Pete McMartin: Was offshore real estate data staring us in the face all this time? : B.C. government already asks for proof of citizenship for property transfer tax exemption

The abiding complaint of those who believe offshore buyers are driving the rise in real estate prices in Metro Vancouver is the lack of data to prove it. How can you identify a problem if you can’t quantify it?

The corollary to that complaint is the provincial government’s apparent inability, or reluctance, or refusal — take your pick — to track the level of foreign ownership in B.C.

Critics believe this data vacuum exists by design, that the government, in cahoots with the real estate and development industries, doesn’t want an angry public to know the true extent of offshore investment because it would jeopardize the billions of dollars it generates for them.

And so, when late last month the provincial government finally provided what it considered answers to the extent of offshore real estate investment in B.C., it based its estimates on the input of “industry experts” — that is, realtors — and referred to a study by the B.C. Real Estate Association that maintained offshore investors comprised less than five per cent of the market. To quote the email to me from the Ministry of Finance, “this fraction is not believed to be sufficient to drive prices in a market as broad-based and diverse as Greater Vancouver’s.” Call me a cynic, but the government’s reliance on the real estate industry to provide empirical evidence might be stated as: Mr. Fox, please count the chickens in the hen house.

Once upon a time, the government did track foreign ownership.

Under the Land Title Act, enacted in 1978, the province required a Statement of Citizenship from the new owner of every transaction in B.C., which included a declaration of the citizenship of the buyers and/or directors involved.

It was repealed in 1998, according to the finance ministry, “to reduce red tape and cut the cost of doing business in B.C.”

Odd, isn’t it, that a simple statement of citizenship would be considered so onerous to “the cost of doing business in B.C.” that it had to be repealed?

It’s odder still considering that there still exists an example of the provincial government asking for proof of citizenship in a real estate matter.

It is called the Property Transfer Tax Return. It stipulates the conditions that qualify homeowners for exemptions to the property transfer tax. It’s not easy to find on the government website, but it’s there, hidden in plain sight.

In the very first section, it asks:

“On the date of registration, are you a Canadian citizen or a permanent resident as defined in the Immigrant and Refugee Protection Act (Canada)?”

It provides a check box for “Yes” and then it states:

“If you have not continuously resided in B.C. for at least one year prior to the registration date, list any two years that you filed income tax returns as a B.C. resident during the six years before the date of registration.”

The form does not ask if the applicant is a foreigner, or a foreign investor. But conversely, and significantly, it does ask applicants to establish their Canadian citizenship or proof of past residency as it relates to a matter of real estate.

Asked about the form, the Ministry of Finance replied in an email that it was used to establish if applicants qualified for certain exemptions, such as the First Time Homebuyers Program. And then, as if to say, don’t bother going down the data road, the email stated:

“Furthermore, the information collected is governed by the Freedom of Information and Protection of Privacy Act.

“Under that act, personal information can only be used for the purpose it is collected — the information can’t be used for a different purpose after collection.”

Well, okay, whatever you, or industry experts, say.

But if it’s a simple matter to inquire as to the citizenship of someone applying for an exemption to the property transfer tax, and if it isn’t an invasion of privacy to ask for that citizenship, and if the form asking for that citizenship is not considered red tape that makes business in B.C. more difficult, then would it be so difficult for the government to ask someone buying real estate here to check a box declaring if they were a foreign investor or not?