Douglas Todd: Is B.C. immigration program a back door for millionaire house buyers?

Interesting questions regarding a possible backdoor.

A question I find also interesting is looking at reported income through tax returns to get a sense of how well these immigrants are doing and whether their capital that allows them to purchase a house is matched by an ongoing income stream (rhetorical question – see Todd: Tax avoidance behind Metro’s disconnect between housing, income where the data suggests it is not):

How did it come to pass that thousands of people who came to Metro Vancouver through a provincial immigration scheme bought pricey houses?

A Statistics Canada report shows 2,370 people who recently arrived in B.C. through a provincial immigration program have bought single-family houses worth an average of $2.38 million in Metro Vancouver, which is $800,000 above the norm for Canadian-born house buyers.

It’s a startling figure, in part because politicians often trumpet how the relatively small provincial immigration programs were created primarily to fine-tune Ottawa’s bulkier immigration policy by pinpointing the right skilled workers for each local labour market.

Given that the emphasis of so-called “provincial nominee programs” is supposed to be on newcomers looking for a job, how have thousands since 2009 been able to quickly buy pricey Metro Vancouver real estate? It’s difficult to get an answer from officialdom. So we’re left to our own devices to figure out this irregular access.

I’m not alone in suggesting one of the last things most young people need in Metro Vancouver’s unaffordable housing market is to be squeezed out by another stream of foreign capital. The B.C. NDP government is among those trying to crack down on this price-inflating phenomenon associated with “satellite families” who buy stately homes.

But the revealing data is there in the particulars of a January Statistics Canada report. Its charts point to the way many families are coming to Metro Vancouver with large amounts of wealth, which they’ve been funnelling into housing.

Chart shows value of Metro Vancouver detached homes bought by recent newcomers under the Provincial Nominee Program and other immigration investor schemes. (Source: Statistics Canada report titled Immigrant Ownership of Residential Properties in Toronto and Vancouver.)

And it’s not only Metro Vancouver’s housing market that has been hit by millionaire migrants entering through provincial immigration programs. So has Greater Toronto’s. The average price of a Toronto house bought by a recent provincial nominee is $1.06 million, according to the StatsCan report, while the average price of a detached house of Canadian-born owners in Toronto is significantly less, $849,000.

And just as in Metro Vancouver, it is the recent newcomers to Toronto from China who have had the most cash to spend on property. Mainland Chinese make up about two of three of the home buyers in each city who arrived through the nominee program.

The StatsCan report, titled Immigrant Ownership of Residential Properties in Toronto and Vancouver, offers only a snapshot of this provincial nominee mansion phenomenon, however. It doesn’t capture the program’s link to condominiums. And it leaves open speculation about causes.

Therefore, many questions remain outstanding about what is going on with provincial nominee programs, questions which are typically paid little heed.

B.C.’s provincial nominee program brought 6,500 newcomers to the province in 2018, a large jump from the 2,600 it  welcomed a decade earlier.

But it is a puzzle how 2,370 provincial nominees since 2009 were able to quickly buy costly houses in Metro Vancouver, especially when the vast majority of such nominees were classified as “workers.”

Only about one per cent of provincial nominees to B.C. — an average of about 80 a year — arrive under the “entrepreneur” category. They are the ones who are worth more than $600,000 and required to invest $200,000 in a B.C. business. It’s common sense to expect many in this tiny group of entrepreneur/investors to arrive in B.C. with capital and to pump part or most of it into real estate.

That is exactly what happened with the federal government’s investor program, which the Conservatives killed in 2014 because so many rich immigrants were snapping up Canadian property but not operating businesses or paying significant income taxes.

Despite such unintended consequences, a large entrepreneur program continues to be run by Quebec. It cynically takes millions from thousands of rich would-be immigrants each year, even while most hastily move to Vancouver or Toronto.

Indeed, the January StatsCan report shows the average value of a detached house bought by more than 4,400 millionaire immigrants who came to Metro Vancouver in the past decade under Ottawa’s investor program, and the one operated by Quebec, is $3.2 million. That’s unfortunate enough in regards to fuelling high-end prices, with its trickle-down effect to all housing.

But how is it that the much smaller provincial nominee programs of B.C. and perhaps other provinces are also bringing in thousands of wealthy home buyers headed for Vancouver and Toronto?

A spokeswoman for B.C. Ministry of Jobs, Trade and Technology, which oversees the provincial nominee program, wouldn’t venture a guess. “It is good to see newcomers coming to Canada and being able to invest in their own business and homes,” she said. “We are unable to speculate on the amount of foreign capital they bring into Canada.”

The minister of jobs, trade and technology, Bruce Ralston, also declined to comment until he had a look at the Statistics Canada report. “It’s an area where I’d have to have the facts.”

In the meantime here are a few questions that need to be answered.

Is it possible many of the buyers of Metro Vancouver mansions are coming in not only from B.C.’s nominee program, but from other provincial programs, such as that in Prince Edward Island, which was cancelled last year. It was riddled with fraud and hundreds of would-be immigrants used fake addresses to pretend they lived in P.E.I.

Another question is whether people buying expensive Metro Vancouver properties are coming in through a camouflaged nominee category, such as “skilled worker.”

The top occupations of those coming in the past two years under the B.C. provincial nominee’s “skilled worker” category were restaurant and food service employees, including cooks and kitchen helpers, as well truck drivers and retail managers.

While Ralston said he needs to gather more information before commenting on whether immigrants who buy expensive houses in Metro Vancouver are coming in as truck drivers, food workers or another irregular category, he justifiably noted Attorney General David Eby and Finance Minister Carole James are trying to tackle a related aspect of the housing crisis.

The two major aims of the ministers’ new speculation and vacancy tax are to increase housing supply by reducing the number of empty dwellings and by targeting satellite families, who often buy and live in expensive properties but pay little or no income tax in Canada.

Since thousands of millionaire migrants appear to have found backdoor ways to enter Metro Vancouver’s over-priced housing market through the Provincial Nominee Program, it looks as if this scheme is part of the problem. As such it needs far more scrutiny.

Source: Douglas Todd: Is B.C. immigration program a back door for millionaire house buyers?

Why Canada’s immigration system has been a success, and what Australia can learn from it

Canada and Australia often learn from each other on immigration and related policies (e.g., Express Entry, the point-based system for speeding up the selection process for selecting economic class immigrants) but there are significant differences as this article attests. The author argues that Australia should learn from Canada’s Provincial Nominee Program to diversity where immigrants settle.

Of course, Australian political discourse on immigration is much more polarized, and while Canada is increasing its levels, the current Australian government is reducing them:

Immigration policy will be a critical issue in forthcoming state (Victoria, NSW) and federal elections. The disproportionate impact of immigration on population growth and public infrastructure in Sydney and Melbourne is the key issue.

If we look to the example of another immigrant-friendly country, Canada, however, we can see how giving states and territories a greater role in immigration target setting and selection can help take the pressure off major cities without drastically reducing immigration rates.

Immigration certainly impacts on Australia’s population to a greater degree than most Western nations. Among OECD countries, only Switzerland and Luxembourg have a higher percentage of foreign-born people than Australia.

Today, 28 per cent of the Australian population was born overseas. The key issue for Australia is that immigrants are more likely to live in large cities than smaller cities or regional areas. According to the Australian Bureau of Statistics, 85 per cent of immigrants live in major urban areas, compared to just 64 per cent of Australian-born people.

Indeed, according to the International Organisation for Migration (IOM), Sydney is now equal-fourth in the world (with Auckland and Los Angeles) with the highest percentage of foreign-born residents (39 per cent), while Melbourne is not far behind (35 per cent). Nearly two-thirds of residents in Sydney, Melbourne and Perth have at least one parent who was born overseas.

A new state-based approach?

The stress that rapid population growth has placed on Melbourne and Sydney has recently become a topic of much debate. This week, Prime Minister Scott Morrison pledged to reduce the annual permanent immigration cap of 190,000. Australia accepted just 162,417 immigrants last year, the lowest level in a decade.

Morrison has also called for a major rethink of the “top-down” approach to immigration in Australia, allowing states and territories to request the number of skilled migrants they’d like to admit each year.

The states and territories currently have a limited ability to nominate applicants for certain skilled visas. But state-nominated and regional visa approvals have fallen in recent years to just over 36,000 last fiscal year following tighter restrictions.

Morrison wants to see a bigger role for states and territories:

This is a blinding piece of common sense, which is: how about states who plan for population growth and the Commonwealth government who sets the migration levels, actually bring this together?

What we can learn from Canada

The Canadian government gave provinces a say in setting targets and selecting economic immigrants – similar to Australia’s skilled migration intake – in the early 1990s. Quebec was first to receive a high degree of autonomy in the process – it was given the right to set its own level and selection criteria for all economic immigrants. (The ability to speak French was a must.)

Quebec was also granted the right to set all of its integration programs, funded by Ottawa every year. The payments reached C$540 million this fiscal year, or C$13,500 for each newcomer.

After Quebec was given this authority, the other Canadian provinces demanded the same. But they received far more limited rights than Quebec. They can nominate the number of economic migrants they need as part of the national immigration target set by the federal government, but they can’t independently set their intake target and selection criteria like Quebec.

While provinces nominate – or in Quebec’s case, decide – annual intakes, all cases are still routed through Ottawa for application integrity testing and vetting for criminality, health and security. Ultimately, final approval rests with Ottawa.

Last year, the Canadian government set an ambitious target of admitting 1 million total immigrants from 2018-2020. The target for next year is 330,000 immigrants, of which about 190,000 will be economic migrants. The remainder will enter under the family reunification category and the refugee, humanitarian and protected category.

About one-third of the economic migrants (61,000) will be admitted through the Provincial Nominee Program. This figure excludes Quebec, which will set its numbers separately.

How the Canadian system encourages rural immigration

Giving the provinces a greater immigration policy role has helped to dramatically shift the settlement of immigrants beyond Canada’s biggest cities.

According to immigration statistics, 34% of economic migrants in 2017 landed in destinations outside Canada’s three most populous provinces, Ontario, Quebec and British Columbia – compared to just 10 per cent in 1997.

After immigrants arrive, the key issue for the provinces is retention, since immigrants can leave at any time. The provinces put a strong emphasis on ensuring that economic migrants receive a strong welcome on arrival and are provided with support programs, including education, access to local migrant community networks and assistance finding a job for those who are not sponsored by employers.

One of the biggest success stories of the Provincial Nominee Program is thinly populated Manitoba, which has added 130,000 migrants since 1998. Ninety per cent have gotten a job within a year of arriving and nearly the same number has ended up staying in Manitoba permanently. New arrivals also express some of the greatest feelings of belonging of all immigrants in western Canada.

Why this could work in Australia

South Australia, Tasmania and the Northern Territory – as well as other regional and rural areas across Australia – want more immigrants and refugees.

Attracting immigrants to less-populated states is the easy part: those willing to settle outside Sydney and Melbourne can receive more points if they are skilled migrants, possibly making the difference as to whether they come to Australia or not. The key issue is retention.

My fieldwork with refugees in Australia has shown that the majority of these migrants love living in regional communities and have received a warm welcome from locals. Our research also found they are willing to stay in regional areas if they can get jobs there. Another way of encouraging more immigrants to settle in regional areas could be to offer them priority in the family reunion process.

Importantly, Canada also doesn’t politicise immigration policy. Australia should follow Canada’s lead by giving the states a bigger seat at the immigration policy table and resisting the temptation to blame immigration for complex growth problems in our overcrowded cities.

Reducing the immigration intake cap will have no significant impact on reducing congestion or strain on public infrastructure in Sydney and Melbourne, but it could severely constrain economic growth.

The ConversationJock Collins currently receives research funding from the Australian Research Council for one Discovery Project, two Linkage Projects and one Indigenous Discovery Project.

Source: Why Canada’s immigration system has been a success, and what Australia can learn from it

‘Determining our growth:’ Morden, Man., finds hope for future in provincial immigration program

It all began 20 years ago with Manitoba’s provincial nominee program, one of the very first experiments in Canada matching foreign workers with specific job openings.

It’s a fast-track option, allowing provinces and territories to nominate people who want to immigrate to Canada, are interested in settling in a particular province or territory and have the skills, education and work experience to contribute to the economy.

Each province and territory has its own criteria and “streams” — programs targeted to specific groups such as students, business people, skilled workers or semi-skilled workers.

The more points they have, based on their work qualifications, experience and language ability, the faster they move up the queue in the immigration process. A definitive job offer by an employer is a significant benefit.

After being nominated, applicants still have to apply to Immigration, Refugees and Citizenship Canada for permanent residence status.

Manitoba’s program remains one of the most successful. It boasts high recruitment and retention rates and accounts for a significant percentage of the province’s population growth.

“We see a program that has specific objectives. It’s met them and it’s one that we can measure as a successful government program,” Winnipeg immigration lawyer Ken Zaifman said last month during a celebration of its 20th anniversary.

Province Program started Total landed nominees Estimated 2017 annual provincial growth* 2017 landed nominees Percentage of 2017 growth from nominee program
Man. 1998 130,000 21,786 9,425 43
B.C. 2001 63,230 59,502** 7,650 13
Alta. 2002 89,979 54,189 6,996 13
N.S. 2003 17,365 6,536 2,735 42
Ont. 2007 27,890 216,727 6,980 3

*Population growth estimates from Statistics Canada

**Source: Province of British Columbia

According to provincial statistics, of the 130,000 immigrants who have settled in Manitoba through the nominee program since 1998, 85 per cent were working within three months and 76 per cent were homeowners within three to five years of their arrival.

In 2012, Morden began a community-driven immigration initiative under the provincial program to attract even more people. Since then, it’s brought 50 families a year to the rural community.

“It’s a win-win situation for us because we get to choose people that our employers want. I believe it’s a win for [the program] because our retention is really good because of the support we give,” Voth said.

With an unemployment rate of just three per cent and a small local labour pool to draw from, Voth said some businesses might be hesitant to invest in the community “but because of our steady flow of people coming in and the fact that we can target skill sets to what they’re looking for, it is a really great incentive for setting up in Morden.”

The city program has been so successful that other communities across the country come to get advice on how to set up their own strategic initiatives inside their provincial nominee programs, Voth said.

It’s more than just the skill set. It’s the work ethic…. That’s a hard thing to find.– Jim Duff, vice-president of manufacturing for ON2 Solutions

The national and international rhetoric around foreign workers taking jobs from Canadians crops up now and then in Morden. Voth and others say they sometimes get asked why they’re recruiting immigrants when there are local people without jobs.

Their answer? Some of these are jobs Canadians don’t want to do while others require skills and experience that can’t be found — or recruited — in the area.

And, Voth said, very few of those who apply are chosen.

“It’s not just an open the doors and anybody comes in. We go through a tough application. We’re picking about five per cent of our applications,” she said.

“We’re picking really good people and I think the success stories of the people that have been coming in speaks a lot for the program and also helps the community to be more comfortable with the program.”

‘It’s the work ethic’

Jim Duff, vice-president of manufacturing for ON2 Solutions, is working with Voth to find up to 200 workers in the next three years. He needs electricians and plumbers to help grow his business of manufacturing oxygen concentrators for hospitals and emergency shelters for mining companies.

Duff has tried to hire local people, but says he can’t find what he needs.

“It’s more than just the skill set. It’s the work ethic. It’s the contribution to the team, the desire to be part of the team. That’s a hard thing to find,” he says.

“Our last interview process, we interviewed a couple of born and raised Canadians and the attitude was shocking, really, when it came down to it. I don’t know how to put that in words but it was a significant difference.”

Duff has talked to the school division and local educational programs to try to train workers, but said he has run into the same problem.

Jim Duff, left, is working with Morden’s immigration program to find up to 200 new employees in the next three years and says foreign workers like Victor Kovtan, right, are helping ON2 Solutions grow and thrive.(Warren Kay/CBC News)

Meanwhile, he’s thrilled with the workers he’s hired through the provincial nominee program and Morden’s strategic initiative.

“I would very honestly say that if we didn’t have these five people, we wouldn’t be where we are now. I don’t even know that we would necessarily be in business. I would say [the foreign workers are] that crucial,” he says.

Source: ‘Determining our growth:’ Morden, Man., finds hope for future in provincial immigration program