EDITORIAL: Old political goodie still works

Some background on the homeowners’ grant is helpful in understanding its significant political potency.

EDITORIAL: Old political goodie still works

It is a rare occasion when the homeowners’ grant becomes a hot political issue, but it was shaping up to do so in the May 9 provincial election.

The reason is that many Metro Vancouver homeowners, including a substantial number in Surrey and White Rock, could have lost their homeowner grants due to soaring assessments. In most parts of Surrey and White Rock, assessments rose close to 40 per cent over the 2016 figures.

Some background on the homeowners’ grant is helpful in understanding its significant political potency. First introduced by longtime premier W.A.C. Bennett in 1957 after he promised it in the 1956 election, the grant was touted as a Social Credit dividend.

In fact, Bennett had little to no interest in Social Credit economic theory, but realized that reducing property taxes for homeowners by using a small portion of a provincial surplus to pay part of the taxes to municipalities made for great politics. And it did (and still does).

The initial grant was $28, but in the 1950s, that was a significant slice of the overall property tax burden. It was initially meant to pay the taxes on $1,000 of the assessed value of the property, which at that time for many homeowners would have been 10 per cent or more of their home’s value.

School taxes were often the biggest part of homeowners’ tax bills and the grant simply meant the province was paying a higher percentage of education costs, which were its constitutional responsibility.

The grant has continued since, frequently raised as inflation has boosted the total tax bill and reduced the buying power of a dollar. The NDP government considered cutting it off for homeowners it defined as wealthy in the 1990s, but quickly reversed course after a storm of protest. For most of the time up to the present, the vast majority of homeowners have received the grant, currently $570. In 2016, 91 per cent of B.C. homeowners received it.

Seniors, people with disabilities and veterans receive an additional $275, and since 2010, an extra $200 has gone to homeowners outside the Lower Mainland and Greater Victoria. This boost to the homeowner grant was initially sold as being additional assistance for people living in hard-hit resource-producing areas, but is now considered to be a return of some carbon tax to those with fewer transportation options, as part of the B.C. Liberals’ “revenue-neutral” approach to taxing emissions.

This is ironic, considering gas prices in Metro Vancouver are the highest in the country – thanks to both the carbon tax and TransLink’s 17-cent-per-litre transit tax.

This extra $200 grant is interesting in the context of the 2017 assessments. The highest boosts in property values in B.C. have almost all occurred in the three areas where homeowners do not get the extra $200 – Metro Vancouver, the Fraser Valley and the Capital Regional District.

So it was entirely possible that many more homeowners in those three areas would not receive any grant at all, while in areas of B.C. where home prices have risen more modestly, almost every homeowner will get a $770 grant. The $570 grant will only go to the homeowners in the Lower Mainland and Victoria whose assessments are below the new $1.6-million property value threshold.

The provincial government announcement on Tuesday boosted the homeowner grant by $400,000, from $1.2 million to $1.6 million. It had been $1.1 million in 2015.

With no change to the threshold, the grant would have been an election issue.

Bennett would be proud. A 60-year-old political goodie still has the potential to play a significant role in shaping voter intentions.

Frank Bucholtz writes weekly for The Leader.

 

 

 

Surrey North Delta Leader