For the NDP-Liberal government, the assault on property rights is a major goal. Sometimes the Socialist Coalition is subtle in its attacks. Other times the attack on owning property is spelled out in black and white on page 41 of the 2024 Budget. That is where Canadians can find the Liberal plan to invent an entirely new federal property tax.
For a government so addicted to ruling by slogans and cliches it is a little surprising they haven’t heard the old cliché about failing to learn the lessons of history. The new proposed federal residential property tax is a perfect example of the Liberals not learning anything from recent Liberal history. And by recent history, I am talking about March.
That is when the Liberal Ministers hit up their local bars and taverns to celebrate an increase in the excise tax on alcohol. Drunk on their own arrogance, the Liberals were celebrating the fact they were not going to pay as steep a political price. The Liberals had put the excise tax on an automatic escalator in 2017. Instead of elected, accountable political leaders being in charge of federal taxes, the Prime Minister handed control over to fate and the inflation rate.
Inflation soared thanks to government spending so the tax on alcohol was set to match it. The Liberals made a political calculation that a 5% tax increase on alcohol would cost them more votes than a 2% increase, so they intervened. Canadians might have hoped that this would be a lesson for these Liberals into the importance of maintaining control over tax rates, but that would require humility.
Having learned nothing, the Liberals are now proposing a brand-new federal property tax to be imposed on Canadians who own vacant land zoned for residential use. Unlike excise taxes on alcohol, the government will control the tax rate, but everything else will be controlled by municipalities and local politicians. Just as with the excise tax on alcohol, the decision over how much tax you pay, or if you even have to pay this tax will be out of the Liberals’ control.
The difference is that no person controls the rate of inflation, though some can influence it more than others. Whether or not your vacant property is zoned residential is a different story. That is decided by a small group of local politicians. The Liberals believe this will incentivize the construction of housing, but they don’t know that for sure. What it will do is incentivize lobbying. The well-connected and privileged will lobby their councils to re-zone their vacant lands to avoid the tax until they are ready to develop or sell it.
Even if a developer wants to build houses on vacant land zoned residential, the decision to move forward is not entirely their own. They have to take into account, interest rates, labour availability, permitting issues, weather, and a host of other normal things which could delay development. The Liberal plan is to punish them with more taxes. At the end of the day the developers won’t be the ones paying the additional costs. That will be passed on to the home buyer.
Only this NDP-Liberal government could be incompetent enough to believe inventing new taxes will build more homes.