A secret study that connects high home prices in Vancouver to millionaire migration and possible tax cheating has finally been disclosed by the Canada Revenue Agency (CRA)—five years after a freedom-of-information request was made.
The documents show that for the past 25 years, the Canada Revenue Agency (CRA) has known that wealthy new immigrants have been major players in Vancouver’s luxury home market, and government migration programs have fueled systematic tax abuse by allowing wealthy foreign investors to declare refugee-level incomes.
The study found that wealthy new immigrants accounted for over 90 percent of luxury home purchases in the metro Vancouver municipalities of Burnaby and Coquitlam, but these buyers often only declared small global incomes.
According to the documents, new immigrants purchasing the most expensive homes in Burnaby declared an average annual income of $16,430, while long-term Canadian residents making such purchases declared incomes 16 times higher.
For example, one new immigrant who bought a $2.88 million home in Burnaby declared a total global income of merely $174.
The study was marked as a confidential and a “protected” document, meaning that it could “cause injury to an individual, organization, or government” if compromised.
This process of tax abuse continued for years before Canada’s Immigrant Investor Programs (IIP), which contributed to the phenomenon, were halted due to auditors’ concerns.
Applicants for these programs, developed by the federal government with the goal of luring a wealthy business class from abroad to settle and invest in Canada, were dominated by Hongkongers and Taiwanese in the 1990s, in the wake of communist China’s 1989 Tiananmen square student massacre.
But contrary to auditors’ warnings, the lucrative programs evolved into a popular migration channel for millionaires over the next two decades, bringing about 200,000 rich newcomers to Canada, and became dominated by mainland Chinese immigrants since around 2001.
