On April 11, our corporate group of Nova Scotian companies forwarded a letter to Nova Scotia Minister of Finance Allan MacMaster in response to two new taxes which are now being imposed on Nova Scotian non-residents.
These taxes appear to be in response to a housing affordability crisis mainly occurring in urban areas of Nova Scotia. The taxes were implemented by the provincial government only upon short notice and appear to have seen very little prior public consultation if any.
Sadly, Minister of Finance Allan MacMaster did not respond to our letter. Many Nova Scotians have already voiced their opinion for various reasons and with different explanations as to why these are detrimental taxes for many local businesses, and jobs in rural areas such as Cape Breton.
Over the past 30 years, our corporate group brought approximately $180 million of investment (through the development of approximately 1,800 lots) to Cape Breton from outside the country. This involves $140 million in assessed values for municipal taxes (Richmond County alone $52 million). These are not increased assessed values, but rather additional assessed values due to the development of land and subsequent house construction.
The remaining $40 million is comprised of money that the new house owners spent over three-plus decades, including the purchases of hundreds of vehicles, ATVs, campers, motor homes, snowmobiles, boats, trailers, but also rentals.
Thousands of people have been spending also significant tourist dollars for decades arising from their house construction. This includes house maintenance, insurance, plane tickets, fuel, meals at restaurants, etc.
The owners of these newly constructed houses will now be punished with a new tax that has in their cases no relevance to the housing affordability crisis whatsoever. They live in buildings that they constructed themselves.
The past has shown that many buildings eventually – even though originally being constructed by non-Nova Scotians – will be sold to Nova Scotians as the heirs of the original owners do sell them. Often, even the first owners sell their houses as the annual cost for a recreational Nova Scotia home has been increasing steadily over decades. They obviously have provided new housing to Nova Scotians as they did live in their houses only temporarily.
This new tax will now lead to a sell-off and therefore construction of new houses will come to a drastic halt in many rural areas. We also already have seen eight non-Nova Scotians canceling or delaying their house construction for this year as they do feel punished by the province for wanting to invest money here. They worry that the province might yet implement other unforeseeable measures due to new revenue needs of the province.
While it might be a good solution to slow down house sales in urban areas, it would hardly be a good idea to prevent house construction, especially in rural areas where we are already seeing too little employment and development.
Many international house owners who constructed their own house would even like to move to Nova Scotia full-time but cannot do so because of an age limit of 55 which the federal government has imposed on most immigration categories.
We are proposing five concrete measures to be implemented with regards to the two new taxes in order not to stifle development in rural areas: do not charge the tax in rural areas as bidding wars for houses have been taking place primarily only in cities and towns; do not charge the tax on residential bare land; do not charge the tax on a house to the first owner constructing it; and do not charge the tax on a house, if the owner in fact was the person who did construct the house.
And with regards to a second tax being five per cent of the purchase price to be charged at the time of acquisition, do not charge this tax to bare land when being assessed as residential.
Obviously, we should not be punishing people for building new houses in rural Nova Scotia or owning bare land, because otherwise, they might simply not proceed with the construction. This would not only prevent employment, but also the collection of much-needed additional tax dollars for the municipalities arising from development.
If these exemptions are not being granted, ours and many other Nova Scotian corporations have very little chance of conducting business in the future in Nova Scotia as we rely on foreign capital and investment like many other Nova Scotians.
Therefore, we and our subcontractors would not only have to lay off staff, but we also would have to wind down our Indigenous Initiative Friends United https://www.friends-united.ca and approximately 30 First Nations artists would see their livelihood jeopardized as we are funding our initiative through land sales and our publishing house (Ad)Venture Canada Publishing Inc. We also would have to shut down our Friends United International Convention Centre which is one of Canada’s largest Indigenous culture and heritage facilities.
Rolf Bouman
Friends United Founder
President
(Ad)Venture Canada Publishing Inc.
Canadian Pioneer Estates Ltd.
Canec Land Developments Inc.
Kempt Road