In Vancouver, Quebec millionaire migration has gone from real estate ‘conspiracy theory’ to premier-level concern
Should new millionaire migrants forfeit their C$800,000 ‘investment’ if they do not submit Canadian tax returns, and show they live in Quebec?
British Columbia’s provincial government on Tuesday imposed its bombshell 15 per cent tax on foreign buyers in Vancouver, and the real estate industry is in a state of apoplexy.
In the nine days since Premier Christy Clark turned the affordability debate on its head by announcing the tax, it has been dissected, analysed, critiqued and praised. It will apply to all residential Metro Vancouver real estate purchases by people who are neither permanent residents nor Canadian citizens.
But buried in the rubble of the tax’s blast crater was a small and barely reported nugget.
Last Thursday, Clark startled the Hongcouver blog by revealing that she had also raised concerns about the impact of the Quebec Immigrant Investor Program [QIIP] on BC’s housing market with her Quebec counterpart, Philippe Couillard, at the recent Canadian premiers’ meeting. Discussions on somehow changing the scheme continue, she said.
The Hongcouver blog has been banging on about the egregious failings of the QIIP for a couple years; most recently by making its elimination the basis of the only-slightly-grandiose One-Point Plan to solve Vancouver’s housing affordability disaster.
(a quick reminder: the QIIP allows Quebec to choose otherwise unqualified millionaires as immigrants if they hand over C$800,000 [HK$4.7 million] as an interest-free loan to the French-ing province. But data show 90 per cent of QIIP arrivals flee Quebec and about two-thirds likely end up in Vancouver - about 1,400 millionaire households per year, and tens of thousands in total over the past three decades. Most QIIPers are now rich mainland Chinese)
But not everyone has been convinced of the QIIP’s role as an affordability factor in Vancouver.
As recently as last Tuesday, Finance Minister Mike de Jong dismissed it as the stuff of conspiracy theories, although he conceded “there is undoubtedly some movement” of immigrants.
He told Global TV: “There is this fundamental truism that once, as a country, we decide to grant someone entry and permanent residency status, they are not precluded from moving around the country.
“I think this is beginning to take on a little bit of a conspiratorial theory that vast loads of people are landing in Montreal with a Vancouver baggage ticket and using it.”
But just two days later, there was Clark, taking the QIIP from conspiracy theory to premier-level concern.
“When people come into Quebec, as investor immigrants, they [Quebec’s government] want them to spend the money there, and they want them to stay there,” said Clark on Thursday, in comments reported by Global’s Keith Baldrey. “That’s the idea of the program. So they are trying to figure out how they can rework the program, to make sure people spend there and stay there.
“So, we’re going to work together on it, and we’re going to try and support him [Couillard] and find ways to make sure their program, their investor program, is for Quebec, and for Quebec alone, and when people come into Quebec, that’s where they stay.”
Stephen Smart, Clark’s spokesman had little to add. “She brought it up and the Premier of Quebec said that they were reviewing the program already. That they understood our concerns and had concerns of their own. Obviously they want to keep investors in Quebec. So they are looking at program criteria like French-language skills as an example. They agreed that BC and [Quebec] will stay in touch as they look at those changes.”
There was no press release issued regarding the discussions which took place the previous week at the July 20-22 premiers’ meeting in Whitehorse, the Yukon.
Submit tax returns or forfeit C$800,000: a viable QIIP fix?
So what exactly can be done about the QIIP? There’s little chance Quebec (or the federal government) has any plan to shut down this lucrative tollbooth entirely; nor is it reasonable to retroactively impose new policy upon QIIPers who have already arrived.
Richard Kurland, a prominent Vancouver immigration lawyer, doesn’t support the One-Point Plan’s nuclear option, but instead says he has a “practical policy solution” for the QIIP: force applicants to submit Canadian tax returns in Quebec, declaring all global income, or lose their C$800,000.
“At the end of the five-year investment term, the C$800,000 is not returned to the investor, but is held back, until the investor provides copies of at least three Canadian income tax returns reporting global income and property as a Canadian tax resident, in the intended province of destination,” Kurland suggested. He prescribed that this apply during an eight-year period, of three years preceding landing and five years afterwards.
“If this is not done, the C$800,000 is forfeit. Quebec keeps it. Result: Quebec would still be able to go forward with the QIIP, as the proposed measure would have no impact on people who abide by the promise of settlement in the province of destination.”
Kurland says that linking such a massive financial penalty to actual Quebec residency and Canadian taxpaying achieves two objectives: “No more parking families in Canada on the Canadian dime while the investor returns to [their] home country and pays no taxes to Canada. And, no more ‘trampolining’ from Montreal to Vancouver.”
Would Quebec countenance such a plan? The likely flaw is that such a measure would reduce the appeal of the QIIP, which takes in 1,750 new applications per year and is also working through a backlog of a few thousand. And those mainly Chinese millionaires would much rather live in Vancouver than Quebec .
As for Vancouverites, they have until Friday to weigh in (via this link). That’s when the Canadian government closes a one-month consultation on immigration reform. So if you think the QIIP should be shut down, changed, or is a perfectly worthwhile mechanism, now’s the time to have your say. And it probably wouldn’t hurt to CC your submission to Christy Clark and Philippe Couillard, so they have something to talk about next time they meet.
Correction: An earlier version of this blog stated that fewer than 1 in 500 QIIP immigrants spoke French. That is incorrect: according to Quebec’s immigration department, 6.1 per cent of QIIP immigrants claim to speak French. The incorrect figure of 0.2 per cent was mistakenly calculated on the basis of a figure referring to the Federal IIP, not the Quebec IIP.
The Hongcouver blog is devoted to the hybrid culture of its namesake cities: Hong Kong and Vancouver. All story ideas and comments are welcome. Connect with me by email email@example.com or on Twitter, @ianjamesyoung70.