The News Rundown
- This week in Alberta we are monitoring the developing story involving the sexual harassment claims out of the Premier’s office. Here at Western Context we believe all allegations must be followed and the full story learned before commenting, as a result we’ll be monitoring this story into the next week.
- For now, we’re going to continue with the coverage of our municipal election results from last week.
- The daylight savings referendum was defeated in a narrow Brexit-like defeat. The No side won by just over 5,000 votes at 50.2% to 49.8%.
- This means that clocks will continue to change twice yearly in Alberta.
- Surveys published in the past suggested a higher number of residents would want the clocks to stop changing. This implies that either the surveys were wrong or these people did not get out to vote.
- There’s also the possibility that Albertans would have favoured staying on standard (winter) time and losing an hour of light in the summer but that was not an option in the referendum.
- Interestingly enough smaller municipalities and the rural areas of the province voted to stop changing the clocks while larger centres like Calgary and Edmonton voted to keep the status-quo.
- In relation to the other question, the question that the ‘experts’ say doesn’t matter, equalization, 61.7% of Albertans voted Yes to remove equalization while 38.3% voted no.
- The only jurisdictions to vote no resoundingly were Edmonton, Banff, and Canmore.
- On the results, Premier Jason Kenney said, “A clear majority of Albertans have sent a powerful, democratic message: They want a fair deal in the federation. These results have given Alberta’s government a powerful mandate to secure changes to equalization and other federal transfers that have treated Albertans unfairly for so long. Our message is clear: Ottawa must respect Alberta and the huge role we play in Canada’s economic prosperity.”
- Once again, we need to be 100% clear that just because the province voted this way, equalization will not go away immediately if at all.
- The next logical step would be for the Premier to bring it up at the next council of the federation meeting with other Premiers and suggest a constitutional amendment.
- To pass, 7 provinces would have to be onboard representing 50% of the population.
- The more likely alternative is that it begins a discussion with the federal government on fiscal fairness.
- The so-called “experts” have encouraged Justin Trudeau to just ignore the referendum because after all in their view, it was Jason Kenney’s Conservative government that negotiated the current formula.
- That’s a short sighted view since equalization has been transferring money between provinces since 1957.
- Ignoring this referendum will fan dangerous flames that could evolve into something much more dangerous within Alberta and Saskatchewan. Something that could lead to a strong showing of western populism or western separatism.
- And that’s just the point, Quebec has used the threat of separation or referendums to bring a message to the federal government successfully for decades.
- Somehow, Quebec manages to operate with the most freedom and within the Canadian federation while still receiving generously from programs like equalization.
- Alberta needs to be a leader today, especially with the appointment of Steven Guilbeault as Environment Minister. He doesn’t want oil, gas, or nuclear power. The latter of which can help us get to a greener future. The question is whether his environmental roots will be a problem for Alberta.
- And as former Prime Minister Jean Chretien put it, “When you are in Alberta, it is almost a culture of complaining.”
- And that’s an interesting comparison because as I mentioned, Quebec has almost become a sovereign state within Canada while still receiving equalization and all the federal programs we enjoy.
- Alberta needs to take the path of Quebec.
- In a final note on this story, we need to point out the hypocrisy of the media and their biased coverage on this matter.
- First it was framed as a referendum on Jason Kenney and his COVID leadership while suggesting the federal government ignore the results.
- Now that we have the results it has shifted to a question of if the results paint a clear picture.
- Those in the media will note that only 38% of Albertans voted. And with that, just over 49,000 ballots were left blank on the question of equalization.
- And failing that argument, it becomes a question of whether or not anyone outside of Alberta should even pay attention because to the media elites, Alberta is one province, O’Toole lost, and Canadians wanted Trudeau (apparently). Despite the minority Liberals getting the least number of votes ever for any government.
- As it goes in the field of communication and persuasion, when the argument shifts or you have a myriad of reasons why something could have happened, or you attack the messenger, you’re losing the argument.
- In capping off our municipal election and referendum coverage, I’ll also say that in the Alberta Senate Election, the Conservative Party of Canada candidates took the top 3 spots winning a combined 46.6% of the votes while former PC Minister Doug Horner who ran as an independent came in fourth and the independents as a block garnered 38% of the vote.
- Prime Minister Justin Trudeau would be served best by appointing any of the Conservative or Independent candidates who as a whole won the support of a majority of Alberta’s population.
- An organization that received $5.8 million from the federal government to help job seekers from under-represented communities is refusing to say if it paid the prime minister’s mother, Margaret Trudeau, to speak at an event it held this month.
- She appeared in Elevate.ca’s Think2030 series, on October 14, to speak about mental health and the effects of the pandemic. Elevate is a Toronto-based not-for-profit that says its mission is “to unite Canada’s innovators to solve society’s greatest challenges.”
- It currently lobbies the federal government for funding through FedDev Ontario, a federal regional economic development agency. As recently as 2019, Elevate was also registered to lobby the Prime Minister’s Office for funding for one of its events, Elevate Tech Fest.
- In June, the federal economic development agency for Ontario announced it would provide the funding for the organization’s Elevate Talent program, intended to help people from marginalized groups find jobs in the tech and creative sectors.
- Past payments to Margaret Trudeau and other Trudeau family members by WE Charity were the subject of an investigation by the federal ethics commissioner, Mario Dion.
- Conservative MP Michael Barrett is calling on Dion to investigate whether Prime Minister Justin Trudeau violated the Conflict of Interest Act for yet another Trudeau family member being involved with an organization that is lobbying the government for money. Barrett suggests that the appearance raises questions about Section 6 and 7 of the Conflict of Interest Act regarding whether the prime minister has advanced his mothers’ private interests by directing money to the organization.
- Barrett’s letter to the ethics commissioner also states that this is not the first time questions have been raised about the speaking engagements of Trudeau’s family: “Mr. Trudeau’s failures in the past to respect Canada’s Ethics Laws make it particularly important that scrutiny is applied to any and all potential conflicts of interest.”
- The story has pulled little attention from the media, as Trudeau finally announced his new cabinet on Tuesday. Chrystia Freeland remains as Deputy Prime Minister and Finance Minister, while others have been shuffled around, and veteran MPs Marc Garneau and Jim Carr have been swept out of cabinet altogether.
- While the media discusses who is in which portfolio, and what this means for the country, the end result is that little has changed as a result of the cabinet shuffle. The power is still concentrated with the Prime Minister and his PMO, which gives mandate letters and direction to the cabinet. Despite the media distracting everyone with the new picks, the real event that could have sparked change was the election in September. As we see with the Margaret Trudeau story, not much has changed at all.
- One of the starkest comparisons in the COVID pandemic has been the differences between Canadian provinces and similarly sized US states.
- US states have lower vaccination rates and are able to operate without restrictions.
- We’ve talked about healthcare capacity per capita in the past on Western Context 237.
- But what about treatment options? One of those options is Regeneron and has been in use since late 2020 and was the experimental drug given to President Donald Trump when he contracted COVID.
- Regeneron is a combination of drugs that effectively spurs an antibody response. It uses lab made antibodies and gives the person in question an initial immune response. The US purchased almost 3 million doses at a cost of about $2100USD each.
- As recently as this September doctors in Canada thought that drug treatments like Regeneron otherwise known as monoclonal antibodies would be useful.
- The reason is that it works well in mild and hospitalized cases for people who don’t have antibodies, otherwise known as the previously uninfected or unvaccinated.
- The treatment is delivered via a one hour infusion and according to Dr. Theresa Tam, it’s not about cost but feasibility of delivery.
- Logistics is a problem that Canada did not nail down until late in the pandemic. When it comes to life and death, we should have been moving earth to make the treatment available.
- One of the shortcomings of inherently public health systems is that they lack the innovation and competition to move things faster than would in the private industry.
- But now, a month later, one Canadian province is leading the way and that is Saskatchewan.
- How we were able to wait nearly a year after the US authorized treatment before starting to use it raises serious questions when lives were at stake.
- In Canada the 4th wave is a pandemic of the unvaccinated and Regeneron could have been used to blunt its damage.
- Starting this past Monday certain patients in Saskatchewan will be able to access Regeneron.
- Saskatchewan will launch a self-assessment tool to see if a person is eligible for the monoclonal antibody treatment.
- Anyone who is unvaccinated, immunocompromised or is immunosuppressed will be able to access Regeneron regardless of vaccination status.
- And, patients will need to be within 5 days of becoming symptomatic.
- And, patients 55 years or older or 18 years and older with a high risk co-morbidity.
- The treatments will be made available in Regina and Saskatoon.
- Canada built a vaccine distribution network and each province was tasked with setting up immunization centres.
- There are hospitals in most municipalities that are capable of carrying out IV therapy treatments. It’s a question of getting the medication to the hospitals in question.
- What’s more, this is a treatment that can be given in an outpatient setting which is crucial when it comes to conserving hospital bed space.
- Each and every province should be building plans and requesting doses of the Regeneron monoclonal antibody treatment.
- Cost should be no issue whatsoever as our governments have spent and seem focused on building back better and the spending that entails.
- But nonetheless our best ally, the United States, approved a treatment that has a chance of keeping people alive, and we’re only starting to use it now.
- Something has to change with our COVID healthcare response in Canada.
- Much of the BC media is gawking over the fate of the container ship that grabbed headlines last week, first for losing 40 containers in a storm (which was then later stated to be about 100 lost), to a fire that broke out on the ship due to a highly flammable potassium compound that send toxic clouds of smoke up into the air off of the south coast of Victoria.
- While the fridges, Christmas decorations and other assorted retail goods float up on beaches all over the west coast of Vancouver Island, another story has flown under the radar of BC coverage this past week.
- Everyone knows that Canadian real estate has gotten wildly out of control. The inflated housing markets of Toronto and Vancouver have crept into almost all other cities as well, and with the inflation crisis upon us, things are reaching their breaking point.
- Moody’s Analytics released its Canadian real estate model this week. The large credit agency firm’s model shows markets are overvalued by up to 91% across the country. Swiss bank UBS ranked Toronto No. 2, only behind Frankfurt, in this year’s Global Real Estate Bubble Index, with Vancouver at No. 6.
- Examples of the inflated housing bubble can be best shown by real examples. Earlier in October, a small East Vancouver home sold $551,000 over its asking price. The two-storey-with-basement home sits on a 24- by 122-foot lot, which is much smaller than a standard cut in Vancouver with a frontage of 33 feet. The detached home was listed for $1,699,000 on September 8. It sold 7 days later for $2.25M.
- The property had an assessment in 2021 of $1,499,000, meaning that it sold for more than 50 percent above its assessed value. It sold for $1,535,000 in February 2018. Before that, the same house sold for $950,000 in June 2010. About 14 years prior, the property sold for $231,000 in November 1996.
- Adam Major, a managing broker with Holywell Properties, who is also the CEO of a real-estate information site, notes that when you look at the % increase in value over the last 25 years, it has outperformed the stock market.
- “This means that since 1996, the house has increased in price by 9.53 percent per year, compounded annually for 25 years. An almost tenfold increase. That is better than the stock market. The S&P 500 returned 7.23 percent per year over the same time period. If you reinvested all dividends, you would have made 10.04 percent. Still, with the S&P, you would have to pay capital gains, but not with your primary residence in Vancouver. So comparing the two, Vancouver real estate has definitely been the better investment over the last quarter century, than the stock market.”
- It remains to be seen just how much of this housing bubble has been driven by money laundering. Since the Cullen Commission of Inquiry into Money Laundering in British Columbia was launched over two years ago, it has held five community meetings around the province, undertaken thousands of hours of investigation, research and interviews, held 143 hearing sessions over 138 hearing days, heard testimony from 198 witnesses with an additional 23 witnesses providing evidence via sworn affidavit, received 1,063 exhibits and released its Interim Report.
- All of this has come to the conclusion that money laundering has had an enormous impact on the value of real estate in BC. Likely, this has also had cascading effects on the rest of the country as well. Conservative estimates from a report from professors Maureen Maloney, Tsur Somerville and Brigette Unger, titled Combatting Money Laundering in BC Real Estate, indicate there was $5.3 billion laundered into B.C. real estate in 2018 alone, thus leading to an increase in real estate prices.
- A case study from the Cullen Commission has focused in on a citizen from China who reported average annual earnings of just $40,615 to Canadian border agents yet went on to buy $32 million worth of Vancouver real estate after moving $114 million from Hong Kong-based depositors with connections to organized crime and the Chinese Communist Party.
- The study is one of over 1,000 commission exhibits, and it hits on a number of vital aspects of money laundering heard during the course of the 18-month inquiry, such as nominee purchases, obscure corporate structures, fraud, layering and placement of assets (particularly real estate) and links to organized crime and corruption.
- The anonymized study describes a family affair of suspected money laundering. The ‘Man’ utilized his ‘Wife,’ ‘Child’ and ‘Mother’ to move funds from Hong Kong-based depositors, or so-called “money changers,” and into luxury homes in Vancouver as well as at least one Bahamas-based shell company.
- The Man came to Canada in 2006 with total declared family assets of $1.25 million but became subject of a deportation hearing under the Immigration and Refugee Protection Act in 2016. A number of reports to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the national financial intelligence agency of Canada, seemed at odds with his declarations. Documents in the study also show the Man was listed by Interpol as being wanted for bribery. The immigration proceedings are now sealed, according to commission counsel.
- Between April 2006 and November 2014, the Man and his family members received about $114 million from Hong Kong. Much of the money moved through an investment holding company listed in the Bahamas owned by the Mother. The company held $34.6 million in three accounts. Documents also show the Wife (listed as “homemaker, unemployed and CEO”) ordered transfers from institutions listed in Switzerland, China, Singapore and Canada.
- FINTRAC reports showed the money moved in 60 separate electronic fund transfer reports, seven large cash transaction reports and just two suspicious transaction reports.
- The Man and the Wife bought their first home in Vancouver for between $2.0 million and $3.0 million, according to the study (exact details are redacted). The Child, listed as a student, then bought a $14 million home in 2012. The Man bought a second home, for at least $15 million in 2016 – the same year the Child bought a second property in the $1 million to $2 million range. The properties were tied to one another via mortgages and names on land titles. It’s unclear where the other money went.
- Overall, the commission found limited open source information about these depositors, despite the large amounts of cash flowing into B.C. One operated in an obscure building belonging to an auto repair shop. “Almost no information is available about these companies online,” the study states in reference to two of the depositors.
- Depositor Hing Wah China + HK Renminbi Exchange Co., which made the most deposits to B.C. accounts, was found to have shareholders named Fang Jinghua and Hing Wah. Those two were accused of operating an underground bank in a Chinese court dispute but were determined innocent of the allegation. Fang, who owns a number of Hong Kong businesses with his family, has also faced charges of assault and criminal damage. A business associate of theirs is Fong Siu Lok, who is a co-shareholder of jewellery shops with the “Fang Family.”
- “Lok has a somewhat higher public profile than other Fang Family members. He became head of the Hong Kong Lion’s Club in 2017, and in 2011 and 2012 was one of Hong Kong’s delegates to the Chinese People’s Political Consultative Congress (“CPPCC”) of Fengkai, a region of Guangdong just north of Hong Kong,”
- The CPPCC is a branch of China’s foreign influence program, the United Front Work Department, according to the U.S.-China Economic and Security Review Commission.
- The commission goes on to detail some of the connections Lok has, including to a woman named Szeto Yuk Lin – a “gaming tycoon widely reported to have close connections to organized crime, particularly Wan Kwok-koi, a.k.a. Broken Tooth Koi, a leader of the 14K triad,” the study found.
- “In 1997, Wan ordered a hit in Vancouver against Lai Tong Sang, an alleged leader of the rival Shui Fong triad. Wan was sentenced to prison in 1999, and after being released in 2012 is alleged by the United States Treasury and others to have continued to conduct criminal activities,” states the study.
- Likewise, the commission has heard testimony about alleged Chinese transnational organized criminals operating in concert with local gangs and using B.C. casinos as a means to launder drug proceeds by loaning cash to gamblers.
- Justice Austin Cullen may also weigh in on his views of foreign capital impacting the Vancouver real estate market and to what extent Canadian laws mitigate any risks of that money being from criminal activity. Cullen heard broadly from experts that it is difficult to pinpoint the exact quantity of money laundering in real estate.
- One thing is clear, money laundering in BC and foreign nationals, largely from the People's Republic of China, have been taking advantage of lax oversight and laws to take advantage of the real estate market. The BC government's, both present and past, have been either slow or ineffective at combating the problem, and may even have encouraged it. This huge story about the Cullen Commission flew completely under the radar in the media, and while everyone talks about housing prices, no one talks about WHY they are the way they are right now.
Word of the Week
Laundering - to conceal the origins of money obtained illegally by transfers involving foreign banks or legitimate businesses.
Quote of the Week
“A clear majority of Albertans have sent a powerful, democratic message: They want a fair deal in the federation. These results have given Alberta’s government a powerful mandate to secure changes to equalization and other federal transfers that have treated Albertans unfairly for so long. Our message is clear: Ottawa must respect Alberta and the huge role we play in Canada’s economic prosperity.” -- Premier Jason Kenney reacting to the results of Alberta’s Equalization Referendum.
How to Find Us
Episode Title: Dirty Laundry
Teaser: Alberta rejects permanent summer time and equalization, Margaret Trudeau speaks at an event by a company lobbying the government, and Saskatchewan approves of Regeneron to treat COVID. Also, we look at just how money laundering affects BC real estate.
Recorded Date: October 29, 2021
Release Date: October 31, 2021
Edit Notes: Start reconfigure
Podcast Summary Notes