Christy Clark, the Premier for the province of British Columbia sits down with the Globe and Mail editorial board to talk pipelines and natural gas on Dec 8 2014.Fred Lum/The Globe and Mail
Premier Christy Clark says the property transfer tax is a "drag" on B.C.'s economy she would like to eliminate, even though it's worth about a billion dollars a year to the provincial government.
But Ms. Clark said Wednesday the challenge is going to be figuring out how to engineer the demise of the tax without endangering British Columbia's balanced budget.
"It is absolutely part of our long-term plan to get rid of it because it is not good for affordability in B.C," Ms. Clark told a question-and-answer session with the Surrey Board of Trade after a speech on this week's budget.
"It's one thing we can do to try to increase affordability."
The tax, which dates back to 1987, is payable upon purchase or gaining interest in a property registered at the Land Title Office. It is calculated at a rate of 1 per cent of the first $200,000 and 2 per cent of the value over $200,000.
Ms. Clark said there was no action on the file in this week's provincial budget because the tax brought in $928-million in revenue that could be replaced only by raising taxes or running a deficit.
This week's provincial budget shows the property transfer tax as generating $1-billion in 2014-15, $928-million in 2015-16, $923-million in 2016-17 and $909-million in 2017-18.
In a subsequent news conference on Wednesday, Ms. Clark cautioned that her government won't be able to act quickly on getting rid of the tax.
"I wouldn't characterize it as a promise," she said of her comments.
"I would say it's something that we would like to do. A promise is something we believe we can do. We don't know that we can do it yet. It's a billion dollars in revenue for government," she said.
"In order to chop a billion dollars in revenue out of the government, government either needs to be a billion dollars smaller, taxes need to be a billion dollars more elsewhere or there needs to be a billion dollars in new revenue from economic growth.
"That can happen over time."
She said the government is focused on economic growth in hopes of engineering the conditions for an attack on the tax.
Ian Bailey