Another week, another protest rally held by multimillionaires on the west side of Vancouver who are upset they are going to have to pay a 0.2-per-cent property surtax on that portion of their home assessed at over $3-million.
For many, it may cost a whole $1,500. I’m sure some of you reading this are now shaking in rage, too. Not in sympathy, but in anger at their pettiness. Even with the small increase, these outraged residents will be paying far less in property taxes than homeowners in major cities across the country. But they don’t want to hear that. It’s far preferable to cry: Class warfare! It’s the “socialist” NDP’s way of getting back at the rich, which these victims of the small tax hike believe is the whole point. It’s Premier John Horgan playing Robin Hood, robbing the wealthy to pay the poor.
Many of these people paid peanuts for their homes decades ago. They admit it themselves. It’s mostly blind luck that has delivered them this massive cash windfall, but deliver it, it has. Many are retired professionals, living on wonderful pension plans as well. When they cash out, as they will eventually, they will have far more than they will ever need to live on. And the rest they will bequeath to their fortunate children, who will use it to buy homes themselves, if they haven’t already. Thus, the cycle of privilege is perpetuated.
There is something wrong with this whole debate. We are devoting unlimited coverage to the concerns of a small subset of society, people who have little to complain about, while paying zero attention to people in their 20s and 30s, many of whom have little prospect of owning a home or being able to retire on a deluxe defined-benefit pension plan, which have now gone the way of the Canadian penny. The road ahead for these people is a lot harder than it was for those millionaires carrying placards, complaining about their lot in life. Honestly, the nerve.
Average house prices across Canada in the 1970s were a fraction of what they are now. This is when many of the people in Vancouver complaining about a small tax increase bought their homes . Today, it takes a person in Vancouver, between the ages of 24-34, 27 years to save for a 20-per-cent down payment on a home. Forty years ago, it took five years. Kids aren’t earning as much, when adjusted for inflation, as the boomers. They need more education, and consequently are graduating with more debt. All of it spells trouble for many young people today, says Paul Kershaw, a professor in the school of population and public health at the University of British Columbia.
He looks at the absurd situation in Vancouver and shakes his head.
“We have an aging population, one that wants and needs more medical care, asking a younger generation to pay more for health care than they did,” Mr. Kershaw told me. “Meantime, house values are disproportionately helping an aging population, while that group is leaving larger bills to their kids’ generation. Is that the legacy they want to leave?”
The prospect of never owning a home, or receiving a company pension of any kind, is a reality for tens of thousands of young adults. Those who live in expensive cities such as Vancouver and Toronto are forced to shell out obscene amounts of money to rent. Likely unable to have a house to one day use as their retirement plan, young people are told their only option is to save. But saving is tough when you’re forking out $2,200 a month for rent, paying off student loans, and making $60,000 a year in some new green industry downtown. For my generation, our mortgage payments were our savings plan.
Benjamin Tal, an economist at CIBC, sounded the alarm a couple of years ago when it comes to the retirement prospects for millennials. He said, given the trend toward lower savings rates and reduced private pension coverage, they face as much as a 30 per cent drop in their standard of living upon retirement.
But, hey, let’s not worry about them. They’ll figure it out, I’m sure. Let’s turn our attention to the homeowners in Vancouver whose $3-million-plus abodes face a minor tax hike. Although they can defer it until after they sell, many don’t want to. So, let’s everyone get together and figure out how we can help these poor, poor multimillionaires.
Maybe today’s twentysomethings can take up a collection.