Clark looks for housing boom in 2017
B.C. legislature reporter and columnist Tom Fletcher's year-end interview with Premier Christy Clark. Excerpts have appeared this week in Black Press print editions.
TF: I'll start with the second mortgage program you've announced for first-time buyers trying to raise a down payment.
CC: W.A.C. Bennett did a program a lot like this in the late 1960s, called the B.C. Second [Mortgage], and the idea was to give people a loan, I think it was up to $10,000 to get into their first home. I remember my parents would talk about this. That's what spurred me to getting the bureaucracy working on one like this.
TF: Central 1 Credit Union and other economists say these loans [up to five per cent of home purchase price or $37,500, interest free for five years] are going to cause price inflation at the low end of the housing market. Is that a concern?
CC: My hope is it will spur municipalities and builders to create more housing under the $750,000 threshold. In the housing market, everything has an impact. But for me, doing nothing was not an acceptable option, because there are so many young people who get approved for loans, for $600,000 worth of mortgage – that's a big number – and they can't scrape together the down payment all in one lump sum.
TF: Personal debt is already a big problem in Canada. Doesn't your program fuel that?
CC: I think if the banks thought personal debt for any one of these individuals was too much of a problem, they wouldn't lend them $600,000. We have the toughest mortgage regulations of just about any country in the world, and we should.
If someone can qualify for a mortgage and the bank trusts them with $600,000, surely the B.C. government can trust them with $37,000 of taxpayers' money. They're going to pay it back. And we own part of that home, so when it is sold, we get that money back.
TF: The 15 per cent foreign buyers' tax in Metro Vancouver has been in place since the summer. Sales have slowed down, but the November average price for a home in B.C. has risen for the third consecutive month to $644,000. Is the tax working?
CC: My object was never to reduce the price of a home, because that means everybody who already owns a home loses money. It was to slow the acceleration and the growth, which we have done. We saw 30 per cent increases year over year before we did the tax.
The province can bring in a foreign buyers' tax or a luxury tax, but cities have to add supply. Mayors of cities have to decide they want to be part of helping to solve the problem, because they are the most important player.
And right now there are 108,000 units languishing in planning departments around the Lower Mainland. And if they don't get those out on the market, if the bureaucrats decide to just fiddle with those for another five years or so, it means we'll have lower supply and higher prices.
TF: Last December I asked you if there would be a major liquefied natural gas project announced this year. Will we see an announcement this spring, as minister Rich Coleman has hinted?
CC: I've given up predicting, because the market is so terrible for natural gas. But we will see some major projects go ahead in British Columbia. Experts say we have perhaps the second best natural gas resource in the world, and we are truly sitting on a gold mine. So let's get it out of the ground and create opportunity and jobs.
We do have an approval on one, not the biggest by any stretch of the imagination, at Woodfibre. Given all the regulatory barriers, that's a real victory. Construction has already started. At the moment it's remediating the [former pulp mill] site, so it's creosote pilings in the water and things they're getting rid of first.
TF: It looks like a tough year ahead for the forest industry, with U.S. trade action returning. I went along on the forest minister's Asia trade mission. Is there anything more that the province can do?
CC: Opening up new markets so we're not just dependent on the U.S., that's one thing. The second thing is we're going to hold out for a U.S. deal that's good for British Columbia.
Let's understand our negotiating partner. Donald Trump is a builder by profession. He says he wants four per cent economic growth. He knows that the fastest way to move the American economy is through construction of residential housing.
And he also knows as a builder that you can't grow a housing market if lumber costs are way too high. Our argument for him is going to be, you need Canadian softwood in order to get that residential housing market really booming. Let's get a deal.
I think he is going intuitively understand that. I'm hoping a resolution on softwood lumber is going to be faster and easier than a resolution on NAFTA, because NAFTA is going to be a tough one for Canada.
TF: National carbon pricing is another highlight of the year. You've talked about being competitive with other provinces on carbon tax. Are we not looking at the same situation with the U.S., no national carbon price and they're going to cut business taxes?
CC: We fought to protect energy-intensive industries under a national carbon price. More importantly for us, we've taken all the money from the carbon tax and put it back into the economy, so we have the most tax-competitive economy in North America today.
We're ahead on all the other taxes, and we want to stay ahead, to the extent that we can control that in B.C., and the carbon tax helps us do that.
Donald Trump is going to wipe out regulation, he is going to abandon the climate fight, he's probably not going to care too much about the deficit in the U.S. We should still do our part in the climate change fight, because it's the right thing to do for our kids.
TF: Minister Andrew Wilkinson says there is going to be additional government advertising this fiscal year. There isn't going to be any political promotion in that is there?
CC: No. That's silly. [Laughs.] We are probably going to advertise getting the mortgage help, for example. People have to know to sign up for the program.
We did advertise the RESP program, mid-year, and forest fires. Fentanyl, we're going to continue to advertise heavily on that. There's a range of stuff that government does in the course of doing business. But it won't be political.
TF: Trans Mountain Pipeline. In addition to a large construction project, what additional benefits are available here?
CC: We're going to fight for a B.C.-first hiring policy. We're going to negotiate some revenue flow from the project as well, for B.C.
TF: From Kinder Morgan?
CC: Well, I guess it would be from their [oil] suppliers, ultimately. We're still working on how that is actually going to be structured, but we do want to see a long-term benefit from it, as well as the preponderance of dubs going to British Columbians.
TF: The B.C. Teachers' Federation finally won its case at the Supreme Court of Canada over class size and support staff levels. Are we going back to the quotas we had in 2001?
CC: I don't know where we're going to end up yet. And I don't think the BCTF does either, because everything has changed in the education system since 2001.
In 2001, there weren't kids at their desks with their phones, looking things up on Wikipedia. We both recognize at the table that we're going to have to innovate a new solution that meets the expectations of the court, but also meets the needs of kids today.
I don't think anyone, the BCTF or the government, thinks this is going to all look exactly the same as it was.