Durning: Be interesting to see your reader’s take on this short piece by David Ley, UBC Professor of Geography (whose early analysis seemed to have little impact when first presented in 2010, but gets more prescient as time goes by. This is from 2015.)
Structural defects in the BC economy exposed by a severe recession led three levels of government to develop networks with the growth region of Asia Pacific from the early 1980s. The objectives, to augment trade and investment, were aided by neo-liberal tools that included open borders, deregulation, a place-boosting world’s fair, liberalised immigration policies, and a development-ready province pushing back the gains of labour and the welfare state.
An innovation that gained significant take-up was the Business Immigration Programme, with Vancouver, the closest major city to East Asia and with a high quality of life, the most popular destination especially for the wealthiest investor newcomers. Although the BIP was open to affluent residents of all nations, in the past 35 years, 80%–85% of investor class immigrants originated in Greater China.
The state’s Asia Pacific outreach has proven successful in reaching its economic goals. In 2014, 37% of BC’s exports were Asia-bound. Piecing together various sources, and including secondary migration, I estimate wealth migration of 200,000 immigrants to Vancouver through the three streams of the BIP between 1980 and 2012, the equivalent of 8%–9% of the metropolitan population in 2011.
Massive amounts of capital moved across the Pacific; the estimated liquid capital available to business immigrants arriving in Greater Vancouver between 1988 and 1997 alone was $35–$40 billion. Some of this was surrendered to the provincial government as a requisite interest-free loan.
Newcomers moved quickly into homeownership in Canada’s most expensive city and their housing impact was elevated by their preference for property as an early site for further investment and rental income.
While real incomes have atrophied for several decades, the Greater Vancouver benchmark price for detached properties is now $1.2 million, and is once again on a tear, having risen by 20% in the past 12 months. Both provincial and municipal government revenues have benefitted from property-based taxation, and are reluctant to harm the goose that lays the golden egg.
Wealth generated in asset hotspots in a deregulated globalised economy can generate huge public revenues as well as private returns. The convergence, even without collusion, of private and public sector property interests in BC creates immense momentum that precludes meaningful policy responses to inequities that include excessive housing unaffordability, precarious mortgage indebtedness, and disillusioned out-migration.
The default housing policy position has become minimal response and the cultivation of ignorance concerning actual trends. In this neo-liberal policy environment, community costs assume the status of acceptable collateral damage.