"Another key reason is that Canada’s corporate registration systems — federally and provincially — are shrouded in the same kind of secrecy that exists in tax havens such as the British Virgin Islands, Panama and the Bahamas. Company owners who don’t wish to be identified in Canadian corporate registries can pay a lawyer or a stand-in to appear on all public filings."
Would I be correct in presuming that in the two years since this story came out the Canadian Parliament closed at least this loophole -- and perhaps several others?
It isn't a "loophole". This structure, by itself, helps you avoid no tax at all. The issue is a combination of: concealing ownership, concealing identity, and (a big one) home countries not acting on information.
But yes: Canada, and the other places where this was happening like Scotland and the Caymans, have started reporting beneficial ownership. This will preserve the reputation of the places involved but, of course, it doesn't tackle the underlying issues.
I don't know why the assumption is that this hurt's Canada's ability to properly assess and tax - it's like a private whois registration, there is a registrar or stand in that can (and usually trivially accedes) to governmental requests as to original identity, it's just harder for individuals to track down.
The government knows who owns what[1].
1. At least in Canada, there are all sorts of fair accounting laws that require people handling assets to report it to the government in addition to the actual parties who own the assets to do that reporting. If your company is shifting money around in various Canadian bank accounts to launder domestically... the government knows... if you're only using international accounts then why are you even registered in Canada.
The awful thing about Canada is that the personal income tax rate is relatively steep, but corporate taxes are among the lowest in the G7.
And there's a whole army of 'small businesses' and 'investors' and 'consultants' lobbying to ensure this remains the case, despite much of their work being wage labour in reality. Driving around in 'company' cars, and owning 'corporate' assets, sponging...
Richmond is majority Chinese.
>nine of 10 recent Chinese immigrants arrive in Metro Vancouver with enough money to immediately buy homes. But only half hold down jobs during their first five years in Canada, while four of 10 report they’re surviving on low incomes.
https://vancouversun.com/opinion/columnists/douglas-todd-how...
But heaven forbid you question the wisdom of these sorts of immigration policies, because if you do you must be a evil bad mean racist.
Edit, sure, downvote away. Even if the government prosecuted everyone who did this 100% fairly, the police and government would endlessly be called racist for targeting minorities. It's absurd.
Would it be magic if it's simply that most immigrants contribute to society in Canada?
I'm not sure what you're implying, but I also don't see why it needs to be 'magic'. Immigration seems to be a net benefit for Canada - especially in the next decades as our worker:retiree ratio moves towards 2:1.
As someone who emigrated up to Canada can I ask you to please not push American preconceived notions on immigration onto Canada?
Canada has a fair and accessible immigration system that has allowed a lot of people seeking work to quickly and easily get settled and find a job - it also has a buy your way in system that allows anyone to immigrate assuming they can put up a big enough pile of cash.
I'm a big fan of merit based immigration when that term isn't used to discriminate low wage workers and various ethnic groups and I'm really not a fan of the American equation of assets to merit.
Canada has it's fair share of racists attacking the immigration opportunity of low and medium earning immigrants. The PPC ran on an intensely regressive platform, but thankfully they captured a marginal 1.6% of votes only. The real debate up here is the question of whether the money these rich immigrants bring in yields more tax earnings into the system than it takes out.
So please don't drag American craziness into Canadian politics.
> it also has a buy your way in system that allows anyone to immigrate assuming they can put up a big enough pile of cash.
Not really. It's more of a "show that you have a pile of cash" immigration scheme rather than a "create X jobs" or "write the government a big cheque" form of immigration scheme.
Quebec's scheme requires you to loan the government (now) $1.2m for 5 years at 0% interest.
That is buying your way in, though you've mentioned a good point - the quantity of money needed to do that isn't actually that high, and, while you lose the ability to earn off those assets it's easier to lose future earnings on 1 mil than losing the mil itself.
Anyone living in a reasonably expensive (like east coast USA) area who owns their own house can probably afford the cost by leveraging their property value.
The Canadian government does get the utility of having the money available though, and usually the money put up will be put into projects that end up deferring adding immediately to the deficit.
I think the philosophy here is that anyone who can afford to do this will be paying lots of luxury taxes or employing people, that's just more of a hope than anything concrete and I think the recent trials and tribulations of the BC Liberals (big L - a political party) has shown how little money ends up being added to the system by these asset gifted immigrants.
* I am the sole bread winner for my family and decide to buy Canadian PR for me and my family - thank you Quebec Investor Program!
* My family moves to Canada and we buy a multi-million dollar home in my stay-at-home wife's name. I'll also buy one for my university-age kid because I like real estate. Sure it wasn't his money, but I gifted him the money and he bought the property. This is perfectly legal and won't be taxed until he decides to sell the property.
* I surrender my PR. I am no longer legally tied to Canada in any way as far as the Canada Revenue Agency is concerned.
* Once a month, I transfer a cash "gift" to my family to support them. This is perfectly legal, non-taxable, and Canadian banks don't really ask any questions. It works great for my family and keeps them comfortable while I continue making my income abroad.
* Come tax time, my family's income is zero because I am the sole bread winner and not Canadian in any way. My "gifts" are not income. My wife owns a multi-million home but her income is zero. My son owns a multi-million dollar home, but he's a student. They actually get money from the government to subsidize their "poverty" plus the wife gets child benefits for our little girl (too young for me to gift her cash to buy another multi-million dollar home, but I have the money ready when she hits 18).
* Meanwhile my family is using tax-supported services like health, education, and other services. My university-aged kid is paying domestic student tuition despite us having contributed functionally no money to the Canadian tax system. Sure, they pay sales tax, but they get a huge rebate since as far as the CRA is concerned they are living in poverty.
Since I gave up my Permanent Resident, I applied and received a 10 year super visa, so I can visit my family any time I'd like. Sure, I don't have access to a few things, but my family does and it's nice knowing I can walk into the country whenever I want.
But it gets better: if my family choses to get Citizenship (could go either way, since our home country does not recognize dual citizenship), they can sponsor me to become a Permanent Resident down the line. In fact we'll probably do it just in time for me to retire and when my healthcare costs will be higher.
The cherry on this delicious sundae, with nuts and cream on top? If you dare suggest I am abusing the system I can call you racist and people will take me seriously. Canada is great.
---
To be clear. No one is suggesting that a university kid who got paid international student tuition, still found a job, and carved out a life in Canada is not welcome or that they are a problem. No one is claiming that the temporary foreign worker who excelled at their job and was sponsored to remain in Canada is a problem. What is causing a serious problem is the media and Lefist parties pretending that when someone tries to talk about the scenario above, they are talking about honest immigrants who came here to live and contribute to the country.
Yes Canadian immigration system is merit based and fastest in the world. But you will have to add an exception which is Québec immigration system.
Québec immigration system is broken, arcane and has unfair delays for merit based immigrants to Québec. Federal stage is 2 years backlogged. Express Entry in rest of Canada will take only 4 or 6 months.
The last point is fairly well-established and almost certainly not linked to organised crime: most immigrants work at businesses owned by other immigrants who might not formally employ people.
Could this explain the "cliquey and flaky" nature of the city? There is no community, locals just don't care other than superficial niceties. Combine the two most exclusive cultures: rich and Asian, this is what you get with 27.7% of Chinese in Vancouver (2011).
http://worldpopulationreview.com/world-cities/vancouver-popu...
Challenge my theory please...I would like to understand why this city is so isolating.
I think the modern world is just more isolated than those golden memories of yore (I can't really speak to their accuracy).
That said, downtown vancouver wouldn't really feel like a community (except maybe Davie) due to the fact that's it's mostly business with a bit of random housing interspersed. If you look out to Burnaby, Surrey, or even better New West, you'll find city centers with a decent bit of community around them. Technically Vancouver does include the DTES along with Kits and various south side neighborhoods, these are more reasonable but are suffering from pretty severe gentrification. In the downtown core everyone I know living there just lives "between stuff" - between stadium and false creek, between granville and burrard station - there aren't any really good nexuses of activity that aren't wholly given over to commercial, but that's sort of alright, Vancouver is a big city and everything in the downtown core is easily accessible to people as far out as Richmond and Surrey.
Where you born in van or moved here? I find locals already have social circles and new people have a hard time breaking into them. Can’t say why but seems to hold water with my social circles
Sounds like London. Lots of people friends with people they knew from their home towns who also moved in. Any time I went to an expat event there, people complaining they never made any British friends.
My brother spent two years in London — nearly all of his friends were either other aussies or from other countries, modulo a few friendly brits: and he ran a pub for those two years!
>>You basically have to marry into this social group, and _none of us really seem to mind_.
Can confirm. Vancouver is a completely difference experience when you have friends/family that actively introduce you as a trusted vertex into their pre-existing social graphs. It feels like a social-stakes version of the "Sand Hill Road warm intros" game.
I moved from the US and every city I went to was really inclusive, but I can be biased because I socialized with churchgoers (where inclusion of outsiders is their responsibility). This is based on a fairly large sample size: Houston, Austin, Menlo Park, New York, and LA for ~10 year period. This subset is completely different in Vancouver though: the cliqueness, especially in Chinese speaking communities, is prevalent- I just gave up after 2 years and ~5-10 churches. Btw, I am Asian and know fluent Chinese...
people say it like it's a bad thing that people have deep roots in a city and plenty of friends and family they've known for decades. as if a city full of transient people all desperate to make new short-term friendships is a great thing.
just because someone like myself chose to leave behind their hometown and move somewhere new doesn't mean I get to complain that locals aren't going out of their way to bring me into their fold. it's my problem, not theirs.
IMO it's a privilege to have deep roots in your city. it's a normal consequence to not put a lot of effort into developing new ones when you are already over capacity and lack time to see the friends you have. that said, it's fine to remain curious about new people, who can also enrich your life.
Moved to Montreal because found it completely the opposite when I visited. It's just generally the thing here that people tend to be more up for socializing it seems.
I think it's a bit of a stretch to point at particular cultural backgrounds, since unique individuals in all of these cultures tend to soften the boundaries we like to create in our heads, but there could be some overlapping reasons. One thing I've noticed is, as the cost of living in the city has increased, the number of people who have to commute to the city has also, of course, increased. What this means is businesses close early and large areas (catering exclusively to the out-of-town work crowd) start to feel like uninhabited, pitch black ghost towns after 6pm. Areas that have no right doing that. I don't think Vancouver has ever been a particularly bustling city, but it wasn't as stifling before since there was a better chance of meeting someone who lives in the same municipality, and more people considering the area they are in to be home, or at least close to it. But at the same time, I think it has largely become a cultural thing. I catch myself doing the Vancouver-style "friendly but not your friend" thing a lot, and I hate it, and I've been trying to do better, but it's hard. "Be the change you want in the world" and all that. We can probably fix this :)
Well, it can be isolating, but I've found it reasonably easy to meet people. Having put some thought into why, my idea is that I make myself available and I don't try to hang out with people who don't do the same or aren't fun. You need common ground outside of whatever reason you had for meeting the person. Also, Eastvan is alright and the skateboarding community is super good as two counter examples. I don't have many Chinese friends, but only because they don't happen to be part of the things I do. If you're playing the friend game like you might try and meet someone at a bar, you're not going to succeed too much. Likewise at work. If you meet someone on a hike or at a club or walking around your area hike, and then bring then to the bar, you might have better luck.
Even though I think you point at a legit source of the issue, it's much more than that - Vancouver has this inherent aspect of isolation, and it's very hard to put one's finger on.
There isn't much of a night life, people are chill, there's a lot of escape to the mountains.
People are just not gregarious, and as so many are transplants (from wherever or E. Canada), then it's just going to stay isolated.
Add to that the near constant rain and lack of other impetus to fire people up (it's like Canada, without the East Coast historical issues), i.e. no Trumps or heavy duty geopolitical fusses ... and it's boring.
That the Chines expat community is of a very distant kind of culture, one in which it's a big jump especially with language skills, makes it even harder. Every time I go to Vancouver I'm kind of shocked at the 'table segregation' - go into any restaurant and you see tables that are either all Asian, or all not Asian.
For what it's worth, my Toronto DJ friend attended UBC and he said there were simply no parties there. It's as though they forgot how to throw 'ragers'. He tried to teach them the ways of partying, to mediocre avail.
The cliquey and flaky nature of city, along with housing costs, are key reasons I left for Montreal five years ago and have never looked back.
I imagine that: the crush of living costs; the theory someone else mentioned of shops and restaurants closing early due to no affordable housing in the city and people living farther away; the massive influx of ill-adapted rich immigrants uninterested in building social ties, etc. could all be factors.
I used to frequent the social dance community in Vancouver and I'll never forget what someone told me about her having spent her entire time doing her PhD in Van essentially friendless because people really are the - as someone else mentioned - "friendly, but not your friend" type.
Man, so glad to be out of there. I'm surprised more people haven't left that sinking ship already. At this point, it feels like Vancouver needs a good recession and a couple of lost decades, similar to what happened to Montreal in the 90s, for it to eventually get back on track. I chose to make my life such that I could stop watching it ruin itself but it's still sad to watch our third biggest city and all those fellow Canadians suffer this.
Vancouver has been seen as "cliquey and flaky" long before the money flooded in but probably exasperates the problem.
I agree with Douglas Coupland who talks about it in https://en.wikipedia.org/wiki/City_of_Glass_(Coupland_book). People from more populous parts of the country in Ontario and Quebec come to Vancouver for the western adventure part of their lives and eventually return to Toronto or Montreal. So locals and even other "transplants" see little upside to forming deep long lasting relationships.
Now we have wealthy trans-national elites who come here to get their papers and have almost no contact with people outside their immediate circle.
>Some ethnic Chinese migrants in Richmond have told UBC researcher John Rose: “(Canadian citizenship) is more like an insurance policy.” Other transnationals refer to their years waiting in a new land for a passport as “immigration hell.”
Most of the stuff by global news is written by Sam Cooper. If you read his pieces he reports on a lot of hear-say, letting the reader's imagination fill in the pieces. Also he likes to inflate the effect of money laundering such that it is the source of all the problems: high real estate prices and the opioid drug epidemic - which is highly simplistic. In a way he is giving what the people want.
If you read the government report on money laundering, they don't really go into detail about how they came up with that 5 billion dollar figure. And then they estimate the effect of money laundering could affect RE prices from 5-20%. So, a lot of guessing. A billion here, a billion there...who cares, right? All the reporters just report on these numbers as facts.
That is about 10,000 homes a year (for a $500,000 property). Over 10 years that would be 100,000 homes. With about 300,000 dwellings that a 1/3 of the homes being involved in money laundering.
You can repeatedly use the same asset to launder money. And an appreciating asset like housing is ideal as the laundering costs can be covered and even exceeded by appreciation. Probably don't want to do it too often for any particular property if you're worried about getting caught, though.
Yeah one of the reports had some data that pointed to this being a major thing. There was a house that had 20 mortgages on it. Take out a home equity loan, pay it off with shady drug cash, then do it again, etc.
(QIIP) Québec investor immigration programme has a major contribution to Vancouver housing crisis. It's basically a "pay for citizenship scheme" Québec gets to keep the money for 5 years before returning it to the investor and BC pays the price for it. These investors have no obligation to set foot in Québec or start a business in Québec !
All other provinces have discontinued this programme except Québec.
Suspended doesn't mean it's cancelled. CAQ govt. is revamping their immigration policies. So far it seems they favor culturally fit Francophones from Europe than any other merit. They also have policies (Bill 21 & Bill 9) in place to discourage immigration from Francafrique countries.
I am sorry to say this but, IMO I feel like CAQ govt. is trying to cherry pick white French immigrants to keep Québec white. Everyone can argue that it's not the case, but they are implementing this system piece by piece over the years. The immigration system of Québec has removed 'D' Diversity from its name. MIDI => MIFI
It was a case of an over zealous employee following rules. That individual was lucky that she is white & French. She has also friends in Montreal CBC media. Hence the outcry."How dare you reject one of us"
There are many unlike her, who is not white & French whose applications got rejected in Québec immigration department's cherry picking. We will never hear their story.
The CAQ is pandering to its 37% of voters. Makes one wonder whether rest of Canada is ok with this openly racist policies of a provincial govt.
"Immigrants Not Being Able to Read Their Hydro Bill Won’t Save the French Language"
I usually don't comment on these, but I do look things differently. Yes -- there are problems, but money coming into a country can be a great addition to the national and local economy.
Yes, it drives the cost of real estate price and etc, but if the demand for real estate goes up, the logical answer should be building more highrises.
If you look at Vancouver (your example), there are ample of areas that need to be wiped out and replaced with highrises.
By building more, we create tremendous jobs, not just the construction workers, but also the bankers, developers, financiers, brokers, furniture sellers, movers, electricians, car salespeople etc. etc.
At the end of the day, whether you live in the States, Canada, or China, the housing market is the most common way of moving economic growth.
People say being the money haven is a bad idea. Why? I don't really understand. You look at Switzerland, Delaware, Ireland, Hong Kong, Singapore, Netherlands, etc etc, it is not a bad thing to structure your system to incentivize so that your domestic businesses want to stay in and foreign business wants to come. Every headquarters that they build, they hire hundreds of accountants, middle-level managers etc. etc. In my opinion, Canada needs more of those tax haven seeking companies, not less. Why would you ever reject free money?
I understand this is a competition to the bottom. But I have to let you know that there will always be corporations and 1% people who will evade the taxes, and there are always too many countries to offer those services.
If Canada hits a foreign buyer's tax, the Chinese and Russians will go to NZ. If Kiwis run a foreign buyer's tax, they go to Australia. If Aussies do it, they go to Portugal. The list goes forever. Again, the right answer to surge in demand is more supply, not restricting the demand, as what many Canadians think.
It's always easy to blame for richer people. Blame on Chinese and Persians in Vancouver, but you have to understand, whether you like it or not, it is the Chinese and Persian people who pushed Vancouver's overall wealth level to the next. Many of their sole job is flipping hosuses, and they don't pay labor taxes. But, they pay more taxes in the end, every time they flip the house. They hire people, move the economic needle every time they flip.
Without them, Vancouver would be another sleepy town. There's no other industry here.
And I used to work in Zurich and New York City for over a decade. IMO, Vancouver's rent, housing price, and the overall price level is cheaper than most global cities. You need to compare the prices with where people want to live -- like New York, LA, Paris, London etc, not Calgary or Louisville, Kentucky.
Despite being ranked as among the best places in Vancouver is relatively cheap. Its overall price level can be compared to Barcelona, Moscow, Seoul, or Tokyo, where prevailing wages are a lot lower than Vancouver.
In short, (1) Vancouver's prices are reasonable, (2) we need more of those evasive money, (3) answer to suge in housing demand is to building more and increasing supply, and (4) letting rich people park the money in your neighbour is a good thing! Let them gentrify -- or you can always move to Detroit or Baltimore.
Reasonable compared to Zurich and NYC maybe but what makes those prices reasonable other then being within the average of the global cities? Just because it's the way we've been doing things doesn't mean it's the right way.
What incentives do builders have to build? Less supply, more money for those that own already, including those on community planning boards, permitting office, etc. And who would buy? Those that would have moved on since they couldn't afford rent. Those that are left are too poor to afford it. Companies look for the cheapest way possible to establish themselves, not where the money is.
Your morals are telling when you say we should learn to accept tax evasion.
On this YCombinator discussion forum of all places we should understand why an influx of foreign capital is terrible for a city.
In short the implications of spiking land values cascade down to entrepreneurs and it becomes significantly more difficult to start a business.
For example in Vancouver over the last decade we've seen this trend in action in the bar/restaurant space, as live music venues have closed, independent spots vanished, and consolidation occurred. The only survivors are the established well capitalized 'upscale casual' players like the Donnelly group, Cactus Club etc.
At this point the notion that a working class person would startup their own small business in Vancouver is laughable. Similarly it's crazy talk that a young person right out of university could go indie and create their own app or game when rents and the cost of living are as high as they are in Vancouver.
It doesn't have to be this way, but the housing crisis has been manufactured by established wealth rent seeking and the financialization of housing.
"People say being the money haven is a bad idea. Why? I don't really understand"
This is wrong in every way.
Because they are avoiding taxes elsewhere!
It's point blank theft of social property that directly results in mass fraud and inequality.
My gosh man.
If Canadian citizens were avoiding taxes en-masse by hiding it in Jamaica, would Canadians have something to say bout it?
I guess so.
The excess money is not good because it's not likely to be invested wisely: building another dozen high rises does not create material value for Canada - it's a misallocation of resources.
Finally - your quote about 'Vancouver being reasonable' is utterly wrong given that it's one of the most expensive places in the world relative to local incomes. (#2 'least affordable city in the world') [1]
'All of that money' has only served to make Vancouver utterly uninhabitable by the local population, which is a serious degradation of the quality of life.
The fact that you would support stealing the money meant for taxation in some other nation is very problematic.
Guys, what you guys are saying is against the market mechanism. Whether you like it or not, people will continue to evade taxes and find a safe haven in countries like the States and Canada, cities like New York and Vancouver.
If there is going to be a large surge in demand, the only counter solution is to increase supply. In my opinion, every single building that is lower than 5 stories below 96 ST in NY and any lowrise between Georgia and Commercial Drive in Vancouver needs to be wiped out and replaced with Hong Kong-style highrises. Housing prices and rent prices will tame down eventually!
If you dump 200k new highrises in downtown Vancouver, how the hell prices are not going to come down? Again, it's supply and demand.
At the end of the day, there is no such thing as market that goes beyond supply and demand. And developers always have incentive to build more as long as city intervenes less and liberalize them in terms of what they want to build.
All I am saying here is to let the market figure out. Look at Uber -- were cabs any better before UBER? Travis Kalanick "gentrified" the taxi market and it turned out to be a beautiful thing!
Who knows? But one theory might be from selling jacked up prices in Amazon (Western market)...being the suppliers themselves. I know people who did this, there are also ecommerce companies that source from China and market the hell out (FB, Adsense) of crappy products to Westerners...those counterfeit and fake product reviews from Amazon- most are Chinese...
The average person in the top 1% in China has over $2.1 million CAD. That's 14 million people, which is half the population of Canada.
Canadian homes are their safe deposit boxes. They buy homes in Canada, one of the safest places in the world to protect their assets from the Chinese govt.
They walk into a casino with a suit case of dirty cash, then walk right out and it's clean, Tax free money. Then they buy a house.
No wonder locals can't afford a home. A studio apartment costs $500,000.
China issues exit visas to Chinese nationals. These people buy citizenship in Canada, fly to Vancouver, and launder their money through our housing market.
How does this improve Canada? Seems like a no-brainer to push the pause button on Chinese immigration. Let’s take this opportunity to do an A-B test.
>“I believe the Canada companies … are managed in a way that the administrators simply declare annually NO-ACTIVITY. In other words, they cheat a bit,”
So the trick to using canada as a tax haven, is to lie on your taxes? I feel like that approach also works in other countries
I honestly don't know if I can take this article seriously when it implies that South Dakota repealing usury laws is singlehandedly responsible for all of the credit card debt in the US.
That doesn't seem like what it implies at all. It is saying the US uses credit cards and South Dakota can now participate (if it is saying anything at all).
>declare annually NO-ACTIVITY. In other words, they cheat a bit,
That's just straight up tax fraud. You don't need Canada for that. If you're willing to make fraudulent declarations to tax authorities you don't really need all these complicated things.
The more I hear about other countries' supposedly "enlightened" criminal justice systems the more I prefer the US system. Like this guy who should have gotten the electric chair and got 2 years in a Swiss hotel: https://en.wikipedia.org/wiki/Vitaly_Kaloyev
You shouldn’t prefer the US system because of cases like this. First mass incarceration has destroyed whole communities and costs the country enormous amounts. And the US also has plenty of cases with people getting away with bad stuff. Just look at Epstein. This guy should have been locked away probably decades ago but somehow his powerful friends (bipartisan) kept him safe.
> On 8 November 2007, Kaloyev was released from prison, because his mental condition was not sufficiently considered in the initial sentence.[12]
He got off because of a process technicality on his sentencing (aka due process) not because of a lax criminal justice system.
8yrs for "a charge that falls between murder and manslaughter in Switzerland" would be pretty standard in most countries. The mental state and motives always plays a large role in determining someone's level of guilt. As it should.
Plenty of people get off because the prosecutors and judges are either overzealous or not following protocol, which ultimately leads to the opposite happening (legitimate criminals getting off easy).
This comment breaks the site guidelines against flamebait and flamewar tangents. We've already had to ask you not to do this. If you keep doing it we're going to have to ban you. Why? Because we don't want HN to be one gigantic flamewar, which is what actions like these lead to.
The United Nations University World Institute for Development Economics Research has a report on estimated losses due to tax evasion by country in 2013 (published in 2017).
when you earn your money in China, and can extract only what you need to live in Canada, it's easy to cheat. Canada has no way of finding out how much they actually earn or hold in wealth in China.
I would challenge the title's assertion somewhat; at least, when Canadian banks are involved (as one would assume even with shell companies).
Canada participates in the Automatic Exchange of Information (AEOI) [1]. That means that even though some of these companies might not be required to file tax reports, the banks where they hold their accounts most certainly have to report the account holder and, where applicable, all beneficial owners [2].
Simply put, if I, personally, held money at a Canadian bank either directly, or indirectly via a shell company, I might not have many reporting requirements with the Canadian government directly, but the bank would have reporting requirements, which would ultimately lead to the bank's reports landing on the desk of my home country's tax authority [3].
The only way around this is the bank not keeping their AML/KYC records as straight as they should, but supervisory authorities usually come down hard on those cases.
[3] Provided both countries actually exchange information, which is the case for dozens of countries as of now. That includes Canada, Switzerland, and many other countries one might consider a "tax haven". It doesn't include the USA, however. Many would say that the USA are the last real tax haven.
I have incorporated many companies in Canada and have always marveled at the lack of vetting. You’d think they would want to see some identification on the incorporation docs. But no. You just fill in a web form and pay $20 or whatever.
You have most certainly never incorporated a Canadian corporation online for $20. That's the fee for filing an annual return for a federally incorporated company; the vast majority of companies are registered provincially.
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[ 3.1 ms ] story [ 164 ms ] threadWould I be correct in presuming that in the two years since this story came out the Canadian Parliament closed at least this loophole -- and perhaps several others?
But yes: Canada, and the other places where this was happening like Scotland and the Caymans, have started reporting beneficial ownership. This will preserve the reputation of the places involved but, of course, it doesn't tackle the underlying issues.
The government knows who owns what[1].
1. At least in Canada, there are all sorts of fair accounting laws that require people handling assets to report it to the government in addition to the actual parties who own the assets to do that reporting. If your company is shifting money around in various Canadian bank accounts to launder domestically... the government knows... if you're only using international accounts then why are you even registered in Canada.
Well this is news to me.
Jokes aside, I've heard about Canada being used to launder money, but this is the first I'm hearing about it being used as a tax haven.
And there's a whole army of 'small businesses' and 'investors' and 'consultants' lobbying to ensure this remains the case, despite much of their work being wage labour in reality. Driving around in 'company' cars, and owning 'corporate' assets, sponging...
Wage labour is truly for suckers in Canada.
[0] https://www.canada.ca/en/revenue-agency/services/tax/individ...
Report finds $5B laundered through B.C. real estate in 2018 https://globalnews.ca/news/5259196/home-prices-in-metro-vanc...
Secret police study finds crime networks could have laundered over $1B through Vancouver homes in 2016 https://globalnews.ca/news/4658157/fentanyl-vancouver-real-e...
CRA (Canada's IRS) to cut managers, fold tax-evasion units, memo shows https://www.theglobeandmail.com/news/politics/cra-to-cut-man...
Entire cities appear poor on paper because of wide spread tax evasion.
Why does upscale neighbourhood appear 'poor' to tax officials? https://vancouversun.com/life/richmond-3-why-does-upscale-ne...
Richmond is majority Chinese. >nine of 10 recent Chinese immigrants arrive in Metro Vancouver with enough money to immediately buy homes. But only half hold down jobs during their first five years in Canada, while four of 10 report they’re surviving on low incomes. https://vancouversun.com/opinion/columnists/douglas-todd-how...
Edit, sure, downvote away. Even if the government prosecuted everyone who did this 100% fairly, the police and government would endlessly be called racist for targeting minorities. It's absurd.
* There are racists who want to curb immigration
* There are immigrants exploiting real-estate laws to launder money
* There are non-racists who want to curb immigration
* There are immigrants who move to Canada and contribute to society there
And somehow this one point magically has more weight than all the others combined. It is a real stumper (not really).
I'm not sure what you're implying, but I also don't see why it needs to be 'magic'. Immigration seems to be a net benefit for Canada - especially in the next decades as our worker:retiree ratio moves towards 2:1.
Canada has a fair and accessible immigration system that has allowed a lot of people seeking work to quickly and easily get settled and find a job - it also has a buy your way in system that allows anyone to immigrate assuming they can put up a big enough pile of cash.
I'm a big fan of merit based immigration when that term isn't used to discriminate low wage workers and various ethnic groups and I'm really not a fan of the American equation of assets to merit.
Canada has it's fair share of racists attacking the immigration opportunity of low and medium earning immigrants. The PPC ran on an intensely regressive platform, but thankfully they captured a marginal 1.6% of votes only. The real debate up here is the question of whether the money these rich immigrants bring in yields more tax earnings into the system than it takes out.
So please don't drag American craziness into Canadian politics.
Not really. It's more of a "show that you have a pile of cash" immigration scheme rather than a "create X jobs" or "write the government a big cheque" form of immigration scheme.
Quebec's scheme requires you to loan the government (now) $1.2m for 5 years at 0% interest.
Anyone living in a reasonably expensive (like east coast USA) area who owns their own house can probably afford the cost by leveraging their property value.
The Canadian government does get the utility of having the money available though, and usually the money put up will be put into projects that end up deferring adding immediately to the deficit.
I think the philosophy here is that anyone who can afford to do this will be paying lots of luxury taxes or employing people, that's just more of a hope than anything concrete and I think the recent trials and tribulations of the BC Liberals (big L - a political party) has shown how little money ends up being added to the system by these asset gifted immigrants.
* I am the sole bread winner for my family and decide to buy Canadian PR for me and my family - thank you Quebec Investor Program!
* My family moves to Canada and we buy a multi-million dollar home in my stay-at-home wife's name. I'll also buy one for my university-age kid because I like real estate. Sure it wasn't his money, but I gifted him the money and he bought the property. This is perfectly legal and won't be taxed until he decides to sell the property.
* I surrender my PR. I am no longer legally tied to Canada in any way as far as the Canada Revenue Agency is concerned.
* Once a month, I transfer a cash "gift" to my family to support them. This is perfectly legal, non-taxable, and Canadian banks don't really ask any questions. It works great for my family and keeps them comfortable while I continue making my income abroad.
* Come tax time, my family's income is zero because I am the sole bread winner and not Canadian in any way. My "gifts" are not income. My wife owns a multi-million home but her income is zero. My son owns a multi-million dollar home, but he's a student. They actually get money from the government to subsidize their "poverty" plus the wife gets child benefits for our little girl (too young for me to gift her cash to buy another multi-million dollar home, but I have the money ready when she hits 18).
* Meanwhile my family is using tax-supported services like health, education, and other services. My university-aged kid is paying domestic student tuition despite us having contributed functionally no money to the Canadian tax system. Sure, they pay sales tax, but they get a huge rebate since as far as the CRA is concerned they are living in poverty.
Since I gave up my Permanent Resident, I applied and received a 10 year super visa, so I can visit my family any time I'd like. Sure, I don't have access to a few things, but my family does and it's nice knowing I can walk into the country whenever I want.
But it gets better: if my family choses to get Citizenship (could go either way, since our home country does not recognize dual citizenship), they can sponsor me to become a Permanent Resident down the line. In fact we'll probably do it just in time for me to retire and when my healthcare costs will be higher.
The cherry on this delicious sundae, with nuts and cream on top? If you dare suggest I am abusing the system I can call you racist and people will take me seriously. Canada is great.
---
To be clear. No one is suggesting that a university kid who got paid international student tuition, still found a job, and carved out a life in Canada is not welcome or that they are a problem. No one is claiming that the temporary foreign worker who excelled at their job and was sponsored to remain in Canada is a problem. What is causing a serious problem is the media and Lefist parties pretending that when someone tries to talk about the scenario above, they are talking about honest immigrants who came here to live and contribute to the country.
Please don't add national swipes to what was already becoming a flamewar.
Québec immigration system is broken, arcane and has unfair delays for merit based immigrants to Québec. Federal stage is 2 years backlogged. Express Entry in rest of Canada will take only 4 or 6 months.
https://news.ycombinator.com/newsguidelines.html
This is why most immigrant communities end up having to create their own banks - https://en.wikipedia.org/wiki/Category:Chinese_American_bank... - because they fail most credit tests but are usually pretty good credits.
That said, downtown vancouver wouldn't really feel like a community (except maybe Davie) due to the fact that's it's mostly business with a bit of random housing interspersed. If you look out to Burnaby, Surrey, or even better New West, you'll find city centers with a decent bit of community around them. Technically Vancouver does include the DTES along with Kits and various south side neighborhoods, these are more reasonable but are suffering from pretty severe gentrification. In the downtown core everyone I know living there just lives "between stuff" - between stadium and false creek, between granville and burrard station - there aren't any really good nexuses of activity that aren't wholly given over to commercial, but that's sort of alright, Vancouver is a big city and everything in the downtown core is easily accessible to people as far out as Richmond and Surrey.
You basically have to marry into this social group, and none of us really seem to mind.
That said, people also form groups around activities (like knitting circles, various sports, and what not).
Can confirm. Vancouver is a completely difference experience when you have friends/family that actively introduce you as a trusted vertex into their pre-existing social graphs. It feels like a social-stakes version of the "Sand Hill Road warm intros" game.
I say as a born and raised Vancouverite, since moved to the US... it’s kinda fucked out there.
just because someone like myself chose to leave behind their hometown and move somewhere new doesn't mean I get to complain that locals aren't going out of their way to bring me into their fold. it's my problem, not theirs.
IMO it's a privilege to have deep roots in your city. it's a normal consequence to not put a lot of effort into developing new ones when you are already over capacity and lack time to see the friends you have. that said, it's fine to remain curious about new people, who can also enrich your life.
There isn't much of a night life, people are chill, there's a lot of escape to the mountains.
People are just not gregarious, and as so many are transplants (from wherever or E. Canada), then it's just going to stay isolated.
Add to that the near constant rain and lack of other impetus to fire people up (it's like Canada, without the East Coast historical issues), i.e. no Trumps or heavy duty geopolitical fusses ... and it's boring.
That the Chines expat community is of a very distant kind of culture, one in which it's a big jump especially with language skills, makes it even harder. Every time I go to Vancouver I'm kind of shocked at the 'table segregation' - go into any restaurant and you see tables that are either all Asian, or all not Asian.
For what it's worth, my Toronto DJ friend attended UBC and he said there were simply no parties there. It's as though they forgot how to throw 'ragers'. He tried to teach them the ways of partying, to mediocre avail.
I imagine that: the crush of living costs; the theory someone else mentioned of shops and restaurants closing early due to no affordable housing in the city and people living farther away; the massive influx of ill-adapted rich immigrants uninterested in building social ties, etc. could all be factors.
I used to frequent the social dance community in Vancouver and I'll never forget what someone told me about her having spent her entire time doing her PhD in Van essentially friendless because people really are the - as someone else mentioned - "friendly, but not your friend" type.
Man, so glad to be out of there. I'm surprised more people haven't left that sinking ship already. At this point, it feels like Vancouver needs a good recession and a couple of lost decades, similar to what happened to Montreal in the 90s, for it to eventually get back on track. I chose to make my life such that I could stop watching it ruin itself but it's still sad to watch our third biggest city and all those fellow Canadians suffer this.
I agree with Douglas Coupland who talks about it in https://en.wikipedia.org/wiki/City_of_Glass_(Coupland_book). People from more populous parts of the country in Ontario and Quebec come to Vancouver for the western adventure part of their lives and eventually return to Toronto or Montreal. So locals and even other "transplants" see little upside to forming deep long lasting relationships.
Now we have wealthy trans-national elites who come here to get their papers and have almost no contact with people outside their immediate circle.
>Some ethnic Chinese migrants in Richmond have told UBC researcher John Rose: “(Canadian citizenship) is more like an insurance policy.” Other transnationals refer to their years waiting in a new land for a passport as “immigration hell.”
https://vancouversun.com/news/staff-blogs/the-unsettled-live...
[Edit]: Also don't rely on Douglas Todd's opinion piece. He plays fast and loose with the "facts" in that piece and he's notably against immigration.
If you read the government report on money laundering, they don't really go into detail about how they came up with that 5 billion dollar figure. And then they estimate the effect of money laundering could affect RE prices from 5-20%. So, a lot of guessing. A billion here, a billion there...who cares, right? All the reporters just report on these numbers as facts.
All other provinces have discontinued this programme except Québec.
I am sorry to say this but, IMO I feel like CAQ govt. is trying to cherry pick white French immigrants to keep Québec white. Everyone can argue that it's not the case, but they are implementing this system piece by piece over the years. The immigration system of Québec has removed 'D' Diversity from its name. MIDI => MIFI
The CAQ is very anti-immigration on all fronts.
There are many unlike her, who is not white & French whose applications got rejected in Québec immigration department's cherry picking. We will never hear their story.
The CAQ is pandering to its 37% of voters. Makes one wonder whether rest of Canada is ok with this openly racist policies of a provincial govt.
"Immigrants Not Being Able to Read Their Hydro Bill Won’t Save the French Language"
https://thelinknewspaper.ca/article/immigrants-not-being-abl...
"Anti-immigrant sentiments hurt Quebec"
https://www.mcgilltribune.com/opinion/anti-immigrant-sentime...
Yes, it drives the cost of real estate price and etc, but if the demand for real estate goes up, the logical answer should be building more highrises.
If you look at Vancouver (your example), there are ample of areas that need to be wiped out and replaced with highrises.
By building more, we create tremendous jobs, not just the construction workers, but also the bankers, developers, financiers, brokers, furniture sellers, movers, electricians, car salespeople etc. etc.
At the end of the day, whether you live in the States, Canada, or China, the housing market is the most common way of moving economic growth.
People say being the money haven is a bad idea. Why? I don't really understand. You look at Switzerland, Delaware, Ireland, Hong Kong, Singapore, Netherlands, etc etc, it is not a bad thing to structure your system to incentivize so that your domestic businesses want to stay in and foreign business wants to come. Every headquarters that they build, they hire hundreds of accountants, middle-level managers etc. etc. In my opinion, Canada needs more of those tax haven seeking companies, not less. Why would you ever reject free money?
I understand this is a competition to the bottom. But I have to let you know that there will always be corporations and 1% people who will evade the taxes, and there are always too many countries to offer those services.
If Canada hits a foreign buyer's tax, the Chinese and Russians will go to NZ. If Kiwis run a foreign buyer's tax, they go to Australia. If Aussies do it, they go to Portugal. The list goes forever. Again, the right answer to surge in demand is more supply, not restricting the demand, as what many Canadians think.
It's always easy to blame for richer people. Blame on Chinese and Persians in Vancouver, but you have to understand, whether you like it or not, it is the Chinese and Persian people who pushed Vancouver's overall wealth level to the next. Many of their sole job is flipping hosuses, and they don't pay labor taxes. But, they pay more taxes in the end, every time they flip the house. They hire people, move the economic needle every time they flip. Without them, Vancouver would be another sleepy town. There's no other industry here.
And I used to work in Zurich and New York City for over a decade. IMO, Vancouver's rent, housing price, and the overall price level is cheaper than most global cities. You need to compare the prices with where people want to live -- like New York, LA, Paris, London etc, not Calgary or Louisville, Kentucky.
Despite being ranked as among the best places in Vancouver is relatively cheap. Its overall price level can be compared to Barcelona, Moscow, Seoul, or Tokyo, where prevailing wages are a lot lower than Vancouver.
In short, (1) Vancouver's prices are reasonable, (2) we need more of those evasive money, (3) answer to suge in housing demand is to building more and increasing supply, and (4) letting rich people park the money in your neighbour is a good thing! Let them gentrify -- or you can always move to Detroit or Baltimore.
What incentives do builders have to build? Less supply, more money for those that own already, including those on community planning boards, permitting office, etc. And who would buy? Those that would have moved on since they couldn't afford rent. Those that are left are too poor to afford it. Companies look for the cheapest way possible to establish themselves, not where the money is.
Your morals are telling when you say we should learn to accept tax evasion.
In short the implications of spiking land values cascade down to entrepreneurs and it becomes significantly more difficult to start a business.
For example in Vancouver over the last decade we've seen this trend in action in the bar/restaurant space, as live music venues have closed, independent spots vanished, and consolidation occurred. The only survivors are the established well capitalized 'upscale casual' players like the Donnelly group, Cactus Club etc.
At this point the notion that a working class person would startup their own small business in Vancouver is laughable. Similarly it's crazy talk that a young person right out of university could go indie and create their own app or game when rents and the cost of living are as high as they are in Vancouver.
It doesn't have to be this way, but the housing crisis has been manufactured by established wealth rent seeking and the financialization of housing.
This is wrong in every way.
Because they are avoiding taxes elsewhere!
It's point blank theft of social property that directly results in mass fraud and inequality.
My gosh man.
If Canadian citizens were avoiding taxes en-masse by hiding it in Jamaica, would Canadians have something to say bout it?
I guess so.
The excess money is not good because it's not likely to be invested wisely: building another dozen high rises does not create material value for Canada - it's a misallocation of resources.
Finally - your quote about 'Vancouver being reasonable' is utterly wrong given that it's one of the most expensive places in the world relative to local incomes. (#2 'least affordable city in the world') [1]
'All of that money' has only served to make Vancouver utterly uninhabitable by the local population, which is a serious degradation of the quality of life.
The fact that you would support stealing the money meant for taxation in some other nation is very problematic.
[1] https://www.vice.com/en_ca/article/eve4j7/vancouver-is-the-s...
If there is going to be a large surge in demand, the only counter solution is to increase supply. In my opinion, every single building that is lower than 5 stories below 96 ST in NY and any lowrise between Georgia and Commercial Drive in Vancouver needs to be wiped out and replaced with Hong Kong-style highrises. Housing prices and rent prices will tame down eventually!
If you dump 200k new highrises in downtown Vancouver, how the hell prices are not going to come down? Again, it's supply and demand.
At the end of the day, there is no such thing as market that goes beyond supply and demand. And developers always have incentive to build more as long as city intervenes less and liberalize them in terms of what they want to build.
All I am saying here is to let the market figure out. Look at Uber -- were cabs any better before UBER? Travis Kalanick "gentrified" the taxi market and it turned out to be a beautiful thing!
How come Chinese have that kind of money while entering? Are they all rich and well-bequeathed?
Canadian homes are their safe deposit boxes. They buy homes in Canada, one of the safest places in the world to protect their assets from the Chinese govt.
They walk into a casino with a suit case of dirty cash, then walk right out and it's clean, Tax free money. Then they buy a house.
No wonder locals can't afford a home. A studio apartment costs $500,000.
How does this improve Canada? Seems like a no-brainer to push the pause button on Chinese immigration. Let’s take this opportunity to do an A-B test.
So the trick to using canada as a tax haven, is to lie on your taxes? I feel like that approach also works in other countries
https://www.theguardian.com/world/2019/nov/14/the-great-amer...
> Thanks to Janklow, South Dakota has a financial services industry, and the US has a trillion-dollar credit card debt.
From the 14th paragraph: "Thanks to Janklow, South Dakota has a financial services industry, and the US has a trillion-dollar credit card debt."
This is definitely the author trying to peg America's credit card debt onto Janklow, and therefore South Dakota.
https://www.gq.com/story/how-puerto-rico-became-tax-haven-fo...
That's just straight up tax fraud. You don't need Canada for that. If you're willing to make fraudulent declarations to tax authorities you don't really need all these complicated things.
> “Things you’d do 20 years for in the U.S., you might get a fine in Canada and that’s not lost on criminals,” Mathers told the Star.
The "US System" from the outside is incarcerate everyone except those who can afford to not be incarcerated.
He got off because of a process technicality on his sentencing (aka due process) not because of a lax criminal justice system.
8yrs for "a charge that falls between murder and manslaughter in Switzerland" would be pretty standard in most countries. The mental state and motives always plays a large role in determining someone's level of guilt. As it should.
Plenty of people get off because the prosecutors and judges are either overzealous or not following protocol, which ultimately leads to the opposite happening (legitimate criminals getting off easy).
It looks to me that yours is plain and simple confirmation bias.
https://news.ycombinator.com/newsguidelines.html
https://www.wider.unu.edu/sites/default/files/wp2017-55.pdf
Anyone uninterested in reading the whole report can CTRL+F country names (there is a breakdown in the appendix).
https://finance.yahoo.com/news/amazon-taxes-zero-180337770.h...
Let’s also not forget that 44% of Americans didn’t pay federal income taxes.
Canada participates in the Automatic Exchange of Information (AEOI) [1]. That means that even though some of these companies might not be required to file tax reports, the banks where they hold their accounts most certainly have to report the account holder and, where applicable, all beneficial owners [2].
Simply put, if I, personally, held money at a Canadian bank either directly, or indirectly via a shell company, I might not have many reporting requirements with the Canadian government directly, but the bank would have reporting requirements, which would ultimately lead to the bank's reports landing on the desk of my home country's tax authority [3].
The only way around this is the bank not keeping their AML/KYC records as straight as they should, but supervisory authorities usually come down hard on those cases.
[1] https://en.wikipedia.org/wiki/Common_Reporting_Standard
[2] https://en.wikipedia.org/wiki/Beneficial_owner
[3] Provided both countries actually exchange information, which is the case for dozens of countries as of now. That includes Canada, Switzerland, and many other countries one might consider a "tax haven". It doesn't include the USA, however. Many would say that the USA are the last real tax haven.
https://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs06939.html
You can incorporate federally and leave it at that. Extra-provincial registration is required if you carry on business within a specific province.
Provincial/territorial corps are all around $300+, but don't have the $20/year filing fee.