Tax excessive profits of developers on federal land.

According to an Aug. 26, 2024 Times Colonist article, "Feds identify 56 government properties for conversion to affordable housing," Ottawa will offer long-term leases on particular federal properties to developers "to reduce the cost of construction and in turn reduce the cost of living,"

The question is whether this plan will indeed reduce the cost of living and if so by how much.

A plan that leases federal land and provides low-interest loans to developers goes two-thirds of the way toward an affordable housing policy. Missing from this approach is an allowable limit on the profit on developments supported with these subsidies. Profit in excess of such a limit government should tax away.

According to Statistics Canada, the operating profit margin that "Lessors of residential buildings and dwellings (except social housing projects)" enjoy has increased steadily from 41.3% in 2012 ($2.2 billion) to 47.2% ($4.6 billion) in 2022 over the time span available for this particular data point.

The operating profit margin for "Food services and drinking places" (restaurants) by comparison averaged 4.4% during the same period, more than ten times less.

Developers hate to pay taxes and will therefore limit the rents they demand to keep their profit below a legislated threshold, without which rents on these properties will increase as far and as fast as developers can raise them, which is how we got into the housing fix we are in.

Revenue collected by an excessive profit tax on housing developments on federal land should be used to commission, train clinicians for, and staff facilities to provide mentally ill people now enduring life exposed to the elements secure, humane, and therapeutic indoor environments to protect them from drug dealers, violent criminals, and the wrath of a public offended and inconvenienced by their crises in public spaces.