The business community’s knock on NDP governments – and on ours provincially – is that they know squat about an economy and that it’s only a matter of time before it’s regularly apparent.
The last week has been fuel for the critique.
Take, for example, the blunt instrument of the $110 cheques coming to drivers to assuage the grief about gas prices.
The real solution is not the palliative of a rebate, not the misuse of the Insurance Corp. of British Columbia (ICBC) as an instrument of partisan administration, but for senior governments to own the over-taxation at the pumps. In the case of Metro Vancouver, about 73 cents per litre flees the public pocketbooks and ends up in the public purse.
The solution lies in reframing the underlying framework of excessive taxation, not in buying drivers off with their own money.
As an electric vehicle owner, I am undeserving of the windfall. Were I a non-driver, I would be livid.
Why wouldn’t government base the rebate – which for some reason it calls relief – on the extent of one’s driving, on the vehicle’s fuel consumption, on the safety record of the driver, even on the income of the driver? These are data points in the hands of ICBC and the government, yet what we will get in British Columbia is flat-rate imprecise issuance of cash, no rationale underlying it.
The $110 cheque (mine will go to charity) also takes ICBC off its fiscal objective to stash funds as a contingency. It was a political incursion into operations, a government out of its lane, a pocket it could conveniently pick without adding to the deficit it is running toward and the debt it will build as it pursues social programming improvements without pursuing tax regime improvements.
And by the way, if you’re going to rebate British Columbians when there are excess funds at hand, how about sending back the surpluses instead of trying each year to spend them feverishly in the weeks before the fiscal year-end March 31?
If the ICBC rebate is the latest Exhibit A in the case against BC NDP economic competence, Exhibit B arrived last week with consumer-oriented legislation concerning housing purchases.
If the government knows little about taxes, it knows less about real estate. All its housing taxes since 2018 have been cash grabs with no effect on affordability, speculation or availability.
The NDP is proposing what it calls a “cooling off” period for homebuyers under the Property Law Act so they can walk away if they develop remorse in our superheated market of far more buyers than vendors.
I think the principle of a Homebuyer’s Protection Period is not unsound. No one should be provoked to buy without adequate insight into the property, only to find the home is a lemon. We need time for professionals to clarify our rank-amateur evaluation of a property. We could use a breathing period to get the information necessary to make the right call on what is usually our lifetime’s largest expenditure.
The question is how.
As the skeptics might have predicted, the NDP has taken the wrong path.
There are many details to come in the legislation, mainly on how long the cooling-off period is to permit you to walk away, how much of a deposit will be necessary to qualify for this cooling-off, what kind of penalty you’ll pay if you walk away, and how the province will ensure that people don’t just cut a deal (under bidding pressure, one assumes) to waive this cooling-off.
Rather than define consumer clarity, the province is punting this to cabinet to eliminate the opaque qualities as they stand, so stay tuned.
But the real estate industry is, as it should be, unimpressed. So should we be.
It notes that the province has opened the door to an investor or purchaser “buying” properties to block others for this cooling-off period, then walking away. It means the penalties on any reneging will have to be substantial, which defeats the purpose of the initiative to let a legitimately disinterested buyer off the hook.
The better solution came from the BC Real Estate Association (BCREA): a five-business-day delay in accepting bids following a listing. This would create a different process of homebuying, good for buyers and vendors and unsusceptible to as many broken and disappointed deals.
The association recommends a period in which prospective buyers could assemble the resources to inspect, finance and insure the home to place an informed and presumably less conditional offer to a vendor. Bids would not be accepted before that period ends. Bidding wars already exist, so this process wouldn’t worsen the reality.
More importantly for the consumer, this industry proposal has a better chance of ensuring competent evaluation of a property in the purchase than does the government’s escape hatch of walking away from a bid.
Importantly, the NDP plan does nothing to stabilize the chaotic market of the moment, with record-low inventory and record-high investors treating real estate as an investment asset class. A bid under its legislation has a better chance of disrupting sales – and indefinitely holding them up, if people repeatedly bid and walk away. How is that helpful?
Even the finance minister admits it wouldn’t restrain the runaway pricing.
By comparison, the association’s idea would create a kind of open house for a pre-bid period (the industry is flexible on how many days, by the way). It would press vendors to open their properties to professional inspectors and financiers, and to provide information in the days before bids. An unconditional bid would be based on confidence; a conditional bid would be based on evidence.
The NDP cooling-off period, on the other hand, would not require a vendor to lift a finger when the bid comes in. You could be cooling off in isolation, and if you can’t get an inspector in before the period ends, you’d be on your own. Why not understand your property’s challenges before you bid, not when you’re on the clock to firm it up?
It should not surprise those with perceptions of the NDP and economy that the real estate industry was not consulted. Why would the most affected entity be brought into the tent, after all? The government, after all, knows better. •
Kirk LaPointe is publisher and editor-in-chief of BIV and vice-president, editorial, of Glacier Media.