In 2018, B.C.’s NDP government, along with all other provinces, signed on to the notion that Canadians were not saving enough for retirement and agreed to force an increase in Canada Pension Plan contributions, also known as “payroll taxes.” They felt so strongly about this that they pushed ahead despite numerous studies questioning its need, and showing that thousands of jobs may be lost as a result.
The NDP then set their sites on bringing down the price of homes by imposing numerous new property taxes on B.C. homeowners. As a result, it’s reported that house prices in the Lower Mainland have already dropped by 10-20 per cent on average, and in some areas even more, effectively wiping out billions of dollars in homeowners’ equity. NDP Finance Minister Carole James even boasted that this was “proof” their measures were working.
Here is the folly of the NDP’s ways. For the vast majority of homeowners, the equity in their homes will make up the most significant portion of their retirement savings; far greater than their CPP investments. So, here you have a government that says on the one hand that it is concerned that British Columbians aren’t saving enough for retirement, and on the other hand implements measures that destroy billions of dollars of potential retirement savings.
Furthermore, the rationale the NDP used to justify their new taxes was to make housing more affordable. My experience has been that one of the best ways to make housing more affordable is to increase supply. However, developers are actually now scaling back on projects and in some cases even putting them on hold because of the market correction. As a result, supply will stop increasing and thousands of people working in the building trades may stand to lose their jobs.
It’s been said that the best social program is a strong economy. If the NDP truly cared about British Columbians’ retirement savings and the social good, they would admit their mistake and at least reverse the measures that most negatively impact B.C. taxpayers and the economy, namely the speculation tax and the new school tax. However, the government has given no sign they intend to do this. So, this will likely go down as yet another failed economic experiment. Unfortunately, hard-working British Columbians are yet again being used as Guinea pigs, with devastating results.
Former Conservative MP and Parliamentary Secretary to the Minister of Finance
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