BC Meetups with Paul Finch, Treasurer of the BC General Employees’ Union
In May 2024, Common Wealth Canada held meetups in Victoria and Vancouver with special guest Paul Finch.
Paul is the Treasurer (Chief Financial and Administrative Officer) of the BC General Employees’ Union (BCGEU). In 2017, BCGEU launched the Affordable BC campaign, which included a detailed proposal for Land Value Capture. Read his article in The Tyee, In Defence of Vancouver’s Proposed Land Value Tax.
In addition, Paul serves as Chair of the Board of Directors, AUTISM CANADA; Board Director, British Columbia Investment Management Corporation (BCI); Board Trustee, Public Service Pension Plan; National Board Member, National Union of Public and General Employees; and Executive Board Member, BC Federation of Labour.
Below are videos of Paul’s talks and conversations with Floyd Marinescu, along with transcript summaries by ChatGPT.
Summaries by GPT-4o
Victoria Meetup
Floyd Marinescu introduces himself, Ken Yang, and Common Wealth Canada.
Common Wealth Canada promotes land value tax (LVT) and sharing publicly created wealth.
Floyd and Ken also run UBI Works, advocating for basic income in Canada.
Background and Rationale for LVT
Floyd describes the journey from promoting basic income to focusing on LVT.
He explains the importance of land value in economics and its impact on poverty and productivity.
Historians and economists in the basic income movement identify LVT as an ideal funding source for basic income.
Even without funding basic income, LVT encourages productivity and fair wealth distribution.
Concerns and Challenges
Canada is facing a housing affordability crisis, similar to Japan.
LVT is not part of the current conversation, and there is no better way to address issues in housing supply and investment.
Potential of LVT
LVT can redirect investment from unproductive real estate to the real economy, benefiting families.
Common Wealth Canada aims to show real numbers and impacts of a full tax shift to LVT.
Historical Context and Goals
LVT predates income tax and aimed to diminish the power of feudal lords, promoting value-adding activities.
Adam Smith and other early economists advocated taxing land because it doesn't harm productivity.
Current research focuses on the potential revenue from LVT in BC and its impact on other taxes and basic income.
Economic Impact
Implementing a 75% tax on annual rental value of land in BC could raise $47 billion annually.
This would be enough to eliminate provincial income tax, municipal property tax, and provincial corporate taxes, and still leave another $10 billion for other uses like funding a basic income guarantee.
Such a shift would make housing more affordable, potentially reducing property prices by over $1 trillion over 20 years, with an average fall of $640,000 per property.
Presentation by Paul Finch
Introduction and Appreciation
Paul Finch expresses gratitude to Floyd and Common Wealth Canada for their work on popularizing LVT concepts.
Current Housing Crisis
BC faces a severe housing affordability crisis due to high land costs.
The high cost of living drives skilled workers to other regions with lower costs and higher wages.
The inability to keep doctors and nurses in BC due to better pay and lower living costs elsewhere exacerbates the crisis.
Role of BC Assessment
BC Assessment was designed to facilitate LVT by valuing land and buildings separately.
The BC Assessment Authority was set up with the intent to bring in a land value tax methodology.
Existing legislation allows for land value capture taxes for transit improvements.
Impact of Public Investments on Land Value
Public infrastructure investments increase land value, benefiting private landowners without corresponding public revenue recovery.
When land is upzoned, its value can increase many times over without any development occurring.
The value of the land around a new transit station can increase six to ten times overnight.
Financialization and Speculation
Lending practices and speculative investments drive up property prices, making housing unaffordable.
Overlending has driven up the speculative value of real estate.
High land prices and long approval processes for development hinder new housing projects.
The approval process should be shortened to nine to twelve months instead of four years.
Proposed Solutions and Examples
Shorten approval processes and centralize assessment functions to encourage development.
LVT would encourage people to make better use of land and not hoard it away from others.
Use land value increases to fund public infrastructure and affordable housing.
Discussion and Q&A
Burnaby Project
Paul Finch shares a practical example from Burnaby where land was upzoned, significantly increasing its value.
They purchased the land for $21 million, upzoned it, and its value more than doubled.
The project demonstrates the potential of LVT and land value capture to support affordable housing and infrastructure.
Next Steps
The importance of continuing research and advocacy to integrate LVT into mainstream policy discussions.
Showing the end results and how much more affordable the economy would be with this tax shift.
Emphasis on collaboration and further exploration of LVT's benefits for housing affordability and economic fairness.
Viewing LVT as just compensation for living in a fully privatized land system where everyone gets a share of the land value in the country.
This detailed summary captures the comprehensive discussion and insights shared by Floyd Marinescu and Paul Finch, focusing on the rationale for land value tax, the current housing crisis, the potential benefits of LVT, and practical examples from ongoing projects.
Vancouver Meetup
Background and Context
Paul Finch discusses the historical context of financialization in British Columbia, mentioning significant credit spreads against land and the resulting impact on people's incomes.
He explains that the financialization of land included both residential and commercial properties, affecting various sectors.
Union Involvement
Paul, initially an executive vice president and later treasurer of his union, recounts how union members raised concerns about the housing market and rising rents.
The union collaborated with the BC Assessment Authority workers to investigate the issue, leading to the launch of the Affordable BC campaign in 2017, which proposed land value tax (LVT) and land value capture policies.
Impact on the Economy
The dramatic inflation of land prices without proper regulation affected every sector of the economy, making it difficult for skilled professionals to remain in BC due to higher living costs compared to the United States.
High land prices drive up labor costs, affecting global competitiveness and creating a contradiction where wages cannot be reduced despite inflationary pressures.
Discussion on Land Value Tax and Land Value Capture
Changing Advocacy
Paul describes the union's journey from advocating for LVT to focusing on land value capture.
The goal is to find a system that materially improves people's quality of life in Vancouver and BC by generating enough revenue to build affordable housing, subsidize transit development, and support inclusionary zoning.
Implementation Strategy
The union aims for a small, achievable version of LVT to demonstrate its effectiveness and garner political support.
Utilizing the BC Assessment Authority's capabilities to assist municipalities in evaluating and implementing land value capture policies.
Challenges and Solutions
Addressing political fears around land value drops and securing retirement incomes through property value.
Paul's argument that many buyers are actually hoping for a moderation of land values to benefit from lower interest rates in the future.
Audience Q&A
LVC Transit Proposal
Paul discusses advocating for better upzoning around transit corridors and using land value capture to fund transit and affordable housing.
Municipalities can implement inclusionary zoning policies that require a portion of upzoned land to be used for affordable housing, following CMHC standards.
Examples and Case Studies
Paul mentions a successful implementation of inclusionary zoning in Burnaby, where additional density is granted only if a portion is designated for affordable housing.
Comparison with international examples like Hong Kong and China's land leasing system to highlight the potential of LVC in funding infrastructure.
Addressing Productivity Crisis
Paul emphasizes that high land prices and related debt obligations hinder business reinvestment and productivity.
LVT can stabilize and reduce land values, promoting higher productivity by freeing up resources for businesses to invest in workforce and technology.
Specific Policy Recommendations
Vacancy control as an emergency measure to stabilize rents.
Implementing LVT to generate revenue for affordable housing and public infrastructure.
Inclusionary zoning to prevent land value inflation from rezonings.
Audience Interactions
Discussion on innovative development funding models like Addy Invest and concerns about managing credit risk and price escalation.
Addressing misconceptions about supply-side solutions and emphasizing the need for balanced development policies.
Intergenerational Equity
Discussion on the municipal maintenance debt and the need for better resource allocation to address infrastructure needs.
The importance of considering intergenerational equity in policy decisions to ensure sustainable development.
Practical Implementation
The need for targeted LVT in underdeveloped regions aligned with public infrastructure.
Highlighting the role of public infrastructure in unlocking land value and the importance of efficient resource management.
Conclusion
Union's Role
Paul's union advocates for policies that address the affordable housing crisis and improve members' quality of life.
Collective bargaining alone cannot keep up with land price inflation, necessitating broader policy interventions.
Political Context
Discussion on the BC NDP government's policies and the need for public demand to drive significant changes.
Emphasizing the importance of continued advocacy and collaboration to implement effective land value policies.
This detailed summary captures the comprehensive discussion and insights shared by Paul Finch and Floyd Marinescu, focusing on the historical context, union involvement, the impact of land value policies on the economy, and specific policy recommendations to address the affordable housing crisis in Vancouver and British Columbia.
