International Trade committee  I have not done an estimate of how many properties would be subject to the tax. I just don't have that. I don't know if that would be easily done, but it's a good question.

International Trade committee  Just off the top of my head, my understanding is that Florida has preferential rates, and maybe Hawaii. There may be preferential rates for the U.S. Again, I'll re-emphasize that for many years Americans with high incomes were able to deduct state and local income and property taxes, whereas overseas, non-U.S. taxpayers were not.

International Trade committee  Let me take exception to one category that you mentioned, which is multi-generational. We have the severe problem that there are people who can't afford a place to live. Now, on vacation communities, of course, you can raise issues, but if I inherited a lovely place on a lake from my father, who in turn, inherited it from his grandfather, I don't know why that makes me a particularly sympathetic person.

International Trade committee  Of course, yes. The tax problem is one problem that I mentioned. The other major issue, of course, is regulation. Something like 70% or 80% of residential land in Canada is zoned for single-family homes. Anywhere near Toronto, probably increasingly Ottawa, Montreal, obviously Vancouver, Victoria—many of our urban centres—a single-family home is just a luxury that's not affordable to 90% to 95% of the income distribution.

International Trade committee  Right. There will be two impacts in terms of affordability—neither of them huge. Properties owned and lightly used by people from overseas have largely been addressed in Toronto and particularly Vancouver, and, of course, foreign buyers are now banned. We're not talking about a solution to affordability.

International Trade committee  I believe it could be applied here, of course. As I mentioned, there are a lot of ways. The central issue is that, generally speaking in Canada, particularly in the expensive markets—and you could demarcate expensive markets—property is undertaxed, and working for a living and buying and selling goods and services is overtaxed.

International Trade committee  I can speak to exemptions if you provide them to me. I just do not have the thorough administrative knowledge of this. I was asked to testify Friday. I can't itemize them for you. I'm happy to respond to itemization by your committee. What I can talk about is the impact on affordability of, one, our existing tax system and, two, what we've seen in British Columbia.

International Trade committee  Thank you for the question. When thinking about property taxation, two issues come up in terms of where you want to have high property taxes. You don't want to have property-linked taxation. You don't want to have taxation where people can run away from the tax. In markets where homes just won't get built if taxes are too high but there will be lots of building when taxes are low, that's a place where you should have low property taxes.

International Trade committee  The speculation and vacancy tax is essentially an empty homes tax with some other issues related to higher rates for people from overseas. If you earn overseas income predominantly, there's an additional tax, but it's largely an empty homes tax. It is, as you say, implemented in markets struggling with affordability.

International Trade committee  That's my understanding, but I didn't implement it. I'm not familiar with that detail.

International Trade committee  I can't tell you what the rationale of the government was. I'm sure it was a concern about housing affordability. Of course, homes that aren't used as primary residences, be they by non-Canadian or Canadian people able to afford second homes, take away the affordability for people who just work for a living in a given market and want to live in a home.

International Trade committee  I believe that is absolutely correct. People are mobile, as you know, and immigrants are particularly mobile inherently. Before too long, the deal—the total amenity, wage and cost of living package—in any two Canadian cities has to equalize. It can't be a better deal to live in Moose Jaw than it is in Vancouver, or else everybody would move from Vancouver to Moose Jaw.

International Trade committee  Is that for me or Mr. Halinda?

International Trade committee  I'm going to defer to Mr. Halinda in terms of implementation on the ground.

International Trade committee  Hi there. My name is Tom Davidoff. I'm a housing economist at the University of British Columbia. I'm going to focus my remarks on the following considerations. Number one, expensive housing markets in the U.S. historically have had high property tax rates overall and required Canadian owners of vacation properties to pay higher effective rates than some U.S. residents.