25-year-old internal memo to Canada Revenue Agency predicted foreign money distorting housing market

Pretty outrageous, both the initial non-release and the five-year ATIP battle. Kudos to Ian Young of the SCMP for persisting. David Anderson and Jane Stewart were ministers at the time:

An internal Canada Revenue Agency audit concluded 25 years ago that wealthy new immigrants were buying up most of the priciest houses taken from a sample in and around Vancouver while declaring poverty on their tax returns. But the report was not made public until a five-year access-to-information battle concluded recently.

Housing and immigration academics say the study could have warned the public about the scale of foreign money being parked in Metro Vancouver’s residential real estate – decades before the provincial government began taking meaningful action to slow this trend.

During the federal election campaign, all three major parties have proposed various policies to curb international demand for real estate, which has contributed to rising unaffordability in a number of urban centres.

The Liberals and Conservatives are promising to ban foreign home buyers for at least two years. The New Democrats have pledged to tax those who aren’t Canadian citizens or permanent residents with a 20-per-cent levy – the same penalty imposed in British Columbia’s biggest cities for the past three years.

But critics say the parties need to follow B.C.’s lead to capture even more information about property owners so that they can be taxed more equitably and governments can tamp down international real estate speculation.

The CRA’s analysis from October, 1996, was shared with The Globe and Mail this week after its release to Ian Young, the South China Morning Post’s Vancouver correspondent who first requested the information in 2016 after being leaked portions of the internal memo explaining its findings.

The audit focused on 328 higher-end sales in the suburbs Burnaby and Coquitlam, but the study also analyzed a random sample of 6,060 sales from Vancouver and neighbouring Richmond and discovered “similar demographic results.”

Of the 46 houses bought in Burnaby, staff found 72 per cent were purchased by new arrivals to Vancouver who reported an average total family income of just $16,000. In contrast, the CRA’s chart from the audit showed four buyers who were long-term residents reported average family incomes that were tens of thousands of dollars higher.

This income gap between new immigrants and neighbours who had lived there longer was also observed in Coquitlam, according to the CRA’s chart released in the package of documents.

“It should be noted that an obvious large discrepancy exists between the average total family incomes for long-term Canadian residents and newer Canadian residents,” the author of the memo wrote to his CRA boss. “Furthermore, based on lifestyle and average age of these taxpayers, it is likely that many of these new Canadians still have active business activities, but are not reporting all their sources of income.”

Vancouver lawyer Richard Kurland, who has been helping international clients immigrate to B.C. for 25 years, said the analysis proves the CRA failed to catch those hiding their global income while competing for homes on Canada’s West Coast.

“They knew it was happening and did nothing, so the bleeding continued, taxes were not paid, property was subject to speculation and the end result [is] people in Vancouver are paying many more times than they have to for residential property because the CRA did nothing when it was warned by its own employees about what was going on,” he said.

David Ley, a geography professor at the University of B.C. who studies housing bubbles, said the 1996 report could have spurred politicians to address the anomaly of “apparently poor people buying very rich properties” decades earlier. He said the CRA had long maintained that they it would take too many resources to crack down on home buyers hiding wealth abroad, in large part because other countries they lived in were unlikely to release the pertinent tax information.

“It’s very difficult to pursue foreign sources of income – so they didn’t,” Dr. Ley said.

The CRA told The Globe this week that the study intentionally focused on cases where the buyer may have been underreporting their income and, thus, “was not intended to, and should not be, extrapolated to the whole population.”

But large parts of the internal communications around the release of this document were redacted because the agency said federal access-to-information law allows consultations or deliberations between government employees, a minister of the Crown or their staff to remain confidential.

The federal agency said it takes cheating its system seriously and has stepped up audits in the hot housing markets of Toronto and Vancouver in recent years. Still, the CRA said its five-year battle with Mr. Young over the release of this document is “clearly not normal, nor is it acceptable; we are continuing to take steps to improve [our] performance.”

Andy Yan, a housing analyst and director of Simon Fraser University’s city program, said the federal government has a lot of tools – such as home loan data and analysis of social demographic changes in neighbourhoods – through which it can confirm or refute how widespread these investment patterns have been. But, ultimately, he said, the CRA has not effectively enforced the country’s tax rules, helping create an unfair system where foreign capital is stored in residential real estate.

“There shouldn’t be any free parking,” said Mr. Yan.

In 2015, a Globe and Mail investigation into public data – including land titles, tax reporting and court records – revealed a similar pattern to the 1996 CRA study that suggested the typical wealthy foreign family buying Vancouver real estate pays little or no income or capital gains tax. These family homes were priced out of reach for many locals whose taxes pay for public services.

The Globe discovered that one in three multimillion-dollar homes bought in Vancouver areas popular with foreign buyers was registered to a homemaker, student or corporation – one indicator of how the identity of the person who actually paid can be hidden.

When a spouse or child sells a property that is registered in their name, the real investor can avoid capital-gains taxes – because the relative in Canada can claim it was their primary residence, therefore not an investment.

This and other Globe investigations helped increase public pressure on the provincial Liberal government to enact Canada’s first tax on foreign homebuyers. After the New Democrats were elected in 2017, in part on their pledge to further crack down on expanding real estate speculation, B.C. implemented a host of new taxes and demand-side tools.

Mr. Kurland said more provinces need to follow B.C.’s lead in requiring that homebuyers declare their country of residence for tax purposes as well as create a registry for beneficial owners – which will come into full force at the end of this year to make it tougher for people to hide real estate investments behind corporations, trusts or partnerships.

He said the CRA’s current “whack-a-mole” approach to catching scofflaws in the housing market relies on auditors digging for specific information in individual cases, but it will soon be able to use algorithms to scour all its tax information and these twin data sets to better catch those hiding wealth in B.C.

“It’s equivalent of an abacus versus a spreadsheet,” said Mr. Kurland, who added that he saw a “massive selling spree” among foreign owners in B.C. before each of those two policies became law.

Rohana Rezel, a software engineer who advocates for more affordable housing by using software and data to uncover speculators in Metro Vancouver’s market, said the most effective federal policy on this issue would be to blanket the whole country with a speculation tax on all homes.

Then, owners could offset this two-per-cent penalty against what they pay to the CRA each year, said Mr. Rezel.

“If you’re paying income taxes of a certain amount it doesn’t apply to you,” said Mr. Rezel, who immigrated to Canada from Sri Lanka in 2008.

Source: https://www.theglobeandmail.com/canada/british-columbia/article-25-year-old-internal-memo-to-canada-revenue-agency-predicted-foreign/

East Asians have Toronto’s lowest coronavirus infection rate. But other Asian groups are suffering badly

Good article and analysis of the Toronto race-based COVID-19 data

  • Toronto’s ethnic Chinese are weathering the epidemic well – yet it’s a much different story for Filipinos, South Asians and all other non-whites

  • Wide disparities are also reflected according to income, with experts suggesting socio-economic factors like racism and poverty are likely at play, not genetics

North American Covid-19 statistics that group Asian communities together have suggested they are experiencing relatively low infection rates – but new data out of Toronto indicates sharp differences among Chinese, Filipino and other Asian groups in the city.

Toronto’s large East Asian population, which overwhelmingly consists of ethnic Chinese, has the lowest rate of infection among all ethnicities.

But all other Asian groups have been hit hard. Southeast Asians, consisting mostly of ethnic Filipinos, have an infection rate more than eight times higher than that of East Asians; the rate for South Asian Torontonians is more than five times East Asians’.

In fact, all other non-white groups have infection rates that exceed the East Asian rate by huge margins.

This chart shows the wide disparities in Covid-19 infection rates in Toronto, according to ethnicity, with East Asians experiencing the lowest rate and Latin Americans the highest. Graphic: Toronto Public Health
This chart shows the wide disparities in Covid-19 infection rates in Toronto, according to ethnicity, with East Asians experiencing the lowest rate and Latin Americans the highest. Graphic: Toronto Public Health

White Torontonians, meanwhile, have an infection rate that is a more modest 25 per cent higher than East Asians’ – still much lower than the rate for the whole of this diverse city.

Experts suspect that a combination of racism, behaviour and circumstance explains the stark differences among various ethnicities. The fact that wide disparities are also reflected in income-based infection rates suggests that socio-economic reasons are at play, not genetics, they say.

Widespread and early mask usage among East Asians could be a factor, said Dr Jason Kindrachuk, a University of Manitoba virologist who is studying Covid-19.
Covid-19 rate in Canada’s most Chinese city isn’t what racists might expect

But teasing apart causality would take time. “Is it as straightforward as income? Could this relate back to earlier community acceptance of things like masks or social distancing?” he asked.

Either way, the data is crucial to identifying communities that bear the greatest burden in the pandemic, said Kindrachuk.

“In Canada we talk about being a multi-ethnicity community, but we’re starting to identify just how different our communities are, how different the vulnerabilities are … so we need to think about how we provide services to those most in need.”

The Toronto data likely reflected the higher risks of certain jobs, those that relied heavily on non-white employees and were ill-suited to social distancing, Kindrachuk said.

Canada’s care industry has high numbers of Filipino workers, for example, while its meat processing and seasonal agricultural sectors employ many foreign workers from Mexico.

As well as suggesting communities most at risk, the ethnic data also stood in sharp contrast to what Kindrachuk called “shocking” racist rhetoric about “the ‘China virus’ [and the] implicit targeting of the East Asian, the Chinese communities, as being to blame for the virus”.

Poverty, racism and risk in Toronto

Previous data from New York and Los Angeles suggested that Asian residents of those cities had the lowest infection rates among various racial groups. But those US statistics lumped all Asians together, disguising any disparities within the group.

The Toronto data, presented by the city’s Medical Officer of Health Dr Eileen de Villa last Thursday and current to July 16, split up East Asians, Southeast Asians and South Asians. West Asians were grouped with Arab and Middle East people.

Separate census figures show that Toronto’s East Asian population is 84 per cent Chinese; ethnic Filipinos similarly dominate the Southeast Asian category, representing 79 per cent of the grouping.

East Asians had a Covid-19 rate of 40 infections per 100,000, far below the citywide rate of 145. They make up 13 per cent of the City of Toronto’s population of about 2.7 million – but less than 4 per cent of all infections.

This chart shows the wide disparities in Covid-19 infection rates in Toronto according to ethnicity, illustrated as percentages of total population and total infections. Graphic: Toronto Public Health
This chart shows the wide disparities in Covid-19 infection rates in Toronto according to ethnicity, illustrated as percentages of total population and total infections. Graphic: Toronto Public Health

The second-lowest infection rate (50 per 100,000) was among whites, who make up 48 per cent of the city’s population, and 17 per cent of infections.

Every other ethnic group has fared much worse.

The highest rates are among Latin Americans (481 per 100,000) and Arab/Middle Eastern/West Asians (454 per 100,000). Those communities are relatively small, at less than 3 and 4 per cent of the city respectively – but they suffered 10 per cent and 11 per cent of all Covid cases.

The larger populations of black Torontonians and Southeast Asians had identical infection rates of 334 per 100,000 people. Blacks make up about 9 per cent of the city, and Southeast Asians about 7 per cent, but experienced 21 and 17 per cent of all infections respectively.

South Asians (grouped with Indo-Caribbeans), had an infection rate of about 224 per 100,000. They make up about 13 per cent of Toronto, but have suffered 20 per cent of infections.

Canada has not been releasing race-based Covid-19 data on a national level, something critics call a blind spot.

But the Toronto data echoes previous geographical data from British Columbia, where the rate of Covid-19 infection in Richmond – the most ethnically Chinese city in the world outside Asia – has been the lowest in the metro Vancouver region.

In her presentation last week, Dr de Villa said there was “growing evidence … that racialised people and people living in lower-income households are more likely to be affected by COVID-19“.

“While the exact reasons for this have yet to be fully understood, we believe it is related to both poverty and racism,” she said.

She noted that 83 per cent of reported COVID-19 cases in Toronto involved a patient who identified as a member of a racialised group, compared to 52 per cent among the general population.

The race-based data from Toronto showed that “risk distribution was very unequal”, said Dr David Fisman, a professor of epidemiology at the University of Toronto. But this could be an overlapping function of wealth and income, he said.

There were dramatic differences between infection rates depending on income, with the rate steeply declining as incomes rose. The infection rate among residents of households earning C$150,000 (US$113,000) or more was 24 per 100,000 – less than one-sixth the rate suffered by the lowest earners, on less than C$30,000 per year, at 160 infections per 100,000.

The risk of Covid-19 in Toronto declines steeply as income increases, this chart shows. Graphic: Toronto Public Health
The risk of Covid-19 in Toronto declines steeply as income increases, this chart shows. Graphic: Toronto Public Health

“We were seeing this anecdotally in hospitals; the lockdown extinguished spread [of Covid-19] in higher-income areas, as a lot of professionals with service jobs got to go online,” he said.

“Lower-income folks are more likely to be people of colour and more likely to be in essential in-person work,” such as jobs in factories, food processing or care facilities, Fisman said.

“We can see that the epidemic split off in Toronto into two epidemics: one for wealthier Torontonians, and another, more prolonged, epidemic for those of lesser economic means.”

Kindrachuk agreed – the income divide was “eye-opening”, he said. “If you have a high income, you likely are going to be able to weather the storm … there is a complete disparity between how the burden of this disease looks between high and low income brackets.”

As for genetics, Kindrachuk said he doubted that it explained the stark disparities among ethnicities. “I haven’t seen evidence that there is a difference” on a genetic basis, he said.

Ian Young on How Local Chinese Communities Helped BC’s COVID-19 Fight

Ian Young does some of the best reporting on the West Coast. This profile demonstrates the irony of those blaming Chinese Canadians, whereas they were the quickest to understand the threat and react accordingly, and were critical of Dr. Tam’s (and the government’s slower response:

“Cast your mind back to the distant days of January, when the Chinese communities in Richmond started masking up, staying home and avoiding busy places,” Ian Young tells me.

Oh boy. By that time, my relatives were already frantically sending me lists of local places that a rumoured virus carrier had visited. My Chinese landlord in Vancouver knew my dad worked in health care and asked me to help him order boxes of masks. A Chinese friend, from Hong Kong, wanted to wear a mask on a Vancouver bus but was scared about what others might think.

But few other British Columbians were worried about COVID-19. This was before the ubiquity of physical distancing, before the mad rush to stock up on personal products. Dr. Bonnie Henry wasn’t yet a household name. Media were busy reporting on events unfolding in Wet’suwet’en territory.

Among local Chinese, however, it was a different story. Young, a Vancouver-based correspondent for Hong Kong’s South China Morning Post, was watching closely.

Metro Vancouver’s various Chinese communities — ethnic Chinese with ties to various parts of East Asia — felt the panic from overseas. News of something akin to SARS spreading in Wuhan went viral among B.C.’s Chinese before the virus itself did.

Many members stopped visiting Chinese restaurants and shopping centres, Young noted. The resulting quiet was regarded as a “curiosity” by people who weren’t connected to the city’s Chinese communities, he found.

Politicians encouraged people to support Chinese businesses, pinning the loss of patrons on rumours and racism. Health Minister Adrian Dix and others marched through Burnaby’s Crystal Mall, a popular Chinese destination with a wet market, in February to show their support.

Young didn’t mince words on Twitter: “Don’t imagine that white-knight stylings will make you the saviour, when what’s really needed is for Chinese folk themselves to feel more comfortable going out again like they used to do.”

Many East Asian locals had already started physical distancing by January. That’s because many had lived through SARS and had, as Young describes it, a “gut reaction and cultural memory.” (Young was the editor in charge of the South China Morning Post’s SARS quarantine team in Hong Kong, and likened the impact of the virus and the climate of fear to that of 9/11.)

It’s insights like this that make Young’s coverage of Metro Vancouver’s Chinese and the city’s ties to East Asia unique, especially when mainstream English media rarely have the cultural expertise or contacts. Instead, they tend to interview the same few Chinese voices over and over again.

Young, for example, recently reported on why chief public health officer Dr. Theresa Tam isn’t liked by many Chinese in Canada. Those lacking cultural and political perspective might wonder why ethnic Chinese might be so critical of her.

With the same kind of myth-busting, analysis and commentary he brings to his coverage of the local housing crisis, Young has been unpacking the pandemic as it relates to B.C.’s Chinese, from “maskaphobia” to the politics of health.

I recently chatted with Young about his astute coverage.

On the early start to physical distancing

On Feb. 8, Young took a photo of an empty Aberdeen Centre, a mall in Richmond, B.C.

“This was a profound thing,” said Young. “Aberdeen Centre to me is as close to a city square as anywhere in Richmond — I’m talking specifically about ‘Chinese Richmond.’”

The mall typically hosts holiday celebrations, fairs and community displays. The Aberdeen transit station attached to the mall was also where local residents on opposing sides of the Hong Kong protests clashed last fall.

“The food court has got 800 seats, and it’s always packed. You’re doing laps with your tray trying to find a seat. So it was shocking that it was deserted,” said Young.

“This was something that had entered the mindset of Richmondites, and [yet] it was barely being reported. The Chinese communities were certainly ahead of the curve. That should be acknowledged.”

It was only after Young pointed it out that outlets like CBC began picking up on the story.

On an expert’s response to the early start

Last month, Young interviewed a Canadian expert in new and re-emerging viruses who said he “absolutely” believes the early response by B.C.’s Chinese may have helped the province combat the virus more successfully than other jurisdictions.

University of Manitoba professor Jason Kindrachuk said more research is needed to determine the true impact but called the community’s quick action “fantastic” and said it “needs to be applauded and recognized.”

“There may have been a grassroots movement,” Kindrachuk, a former Vancouver resident who worked in Africa during the 2014 Ebola outbreak, told Young. “What you have in B.C. is a Chinese community that was seeing the impacts across Asia [and] had been through SARS.”

On the unintended revelation of Richmond’s low infection rate

“I think there was this perception that went on for so long about Richmond being a hot spot of infection because there’s so many Chinese people,” said Young. “It plays to a lot of racist tropes about cleanliness and disease in general.”

One piece of fake news that went viral online showed Chinese climbing Costco scaffolding to get bags of rice, allegedly in Richmond.

According to the most recent census, 54 per cent of Richmond residents identify as ethnic Chinese. (Richmond is 23 per cent white.)

B.C. doesn’t share information on specific communities with confirmed COVID-19 cases, only which health authority they fall into.

Health officials have said this reduces stigma in hard-hit places and prevents a false sense of security in others.

“It’s irrelevant what community you’re in,” Henry has said. “The risk of this virus is everywhere in British Columbia.”

Richmond is part of the Vancouver Coastal Health Authority. The figures released by government don’t let the public know whether a COVID-19 case is in Richmond, Vancouver, the North Shore or a number of smaller coastal communities.

But in late April, Young tuned into Facebook Live chat with a VCH doctor who shared a partial breakdown of cases. Richmond only had 10 per cent of the jurisdiction’s cases, whereas 60 per cent were in Vancouver and 30 per cent on the North Shore.

On a per capita basis, Richmond’s rate of infection is 36.8 cases per 100,000 people. This is half Vancouver’s rate and about one-quarter of Canada’s rate of 120 cases per 100,000 people.

Young said Richmond had “a very laudable reaction” to COVID-19.

“I think it’s worth pointing out that despite being the most Chinese city in the world outside Asia, with all these links to China and Hong Kong, it had half the rate of infection of Vancouver just over the river. And I don’t think that’s captured as a fact in common perception.”

The public wasn’t meant to know these specifics. When Young put the numbers to the health authority itself, a spokesperson said that it wouldn’t elaborate.

On why Dr. Theresa Tam is criticized by some Chinese Canadians

Born in Hong Kong, Tam, Canada’s chief public health officer, has received plenty of racist hate online.

And she’s been criticized by high-profile conservatives like Ontario MP Derek Sloan who questioned whether she was more loyal to China than Canada and called for her firing.

But look within Canada’s Chinese communities and you’ll find people critical of Tam and her advice too, simply based on her record on the job.

“All these people in my ethnic Chinese circle were vehemently critical of Dr. Tam in ways that my non-Chinese friends and acquaintances would be very reluctant to state, fearing themselves grouped with racist rabble-rousers,” said Young.

“I’m not suggesting that racism gets a pass. What I am pointing out is that Chinese communities here are not shy about expressing things that some people in non-Chinese communities would be reluctant to do as a simple matter of solidarity against racism.”

Aside from bigots who seem to be targeting Tam for being a woman and for being ethnically Chinese, her connections to the World Health Organization have been a point of controversy.

Tam, who’s served on a number of WHO committees and missions in the past, is currently an advisor to the agency’s International Health Regulations Emergency Committee on COVID-19.

“It’s a hugely controversial thing in some Chinese community circles to champion the WHO because of its stance on Taiwan as a non-nation.”

The WHO has been criticized for uncritically accepting China’s virus data, parroting its messaging and being overly complimentary to the country.

On top of this, there’s also Tam’s describing COVID-19 as “low” risk until March 15 and her long dismissal of the need for the public to wear face masks. In April, she said that wearing them “seems a sensible thing to do”and on May 20 she said masks would serve as an “added layer of protection” when physical distancing is not possible.

“It really pissed off so many in the Chinese community, particularly those who believe the real successes that places like Hong Kong and Taiwan have had,” said Young.

“All sorts of highly-qualified people have praised mask-wearing. So we’re talking about big sections of the community fully invested in masks, and they see Dr. Tam basically flip-flopping, taking a position that’s neither here nor there.”

On ‘maskaphobia’ and where it comes from

On April 15 in Vancouver, a man told two Asian women wearing masks “Go back to your country. That’s where it all started.” A third woman who came to their defence was attacked by the man, who kicked her, wrestled her to the floor and ripped out a clump of her hair.

This was one of many racist and violent incidents against people who are or look East Asian, often in masks, around the world. On May 22, the Vancouver Police Department noted they had opened 77 hate-associated police files so far in 2020, compared to 26 in the same period last year.

Young interviewed sociologist Yinxuan Huang of the University of Manchester, who’s been examining “maskaphobia.”

“It is on the one hand a cultural conflict between the East, where wearing masks are pretty normal, and the West, where wearing masks can present a different meaning, even a sort of threat to some extent,” Huang told Young. “This cultural difference has become an excuse to legitimize xenophobia, particularly given that China is where the pandemic started.”

Wearing masks has made Asians in overseas communities “clear targets” of amplified racism, Huang added, which often stems from a perception of Asians as being bad at integrating with the mainstream society they’ve moved to.

Health authorities in Canada have expressed worry that if they recommend masks, then the public will start ignoring other measures such as hand washing and social distancing.

“I don’t think people are as stupid at health authorities seem to assume,” said Young. “They say that masks don’t work 100 per cent of the time. Of course they don’t! Nothing does. But the absence of 100-per-cent efficacy doesn’t mean they don’t help.”

Why Young isn’t afraid to engage trolls on Twitter

Young’s reporting on the role of immigration and foreign money in Vancouver real estate has long attracted Twitter trolls and armchair analysts in denial of his research.

His COVID-19 reporting has attracted a similar new audience, from virus skeptics to those who believe this all started from bat soup in China.

“I always try to engage, unless someone is outright rude to me at the first instance,” said Young. “For a lot of trolls, they can be quite surprised when someone engages and says, ‘Hi there.’ Some of them say ‘I dare you to block me! Block me won’t you!’

“You also run the risk of silo-ing yourself if your immediate reaction is just to block. I actually don’t block that many people…. There are some terrible people out there. There are hardcore irredeemable racists, but I try to converse. I don’t mind taking the piss a bit with them too. People treat Twitter different ways. I treat it as a conversation.”

On the divides and differences between ‘Chinese Vancouver’ and the rest of Vancouver

After decades of immigration, Chinese communities in Metro Vancouver have their own social networks, information channels and particular destinations. The pandemic has highlighted this parallel “Chinese Vancouver” and how it seems to exist outside of the mainstream.

After all, Aberdeen Centre, the popular Chinese “city square,” was empty of patrons in February, while Vancouver’s mayor had to shut down bars on St. Patrick’s Day in March and instruct people to instead “drink a Guinness at home.”

I put the question of these divides and differences to Young.

“It’s definitely not an enclave. It’s bigger than [an] enclave,” said Young. “We do have quite segregated parallel cities. But there’s different kinds of Vancouver; there’s all sorts of different ethnic Vancouvers. It’s an inconvenient thing to think about, but it shapes so many people’s personal understandings of what they mean by ‘Vancouver.’

“In Hong Kong, Vancouver occupies a huge space in people’s minds. It’s a special place. You watch Asian dramas on TV that reference someone in Vancouver. You go to karaoke in Hong Kong, and there are these generic videos filmed at Stanley Park or Kits Beach associated to versions of western songs filmed. Vancouver punches so far above its weight. But these Vancouvers aren’t a Vancouver that non-Chinese Vancouverites understand.”

On being a Vancouver correspondent for a Hong Kong-based international paper

Young is originally from Australia, where he worked in newspapers before reporting for the London Evening Standard and the South China Morning Post in Hong Kong. He became the international editor there before arriving in Canada in 2010 and becoming the Vancouver correspondent.

“I’ve always been an outsider for various reasons throughout my career,” said Young. “If you’re an ethnic Chinese person in Australia, you’re an outsider for a start. That was the same in London. And when you go to Hong Kong, you’re an outsider for different reasons: my accent and because I don’t speak Chinese. But when I came over here to Vancouver, all that merged and I kind of ended up straddling a lot of different worlds.

“I do occupy a strange place. There’s lots of things I’ve written about that are huge surprises to people in Chinese communities when they see it in English.

“As a foreign correspondent writing for not just the Vancouver community but also people who are observing Vancouver from afar, there’s a different perspective. I think the fact that there is now a small community of foreign correspondents who are taking a foreign correspondent’s eye to Vancouver is useful, because Vancouver, like any other city, can be an insular place.

“When you’re a goldfish, you don’t know you’re living in a bowl. And when I say outsider’s perspective, I’m not just talking about me, but my editor’s perspective as well. It’s useful to understanding the city, not just for the people who are there.”  [Tyee]

Source: thetyee.ca/News/2020/05/2…

Glavin: Beijing casts shadow of fear across Canada

Terry Glavin and Ian Young have valid points along with a good thought experiment to underline them. The distinction between “Canada’s Chinese community” and Chinese Canadians is an important one:

Serving mainly the city’s ethnic Chinese community, Vancouver’s Tenth Church, in the Mount Pleasant neighbourhood, has been a venerable Vancouver institution, a refuge for the poor and the marginalized, since the 1930s. During a prayer service on Sunday, Aug. 19, a braying, flag-waving mob gathered outside. It took 20 officers from the Vancouver Police Department to guard the church doors, block passing traffic, and escort the frightened parishioners, at the conclusion of the service, through a gathered crowd of more than 100 people.

That same weekend, in Montreal, another crowd of shouting flag-wavers crashed the Pride parade after bullying organizers into barring a group of LGBTQ Chinese-Canadians from participating in the parade. Leading up to the event, on social media, the bullies had talked about following members of the ethnic Chinese group after the parade, to beat them up. The bullies went on to march alongside the annual Montreal parade in their own column, belting out a fiercely nationalistic song in a disruption of the conventional moment of silence honouring the gay community’s dead from homophobic murders, and from the time of the AIDS crisis.

In the case of the Vancouver incident, the mob was made up of people who had showed up earlier in the day, waving Chinese flags, to disrupt a rally in support of Hong Kong’s pro-democracy movement that had assembled outside the Vancouver consulate of the People’s Republic of China. The flag wavers heard about the prayer service, which was devoted to Hong Kong’s protesters, and followed the church-goers from the rally.

At the time, a thought occurred to me. Why wasn’t this a Canada-wide, above-the-fold national news story? That little puzzle is easily solved. Most of the churchgoers were not white people, and neither was the mob. They were all mostly ethnic Chinese. If the mob had been made up of preposterously nationalistic, flag-waving white people, it would have been a shocking story about a horrible, racist incident in Vancouver. But if the Christians had been mostly white people, and the mob mostly ethnic Chinese, the incident would have been lurid grist for racist teeth-grinding mills and radio hotline shouters from coast to coast.

In the case of the Montreal Pride incident, a similar thought occurred to the South China Morning Post’s Ian Young, who has developed a habit of breaking big stories overlooked by Canada’s mainstream news media. Based in Vancouver, Young ended up reporting the most complete story about what had happened in Montreal, and his thought experiment went like this: What if a mob of flag-waving American right-wingers had threatened violence and bullied the Pride organizers into expelling an ethnic Chinese group that wanted to honour Hong Kong’s LGBT community? What if the right-wingers had then crashed the parade with their own marchers, and the song they belted out during the solemn moment of silence was the Star-Spangled Banner?

You can probably imagine how widely and thoroughly a story like that would have been reported, and the sorts of stirring speeches our politicians would have made about it. But the bullies in Montreal were from the same pro-Beijing cohort as the bullies in Vancouver, and the song they sang was March of the Volunteers, the anthem of the People’s Republic of China.

You can’t say that the event in Montreal was racist, or even necessarily homophobic, exactly, just as it can’t be said that what happened in Vancouver was categorically racist, or even a straightforward case of religious bigotry. But it is exceedingly difficult to argue that something kindred to racism is not at least involved to some degree, in the way the news media fails to pay attention to the phenomenon of Beijing’s bullying and influence-peddling in Canada. And in the way our politicians, from all the political parties, if only most egregiously the Liberal Party, pander and placate in these matters.

It may not be exactly racist to resort to the term “Canada’s Chinese community,” but it will get you off on the wrong foot, and if you’re not careful, whatever your intentions, you may end up at least serving a fundamentally racist purpose.

There at nearly 2 million people of Chinese descent in Canada, but until very recently, owing to migration facilitated mainly by the scandal-plagued and now-shuttered federal Immigrant Investor Program, Canada’s ethnic Chinese came almost exclusively from the five Cantonese-speaking communities at the mouth of the Pearl River and adjacent areas around Hong Kong. Among Canada’s immigrants classified as ethnic Chinese, there are at least hundreds of thousands of people that Beijing describes in the argot of Communist Party propaganda as the “five poisons”: Taiwanese, Tibetan and Uighur nationalists, followers of Falun Gong religious practices, and democrats.

Increasingly, these Canadians are living in fear. If they aren’t careful about what they say, their family members back in China will end up being badgered, blacklisted, or worse. This fear is particularly acute among Canada’s Uighurs, whose fellow Muslims in Xinjiang have been interned, as many as 2 million of them, in re-education camps.

The fear is spreading in Canada, now that Hong Kong is in turmoil. It is restraining Canadians from exercising their rights to free speech and freedom of assembly in the Chinese-language news media — now controlled almost entirely by wealthy pro-Beijing interests — and in their decisions about whether to risk raising their voices or attending rallies in support of pro-democracy Hongkongers. It is spreading on university campuses — Beijing closely monitors the activities of Canada’s nearly 80,000 Chinese student-visa holders — and Beijing’s United Front Works Department now effectively controls hundreds of Chinese community and business associations, big and small, across Canada.

In these ways, Beijing is asserting its international reach to undermine the inviolable human rights of hundreds of thousands of Canadian citizens, and by the reckoning of the Geneva-based Human Rights Watch organization, the problem is getting worse. Earlier this year, Amnesty International and a coalition of diaspora groups presented the Canadian Security Intelligence Service with an exhaustive study that describes in detail the threats and harassment Beijing and its operatives in Canada are spreading.

“Definitely, people are afraid to speak out,” Ivy Li of the Canadian Friends of Hong Kong told me. “But it is a dilemma. People are also afraid of backlash, that Canadians in the mainstream will think all Chinese Canadians are involved in infiltration, or are working for Beijing, and will be suspect.”

Li, who emigrated from Hong Kong decades ago, said she has personally experienced hostility owing to perfectly well-justified concerns about Chinese money-laundering and the gross distortions created by Chinese capital investment in the real estate market. “But Canadians are very considerate, and we want our society to be more fair and just, and so this fear of being accused of racism, it is part of why mainstream society, especially the media, allows the pro-Beijing supporters to play the racism card.”

The role racism plays in these necessary debates is obviously complex, but even the most virtuous Canadian politicians have been happy to see Chinese immigrants as cash cows, and to regard Chinese Canadians as voting blocs, Li tells me, “and as Chinese diaspora first, rather than as Canadian citizens first.

“This allows Beijing to own at least part of us in Canada, and it means we are left to fend for ourselves against the Chinese government. And that is racist.”

Source: Glavin: Beijing casts shadow of fear across Canada

Revealed: how Canada border agency tried to conceal Chinese immigration mega-fraud files from tax collectors

More good reporting from Ian Young of SCMP:

Last year, Canadian tax collectors and border officers were hailing their cooperation on the biggest immigration fraud case in Canadian history – that of unlicensed consultant Xun “Sunny” Wang, who helped Chinese millionaires fabricate evidence needed to maintain residency and obtain citizenship in Canada.

“The CRA [Canada Revenue Agency] works closely with other law enforcement agencies and departments, including the CBSA [Canada Border Services Agency], to help maintain the integrity of the tax system,” said Elvis Dutra, Assistant Director of Criminal Investigations for the CRA, in a press release about the sentencing of Wang’s staff for their role in the scam. “Tax evasion costs all of us,” Dutra added.

But in contrast to that depiction, a 2013 court ruling reveals how the CBSA resisted the CRA, and tried to conceal the vast haul of evidence about Wang and his wealthy clients, hundreds of whom have since been blacklisted from the country for fraudulent behaviour.

The failed effort to impede the tax collectors is described in a judgment by Associate Chief Justice Austin Cullen; listed as the applicant in pursuit of the files in the Supreme Court of British Columbia is the CRA, while the CBSA is listed as a respondent alongside Wang himself and his firm, New Can Consultants.

Cullen’s April 8, 2013, ruling describes the respondents attempting to withhold from the CRA 90 boxes of files and 18 computers that were seized from Wang by the CBSA in 2012 raids. The CRA’s demand for the material was an invasion of privacy, the respondents said, and the tax agents should be required to demonstrate probable grounds for suspicion of an offence – but not based on the contents of the actual documents being sought.

The respondents also offered an alternative argument – that handing over the files would amount to a breach of a sealing order imposed on “records pertaining to [the] search warrant”.

Cullen was dismissive.

“I conclude that the CRA is not obliged to demonstrate the existence of reasonable and probable grounds to be permitted to examine the materials seized by the CBSA pursuant to a valid warrant. Nor do I find that the provision of information from CBSA to CRA implicates a reasonable expectation of privacy on the part of the respondents in the circumstances.”

Cullen also said the sealing order on the search warrant did not cover the actual material seized in the searches, which were conducted on Wang’s home and offices on April 17, 2012. “It is apparent from reading the sealing order that what it refers to is ‘the records’ comprising the basis for obtaining the search warrant and the search warrant itself, not the fruits of the search,” he said, as he ordered the CBSA and Wang to relinquish the files to the CRA within 14 days.

‘Protecting taxpayer information’

In response to questions lodged separately with the CRA and CBSA, the agencies issued a joint statement to the SCMP, saying that “the opposition of an action does not reflect on the level of cooperation between the two agencies.”

“Federal partners must exercise due diligence when exchanging information with each other, and ensure they do so in accordance with the legislation and policies in place,” the response said. “At times, requests for information exchanges will not be covered by these policies and as such, could be subject to specific rules or require that requests be made to the courts to support transparency and to protect taxpayer information.”

It added: “In cases in which another Government Department or entity are seeking access to evidence seized through a warrant execution it must apply for a court order to obtain copies.”

In a response to a follow-up question, the CRA refused to describe what actions it was taking against Wang’s clients, saying “the CRA does not comment on other compliance actions related to this case that it may or may not be undertaking”.

However, a large number of possible tax offences are outlined in court cases and immigration hearings resulting from the demise of Wang’s scam (Wang was sentenced to seven years’ jail in 2015 but was freed late last year after serving a third of his time).

“In fact, 146 [of Wang’s] clients received a total of almost C$188,000 in Working Income Tax Benefits meant for working taxpayers with low incomes,” wrote immigration tribunal panellist Susy Kim in a November 2017 ruling, that imposed an exclusion order against Wang’s client Rui Zhang, husband Zhe Li and their minor son.

Other cases involving Wang’s clients feature immigration tribunalists loudly flagging a core problem – the clients’ failure to properly declare worldwide income.

One such client was Ying Wang, who was deemed “vague and evasive” about her millionaire husband Pi Long Sun’s business activities and earnings in China.

Sun’s “nominal income tax returns in Canada” did not represent his global income” and “he was evasive about his actual income,” wrote tribunalist Craig Costantino in a 2017 ruling that the couple be excluded from Canada for five years. “On a balance of probabilities, Mr Sun was not reporting his worldwide income to the Canada Revenue Agency,” Costantino added.

Another Wang client – whose exclusion order was overturned last year, and who the SCMP has therefore decided not to name – lived in a C$10million Vancouver mansion, on which he was paying a C$2 million mortgage on his son’s behalf. But he too was deemed to have filed “only nominal” tax returns in Canada.

“[These] I find do not represent his global income. I find that he was evasive about his actual income,” wrote the tribunalist. “I find that it is clear that his business activities in China generate significant income as nothing he or his family have done in Canada can account for the value of their properties in Canada, let alone the C$6 million worth of assets that the appellant stated he currently holds in China.”

Current and former CRA auditors have previously complained to the SCMP about a historical lack of cooperation from immigration officials. CBSA was carved off from the immigration department and other agencies in 2003.

In 2016, one former veteran auditor, who acted as a go-between for the SCMP and a current auditor, said “there was/is no cooperation between CRA and Citizenship and Immigration Canada [the former name of Immigration and Refugees Canada] that we are aware of.

“If there is, then a memorandum of understanding would have to exist. There may in fact be one – but no one I talked to knows of it,” the ex-auditor said. “And even if there is then you have to go through an intergovernmental affairs officer to get anything – red tape and time. There is no bulk data that we ever knew of, no database easily accessible by an auditor.”

Both the current and former auditor requested anonymity to discuss CRA matters without authorisation.

This month, the SCMP reported that 860 of Wang’s clients had already either lost immigration status – resulting in expulsion and five-year bans from entering the country – or been reported for inadmissibility. The CBC has separately reported that more than 200 others face the potential loss of their Canadian citizenship.

Source: Revealed: how Canada border agency tried to conceal Chinese immigration mega-fraud files from tax collectors

Special report: how Canadian immigration fraud saw 860 rich Chinese blacklisted

Ian Young of the South China Morning Post detailed report on investor immigrant fraud and the false premises of the program (fortunately cancelled by the former Conservative government although Quebec still maintains its program which is largely a backdoor entry point for Vancouver and other locations). Good long read:

On the morning of October 17, 2012, Canadian border agents began their raids simultaneously, targeting offices in downtown Vancouver and nearby Richmond, as well as a large house on a busy arterial road.

They seized 90 crates of documents and 18 computers, stacks of supposedly “lost” Chinese passports, even a handful of red rubber stamps. There was so much evidence it would take more than a year to translate and organise.

The vast haul, seized from unlicensed immigration consultant Xun “Sunny” Wang, would send shock waves through the lucrative arena of millionaire migration, and in 2015 sent Wang to prison, for scams that had earned him C$10 million (US$7.6million). Sentenced to seven years’ jail, Wang was paroled late last year, having served a third of his time.

But an investigation by the South China Morning Post – based on dozens of court and immigration hearings, as well as on interviews with lawyers, tax auditors, officials and industry veterans – shows that the scandal of the biggest immigration fraud in Canadian history is far from over.

And the story began years before officers pulled up outside Wang’s home.

Some of the hundreds of Chinese passports, along with fake Chinese passport stamps, that were seized from the home and offices of the former unlicensed immigration consultant Xun ‘Sunny’ Wang, by Canadian border officers in raids across greater Vancouver on October 17, 2012. Photo: Canada Border Services Agency

Canada’s border authority told the Post at least 860 clients of Wang’s firms, New Can Consultants and Wellong International Investments, had already either lost immigration status – resulting in expulsion and five-year bans from entering the country – or been reported for inadmissibility.

Resolved cases reveal the privileged lives of the Chinese millionaires whose presence in Canada Wang fabricated with fake addresses and jobs, allowing them to maintain permanent residency or obtain citizenship when, in fact, they lived most of the time in China.

Yet there had been warning signs for years about the endemic failures in Canada’s wealth migration system that allowed Wang’s scam to flourish.

The little-remembered case of the disgraced immigration lawyer Martin Sheldon Pilzmaker rocked Canadian legal circles in the late 1980s.

It featured a cast of foreign millionaires and a rule-breaking advocate who would fix their immigration woes, as he cruised Toronto’s Bay Street in a chauffeur-driven Rolls-Royce. His tactics and his Hong Kong clients’ motives offered a near-perfect template for the Wang case.

Instead of jail, Pilzmaker’s adventures in the world of wealth migration ended 27 years ago with his suicide in a cheap hotel.

The implications of his lurid case would go ignored by policymakers for decades, as waves of wealthy newcomers helped Canada dominate the global millionaire migration industry and reshaped parts of the country, particularly the west coast city of Vancouver.

The fraud employed in the Wang case “is old hat” said one 30-year veteran of the industry, pointing to the Pilzmaker scandal. “It’s been going on ever since we’ve had business immigration.”

He and other insiders said both cases exposed the foundational flaw in the premise of millionaire migration: the widespread unwillingness of breadwinners in such households to actually live and pay tax in Canada. Their observations are also backed by years of tax and immigration statistics.

“What’s the main reason [for the Wang case]? Well, it’s the fiction that wealthy immigrants are going to come here and do a lot of business here … Wealthy immigrants have no interest in that. They want to park their wives and kids here.”

Among Wang’s ex-clients, case after case tells that very story – salted with various eye-popping details.

There is the wealthy Beijing lawyer and his family who returned to China just 10 days after activating permanent residency in Vancouver. There is the investor with five homes in Canada, who still lived in the mainland because he claimed Chinese custom required him to mourn his dead mother in her home village for three years.

There is the millionaire who declared his entire worldwide income as C$720 in Canadian childcare benefits, but who sent his student daughter C$61,000 to buy a Mercedes-Benz in Vancouver that year.

New cases continue to emerge, as Wang’s 1,600-plus clients are checked off against a list when they arrive at Canadian airports, according to a lawyer for one.

“By their very nature, these are individuals who are not inclined to stay in Canada,” said the lawyer, who declined to be identified. “They have lives and businesses in China.”

The rise and fall of Martin Pilzmaker

An open packet of cigarettes sat on a window ledge outside the front door of Wang’s house in south Richmond – the same property where at least 20 of his clients once fraudulently claimed to reside.

The home, built in 1990 in gauche Palladian style, looks dated now with its five-metre columns and salmon paint. It is nevertheless worth C$1.5 million.

When the Post knocked on a recent Sunday, the curtains flickered and someone peeped outside. But no one came to the door. A written request for Wang to contact the Post went unanswered, although he was recently spotted leaving the home by broadcaster Radio-Canada.

For Wang, his return to the scene of the 2012 raid brings him full-circle.

There would be no such closure for Martin Pilzmaker.

David Lesperance, a former border officer at Toronto’s Pearson International Airport, had just started out in his new career as an immigration lawyer when the scandal was hitting headlines.

It was the talk of the industry – one day in the early 1990s, a wealthy Hong Kong immigrant turned up at Lesperance’s office, asking if anyone knew how to find Pilzmaker, from whom he expected delivery of a Canadian passport. It was left to Lesperance to deliver the double blow that Pilzmaker was dead, and it was unlikely the immigrant would be getting his passport any time soon.

As Lesperance digested the case: “Things that I was seeing when I was a border official all of a sudden started to make sense.”

Pilzmaker had been called to the bar in 1977, but his story really begins with the 1984 Sino-British Joint Declaration on Hong Kong, sealing the territory’s return to Chinese rule in 1997 and triggering a rush for foreign passports that would make Pilzmaker rich.

Pilzmaker was one of the first to recognise the lucrative potential of millionaire migration out of Hong Kong. His solo practise was booming when he set his sights on a partnership with a Bay Street firm in Toronto, the top tier of Canadian legaldom.

Immigration lawyer Martin Pilzmaker is freed on C$75,000 bail in Toronto on July 6, 1989. Pilzmaker, charged with more than 50 immigration-related offences, committed suicide on April 19, 1991, two weeks before his trial was due to begin. Photo: Getty Images

Rhodes scholar Philip Slayton recalled Pilzmaker applying for a job at Blake Cassels & Graydon, where Slayton worked. His demands “were hard to swallow”, Slayton wrote in his book Lawyers Gone Bad, in which he described Pilzmaker wearing a C$20,000 fur coat.

“Pilzmaker wanted an immediate partnership, a big share of the profits, and a corner office. Blakes … would also have to pay for the chauffeur of his Rolls-Royce Corniche convertible.”

Rejected by Blakes, Pilzmaker was recruited instead by Lang Michener in 1985. He was just 37, but in his first year he received full partnership and an astonishing C$400,000 starting salary – his stablemate at the firm, the future Canadian prime minister Jean Chrétien, had to settle for C$100,000.

The flashy Pilzmaker was an awkward fit at a practice described as the “government in waiting”, so packed was it with Liberal Party elites. But “they were ready to hold their noses and suffer Pilzmaker’s crude conduct for an entry into the teeming Pacific Rim,” wrote investigative reporter Victor Malarek, in an account of the scandal in his 1996 book Gut Instinct.

The new recruit was an immediate success, bringing more than C$1 million in business in his first year, the Toronto Star later reported.

It was too good to be true.

Pilzmaker clients’ initial preferred pathway was via an entrepreneur immigration scheme. Then in 1986, Canada launched its Immigrant Investor Programme (IIP), in which applicants selected by wealth benchmarks paid for permanent residency via government-approved investment, initially C$150,000.

It was the world’s “first true residence by investment programme”, according to the Global Investor Immigration Council.

The industry exploded, and Canada found itself at the forefront of an immigration gold rush.

By 1996, the federal IIP and its Quebec variant would bring more than 57,000 rich immigrants to Canada, about half from Hong Kong and a further 20,000 from Taiwan.

But Pilzmaker – like Sunny Wang decades later – recognised the flaw in the basis of wealth-determined migration.

Although applicants coveted Canadian citizenship and residency rights as a potential escape route for their families, they were unwilling to actually live, work and pay much tax in Canada.

Pilzmaker offered a solution. He bought three houses in Toronto to help fabricate backstories for his clients. The addresses were used to obtain local driving licences and utility accounts in their names. Bills and other official documents addressed to his clients provided fake proof of residency.

In Business & Professional Ethics for Directors, Executives, & Accountants, by Leonard J Brooks and Paul Dunn, Pilzmaker’s deceptions are fleshed out – becoming a literal textbook case of immigration fraud.

Citing Law Society proceedings, it recounts how Pilzmaker’s juniors confessed in 1986 to Tom Douglas, a senior colleague at Lang Michener, that Pilzmaker “was running a double-passport operation”.

“The scam involved the false reporting of lost Hong Kong passports by his clients, which, in fact, would be kept by Pilzmaker in Canada,” the book recounts, paraphrasing Douglas.

The Cromwell hotel flats on Isabella Street in downtown Toronto, where immigration lawyer Martin Pilzmaker committed suicide on April 19, 1991, two weeks before his trial was due to begin. Photo: Google Earth

“On their replacement passports, the clients could travel in and out of the country at will. When the time came to apply for citizenship … they could supply the original ‘lost’ passports to show few if any absences from Canada.”

On June 8, 1988, the Royal Canadian Mounted Police raided Lang Michener’s First Canada Place offices, seizing files on 149 of Pilzmaker’s clients.

The Law Society found five Lang Michener partners guilty of misconduct in 1990 for their handling of their rogue colleague.

As for Pilzmaker, he was charged with more than 50 immigration offences in July 1989, then disbarred on January 25, 1990, and declared “ungovernable”.

Fifteen months later, freed on C$75,000 bail, and with his criminal trial scheduled to begin in a fortnight, Pilzmaker checked into The Cromwell hotel flats on Isabella Street in downtown Toronto.

There he was found dead, next to two empty pill bottles, on April 19, 1991.

Warning bells and the ‘complete fantasy’ of millionaire migration

In legal circles the recriminations of the “Lang Michener Affair” went on for years, damaging the reputation of Chrétien and others and raising questions about the governance of lawyers.

But for immigration policymakers it was as if the scandal, with its obvious implications for the booming millionaire migration industry, never occurred.

The reluctance of rich immigrants to physically relocate and declare all worldwide income to Canada – Lesperance terms them “ghost immigrants” – seemed almost universal.

“It wasn’t a function of nationality of the immigrants … it was simply the target market,” said Lesperance, describing how the problem was as common among Hongkongers fleeing in the wake of the Tiananmen Square massacre as it was among millionaires from the Middle East after the first Gulf War.

In Vancouver, long favoured as the primary destination of millionaire migrants in Canada, these tendencies would fuel the phenomenon of astronaut families, whose primary breadwinners return to their place of origin. Peer-reviewed research has linked undeclared foreign earnings and immigrant wealth to the chronic detachment of property prices and local incomes in the city, now one of the most unaffordable in the world.

Obscuring this tendency of his clients to live in China – while claiming residency in Canada – formed the entire basis of Sunny Wang’s services.

Vancouver, seen from near City Hall, has long been the most popular destination for wealthy foreign-earning immigrants, whose role in boosting property prices has been attested to by peer-reviewed research. The Chinese millionaire clients of unlicensed immigration consultant Xun “Sunny” Wang were among those who flocked to the city, though many breadwinners returned to China, while buying real estate and leaving families behind in Vancouver. Photo: Ian Young

One client, investor migrant Xi Wen Dai, 61, repeatedly described Canada as home as he fought an exclusion order. But he had spent just 33 days in Canada in the five years prior to his appeal, which was rejected by the Immigration and Refugee Board in April 2017. “China is and always has been his home,” said IRB panellist George Pemberton.

Xi claimed his lengthy absences from Canada were due to a tradition demanding three years of mourning the death of his mother – in her Chinese home village. That “is beyond the norm of what I can reasonably take notice of as cultural practice”, Pemberton said.

In 1991, soon after Pilzmaker’s death, Lesperance testified in Ottawa to a parliamentary subcommittee on immigration, laying out the quandary posed by ghost immigrants. But the parliamentarians, he said, subscribed to the image that rich immigrants wanted to come to Canada to “rub shoulders with everyone in Canadian Tire and Tim Horton’s”. It was, he said, a “very nice, complete fantasy”.

They were also ignorant, he said, of the situation’s impending scale. “They didn’t see the tidal wave coming,” said Lesperance.

Combined, the entrepreneur and investor schemes would eventually bring about 400,000 rich newcomers to Canada, although the federal IIP and the entrepreneur scheme were shut down in 2014. The QIIP, now priced at C$1.2million in loans to the provincial government, is still scheduled to bring in 1,900 millionaire households each year.

It wasn’t just Lesperance raising concerns.

In 1995, a team of Canada Revenue Agency auditors in greater Vancouver began investigating 200 immigrant investors on a client list obtained from one of the funds that were then linked to the scheme.

“The results were worse than we thought,” said one of the auditors – now retired from the CRA but requiring anonymity because of their current employment. “Even though many of the investors had not even filed income tax returns, not one of the investors that filed tax returns reported any business income, or income from offshore sources such as salary or dividends.

“Only Canadian interest income and government family allowance income was reported. So no taxes were paid, and certainly no worldwide income from persons who supposedly had businesses located overseas.”

Those investigated were mostly in their 40s and 50s – “their prime income earning years”.

The auditors then examined the lifestyles of the 200 migrants and “immediately recognised that many of them had purchased homes in the wealthiest neighbourhoods in various parts of Vancouver”.

Spreadsheets showed the vast disparity between their supposed incomes and the values of their new homes; some of these documents were leaked to the Post in 2016.

A chart that was part of leaked documents provided to the ‘South China Morning Post’ by current and former Canada Revenue Agency auditors in 2016. The 1996 chart depicts the huge disparity in declared incomes among investor immigrants and other buyers of Vancouver-area luxury homes, a part of an analysis by the auditors suggesting widespread tax cheating among the newcomers. Image: SCMP

The results were sent to CRA bosses in the hope of triggering a major investigation of investor migration. “The thought process was that this factual info could shock local senior management and management in Ottawa of the gross misrepresentation of reported income by these very wealthy people,” the retired auditor said.

But few official audits were launched – and those that were resulted in drawn-out court battles with well-financed opponents. Because of the huge manpower required to audit unidentified global income – versus, say, a local Canadian business – tax recovery was minimal compared to the effort.

Auditors were keen to pursue immigrant investors as a matter of law enforcement and principle, but as a revenue raiser, bosses saw the project as a bust.

There was “not enough leadership or recognition of the magnitude of the non-compliance from top management … the screened files got swept under the carpet”.

In hollow vindication, the auditors’ suspicions would eventually be reflected in long-term tax data showing immigrant investors declaring, on average, refugee-level incomes in Canada.

Ten years after admission, a 2014 federal government evaluation showed, average annual income tax being paid by IIP breadwinners was C$1,400 (one-fifth that of the average taxpayer, and one-eighth that of skilled-worker immigrants). Their annual taxable income from all sources peaked at just C$19,500 three years after arrival, then defied the trend of all other immigrant classes by falling sharply, to C$15,800 after 10 years.

The failure for more than 30 years to systematically investigate the suspiciously low incomes endemic to wealth migration remains a source of regret among CRA staff: three current and former auditors helped the Post with its 2016 investigation.

Forged alterations on stamps in the Chinese passport of a client of former unlicensed immigration consultant Xun “Sunny” Wang. The altered dates helped Wang’s clients retain Canadian permanent residency and receive citizenship by making it appear they had been living in Canada when in fact they were in China. Photo: Canada Border Services Agency

“I spoke recently to a retired CRA real estate appraiser, who said ‘we missed the first wave in the ’90s, then the wave in the 2000s, now we have gone through another wave, and we still have no handle on it’,” said one of them. “You’d think we, or the politicians, would have it figured it by now.”

An associated phenomenon is the chronically low retention rate of IIP and QIIP, another tendency exploited by Wang and Pilzmaker.

Census and immigration data show more than 40 per cent of IIP principal applicants do not live in Canada; the true figure is likely higher, since it excludes people who deceptively claim physical residency. It is, nevertheless, the worst in-Canada retention rate among all immigrant classes.

Even lower are the in-province retention rates for the Quebec IIP. Only 10 per cent of the 58,000 QIIP immigrants still in Canada for the 2016 census were living in Quebec. Most of the rest lived in Vancouver.

A 30-year veteran of the Canadian immigration industry, now retired, said that low retention of millionaire migrants suggested illicit services like those provided by Wang would be commonplace.

“It’s the same pattern that’s been going on for 30 years now,” he said, drawing a direct line between Pilzmaker and Wang, both of whom were “fabricating indicia of presence in Canada when in fact [their clients] were not here”.

“It goes way, way, way back and it’s part of the same phenomenon that we see with Hong Kong and Taiwan and now mainland Chinese – mostly business immigrant – families, where the head of the family has no interest in immigrating to Canada at all. He wants to continue running his business in China, or wherever.”

The Chinese passport of a client of former unlicensed immigration consultant Xun ‘Sunny’ Wang. Photo: Canada Border Services Agency

This was not a specifically Chinese behaviour but was instead typical for the rich, with profitable businesses and high-paying jobs in their country of origin. “They are the ones with the incentive not to actually live in Canada,” the immigration expert said.

One such client of Wang, millionaire businessman Pi Long Sun, had only visited Canada twice since 2012. However, he continued to file his taxes in Canada, listing his entire worldwide income in 2015 as C$720 from Canada’s Universal Child Care Benefit.

“In that year [Wang and wife Ying Wang] paid for their children’s living expenses in Canada, university tuition at the University of British Columbia for [their eldest daughter], private school tuition for their youngest daughter, and C$61,000 cash for a Mercedes-Benz [for their eldest daughter],” said IRB panellist Pemberton, as he denied the couple’s appeal against exclusion last year.

The downside of this general phenomenon was not just the loss of tax revenue, and the compromised integrity of Canadian residency and citizenship, added the retired CRA auditor. “They do not report their income while taking full advantage of our social programmes and boosting the value of real estate,” he said.

Among Wang’s clients, 146 fraudulently claimed Canadian benefits meant for the working poor, investigators say.

These included Xiao Qing Li, who lost an appeal against exclusion in June 2017. She and her husband, a partner in a Beijing law firm, had returned to China to live just 10 days after activating Canadian permanent residency in 2006.

In 2014, Li and the couple’s two sons did indeed move to Canada, where Li claimed benefits based on her status as a low-income worker, in a fake job arranged by Wang.

Her West Vancouver home was valued at more than C$8 million. Other Canadian properties boosted the family’s net equity position to “well over C$10 million”, according the IRB ruling against her.

The legal wreckage left in Wang’s wake

Vancouver immigration lawyer Peter Larlee is busy these days, as he cleans up after Sunny Wang.

He has represented about 50 ex-clients of Wang, about 35 of whom have already lost residency status and been issued five-year exclusion orders. Other cases are pending, while three have been successfully appealed.

“I really feel for my clients because a lot of them were so poorly served by Wang. They were led into a type of behaviour that is not condoned in our society, signing blank forms, leaving it all up to someone else to do,” Larlee said. “But we all tend to fall into that. I mean, if you go into a lawyer’s office you put your trust in someone, and they put their trust in the wrong people.”

The bid to expand millionaire migration and ‘placate concerns’

Sources such as the Middle East and Taiwan represent large but finite pools of would-be millionaire immigrants. But mainland China’s pool is limitless, practically speaking.

Even as Wang’s clients wend through the legal system, some in Canada’s immigration industry eye that pool hungrily, as they pursue the revival of the federal millionaire migration scheme.

In December 2016, scores of immigration professionals, lawyers, academics and other stakeholders gathered at the Hilton Toronto Airport Hotel. They were there for the Conference Board of Canada’s “Entrepreneur & Investor Immigration Summit”, an event pitched as helping shape the future of business immigration in Canada.

“Launching a new federal immigrant investor programme could draw more foreign capital to Canada to support such key areas as infrastructure, affordable housing, and venture capital,” wrote the board’s Kareem El-Assal, the summit organiser, in a report summarising the event.

Vancouver immigration lawyer Jeffrey Lowe suggested to attendees that a new IIP could require applicants to fund affordable housing with investments of C$1.5 million.

Retention of IIP immigrants had been a pervasive problem, Assal’s report acknowledged, while the board noted in a news release that “a public awareness campaign would also be required to placate concerns regarding the impact of immigrant investors on real estate prices in major cities such as Vancouver”.

Another investor immigration summit is planned by the board in Ottawa this November, by “popular demand”. Guests are slated to include government ministers….

Source: Special report: how Canadian immigration fraud saw 860 rich Chinese blacklisted

Quebec immigrant program increases in popularity … with ‘downsides’ for B.C. | Vancouver Sun

Ongoing coverage and controversy. I agree with the critics:

The Quebec government, running a cash-for-visa program labelled a “fraud” and “scam” by critics who say it hurts British Columbia, received a record-breaking number of rich immigrants in 2015.

The 40-per-cent increase took place a year after the former Conservative federal government complained that the program’s harms outweighed its benefits and shut down an identical national investor-luring scheme.

Quebec has autonomy to select its own immigrants under a 1991 accord with the federal government, so decided to continue its own program.

Critics, including Conservative MP Jason Kenney when he was immigration minister, have complained that the vast majority of investor immigrants are wealthy Asians who dishonestly declare an intention to live in Quebec, then move immediately, to Toronto and, especially, to Vancouver.

Quebec gets the financial benefits of the program while Metro Vancouver gets inflated housing prices and added stress on the public education and health care systems, the critics argue.

The latest evidence of Quebec’s growing enthusiasm for luring millionaire migrants prompted criticism of the B.C. government, which hasn’t been vocal on the issue despite allegations that the program has played a role in Vancouver’s housing affordability crisis.

“The silence from the B.C. government has been absolutely startling,” said New Democratic Party MLA David Eby.

“In effect, they are content with a program that brings major housing affordability problems, while allowing many wealthy migrants to use British Columbia’s social services virtually for free.”

Jobs Minister Shirley Bond said in a statement Friday that Victoria has “consistently” raised its concerns with Ottawa about the need for additional settlement funding to offset the cost of “secondary migration” when immigrants land somewhere else but then head straight to the West Coast.
“We are in active conversations with the federal government,” she said, noting that Quebec has had the authority for decades to select its own immigrants.

The total number of applicants and their family members admitted under the Quebec Immigrant Investor Program reached just over 5,000 last year.

That compares with 2014’s total of 3,669. The previous high was 4,436 in 2012.

Quebec says it will bring in roughly the same number in 2016, according to the province’s immigration plan tabled recently in the Quebec National Assembly.

The former Conservative government, while initially enthusiastic about the program, soon questioned its value and sharply reduced national admissions from an average of around 9,200 in 2008-2010 to 3,787 in its final year of 2014.

When the Tories shut down the program in 2014 they said the program’s costs far outweighed the benefits for Canadian — and especially B.C. — taxpayers.

Quebec’s enthusiasm during this period soared, from a little over 1,000 in 2008 to five times that annual total now.

Kenney, who said applicants misrepresenting themselves in their applications were engaged in “a crime” and “fraud” in 2013,  was unable to get bureaucrats to take action before he was shuffled out of the ministry later that year.

The only positive economic spin-off Eby said that he’s witnessed in his Vancouver-Point Grey riding, the focus of Vancouver’s housing price explosion, is the opening of a Ferrari dealership.

“Apart from that, it’s hard to figure out what benefit we see in British Columbia for this program. And the downsides are profound.”

Simon Fraser University professor Joshua Gordon, author of a recent report on Vancouver’s housing crisis, said every British Columbian who hears about the Quebec program is “appalled,” and yet the Clark government “won’t go to bat” for them.

“The absence of any public pressure from the B.C. government on the feds or Quebec to end the program is revealing about the way the Clark government thinks about the housing issue,” Gordon said Friday.

“What this suggests is that the Clark government’s strategy is to continue to fuel the housing bubble, since they realize it’s the main economic game in town, and hope that equity windfalls for boomers will get them re-elected — and that the whole thing doesn’t come crashing down.”

A spokesman for the Quebec immigration ministry, meanwhile, said Friday that his province didn’t jump in to increase its intake as a result of Ottawa’s departure from the field.

Quebec has actually reduced the number of applications it has accepted in recent years, from 2,138 in 2013 to 1,278 in 2015, according to Jonathan Lavallee. He indicated the recent bump had to do with a processing backlog in the federal system — a contention that Vancouver immigration lawyer Richard Kurland supports.

The Quebec government has also acknowledged the leakage problem, saying in a 2014 discussion paper that only a “small minority” choose to settle in Quebec for the long term.

Kurland praised Quebec’s recent efforts to retain more rich immigrants. One such measure gives preferential treatment to French-speakers.

The federal figures don’t break down the source countries for the immigrants through the investor program. However, the Quebec government says 89 per cent of its investor immigrants this year will come from Asia.

The Quebec investor program, for a net cost that Kurland pegs at $125,000, allows wealthy foreigners jump to the front of the immigration queue even if they didn’t speak a word of English or French.

Federal Immigration Minister John McCallum said in a recent interview that he has no intention of challenging Quebec on its immigration policy, and a departmental spokeswoman said the province has every right under a 1991 Canada-Quebec accord to set its immigration policy.

Kurland said Canada has the authority to shut down Quebec’s program if it has the political will to annoy a province in which Trudeau holds 40 of 78 seats.

And he challenged the common assertion that the Charter of Rights and Freedoms, which guarantees mobility rights, prevents authorities from forcing newly arrived permanent residents to stay in Quebec after arrival.

He noted that all charter rights are subjected to Section 1 of the 1982 Constitution Act, which says all rights can be circumscribed by “reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.”

Kurland, who believes B.C. should set up its own investor program, said a court could be convinced that it is “reasonable” to insist that newcomers stay in the province they declared an intent to live in for their first two years in Canada.

That could be enforced by requiring successful applicants to forfeit the entire $800,000 investment if they move before that time.

“The Charter has a two-part test. A breach of rights is not the end of the debate.”

Ian Young, the South China Morning Post’s Vancouver correspondent, echoed Kenney’s harsh assessment in a column last week.

“It is a money-grubbing prank perpetrated upon Vancouver by Quebec,” Young said. “It is a scam, and it needs to stop.”

Source: Quebec immigrant program increases in popularity … with ‘downsides’ for B.C. | Vancouver Sun

Study reveals awfulness of Canadian investor immigration; income tax averages C$1,400 per millionaire | South China Morning Post

More on Vancouver real estate and investor immigration:

Yet other resultant economic activity is scant – in fact, investor migrants’ favourite “business” is real estate ownership.

Average annual income tax paid by millionaire migrants was C$1,400. No, that isn’t missing a zero

That’s just one finding of a Federal government evaluation of the Chinese-dominated investor schemes, quietly published in October 2014. I can find no reference to the 103-page report in any media; two leading academics who have studied the schemes for years were unaware of it before I forwarded it to them this week.

A skinny internal report on immigrant employment earnings, dating from 2012, gave a hint of what many suspected about the investor schemes, whose only real requirement of applicants was a willingness to hand over a pile of cash (latterly, C$800,000) as a five-year loan to Canada. But the latest data is depressingly comprehensive.

Among other things it reveals that 10 years after admission, the average annual income tax paid by millionaire migrants’ primary breadwinners was C$1,400. No, that isn’t missing a zero. The true average is even lower – since one-third did not file tax returns.

Compare that to the C$10,900 paid by skilled worker immigrants, or the C$7,500 paid by Canadians on average.

 Millionaire migrants’ average taxable income from all sources peaks at C$19,500 three years after arrival, but then defies the trend of other immigrant classes by falling sharply, to C$15,800 after 10 years. The report notes “increasing rates of out-migration after five years (especially among investors) may indicate a relationship with obtaining citizenship … a share of these immigrants wait to obtain Canadian citizenship to move out of the country.”

The Quebec backdoor: still open, still ripping off BC

Why does this matter? Wasn’t the federal IIP shut down? Yes, but the QIIP continues to operate and has always been the biggest component of investor migration to Canada. In fact, with 1,750 applications accepted annually, and a hefty backlog, Quebec’s immigration department is on track to funnel about 1,400 new millionaire households to Vancouver per year; that’s down from the 2011 peak, but is about the same average level the city received under both the federal and Quebec schemes in the past decade.

Source: Study reveals awfulness of Canadian investor immigration; income tax averages C$1,400 per millionaire | South China Morning Post

Millionaire migration to Canada didn’t fall after investor scheme’s axing – it rose, new data reveals | South China Morning Post

Millionaire_migration_to_Canada_didn_t_fall_after_investor_scheme_s_axing_-_it_rose__new_data_reveals___South_China_Morning_PostMore on the Investor Immigrant Program and how Quebec continues to encourage investor immigration through its own program:

Citizenship and Immigration Canada (CIC) spreadsheets demonstrate that, yes, immigrant investor visa approvals under the federal IIP plunged 42 per cent as the scheme  wound down, falling to a mere 2,541 applicants and family members in 2014.

Yet, astonishingly, overall investor immigrant approvals nationwide were up by 7.2 per cent, hitting 8,762 approvals, the most since 2011.

How? Because, even while Ottawa was hitting the brakes on millionaire migration, the province of Quebec (which runs its own IIP) was hitting the accelerator. And l’accélérateur was winning.

In 2014, Quebec approved a bumper 6,221 millionaire migrants and family members, a whopping 62 per cent increase compared to 2013. It was a near-record year, surpassed only by the 6,292 approvals in 2011.

Quebec’s programme matters to Vancouver, because 89 per cent of Quebec investor immigrants do not end up living there, according to federal data. Most likely end up in Vancouver, assuming those 89 per cent disperse in a fashion similar to their counterparts in the federal scheme.

At this point thanks should go to Richard Kurland, the Vancouver immigration lawyer who has been a relentless pursuer of data that CIC does not prefer to release as a matter of course. The CIC spreadsheets that he shared with me this week were only obtained under access to information requests.

The spreadsheets demonstrate in clear fashion how Quebec has historically approved a majority  of Canada’s millionaire migrants, and has likely approved a majority of those who end up in Vancouver. From 2002 to 2014, Quebec approved 65,151 investor migrants, compared to 45,294 okayed under the federal IIP.

Millionaire migration to Canada didn’t fall after investor scheme’s axing – it rose, new data reveals | South China Morning Post.