Canadian tax authorities have confirmed they are aware that illicit foreign capital is swelling real estate. They discovered it over twenty years ago, but only confirmed it to the South China Morning Post (SCMP) this week. A retired auditor whistleblower first spoke about the report to SCMP reporter Ian Young in 2016. He waited half a decade for a response from the agency, which confirmed that the study had taken place 25 years ago. The situation shares strange circumstances with an intelligence report mentioning foreign capital and real estate, called Sidewinder. Whistleblowers allege the two reports, written one year apart, were suppressed for political reasons.
Canadian government hid report on immigrants buying mansions with income from poverty
In 1996, the Canada Revenue Agency (CRA) studied millionaire migrants and homeownership. The tax administration was examining reports of buyers of mansions with incomes on the poverty line. Not one or two either, it was a systemic problem.
The secret report was unknown to the public until 2016, when a CRA whistleblower told SCMP about it. At the time, he alleged that the study was removed from above. Five years after SCMP filed an access to information request, the agency confirmed its existence.
The volume of wealthy new immigrants reporting refugee income was staggering. Young’s analysis shows that these buyers have reclaimed 90% of high-value homes in the suburbs of Metro Vancouver, Burnaby and Coquitlam. He notes that longtime residents making similar purchases reported around 16 times the income.
In one example, Young mentions a buyer of a $ 2.88 million home who reported only CAD $ 174 in income. Not CA $ 174,000, but CA $ 174 – about as much as a one-night stay at a Holiday Inn … for some of the most expensive real estate in the world … in 1996.
Greater Vancouver Real Estate has a very long relationship with foreign capital
Greater Vancouver real estate has long been a hub for foreign capital. At the time of the study, the use of the houses as a safe for foreign capital was an open secret. The president of Vancouver’s biggest developer would boast a year after the study: “No one really got out of Hong Kong… they just changed their portfolio. He himself is now Vancouver’s biggest promoter, for the curious.
Meanwhile, locals and politicians argued over whether the problem even existed. A study confirming that foreign capital inflated house prices may have been a game-changer. Fringe buyers can and have had a great influence on home prices.
Instead of using this information to improve the lives of residents, it has been hidden. Why it has been hidden until today is still a mystery, and no one will likely ever discuss the real reason. However, it looks suspiciously like another report on foreign capital and real estate, Operation Sidewinder.
Canadian Intel report on foreign capital and real estate has also been suppressed
A joint RCMP / CSIS task force was established in 1997 to assess China’s influence on Canada. The result was a “Top Secret” report called Sidewinder: Chinese Intelligence Services and Triad Financial Ties. The brand’s budget must have been really minimal at the time.
There were many allegations, but one of them involved criminals exploiting the immigration system. Hidden among legitimate immigrants, organized crime has infiltrated the same channels to do business. One goal they have been accused of is buying real estate to control local politicians.
“Real estate in and of itself is not an obvious threat to Canada’s security, but it becomes an excellent vehicle for accessing local politicians and their influence and power,” the report read.
The report concludes that the joint working group should involve immigration for better screening. Instead, the project was shelved and discredited by CSIS. The RCMP claim that the the spy agency “cleaned up” the report. One officer even went so far as to file an obstruction complaint.
A report of the Security Intelligence Review Committee (SIRC) in 1999 concluded that Sidewinder was “deeply flawed and unconvincing”. A 22-page longer report was also published with, which does not use the word “China” once. Instead, they choose to call it “… a certain foreign country,” but they validate some of Sidewinder’s conclusions as correct. Details on the correct parts are scarce, but this part gets airtime for Canada’s Best Spy over a decade later.
“The triads, the magnates and the ChIS [Chinese Intelligence] have learned that the fastest way to gain influence is to fund major political parties. Most of the companies identified in this research have contributed, sometimes several tens of thousands of dollars, to the two traditional parties, that is, the Liberal and Progressive Conservative parties.
– Operation Sidewinder, 1997
Despite the rejection of the report, a few key allegations resurface. The US Congress wrote a report on organized crime in Canada from Asia. A member of the United States Congress also made similar allegations to Sidewinder, but with regard to Panama, when testifying before the House Committee on Banking and Financial Services in 1999. It’s not just Americans who are paranoid.
In 2010, the head of CSIS frankly told Radio-Canada that he was following British Columbia officials. He backtracked a few weeks later, saying it was nothing. Apparently it’s a fun game that Canada’s top spies play, where they mention threats and then add “jk”.
Suppose the two reports one year apart have not been maliciously deleted. What we are seeing here is a period when essential information was suppressed. Information that could have radically changed the housing crisis in Canada, if not completely avoided.
Twenty-five years ago Canada learned that money laundering and tax evasion influence the price of homes. During this period, politicians and bureaucrats did not simply hide the results. They denied it and often attacked anyone who made similar allegations during this time. While accommodating affordability turned into a systemic problem, threaten economic stability. Now all parties recognize that these problems exist. In fact, addressing them is a key part of the electoral platform of each major political party this year.
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