The following is a comment from HK Howard in response to an article by Ian Young (Equity before affordability: Justin Trudeau’s vacuous response to Vancouver’s housing crisis, in the SCMP). HK Howard, a long time resident of Vancouver who spends much time in Hong Kong, also wrote: “I am growing increasingly concerned that if all three levels of Government do nothing – the social fabric of Vancouver is going to be irreparably damaged – with as yet unforeseen social consequences.”
The South China Morning Post of Hong Kong reports that China will be one of the top 10 economies for US dollar millionaires in 2020, when it will be home to 2.3 million, compared to 1.3 million now, according to a Credit Suisse forecast issued on Oct 15, 2015.
Credit Suisse Research Institute’s global wealth report said total household wealth on the mainland increased 7 per cent to US$22.8 trillion from mid-2014 to mid-2015, putting it second to the US.
According to a Barclays Bank Wealth report issued Sept 15, 2015, around half of China’s rich aim to move to another country within the next five years.
Respondents from the mainland were the most eager to move, with 47 per cent saying they planned to do just that in the next five years, compared with just 16 per cent of Hongkongers.
Around 30 per cent of Chinese respondents listed Hong Kong as their top destination, followed by Canada at 23 per cent.
If this Credit Suisse forecast and Barclay’s Wealth report are anywhere near accurate it will mean that about 1.1 million Chinese millionaires will be leaving China in the next five years and of those 1.1 million about 250,000 will be coming to Canada – mostly to Vancouver followed by Toronto.
With the 10 year multi entry visa program in place for Chinese visitors the 250,000 don’t need to immigrate – they can just come to visit many times each year – or they can apply to become immigrants through the still open Quebec immigration program and then just stop off in Vancouver or Toronto. There is no requirement enforced about settling in Quebec.
Unless city governments are prepared to charge a property surtax on vacant properties, unless provincial governments are prepared to vastly increase the property transfer tax for non resident buyers, and unless the federal government is prepared to insist that residents in Canada, whether permanent or temporary, declare incomes commensurate with the value of the property they own, nothing is going to stop the juggernaut of cash flowing out from growing but legally uncertain economies like China.
If nothing is done then the living standards of tax paying Canadians can only fall and young people starting out will have little hope of advancing themselves and their families through their working life.
Is this the kind of Canada we want?