Beneath The Beauty
Is Vancouver teetering on the edge of bankruptcy? Are you old enough to remember the federal immigration policy instituted by Brian Mulroney which encouraged capital investment from abroad via the immigration system? Come to Canada and invest a sum while guaranteeing to employee a few. This was the start of the of the real estate growth wave in Vancouver. The program was only loosely monitored and became the conduit for infusing money into the lower mainland thereby ousting those native born without ancestral ties access to the market.
The demographic of Vancouver changed dramatically in a short time frame and there was a definite cultural shift amidst a policy of “multiculturalism”. This was new vocabulary established partly to challenge the xenophobe while complementing robust immigration policy. When we look around at the cultural mosaic today in lieu of the government message, we see some success but greater failure. The greater failures were middle aged and older Asians not really making the strong effort to immerse along with a white contingent who was not overly welcoming. So, there was a contrast between the government’s ideal and the urban reality. When we look around today, we can give strong marks to the immigrants of millennial and younger generations for gravitating toward their own Canadian destiny.
The capital infusion into B.C.’s lower mainland didn’t stop with the economic immigrant. Banking regulation in Canada has been lax. Imported capital has not been scrutinized. Dirty money has been making its way into Canada for decades and politicians have turned a blind eye. Bankers liked it. Bank shareholders have liked it. It’s only been as recent as four years ago that money laundering activity at casinos in Vancouver became targeted by regulators.
These two sources of capital have been substantial in the real estate market in Vancouver. As of this writing during the COVID-19 pandemic, the City of Vancouver has suggested bankruptcy as an option in the context of 65 per cent of Vancouverites missing their April 1, 2020 property tax payment. Fifty-five per cent are projected to miss their May 1st 2020 payment. What’s the correlation between a hypothesized artificial rise in real estate valuation and the failure of the city to collect taxes amidst the COVID crisis? I suggest that the city’s budget and historic spending grew in tandem within the context of a property tax system built on a weak structure of property valuation and hence the house of cards is now teetering amidst a black swan.