Canada’s public guardians failed Vancouverites: Readers respond
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Many readers responded hotly to my two-part series on how Canada’s public guardians have failed the residents of Metro Vancouver.
Part One quoted leading researchers arguing Canada’s public guardians have failed to protect Metro Vancouver residents from forms of rule-bending and law-breaking that have been significant contributors to city housing becoming gravely unaffordable.
Two of the government departments that have let down city dwellers are Immigration Canada, which for decades did not monitor its business immigrant program (BIP); as well as the Canada Revenue Agency, which has looked the other way while mansion owners dodged income taxes.
Part Two looked at two more supposed guardians of the public trust, which have been disturbingly impotent in the face of stratospheric housing costs. Canada’s anti-money-laundering arm, Fintrac, has been inoperative, and the B.C. government has for years been sluggish about protecting constituents. Is someone being paid?
The two-part series received a high volume of online page views. Those who emailed me came from a diverse range of genders and ethnicities. Some agreed to having their names published, others did not. Here is a sample of responses:
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From Iain Palmer, a mortgage broker:
Your recent article on public guardians has left me distressed, to say the least. I don’t understand why this is not front-page news and being broadcast on all our news feeds. We need acknowledgement from our political leaders, action to alleviate the loopholes and follow-up to collect what is due to our country from those who have taken advantage of us.
As a mortgage broker I’m greatly concerned that there are several things taking place that will have a significant impact on a portion of the Canadian public. The issues you have raised are important. So are the recent changes to mortgage financing by our federal government, as is the new legislation about to be imposed by B.C.’s FICOM (Financial Institutions Commission).
We know that the FICOM changes will reduce competition. And the failures you mention have left tax revenues on the table and may continue to do so.
All these things are reducing home ownership for Canadians, which flies in the face of what our government should be doing….
All future home sales should pass through checks by the Canada Revenue Agency and immigration departments before completion.
The mandatory check should be for principal-residence status, income-tax avoidance and evasion. All home purchases should be checked for citizenship — and if the buyer is not a citizen — then that status should be registered on title.
From M.J.:
As someone who was born and raised and currently living in Richmond, there aren’t words to describe how frustrated and disappointed I feel with the state of our housing/rental market. It is utterly egregious.
I plan to leave BC within the next two years, after finishing university – not because I want to, but because I feel I have to. With low wages and exorbitant rents and housing prices, it is no longer possible to have a decent life here. I have three friends who have left this past year alone for the same reasons.
By continually exposing the corrupt nature of our politicians and negligence of our public guardians, I truly hope that some sort of change will come.
From K.B.:
In the early 80’s I worked for (a major IT company) and sold a number of high value systems to business immigrants, all Chinese. They, at that time, did what was expected: Created real businesses and employment. They were a pleasure to do business with, tough negotiators but honest people here to make a difference.
I am saddened to see we have debased our passport since then. A home is not an investment in the business sense. If buying a home qualifies a person to get permanent- residence status in Canada under a business-immigration-program, well, something is wrong.
From T.S.:
Your article points out a number of truisms, which many Vancouverites have known for years. But their voices have been silenced by both the right (real-estate people and developers) and by the left (who say any comment about Chinese investment could be seen as racist).
We will never get out of this mess. And I fully expect that my children will never come to live in Vancouver. All of this to provide a money-laundering service to millionaires.
From G. Wilson:
We downsized a couple of years ago and our house was bought by an off-shore student. The offer included a contingency to get financing for $850,000. What bank gives a student $850,000?
I was suspicious and asked a mortgage broker friend of mine about this. He said it’s very common. The banks feel safe that the house won’t go down by half.
G. Wilson says only a third of the houses in his west side Vancouver neighbourhood ever have their lights on.
As for the money assembly: The mortgage broker said wealthy residents of Mainland China open several accounts and deposit $50,000 in each. Then, on the date of sale, they put them all in one account for the cash down payment, which in our case was about $700,000.
My real beef is how there has been no real oversight on these transactions and how our principle-owner rules have been abused. Our system is being abused and the realtors are not reporting suspicious activity (your FINTRAC comments ring true). We have been the best tax haven in the world! The realtors must be held to account and report this type of activity.
We walk the dog through the Arbutus Ridge area above 16th and west of Arbutus. At night there are only two or three cars per block and only about a third of the houses ever have any lights on. It’s not a neighborhood. It’s a bank!
From Bill Wadsworth:
We all know the politicians are playing dumb. I am by no means an economist or a rocket scientist and yet I was able to connect the dots, like many others, ages ago.
The political ethics are shameful. It all boils down to tax revenues in my simple mind. All levels of government are making countless millions as a result of the inflated real-estate values. They are allowing the sale of our most valuable asset to foreign investment. Our land.
Canada has become the laundromat for the world’s dirty money. It is appalling that so few are asking some very basic questions.
From a UBC prof:
Thanks for your wise and insightful column on how federal immigration and tax policies have led to the housing disaster in Vancouver. I agree entirely. I have been surprised no one really took this theme up in the past, except for (UBC geographer) David Ley.
From M.J.:
Thanks so much for continuing to bring attention to this travesty. I hope you will not let the local municipal level off the hook.
For years our Vancouver mayor and most councillors denied there has been a problem. Then, when it became impossible to ignore, they said there was a problem, but it had nothing to do with wealthy capital from China. They called anyone making this claim “racist.”
When I last spoke to council on housing affordability in April, I asked councillors to address the issue of foreign capital, using UBC geographer David Ley’s research as a basis.
“I am by no means an economist or a rocket scientist and yet I was able to connect the dots, like many others, ages ago,” says Bill Wadsworth.
Councillor (—–) claimed David Ley was simply wrong. Councillor (—-) questioned whether Ley’s research had been “peer reviewed.” Only Councillor (—–) supported my request.
Later, and much too late, when even Vision had to admit foreign capital was skewing the market, Vancouver city council has demanded that senior governments do something about it, claiming there is nothing they can do as a municipality.
But the city has land-use authority and Vision could have acted to halt gentrification and destruction of all the affordable (or at least more-affordable) homes that have been demolished over the last eight years. They’re always replaced with homes that are 2x as expensive.
This has been the driver of the affordability crisis and Vancouver council has failed, because it has been in their interest to allow prices to rise. The same developer-driven agenda and easy money has influenced both the local and provincial levels. So please don’t let them get away with it.
From M.B.:
I applaud you for a well-written piece on the failure of our three level of governments to exercise their duties on behalf of the Canadian people, especially in regards to our so-called Immigrant Investor Program and immigration policies that have gravely affected Canadian citizens, particularly our young.
The deceitful policies and practices in place by all level of governments have not benefited Canadian citizens at large. They benefit only a select few who are involved in real estate marketing and development, along with government insiders directly or indirectly tied to those industries. All at the expense of our next generation.
Perhaps there should be an official investigation on all the three levels of governments and the powers that were for the last 30 years, on their neglect to serve the Canadian people first and foremost and with honesty and integrity. We must expose any conflict of interest or paybacks.
I am very surprised that there is very little investigative journalism in our country in regards to our governments role at all the levels and how they have created the huge mess we are in.
The article you have written should have been in big bold headlines and on the front page of every major newspaper in our country, so that our fellow citizens are more aware – and not blindsided by the self-serving powers and their disingenuous political take on our immigration policies.
From Sam Hyman, a Vancouver immigration lawyer (appeared in Sun letters page):
Agencies such as the Canada Revenue Agency and Citizenship and Immigration Canada take direction from their political masters. Policy priorities, including enforcement and budgeting, are set by governments of the day…
While Douglas Todd’s article (Part 1) is critical of the CRA and CIC, the B.C. premier and her government have some explaining to do about their behaviour.
Christy Clark became premier on March 14, 2011.
On June 15, 2011, Bank of Canada governor Mark Carney, in a speech to the Vancouver Board of Trade, warned that Lower Mainland housing stock “is taking on the characteristics of a financial asset market” – being traded as an international commodity by wealthy foreign speculators and investors.
He laid out the source countries of the investors and speculators. He provided detailed Bank of Canada data to back it all up.
By 2014, a Walker Consulting Group poll commissioned by the CRA reported the most serious tax non-compliance problems in Canada are in the Lower Mainland.
Tax industry experts in Vancouver exhorted the CRA to take tougher enforcement action to preserve program integrity in the aftermath of the Harper government slashing the CRA’s enforcement budget in 2012 by $300 million a year and laying off 3,000 staff.
With more than 14,000 vacant homes in Vancouver alone, the arithmetic says hiring another 70 auditors in Vancouver won’t be enough to inject vigour into tax enforcement.
There wasn’t a peep from the premier in May 2013 in response to the auditor general’s report that disclosed billions in the previous year’s reported income tax revenue in B.C. was uncollected by the CRA. Forty per cent of that revenue was owed to B.C. under its provincial Income Tax Act.
Premier Clark’s government denied and knowingly permitted the Lower Mainland real estate debacle to continue, unchecked, for five years after Mark Carney’s warning.
Her government permitted dishonest realtors to operate with impunity over the same period; failed to implement an effective real estate transaction tracking and registration system to catch unreported deals; retained the bare trust loophole, long ago closed in Ontario; allowed foreign money contributions in B.C. elections; permitted unlimited political contributions by any individual or entity, including major players in the real estate industry; and allowed the premier to draw a party salary in addition to her premier’s salary – arguably with the appearance of being paid from party revenues raised from these significant sources.
Will Lower Mainland voters look the other way come next May?
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