This city has a problem: too much money-the financier WhatsApp logo

The car stopped outside Casino Starlight, in a suburb of Vancouver.He lowered the driver and took two large plastic bags out of the trunk.They were handed over to a red shirt, who took them to the premises, announced with signs in English and Mandarin.The bags wore thousands of tickets of 20 Canadian dollars, arranged in small bundles fastened with leagues.

The accountant machine took 10 minutes to process all tickets, which would add more than 250 thousand Canadian dollars, about 3 million 700 thousand Mexican pesos.

Once converted into casino chips, which could be changed then even without having been played at the tables, money could be spent anywhere in Canada, without questions about its origin.

The transaction in the Starlight that winter 2009 winter, captured in a video released this year by the government of the province of British Columbia, to which Vancouver belongs, was one of thousands that were held in and around and aroundThe city during the last decade.

Stormly known for its beautiful views of the Pacific coast and its sports lifestyle, Vancouver has become one of the main inputs of questionable funds that arrive from Asia to Western economies.

An academic coined the process as 'The Vancouver model', a sordid mixture of clean and dirty money in casinos, real estate and luxury items that is possible by historical ties with China and the lax history of fighting financial crimes in Canada.

It is also the product of one of the largest financial flows of the 21st century: the money of millions of wealthy Chinese that leaves the country in search of safer assets abroad, in a clear contempt of capital controls imposed by Beijing.

Since mid -2014, the capital departure of China has risen to 800 billion dollars, according to estimates from the International Finance Institute.

In Vancouver, this flood of funds has generated a dramatic economic, demographic and physical transformation.Alberni Street, a common street in the center of the city, has welcomed a two -story Prada Boutique and marble facade, one of the largest rolex stores in North America and a 62 -story tower with a 62 -story tower andA five-star hotel on the Shangri-la chain.

Everyone has employees who speak Mandarin.In May, Rolls-Royce chose Vancouver to unveil his first luxury SUV, which has an initial cost of about 300 thousand dollars, with an elegant reception with champagne in his new and sumptuous concessionaire in an exclusive neighborhood at a couple of kilometers ofAlberni.

Six of those vehicles were sold the first day, driven, perhaps, by the phenomenon of the 'Condominiums for Cars', luxury garages that are being built in an Asian majority suburb with a price per unit of 800 thousand Canadian dollars (littleless than 12 million pesos).

Much of the money that enters Vancouver has a legal origin, but the authorities ensure that a substantial proportion is the product of corruption or crime, including the illegal sale of opiates such as fentanyl.

The growing public outrage due to the astronomical increase in housing prices and an economy distorted by millionaire foreigners, has caused the left -wing government of British Columbia, elected last year after promising that it would put the real estate market on the waist, an laboratory instructs a laboratoryGlobal public policies designed to restrict the arrival of Chinese money.

As a result, the province is raising taxes and strengthening the rules of transparency and surveillance to casinos and financial institutions.

The change will be difficult and delicate.Vancouver has been linked to Asia since the end of the 19th century, when the first Chinese workers arrived to help in the construction of the Transcaniense train, and the city is proud of its integration of immigrants.

In addition, beyond real estate, the economic base of the city is not so deep.It is not the business capital of the west of Canada (that place is occupied by Calgary) and is the seat of few companies of weight or large -scale manufacturing operations.

"Asian capital has kept the economy alive, end of history," says Ron Shon, a Chinese-Canadian investor who arrived in his adolescence in the late sixties."You can see it in all aspects of our lives."

But money is coming so fast, and in such a volume, that it has become impossible to cross your arms.Vancouver was perhaps the first major western city to experience all the force of Chinese capital.Soon, it could be the first to discover what happens when you try to stop it.

The West Coast of Canada is one of the most rugged environments in North America, dotted with imposing mountains and glacial valleys, and Vancouver is located at its southern end.

Since the beginning of the European settlement in the mid -nineteenth century, it was obvious that the city, with its deep natural port, would be a sea door, so Canadian Pacific Railway chose it as its western station.Vancouver quickly became a passage station for the natural generosity of Canada, the first destination of the gold seekers who were heading inside in search of fortune.

The antichino prejudice began early and intensified rapidly.In 1885, when the railroad was finishing, Canada introduced an 'imposed by immigrant' destined to stop the Chinese migratory flow, the tax increased considerably in 1903. Four years later, members of the Asatic Exclusion League were mutinied in the Chinese neighborhoodDe Vancouver, hitting the residents and looting the stores.

In 1923, Canada approved what was known as China's Exclusion Law, prohibiting most China's immigration and demanding that any person of Chinese ancestry be registered with the authorities.It was not until 1947 that ethnically Chinese residents could vote.

When Canada, hungry for foreign investments and workers, liberalized its immigration policies in the 1970s, Vancouver became a natural destination again.

Many people came from Hong Kong, a trend that accelerated after the United Kingdom agreed in the early 1980s to return the city to China in 1997.

In 1988, Li Ka-shing, a magnate of that city, agreed to pay 320 million Canadian dollars for a piece of land in False Creek, the close entrance that separates the two peninsulas from the city.It was the largest agreement on land in the history of Vancouver, and the slender residential towers that li erected there established the pattern for rapid development in other parts of the city.

Buildings like these received a large community of immigrants from Hong Kong, a growing number of Taiwanese and, over time, continental Chinese, many of them rich.

In China, Vancouver almost became synonymous with prosperity: one of Cathay Pacific's daily flights from Hong Kong has the number 888, the most auspicious number possible for that culture.

According to the last Canso de Canada, around half a million people in the Vancouver metropolitan area have approximately 20 percent of the population.The proportion is higher in Richmond, south of Vancouver, where it reaches 50 percent.

The Canada's immigration regime is strongly oriented towards qualified applicants, and also offers other advantages for the most wealthy, citizens can be obtained after only three years of residence.

These provisions have contributed to the proliferation of 'astronaut' families, where the main support of the family remains abroad, while the spouse and children live in Vancouver or Toronto.

Canada admits around 300 thousand new permanent residents per year, a much higher proportion than that of the United States as a percentage of the population, and its main political parties proclaim the economic and cultural benefits of immigration.

Surveys constantly show similar attitudes among the public.The inhabitants of Vancouver had never put but the newcomers, partly because they have brought money, and much.Thanks to a large extent to the purchases made by those wealthy foreigners, the real estate values of the city are now the highest in the country.

On The Phone With The Hospital on How To Go About Selling My Eggs https://t.co/i0f6rdlCGP

— ✿thotgirl✿ Mon Jun 14 19:23:05 +0000 2021

The average cost of a single -family home in Vancouver has tripled since 2005, a million and a half of Canadian dollars, constituting a heritage for thousands of owners.

But recently that attitude of open arms has changed.The signals were visible in 2010, when an online game called 'Crack Shack or Mansion appeared?

The discomfort was deepened as the neighborhoods emptied from the residents of a lifetime and many young people from Vancouver abandoned the hope of ever paying a home.Instead of being the clean and green city that dreamed its leaders, the city looked like a rainy monacious, although with better Chinese food.

The Liberal Party, which ruled British Columbia from 2001 until last year, minimized the importance of foreign money, accepting the arguments of the builders that high prices were the fault of a Byzantine bureaucracy and the shortage of buildable lands.

But in 2016, when the elections and real estate values were approaching, they continued to rise through the clouds, the liberals imposed the first Canadian tax on foreign buyers, a surcharge of 15 percent applied to any person without residence or Canadian citizenship that bought a housein Vancouver or its surroundings.For many voters it was too late, and the new democratic party party won power after promising to stop market prices.

The new British Columbia Prime Minister John Horgan, increased the surcharge to 20 percent and extended its geographical reach.His government plans to impose an annual tax of 2 percent on vacant properties in the hands of foreigners and has begun to close the legal gaps that allow buyers to avoid taxes on condominium purchases and properties transfers.

Of course, for these changes to be effective, the Government must know who owns real estate in Vancouver.Statistics Canada did not publish figures on real estate ownership in the hands of foreigners until 2017, when he informed that non -residents possessed more than 7 percent of the city's homes.

The Federal Housing Agency says that this is a underestimation, because foreign investors can make purchases through Canadian relatives or ghost companies.In 2016, international transparency discovered that the property of almost half of the one hundred most expensive properties of Vancouver (representing at least one billion Canadian dollars in anonymous wealth), was effectively impossible to track.

David Eby, the new British Columbia Attorney General, has experienced Vancouver's transformation directly.Provincial legislator Since 2013, he represents Point Gray, a well -off area whose mansions next to the beach include several of the most expensive properties in Canada.

In 2016, he revealed that in his district, real estate worth 57 million Canadian dollars had been bought by students without reported income."From my first day in the Prosecutor's Office, it was totally obvious to me that we had a big problem," she says.

"Our jurisdiction provides a series of very useful structures if you want to hide funds. We have a land property system that allows you to hide the true owner," he laments.

Those lagoons in British Columbia are as spectacular as the views of the mountains.It is perfectly legal, for example, buying the actions of a 'naked trust' whose only asset is a home, instead of buying the property itself.

Technically, the title never changes hands, which allows the buyer to avoid taxes for the transfer of property.Until September, it was also possible to buy a property using an anonymous corporation with a lawyer as its only director, or designate a 'fiduciary shareholder' that controlled that anonymous company, without revealing the true property in any of the cases.

Meanwhile, lawyers in British Columbia, as in the rest of Canada, are exempt from the key provisions of the law against money laundering, a prerogative that lawyer associations protect on the basis of the privilege of lawyer-client.

Shortly after assuming the position, EBy commissioned an independent investigation of the game industry.

The resulting report, published in June, concluded that "in our casinos there is a large -scale transnational money laundering" and warned that these funds are increasingly infiltrating the economy.

These money bags left in the Starlight casino in 2009 were one of the many transactions that should have activated the alert signals.In 2010, that same casino allowed, without questions, that someone turned three million Canadian dollars into chips.

The operators of Starlight and River Rock, a rival casino who according to the report is an even greater center for questionable deposits, channeled our questions on this topic to the Association of the Game Industry of the Province.Its executive director, Peter Goudron, said in a statement that the members "have always strictly adhered to protocols against money laundering established for them."

In September, Eby announced that its office would expand the review of the money laundering to include real estate sales and luxury cars.Although he has asked federal politicians more legal resources, he has not been successful."They have been ignoring fiscal problems, international criminal problems," he said.

The efforts to control the funds that flow to Vancouver will have to overcome a series of problems.The first will be to determine what is understood exactly as illegal, bribery profits and drug trafficking comply with the definition of dirty money of anyone, but what about the honest fortunes that leave China by raffling the bank rules?To keep Yuan stable and protect foreign currency reserves, China prohibits citizens from exporting more than 50 thousand dollars a year without government approval.

It is not necessarily Canada's work to impose that limit or punish people who resort to gray market transfers.

The new British Columbia policies seem to be producing the desired effect.Residential sales in the Vancouver metropolitan area fell 44 percent in September compared to the previous year, at the lowest level for that month since 2012.

Prices begin to decrease and houses remain in the market for longer;However, these statistics also highlight the underlying economic weakness of the city, dependent on the strength of the real estate sector.

According to some estimates, sales and housing construction and related activities represent up to 40 percent of the Gross Domestic Product of the province.

The diversification of the economy is an urgent priority for local and provincial authorities, which have tried to attract new renewable energy and clean technology companies, as well as expand tourism and encourage the manufacture of ships and airplanes.But all these ideas have run into the same problem: the high value of property.

And the more land prices have displaced other industries, the more the economy has supported the real estate properties, a vicious circle without an obvious exit.

Creating a global company in Vancouver is not impossible, you just have to ask Chip Wilson, the controversial founder of the sportswear manufacturer Lululemon Athletica, one of the few international brands originating in the city.

However, he has been aggressively buying land throughout the city, especially in False Creek Flats, an abandoned industrial area that will be remedicated.

The current British Columbia government can temporarily stop the flow of money, says Wilson, however China's boom has created many billionaires who need a place to put their money."So, where are you going if you are Chinese? Sydney, maybe. But no part is more friendly than Vancouver."One way or another, she says, those funds will find their way to Canada.

In Wilson's opinion, global financial forces will inevitably crush local measures.

Horgan and Eby may stop the worst excesses, but faced with one of the world's largest funds, not to mention Vancouver's own history, the wall of the provincial government will be of little use.

There is still a lot of money to earn in the eternal safe bet that is Vancouver.Therefore, every time he returns from a trip to Asia, the businessman says: "Buy land, chip, buy land".