The need for decisive action in what has been deemed as a pressing electoral issue—namely, affordability—is what prompted B.C. authorities to pass the new levy, University of British Columbia political scientist Max Cameron told The Canadian Press
“Their gamble is that it's better to look like you're doing something than to appear indifferent or tone deaf to the issue,” Cameron explained. “This is a government that is very single-minded about its electoral calculations. That's what drives its policy making.”
“The big fear on the part of the Liberals, to be blunt, is [NDP housing critic] David Eby filling town halls with angry residents saying, ‘I can’t afford to live in this place anymore and I’m moving out,’ and the NDP capitalizing on that and carrying it forward as a central part of their campaign,” he added.
University of the Fraser Valley academic Hamish Telford noted that direct market intervention is the last thing that Liberals would consider, by the very nature of their ideology—which might possibly lead to a catch-22 for the party.
“The risk here is that they cool off the housing market too much and they get trapped in a situation where, on the one hand, Liberal voters are losing equity, but (on the other hand) housing doesn't become affordable enough for those who already can't get into the market,” Telford stated. “One hopes that the 15-per-cent tax was calculated carefully enough that it would cool but not crash the market.”
University of Victoria political scientist Jamie Lawson agreed that the Liberals’ hands were ties lest they be seen as anti-free-enterprise, but added that it’s still too early to determine the final policy and social outcomes of the tax.
“It's actually quite a delicate thing they have to do and there aren't too many directions that a government with their commitments can go to provide really aggressive solutions.”
Latest date from the Real Estate Board of Greater Vancouver revealed that home sales volume in the city sharply declined by 26 per cent last month on a year-over-year basis, possibly due to increased apprehension on the demand side.
Ahead of B.C. elections, voters thinking of affordable housing the most
Tax on foreign home buyers might lead to greater local unemployment
The B.C. government’s decision to implement a 15 per cent tax on foreign home buyers early last month might prove to be foremost on voters’ minds come the provincial elections next year, observers said.