Francis Plourde, “Operation Mr Chen: The Hidden Face of Quebec’s Golden Visas” (Enquete, September 2018)
In 1986 the Canadian federal government and the Quebec provincial government pioneered investment programs encouraging wealthy migrants with at least $2 million in assets to settle in Canada and Quebec province respectively, provided that, among other conditions they had to meet as immigrants, they invested a minimum amount of $1.2 million (as a loan to the respective governments) into the country or province to generate business, revenues and jobs. Since 1986, thousands of immigrants have gained permanent residency in Canada through these programs. In 2014, the federal program shut down over concerns about its effectiveness but the Quebec Immigrant Investor Program (hereafter QIIP) continues. An investigation by Radio-Canada’s current affairs program Enquete in 2018 reveals that QIIP has degenerated into a financial scam that encourages tax evasion, money laundering and the Canadian economy’s dependence on money – much of it from China and Hong Kong – sloshing through banks and other financial institutions to prop up excessive property speculation in Vancouver and other major cities.
The Enquete investigation takes a multi-pronged approach to covering all aspects of this investment scheme and its consequences for Canada’s economy including hiring a Hong Kong man to pose as wealthy prospective businessman investor Mr Chen, with plenty of money and a shady history of businesses and tax evasion to match his wealth, who approaches an immigration consultancy to inquire about obtaining permanent residency in Quebec and a Canadian passport. What journalist Francis Plourde discovers through “Mr Chen” and his “secretary” using hidden cameras is that immigration consultants and lawyers connected with QIIP are prepared to overlook the huge gaps in the would-be migrant’s business and tax affairs and even suggest that he change his name to “Bruce Lee” (ha!) and acquire citizenship in a dodgy Caribbean tax haven place to evade both Canadian and Chinese tax authorities by establishing a trust fund based there.
Interviews with Quebec government public servants who worked in Hong Kong dealing with QIIP applications and the immigrant consultants and lawyers who represented or were asked to vet wealthy clients wanting permanent residency status in Canada reveal the extent of the corruption involved; the undercover operation using the fake investor Mr Chen confirms the sloppy way in which applications were processed and how consultants turned a blind eye to applicants’ shady financial pasts. The officials who worked in Hong Kong speak of not having enough time to do full due diligence work on applicants’ documents and of being pressed by the Quebec government to accept applicants in spite of not having the time or the resources to check and authenticate their papers.
The investigation also examines whether the QIIP program has delivered economic benefits to Quebec in the generation of new business and jobs in that province. While bureaucrats and new small to medium-sized firms in Quebec are enthusiastic about government programs that fund their growth and development, what the investigators found that the money loaned by investors (interest-free, for five years) to Quebec was placed with Investissement Quebec (hereafter IQ) which invested the money in funds at market rates. The interest earned would be invested in actual businesses. Further investigation with an economist found that the number of jobs generated by investment by IQ was far less than IQ itself claims. On top of this, the revenue earned from IQ’s investments has been low due to very low interest rates over the past decade (2008 – 2018). If this were not enough, much of the revenue has to be paid to immigration consultants in commissions for referring prospective immigrants to QIIP so the amount invested in new businesses is much, much less than it could be.
A further consequence of QIIP is that most Chinese immigrants – they make up the majority of the QIIP immigrants – end up in cities like Vancouver and Toronto where they drive up the prices of properties and help create property speculation bubbles. Many immigrants commute between Canada, China and Hong Kong, and rarely or even never set foot in Quebec. They pay very little income tax in Canada – indeed, buying property is itself a form of tax evasion – while Vancouver suffers from an overheated property market in which local people are effectively barred from buying their own homes, and Vancouver city authorities suffer the burden of supplying education and health services to foreign families that contribute very little to Canada.
In effect, the whole QIIP project has created a financial monster in which the main beneficiaries are financial institutions and people gaming the project as if it were a giant casino. The program has created opportunities for money laundering and taxation evasion. It appears that neither the Canadian nor the Quebec government seems to care very much about the adverse economic and social consequences that QIIP creates for communities in Vancouver and other cities where wealthy immigrants have flocked to buy up mansions and expensive apartments and to educate their children in private schools, as long as money is flowing into the country. In the process, an elite transnational class of people dependent on rentier income derived from property speculation and with no concept of national loyalty is created.
Above all, the notion that citizenship can be bought at a price, and the conditions attached to the purchase of citizenship can be disregarded, as long as the buyer brings plenty of money, is cynical and says quite a bit about the grubby motivations and aims of the people who dreamt up the idea of fast-tracking residency status and citizenship on the basis of material wealth.