The B.C. Government’s proposed Speculation Tax hasn’t even taken effect yet, and local business owners are already feeling its negative impact.
Chris Freer and Jonathan Jenion of Fawdry Homes in Kelowna say the implementation of the new tax threatens the achievability of their business goals, and the evidence has presented itself already.
“We had about ten contracts lined up for next year. Immediately when the proposed speculation tax was announced, we had several clients come to us to completely cancel or postpone the projects due to the uncertainty of how the tax will affect the affordability,” Freer explains.
Freer and Jenion have co-owned and operated their medium-sized construction business for the past several years. The company has formed a reputation across the Okanagan Valley for their quality single-family and multi-family residential builds. Freer employs a handful of people directly and many more indirectly through the various subcontractors used on projects.
“We have about twenty people directly working for us that count on those paychecks every week,” Freer says.
Building an average of one to ten homes a year, Freer strives to arrange a new project every month to bring in the necessary income to keep operations afloat.
“More than anything, the uncertainty of things doesn’t allow us to plan, it doesn’t allow our clients to plan, and it doesn’t inspire confidence in anyone,” Freer says. “No business can operate in this uncertain environment,” he adds referencing the implications of the tax for both business owners and clients alike.
As a result of the collective uncertainty, some of Freer’s recent clients have attempted to protect themselves. “I had a client who asked me to write a clause in our contract about the BC Government enacting taxation policy that would result in the project being uneconomical [for myself] to complete,” Freer recalls. “It would basically be a blank cheque for them to get out of the contract if they wanted to.”
Obviously unable to engage in such contract stipulations, Freer and other local business owners are left in a state of limbo with risk at the forefront of everyone’s minds.
Clear, transparent policy that applies equally to everyone. That’s what Freer hopes to see from the B.C. Government in place of hasty legislation and poor communication that disturbs business operations and divides the province and nation.
Canadian Home Builders’ Association of British Columbia CEO Neil Moody echoes Freer’s position. "There are no metrics to determine if and how this tax could be considered successful in comparison to the significant economic effects we are already experiencing in this province of lost jobs and contracts.”
“In addition, the data shows the hardest hit will be 20,000 British Columbians with either a vacation home or second property. We need to see some clear targets to measure the results, otherwise, it will only benefit general revenue.”
Freer fears that in an industry where a massive labour shortage already exists, the tax will only worsen the problem. He also emphasized, in terms of housing, the province needs to add inventory, not decrease it.
“Business needs to know what the policy is, it needs to be fair and it needs to address the problem,” Freer says. “That’s three strikes. It’s not fair, it doesn’t address the problem and it’s not transparent; we don’t know what it is.”
To learn more about the Speculation Tax and the concerns surrounding the policy visit stopthetax.ca.
About CHBA BC
The Canadian Home Builders’ Association of British Columbia is the leading advocate of the province’s residential construction industry.
