The Bank of Canada is confused. And when it’s confused, it stops what it’s doing until it figures things out.
KEVIN CARMICHAEL (FINANCIAL POST) - Canada’s central bank left its benchmark interest rate unchanged at 1.75 per cent on March 6 and signalled that policy has entered an extended period of stasis.
Stephen Poloz, the governor, and his deputies on the Governing Council expected slower global economic growth, but the slowdown has been “more pronounced and widespread” than forecast in January, the central bank said in its latest policy statement.
Similarly, they assumed Canada’s economy would stumble, but the fall in the fourth quarter was “sharper and more broadly based” than they predicted, the statement said.
The recalibration was made necessary by Statistics Canada’s latest tally of gross domestic product, which shows the economy nearly stalled in the fourth quarter.
Years of outsized borrowing appears to have caught up with households, which have cut their spending significantly.
The housing market no longer is red hot. Exports and business investment have gone cold, as weak oil prices and the trade wars sap business confidence.
Policy makers said the gap between actual economic output and its estimate of what the economy can produce without stoking inflation is wider, although they won’t have a new estimate until April.
Still, the central bank is less worried about losing their grip on prices, meaning it can leave borrowing costs low for longer.
“Governing Council judges that the outlook continues to warrant a policy interest rate that is below the neutral range,” which is 2.5 per cent to 3.5 per cent, the statement said.
“Given the mixed picture that the data present, it will take time to gauge the persistence of below-potential growth and the implications for the inflation outlook.”
Those words suggest the Bank of Canada’s slow march to higher interest rates in now on hold, perhaps until 2020. There was no hint in the central bank’s statement that policy makers contemplated cutting interest rates.
The goal remains getting back to higher levels, eventually.
“With increased uncertainty about the timing of future rate increases, Governing Council will be watching closely developments in household spending, oil markets and global trade policy,” the statement said.
Some on Bay Street and Wall Street — and in Calgary — might have wanted a more declarative statement of alarm from Canada’s central bank.
In the United States, the Federal Reserve has made sure that everyone knows that it is no longer inclined to raise interest rates, even though the economy grew at an annual rate of almost three per cent in the fourth quarter.
StatCan reported March 1 that GDP grew at an annual rate of 0.4 per cent in the fourth quarter, less than half as fast as what the Bank of Canada predicted in January.
If there was a North American central bank that needed to pivot, you might have thought it was the Canadian one.
But the Fed and the Bank of Canada are in different places. The U.S. dollar is strong and constraining financial conditions; the Canadian currency is so weak that it’s probably undervalued, according to Derek Holt, an economist at Bank of Nova Scotia.
And inflation in Canada still is higher than benchmark interest rate, suggesting borrowing costs remain stimulative. The Bank of Canada did a half pivot in January, when it said it planned to take the benchmark rate to a neutral setting “over time.” Those two words reflected deteriorating economic conditions and showed that policy makers were in no rush to raise interest rates. They are in even less of a hurry now.
REAL ESTATE BOARD OF GREATER VANCOUVER - The deadline to complete the annual declaration to claim an exemption for the provincial government's Speculation and Vacancy Tax is coming up on March 31.
Bill 45: Budget Measures Implementation (Speculation and Vacancy Tax Act) was introduced in the legislature on October 16, 2018. The name of the tax has changed since it was first proposed in the February 2018 provincial budget. Legislation is in place and received royal assent (became law) on November 27, 2018.
The tax will apply in these designated taxable regions of BC:
For 2018, the tax will be 0.5 per cent of a property’s assessed value for all properties subject to the tax in the designated taxable regions.
For 2019 and subsequent years, the tax will be levied at:
Residential property owners in the designated taxable regions will have to complete an annual declaration to claim exemptions. If there are multiple owners of a home, each owner must complete a declaration by March 31.
Information on how to declare has been mailed to residential property owners within the taxable regions.
Are there exemptions?
There are exemptions for principal residences and long-term rentals.
Exemptions are also available for:
LIST OF EXEMPTIONS
Principal residence exemptions
An owner is exempt on their principal residence. Owners with multiple homes must determine which home is their principal residence. Couples are deemed to have one principal residence for the purposes of the tax. To be eligible for this exemption an owner must be a Canadian citizen or permanent resident who is a BC resident for income tax purposes and isn’t part of a satellite family.
Others eligible for the principal residence exemption:
Rental exemptions are available for homes occupied by tenants. To qualify, the home must be occupied for at least six months of the year in increments of one month or longer. For 2018, tenants need to occupy for only three months in increments of one month or longer for the owner to qualify for this exemption. Only one residence must be rented for the property to be exempt.
Exemption for hazardous or damaged property
Owners of a property may claim an exemption if a residence is uninhabitable due to a hazardous condition or the property has been substantially damaged or destroyed. The property must have been uninhabitable for at least 60 days in the year. This exemption is available in the year the property became uninhabitable, and in the following year if the property remains uninhabitable for at least 60 days in the second year.
Medical exemption for second home
Owners are exempt for a calendar year on a secondary residence if it is periodically occupied by the owner (or owner’s spouse or child) to obtain treatment needed in the opinion of a medical practitioner, and the treatment facility is in close proximity to that second home.
Year of acquisition exemption
Owners are exempt in the year they buy a property if the transaction was exempt from property transfer tax for one of these reasons:
Spousal separation exemption
Married couples, or common-law spouses living together in a marriage-like relationship for at least two years, are eligible for an exemption on family property if they have separated and live apart (due to a breakdown in a spousal relationship) for at least 90 days in a tax year.
An owner or a trustee in bankruptcy is exempt from the speculation and vacancy tax if the owner’s property has vested with the trustee for at least 60 consecutive days in the year, or is vested with the trustee in bankruptcy on December 31.
Exemption upon death
If an owner of a property dies in a taxation year, all owners of the property at the time of death are exempt in the year of death and the immediately following tax year. The owner’s personal representative is also exempt, even if they weren’t on title at the time of the death.
Exemption for testamentary trusts for minors
The speculation and vacancy tax does not apply to property held in trust for a minor child, if the trust was established by a deceased parent or guardian of the child.
Exemption for properties with rental restrictions
All owners of a property where a covenant or a strata bylaw prevents the property from being rented out in a manner that would allow a rental exemption are exempt for the 2018 and 2019 tax years, if the rental restriction was in place on or before October 16, 2018.
Exemption for strata accommodation unit
Units in strata hotels are exempt for the 2018 and 2019 tax years.
Licensed daycare exemption
Properties that are used as licensed daycares are exempt from the speculation and vacancy tax.
Vacant land exemption
The speculation and vacancy tax will not be levied for the 2018 tax year for land that contains no residential property.
Other exempt properties and entities
Other exempt properties and entities include:
Exemptions for land under development
Owners of property under construction or substantial renovation are exempt if reasonable steps are taken without undue delay to develop or renovate the property. These exemptions cover phased developments, vacant new inventory (unsold units in a building) and heritage properties undergoing conservation work. To be eligible for the exemption, the owner must be carrying out eligible building activity. “Building activity” is defined to include the following types of activities:
The following exemptions are available to eligible owners who own land that’s under development:
Exemptions for Corporations, Trustees and Partners
Corporations, trustees, and parters that own residential property may be exempt. To be eligible for a principal residence exemption, a corporation, trustee or partner must take account of its corporate interest holders, beneficial owners or partnership interest holders:
Generally, corporations, trustees or partners can also claim other exemptions in a similar manner, providing their corporate interest holders, beneficial owners or partnership interest holders meet the same requirements that individual owners would need to meet.
Tax credits include:
All revenues will be directed to affordable housing projects in the impacted regions.
Amendments to the legislation from the Green party are expected.
Read Frequently Asked Questions.
Subscribe to receive updates as new information about the speculation and vacancy tax is available.
BC Real Estate Association lobbied for exemptions to this legislation. Thanks to their work, the exemptions listed were enacted as part of the legislation.
KENNETH CHAN (DAILY HIVE) - A years-long vision by the architect and developer behind Vancouver House to redevelop the site of downtown Vancouver’s steam heating plant has finally been fully revealed.
Local developer Westbank and Danish architectural firm Bjarke Ingels Group (BIG), as well as HCMA Architecture & Design, have submitted their rezoning application for their proposal at 720 Beatty Street — the southeast corner of the intersection of West Georgia Street and Beatty Street, located on the northeast corner of BC Place Stadium.
“Although this Creative Energy site is currently less than prominent, it will quickly become the new gateway into both the Central Business District and Northeast False Creek neighbourhoods,” reads the application.
“Now is the opportune time to redevelop this site given the timing of viaducts replacement and if both are not considered concurrently, this gateway site will become a missed opportunity and a potential eyesore. A significant portion of the Georgia Street frontage is located on this redevelopment site and the success of this is contingent on having a coordinated design solution.”
S-shaped office tower with ‘illusional’ facade, and new steam plant
A new and upgraded Creative Energy steam plant with a relatively small 7,200-sq-ft footprint — half the size of the current utility — will be squeezed into an area near the base of the new 264-ft-tall, 17-storey, S-shaped office tower. The entire redevelopment within the 52,000-sq-ft site spans 617,000 sq. ft. of total floor area, including 515,000 sq. ft. of office space and office plates as large as 35,000 sq. ft., suitable for tech companies.
Within the ground level, the office tower also offers 18,500 sq. ft. of retail space. Pipes of the steam plant will be visible from the office lobby to “celebrate” the significance of the utility to the city.
“Instead of creating a wall within the city, 720 Beatty has a form that is dynamic and permeable to the site’s unique location and qualities,” reads the architect’s design rationale for the tower.
“As you walk up Georgia Street and turn on to Beatty, the building’s appearance constantly changes. Sometimes it appears as a slender tower, and sometimes it appears as two.”
The tower’s facade will be made of reflective glass and metal panels, with a “fluid geometry” that can “look completely opaque or completely transparent.”
“The metal panels will reinforce this condition, by creating crisp a edge to the building,” continues the design rationale. “Due to the geometry of the pleated facade elements, the reflective glass will be able to break down the scale of the building even more. The reflections of the surroundings will not be seen as in a mirror, but broken down in smaller elements.”
This same facade also provides large-scale signage opportunities for multiple companies, not just the anchor tenant, with the signage disintegrating into an abstract pattern as a passerby moves closer to the building.
As for the new replacement steam plant, it will be relocated to a new off-site facility along the east side of Expo Boulevard — across the street from the redevelopment site, within a unused void space on the edge of BC Place. This is made possible by a new partnership with Pavco, the provincial crown corporation that operates the stadium.
The new steam plant will be constructed first, before work begins on the redevelopment of the existing plant on the primary development site. Components of the new steam plant utility will also be located within the base of the new tower, when it is complete.
Circular entertainment pavilion
Also unique to this project is a five-storey, circular-shaped entertainment pavilion wedged between West Georgia Street and the stadium concourse on the south side of the building.
“This is an important transition site between the Central Business District and the surrounding entertainment/cultural districts and requires a built form capable of breaking down the scale of the area and will greatly enhance the beauty of this new gateway into downtown Vancouver and NEFC,” reads the application.
This standalone, column-free building, which includes an outdoor rooftop patio, could accommodate restaurants, sports bar, a brewery, a virtual reality sports experience, and karaoke. It would significantly enliven and add to the emerging NEFC events and entertainment district, especially events happening at the area’s two stadiums.
With layers of lighting inspired by Tokyo’s streetscape, the entertainment pavilion could become a beacon in the new district. Special nighttime lighting and signage are strongly associated with many of the world’s most vibrant streetscapes.
Plaza space and Expo Boulevard facadeOn the level of the Beatty Street and the future West Georgia Street extension ramp to Pacific Boulevard, the building will enhance the area’s public realm by extending the BC Place concourse into its site with public plaza spaces and a breezeway allowing for crowd movements.
The plaza floor is inlaid with a diffuse pattern of timber and gold planks to provide “cues” for pedestrian movement, helping to move crowd flows during peak events and encouraging office workers and visitors to linger in the area during a typical weekday.
During night, in-ground LED lights integrated into the patterned floor will draw visitors to the entertainment pavilion, which is the heart of the plaza.
A level further down, the building’s facade along Expo Boulevard — underneath the BC Place concourse deck — will be optimized by a new glazed facade that showcases the steam plant allows for advertising opportunities.
Four underground levels with 358 vehicle parking stalls will be accessed from Expo Boulevard.
“The facade treatment here will mimic the redevelopments above grade façade and illuminated with potential signage opportunities to animate this public realm,” continues the design rationale.
“This new facade will take the materiality of the building at grade and apply it along Expo Boulevard. A pleated facade will create a rather opaque facade, as seeing when driving while a series of perforated panels will illuminate the street without affecting the drivers.”
The project is aiming for a LEED Gold environmental certification, using green building features such as a tenant-accessible garden roof with running track, low-carbon and efficiency improvements for the steam plant, and a partnership with BC Place for the installation of a new rainwater recovery system from the stadium’s roof. This would result in a water usage reduction of over 45 million litres annually for the plant.
Westbank acquired the plant in 2014, then known as Central Heat Distribution, for $32 million as part of the company’s long-term strategy to diversify into neighbourhood energy and add another redevelopment site to its portfolio.
Creative Energy currently provides heating to over 210 buildings, totalling 45 million-sq-ft of floor area, across much of the downtown Vancouver peninsula. The municipal government says the conversion of the plant into a low-carbon energy supply will be the “largest single GHG emission reduction opportunity in the city.”
Last year, Vancouver City Council approved a rezoning application by Pavco to develop the southwest corner of BC Place — where the West Georgia Street ramp extension meets Pacific Boulevard — with a 400-ft-tall, 40-storey residential tower, with a stipulation that all of the homes must be rental units.
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