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Apr
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Wealthy Chinese Immigrants and Tax Evasion
Clubs, Politics, Uncategorized, Vancouver
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The tax season is upon us and the federal election date is approaching. During this time, we are reminded how taxes and government policies affect our lives. A good example is the Immigrant Investor and Entrepreneur Program by which Citizenship and Immigration Canada (CIC) expedited immigration of thousands of wealthy Chinese investors. Nevertheless, the government did not ensure that those immigrants would pay their fair share of taxes as they and their families enjoy our public services such as medical and education services.
The Government of Canada mistakenly thought that those investors would bring their wealth and expertise to Canada and contribute to the growth of our economy. This assumption has been proven wrong and the government terminated the program on June 19, 2014 because of its abject failure. However, the program continues to run in Quebec and wealthy Chinese immigrants still have a back door open to get into British Columbia.
It took the Government of Canada sixteen years to discover that those wealthy immigrants took from our public services much more than they would ever contribute and did not pay a dime in taxes on their profits overseas. It is unfair for the local struggling Canadians to carry all the burden of funding public services. It is time that the Government of Canada took a serious step to make those wealthy immigrants pay their fair share of taxes on their global income if they want their families to continue enjoying living in Canada. No free lunch anymore!
Most of the wealthy Chinese who immigrated to Canada, did not care much for Canada. They were seeking a safe haven to secure a residence for their families and a citizenship they can lean on if for any reason, things go bad in China. In addition, Canadian citizenship makes it possible for Mainland Chinese investors to do business and buy real estate in Hong Kong. They did not bother to learn the English language because they know they would not need it.
The immigration visa to Canada was one of the best investments for Chinese wealthy investors—free health care for their seniors and other family members, free education for their children, much better life quality in Canada, no taxes on their investments overseas, and their speculation on real estate in Canada would make them a small fortune. In addition, their seniors who have no income might be able to join poor senior Canadians to enjoy some free benefits. Because of this program, we did not see the expected tax revenues, nor ground shaking investments other than those digging foundations to build new homes and condominiums and sell them at astronomical prices to those immigrants, making life too difficult for the rest of us who live and work here.
Those investors brought in their families, children, parents, grandparents, but their wealth and profits stayed overseas hidden from the sight of CRA. The head of the family goes back to China to manage their businesses and leave behind their family members who need medical and educational services. If you visit our hospitals today, you will see the demand those Chinese senior have on our medical services. Most of those new senior immigrants do not speak English and would not belong to this society in anyway other than consumption of our public services without any contribution to our economy.
Those immigrants exploited the visa to the detriment of Canada and Canadians who work and live in Canada. They overloaded already diminishing education and medical services. Through speculation, they caused the astronomical rise in the prices of real estate making it unaffordable, increased of cost of living in Metro Vancouver due to higher retail properties rent, and contributed to congestion in the Lower Mainland as each of their families added two cars to our already congested roads. In addition, they increased the waiting period for surgery because of the huge number of senior they brought (their parents and grandparents). They turned the most beautiful city into one of the most congested and most expensive in the world. Soon, due to the increase in demand for medical services by their seniors and education for their children, exacerbated by their taxes evasion, governments will not be able to continue to offer the services needed and would privatize them—making them available only to those who can afford to pay.
Instead of facing the problem of tax evasion heads on, Revenue Canada using its security and intelligence resources to deal with it, it launched its 2013 Informant Leads Program (OTIP) to fight international tax evasion and aggressive tax avoidance. The program offers financial awards to individuals with information about major cases of international tax non-compliance resulting in more than $100,000 of additional federal tax being assessed and collected.
In other words, the government is telling us that it does not have the resources to catch International tax evaders, but has the resources to spend on a war in the Middle East or chasing the ghost of terrorism at home. Moreover, while the government spends millions of dollars to collect every phone call we make, every email we send, and every move we make, it is unable to find out who those tax evaded are, and how much taxes they are stealing from the government. Evidently, this program will be another failure because it is asking individuals to do the government investigative work.
An easier solution is for Canada Revenue Agency to audit those new wealthy immigrants who claim on their tax return that their income is less than a portion of what the utility services cost them at their luxury homes, and the maintenance of their luxury vehicles. May be asking them where they spend most of the year will give the government a clue where those businessmen make their profits overseas.
It is time that our government took this issue seriously and investigate who those wealthy immigrants are, where they have their businesses overseas, and how much of taxes they report. It should dedicate some of Canadian Security Intelligence Service (CSIS) resources to find out how much taxes those immigrants are evading. It would become a source of income to make up for public services consumed by the families of those wealthy immigrants.