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Vancouver-region foreign-buyers tax does not violate rights, province says

A real estate sign is shown outside a house in Vancouver, Jan. 3, 2017.

Jonathan Hayward/THE CANADIAN PRESS

British Columbia says its 15-per-cent tax on foreign home purchases in the Vancouver region does not discriminate unfairly against non-Canadians because it targets buyers' immigration status, not their citizenship.

In a filing in B.C. Supreme Court earlier this month, the provincial government maintains that a tax based on the immigration status does not unjustifiably infringe on a section of the Charter that prohibits discrimination based on race, national or ethnic origin, or colour – as alleged in a potential class-action lawsuit originally filed in September by a Chinese woman working for a local non-profit who was hit with the tax.

The challenge, which still must be certified, was launched by Jing Li after she paid an additional $83,850 on a Langley townhouse she was locked into buying about a week before the tax was announced last summer. Ms. Li's amended claim said the tax violates the Charter of Rights and Freedoms and is "disproportionately felt by persons whose national origin is from an [East] Asian country, a class of persons that have historically suffered discrimination in British Columbia."

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In its response, filed May 1, the province says if the tax hit East-Asian buyers disproportionately that "is a function of population size and relative demand for market participation, and in no way involves prejudice against or stereotyping of foreign nationals from [East] Asian countries."

The province brought in the levy to reduce demand in Metro Vancouver's skyrocketing real estate market, which was "causing increasing imbalance between the incomes of those who live and work in the region and the cost of residential property," according to the government's response.

In a separate application filed May 5, British Columbia applied to have these constitutional arguments heard in a summary trial, before the class-action suit faces a certification hearing in October, to cut down on the potential liability the province could face if it loses the case and the tax is thrown out.

"By the time the legislation's validity is finally determined, the Province could face a staggering quantum of damages," the application states.

The tax is credited with slowing down the market for pricey single-family homes in the region after it was introduced last August. From the inception of the tax up until the end of February, the tax brought in $92-million. The current provincial budget estimates the tax could bring in another $150-million this fiscal year.

Joel Bakan, a professor and constitutional law scholar at the University of British Columbia, said the lawsuit will hinge on whether one's immigration status is protected under the Charter. He said a judge may side with Ms. Li on this point because previous judgments have been "quite generous" in extending protection from discrimination to other groups not explicitly named in the Charter, noting people in the LGBT community.

The province is also arguing that, even if the tax violates that section of the Charter, it is a reasonable limit that is demonstrably justifiable in a free and democratic society.

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Prof. Bakan said that argument is unlikely to sway any judge who has already found the tax violates another portion of the Charter.

"Once a court has found that a measure enacted by a government or legislature is discriminatory, it's almost impossible for a government to say it's discriminatory but it's justifiable," he said.

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.

The BC Greens have said they want to expand the tax provincewide and increase the levy to 30 per cent. Amid talks with both the Liberals and New Democrats, a party spokesperson did not say Wednesday whether that issue is a priority for Green support for a minority government.

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About the Author
News reporter

Mike Hager is a general assignment reporter at the newspaper’s B.C. bureau. He grew up in Vancouver and graduated from the University of Western Ontario’s Huron College and Langara College. Before joining The Globe and Mail, he spent three years working for The Vancouver Sun. More

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