We’ve been told there’s no silver bullet to reign in Vancouver’s skyrocketing house prices, but one investigative journalist says he’s got the next best thing.
Ian Young with the South China Morning Post says he’s got a one point plan to keep hot foreign money out of the market:
End Quebec’s immigrant investor program.
LISTEN: Ian Young’s One Point Plan
The Quebec Scheme
So what is the Quebec Immigrant Investor Program?
It’s a scheme run by the Quebec government that gives immigrants permanent residency status in Canada, in exchange for an interest free loan of $800,000 to the government.
That’s it. They’re meant to stay in Quebec, but Young says they almost never do and most end up here on the West Coast.
“I think we can say very safely that the very great majority of them buy real estate. Because for a start, its not just the behaviour of them as millionaire households, but in addition their absolute favourite business activity, and we know this from federal tax data, is owning real estate. That occupies 63% of all unincorporated business activity by immigrant investors.”
The Quebec program mirrors an old federal program that worked the same way, which was scrapped in 2014.
Young says that one was a failure too. On average, immigrant investors paid an yearly average of $1,400 in income taxes. Many arrived, set up a household and perhaps left their spouse and child behind, before returning overseas to continue with their business.
But he says at least under that program the cash was shared by all provinces. In the Quebec program, every dollar stays east of Hull.
Young says the program is sending a flow of about 1,400 millionaire households to Vancouver each year, a major driver in our hot market.
While that makes up about 5% of new immigrants to the region, Young says they punch above their weight in the real estate market. Most are buying (at least one) homes – and they’re buying at the high end of the spectrum, making up 12-20% of the actual market.
So why not put a stop to it?
Young says all of that money represents a sizeable enough chunk of the market, that taking it out of the equation could be risky.
“Christy Clark’s government has said very clearly that they are all about preserving equity in the Vancouver real estate market.”
To that extent, he says there’s been little appetite, either from Victoria or Ottawa to push for change.
Until that changes, he says Quebec will continue to operate, essentially, “as toll booth on the way to B.C.”