Real change in real estate corruption and money laundering
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To Those Responsible for the Canadian Housing Crisis and Consequent Erosion of Canadian Society,
I am one of the many Vancouverites who has sat in relative silence over the past decades, watching in disbelief as housing prices here and across the country have climbed to ever more astronomical highs; as successive governments at all levels have denied the reality of the driving forces behind the situation and enabled it to continue; as the political class has colluded with the real estate and development industries to ignore facts and obscure the truth; as countless livable homes (some with priceless heritage value) have been destroyed and replaced by generic box-style 'mansions' that act as piggy banks for wealthy foreign nationals; and as friends have left with their families in search of a more affordable life. But in 2018 I believe we are reaching a tipping point, and it is time for more of us to speak up and for those in positions of power to take real action.
The lawsuits referenced below are perfect examples of everything that is broken with the current system. These lawsuits embody the reality which those of us living and working in British Columbia's Lower Mainland region have been experiencing for years. They are by no means isolated cases; rather they are the tip of a massive iceberg of corruption and abuse of Canada's generous immigration programs, our systems of law and taxes, our social programs, our land use policies, and our values.
There are endless questions arising from these lawsuits and others like them, which have exposed the inner machinations of foreign wealth flows into the Canadian housing market. The questions are similar to those put forth and pondered by many academics, journalists, and citizens in various public forums over the years. Here are just a few that come to mind:
How is it possible for a nominee under the PEI Immigration Entrepreneur program to buy residential property in British Columbia when the requirements of the program state that the nominee must "intend to live and work in PEI and provide day-to-day active and ongoing management of your company from PEI." With these facts coming to light in this particular case, what consequences does the nominee face for violating the terms of the program? It is clear from the court case details that the people never intended on living in PEI, and simply took advantage of the PEI program in order to get into Canada with money they had moved out of China illegally with the purpose of parking it in Vancouver real estate.
How is it possible for a foreign national to get a mortgage from a Canadian bank when his sources of income and funding are deliberately obscured, and when the only way for such a large sum to be available to that person to purchase property in Canada is if that person broke the laws of his home country to get it here? And what if any consequences do the perpetrators face with such facts coming to light? To quote the from the judges findings in the BC Supreme Court case linked above: "Some transactions were structured using the name of a person who was not the true beneficiary...in order to gain some perceived advantage, whether it be to evade Chinese currency controls, minimize taxes, obtain a favourable mortgage, evade Chinese restrictions on the number of properties a person could own, or otherwise."
How is it possible that a person who claims worldwide income of $97 is able to secure a mortgage from a Canadian bank and purchase property costing millions of dollars. Where were the bank managers, real estate agents, lawyers, and accountants who should be questioning such transactions and the integrity of the perpetrators?
Why do governments at all levels continue to rely on half-baked statistics that downplay the impact of foreign money in the housing market when there are mountains of evidence and research, as well as first-hand knowledge of those of us who live here, that the impact is much greater than what those statistics suggest.
Why does the BC provincial government continue to allow foreign nationals to avoid the foreign buyers tax by purchasing units in pre-sale housing developments and then flipping them for profit before completion? Why are numbered companies, trust and other such entities allowed to purchase residential properties in an obvious attempt to hide the true identities of the the beneficial owners and sources of funds? More generally, why do all levels of government continue to allow housing to be used a vehicle for speculation and money laundering?
Why does the federal government continue to advocate for stronger trade and commercial ties with a country run by an authoritarian government which has a horrendous human rights record, which shows no regard for labour rights or environmental concerns, which practices widespread censorship, and many of whose citizens have demonstrated through multiple examples such as the cases above a complete contempt for Canadian laws and values as they blatantly abuse our immigration, legal, and tax systems for personal financial gain and to the absolute detriment of Canadian society?
The impact on the Canadian housing market from the types of activities detailed in these lawsuits is undeniably clear, no matter how many times politicians and real estate industry actors publicly deny it or deliberately try to oppress any outcry with accusations of racism or xenophobia. Housing prices have skyrocketed across the region and have become completely detached from average local wages. The flow of foreign wealth into the top end of the market has made it's way through the system over the years so that now even condos and townhouses, which were the last potential semi-affordable options for people with average incomes, are now surpassing detached homes in year-over-year percentage price increases.
The long-term implications from this continued abuse of our systems and the impacts on our communities are shocking and extreme. People who have lived here for years continue to leave, local businesses face an increasing labour shortage (especially at the entry-level), and neighborhoods are becoming dominated by empty houses. Canadians are fed up, and I am adding my voice to the chorus of growing discontent among those of us who live and work here, who pay taxes and contribute to society, and who are being slowly pushed out of our communities because of years of government ignorance and inaction to one of the most significant national crises of our times.
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