Canadian tax authorities confirmed they knew about illicit foreign capital inflating real estate. They first found out over two decades ago, but only confirmed it to the South China Morning Post (SCMP) this week. A whistleblowing, retired auditor first told SCMP journalist Ian Young about the report in 2016. He waited half a decade for a response from the agency, which confirmed the study took place 25 years ago. The situation shares odd circumstances with an intelligence report mentioning foreign capital and real estate, called Sidewinder. Whistleblowers allege both reports, written one year apart, were suppressed for political reasons.
In 1996, the Canada Revenue Agency (CRA) studied millionaire migrants and homeownership. The tax authority was looking into reports of mansion buyers with poverty-level incomes. Not one or two either, it was a systemic issue.
The secret report was unknown to the public until 2016, when a CRA whistleblower told the SCMP about it. At the time, he alleged the study was suppressed from above. Five years after SCMP filed a freedom of information request, the agency confirmed it does exist.
The volume of wealthy new immigrants declaring refugee amounts of income was impressive. Young’s analysis shows these buyers scooped 90% of high value homes in the Greater Vancouver suburbs of Burnaby and Coquitlam. He notes long-term residents making similar buys declared around 16x the income.
In one example, Young mentions a buyer of a $2.88 million home who declared just C$174 of income. Not C$174,000, but C$174 — about as much as a single-night stay at a Holiday Inn… for some of the world’s most expensive real estate… in 1996. (more...)
Canada Hid A Foreign Capital & Housing Study While Dismissing Intelligence Warnings
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