Sunday, September 11, 2016

$13.5M seized from Chinese travellers at Vancouver airport

The amount of undeclared cash seized from Chinese travellers at Vancouver International Airport has spiked in recent years, according to documents released by the Canada Border Services Agency.
Between 2013 and 2015, Chinese citizens were caught with about $13.5 million in cash by customs officials at the airport. According to the documents the following amounts were seized each year:
- 2013 - $2.8 million
- 2014 - $4.3 million
- 2015 - $6.4 million
That amounted to more than 70 per cent of the $18.7 million of undeclared cash seized from all travellers, including Canadians, during that time at the airport. The reports did not say the number of people involved.
The figures come from CBSA reports obtained by an Access to Information request by B.C. NDP MLA David Eby.
While it is not illegal to bring large amounts of cash into Canada, anything over $10,000 must be declared at the border or it can be seized by customs officers.
Concerns over housing, corruption
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Eby says the spike in the amount of undeclared cash Chinese citizens are bringing into Canada raises concerns about the source of the money.
"We are seeing in court cases in British Columbia, evidence coming out from people that they are bringing in money for corrupt officials from China, or they are bringing in money that was obtained by fraud from China.
"The concern on the undeclared money is it may just be the tip of the iceberg ... but the trend line of 50 per cent increases year-over-year is something we want the government to be concerned about."
And he's worried about the effect both legally declared and undeclared cash might be having on B.C.'s real estate market.
"There is money coming into our real estate market that isn't taxed here, that has no connection to our local market and it is distorting prices for people who earn their living here in Metro Vancouver," he says.
Eby is urging the province to bring in a special tax targeting cash that has not been subject to Canadian income tax.
"Increase property taxes on people who are buying property here with money not earned here in British Columbia that they haven't paid income tax on," he suggested, referring to an earlier proposal from Tom Davidoff at Sauder School of Business at the University of British Columbia.
Foreign cash a federal issue
A spokesperson for the province's Finance Ministry noted that controls on foreign cash and income tax are both federal responsibilities, and largely outside of provincial powers.
The spokesman also said B.C. Finance Minister Michael de Jong did raise the issue of foreign cash with his federal counterpart Bill Morneau when they last met in June.
"We are working with the federal government in identifying strategies to strengthen information sharing among various levels of government, in an effort to prevent tax evasion and money laundering in real estate," said a statement from the ministry.
Likewise property taxes are generally a municipal affair. While the province did recently grant Vancouver Mayor Gregor Robertson's request for the power to tax vacant homes, the city has yet to roll out any such tax.
The province recently introduced a 15 per cent tax on foreign buyers in Metro Vancouver, which has been linked to signs of significant cooling of Vancouver real estate market in recent months, and it has been tracking data on foreign buyers since June.
"The data we're collecting will allow us to monitor any changes in foreign investment and assess the effect of the additional tax," said the statement.