BC assessed a $1.32 million tax for a resident who has lived in the Lower Mainland since 1995
British Columbia did not violate the Canadian Charter of Rights and Freedoms when it levied a foreign buyer’s tax on an Iranian citizen’s property the year before he was granted permanent residency, the BC Court of Appeal ruled Tuesday.
According to the decision, Kourosh Esfandiar Bakhtiari came to Canada as a refugee and has lived in the Lower Mainland since 1995. He first fled Iran for the US in the 1980s, after his father was tortured and killed by Iranian authorities and his mother and sister were put under house arrest.
In the US, Bakhtiari served a prison sentence for exchanging weapons and military information in an effort to help his mother and sister. The US deported him to Iran, and after he escaped again, the United Nations High Commission for Refugees declared Bakhtiari a refugee. Canada’s immigration agency also recognized him as a refugee after his arrival in the country.
Bakhtiari applied for permanent resident status in 1997, 2014, and 2017, but his application was not approved until 2022.
In 2019, he bought a $6.6 million home in West Vancouver, where he lives. In 2021, about a year before Canada granted him permanent residency status, BC assessed a $1.32 million foreign buyer’s tax – also known as the additional transfer tax – on the home purchase. Under BC’s Property Transfer Tax Act, the province will levy the tax when a “foreign entity” acquires a residential property in certain areas of BC.
The law defines a “foreign entity” as a foreign national or a corporation controlled by a foreign national. The former category includes stateless individuals, as well as people who are neither Canadian citizens nor permanent residents.
Bakhtiari appealed his notice of assessment, but the province refused because he did not technically receive permanent resident status within a year of buying his home.
Bakhtiari sought a court order declaring that the PTTA’s definition of “foreign national” breached s. 15 of the Charter, which protects equality rights. He argued that the definition discriminated against him on the basis of his being a long-term BC resident who could not access permanent residency or citizenship; a refugee who is ineligible for permanent resident status; a stateless person; and a non-citizen whose application for permanent residency was delayed by the federal government.
Bakhtiari also alleged the foreign buyer’s tax infringed his and his company’s rights to liberty and security under s. 7 of the Charter. Bakhtiari’s company is the registered owner of his home.
A chambers judge tossed out the claims, but allowed Bakhtiari to rework the s. 7 argument. However, Bakhtiari appealed the order that tossed out both his claims.
The appellate court sided with the lower court. In her decision, BCCA Justice Margot Fleming dismissed Bakhtiari’s argument that being stateless was grounds for making a s. 15 claim. She added that his “definition of statelessness is also plainly and obviously predicated on immigration status.” In a 2021 decision called Li v. British Columbia, the BCCA had ruled that immigration status is not grounds for discrimination under s. 15.
Fleming added that the three other grounds on which Bakhtiari made his discrimination claim, which she described as “long term ineligible resident,” “ineligible refugee,” and “postponed permanent resident,” were also “clearly predicated on immigration status and therefore precluded by Li.”
The justice also tossed out the s. 7 claim. Bakhtiari had argued that the foreign buyer’s tax infringed on his liberty by restricting his ability to buy a home in the municipality of his choice.
Fleming disagreed, ruling that the chambers judge correctly found that this claim “involved extending the scope of s. 7 ‘well outside the narrow zone of protected liberty,’ limited to fundamental personal choices, to include what are fundamentally economic rights and interests.
“Unless they are fundamental to human life or survival, economic rights are decidedly not encompassed within the right to liberty protected by s. 7,” Fleming added.
The court then turned to arguments by the two intervenors, South Asian Legal Clinic of British Columbia and South Asian Legal Clinic of Ontario. The clinics had asked the court to clarify Li, since a 2023 decision by the Ontario Court of Appeal offered a different analytical framework for assessing the legality of policies that distinguished between “non-permanent residents” on the one hand, and Canadian citizens and permanent residents on the other.
Fleming ruled, however, that the Ontario case had no bearing on her analysis in Bakhtiari’s case. She also said the intervenors were trying to expand the scope of the parties’ litigation and “overturn binding precedent when no party seeks to do so.”
Sujit Choudhry, head of Hāki Chambers Global and one of the lawyers who represented the intervenors, told Canadian Lawyer on Tuesday that he disagreed with the court’s finding that their arguments exceeded the scope of the litigation.
However, he says the issue is one in which “there is disagreement between the Ontario Court of Appeal and the BC Court of Appeal, and ultimately it’s a matter that should be resolved by the Supreme Court of Canada.”
Jason Gratl, a litigator at Gratl & Company who represented Bakhtiari, noted that they “pressed for judicial recognition of normative immutability, rather than empirical immutability, for making statelessness an analogous ground under s.15” of the Charter.
He said they also pushed “for recognition that choosing where to make your home is a fundamental choice under s.7. We may well press onward.”
The BC Ministry of Finance declined to comment. Immigration, Refugees and Citizenship Canada did not respond to a request for comment.
