Homebuilder association gives thumbs up to a Vancouver regional taxCanadian Contractor Profitability Business canada
Contractors and developers are among the most vocal anti-tax business people in Canada. But the Greater Vancouver Home Builders' Association (GVHBA) has come out in favour of a 0.5% regional tax in Vancouver to pay for transit and infrastructure.
The board of the GVHBA (Greater Vancouver Home Builders’ Association) has given its endorsement to the idea of a dedicated regional sales tax of 0.5% in Vancouver. The tax proposal will be voted on by the public in a forthcoming plebiscite, later this month.
If the tax is introduced, the City of Vancouver will have found a way to raise $250 million annually for improvements for roads and the City’s TransLinks public transit system. However, such a tax would add significant dollars to the cost of home construction and renovation – an additional 0.5% tax would add $1,500 to a $300,000 project.
This does not seem to have deterred the GVHBA’s 18-member Board from supporting the idea. GVHBA CEO Bob DeWitt says the benefits of improved transit infrastructure outweigh the small additional cost. “No one wants higher taxes, but in the absence of any other funding model at the moment, this is better than nothing,” DeWitt said. “In the shorter term, this does add to costs. However, in the longer term, improved infrastructure makes it is easier for builders and vehicles to get around. Not only that, building development usually increases in step with improved transit. It’s the correct long-term position to take.”
Not all members agree. DeWitt said he has received emails from his own members criticising the GVHBA position taken on their behalf. He acknowledges the concerns surrounding government accountability for the funds raised. He said there were criticisms were from individuals “who are dogmatic in their opposition to new taxes generally.”
The idea of a regional tax is not limited to Vancouver. The notion of targeted taxes to fund specific regional services is popping up in major urban centres across Canada, especially in cash-strapped, transit-deficient Toronto, and in Montreal, which last year instituted a 15% tax targeting re-builds and major renovations in the Plateau-Mont Royal Area, calling it a ‘Park Tax.’
But in Vancouver, regional tax supporters like the GVHBA face considerable opposition. The Canadian Taxpayers’ Federation vehemently opposes the new tax. Individuals like Jody Emery, a small business owner and political activist in Vancouver, said that “taxpayers are tired of being disrespected,” citing mismanagement at Translink and misdirected priorities in government spending. “We simply do not have any more money to spare, and this is an opportunity to tell government to stop hurting taxpayers.”
Some concern may be alleviated by this week’s announcement that legendary Vancouver billionaire Jim Pattison will, on a voluntary basis, chair the Public Accountability Committee overseeing the funds collected regional transit sales tax.
Vancouver Mayor Gregor Robertson suggested that this will “provide voters with a concrete mechanism to monitor and ensure that the funds raised will be used for the infrastructure they are meant to pay for.”
Editor’s Note: Let us know what you think. Do you believe additional regional taxes added to the cost of your construction project in order to fund public infrastructure and transit would ultimately benefit the residential construction industry in your city?