Budget 2018

[Urban Cowboy]

Maybe someone can answer the question that FF can't answer: If almost all employers are already paying the MSP premiums for the employees, as FF asserts, then where is the money going to come from to replace the MSP premiums? Maybe there's a logical explanation but what is it?

The logical explanation is that BC is driven by small business, and many of those in fact do not pay MSP premiums for employees, despite what some seem to think.

I don't expect those accustomed to the public service payroll to know that though.

[Veovis]

The dream is that Wal-MArt and Fast food joints will be considered "one corporation" and they think they then can tax them on the totals.

Reality is many are singular franchises and will be under the 500K payroll.

I forecast a 500 million plus "error" when things shake out in 2020. However in the mean time we will lose a few hundred million in wine, a couple billion in oil taxes, and a 2 point increase in unemployment.

Clock starts now, and I hope to be wrong.

[seewood]

Where in the budget do you see small business being 'shut down'????

Shut down....perhaps Move out of BC Yes :https://www.castanet.net/news/Penticton/219133/Plant-closing-58-jobs-lost

Pattison made a statement.

[Urban Cowboy]

The dream is that Wal-MArt and Fast food joints will be considered "one corporation" and they think they then can tax them on the totals.

Reality is many are singular franchises and will be under the 500K payroll.

I forecast a 500 million plus "error" when things shake out in 2020. However in the mean time we will lose a few hundred million in wine, a couple billion in oil taxes, and a 2 point increase in unemployment.

Clock starts now, and I hope to be wrong.

I hope you are wrong too, however I highly doubt it. The NDP has never learned from it's past mistakes, and simply keeps repeating the same ones over and over again.

Being involved in construction, I know that when the NDP won in Alberta, many packed up and moved to BC, and I'm not talking poor people either.

They were infuriated that the NPD won there, so now here we are with the same lunatics running BC. It would not surprise me to learn some of those people move back to Alberta, given that between the two NDP Premiers, Notley is clearly the more intelligent one.

[hobbyguy]

There are some comments here that reflect my general notion that the BC NDP have always been incapable of asking the questions "and then what? and then what beyond that? and then what beyond that?"

https://www.theglobeandmail.com/opinion/bc-governments-housing-plan-took-political-courage-but-dramatic-change-is-doubtful/article38040124/

"In other words, in trying to fix the housing problem in B.C., the NDP has come upon a remedy anticipated to provide nearly $1.3-billion in tax revenue over the next three years.

Funding it is going to depend on.

You would think that if a government was confident the tax instruments it was introducing to curb foreign investment were going to work, then the revenue derived from the measures would decline over time. Yet, budget documents indicate that the speculation tax, for instance, is estimated to bring in $87-million this year, and $200-million in each of the two that follow. When I asked Ms. James about this, she said it had something to do with an increase in housing starts. And yet, the budget documents show housing starts are expected to go down over the next couple of years, not go up."

Hmmm... so the BC NDP increase taxes already in place to bring housing prices down (which should reduce revenues from property purchase tax etc. etc.) and get as far as figuring out that that housing starts will go down, but then say that the new lower priced housing at lower volumes will produce increased revenue. Lets see, less volume times lower prices = substantially less total market $ volume, and somehow that lower market $ volume is going to produce MORE revenue. IF you drive out all foreign buyers, speculators and buyers from other provinces, then those targeted taxes should actually be $0. 15% of $0 = $0, just the same as 20% of $0 = $0.

So IF the BC NDP "strategy" works, then those speculation and foreign buyer taxes should be $0, and the lower prices will eat into existing property purchase tax revenue and it should decline. Why then does the BC NDP forecast increased revenues from the real estate markets???

And - question? How does decreased housing starts benefit home buyers/renters et al? Fewer new options = tighter supply in already tight markets. Is a conundrum trying to understand NDP so called math.

I have long said that the housing market problem was primarily a municipal one, with federal input (interest rates) that exacerbated and accelerated the maturing of a metropolis. Home ownership in a metropolis is beyond average folks around the world (New York as an example, where 69% of the population rent). The NDP junior varsity of bicycle Gregor and demovictions Derek did everything wrong in failing to look forward and even live up to the long standing policies (Vancouver has a decades old policy of 20% social housing, but NDP Gregor let that fall to 8% during his tenure). Both NDP junior varsity members happily and continuously myopically approved the destruction of rental housing for thousands and thousands of folks to replace it with for sale condos. So a market that should have been transitioning to rentals (and aiming to build up social housing) was instead destroying rental housing and not building social housing (most metropolis areas have between 30 and 80% social housing in other parts of the world).

So, as Gary Mason continues:

"But the market, in many ways, is set. The new mileposts are established, ones that will continue to prompt many young people to leave the province for somewhere else."

[Urban Cowboy]

Math has never been an NDP strong suit, and the choices made in this budget prove that.

The economy here is going to decline, and frankly I don't believe they give a damn about housing, other than it's a good excuse to put in place another cash grab to make it appear they care.

We were in a good economic upturn, but I suspect housing that is underway will be completed, but with this new tax, as well as the tougher mortgage qualifications, future starts will decline.

[harblz]

You would think that if a government was confident the tax instruments it was introducing to curb foreign investment were going to work, then the revenue derived from the measures would decline over time. [/b]."

This is unsurprisingly disingenuous. If the expected foreign investment is predicted to increase by 30% over the next however many years and because of this measure only increases by 20%, then both foreign investment has been curbed, and revenue will increase.

[madmudder]

Off Topic

[alanjh595]

Kelowna-Lake Country Liberal MLA Norm Letnick says Tuesday's budget unveiled by the NDP plunges B.C. back to the 1990s.

"Welcome back to the NDP of the 1990s, which is a lot of spending and really no measures to grow the economy," said Letnick.

"It's an unfriendly business budget that sees taxes shifted from people to businesses that creates jobs for people."

Letnick says the province is already feeling the economic pinch with the economy forecast to grow by 2.3 per cent in 2018, lower than the 3.4 per cent in 2017.

"Politically, it will be popular to the employees, but the businesses that are trying to create the jobs for those employees will have the added burden. When you add up all the added burdens, that will tend to, over the long term, reduce the growth of the economy."

He points to MSP premiums, which will be eliminated for individual payers by Jan.1, 2020. However, he says those premiums will be downloaded to businesses.

Letnick says an additional $8 billion in taxes is being transferred to businesses, which he says will make some think twice before relocating or investing here.

"That's unfortunate because a lot of the items in the budget are worthwhile items," said Letnick.

"Putting money into daycare is something our party in the election ran on. Making sure we have a housing strategy is something that is very important to everybody in the legislature."

As for the NDP pledge to build 114,000 affordable homes, Letnick says it's actually only 34,000 over the next three years at a cost of $1.6 billion. He says that's 80,000 short of the NDP's election promise, and works out to just $47,000 per unit.

Two items were also introduced that will have a direct impact on Kelowna – the extension of the foreign buyers tax and a new speculation tax.

Letnick says he will have to have discussions with constituents and industry professionals before knowing how both will impact the riding

https://www.castanet.net/news/Kelowna/2 ... to-the-90s

[alanjh595]

VICTORIA — For the first budget of a new era, Finance Minister Carole James announced several billion dollars worth of tax increases Tuesday, offset by an almost equivalent number of billions in unallocated spending.

[alanjh595]

If the New Democrats were as determined to improve the supply side of the equation as they claim, I doubt they would be forecasting the construction of 25,000 fewer units over the next three years than in the last three years under the Liberals.

[marooned]

So IF the BC NDP "strategy" works, then those speculation and foreign buyer taxes should be $0, and the lower prices will eat into existing property purchase tax revenue and it should decline. Why then does the BC NDP forecast increased revenues from the real estate markets???

Increases in revenue could be explained by the speculation tax rate increasing fourfold over the next three years, from 0.5% in the first year up to 2%. If the rate rises 400% over three years, and revenues only rise from $87m to $200m (225%), then you are seeing the change at work. Note also that their property taxes 'bucket' will include transfer taxes (from sales and possibly housing starts, so increased starts will increase revenues), and possibly include a share of cap gains reported as income (on this point I am unsure, though provinces and feds must be sharing).

[alanjh595]

NDP Finance Minister Carole James acknowledged her government hasn’t fully modelled the effect the new tax measures on B.C. real estate prices or calculated the cost of increased auditing and enforcement. But the government wants housing prices to drop, she said.

The most significant action to cool B.C.’s speculative housing market was raising the existing 15 per cent foreign buyer tax to 20 per cent. The existing tax applied only to Metro Vancouver; the higher tax will also cover the Victoria and Nanaimo land districts on Vancouver Island, the Fraser Valley, Kelowna and West Kelowna. The expanded tax is expected to bring in an extra $40 million a year.

[The Green Barbarian]

*removed*

[The Green Barbarian]

I see a new approach to proactively dealing with whole series of cascading social problems associated with our housing market.

This isn't a new approach by the NDP, it's the same approach they used in the 1990's to kill the rapidly increasing housing market. Kill the economy, kill jobs, raise taxes through the roof and force a mass exodus - it's the NDP formula and it's guaranteed to cause housing prices to drop.

Over the past 10 years, when someone has complained to me about housing prices, I have been consistent in my response - "you want to drop housing prices, hard and fast, elect the bonehead brain-dead NDP. They are the cure for all problems caused by economic growth, because they are the flesh-eating disease of economic growth". And here we go. I am already banking on a $100K or more decline in the price of my house by this time next year. It's inevitable. There is always one and only result of stupidly electing the NDP, and that's pain and misery for all, but especially those most vulnerable, as their jobs are wiped away by insanely stupid policy decisions.