Canada plans to stop selling citizenship

The federal government has announced that they are closing the immigrant investor program.

So how does this wash out with Vancouver HAM-hype?

If prices crash now does that mean that all the salespeople that used ‘foreign money’ instead of ‘in debt locals’ as a justification for high prices were correct?

A source said the government is acting based on data that show that, 20 years after arriving in Canada, an immigrant investor has paid about $200,000 less in taxes than a newcomer who came in under the federal skilled worker program, and almost $100,000 less than one who was a live-in caregiver.

In the past 28 years, more than 130,000 people have come to Canada under the investor program, including applicants and their families.

And what about those ‘in debt locals’?

Turkey shared some interesting numbers on the sheer size of Canadian debt growth:

Let’s start with non-mortgage debt:

Equifax said Monday that its figures show that consumer debt, excluding mortgages, rose to $518.3-billion through the end of November 2013. That was up 4.2 per cent from $497.4-billion a year earlier.

Up 20 billion dollars in a year; the total is 520 billion. That works out to about $15k per Canadian man, woman, and child.

Meanwhile, overall consumer debt, including mortgages, also continues to rise — up 9.1 per cent to $1.422-trillion from $1.303-trillion a year earlier.

Up 120 billion dollars in a year; the total is 1.42 billion. That’s about $41k per Canadian man, woman, and child.

Now the editorializing bit.

High debt levels are not a big concern in current conditions, which signal a stabilizing economy, improvement in the unemployment rate and an anticipated gradual increase in interest rates.

An increase in debt, by itself and without context, is not a troubling sign in an improving economy. It’s the friggin’ size of the thing that’s a catastrophe! These numbers are absurd. Plus, BC’s numbers have traditionally been worse.

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Melba
Guest
Melba

….If prices crash now does that mean that all the salespeople that used ‘foreign money’ instead of ‘in debt locals’ as a justification for high prices were correct?…..

Not necessarily. If prices crash now, it might just mean that all the salespeople were successfully able to dupe the average moronic Vancouver buyer into thinking ‘foreign money’ was a justification for high prices.

Turkey
Guest
Turkey

Quibble: I typed “1.42 billion” when I meant “1.42 trillion”. Not that it matters; 9 zeros is just as hard to visualize as 12 zeros. The rest of the math is correct.

IoriYagami
Member
IoriYagami

Just went to 2 presentation centers this weekend: Riva (richmond) and Empire QE (vancouver). There seems to be quite a few units available at Riva. At Empire, everything in the top 2 floors is pretty much taken. Price is in the range of $800/sq ft too! I guess it is slowing down in richmond, but not in vancouver??

BWilson
Guest
BWilson

Canada 5-year rates up around 5 basis points today + end of investor immigrant scheme. Tough day for the RE spin machine around here.

RaggedyRenter
Member
RaggedyRenter

That’s about 100B extra mortgage debt a year on about 450 thousand houses sold via MLS across Canada.
That’s 9.1% increase on total mortgage debt fueling a 10% increase in national average house price.

If loose liquidity doesn’t change, we’ll just continue this party come hell or high water.

VMD@work
Guest
VMD@work
1. officially confirmed in the Budget Document(PDF): Canada to End Immigrant Investor Program (pg 89) “The current Immigrant Investor Program stands out as an exception to this success. For decades, it has significantly undervalued Canadian permanent residence, providing a pathway to Canadian citizenship in exchange for a guaranteed loan that is significantly less than our peer countries require. There is also little evidence that immigrant investors as a class are maintaining ties to Canada or making a positive economic contribution to the country. Overall, immigrant investors report employment and investment income below Canadian averages and pay significantly lower taxes over a lifetime than other categories of economic immigrants. For these reasons, the Immigrant Investor Program has been paused since July 2012 and the Entrepreneur Program since July 2011. Economic Action Plan 2014 proposes to end these underperforming programs. To eliminate… Read more »
b
Guest
b

Vancouver sun has nothing about the invester program

VMD@work
Guest
VMD@work
re: housing market: (pg 47) “Resale activity and prices have picked up modestly since mid-2013. However, in contrast to the national price gains from 2001 to 2007 which were broad-based, the most recent national price appreciation has been driven by developments in Vancouver and Toronto. The strength in resale prices in these two cities reflects stronger price gains in the single- and semi-detached market segments that are more sensitive to land scarcity. Recent developments suggest that actions taken to ensure the long-term stability of the Canadian housing market have been effective. The Government remains vigilant in monitoring the sector and is willing to take further action should the situation warrant.” re: CMHC: (pg 135) For 2014, Canada Mortgage and Housing Corporation (CMHC) will pay guarantee fees to the Receiver General to compensate the Government for mortgage insurance risks. This will… Read more »
would-be buyer
Guest
would-be buyer

This story has been updated in the Vancouver Sun to reflect the new Federal Budget’s abolishment of the investor class immigrant:

http://blogs.vancouversun.com/2014/02/10/is-vancouver-ready-for-influx-of-up-to-45000-wealthy-chinese

I don’t subscribe to the Sun, so I can’t read all the comments, which I’m sure are interesting.

I do find it interesting that over 45,000 wealthy Chinese are sitting in queue trying to enter Canada using the investor class category, with most wanting to reside in Vancouver. It shows that these wealthy mainland Chinese are not willing to buy Vancouver real estate without having residency. They could just buy Vancouver real estate if it’s such a good investment or if they were just trying to park their cash, as some commenters have noted. No? Why aren’t all these would-be Chinese immigrants who are desperate to come to Vancouver not buying our real estate?

UBC in crisis mode
Guest
UBC in crisis mode

I don’t see any change in Vancouver luxury housing market even the Investor Program stopped.

Chinese travelers to Canada can hold 10-year visitor visa, so they can come often and keep buying luxury houses (no foreign ownership restrictions).

Shanghai apartment price:
Price per Square Meter to Buy Apartment in City Centre 8,487.17 C$
($788/square ft)

Rental in Shanghai:
Apartment (3 bedrooms) in City Centre 2,628.77 C$

It seems Vancouver is cheaper.

taylor192
Member

#9 Most of the subscription news sites can be defeated by using the Incognito tab in Chrome. They store cookies that track usage, and Incognito mode doesn’t allow cookies. Not that I do this of course…

BWilson
Guest
BWilson

Coincidence?

One of the biggest HAM pumpers, Cameron MacNeil “looking to Calgary” the day the investor visa program scrapped:

http://www.biv.com/article/20140211/BIV0111/140219983/vancouver-condo-developer-looks-to-calgary-for-future

VMD@work
Guest
VMD@work
Guess what the top 3 threads today in local chinese RE forums are about? Over 4000 views on the thread titled “Canadian government abolishes immigrant investor program. Over 40000 waitlisted applications cancelled. Very Bearish for Vancouver RE” People are speculating that the next step might very well be limiting/taxing foreign ownership. Realtors/Pumpers wasted no time to dish out their pump piece, saying “Rich people can still come to Canada on a 10 year Visa. RE won’t be affected”. Realtors/pumpers based in outlying areas were quick to bash West Van / Van West, saying there will be no more “greater fools” to pass the baton to. While “RE in other areas of greater vancouver will continue to appreciate due to local demand” They were countered by people commenting: “Rich people / officials from China care most about foreign citizenship status for… Read more »
Yunak
Guest
Yunak

Canada plans to stop selling citizenship!

Too bad, immigrant investor will miss the beer.

http://greatideas.people.com/2014/02/11/canadian-beer-fridge-olympic-village/

Van coffee
Guest
Van coffee

What about the quebec investor immigrant program.

BWilson
Guest
BWilson

@ Van Coffee

I suspect the Federal Gov’t will put a lot of pressure on Quebec to scrap the program. Based on recent comments form the immigration minister it’s clear they’re looking at the Quebec program closely:

Federal Immigration Minister Chris Alexander issued a statement Monday saying his department is looking at the issue.

“If someone applies to immigrate to a particular province, that is where they are undertaking to reside. While we respect provincial jurisdiction, as a matter fairness, we cannot send federal transfer payments to one province for someone living in another.

“That saddles the other provinces with unfair resettlement costs, such as health care and education,” the statement said, adding. “This is a matter in which we are actively engaged.”

http://www.cbc.ca/news/politics/millionaire-immigrants-invest-in-quebec-and-then-move-on-1.2458162

When 90% of the applicants don’t settle in Quebec, they really don’t have many argument for keeping it.

patriotz
Member

@10: “Chinese travelers to Canada can hold 10-year visitor visa, so they can come often and keep buying luxury houses (no foreign ownership restrictions).”

Right, keep an empty house in Vancouver just for the hell of it. Surely the number of people willing and able to do so must be an order of magnitude or more lower than those who have applied to immigrate under the investor program.

patriotz
Member

@16: “I suspect the Federal Gov’t will put a lot of pressure on Quebec to scrap the program. ”

The feds can scrap it themselves if they want to. Provincial immigration schemes operate under Federal delegation of power.

I doubt the Cons care much about what Quebec’s reaction would be (particularly the current PQ government), but such a move might make other provinces which operate provincial nominee schemes nervous.

Van coffee
Guest
Van coffee

BWilson
I suspect you are correct.

Looks like this tax policy issue resonated with the people of this country.

Looks like i will keep voting conservative.

Good on them for scrapping this.

I eagerly await the “perceived fallout” in the west side from the elimination of this program.

VC

paulb
Member
Active Member

New Listings 319
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back tax
Guest
back tax

I propose a $200k tax per head for those that are already in the country.

mac
Member
mac

Those of us who are HAM will be gobsmacked that the Feds did something sensible. Now… will they be able to stick to their guns or does the Cartel and those invested start to whine and complain tomorrow until they set up another program.

Best place on meth
Member
Best place on meth

Woooooo!

Death to the locusts!!!

Renter
Guest
Renter

Watch listings explode and sales fall, popcorn stocks headed higher!

mac
Member
mac

Quebec is never pressured by anything Ottawa to Ontario wants it to do. LOL!

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