Vancouver, Fraser Valley, Squamish-Lillooet, Capital and Central Okanagan regional districts added 211,348 residents, accounting for 85% of total provincial population growth. These regions accounted for 72% of B.C.’s 2011 base population, indicating a trend toward further concentration of population in the province’s larger metro regions.

At the other end of the growth spectrum were six of B.C.’s rural regions where populations declined, ranging from 0.3% fewer residents in Alberni-Clayoquot to a 4.1% decline in Mount Waddington. A lack of both job growth in and migration to these regions are key factors driving this trend.

In the Lower Mainland – comprising Greater Vancouver, the Fraser Valley and Squamish-Lillooet – the population grew by 6.6%, led by the University of British Columbia/Endowment Lands area (24%) and Whistler (21%). These were followed by Squamish, the Township of Langley, Surrey and Coquitlam, with these six municipalities also registering the fastest growth in their occupied housing over the 2011 to 2016 period. This points to a general observation about growth in the region: population change mirrored that of housing change. Ergo, if it was built, they came; if it was not, they did not (as was the case for West Vancouver).

Another interesting observation was that the pace of occupied housing growth (7.7%) exceeded that of population growth (6.6%), a reflection of increasingly smaller household sizes that is related to an aging population, smaller family sizes and an increase in the prominence of smaller, attached dwelling forms. This was most clearly seen in Richmond and Vancouver – two cities with constrained land bases that focus growth upward and not outward – where the number of additional persons per additional dwelling unit between 2011 and 2016 were 1.43 and 1.45, respectively, the lowest in the region.

This current census release provides but a sneak peek into the landscape of homes not occupied by usual residents, a census null space often erroneously referred to as “vacant” dwellings. The latest data indicates that 7% of all private dwellings in the Lower Mainland were not occupied by usual residents on May 10, 2016; put slightly differently, 7% of all homes were either unoccupied or occupied by foreign or non-permanent residents (including temporary workers and students). This was up slightly from the 6.9% registered in 2011. We’re now eagerly awaiting a more detailed tabulation of this information that will accompany the next wave of census data, scheduled to be released in May.

So there you have it. Thanks to the 2016 census we now have a more informed sense of who’s growing and who’s shrinking, and by how much. Future releases though 2017 will shed more light on the “whys” associated with these changes, including insights into dwelling structural types, population by age, immigration and employment. Stay tuned. 

Ryan Berlin (rberlin@rennie.com) is the Rennie Group’s senior economist.

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Retooled U.S. tax regime could erode Canada’s competitive advantage

As U.S. President Donald Trump settles into office and the Republican-controlled Congress begins work on its legislative agenda, it is clear that sweeping changes are in store for U.S. policies in several areas. Overall, the direction of change is likely to pose some significant economic challenges for Canada.

To start, President Trump and Republican congressional leaders have promised to slash the U.S. corporate income tax rate to 15% to 20% from 35% as part of a larger overhaul of America’s outdated business tax regime. They are also contemplating new incentives to encourage American multinationals to repatriate some of the $2.5 trillion in profits they currently hold in foreign subsidiaries. These steps, if implemented, should bolster U.S. economic growth, thereby increasing the demand for Canadian exports. But they also suggest that Canada’s existing competitive advantages over the United States in business taxation could soon disappear, raising the prospect that capital investment will leak out of the country over time.

Trump and the Republicans also plan to reduce personal income taxes, including by lowering the top federal marginal tax rate to 33% from 40%, making the U.S. a more attractive location for high-level managerial, professional and technical talent. With state income taxes added, the top combined federal/state income tax rate will be under 40% across most of the U.S., compared with 50% to 54% in seven Canadian provinces. This tax gap increases the odds of a renewed brain drain from Canada. And if the Justin Trudeau government decides to hike capital gains and dividend taxes on our side of the border, an accelerating brain drain is a near certainty.

A final possible shift in American tax policy is even more worrisome. Many Republicans are pushing for a “border adjustment tax” (BAT) as a plank in their tax reform agenda. A BAT would make imports of goods and services taxable, while exports from the U.S. would no longer be subject to corporate income tax. The idea is controversial because it would boost the prices Americans pay for many consumer products. But a BAT of some kind may materialize; if it does, Canada must seek an exemption. A recent Deutsche Bank report estimates that a 20% BAT applied to U.S. imports would slice 4% from Canada’s gross domestic product. It would also tilt the competitive landscape toward investing in America rather than in countries that export to the U.S. An American BAT would compel many firms in Canada to reassess their production, supply and distribution strategies.

Turning to trade, President Trump has announced America’s withdrawal from the Trans-Pacific Partnership (TPP) agreement to which Canada and 11 other nations are parties. And he has notified Canada and Mexico of his intention to renegotiate the North American Free Trade Agreement (NAFTA) – or to scrap it entirely, if a revised agreement cannot be achieved. The death of the TPP is a setback for Canada, given years of effort by our government to deepen trade and investment ties with Asia-Pacific markets. At the same time, some of the gains that Canada won under NAFTA could be in jeopardy. Two-thirds of Canada-U.S. merchandise trade consists of “intermediate inputs” – semi-processed goods, parts and materials that eventually find their way into finished goods. Ending NAFTA’s tariff-free treatment of business inputs along with final products would damage the competitiveness of most industries now operating in North America.

On energy, Trump is committed to expanding domestic oil and gas production and lightening the regulatory and fiscal burdens on the U.S. energy sector. Coupled with the continued American rejection of national carbon pricing and the likelihood of steadily escalating carbon prices in Canada, the Trump administration’s energy strategy is destined to draw capital and management attention in the oil and gas sector away from Canada, in favour of investment opportunities stateside.

A more positive story for Canada might lie in the domain of immigration. If America becomes less welcoming to newcomers, Canada can attract talent that otherwise would migrate to the United States. Already, the CEOs of dozens of leading American technology companies are voicing alarm over a scenario of tougher restrictions on working visas, fewer foreign students in U.S. universities and stepped-up immigration enforcement. Such measures will hurt the quality of the labour pool available to American businesses and academic institutions, particularly in fields like engineering, information technology, the natural sciences and health care. In this situation, Canada may be able to benefit from America’s self-inflicted wounds.

Add it all up, and the era of Trump is set to present Canadian policy-makers and business leaders with plenty to ponder and a number of emerging risks to manage. 

Jock Finlayson is the Business Council of British Columbia’s executive vice-president and chief policy officer; Ken Peacock is the council’s chief economist.

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