Tuesday, September 24, 2013

Coming in 2016: a value added tax at the urban resort?

Sept. 24, 2013 was the anniversary of Premier Christy Clark's announcement that her chief of staff Ken Boessenkool resigned for an "incident of concern."

It was another great day for euphemisms. Let's have two.

John Winter, the CEO of the British Columbia Chamber of Commerce, is lobbying for the resurrection of the Harmonized Sales Tax. Except he’s not calling it that. Nosiree. It’s a Value-Added Tax. Get it? 

According to Barbara Yaffe in the Sept. 24 Vancouver Sun
“Winter says the chamber is not trying to resurrect an HST debate, which he calls 'a nonstarter' in this province. 'What we are proposing is a way to leave our HST angst behind and move B.C. forward into tax dialogues.
"By not taxing business inputs, a VAT would allow B.C. to grow its prosperity by encouraging entrepreneurs, innovators and job creators."
In a June 8, 2010 Georgia Straight editorial ("HST is key to a strong economy in B.C."), Winter used the terms in the same sentence. 
“Experience in Atlantic Canada and other jurisdictions confirms that shifting to a value-added sales tax like the HST paves the way for increased capital spending on machinery, equipment, structures, new technologies, and other productive assets.”
The HST was imposed on British Columbians by Premier Gordon Campbell on July 1, 2010. It was announced July 23, 2009, just over two months after the BC Liberals won an election in which they vowed to be disinterested in giving B.C. a VAT. In the July 23, 2009 government news release, the HST was described as a VAT.
"More than 130 countries, including 29 of the 30 OECD countries, along with four Canadian provinces, have adopted taxes similar to the HST, called value-added taxes, which reimburse most businesses for the tax they pay on their inputs."
The HST was phased out March 31, 2013 after almost 55% of those who voted opted to extinguish the tax and return to the Provincial Sales Tax. 

Winter, by the way, knows a different kind of vat. He had a three-decade management career with Molson Brewery, including presidency of its Western Canada division. 

Also on Sept. 24, Paragon Gaming unveiled its plans for "Vancouver's Urban Resort."  This, two-and-a-half months after I broke the story in Business in Vancouver about financially troubled Paragon inking a revised deal with B.C. Pavilion Corporation to lease land next to B.C. Place Stadium. The original $6 million a year toward the $514 million stadium renovation will now be $3 million if the complex gets built. 

Yes, this Las Vegas company doesn’t want us to call it the proposed, $535 million new home of Edgewater Casino or a hotel/casino complex. Especially after Vancouver city council threw a curveball and quashed its bid to expand the 75-table, 600-slot machine casino to 150 tables and 1,500 slots in April 2011. Instead, it gave Paragon the go-ahead to move the existing licence to land for lease beside B.C. Place Stadium. Paragon's original $6 million-a-year, 70-year lease was cut to $3 million in a deal agreed to in March 2013. 

The 2011-proposed casino/hotel complex
Paragon revealed the architect's drawings for the casino complex.... er, urban resort... and its investors at a Sept. 24 news conference. Evidently my invitation was lost in the mail. 

I did some digging and found the company's CEO Diana Bennett and president Scott Menke registered a company called Paragon Holdings (Vancouver Resort) ULC on Aug. 8. They are the only directors of the company. Bennett and Menke are also the sole directors of Paragon Gaming Training School Ltd. Their Paragon Development is not to be confused with Paragon Development Inc. of Richmond, whose directors are Julie Chan and Terry Lai. 

The corporate registry doesn’t yet show executives of Paragon backers 360 Vox or Dundee Corporation as directors of Paragon Holdings (Vancouver Resort) ULC. 

The 2013-proposed urban resort... yeah, urban resort

Montreal-headquartered, TSX-V-listed 360 Vox is the umbrella for Enchantment Group Hotels, Resorts and Spas, Sotheby's International Realty Canada, Blueprint Global Marketing and 360 blu. Its asset management portfolio includes Fairmont Hotels including the Empress in Victoria, Olympic in Seattle, Chateau Laurier in Ottawa, Royal York in Toronto and Queen Elizabeth in Montreal. 360 Vox is also the project marketer for the CityCenter development in Las Vegas and developer of  two resorts in Dalian, China and three hotels in Cuba. 

Those Cuban properties are the subject of 360 Vox's $25.5 million lawsuit filed in Florida against the PGA of America. Vox 360 claimed PGA cancelled its licensing deal in December 2012 to use the PGA Village Cuba and PGA National Golf Academy Cuba names. 

Dundee Corp. owns 18% of 360 Vox and both companies are chaired by Ned Goodman who, according to the Globe and Mail, sleeps like a baby. Dundee, by the way, owns 58% of oil and gas exploration, development and production company Dundee Energy Ltd. and it owns 83% of Blue Goose Capital Corp., which bought the 14,052-acre Diamond S Ranch in Pavilion, B.C., for $14.8 million. Blue Goose, according to Dundee's annual report, is “focused on the production of clean protein.” (That’s another euphemism for another day.)

Vancouver Not Vegas coalition leader Sandy Garossino was not feeling enthusiastic about Paragon's euphemism. The casino development is not welcome and will be vigorously opposed, she said. Vancouver Not Vegas has already filed a petition, seeking a B.C. Supreme Court order to overturn city council's decision to allow the relocation.

“The people of Vancouver and Vancouver city council roundly rejected the first time this mega casino was proposed. Now we have the appearance of a smaller casino but there still has been no disclosure, there are still too many questions unanswered," Garossino said. "This is really an attempt to do an end run around city council. It makes no economic sense to do such a substantial development around a casino as small as the existing Edgewater is, it’s not going to anchor a development on a scale as being advanced here. We’re very skeptical this is the reality Vancouver is eventually going to have.” 

Yes, here comes another great casino debate about an urban resort.

Which is really just a value-added casino.


Grant G said...

If the Province wants to reimburse business for their inputs so be it, as long as ALL the present consumer tax exemptions remain in place.

Let Johnny Winters ASK, PLEAD, Beg the BC Liberals to take on, carry, absorb roughly $2 billion dollars per year in tax relief..

Christy Clark can easily afford $2 billion per year, just take it out of the $trillion dollar LNG windfall..

eeer, nevermind!

Chad Moats said...

Here we go,again.
By the way in all the legislation , it was reffered to as the PVAT or Provincial Value Added Tax.

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