Foreign buyers' tax does not violate charter rights, B.C. Supreme Court says
VANCOUVER - A B.C. Supreme Court Justice has dismissed a lawsuit challenging the constitutionality of British Columbia's extra property transfer tax on foreign buyers of real estate.
In reasons for judgment issued Thursday, Justice Gregory T. W. Bowden rejected the arguments of plaintiff Jing Li, a Chinese citizen who moved to Canada in 2013 but is not a Canadian citizen or permanent resident.
Li reached an agreement to purchase a home in Langley in July 2016, before the foreign buyers' tax took effect on Aug. 2 of that year. Because the sale was not registered in the Land Title Office until after that date, however, Li was obligated to pay the tax - then 15 per cent.
She paid the tax in November 2016, according to Bowden's reasons. The tax amounted to $83,850 on her $559,000 purchase.
Li's lawyers and those for the provincial government each submitted written expert testimony in the case to support their position.
The plaintiff argued that the tax imposes an unfair burden on those who are subject to it, on the basis of their citizenship. Essentially, the argument was that the tax is discriminatory against non-citizens.
In his reasons, Bowden rejected this argument, writing that the tax makes its distinction not based on citizenship, but based on immigration status. Unlike citizenship, immigration status is not equivalent to "national origin," the justice wrote, meaning that law does not amount to discrimination.
"The distinction drawn by the Impugned Provisions is not based solely on citizenship but also upon whether an individual is a permanent resident or is imminently entitled to permanent residency," Bowden wrote. "In effect, the distinction is drawn between those persons who have a permanent entitlement to live in Canada or an imminent permanent entitlement to reside in B.C. and thus in Canada. In my view that distinction is based on a person’s immigration status."
Li's other argument was that the tax indirectly discriminated against Chinese people, who are "the largest group of immigrants to the GVRD (Metro Vancouver) and more likely to purchase real estate than others."
Bowden wrote that this argument is invalid because the court doesn't agree that the law excludes people based on citizenship. Beyond that, the justice wrote that the plaintiff had not shown that the tax "perpetuated or exacerbated racial stereotypes and prejudices."
"While the majority of transferees after the tax was enacted and until November 2017 have been citizens of Asian countries, particularly China, that does not mean that the tax adversely affected Asian buyers in particular," Bowden wrote.
"As the defendant says, it is not a numbers game. Buyers from Asian countries, such as China, receive equal treatment that is proportionate to the demand from those countries. There is no burden imposed on buyers from Asian countries that is not imposed on buyers from other countries. Further, buyers from Asian countries have the same opportunity to seek permanent residency status or a provincial nomination so as to be exempt from the tax."
Finally, the justice also engaged with the possibility that he had erred in ruling that the tax was not discriminatory, and thus not a violation of Section 15 of the Charter of Rights and Freedoms.
If that were the case, Bowden wrote, his conclusion is that the tax itself should be considered "a reasonable limit justifiable in a free and democratic society," and thus permissible under Section 1 of the charter.