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over 46,000 wealthy immigrants took a back door into Vancouver and Toronto’s housing markets


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January 29, 2018 6:45 pm
Updated: January 29, 2018 6:58 pm

How over 46,000 wealthy immigrants took a back door into Vancouver and Toronto’s housing markets

271837_10100672125736641_1074734122_o.jpBy Jesse FerrerasNational Online Journalist  Global News
Condo towers are shrouded in dense fog as a man walks a dog along the seawall in downtown Vancouver, B.C., on Sunday January 3, 2016.

Condo towers are shrouded in dense fog as a man walks a dog along the seawall in downtown Vancouver, B.C., on Sunday January 3, 2016.

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Over 46,000 wealthy immigrants took a back door into Vancouver and Toronto’s housing markets over the past three decades, according to custom Census data obtained exclusively by Global News.

That back door is the Quebec Immigrant Investor Program (QIIP).

Established in 1986, it offers permanent residency to international business people with net assets of at least $1.6 million, who make an interest-free investment of $800,000 in la belle province — and the government returns their money after five years.

Applicants are supposed to settle in Quebec.

But data shows just how many of them have ended up elsewhere – leaving Quebec with their investments, other provinces with their health care bills, and cities with flows of foreign capital that have been linked to soaring home prices.

Coverage of foreign buyers on Globalnews.ca:

The data, which includes both primary and secondary applicants, showed that 57,935 investor immigrants who came through Quebec were living in Canada as of 2016.

Nearly 28,000 of them (48.3 per cent) were living in B.C., while almost 22,000 (37.9 per cent) were in Ontario.

Only 6,050 investor immigrants who came through Quebec (10.4 per cent) were living in the province at that time.

This chart shows where immigrant investors who came to Canada via Quebec were located as of 2016:


Vancouver was a major recipient of investor immigrants. The data showed 27,080 (46.7 per cent of the total) living in the Vancouver region as of 2016, with 8,590 (14.8 per cent) in the City of Vancouver, 6,835 (11.8 per cent) in Richmond and 3,160 (5.5 per cent) in Burnaby.

Meanwhile, in Ontario, there were 19,265 (33.3 per cent) investor immigrants in the Toronto area. Major destinations within that region included the City of Toronto (8,760), Markham (3,510), Richmond Hill (2,355) and Mississauga (2,060).

By contrast, there were 5,660 investor immigrants in the Montreal region, and very few in any of Quebec’s other Census Metropolitan Areas (CMA).

WATCH: Quebec’s Immigrant Investor Program criticized for housing prices


As permanent residents, no foreign buyers taxes can touch these people. Nor can any measure to curb foreign demand in Canadian real estate.

The numbers didn’t surprise Josh Gordon, an SFU public policy professor who has focused on Toronto and Vancouver’s housing markets.

“There has been kind of insider accounts that suggest this is what’s been going on,” he said of QIIP applicants settling outside Quebec.

“To have this data that confirms this should put extra pressure on governments to address this awful program.”

Gordon described the QIIP as a “farce,” saying that Quebec benefits from the program while other jurisdictions incur the costs of hosting wealthy immigrants in their provinces.

“The Quebec government receives an interest-free loan, while the house price pressures and the social service costs of supporting investor immigrant families, who have historically paid low amounts of tax, falls on British Columbia and Ontario,” he said.

A pipeline funneling foreign billions into B.C.

Estimates of where these households came from have varied over the years.

In the mid-1990s, investor immigration to Canada, which came both through Quebec and the cancelled federal Immigrant Investor Program (IIP), was dominated by applicants from Hong Kong and Taiwan.

From 2007 to 2011, the country of last residence for 86.8 per cent of principal applicants to the IIP was in Asia, Australia or the Pacific, according to a federal report.

UBC geographer Daniel Hiebert, who has focused on international migration, said investor immigration is likely now dominated by applicants from Mainland China.

The federal report also showed that investor immigrants are heavily invested in real estate.

READ MORE: Foreign buyers may not live in Vancouver, but their money sure does: StatsCan

As of 2016, there were 15,285 investor immigrant households in B.C. after they came through Quebec and the IIP.

If each household brought $1 million with them, that’s an impact of $15.285 billion over three decades.

Divide that by 30 years, and that’s an annual average of about $510 million over the life of Canada’s investor immigrant programs — a significant impact in a housing market, said UBC economist Giovanni Gallipoli.

“That’s an underestimate, because these guys bring in more than $1 million per year,” Gallipoli said.

Gallipoli did a “back-of-the-envelope” calculation to estimate the wealth that investor immigration has brought to B.C.

He took the average price of a property in the area covered by the Real Estate Board of Greater Vancouver (REBGV) (about $990,000 in 2017) and average monthly sales in the same year (about 3,000).

READ MORE: Report recommends Canada revive wealthy immigrant program linked to soaring home prices

The calculation yielded about $36 billion spent on Metro Vancouver real estate in a single year.

Then he took the number of investor immigrant households.

Gallipoli assumed each of them spent $1.6 million on real estate, which was the benchmark price of a single-family home in Greater Vancouver in December 2017, according to the REBGV.

If each of these households owned one benchmark single-family home, their financial impact on the market would be just over $24 billion — an estimated 67 per cent of the Vancouver market in a single year.

But even that’s a conservative estimate, he said.

“Even if in each year, only a fraction of that money was mobilized to buy real estate, it would have a non-negligible effect on prices and inventory,” Gallipoli told Global News.

But why do so many investor immigrants who come through Quebec end up in Vancouver or Toronto?

Two successful QIIP applicants who have remained in that province have some ideas.

Mr. Ho and Mr. Zheng

Mr. Ho, a logistics professional from China’s Hebei province, came to Canada through the QIIP in 2016, after he learned about the program through an immigration company that held a conference in his hometown.

He now owns a home, a hotel and a supermarket in Montreal.

Speaking through a translator, he said language skills can be an issue for people who come through the QIIP.

It’s simply easier for applicants to live in Toronto or Vancouver, where they can manage with “simple English.” Those areas also have communities where they can speak their own languages.

The Shanghai skyline on March 7, 2008.

The Shanghai skyline on March 7, 2008.

Lucas Schifres/Pictobank/ABACA

Mr. Zheng, a securities professional from Shanghai, initially wanted to come to Canada through the federal IIP before it was shut down in 2014.

But when that door closed on him, another one opened through Quebec. He arrived in August 2017.

Zheng came to Canada hoping he could move his family and have his kids study here.

READ MORE: This 1989 documentary on Asian investment in Vancouver shows how little the debate has changed

Like Mr. Ho, Zheng has settled in Montreal and bought a house there, though he has yet to establish a business. And he admitted to spending a good part of the year in China.

Through a translator, he said one of the reasons why most investor immigrants settle elsewhere is that they already have friends in those cities.

He said it’s easier for many of them to fly back and forth to China from Toronto or Vancouver. Many also don’t like Quebec’s weather, he added.

The investor immigrants that Zheng knows also buy big homes — usually for their families, for a long-term stay, he said.

Conservative estimates

Research by UBC geographer David Ley shows how conservative Gallipoli’s estimates of investor immigrants’ capital were.

In his book Millionaire Migrants, Ley analyzed “total funds” that investor immigrants disclosed to prove their financial capital in the 1990s.

Ley looked at total funds held by investor immigrants from 1994 to 1997 and found that they “fluctuated between a mean level of $2.47 million in 1994 and $2.22 million in 1996” — and those numbers didn’t necessarily represent their entire net worth.

Those numbers loom large when compared against the average net worth of British Columbians and Vancouverites around that time.

Average net worth in B.C. in 1999 was $395,400, while in Vancouver it was $409,600, according to the Survey of Financial Security (SFS).

This chart compares average “total funds” available to investor immigrant applicants in 1996 against average net worth for Vancouverites and British Columbians in 1999:

Ley derived an even larger figure when he combined entrepreneur and investor immigrants — two streams that once formed part of Canada’s Business Immigration Program (BIP).

First, he took the smallest annual record of average total funds for business immigrants between 1994 and 1997 — $2.22 million for investor immigrants, $1.2 million for entrepreneurs.

Then, he multiplied those figures by the number of principal applicants who landed in B.C. from 1988 to 1997.

From that, he estimated that $35 to $40 billion of foreign capital could have landed in B.C. in this period, with as much as $27 billion hitting Vancouver alone — and that didn’t capture the money that business immigrants held overseas.

READ MORE: Foreign buyers ‘not the problem’ in Canada, says CEO of Chinese overseas real estate portal

Ley was not available for an interview on this story.

But Hiebert said it’s likely that these “total funds” have increased, “since the vast majority use these funds to purchase a home and housing prices have risen.”

Gordon said there’s “no doubt” that programs like investor immigration help to “decouple the housing market from the labour market and make housing more unaffordable.”

He said the entry of such capital creates a “ripple effect” that begins in wealthy neighbourhoods.

“What happens is that the money arrives in the high-end neighbourhoods, which means that people who would have previously bought in those neighbourhoods are no longer able to,” Gordon said.

Then, they “bring their greater purchasing powers to second-tier neighbourhoods, and push the people who would have previously bought there out further, and so on and so forth.”

“Whatever the initial intentions, there is no doubt that these programs have facilitated the flow of wealth into real estate in Toronto and Vancouver, and that this has played a big role in the relative unaffordability of those two cities historically,” he added.

Tax impacts

The soaring cost of homes isn’t the only issue that has been tied to investor immigration.

Many investor immigrants also declare low incomes, and therefore don’t pay very much Canadian income tax, despite their wealth.

A Global News study from 2016 found that “business class” or “investor” immigrants who had spent two decades in Canada had the smallest employment income of any immigration category in 2013.

They declared lower incomes than refugees.

READ MORE: Refugees out-earn millionaire ‘business class’ immigrants years after arriving in Canada

Ley reached a similar conclusion in Millionaire Migrants: he found that investor immigrants declared average total income of $11,918 in the 1997 tax year — less than the average of $18,621 for all immigrants and refugees.

As permanent residents, they’re entitled to all the social benefits — including health care — that those taxes might pay for.

The lower tax bills were one reason why the federal government cancelled the federal immigrant investor program.

The government also said the IIP produced “limited economic benefit,” and that investor immigrants were “less likely to stay in Canada over the medium- to long-term.”

Quebec’s program, however, has continued to operate.

Montreal skyline is shown at night on Wednesday, March 1, 2017.

Montreal skyline is shown at night on Wednesday, March 1, 2017.


La belle province has set at 1,900 the maximum number of applications it expects to receive under its investor immigration program for the period of May 29, 2017, through Feb. 23, 2018.

If trends continue as they have for the last three decades (and if all those applications are accepted), that could mean just under 900 households will end up in Vancouver through the QIIP.

With net assets of at least $1.6 million each, about $1.4 billion in capital could land in Vancouver’s housing market within that time frame — and that, again, could underestimate applicants’ total funds.

The QIIP requires applicants to “intend to settle” in Quebec. But as permanent residents, they don’t have to, Quebec Immigration Minister David Heurtel said in a statement to Global News.

“Like all permanent residents and all citizens of Canada, they are free to move and settle wherever they wish,” he said.

The program is only expected to keep growing as Montreal becomes a more attractive place for international immigrants, Marc Audet, the CEO of Auray Capital, an investment dealer and a financial intermediary for the QIIP, told Global News.

But as this happens, the city might also start retaining more investor immigrants, he added.

“We have more direct flights from China for the last two years, so that’s another thing to help with their retention,” Audet said.

He said Quebec doesn’t want to ship QIIP applicants to places like Vancouver or Toronto, but sometimes, it’s difficult to keep them there for reasons such as language.

There are signs that Quebec has tackled the retention issue.

Vancouver immigration lawyer Richard Kurland told Global News that Quebec has changed its selection process for the QIIP, screening prospective applicants for ties to other provinces.

“If you have relatives elsewhere in Canada; children in school in another province; own property in another province; work in another province… don’t bother to apply,” he told Global News in an email.

Apartment buildings in downtown Vancouver, on the north shore of False Creek, Vancouver, B.C.

Apartment buildings in downtown Vancouver, on the north shore of False Creek, Vancouver, B.C.


Audet, meanwhile, wasn’t convinced that investor immigration had a strong effect on home prices.

He cited a Conference Board of Canada report from last year, which cited academic research showing immigrant investors were found to have “contributed to a three-per-cent increase in prices” – a finding whose methodology has been questioned.

“[The] bottom line is those guys don’t have a big impact,” Audet said.

Concerns about the QIIP have nevertheless been shared by members of B.C.’s major political parties.

In 2016, then-premier Christy Clark said she would work with Quebec’s premier to make sure that investor immigrants “spend there and stay there.”

WATCH: Quebec immigrant investor program impacts B.C. real estate


In that same year, then-BC NDP MLA, now-Attorney General David Eby said, “No matter what, extreme wealth should not put you at the front of the line for immigration.

“And no matter what, everyone needs to pay their fair share of taxes in our community.”

Now in government, the BC NDP have promised “tax changes that will affect demand” in the February budget.

In a statement, B.C. Municipal Affairs and Housing Minister Selina Robinson said, “in our upcoming budget, we will take real action to make life more affordable for all British Columbians, including by addressing domestic and foreign speculation in the housing market.”

But any measure to take on foreign demand wouldn’t apply to investor immigrants because they’re permanent residents.

While on a trade mission to China, Premier John Horgan said he wasn’t aware of any effort to try and close this back door into B.C.’s housing markets.

He said he would raise the issue with Jobs, Training and Technology Minister Bruce Ralston, who was with him on the trip.

Horgan said immigration is a “key component” of the fields that Ralston has been asked to manage, “and we want to make sure that the programs that are in place are meeting the needs of British Columbians first and foremost.”

He said he wanted to ensure that people weren’t “taking advantage” of access to Canada, or to B.C.

  • With files from Richard Zussman

© 2018 Global News, a division of Corus Entertainment Inc.

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(re: article cité dans le message posté ci-dessus)

Pas de surprise, mais une emphase différente quant aux préoccupations soulevées.

J'ai lu l'article en entier:  ça ne fait que confirmer mes diverses observations sur le phénomène.  Je comprend bien les préoccupations exprimées, surtout à Vancouver et à Toronto quant à l'impact indésirable sur les prix de l'habitation dans ces villes; je remarque également que, par voie de conséquence (de la migration subséquente dans d'autres provinces), l'impact sur les prix montréalais soit bien moindre.  Mais il y a une autre conséquence qui nous affecte tous, celle qui découle du fait que les revenus déclarés (et imposables) des «immigrants-investisseurs» ainsi admis sont en moyenne très faibles, alors même que ces personnes (ou leurs enfants par exemple) ont accès à nos programmes gouvernementaux (surtout en éducation mais aussi en santé).  Le Gouvernement du Québec retire un avantage, mais minime (prêts sans intérêt pour une période limitée).

Sur le plan macro-économique canadien, ce programme a pour effet de gonfler l'afflux de capital étranger (sans égard à l'immigration).  Pour déterminer si c'est désirable ou non sous ce rapport, il faut faire appel à d'autres considérations.  Qu'il suffise de dire que l'afflux de capital étranger n'est pas, toujours et en toutes circonstances, bénéfique à l'économie.

Je préférerais nettement que le programme québécois soit limité aux «immigrants» qui investissent dans la création de nouvelles entreprises.  L'acquisition d'entreprises existantes ne se qualifierait pas.  Un «investissement» dans l'immobilier résidentiel non plus. Rien en cela n'empêche l'investissement étranger pour l'acquisition d'entreprises existantes ou l'achat de propriétés résidentielles, mais ça ne se ferait pas sous le couvert d'un programme d'immigrants-investisseurs.  Et rien n'empêche non plus l'immigration (des personnes réelles), mais que ce soit pour les bonnes raisons, conformément à nos politiques en la matière.

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En lien avec ça :



Chinese millionaires 'lined up' to buy Montreal real estate: expert

Record-breaking sales numbers. Bidding wars. A growing number of buyers from China. As a lifelong Vancouverite who left for Montreal two years ago, it all leaves me with a feeling of déjà vu.

In Vancouver, the boom began with bidding wars in tony neighbourhoods with million-dollar mansions, but the impact eventually rippled throughout the metropolitan area.

Today you are lucky to find a million-dollar teardown in Vancouver.

Between 2005 and 2017 in Vancouver, house prices increased more than 173 per cent. In Montreal today, the median price of a detached home on the island is just under half a million dollars. In Vancouver, it’s almost $3 million. Yet the median family income is similar in both cities. In Vancouver, it’s just under $80,000, compared with $77,000 here in Montreal.

But Montreal is not Vancouver, or Toronto, for that matter. Most analysts I spoke to say they don’t believe house prices will climb quite as high here. We are not locked on a finite piece of land like Vancouver is. We don’t have as many high-paying corporate jobs as Toronto does.

And the biggest lid on speculation might be the thing Montrealers hate even more than a seemingly endless winter: bureaucracy.

According to immigration lawyer and policy analyst Richard Kurland, the biggest reason Montreal has been overlooked by foreign property investors so far is taxation and regulation.

While B.C. regulators seemed to turn a blind eye to speculators exploiting the system, Quebec has shown the muscle to crack down on shady dealings through its own provincial tax collection system, Kurland said.

But now governments in B.C. and Ontario are imposing new taxes on foreign buyers and beginning to enforce existing regulations on property ownership to ensure these buyers pay their fair share of taxes. As a result, Montreal is looking more attractive, he said.

“I expect to see Vancouver investments slide sideways, but that money’s got to go somewhere,” said Kurland. “It makes it more logical to consider other destinations like Montreal.”

Kurland, a former Montrealer now based in Vancouver, has advised the federal government on immigration issues since the 1990s. He said it is all but inevitable that Montreal will see increasing interest from Chinese buyers, thanks to an exponential increase in millionaires in China, and a commitment to immigration that all but guarantees a flow of up to 2,000 new millionaires per year arriving in Quebec from overseas.

Under Quebec’s investor program, immigrants with more than $1.6 million in net assets can settle in Quebec if they agree to invest a minimum of $800,000 over a five-year term. Between May 2017 and February 2018, the province planned to accept up to 1,900 applications through this program, with as many as 1,330 to come from China, Hong Kong and Macau.

“The number of millionaires who want to escape Chinese pollution is so big that they are willing to pay big bucks to access Canadian status,” Kurland said. “They are not bad people, and their source of funds is legitimate. They just want a better life for their kids.”

Now that Quebec has tightened up regulations to prevent millionaires from coming here and rapidly trampolining to Vancouver or Toronto, Kurland said the wealthy immigrants who land here are even more likely to invest in high-end residential property.

“It doesn’t matter to them if they pay $1.7 million or $2.3 million for a home,” Kurland said. “Folks from Hong Kong see the prices here as a joke. It’s so much cheaper here.”

According to Kurland, accepting 1,000 millionaires a year into Quebec from China barely makes a dent in the millionaire supply, because there are many, many more families in the queue waiting for their applications to be reviewed.

“There’s a supply of buyers — millionaire buyers — lined up,” Kurland said. “It’s the golden heart of the demand for Montreal property.”

With a limited supply of housing here for those used to millionaire lifestyles, Montrealers can expect the price of luxury real estate will likely go up, Kurland said.

And indeed, the hot streak in Montreal real estate has, by all accounts, been fuelled by sales of luxury homes.

In 2017, on the island of Montreal, 1,338 single-family homes were sold with a list price between $700,000 and $5 million. While overall sales rose eight per cent over the previous year, Centris data reveals that sales spiked by 19 per cent for homes between $500,000 and $700,000 and by 30 per cent in homes listed over $700,000.

Analysts at Statistics Canada, the Canadian Mortgage and Housing Corporation and the Quebec Federation of Real Estate Boards have all been working in recent months to quantify just how many non-resident buyers from other countries are investing in Canadian real estate.

In most Canadian cities, they found the number of transactions involving buyers with a home address in another country is less than one per cent, with a high of almost five per cent in Vancouver, three per cent in Toronto and less than two per cent in Montreal.

The numbers might seem small, but it is a mistake to say the impact is insignificant.


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1 hour ago, p_xavier said:

I have a major problem with the minimum $800K "investment" in Quebec including a Real Estate deal.  That isn't an economic investment, its buying an empty shell as a way to artificially prop up a single industry.  

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26 minutes ago, SKYMTL said:

I have a major problem with the minimum $800K "investment" in Quebec including a Real Estate deal.  That isn't an economic investment, its buying an empty shell as a way to artificially prop up a single industry.  

C'était le modèle à Hong Kong et ils ont retiré l'immobilier, et depuis quelques années le programme au complet.

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