Affordable housing has been a huge issue in Metro Vancouver,increasingly in Vancouver, Burnaby and Richmond as the debate over whether or not to tax absentee and/or foreign investors driving the market, continues.
The province, had this to say recently as to why they would not be imposing such a tax: http://www.cbc.ca/news/canada/british-columbia/bc-real-estate-tax-housing-prices-1.3409587
Premier Christy Clark has said housing affordability will be ‘front and centre’ as the government prepares to deliver its budget next month, but she has also shot down speculation and luxury taxes on foreign investors as fixes for rising prices.
To me,as a British Columbian fully invested in my families future in the province,it just doesn’t make sense. Are the Forces of NO, striking families- and successful singles and couples in British Columbia, once again?
My answer? Yes, I believe they are.
But why? Why would the province put foreign or absentee owners -whose only interest may be parking funds in a hot real estate market rather than building community-over people actively involved in our local and provincial economies?
The province of British Columbia recently issued the 1st sovereign Panda Bond in China and it has been making news in financial papers around the world: http://www.ecns.cn/cns-wire/2016/01-22/196811.shtml
ECNS) — The Canadian province of British Columbia issued a panda bond on January 21, the first by a foreign country in China’s interbank bond market.
BC Finance Minister Michael de Jong, Ambassador of Canada to China Guy Saint-Jacques, and representatives of the BC Finance Ministry, Bank of China and HSBC briefed the media in Beijing on Friday.
The three-year-term bond, priced at 2.95 percent, raised 3 billion yuan, or about 665 million Canadian Dollars.
It was twice-oversubscribed by domestic investors in China, including policy banks, commercial banks, fund managers and brokerage firms. Proceeds were immediately reinvested in an offshore RMB-denominated investment with Singapore’s United Overseas Bank. Net income on the RMB investment will be used to support and expand the province’s trade and investment offices in China.
“The coupon rate is set below 3 percent, not because nobody wants to buy it. There’s strong appetite for AAA-rated bonds,” de Jong said, adding that the oversubscription owes much to lead underwriters.
BC got approval from the People’s Bank of China to issue panda bonds worth 6 billion yuan ($938 million) for terms of up to 10 years on November 27.
“It could have taken years,” de Jong said. “We’re very pleased to see the level of cooperation by the NAFMI (National Association of Financial Market Institutional Investors) and our lead underwriters.”
BC was the first foreign government to sell a “dim sum” bond of 2.5 billion yuan in 2013 and 3 billion yuan in 2014.
A dim sum bond is issued outside of China but denominated in Chinese renminbi, while a panda bond is a renminbi-denominated bond from a non-Chinese issuer sold within mainland China.
The move allows the use of RMB in bilateral trade and more efficient investment for Canadian financial institutions.
“It shows our support for the internationalization of RMB,” Saint-Jacques said. “RMB use could save 5 to 6 percent of transaction fees.”
Accordingly, bilateral trade in 2015 amounted to 86 billion Canadian dollars.
In 2015, Canada became the first country in the Americas to become an offshore clearing and trading centre for the RMB.
Saint-Jacques said Canada hopes to further advance political and economic ties with China.
“Our Prime Minister Justin Trudeau is likely to attend the G20 summit in Hangzhou in September, and we hope high-level Chinese leaders could visit Canada in 2016,” he said.
HONG KONG, Jan 4 (IFR) – British Columbia has hired Bank of China and HSBC Bank (China) as joint lead underwriters for a potential maiden offering of Panda bonds.
The offering is for up to 3 billion renminbi ($460 million) with a maximum tenor of five years.
The Canadian province registered with Chinese regulators in late November to issue Panda bonds of up to Rmb6bn in the domestic interbank market.
HSBC.( China branch)
And the Bank of China:
Both banks have been plagued in one form or another, by investigations into bribery,fraud and missing funds. Don’t trust me, ask your financial advisor!
I just want you to sit, and think a moment, about the possibility that the reason that Premier Clark and the BC Liberal MLAs don’t want to tax foreign investment is…
… that they are relying on it. You issue the first sovereign bond in China, and you clearly need it to be a success. Your LNG Prosperity Fund you promised isn’t working out for you and you need some help,yesterday.
Are you going to send a message to foreign investors who may buy those bonds, that BC is not interested in your investment?
I think not.
Not when the: “Net income on the RMB investment will be used to support and expand the Province’s trade and investment offices in China” ttp://advantagebc.ca/blog/b-c-enters-worlds-third-largest-capital-market-with-panda-bond-issue/
BC families first? With no effort to increase value added exports instead of raw logs etc. to keep BC workers, working? And no effort to make it easier to own your own home, in your hometown, in Metro Vancouver?
And who exactly is buying these bonds? Because it seems to provide a prime vehicle for money laundering or buying BC real estate.
*** I first raised concerns in 2013 over the first dim sum bonds https://www.google.ca/amp/s/lailayuile.com/2013/11/08/bc-government-dim-sum-bonds-a-success-in-hong-kong-but-give-indigestion-to-many-here-in-british-columbia/amp/
**update** David Eby finally caught up to this in July 2016…https://www.google.ca/amp/s/globalnews.ca/news/2798386/concerns-raised-over-panada-bonds-issued-by-b-c-government/amp/
*** And…..after concerns over Panda Bonds…now the ndp is jumping back into the fray and issuing more bonds ( facepalm)
** good read and report here on how taxpayers money is at risk after proceeds were reinvested in foreign markets http://www.andrewjohns.ca/blog/pandabondsscheme