End the Quebec Immigrant Investor Program (QIIP), the fraud-drenched immigration scheme which still pumps thousands of foreign-funded millionaire homebuyers into Vancouver’s market. Divert that immigrant intake to programs with authentic economic or compassionate purposes. Just stop selling passports at Vancouver’s expense, now.

It sounds so simple. Too simple?

Wait - surely a One-Point Plan is a major simplification?

It is, of course. The war on unaffordability requires a range of weaponry, including supply, taxation and more data.

But here at One-Point Plan HQ, we are all about priorities, and addressing the root cause of Vancouver’s unaffordability. Lack of supply didn’t get us here. If there’s inherent undersupply, it didn’t worsen last year in any correspondence with the crazy price increases. On the contrary, housing starts are at record levels.

Similarly: interest rates in Vancouver are no lower than the rest of Canada. Vancouver’s awesomeness didn’t skyrocket in recent years. Neither did over-taxation nor under-taxation. Our magnificent, restrictive geography? Unchanged. Our demographics weren’t hit by a tsunami of home-hungry millennials who somehow dodged the rest of Canada.

What DOES set Vancouver apart - both in scale at this moment, and compared to the rest of the nation and most of the world over time - is foreign money.

Foreign money, which by definition boosts the price-to-local-income ratio, is the gleaming core of Vancouver’s housing woes. It is the irreducible base element to the alchemy that saw unaffordability double in the decade since 2005 - then saw median prices soar a further 30 per cent in 2015, as the Canadian dollar collapsed and the Chinese yuan floodgates opened.

The One-Point Plan seeks to remove one of the most important conduits for that foreign money. It can’t stop all of the foreign money flowing into Vancouver, and nor should it try to stop that which builds a thriving economy. But it can stop some of it, the bits that bear no relationship to meaningful investment or tax revenue and instead treat Vancouver like a piggy bank.

The QIIP’s role in the Vancouver real estate market

The passport-selling party didn’t end when Ottawa froze the federal IIP in 2012. In fact, in 2014, likely IIP and QIIP arrivals in BC had only fallen 26 per cent from the absolute peak of intake in 2011 (full 2015 stats are not yet available). In the 10 years from 2005 to 2014, BC took in about 14,300 IIP and QIIP households. That’s right: compared to the 10-year average, millionaire migrant arrivals in Vancouver are to remain virtually unchanged for a few years, despite the Federal IIP’s axing. All thanks to Quebec.

And the QIIP is awful, built on fraud from start to finish. Quebec receives an C$800,000 loan from each selected IIP household. But instead of settling in Quebec as they vow in their applications, at least 89 per cent leave and settle elsewhere, mainly Vancouver.

Even this understates the scale of the exodus, since the Federal government knows that some IIP households use “addresses of convenience” in Quebec, according to an internal 2013 briefing document.

In its own official immigration policy, Quebec admits with droll understatement: “Immigrant investors’ contributions to Quebec’s economic development stems much more from the financial investment resulting from their selection than from their physical presence, which remains limited.”

That awareness hasn’t deterred Quebec from siphoning up the cash. Those 1,400 annual BC-bound QIIP households will give Quebec C$1.12billion in interest-free loans. BC will get none.

Knocking out a market strut

This is the point where supply hawks point out that 1,400 households only represent a small fraction of Metro Vancouver transactions: about 5 per cent of residential sales in a typical year.

But a basic understanding of the home-buying behaviour of the Chinese multi-millionaires who dominate IIP/QIIP arrivals reveals their folly.

Pretty much all data and market observers – from condo king Bob Rennie, to industry-friendly economists, to academics like David Ley and Andy Yan - agree that such buyers are concentrated in expensive detached housing, in areas like Vancouver’s Westside and Richmond.

So let’s apply conservative assumptions. Let’s assume the typical QIIP household buys a home worth C$2.5 million, the bog-standard average detached price in the City of Vancouver.

According to the REBGV, the all-sales average for Greater Vancouver last month was C$1.06million. This means that if our QIIP households represent 5 per cent of sales, they actually represent about 12 per cent of the entire dollar value of the market.

Real estate ownership made up 63.1 per cent of all unincorporated business activity by IIP migrants, according to the official Canadian Employer-Employee Dynamics Database. For all IIP businesses, both incorporated and unincorporated, real estate ownership was easily the biggest category, at 48.8 per cent.

Modest adjustments to our assumptions boost the QIIP’s dollar share of the Greater Vancouver market. If their average purchase is C$3.5 million, closer to the Westside detached average, their dollar share leaps to more than 16 per cent. If only one in three such millionaire households buys a second property based on the same assumptions, then it’s 22 per cent of the entire Greater Van market. And so on.

These calculations represent the dollar proportion of all sales of all housing types, in all areas from Pemberton to the deepest Fraser Valley. Yet, the QIIP’s impact is not so dilute: it is focussed to an extreme degree on detached housing in areas like Richmond and the Westside, the epicentres of the unaffordability boom in the past decade. The QIIP is thus a vital strut that supports these sectors, and these sectors arguably support the whole market, as other buyers look further afield, and cashed-up boomers hand off the same money to their kids to buy condos.

The One-Point Plan aims to instantly knock out that strut. Scary, risky stuff, yes. But the One-Point Plan isn’t about preserving equity, mitigating risk or allowing cosy price growth at a decelerated pace. It’s an affordability plan.

But isn’t Quebec a law unto itself?

Could it be done? Yes. The process of winding down Quebec’s IIP could begin as soon as the federal government dares incur the wrath of that province, which says it raised C$671.9 million in revenue from the scheme’s billions in loans from 2000 to 2014.

Although Quebec is in charge of choosing its immigrants, Federal authorities actually issue their certificates of permanent residency, and decide the speed at which to do so.

According to Vancouver immigration lawyer Richard Kurland, there is no doubt that “the feds have the legal right, pure and simple, to cancel the program”. “This is not about a constitutional or legal barrier. There is neither,” he said.

And the time for the Feds to call time on the QIIP is ripe.

The local real estate board remains steadfastly in denial about the role of foreign money, but you might as well ask a meth dealer about the virtues of moderation.

Why should he? BC’s government isn’t complaining. Premier Christy Clark’s six-point affordability plan unveiled on YouTube this week makes no mention of foreign money whatsoever, let alone the specifics of the QIIP.

The math doesn’t even matter

Do the federal and BC provincial government care exactly how much of Vancouver’s crushing housing unaffordability is related to foreign funds associated with the QIIP? Probably not – but herein lies the true beauty of the One-Point Plan.

It doesn’t matter whether they, or you, or the development industry, accept the evidence that the QIIP is turbocharging the market. It doesn’t matter if you don’t like the math. It doesn’t even matter if you are the real estate board’s chief economist.

Because irrespective of all these things, the QIIP is horrible. It is a money-grubbing prank perpetrated upon Vancouver by Quebec. It is a betrayal of Canadian ideals that diminishes residency and citizenship to the status of mere commodities. It makes mockery of the true worth of immigration as a whole. It is a scam, and it needs to stop.

Correction: An earlier version of this blog stated that 0.1-0.2 per cent of 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 was mistakenly based upon 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 protected] or on Twitter, @ianjamesyoung70