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In addition, the government should appreciate that all appraisals conducted by the banks in respect of future or pending mortgage applications will be of no use, as the banks will not be able to rely on them, since they would be conducted before the implementation of the tax and thus wouldn’t have the impact of the tax built into them. The true effect of the fall in prices may not be known until later this fall or next spring as the markets will need time to settle out after the negative impact of the tax. It’s likely that appraisals won’t become reliable for the purpose of approving loans until that time.

A regressive and punitive tax like the one proposed will immediately drain business confidence in the province, and make investors reluctant to consider B.C. as a place to invest their capital. Investors and businesspeople have options as to where and when to invest their money, and the more B.C. is made to be a difficult and expensive jurisdiction to invest in, the less capital that will flow in, and the fewer jobs that will be created for the very people you’re trying to help in the province.

In closing, based on my knowledge of the banking industry and its propensity to be cautious and defensive in times of patent uncertainty such as will be the case with this new tax, my advice would be to withdraw from this regressive and potentially disastrous new tax and instead look for a policy that will achieve the desired result, being a significant and meaningful increase in the number of affordable-housing units in the province. Whether that be by way of incentives, subsidies, regulations or restrictions, is entirely up to your government.

But to try to solve the problem by taxing unsuspecting Canadian owners is patently un-Canadian and ill-conceived, and in the end will be to nobody’s best interest. There is a tremendous amount of innovation and creativity available out there, so why not tap into it.

Yours truly,

Larry Pollock, retired CEO, Canadian Western Bank

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