Tuesday, June 21, 2011

The HST

I apologize for getting political on you. If you don't want to read or discuss this, simply skip down to the previous post.

BC faces a critical decision. It's important you're in the know before casting your vote in the upcoming mail-in referendum on the HST. Here's some links:

http://www.hstinbc.ca/

http://fighthst.com/

And the two most important things you can watch when it comes to this critical economic decision for BC:





We've been discussing prudent economic choice here at HHV since day 1. That's why I'm advocating that you choose to keep the HST. It's the right economic choice at this time. Please take some time to watch the videos above, unfortunately it's close to 30 minutes in total, but I remind you that financial matters are rarely quick decisions...

104 comments:

ginnad said...

Hi HHV,

I lurk and don't comment often, but I wanted to this time.

First off, wow, those videos are condescending.

Fundamentally, I understand the economic arguments, and always have. I can get behind the idea that there are savings for businesses, but I laugh when I hear that these savings will naturally be passed on to consumers. Any examples you can think of where prices have gone down? None come to my mind. (Also, I have a business, and worked in manufacturing, and have trouble believing the savings are as great as some people claim.)

I would also note that many of the benefits of the HST could have been achieved with a reform of the PST. The BC government could have chosen at any point to waive or refund the tax on input goods for manufacture. And yet, they never did.

Finally, here's my biggest issue. You don't have to "hate Gordon Campbell" to be uncomfortable with the way this tax was implemented. We went from "the HST is not even on the radar", to "the HST is a done deal". No public input, no marketing campaign, nothing. There wasn't even a chance for any meaningful debate in the legislature, since the agreement with the feds was already made.

I have a problem with any government sweepingly implementing fairly significant tax reform in this manner. If the arguments are so good, why weren't they made at the time of the last election?

I'm undecided as to how I will vote in the referendum. Outside elections, we don't have many ways to make our voices heard. Part of me is willing to pay the cost of repealing the HST just to put some humility in the government, no matter who is in charge.

After all, my only other option is to vote NDP at the next election, and that would be far more expensive...

Robert Reynolds - HMR Insurance said...

"Part of me is willing to pay the cost of repealing the HST just to put some humility in the government, no matter who is in charge.

After all, my only other option is to vote NDP at the next election, and that would be far more expensive... "


I am right with ya. This is one of those rare opportunities to humble govt. Which IMHO is worth it any chance you get.

HouseHuntVictoria said...

I don't want to get into a back and forth debate, but there's plenty of academic study examples in the second video of decreased prices since the HST was implemented in BC.

You can hate the politicians, and the way it was implemented... I completely agree... but there is no rational economic reason to choose the PST/GST over the HST.

Just Janice said...

HHV-

From a this tax versus that tax standpoint the HST is a good tax.

How it was implemented was bad.

In terms of the 'economic' decision voting against the HST is an 'economic' decision if one values the ability to rebuke government more than the additional cost to themselves personally for having the PST/GST scheme reinstated.

Personally, I'm not an individual who needs to hurt myself to make a point so I will likely support the reformed HST.

ginnad said...

Well, just to elaborate on your point HHV.

You said: "...there's plenty of academic study examples in the second video of decreased prices since the HST was implemented in BC."

Well, he quotes one study. Which doesn't quite say what he claims it says. (It uses pure CPI to compare prices, and also notes that restaurants meals have gone up 6.5%, which your guy lists as having gone down...according to the study.) And there's a guy selling marine flotation devices who says he's dropped his prices. Not having been in the market for these I can't say either way.

But as for the basket of items which they claim have gone down, I can say that with a review of both Quicken and Simply Accounting, my costs on items has actually increased slightly over the last 18 months.

I didn't compare every item, but off the top of my head nothing went down. Certainly there is no category for either business or home in which my spending went down without deliberate effort. But I can think of all sorts of things I paid a lot more money for.

Real estate commissions (this was a biggie, especially in Victoria), contractor fees for getting the house ready etc. All went up by 7%, which was a significant amount of cash.

Fundamentally, I believe that the HST impact is somewhere in the middle of what both sides are claiming.

Finally, I just wanted to make a point about the complex and difficult PST. (Although, I've filled out both forms, and frankly it's not that complicated.)As the video notes, and as the studies not, reforming input taxes will definitely allow BC businesses to be more competitive outside the country in particular.

So if the HST falls, why not reform the PST? Somehow I don't see that happening.

Just Jack said...

I would have preferred the prices to be including HST and not a dollar plus HST.

Some goods have gone down but all services have gone up. The biggest cash grab was on services like accounting, hair cuts, etc.

When something is advertised for a $100, that's what I want to pay not $112.

Rhino said...

"This is one of those rare opportunities to humble govt. Which IMHO is worth it any chance you get."

Has to be one of the most ignorant comments I have heard. The government represents you, you want to humble yourself? How about getting involved in the political process. There are a lot of good and smart politicians out there, you just have to get involved. Simply hating all politicians and using every opportunity to "humble the government" will just leave our province in worse shape for our kids

Reid said...

The move to HST is a total no brainer for the economy and job stability. The fact that business taxes will be rising (or not dropping) makes the move to HST more costly for me and my family, but I see it from both sides and for the province it would be a major setback to go back to the PST.

CD said...

ginnad

I understand that you personally laugh when you think a business will lower prices when the have more profit.


What you must be saying is there is no such thing as competition. If that was the case. Ma and Pop operations wouldn't be forced to close there doors because Walmart came to town. I mean, businesses can charge what they want right?

patriotz said...

If you want house prices to go down faster and are 100% sure you will keep your job by all means vote against the HST, because it will cut down the desirability of BC as a business location a few more notches from that hit it took last Wednesday. Bringing back the PST would be a form of economic vandalism.

Having a federal VAT and provincial/state conventional sales tax makes no sense at all and is not found in any other country. Gordo may be a jerk, but he's a jerk who was right.

Leo S said...

First of all, that guy is a total douche in the second video. His first video is pretty good, and Vanderzam is not being truthful. However, spending half the video mocking spelling or setting people up using stupid video clips is pretty pathetic as an argument.

@HHV I don't want to get into a back and forth debate, but there's plenty of academic study examples in the second video of decreased prices since the HST was implemented in BC.

Well, I haven't read the full study, but Jon Kesselman's report actually says that prices went up overall.. Yes some prices fell, but overall we're still paying slightly more. Funny how he didn't mention that key conclusion in the video.

The government represents you, you want to humble yourself? How about getting involved in the political process.

My wife says: The forum in which the government represents us is the legislature. The HST was never debated in the legislature before it was implemented so now the referendum is the only opportunity to have our opinions heard.

That said, HST makes a bunch of sense from an efficiency standpoint. Really the only question is if you want to try to teach the government a lesson or not. Let's be honest, it'd be about as effective as slamming your head into a wall.

Grezilda said...

Leo S's wife here. Long time reader, first time poster. I wanted to add that I haven't decided which way I will vote yet, so don't jump all over me!

Man, I need thicker skin before I can become a blog dog.

Trilobite said...

I'm definitively in favor of the HST but like so many deplore the way it was introduced. The benefit to our economy (and therefore jobs) will be substantial. I think it's a missed opportunity though for a wider (revenue neutral) tax reform ... and indeed, I wish it'd be included in the price. JJ, I too want to pay 100 when the tag shows 100 and not 112!

Introvert said...

Wow, a lot of support, albeit tepid, for the HST here.

The HST doesn't have my support.

Helping to inform my reasons is David Schreck's recent blog post entitled "I'm Voting Yes," which can be found here

Here are some excerpts:

I am voting YES to extinguish the HST and reinstate the PST/GST system because the system we had until July 2009 was better for my family and for the BC economy.

There are hundreds of things that used to have no provincial sales tax and now cost 7 percent more: vitamins, basic cable TV and telephone, concert and sports tickets, energy efficient appliances and dozens of services from haircuts to lawn care, from veterinarians to accountants. Voting yes will reduce the tax on a large part of your family budget from 7 percent to 0; compare that to the government’s promise to reduce it to 5 percent in July 2014. Estimates of what the higher HST cost means to the average family are subject to debate, but you don’t need to reply on economists since you can look at your household expenses and determine what the HST costs you. If you didn’t paint or re-roof this year, look ahead and see what it costs then.

Tax changes create winners and losers. The PST did not apply to most labour, so services like lawn mowing, house cleaning and restaurants (the service of cooking your dinner) weren’t taxed. The HST increases what is taxed, applying it to those services. Even pro-HST economists know that increasing prices means reducing demand; higher prices equal lower sales. That is why the HST reduces employment in the service sector of the economy. The government listed HST winners in its July 2009 news release, but unless your family builds a lot of roads, it probably isn’t a winner. There is an enormous difference between capital intensive construction like road building and labour intensive construction like roofing or painting. The PST favours labour intensive construction; the HST hurts it.

Supporters of the HST claim that it will stimulate investment and thereby economic growth. They ignore the fact that ten years ago investment in production machinery and equipment was made exempt from the PST. The independent panel on the tax reduced claims about the HST’s impact on job growth over the next ten years to a level that would not be measurable against normal growth. Those forecasts are for 2020; the immediate impact is negative on the service sector.

I will vote yes because the PST is best for my family and for the economy. There is also an argument that a yes vote is best for democracy. This is the first time in BC history when voters can tell the government what they think about a surprise tax announcement just weeks after a provincial election. If the government gets away with imposing the HST on you, are there any limits to what it can pull-off?

HouseHuntVictoria said...

@Introvert,

Schreck's blog post is miss-informed, miss-information and conveniently ignore the truth. He say's he's voting yes because he thinks families will be better off, especially families with lower incomes. He couldn't be more wrong.

I will be voting NO in the referendum about the HST. Oddly, you have to vote NO to keep the HST. I’m voting NO because I do not want to go back to a two tax (GST plus PST) system. I’m voting no to a GST plus PST system because I don’t want a million low-income families to lose their HST rebate cheques and wind up worse off. I’m voting NO to a GST plus PST system because I don’t want BC to create a new 300 person auditing bureaucracy that will cost British Columbians $35 million a year. I’m voting NO to a GST plus PST system because I don’t want BC to give $1.6 billion back to Ottawa. And I’m voting NO to a GST plus PST system because I don’t want small businesses to face administration costs estimated at well over $100 million per year just to deal with two taxes.

As for the whole argument about voting Yes to send a message to government about the way the tax was brought in: kinda like cutting off your nose to spite your face isn't it?

CD said...

BC is in debt and runs a deficit. So anybody who thinks they are going to "save" money by reducing the taxes they pay must not understand taxes and government.

It is already been announced the money lost will just come from else where. Which means layoffs and increased taxes.

commuter12 said...

What about service industries? We're supposedly a service industry economy and in those industries labour is the largest cost. You do not get HST credit for wages unless you use sub contractors. The net effect of the HST on labour industries is either higher prices (after tax) or lower wages take your pick. Oh wait but it gets better! If the HST is kept you also get higher corporate taxes!!! Yes you too can get an even lower paycheque and pay higher prices for services too! Step right up and feel the Christy Clark families first wave!

a simple man said...

from cbc.ca - the BoC is singing a familiar song again. They must really be worried.

"The Bank of Canada is renewing its warning about household debt, citing it as a top domestic concern for financial stability in the country.

"The main source of concern domestically continues to be the high levels of debt carried by Canadian households in relation to their disposable income," the central bank said in its Financial Systems Review Wednesday.

While it calls Canada's economic situation "healthy" compared to the situations elsewhere, the central bank points to plenty of turmoil outside Canada's borders.

It says sovereign debt in peripheral European countries — specifically Greece, Spain, Portugal and Ireland — remains a big risk.

"Sovereign balance sheets remain strained in many advanced economies, and a small number of banks," the central bank says.

Although direct Canadian banking exposure is small, the country's financial system could be adversely impacted indirectly by virtue of connections to banks in other countries.

The central bank says the high degree of interconnectedness in the international banking system can amplify such shocks and that exposure from derivatives contracts could exact even greater damage."

Dave said...

@a simple man
TED spread is only 23 basis points. Seems like the banks aren't that worried over those economies (at least for now).

Dave3

a simple man said...

Hi dave3 - thanks - can you educate me to what a TED spread is?

My main concern is our consumer debt and the "buy now, pay later" attitude that seems pervasive.

Introvert said...

I’m voting no to a GST plus PST system because I don’t want a million low-income families to lose their HST rebate cheques and wind up worse off.

HHV,

Isn't it true that a million low-income families wouldn't need rebate cheques if only for the HST?

I think the government sort of admitted the tax was unfair when it decided to offer folks rebate cheques. And if that isn't the reason behind the rebate cheques, then what is? Are the cheques bribes?

HouseHuntVictoria said...

"Isn't it true that a million low-income families wouldn't need rebate cheques if only for the HST?"

They get them under the GST scheme, HST makes them larger as I understand it.

"I think the government sort of admitted the tax was unfair when it decided to offer folks rebate cheques. And if that isn't the reason behind the rebate cheques, then what is? Are the cheques bribes?"

Yes, the one-time payments of $150/kid are bribes.

The GST/HST rebate cheques are something entirely different as I understand them and they're meant to redistribute wealth. Regardless, rich folks pay more VAT taxes than poor folks based on consumer spending habits.

I think the HST scheme on offer in BC is flawed. I hate that the rate gets lowered to 10% while they increase corporate taxes to make up the difference. Defeats the purpose IMO. But that said, and this is the key, the HST even in it's flawed offering, is still superior economically to the PST + GST combo we had before.

Campbell almost got the tax policy right, despite his clusterf&cked way of bringing it in. Christy's political hand on the policy has made it worse than it was, but that doesn't mean it's worse than the PST + GST.

I implore people to read up on what this is all about. There's a choice: HST or PST + GST. Weigh the benefits of HST against the old regime and there are no legitimate economic reasons for retaining the old system, just a bunch of bafflegarb about "consumer costs" that ignore economic reality: corporations don't pay taxes, people like you and me do. This is a question of tax efficiency. PST is an inefficient taxation system that has long since been abandoned by most other jurisdictions.

SilverSurfer said...

Just WOW! I did not expect this from you HHV, and other pro HST'ers on here.

I'm going to be blunt - You guys are sell outs.

I don't give a *hit if the revised HST at 10% is slightly better or slightly worse than PST+GST for my pocket book.

That's just so not the point!

What I know for sure is this:
1) As ginnad said: The government brough on HST without public consultation - this is just wrong on so many levels! Today it's HST, tomorrow it's going to be something else!

2) They have now spent an additional 5 MILLION dollars in a PRO-HST ONE-SIDED advertizing campaign with our tax dollars. Where's the funding for the opposing views??????????? You guys are swallowing this propaganda info hook-line and sinker?

3) The HST will be a FEDERAL tax, that means BC will lose control over its tax base. If we have another recession (count on it), watch what happens to our 10% HST after Ontario becomes the next California. You guys want to pay for more Ontario Auto-Worker bail-outs?

4) I'm calling 100% bullshit on any "guarantee" that the HST will remain at 10%. Notice how they never said "guarantee forever?". For what period of time is it guaranteed? Right...

Seriously, are we that naive?

My opinion is that this entire thing needs to be scrapped, and the PROPER PROCEDURES, including public involvement and debate, need to be followed to implement *any* tax.

The bottom line is this, if you are voting to keep the HST, you are sending a message to our government (irrespective of party) that it is ok to shoot first, and deal with consequences later - public opinion and rights and representation be damned! And that you (citizens) will cower before government and can be paid off at the cost of your rights and liberties.

For me, this is not about the money, it's about principles - which I will exchange for no amount of money.

I'll leave you with a few Thomas Jefferson quotes to contemplate:


"What country can preserve its liberties if its rulers are not warned from time to time that their people preserve the spirit of resistance?" -Thomas Jefferson

"When the people fear their government, there is tyranny; when the government fears the people, there is liberty. " - Thomas Jefferson

"In matters of style, swim with the current;
In matters of principle, stand like a rock. "
- Thomas Jefferson

nan said...

For the first time ever, I agree with Silver Surfer. The gov't needs to be taught a lesson here: democracy means by the people, for the people and if politicians think they can do whatever they want, they need to know that they have another thing coming.

People naturally push boundaries and the old "extreme" quickly becomes the new "normal" if consequences aren't applied to correct innappropriate behaviour.

To all of you in favor of the HST, this is not a vote for a tax, it is a vote for correct political process.

CD said...

Silver Surfer:

1) As ginnad said: The government brough on HST without public consultation - this is just wrong on so many levels! Today it's HST, tomorrow it's going to be something else!

WRONG
Its called a majority government. If you do not like it you should have voted for single transferable vote.


2) They have now spent an additional 5 MILLION dollars in a PRO-HST ONE-SIDED advertizing campaign with our tax dollars. Where's the funding for the opposing views??????????? You guys are swallowing this propaganda info hook-line and sinker?

UMM YEAH
I don't think you realize the costs associated with voting down the HST. We have to pay back 1.6 Billion. It is federal money which will only contributed 14% of. (BC is 14% of the pop of canada)



3) The HST will be a FEDERAL tax, that means BC will lose control over its tax base. If we have another recession (count on it), watch what happens to our 10% HST after Ontario becomes the next California. You guys want to pay for more Ontario Auto-Worker bail-outs?

WRONG! BC controls the rate of its portion. Ontario is at 8% now. Ontario is free to increase/decrease its portion as it sees fit. On a federal level there is no stopping the GST portion from changing with HST or GST/PST since GST is present in both scenarios.


4) I'm calling 100% bullshit on any "guarantee" that the HST will remain at 10%. Notice how they never said "guarantee forever?". For what period of time is it guaranteed? Right...

UMM OK
You can call bull on anything you want, but guess what. The government is still going to tax you as it sees fit. The government is going to get its money.

SilverSurfer said...

CD said:

1)"WRONG- Its called a majority government. If you do not like it you should have voted for single transferable vote."

I didn't vote for Campbell or Christie for that matter. Majority government does not translate to authority to passing any law ignoring process. The government is supposed to represent the people. If there was no public consultation, where is the representation?


2)"UMM YEAH
I don't think you realize the costs associated with voting down the HST. We have to pay back 1.6 Billion. It is federal money which will only contributed 14% of. (BC is 14% of the pop of canada)"


Yeah I do realize that short term cost, and I also believe that those costs came from a government that promissed no deficit spending, that the Olympics were going to be net revenue positive, and that there would be no HST. Guess what? They lied, and lied and lied and will lie again. But this time you believe them?? Tell me, what are the long term costs of keeping a blantly lying government in power?

3) "WRONG! BC controls the rate of its portion. Ontario is at 8% now. Ontario is free to increase/decrease its portion as it sees fit. On a federal level there is no stopping the GST portion from changing with HST or GST/PST since GST is present in both scenarios.

Really? Not according to constitutional lawyers. Can you please cite a valid source that validates your statement? I will read it. Thanks.

4) "UMM OK
You can call bull on anything you want, but guess what. The government is still going to tax you as it sees fit. The government is going to get its money."


I fear that you fear the government too much. Don't underestimate and downplay your power as a citizen.


It sounds to me like some of you guys are getting caught up in the framework of the debate, that was put forth by the same government that is now on the defensive.

If you ever took Debate 101, one of the first things you learn is that if you want to win an arguement, control the questions.

I repeat, for me, this is not about $$, it's about principles, and they were trampled upon.

BCAccountant said...

As an accountant I see many types of businesses and see the implementation of the HST and know how the GST/PST taxes worked. HST is a far better tax in that it is so much more efficient for the businesses to deal with and we have one government body dealing with it instead of two under the old rules. PST rules were extremely intricate and complex and besides construction and restaurants there weren’t any large industries that couldn’t deal with this change.

The posters saying that their costs increased, costs always increase so how can that be directly related to the HST. I have many businesses that weren’t happy with the HST at first but as time went on almost all are and some have even said that they have seen their suppliers’ costs come down.

Totally agree with Rhino that we are the government and to punish ourselves is ridiculous. The government in charge at any given time is constantly bringing in new and tweaking other legislation so I’m not sure why some feel so differently about this particular legislation and say we should have been consulted. It is a more efficient tax and we would taxed some other way if not this way. When all is said and done the individual person is responsible for ALL taxes. Even corporate taxes are a cost of doing business and are reflected in the price of the goods and services consumed by individuals.

I think most taxpayers really don’t understand tax, business or economics and leave these types of policy decisions up to the government and then in their ignorance of how it works become irate at policies that actually would help the economy and the taxpayer. People should either educate themselves or leave the government to deal with it, I would prefer people taking more of an interest and educating themselves.

I have change dozens of people’s view of the HST by just explaining to them how and why it works. Thanks for the opportunity to discuss this HHV and for all the time and effort you put into this blog, I really enjoy it.

CD said...

Silver Surfer:

Nova Scotia just increased there portion of the HST. Yes it is a federal tax administered by the feds but the provinces controls its portion and to a degree what is taxable or not. IE)Ontario is subject to 13%HST on gasoline where as we are subject to 5%.

http://www.gov.ns.ca/finance/site-finance/media/finance/NS_Trans_Rules_HST_Increase2010.pdf

The people of British Columbia had a choice to vote for STV. They voted it down twice. Next election vote the NDP and then they will do as they please.

I do not fear the government. I just realize services cost money. If you cut your tax base, services have to be cut. People always want more services and less taxes. People are not going to pay less if we vote down a tax. The govt will just increase it elsewhere or cut services. If not we can end up in a debt crisis like California.

As for Campbell coming out and saying "I will raise taxes" as his platform. Yeah, the NDP will just say, "I will NOT raise taxes". Guess who the people will vote for.

Yes... Campbell screwed up (He acted too soon) and got forced out of office. Just like Vanderzalm did.

Leo S said...

I didn't vote for Campbell or Christie for that matter.

Has no relevance to the discussion. Majority, not unanimous.

Majority government does not translate to authority to passing any law ignoring process.

Actually it sort of does. Of course majority governments still have to be concerned about re-election, and in extreme cases, defection of their MLAs, but assuming they stand together they can pass what they want.

If there was no public consultation, where is the representation?

You have representation by the member you elected. There is no mandate for direct consultation on every issue.

Guess what? They lied, and lied and lied and will lie again.

The sky is blue, the grass is green. What else is new?

BC controls its portion of the tax. Hence the lowering to 10%. That comes out of the provincial portion.

Where's the funding for the opposing views???????????

The Yes side also got funding. Didn't you get the pamphlet? Don't you see the millions of "Yes" signs around Victoria?

watch what happens to our 10% HST after Ontario becomes the next California.

Haha. It's funny that you think the same thing wouldn't happen with the GST. Of course they will raise it again when they need money. The HST changes nothing.

I'm calling 100% bullshit on any "guarantee" that the HST will remain at 10%

Of course not. There are never guarantees.

Am I pissed at how the HST was introduced? Sure. Campbell lost his job over that, and I'm satisfied with that as a punishment. Trying to teach them (different people now) a further lesson is pointless and just hurts everyone else.

SilverSurfer said...

A few strawman arguements, a few good points and others that are still argueable in reference to Leo and CD. Appreciate your insights. Unfortunately, I do have a job, and don't have all day to debate this with you guys. I'm still voting against the HST, as for me the #1 priority is governing principles, not getting HST rebate cheques or simplifying corporate accounting methodologies.

Best Regards

Sweetrealtor said...

Absolutely no support for HST from me. I'm curious if other real estate agents feel the same way.

Sure it's easier for companies and accountants but there is no benefit for your average consumer and an eventual decrease in product prices is a pipe dream.

It's an absolute shame that it will cause a lot of chaos when HST is repealed. But it was a bigger shame that it was bulldozed in for a $2B Federal transfer, quickly absorbed into the provincial coffers to mask how poorly the province was being run.

Find another way to get your tax dollars.

BCAccountant said...

Sure it's easier for companies and accountants but there is no benefit for your average consumer and an eventual decrease in product prices is a pipe dream.

It's not that it is easier, it's that it takes less time and money to navigate... otherwises it costs a company money, which has to be built into their prices, which the average consumer pays for.

The benefits to the average consumer are numerous, off the top of my head:
- lower implementation and audit costs for the government which is lower costs to the people
- a consumption tax instead of an income tax, consumption tax is easier to avoid than income tax, you can choose to consume less
- an increased benefit to businesses in BC, which leads to more businesses coming here, which leads to a better economy and more jobs/less layoffs
- whether you believe it or not, businesses will, and some already have, lowered prices which leads to less cost for consumers
- low income families actually benefit from GST/HST rebate cheques and will now even more so

Dave said...

@ a simple man
Seems like this is the wrong post to discuss housing in. I will post in the previous HHV poost.
Dave3

Introvert said...

My comments on the two issues.

1. The "What"

The HST is not unambiguously positive in terms of economics.

Case in point, there are hundreds of things that used to have no PST and now cost 7 percent more: vitamins, basic cable TV and telephone, concert and sports tickets, energy efficient appliances and dozens of services from haircuts to lawn care, from veterinarians to accountants.

How exactly does paying more for these items benefit me?

2. The "How"

Almost everyone agrees that the government "mishandled" the tax's introduction, to put it charitably.

Now some people can get over this, and others cannot. For those who can, good for you! For those who cannot, it is perfectly legitimate for them to vote against the tax based solely on principle.

Because one can't say that principle is not important to democracy, it is then perfectly valid for one to vote against the HST based solely on the way it was introduced.

nan said...

@ Silver Surfer: again I agree. What matters is political process, not short term financial gain or convenience.

@ BC Accountant: I'm also an accountant (Chartered, I might add). I get it - the HST is easier to account for and my book keeper will be pissed if we have to deal with the PST again. All of this pales in comparison to a broken, dictatorial political process. Your money isn't worth $hit if the government that controls it doesnt follow the rules.

If the rules are broken, it's political smackdown time. If we let this slide, what's next? I'll bet you its something dumber than the last Olympic failure.

BCAccountant said...

@ BC Accountant: I'm also an accountant (Chartered, I might add). I get it - the HST is easier to account for and my book keeper will be pissed if we have to deal with the PST again. All of this pales in comparison to a broken, dictatorial political process. Your money isn't worth $hit if the government that controls it doesnt follow the rules

I'm not sure what your type of accounting designation has to do with it.

I'm not sure you 'get' my post. I thought I made it clear that it wasn't to do with making it easier, it is what is best for Canadians. And I truly believe the HST is the better system.

I'm still not clear what 'rules' were broken.

nan said...

@ BCAccountant: so in your opinion, a marginally more efficient tax regime is "better for British columbians" than a functioning political process. If you can't see the forest for the trees, you are probably part of the problem.

BCAccountant said...

@nan I don't believe there is a problem with the political process. I agree that the implementation was not done well and Campbell was ousted for that. And now we need to decide which is a better system. In my opinion not only is the HST a better system, but it's already in place and it would cost more money to recind it.

I also don't believe it is only marginally better, it is a much better system.

Do you really think by telling a new premier to get rid of the HST you will be proving some kind of point? Was a point not already made in getting the referendum? And now armed with the information on the HST compared to the GST/PST is it not logical to go with the best option.

You could take it further and say the HST was the best for Canada and the government that brought it in was doing a good job, but that might take it too far for most :)

Marko said...

Building lot - 1551 Pembroke St - just went for 396k after 208 days on market (asking 405k). This lot is very difficult and expensive to build on (will require a number of large trees to be cut down, extensive blasting likely, big excavation and tall foundation walls.)

With that sale there is only one listed lot on MLS in the City of Victoria....416 Cecelia at 1.75 million.

Tear down prices and bare land lots are starting to approach each other in terms of price. If it only wasn't for asbestso....which is a large cost that has been added to tear down projects in recent years.

a simple man said...

and the flippers on Sandowne as busy bees - lots of activity around that hive. Will they get their money out? Only time will tell - they overbought to begin with.

Leo S said...

@Introvert at 3:04PM

Didn't you say you had a job? ;)

The HST is not unambiguously positive in terms of economics.

I agree. It is minimally more expensive for the consumer and more efficient for everyone else. If anyone thinks that taxes are not going up in the coming years you've got another thing coming. If the HST is struck down they will find a more onerous way to raise taxes (ie, raising your income tax). Then I would make a stink about it. The HST is one of the least offensive ways to raise taxes.

For those who cannot, it is perfectly legitimate for them to vote against the tax based solely on principle.

Sure, but I'm a realist. What are the chances of your vote against the HST changing the behaviour or any politician in the future? Round about zero I'd say.

So maybe your personal desire for revenge will be satisfied, but let's try to be more logical about this.

The HST was a kamikaze move by Campbell.
While I'm somewhat offended at the blatant lying, I do realize that the tyranny of the majority and rampant populism in the political process prevents the introduction of a new tax in a civil manner. Given the chance, everyone will vote against new taxes, and yet still demand more services. How exactly is the government supposed to honestly balance their budgets?

Like CD said, if Campbell had been honest and said "We want to introduce the HST" they would never have been elected, even though the HST is unquestionably a better tax system than the PST/GST.

@nan so in your opinion, a marginally more efficient tax regime is "better for British columbians" than a functioning political process.

Nice strawman. You have yet to explain what about the introduction of the HST constitutes a broken political system.

a simple man said...

and oh my sweet jesus - my personal fave St. Anne has just dropped its price from $839K to $829K.

pod_x said...

While I'm somewhat offended at the blatant lying, I do realize that the tyranny of the majority and rampant populism in the political process prevents the introduction of a new tax in a civil manner. Given the chance, everyone will vote against new taxes, and yet still demand more services. How exactly is the government supposed to honestly balance their budgets?

Honestly, the process is broken. Why does anyone get to vote on taxes at all? If the people vote themselves new services, facilities, or laws, they should automatically come with revenue increases to pay for them (double or triple any cost estimates).

Anything else just promotes the "something for nothing" mentality, that is the chief cause of most issues in democratic countries.

As for those two videos, all I got from them is that HST supporters are pricks, spelling and grammar matter more than issues, and floatation devices are cheaper by some undefined amount, but probably not cheaper after HST is added in, not that the kinds of people who need to own floatation devices really care that much.

Just Jack said...

Well, the saying that it's different here, was tarnished a little today as a home on Linkleas that was bought in February 2008, after a full renovation, for $840,000.

Then re-sold in April, 2010 for $810,000

Has once more sold for $790,000.

The home was originally bought in in September 2006, before the extensive renovations, for $645,000.

The home owner, after reading Vanilla Ice's book on real investment, renovated and listed in 2007 for $949,900.

Ice, Ice, Baby, Baby

omc said...

I have to ask, where do you get your information JJ, you always seem to have a much more complete history. I would, however, call Linkleas a full flip, not renovation. I will make one of my famous predictions; that house will be on the market many times. All the turkeys are.

Jason said...

Sorry for repeating an oft-posted question, but where can i get a matrix account without bothering a realtor? I like to keep an eye on whats for sale but will not be buying until some sense returns to the market. Recently dropped by my second realtor for my idleness in the last 4 years.

HST bad.
GST + PST worse.
Sending a messge by costing us all money is pointless.

Marko said...

Jason, email me your criteria at marko@jmjrealty.ca and I can set you up.

Just Jack said...

Linkleas is a nice example why you should be cautious when buying a home that had had just been renovated. The gleaming wood floors and smell of fresh paint adds another 3 percent premium to the price.

A premium that disappears a few months after you move in and that freshness is gone. Which is Okay, if you are comfortable about paying a premium over market value. Just don't expect the next buyer to pay for your temporary irrational behavior.

The same goes for "staging" houses.

a simple man said...

Staged houses make me itchy. When purchasing the biggest financial asset of my life i want to be able to see what I am buying as much as possible. I don't want things hidden by throw rugs, bad art and leather ottomans. No lipstick on the pig - let me see its bones.

When a house is staged I automatically am suspicious. If it is a great house it will stand on its own.

yogurt said...

Should I be able to see recently sold properties in my Matrix/PCS listings? I swear my listings used to show sales, but now sold properties just silently vanish from the list.

a simple man said...

yog - I put everything into my discard list - the sales and price changes all show up there. if I do not, they disappear when sold.

Just Jack said...

You gotta love the rich people of the world. Working 80 hours a week in their profession. Becoming well known, well respected and highly intelligent in their fields. In fields where people pay them hugely for their advice.

Then, they buy real estate. And that analytical side of the brain shuts down and the emotional side of the brain gets a woody.

Such as the case of a waterfront property in Brentwood Bay that was bought by an out-of-town buyer exactly four years ago for $1,240,000.

And has just sold this week for $860,000.

In my opinion, only the mainstream properties are holding their values. Properties that are at the extremes, such as waterfront, acreage or recreational are really get screwed over because of the irrational behavior of buyers in the past.

Just like what is happening in parts of Vancouver and some neighborhoods of Victoria and Oak Bay today.

The problem with bidding wars in these communities is the loser is the one who wins the bidding war. Its kinda like going to the bar on Saturday night with your buddies and being the only one to score - until you find out its with your mom's best friend.

commuter12 said...

There is no difference between the NDP and the Liberals at this point BTW. They are both tax and spenders. The only difference is what they will waste the money on. Christy Clark is into eco-terrorist money transfer schemes to oil companies whereas Adrian Dix is into giving it all to unions. I personally don't really care who gets the money so I'm voting Rhino and I hope you'll do the same.

fastso said...
This comment has been removed by the author.
fastso said...

HST.

If government got more revenue from the HST system, they are less likely to raise income taxes.

Seems everyone is treating this as a fact. It is at best an assumption.

To me, it is fiction.

EatMe said...

If the rules are broken, it's political smackdown time. If we let this slide, what's next? I'll bet you its something dumber than the last Olympic failure.


Ha ha ha ha!!! Really? You're going to teach them a lesson? Sober up!

BCAccountant has the best arguments on here hands down.

patriotz said...

"They are both tax and spenders"

Actually they are borrow and spenders. "Tax and spend" means that you spend only the money that you raise through taxes - to me, anyway.

What would "earn and spend" mean to you for an individual?

pod_x said...

Gordon Campbell's "punishment":

http://www.theglobeandmail.com/news/politics/harper-to-pick-former-bc-premier-as-canadian-envoy-to-britain/article2072957/

Well, if it wasn't a cushy political appointment, it would have been some fat consulting gig. And we didn't even get a chance to fire him.

SilverSurfer said...

I saw that on the news tonight. First word that came to mind... "WTF?". How did the guy we just fired, get promoted? That's just so wrong.

patriotz said...

Well since he will have diplomatic immunity, he won't have to worry about turning up in a Scotland Yard mugshot.

:-)

But there are four years to the next federal election and Harper thinks we will have forgotten about it. And he's right.

Renter said...

Bah, it's Gordo's reward for bringing in the HST and getting spanked by BC.

Also, it keeps him busy and out of the federal Conservative party where he might offer some competition.

Mindset said...

Tripped across an interesting graph that shows the obvious link between CMHC, Interest Rates, Bank interventions and house prices. Thought I would share for those that believe that somehow the last 10 years wasn't driven mainly by debt (which cannot be sustained).

http://tinyurl.com/6a5rd3y

yogurt said...

@A Simple Man -- Thanks! I've thrown everything into the Removed Listings and will keep an eye there for Solds.

a simple man said...

@ Mindset - thanks for bringing that graph - it is a great one for understanding what has happened in housing in Canada over the past decade.

@ yogurt - you are welcome. One my service it has "Discarded" as the removals, so you may want to try with a few listings in your until you see if the solds show up there with yours. I am on the VREBMatrix system.

nan said...

Do any of you believe in the political process? Of course we can teach them a lesson- that's what a vote is for! I see you complaining about Gordo and long term issues but none of you (except silver surfer) seem to think we can do anything about it. Vote like the idiot box tells you to and complain about how nothing is how you want it. You want the govt to stop wasting money and start thinking about long term consequences? Well vote the HST down and every other heavy handed initiative you can. Sober up? What part of short term pain for long term gain doesn't make sense to you? The term "defeated conformist moron" comes to mind.

SilverSurfer said...

^^^ +100

Just Jack said...

So, what happens when you have a glut of condominiums for sale.

Well, the prospective buyers for condominiums will cluster around the newer complexes keeping those prices relatively stable. But, with 6 months of inventory, the older condo complexes get eaten up by the wolves.

Like the recent sale of a 1,216 square feet ground floor suite on Bellville in Victoria. Originally sold in May 2004 for $315,000 and today sells for $367,000. The condominium barely kept up with the cost of inflation over the last 7 years. But it's not new or newer, the complex is 35 years old. Because if it were newer, you would be paying closer to $525,000 for the same size of suite.

But we live in a debt culture. Where people are defined by how much they owe. You buy a BMW not because its a great car, but because it implies to people that you are successful. And, you buy an expensive condominium because it allows bragging rights of how much you're worth.

Rightly or wrongly someone that owes a million dollars is perceived to have more worth, amongst their peers, than a person that is debt free. All because a pimply faced 23 year old loan officer approved their million dollar mortgage.

Leo S said...

Of course we can teach them a lesson- that's what a vote is for!

Right. So go vote them out in the next provincial election! That's the correct forum for expressing your disapproval. By taking the HST referendum as an opportunity to punish the government you are shooting yourself in the foot.

You want the govt to stop wasting money and start thinking about long term consequences? Well vote the HST down

Brilliant move. Let's take a stand against government waste by forcing them to waste millions of dollars reinstating a less efficient tax system! That'll show em!

What part of short term pain for long term gain doesn't make sense to you?

Except in this case, voting down the HST is short term pain for long term pain. Wait until the general election to exact your revenge against the politicians.

Leo S said...

Gotta laugh at those commercials for the Zen condos. Starting at only $190,000 (before buying costs)!

For that you would get this beautiful walk-in closet.

Come to think of it, I could use some extra storage...

ginnad said...

Well, this turned into a lively thread!

Without responding to one comment in particular, I thought I would elaborate somewhat on the "punishment" aspect of the vote.

As some have noted, the Liberals had a majority government. Technically, they can do what they like. In my memory however, and certainly my study of history, a government has never forced through a major tax overhaul like this before. Consider:

- Pre-election, when asked, the government said categorically that the HST was off the table.
- After the election, the HST was legislated without much debate, since debate was shut down by the government
- Once the HST was legislated, we discovered that the Liberals had secretly been negotiating with the feds all along

Now, you may not be alarmed by all this. But it's somewhat unprecedented as far as I know. Even the GST, which was hated at the time, had public input sessions and was debated in parliament.

So here's the thing. If this precedent stands, then any government with a majority may feel free to impose whatever legislation they like, regardless of public approval or opinion. Call it the philosophy of "better to ask forgiveness than permission".

To my mind, such precedent may cost us as citizens far, far, far, more than the $1.6 billion penalty for backing out of the deal.

Think about the so-called pet projects of each government, and each party in particular. Are you really prepared to give up any kind of voice? To say that a majority government has an unrestricted mandate to do whatever they chose, regardless of their platform at election time?

Really?

It's possible that the precedent has already been set, of course, and that a Yes vote will not actually set them back on their heels. But a No vote will cement such privilege in our government for the foreseeable future. And to me, that's more dangerous than even losing some industry jobs or paying a penalty.

a simple man said...

I know when I send out my consulting bills, the HST added goes over like a lead balloon.

DavidL said...

Okay, I've been sitting on the sidelines for too long. I gotta add my 2¢ ... I have never had an issue with paying taxes, either directly through a consumption tax (PST, GST and now as HST), income tax or indirectly (thought corporate income tax, etc.). After all, we as citizens enjoy the many benefits of our society: the money has to come from somewhere!

However, there are three issues related to taxation that people often disagree over: [1] the amount of tax collected, [2] the way the taxes are collected, and [3] how the taxation revenues are spent. If I leave issue #3 out of the question, and focus on the amount of tax collected - it is apparent when the provincial government is running a annual deficit, that more taxes need to be collected. The remaining issue is then how the taxes are collected.

Both the federal and provincial governments realize that the 12% HST puts undue financial burden of the lowest income groups - thus previously providing GST (and now HST) rebates and exemptions. This demonstrates a common problem with consumption taxes: the tax is applied evenly, regardless of income of the person who pays the tax. Another problem with consumption taxes is they create an "underground economy", where small contractors and service providers offer a "cash business" where they don't collect the appropriate taxes. The consumer saves by not paying "additional" for the tax while the business owner saves by not declaring the revenue on their income tax. Of course, this isn't legal - but that does not stop many people from engaging in this underground economy. Many people feel fine "screwing the government" out of their taxes when in fact they are just hurting their fellow citizens - who ultimately will have to pay more in taxes to make up the shortfall.

Both personal and corporate income taxes allow revenue to be collected. Once again, small businesses may opt to not declare cash-based income, however this is harder to do if they accept cheques, debit and credit cards. In BC, the corporate tax rates are amongst the lowest in the country, and considerably less than in Ontario and Quebec. In spite of this, there doesn't appear to be a migration of businesses from eastern Canada to the West coast.

So here's a few questions to reflect on while you vote either for or against the HST:

[1] Will raising corporate tax rates either drive businesses away from BC or cause them to go out of business?
[2] Will increased personal income tax cause people to move away from BC?
[3] Will elimination of the HST cause increased personal and/or corporate tax rates?
[4] Will keeping the HST decrease personal and/or corporate income tax?
[5] Will reducing the HST from 12% to 10% be equivalent to the revenue collected with the "old" 5% GST and 7% PST (applied to fewer items)?
[6] Will reducing the HST from 12% to 10% increase personal and/or corporate income tax?

Just my my 2¢ ...

Introvert said...

As a partial answer to DavidL's #2 question, NPR's Planet Money did a podcast explaining how, in the United States, rich people actually don't flee high-tax states.

I presume the same is true in Canada. Something to ponder.

Leo S said...

@ginnad
Good points, well made. So it just comes down to what degree of punishment you think is enough. I'm satisfied with Gordon being ousted for it, others want more. Fair enough.

mikel_boeur said...

Like others I have to chime in and I don't have a locked down view yet. The HST as a tax is acceptable in my books. It streamlines the system they we've accepted.

My real issue, like others, is the political strong arming of the move. At the time it did not appear to be a move even Campbell wanted. The Olympics put us in a financial corner and the federal government used the vulnerability to press their tax. Now the taxes are collect by Ottawa and issued back to the participating provinces.

To me it's another move to centralize power by the Harper government. In the past I remember provinces refusing to pass tax money on to Ottawa until an issue was resolved. This will remove any ability for our province to get Ottawas attention in any real way.

I'm more than open to being off the mark on this, please correct any wild leaps I've made.

omc said...

Sorry to talk about real estate, but my pcs is showing an awful lot of sales. These are not prime ones either, they have been on the market for a long time for crazy prices. I am looking at Henderson and the flip on Plymouth has sold for way too much and that place on Fredieric Norris sold for over 1MILL. I am sorry but I can't do a PCS search for the #s on an iPad.

Is the news that interest rates will be staying low for quite a while fueling things?

Just Janice said...

Omc - thanks for the break from thread...I think what's happening is that people are tired of waiting but don't see real estate as being investment worthy (ie. Not expecting to flip in 2-3 years and make a great profit) so they want something that doesn't look like an endless make work project that they can happily live in for 10 years....

Leo S said...

No increase in sales here. Under $550k is all normal, over $550k is a bit lower than usual this week.

omc said...

I guess I am mostly looking at the Oak Bay market, and it is going nuts! Flippers every where and nutty, record prices for far less than prime locations. There is a new listing on Allenby for $840k! That is Landsdowne flats.

It seems to me that this part of the market is being driven by out of towners that want Oak Bay no matter how crappy the location. They do not have the local knowledge to know that there are neighborhoods in Saanich that are far nicer, for much less, just as conveniently located. At least the love affair with 40s houses that need to torn down is over. I got the impression that the Albertans from a few years ago had some kind of romantic vision of these crack shacks.

CD said...

5yr mortgage rates (fixed) are back down to 3.59%. (Dominion lending - broker)

So we are near all time lows again. Same thing happened last OCT which triggered a little surge in sales.

omc said...

Variables are way down to 2.05%, and the news is full of stories why it is going to be that way for the next few years.

That house on Allenby is $820k, sorry. I have no idea what these people buying in that area are thinking, just go across foul bay and you are in fernwood. We are only talking about 1 or 2blocks here, but huge differences in price. That neighborhood has nothing for it that makes Oak Bay special. You are surrounded by busy roads, the roads themselves are pretty busy and you are far from the water.

Marko said...

"Is the news that interest rates will be staying low for quite a while fueling things?"

I work with a lot of buyers (two of whom bought last week) and the need for a place to settle down is a large factor - especially those with kids.

One of my younger buyers just bought a home in Victoria, suite rented for $950/month for just under 500k. There is also a spare room in the basement independent of the suite so the buyer will pick up a home stay student from UVIC.

Buyer is coming from a $1,600 month rental. I don't think buyers are rushing in because of the low rates but it makes a decision to buy easier.

omc said...

I think your argument actually supports mine Marko. The low rates are making homes affordable to people.

Marko said...

I agree that low interest rates make homes more affordable but I don't think news of interest rates staying low is pushing them into the market.

omc said...

It very well could be getting them off the fence though.

Marko said...

The only thing that has made my buyers get off the fence in regards to interest rates is the news of rates going up.

A few of my buyers had rate holds on 3.40% & 3.45% last year and wanted to buy before their hold expired.

If you have a rate of 3.59% and you get news rates are going to stay low - does that really get you off the fence?

Phil said...

I still don't understand why people who have kids suddenly think they need to "settle down" by renting from the bank instead of a landlord and sharing their house with 2+ strangers. Weird times.

Leo S said...

So 1600/month in rent + investment returns on your $25k (assuming 5% down) and zero risk vs
~$2,100 mortgage + taxes + maintenance + more utilities = 2600 to 3000/month.
Minus 900 rent (account for the odd vacancy). Minus whatever a homestay student pays (doesn't even count, since you can have one of those in a rental too).

So at best you're at break even from a cashflow standpoint or a few hundred worse (but some of that goes towards equity).

In return you have all your eggs in one basket, you're nailed down to Victoria (important consideration for a younger buyer), you have the hassle of a renter and the damage they can cause, you assume an interest rate risk when you renew, and you assume the risk of expensive unexpected maintenance (with a 500k house that has a suite this risk is high).

Not a trade I would take.

omc said...

I keep forgetting that people using CMHC cannot hold variable mortgages. The 2.05% could be attractive, when interest rates are expected flat.

CD said...

omc, With CMHC you can hold a variable. You just need to qualify for the 5yr fixed (posted).

Introvert said...

In return you have all your eggs in one basket, you're nailed down to Victoria (important consideration for a younger buyer), you have the hassle of a renter...

Yes, renters are a hassle! Just listen to this one go on and on about how owning a home is terrible and renting is paradise.

pod_x said...

I keep forgetting that people using CMHC cannot hold variable mortgages. The 2.05% could be attractive, when interest rates are expected flat.

Sure they can, they only have to qualify under 5 year fixed. Or am I wrong?

And I agree with Marko. Rates expected to stay low doesn't move people to buy, if anything it should get them to take their time buying. Only prospect of immediately rising rates gets people excited. No one seems to think about what rates may be like when they have to renew (fixed) or what they may be a year from now (variable), only what they will be when they buy.

pod_x said...

Yes, renters are a hassle! Just listen to this one go on and on about how owning a home is terrible and renting is paradise.

I'm sure owning a solid house you bought cheap can be wonderful. But owning a house with a renter in it, or renting a basement for that matter, is no one's idea of paradise.

omc said...

yes they can have a variable, but they would have to qualify at the posted 5 year rate. Most people who can't afford to buy (and therefor need cmhc) cannot qualify for much if the rates were a full 1.6% higher.

MC said...

So I am being quite particular in trying to find a house to rent (I am looking for a place to settle for awhile that I am comfortable in). Is there a general drop in rental prices in the fall and winter around here, after the student rush has taken place in August?

jesse said...

There seems extreme impetus to scratch together a 25% downpayment to 1) avoid insurance premium and 2) avoid qualifying for the 5 year posted rate.

You know what would cause a rush to buy? Banks requiring all low ratio loans to be qualified at the posted 5 year rate. But that'll never happen. No siree.

a simple man said...

Went and saw the new listing on Musgrave during their open house. Bring wheelbarrows of money for the renos. I didn't find even one room that did not need a major overhaul.

Sandowne flip is progressing nicely. I am guessing $850K when it is done. Speaking of which - open house today on Allenby Manor - the $820K bungalow near Foul Bay Rd.

I am with omc on these ones - you are paying a lot of money for the lot, and the lot really has nothing special about it in these areas.

omc said...

The only thing special about Henderson and Landsdowne is that you get to say you live in Oak Bay. I seriously believe that out of towners buying here are fueling those bubbles; they have an irrational belief that it has to be Oak Bay. If you look at the houses that corrected the most after the Albertan wave crested, they were bought under similar circumstance. An example would be the house that sold on the corner of Wilmot and theater row; Albertans with too much money paid nearly $100k more than they were able to sell this year.

Broaden your search simple man. Spend a day in the cadboro bay area and see how it feels compared to Oak Bay. Ten Mile point can be good for families if you don't go too far in, as there are no buses for older kids. Queenswood is great for families, but nothing on the market right now. There are many nice places in the Arbutus neighborhoods, and if you compare apples to apples with Oak Bay you are paying about 2/3. Better schools too, Oak Bay high is known for shop and arts where the top rated academic public high school around here is Mt Doug.

DavidL said...

Regarding MLS 291705 (869 Darwin, by Swan Lake): What the heck does "pre-foreclosure" mean? Is this a last ditch effort by the owner to sell before the bank seizes the property?

Leo S said...

Was about to post the same, DavidL.
Wonder what's wrong with it. 1800 sqft for 400k in Saanich East seems comparatively cheap.

Leo S said...

Garth has an interesting post about the feds limiting applicants for investor immigration to 700/year.

In 2009 they admitted 2,872 so the new limits would cut that down by 75%. However, as I understand it there is a backlog, so this might just be a temporary measure to cut that down.

Just Jack said...

In BC, we don't technically have "foreclosures". But hey - that may be nit picking - a rose is a rose is a rose. A foreclosure is when the bank seizes the property and sells it. In BC the bank sues for the money and takes the home collateral and sells it, with court approval, to recover what they can of the loan and sues for the remainder of the money.

They sound the same, but in a foreclosure the banker could sell the property for under market value to his brother in a quick claim. In a court administered sale that's not very likely.

Court ordered sales are more costly, because there are lawyers and appraisers fees involved but they reduce fraud. The process takes longer and is public.

Which is better? - You be the judge.

Likely in this case the owners have not been able to make the payments to the lending institution and have been served notice by the lender and they are trying to work a deal before the court grants a conduct of sale to the lender whereby the lender gets title to the property.

At this point, you could make an offer subject to bank financing or a home inspection. When it is a court ordered sale, you can not have any subject to clauses in your offer.

I don't know how this would impact the price, as it seems there are lots of prospective buyers willing not to have any subject clauses in the interim agreement. But then again, 6,000 Americans will shoot themselves this year while cleaning an "unloaded" gun.

a simple man said...

Federal Immigrant Investor Program

CIC has announced that as of July 1, 2011, the number of Federal Immigrant Investor applications accepted for processing will be capped at 700 for the coming 12 months. Canadian financial institutions, which act as facilitators in this program, are reporting that applicants will be required to submit government processing fees, a copy of their passport, and completed simplified forms to the Centralized Intake Office in Sydney, Nova Scotia. All other supporting documents will be required at a later stage of the processing.

To qualify for the Federal Immigrant Investor Program, applicants must have:
• Prior business experience;
• A minimum net worth of C$1,600,000 CAN; and
• Make a C$800,000 CAN secured investment.

“Given the demand for this program, especially from Chinese nationals, we expect this imposed cap limit to be reached extremely quickly… probably within a matter of days,” says Attorney David Cohen.

Marko said...

Monday, June 27, 2011 8:00am:

MTD June
2011 2010
Net Unconditional Sales: 511 625
New Listings: 1,209 1,503
Active Listings: 4,845 4,730

Please Note

•Left Column: stats so far this month
•Right Column: stats for the entire month from last year