Pete McMartin: Racism and resentment surround nixed investor-class immigrant program

posted on February 20, 2014

By Pete McMartin, Vancouver Sun | Link to Article

By Pete McMartin, Vancouver Sun | Link to Article

Was driving down Oak Street Tuesday night. Going to dinner downtown. My wife warns me, watch out for car ahead of us, it’s drifting into our lane. The car, creeping down Oak, has an “N” in back window. A new driver. The car is a Bentley Continental, list price well over $200,000. The driver is young Asian guy.

Let me be honest, since we are often not honest when it comes to owning up to these sentiments.

If I attempted to beguile you into believing that I, at that point, did not feel the pang of resentment toward the driver simply for what I imagined he represented and not for his driving skill, I would be lying.

It was all there for me to loathe and envy — the spoiled one per center, the rise of Asia, the jarring display of wealth out of all proportion to its surroundings, the sense that Canada was being played by opportunistic immigrants.

For all I know, the guy could have been a sixth-generation Canadian whose forebears had worked a claim in the Barkerville gold fields.

But experience dictated, and my own prejudices led me to believe, that he wasn’t. The sight of young Asian immigrant kids in luxury sports cars is so common it has entered the urban folklore of Metro Vancouver.

And that was only one personal vignette that, rightly or wrongly, plays itself out thousands of times a day in Metro Vancouver. They all give rise to the same resentment. That resentment can be about cars, or real estate, or schooling, or even about the sense that a luxury store was targeting only wealthy immigrants.

And when the federal government killed the investor-class immigrant program last week, it played on that resentment, too, maintaining in its news release announcing the program’s closure that a millionaire investor immigrant could pay less in tax than an immigrant who works as a live-in caregiver. It was put in terms — stereotypical terms — to give the impression that some kind of injustice was being committed. Sly, scofflaw millionaire! Poor, upright caregiver!

But the millionaire was only playing by the rules. It was the feds’ lax regulatory structure that messed things up.

The program deserved to be scrapped, no question. There was a poor return on investment, and a huge discounting of the buy-in when compared to the programs of other nations. We woefully undersold ourselves.

But money wasn’t the real problem. The real problem was the damage it has done to the social fabric.

When the feds decided to import a wealthy class rather than create one, it made two mistakes that did more to divide Metro Vancouver along financial and racial lines than any other phenomenon:

One, the government never thought out the rationale behind the investor program or its social consequences. Was it real desire that brought that class of immigrants here, or convenience? Did they bring just their money with them, or their hearts, too?

The suspicion, in the end, was, neither.

Two, since the overwhelming majority of that class of immigrants have been Asian, and the overwhelming majority of those Asians have been Hong Kong or mainland Chinese, the investor program succeeded in conflating flaunted wealth, which always causes envy, with race, which brings its own set of problems.

So while the overall numbers and economic effect of the investor-class immigrants may be small — and I’ve never bought into the argument that they alone have driven the rise in real estate prices — their visibility has had a much greater effect on racial stereotyping and the city’s sense of fracturing social cohesion. That is, it isn’t just the immigrant communities that have been self-ghettoizing.

It also brought into question the purpose of immigration. Should its purpose be altruistic or strictly economic?

Says Tsur Somerville, professor with the University of B.C.’s Sauder School of Business: “I find it a mind-boggling program. I know it’s a U.S. thing with the give-me-your-huddled-masses-yearning-to-be-free ethic … but somehow the overwhelmingly wealthy don’t fit into that category for me.”

And more pragmatically, Somerville felt the investor program lacked a clear economic rationale.

“If you’re going to bring in investors, make them be investors in areas that your domestic economy is not providing.”

(The U.S. EB-5 investor-class program, for example, is designed mainly for job creation, especially in low-employment areas.)

“And if you’re bringing in investors, it’s because you believe your capital markets aren’t working well … or there’s a capital shortage in Canada, so you bring in people who have capital. You’d be doing something like that, but that’s not what we’re doing.”

What we were doing with the investor-class program, the feds have admitted, was wrong, but not for the reasons the feds gave.

It was wrong because we failed to make the distinction between being an “investor” in Canada and being “invested” in Canada, and we’re all poorer for it.

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