The Canadian Association of Journalists (CAJ) has called for an overhaul of the country’s “archaic” access-to-information system after Canada’s tax agency took five years to provide the South China Morning Post with a secret study linking millionaire migration to high home prices in Vancouver.
The long wait for the study, conducted by Canada Revenue Agency (CRA) auditors in 1996, was a “damning” example of the system’s dysfunction, the association said in a statement on Wednesday, calling on party leaders to address the issue in federal election debates this week.
“A functioning democracy thrives on a free-flowing stream of access to accurate information,” the association said. “[The Post’s] story lays bare the real-world consequences of frequent and severe delays to information requests.”
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The CRA meanwhile acknowledged on Wednesday that the five-year wait was unacceptable and “clearly not normal”.
Last week, the Post reported details of the study that suggested wealthy migrants made more than 90 per cent of high-value home purchases in two Vancouver municipalities, but on average declared extremely low incomes, on par with those of refugees.
The documents confirm the CRA knew 25 years ago that wealth migration and foreign money were playing a vast role in the region’s luxury home market, and that government millionaire migration schemes – dominated by Hongkongers and Taiwanese in the 1990s and then mainland Chinese – appeared connected to systematic tax abuse.
But the schemes were allowed to continue operating for decades, and Vancouver would go on to become one of the most unaffordable cities in the world.
The Post lodged an access to information and privacy (ATIP) request for the study on August 30, 2016. It was finally provided this August 17, amid an election campaign that is strongly focused on housing affordability.
University of British Columbia geographer David Ley has studied housing unaffordability and international money flows for about 30 years, often hampered by a lack of official data. Debate over the subject had been controversial for decades in Vancouver, Ley said, and frequently roiled by accusations of racism.
He said he “felt a lot emotions – disappointment would be one of the milder ones” to discover that the CRA study had existed but been withheld for so long.
Foreign money’s influence on Vancouver’s market “was dismissed as anecdotal” for many years said Ley, shaping policy and public perception. The CRA study “joined the dots” between wealth migration and the market, he said.
Linking high home prices to buyers with low declared incomes represented a “hefty contribution” to the understanding of unaffordability in Vancouver, where median home prices are 13 times higher than median annual incomes, behind only Hong Kong, according to the annual Demographia report by think tank Urban Reform Institute.
“It would have allowed a much more constructive and decisive conversation to have occurred at the time,” Ley said. “These issues were regarded as contentious, but it turns out they had some quite firm data to weigh in but chose not to.”
It was only in 2016, after decades of soaring prices, that BC government policy began to crack down on foreign money flows into real estate, first via a foreign buyers tax, and then a speculation and vacancy tax on foreign owners and satellite families whose principal earner declares more income overseas than in Canada.
Had the study been made public when it was performed, it would have also allowed “a much more critical eye” to be cast on Canada’s millionaire migration schemes, sooner, said Ley.
The Federal Immigrant Investor Programme was shut down in 2014, while the Quebec IIP was frozen in 2019 pending a review. Together, the schemes were the world’s biggest millionaire migration vehicles for many years, and Vancouver the most popular destination city.
The CRA had said in 2016 it could not confirm the existence of the housing study, after summaries were provided to the Post by a whistle-blower.
On Tuesday the agency said it was “continuing to take steps to improve our performance” processing ATIP requests.
“Taking five years to complete an access to information request is clearly not normal, nor is it acceptable,” a spokeswoman said.
She attributed the delay to “ensuring the information provided was in scope with the request, and as complete as possible while ensuring the protection and privacy of taxpayer information; significant staffing changes; and the impact of the Covid-19 pandemic on how the CRA conducted its business”.
In its statement, the CAJ called on party leaders to explain how they would implement “long-overdue reforms” to Canada’s ATIP system during this week’s election debates. The French-language debate will be held on Wednesday and the English-language debate on Thursday.
“Canadians’ right to know is so frequently poorly served by our crumbling federal access to information system,” said CAJ president Brent Jolly. “Looking at the party platforms, there is scant mention of plans for reforms, which is a Houdini-like act of deception aimed at keeping citizens perpetually in the dark about how government decisions are made.”
Regarding the five-year wait for the ATIP request to be fulfilled, Ley said it was “hard not to make the inference that some people were sitting on this information, and hoped that [the request] would just go away”.
Andy Yan, housing academic and director of the city programme at Simon Fraser University, said that had it been released sooner, the CRA study “would certainly have informed and directed a level of federal policy”.
The delays represented a “deflection that undermine Canadian democracy … this type of obfuscation creates an environment of distrust in government,” he said.
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