Odd bedfellows: As Canada heads to polls, who agrees that offshore money helps fuel Vancouver’s housing market?
The politics of immigration, offshore money and Vancouver housing prices can be a tricky business. It makes for some pretty odd bedfellows, as Canada heads towards next month’s federal election.
Take Green Party leader Elizabeth May and the Conservatives’ minister of multiculturalism and defence, Jason Kenney.
It was under Kenney as immigration minister that the federal government decided to shut down the Immigrant Investor Program, a scheme which (in conjunction with Quebec’s still-running IIP) brought tens of thousands of rich, mostly Chinese, homebuyers to Vancouver. By the time the shut-down was implemented last year, Kenney had moved on from the immigration portfolio, but he remains justifiably proud of bringing down this out-of-control scheme, which had a queue of 60,000 at the time of its demise.
On Twitter last month Kenney wrote in an exchange with Vancouver journalists that “the issue revolves around abuse of Investor Immigrant Program, leading to speculative real estate transactions.”
For a mainstream political figure to draw the explicit connection between immigration and the property market is unusual, particularly since Kenney’s leader, Prime Minister Stephen Harper has danced around the subject by pledging instead to tackle concerns that “foreign, non-resident” buying is the problem for Vancouver.
But it probably isn’t, and the subtleties of language are extremely important. There may be no convincing evidence of many “foreign, non-resident” buyers in Vancouver - the world’s second least-affordable city according to Demographia's* study of 378 cities in nine major markets - but there are most definitely a great many millionaire immigrant buyers. More than 50,000 rich newcomers have arrived in the city under the two IIPs in the past 10 years, representing about 14,000 households.
Despite his leader’s line, Kenney (sometimes touted as a successor to Harper) has for years been notable for his frankness on the subject of how offshore money coming via wealthy immigrants has fuelled property prices in Vancouver.
In 2012, he discussed the Quebec IIP with the editorial board of the Montreal Gazette, saying that: "People in Vancouver are always asking me why are we facilitating this because it is leading to inflation of real estate prices. Which is great if you are well-established and you have paid down your mortgage. But if you are a young family starting out, good luck being able to afford a house in Vancouver. A lot of people who aren't rooted in Vancouver are inflating the costs."
In 2013, in a parliamentary committee, Kenney was letting rip again, describing the practice of Quebec IIP applicants moving directly to Vancouver as “fraud”. He pointed out that 90 per cent of QIIP immigrants end up leaving the province; most of them likely head for Vancouver.
But there is little consistency within the Conservative Party about the role of foreign money in the Vancouver market. In fact, Kenney’s successor at immigration, Chris Alexander, told me last year that he flat-out rejected the connection, and that it played no part in the decision to axe the IIP: “We look at all factors but there was absolutely no concern [about the impact on property prices].”
Let’s turn now to the BC-based Greens leader Elizabeth May. Her party’s housing strategy, released on August 25, includes the very specific assessment that “Canadians are increasingly unable to access homes in major cities where the market has been inflated by off-shore money”.
She pledged to “ensure that people coming to Canada come to make their lives here – not just park their wealth here while not contributing through taxes or residency to the lives of their communities”, which sounds remarkably similar to Kenney’s stance.
It’s an entirely laudable goal. The Greens’ aim is off, though; instead of directing it at Quebec’s fraud-riddled IIP, which continues to pump thousands of millionaire home buyers into Vancouver, the Greens’ policy instead singles out the new Immigrant Investor Venture Capital Pilot Program, claiming it “has made matters [of affordability] much worse”.
It hasn’t though. The IIVC has been a near-total dud, attracting just six (count ‘em!) applications worldwide in its first six months of operation. And not a single immigrant has yet made it to Canada under the scheme.
What of the two main opposition parties, the NDP and the Liberals?
The Liberals’ immigration spokesman John McCallum did not specifically address the party’s stance on wealth-determined immigration and its impact on property prices in his response to my queries, but he did reject Kenney’s assertion (made via Twitter) that the Liberals want to revive the IIP.
"Once again, Jason Kenney is deliberately misleading Canadians to stoke fears and create divisions,” said McCallum. “The Liberal Party of Canada has not said it will revive the Immigrant Investor Program. However, we did criticize the Conservatives for tearing up all existing applications upon cancellation of the program.”
Axing the queue represented “careless disrespect” for the applicants, McCallum said.
Comment is being sought from NDP immigration critic Don Davies*.
In truth, a politician of any stripe who wants to challenge the status quo of wealth-determined immigration, and specifically the very existence of the Quebec IIP, is going to have a fight on their hands. For almost three decades, that scheme has allowed Quebec to act as little more than a toll collector for rich immigrants making their way to Vancouver. And getting Quebec to shut down its lucrative toll booth won’t be easy.
[*Update: this story has been updated to include a link to the latest Demographia study and to describe its scope]
[*Update A previous version of this blog mistakenly referred to Teresa Armstrong as the NDP's immigration critic; she is the NDP immigration critic in the Ontario provincial legislature]
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 protected] or on Twitter, @ianjamesyoung70. RSS feed here.