Nova Scotia’s Discriminatory Tax on CFAs

The latest budget of Nova Scotia’s Conservative Houston government adds enormously to its already discriminatory treatment of out-of-province Canadian property owners (Come-From-Aways – CFAs). The province currently raises property taxes annually on non-resident owners and caps increases for residents at a much lower level, leading to wide differences in tax treatment between neighbours whose properties may be of equal value.

The government now wants to add a new transfer tax of 5% on the sale of  property to a non-resident, and an additional annual property tax for non-resident owners of 2% of the property’s value. It is a bold thrust into the pockets of non-voters by a desperate government, and a good modern example of “taxation without representation”.

Noah Richler put it well in an op-ed in the Globe and Mail (April 21, 2022), entitled “My Fellow Canadians: Nova Scotia Doesn’t Want You”:

“I shall never renounce my citizenship to the greater country – to the….greater idea. Which is Canada. From coast to coast to coast. The whole of Canada is home and we all have a right to be anywhere in its glorious variety – without penalty or prejudice.”

Richler is also right to see Nova Scotia’s move as giving the finger to the principle of universality, so crucial to so many of our embattled national social programs, from employment insurance to public health care. It is the principle that underpins our right as citizens of this country to equal treatment, whatever our circumstances or location, and a principle our national government has the primary responsibility to defend against the incursions of provincial satraps. In his rush to make the Houston government the villain of the piece (and it isn’t blameless), however, Richler overlooks the real culprit – the retreat of the federal government from its national responsibilities and the consequent erosion of federalist values.

As an aside, it has always puzzled me why the premiers of Nova Scotia, and other smaller provinces have not seen fit to be vocal national advocates of federal values and of a strong central government to defend and protect those values. The field, ironically, has been left to the likes of Jason Kenny and Scott Moe, whose idea of federalism is purely transactional and self-interested – what’s in it for us?

Who speaks for all of us in this parochial arena?

The Houston government is playing the short game like everyone else these days, searching for revenue at least political cost,. The long game requires the federal government to step up to the plate and start advocating measures in the interests of the majority of Canadians irrespective of where they live – measures that address the climate emergency, universal public health care, electoral reform, child and seniors’ care, adequacy of housing, and so forth. That advocacy must be backed up by a readiness to raise and spend the funds to make those programs truly universal, regardless of province of domicile.

From 1966, when Ottawa passed the Medical Care Act, until 1977, the federal share of provincial and territorial expenditures for insured services was 50%. This year the Canada Health Transfer will cover just under 20% of Nova Scotia’s $5.7 billion health care expenditures. We could quibble over the reasons (among them unwise corporate and upper income federal income tax cuts) for the shrinkage of the federal percentage contribution, but the consequences of this retreat are clear and unsustainable.

Revenue must come from somewhere in the short run – from the hides of non-resident property owners in this case. It doesn’t make it just, but it helps explain the root cause and where the blame really lies.

By Peter Puxley

Hi, I'm Peter Puxley, an economist, geographer and urban planner by academic training, and a political organizer/activist, development educator, journalist, policy wonk, researcher and political staffer by practice. I have tried my hand at poetry, fiction and non-fiction writing, some of which has been published.

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