An anti-corruption watchdog group says Statistics Canada “got it wrong” in a report last month that left the impression foreign buyers aren’t a major part of Canada’s housing market.
Transparency International Canada, which has been raising the alarm for years about money-laundering in the country’s real estate markets, says StatsCan could not have possibly gotten the numbers right on foreign ownership — because it lacks the tools needed to know just how much property is foreign-owned.
StatsCan reported last month that non-residents own just 3.4 per cent of all residential properties in Toronto and 4.8 per cent of residential properties in Vancouver. Real estate industry insiders pointed to this as a sign that foreign home-buying is not driving up house prices in Canada, as many had argued.
But “there’s no way to actually know what the total amount of foreign ownership in Canada is,” TI Canada president James Cohen told HuffPost Canada this week.
Watch: The government doesn’t know who owns many of Vancouver’s priciest homes
One major part of the problem is that Canada is among a shrinking number of developed countries that don’t require that the “beneficial owners” of corporations be revealed. In other words, it is possible to establish a shell company in Canada without disclosing who exactly owns it.
And because many properties in Canada are owned by shell corporations, it’s impossible to say exactly how much Canadian real estate is in the hands of foreign owners, TI Canada says. The group estimated last year that the government has no idea who actually owns half of the priciest properties in Vancouver.
“Only in Kenya and a select few U.S. states is it easier to set up an untraceable company than it is in Canada,” TI said at the time.
“In Canada, more rigorous identity checks are done for individuals getting library cards than for those setting up companies.”
‘The tip of the iceberg’
Statistics Canada itself seems to be aware of this problem, and of other challenges to figuring out exactly what’s going on in the housing market.
Last month’s release of data was “just the tip of the iceberg,” Haig McCarrell, the head of StatsCan’s new housing data program, told the Vancouver Sun.
McCarrell outlined weaknesses in the data released so far. He noted, for example, that a home owned by a shell company incorporated in Canada would count as Canadian-owned in StatsCan’s data, even if the owners …
Source:: The Huffington Post – Canada Travel