Kevin Falcon is against limiting foreign ownership of residential property in B.C., despite anecdotal evidence foreign buyers are running up the price of single-family homes in Vancouver and the Lower Mainland.
Speaking on the sidelines of Whistler’s first economic symposium, B.C.’s finance minister told Business in Vancouver any such moves would send the wrong signal to global investors.
He noted, “We heard the same thing in the ’80s and ’90s when Chinese investors started coming from Hong Kong, Taiwan and later Mainland China. There’s a bit of that talk, but we have to be careful there, because we are an open trading economy. We welcome people and money from around the world and B.C. has benefited from that. Our exports to Asia have gone up 77%. That is a big boon for B.C., and we want to be careful not to give the message that ‘We welcome some of your investment, but not all of it.’”
He suggested that as Vancouver continues to grow in stature as a world-class city, the region will continue to face similar challenges in other major centres around the world, including having very expensive real estate.
“What we can do is give people the help they need by providing rent supplements for people on low income,” he said. “We’ve invested in record levels of social housing to create affordable housing for those with specific challenges, whether it’s mental health, drug addition, what have you.”
While affordability will remain an issue in the Lower Mainland, we will have to adjust to the market realities as they unfold.
“Vancouver is a great city, but I moved to Surrey because that’s where I can afford to live,” he said. “I think, though, you’ll see Burnaby, north Surrey and other regions act as major centres that will help provide different kinds of housing at different price levels that might allow people to live a SkyTrain ride away from the heart of Vancouver.”
Housing affordability, however, remains a tertiary focus in the short term for Falcon. Since he became finance minister in March, replacing Colin Hansen, his priority has been convincing British Columbians of the merits of the HST. While polls suggest people are warming to the idea of a 10% HST by July 1, 2014, if the tax survives the mail-in referendum, he admitted the race will remain very tight despite spending millions of dollars to provide information through media buys and mail-outs to voters. The move has been derided as blatantly unfair by anti-HST crusaders, however, Falcon noted the province has a lot of work to do to correct the “flagrantly wrong” information that persists in the public realm. Among them is the loss of provincial control over tax policy.
“I keep hearing people calling in to radio stations saying we’re giving up our economic sovereignty because of the HST. I’m sorry, this borders on mental disassociation, because we’ve been having our federal government do our corporate income taxes and personal income taxes for decades in B.C. Even under Bill VanderZalm as premier, I don’t remember him saying how terrible it was that we ‘gave away our tax sovereignty’ to the CRA.
“I still have not heard any coherent argument as to why it actually makes sense to go back, because it doesn’t exist. But part of the problem is, we vacated the floor for two years and didn’t provide any information to the public. In that vacuum, we had these great economic thinkers like Chris Delaney and Bill VanderZalm out there putting out information that was flagrantly wrong and continues to be.”