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Proposed lawsuit says B.C.’s foreign-buyer tax violates Canada’s Charter

Plaintiff in potential class action says B.C. levy imposed on foreign purchasers is discriminatory, violates Canada’s Charter of Rights

Rafal Gersza/For The Globe and Mai

British Columbia's 15-per-cent tax on foreign home buyers violates Canada's Charter of Rights and Freedoms and "perpetuates prejudice and stereotyping on the basis of national origin," says the plaintiff in a proposed class-action lawsuit.

The lawsuit, which still must be certified, was first filed in September by Jing Li, a Chinese citizen who moved to Canada in 2013 and earned a master's degree from the University of Saskatchewan. Ms. Li, who is not a permanent resident, later moved to the Lower Mainland and worked for a non-profit. She agreed to buy a townhouse in Langley, B.C., for $559,000 plus GST in mid-July – about a week before the tax was announced.

An amended notice of civil claim, filed in B.C. Supreme Court earlier this week, says Ms. Li was able to complete the purchase of the property in November after she paid an additional $83,850 under the tax.

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The updated claim says high-profile constitutional lawyer Joseph Arvay has signed on to Ms. Li's case, and argues the tax unjustifiably infringes on a section of the Charter that prohibits discrimination based on race, national or ethnic origin, or colour.

"The Foreign Nationals' Property Tax assumes foreign nationals have more wealth and are able to outbid Canadian citizens and permanent residents in the housing market in the specified area. Nationality and citizenship are not related to wealth," the document says.

"The Foreign Nationals' Property Tax is over inclusive because many persons who are neither Canadian citizens nor permanent residents have no more wealth than Canadian citizens or permanent residents. The Foreign Nationals' Property Tax is also under inclusive because there are many Canadian citizens or permanent residents who have more wealth than some foreign nationals."

The document says the tax is "disproportionately felt by persons whose national origin is from an Asian country, a class of persons that have historically suffered discrimination in British Columbia."

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The B.C. government has not filed its statement of defence and a spokesperson for the province did not provide a response when asked about the updated notice of civil claim Thursday.

Shortly after the lawsuit was filed in September, B.C. Premier Christy Clark said the tax had a solid legal foundation and she was hopeful the courts would dismiss the legal challenge.

"I mean, there is nothing government can do in the world today, in Canada, that doesn't garner a lawsuit," she said at the time.

Ms. Clark said the idea with the tax was to "put British Columbians first." Her government repeatedly refused calls to exempt home sales that were pending just before the tax was announced.

A hearing in the case is scheduled for next week.

The amended notice of civil claim also argues the regulation of foreign capital is exclusively within the constitutional authority of the federal government, and the court document broadens the class of people who could participate in the lawsuit. Whereas the class was initially confined to citizens of countries that have financial agreements with Canada, it has now been broadened to anyone who paid the tax on foreign home buyers.

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Figures released Thursday by the Real Estate Board of Greater Vancouver said sales in the region have tumbled, though prices for condos and townhomes continue to climb.

The benchmark price for detached houses, condos and townhomes hit $906,700 last month, a 2.8-per-cent decline over the past six months but up 14 per cent since February, 2016, according to the board. The benchmark price is the industry's representation of typical properties sold.

With reports from Mike Hager and Brent Jang

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