Canada

British Columbians overwhelmingly favour the provincial foreign buyer tax and the federal two-year ban on foreign real estate purchases, a new poll shows. But developers, experiencing a bitter downturn, are pushing the government to ditch policies that curb foreign investment. They say they desperately need investors to return to the market.

According to a recent paper, in the 1980s, the government opened its doors to wealthy migrants with the Business Immigration Program that allowed about 200,000 people, mostly from East Asia, into Canada, until it was shelved in 2012. Instead of spurring entrepreneurial activity, the wealthy migrants invested heavily in property. Meanwhile, they continued to earn most of their income offshore, paying an average annual income tax in Canada of only $1,400

After much reluctance, the B.C. Liberal government finally responded with a 15 per cent foreign buyer tax in 2016. It was too little, too late for the party, and the next year the NDP took over the government and increased the tax to 20 per cent. They also introduced other demand-side measures, including the speculation and vacancy tax, which requires citizens to declare if they are paying Canadian income tax and if the home is a principal residence.

There are signs that in the current market downturn, the development community would like to reopen those doors to outside money. Condo marketer Bob Rennie said racism is driving the pushback against foreign investor buying.

Bob Rennie recently spoke on a real estate industry panel hosted by Postmedia and said he’d been talking to Mark Carney about opening rental housing development to foreign investment. Rennie also said he was opposed to the foreign buyers’ tax from the start, and believed it was a racist policy.