British Columbia's NDP government will continue defending a 15-per-cent tax on foreign home buyers against a proposed class-action lawsuit, even though the party criticized the levy while in opposition and has not said whether it intends to keep it in place.
Attorney-General David Eby said his department would continue fighting off a proposed lawsuit filed last fall by a Chinese citizen who moved to Canada in 2013 and was forced to pay an extra $83,850 when she bought a townhouse in Langley, B.C.
"We will defend the legislation," said Mr. Eby, who, as former housing critic, has previously argued that the tax brings unnecessary hardship for immigrants and employers trying to recruit foreign talent to Metro Vancouver.
Last week, lawyers for the province said a class-action lawsuit is "unneccessary to meet the objectives of judicial economy, access to justice, and behaviour modification," according to a B.C. Supreme Court filing that included affidavits from two bureaucrats and an expert witness on international trade disputes.
The tax on foreign home buyers, which took effect on Aug. 2 of last year, was introduced amid a debate about the role of foreign money in the region's increasingly unaffordable housing market.
The New Democrats have long advocated for taxing international capital – not citizens – but have only said they will review the current 15-per-cent tax on purchases in the Vancouver area involving foreign buyers.
During the recent provincial election campaign, the New Democrats proposed a 2-per-cent speculation tax on properties in the region if their owners pay little or no taxes in B.C. The Greens, whose three MLAs have agreed to support a minority NDP government, proposed doubling the foreign-buyer tax to 30 per cent and expanding it across the entire province.
Statistics collected by the province showed buyers who weren't citizens or permanent residents accounted for 13 per cent of purchases in the Vancouver region before the tax. That has fallen to between 3 per cent and 4 per cent in the year since.
From the inception of the tax, from Aug. 2, 2016, to May 31 this year, 1,355 foreign buyers paid the levy, according to the province's July 14 filing. The tax also brought in $131-million in extra revenue during that period, saw buyers paying an average of $96,870 and had the highest amount of $2.3-million for one transaction, the government's filing said.
Vancouver lawyer Luciana Brasil says the lawsuit, which she argues violates the Charter of Rights and Freedoms and "perpetuates prejudice and stereotyping on the basis of national origin," is scheduled to go through a certification hearing at the start of November. If it is certified, then any of the foreign buyers who live in B.C. would automatically be included in the challenge.
In an affidavit filed May 31, Jing Li, who has a three-year post-graduation work visa, detailed how she moved to Metro Vancouver last June after earning a master's degree in public administration from the University of Regina.
Ms. Li, 29, agreed to buy a townhouse for $559,000 plus GST in mid-July – about a week before the tax was announced. She was able to put a down payment on the property thanks to her parents in China, where her father works as a geologist and her mother raises their family, according to the affidavit.
"This consisted of their life savings, and money borrowed from my grandmother and other family friends," her affidavit stated.
When the tax hit, she said her parents went further into debt to help her pay the levy instead of forfeiting the $55,900 deposit she had put down on the Langley property, the affidavit stated.
More than 50 people have reached out to Ms. Brasil to inquire about joining the proposed action, according to court filings.
"The problem is when people talk foreign buyers, there is this assumption that these are all people who live in mainland China and are billionaires who buy a Point Grey mansion for their kids to go to school," Ms. Brasil said. "The reality is there are a lot more people who have been captured by the tax people that lawfully are here in Canada and doing what they need to do to contribute.
"I don't see how Ms. Li's purchase of a townhouse in Langley is causing the problems that exist in the province in relation to real estate."