The Greater Vancouver area is expected to produce more than half of the province’s total output of goods and services in 2005

Derrick Penner
Sun

For the sheer size of its population and weight of its industries, the Lower Mainland truly is the engine of British Columbia‘s economy, and it appears to just be getting revved up.

With a population touching 2.4 million, the Lower Mainland — stretching from Hope in the east to Bowen Island in the west — accounts for some 57 per cent of B.C.’s population.

And Greater Vancouver is expected to produce more than half of all B.C.’s output of goods and services in 2005, according to the Conference Board of Canada.

“Vancouver is obviously the dog that wags the tail, especially in terms of the sorts of industries looked at as leaders of growth into the future,” says Robert Helsley, economist and associate dean of the Sauder School of Business at the University of British Columbia.

As the biggest population centre, Helsley said the Lower Mainland is B.C.’s biggest beneficiary of the inexorable shift towards service-based economies that are less dependent on resource extraction and manufacturing.

POPULATION MAGNET

The Vancouver area is also the biggest magnet for the province’s population growth, which pushes demand for the housing and retail sales that have helped fuel B.C.’s economy over the past two years.

The Conference Board of Canada predicts that the area defined as the Vancouver census metropolitan area — roughly the Greater Vancouver Regional District — will churn out $72 billion in economic output during 2005 compared with a total provincial economy in 2004 of $138 billion as measured by B.C. Stats.

And while Vancouver is clearly the economic powerhouse in the Lower Mainland, Abbotsford is posting strong growth rates, with the Conference Board saying it had the fastest growing economy in Canada last year.

Mario Lefebvre, an economist with the Conference Board of Canada, defines Vancouver as “one of the four big engines of [Canada‘s] overall economic activity.” Toronto, Montreal and Alberta‘s Calgary-Edmonton corridor are the other key business generators.

DRIVING FORCES

“City regions are the driving force of this economy,” Lefebvre said. “They are our window on the world, and with the expression ‘globalization’ being so highly recognized, we know how city regions are playing a role in terms of putting Canada on the map internationally.”

And while it is sometimes a hard sell, Lefebvre argued that initiatives that increase economic activity in the big cities bring about benefits for the entire economy.

They are where innovations are developed that spill over into the general economy, and often benefit the regions surrounding big cities. In Vancouver, innovation itself is pretty big business: the University of British Columbia, with some 10,000 employees, and Simon Fraser University, with 2,500 workers, rank as two of the Lower Mainland’s biggest employers.

AGGLOMERATIONS

Helsley said that economists study these effects in a branch they call “agglomeration economics.”

More simply, he added, the effect of “agglomeration” can be thought of as the formation of business clusters. Companies involved in a particular activity are increasingly drawn together in “clusters” as the talent pool and support services for their businesses grows.

Vancouver‘s biotechnology sector, for example, is drawn to the Lower Mainland’s universities and the talent they can draw from institutions such as Genome B.C. and the Michael Smith Foundation for Health Research.

“It’s like a scale economy,” Helsley says, adding that biotechnology or other technology endeavours are still small in relation to the overall economy.

Helsley added that people “should not lose sight of the fact that traditional business service industries: financial services, business consulting in addition to software development and engineering, are places where one can have this kind of critical mass and clusters.”

Helsley said the Lower Mainland’s construction industry is not typically considered a cluster, because the market is local and so dependent on local conditions.

However, he added that there “definitely are agglomeration effects” in the city’s financial services sector. Employment in Greater Vancouver’s finance, insurance, real estate businesses, for instance, was 90,300 people in 2004, as measured by Statistics Canada’s labour force survey. That’s up 15 per cent since 1996.

Helsley said the region’s ports — Port of Vancouver and Fraser River Port — are also catalysts to form such clusters in the transportation sector.

Vancouver, he said benefits from: “its location on the Pacific Rim, growth of the Asian economies, the fact that we’re a transshipment point where we can move freight from water to rail, even air.”

“All these things create an advantage firms that locate in the Lower Mainland can take advantage of.”

RESOURCES STILL KEY

Dave Park, chief economist for the Vancouver Board of Trade, said it is important not to overlook the importance of B.C.’s resource industries to the economic health of Vancouver.

He added that as late as the late 1990s, the forest industry made up one-quarter of the province’s total economy, and accounted for one-in-five jobs in the Lower Mainland.

Park didn’t have an up-to-date assessment, but estimated that the proportion of forest industry has probably shrunk, not necessarily because the number of jobs has declined, but because employment in other sectors has grown more.

“Yes, there has been shrinkage in direct manufacturing jobs, but there has been huge growth in employment,” Park said.

He added that it is surprising how strong the region’s economic growth has been, and it looks like it will stay strong through the 2010 Olympics and beyond.

CONSTRUCTION BOOM

“Construction is red hot,” he said. “Residential started sooner, but non-residential construction is going to be so strong right past 2010. Some of it is Olympics-related but there is a lot of other stuff coming as well.”

Lefebvre said Vancouver‘s status as “one of the large hosts” for immigrants drives a lot of Greater Vancouver’s growth.

“Give or take a few, in the area of 30,000 to 40,000 international migrants arrive in the city annually,” he added. “That is like a medium-sized city [every year].”

And like in a medium-sized city, the new arrivals require housing, which drives residential construction. New people also demand adequate services, driving the need for new bank branches, grocery stores and shopping malls, which boosts commercial construction and employment in retail trade and other service sectors.

“In terms of future growth, the prospects of [B.C.] are intimately tied to the prospects for the Lower Mainland,” Helsley said.

– – –

TOP SECTORS

The top 10 industry sectors in Greater Vancouver, by employment.

1. Trade (retail and wholesale): 183,400

2. Health care and social assistance: 124,100

3. Manufacturing: 118,500

4. Professional, scientific and tech: 107,900

5. Accommodation and food services: 95,100

6. Finance, insurance, real estate and leasing: 94,700

7. Educational services: 85,900

8. Construction: 85,800

9. Transportation and warehousing: 71,400

10. Information, culture and recreation: 68,100

Total: 1,034,900 or 85% of total employment in the region

ECONOMIC WAVE

The Lower Mainland

– Generated $70 billion of B.C.’s 2004 economic output of $139 billion gross domestic product.

– Accounted for 1.22 million of the economy’s 2.059 million jobs.

© The Vancouver Sun 2005

City’s advisers give spectacular building plan unanimous approval

Ashley Ford
Province

The new Vancouver Convention & Exhibition Centre on the waterfront has cleared another hurdle with the city of Vancouver‘s approval of the development permit.

The $565-million, 68,000-square-metre project now only has to clear a number of technical design conditions from the city before a final development permitting actual construction of the building is issued.

Larry Beasley, Vancouver‘s director of planning, says he is enthusiastic about the building, despite some reservations from two members of an advisory group, who felt it could have been improved upon.

“It received unanimous approval. It will be an excellent building and will provide a wonderful public meeting and activity place for the people of Vancouver. It’s a pretty spectacular result,” he told The Province yesterday.

He said it will certainly be no black box on the waterfront and will be a very active public place with the seawall, public plaza and the green-living roof. It will be much, much more than just a convention centre.

The two-hectare living roof will be an amazing feature, he says. “In effect it will be creating a nature reserve in the heart of the city, which speaks to what Vancouver is all about.”

The remaining conditions are technical and Beasley expects full approval by the end of the year.

Russ Anthony, president of the Vancouver Convention Centre expansion project, said the approval is an “important milestone for us. We have worked on this for two years and it is good to have this step behind us.” He expects all the major components to be substantially completed by the end of the year.

While the current piling program is on schedule, Anthony said there have been a few “surprises” that have been overcome.

With over 100 years of previous industrial development in the area, it is no surprise the piling program has occasionally run into problems such as old concrete footings. The huge piling effort remains on track for completion by the end of the year. The next major step will be the awarding of the critical contracts for concrete and steel next month or in August. The tenders are already in.

Anthony admitted there is some concern with escalating prices for construction materials and “we are working very diligently to get every cent of value we can.” Financial provisions have been made for such escalation, he said, without saying how much has been set aside.

The new building is on course for its 2008 completion. Then the existing convention centre at Canada Place will undergo a $20-million renovation, with completion scheduled for September 2009.

© The Vancouver

Jered Stuffco
Sun

An online game aimed at children can result in parents being billed for hundreds of dollars in phone charges — all for imaginary items purchased in cyberspace.

Vancouver dad Jimmy Goh was shocked when he looked at his Telus bill last month–all 16 pages of it.

The total tab: more than $300.

“I thought it was some kind of mistake at first. It almost [looked] like an adult phone line,” Goh told The Province.

Instead, Goh realized his son Brandon was responsible for the pricey phone bill.

The 12-year-old had been playing the Internet game Habbo Hotel and multiple-dialling the website’s 900 number– at $3 a pop — to buy credits for the game.

“He didn’t understand the concept of it adding up. It’s ridiculous. I think it’s a scam, because the kids don’t know,” Goh said.

Goh knew his son was playing the game, but he thought it looked harmless and legitimate.

The game’s website is promoted by www.muchmusic.com and has a link to the government of Canada‘s Kid’s Help Line.

Goh has blocked 900 numbers on his home phone — and banned his son from using the phone and the Internet.

Now he wants to warn other parents in the Lower Mainland.

“I can’t be alone. There are other kids like my son, but I think the parents are keeping quiet,” he said.

On Friday afternoon, more than 2,000 users were playing the game in Canada. Another 5,400 were logged on in the U.S.

Representatives from Sulake, the Finnish-based company that owns and operates Habbo Hotel, did not respond to phone calls or e-mails from The Province.

Vancouver‘s Better Business Bureau wasn’t aware of any outstanding complaints against the company.

“We wouldn’t necessarily get any complaints, because the parents would take a strip out of their kids,” said the Better Business Bureau’s Sheila Charneski.

Telus was also unaware of any complaints.

Habbo Hotel promotes itself as an online gaming community where 13-to-20-year-olds can meet new friends and hang out online.

“It’s not hard to break into conversation for the first time, and you’ll soon find a friend who has something in common with you,” reads Habbo’s website.

Signing up is free, but players are encouraged to take advantage of Habbo extras, like eating, diving into the hotel’s virtual swimming pool and customizing hotel rooms with furniture purchases.

To do this, players have to buy credits — via credit cards, text messages, cheques or by calling the company’s 900 number.

Canadian law requires that 900 numbers have an 18-second preamble warning callers of the cost.

And callers under the age of 18 must get parental permission.

© The Vancouver Province 2005

THE ULTIMATE IN PRIVACY:

PETER CLOUGH
Province

On busy weekdays, West Vancouver tax consultant David Holt looks out his office window and dreams of his own private island.
   There are eagles’ nests in the trees, seals and cormorants in the harbour, wild roses in the meadow and a nice, sandy beach with clear water. To top it off, the sunsets from the house on the rocky outcrop are sublime.
   For most of us, that’s where the fantasy ends. But on Friday afternoons, David Holt leaves tax shelters and business plans behind and drives out of the city and up the Sunshine Coast to his boat. After 15 minutes on the water, he pulls up to the dock at West Trail Island.
   Some weekends, he takes friends along to enjoy the swimming and fishing, the arbutus trees and wildflowers and birds — including Bob, the island’s resident peacock. These days, however, Holt says he’s been spending his weekends alone. On a 16-acre island, complete with house, guest cottage and outbuildings, there’s always work to do. He usually makes a point of cranking up his stereo and not worrying about the neighbours.
   “I’m in love with the place,” is how he puts it. “When I’m there, the world changes.”
   Holt became king of his own domain 12 years ago when he paid less than $500,000 for West Trail, one of four islands that form the Trail Islands Group off the coast from Sechelt.
   Today, as island-hunters from around the world discover what one realtor calls B.C.’s “hidden gems,” West Trail is valued at $2.7 million.
   Holt has it listed for sale — though he admits he’s not entirely sure what he’ll do when the offers start to roll in. “I don’t really want to sell it,” he says.
   West Trail Island comes with a deluxe 216-square-metre home, a cultivated park with pond, panoramic views of Georgia Strait from just about every room, arbutus trees, sandy beaches, a warm tidal “swimming pool” and a micro-climate that promises 60 per cent less cloud cover than Vancouver’s.
   Holt says it’s really quite magical.
   “You can be sitting there on the deck and you’ll see swans flying by at eye-level,” he says. “It’s just stunning.”
   The man to call about West Trail and nine of the other 44 B.C. islands listed for sale (or recently sold) on www.privateislandsonline.com is Neil Wark of ReMax.
   Wark is considered Vancouver’s leading island specialist and has promoted the lifestyle and investment opportunities of privately owned Gulf Islands to magazines and newspapers as far-flung as Japan and France.
   “I have people coming in from Zurich and all over the place,” says Wark. “B.C.’s becoming better and better known all the time.”
   Like most agents, he’s reluctant to name high-profile clients, though he somehow lets it slip that in the past couple of years he’s been helping sax player Kenny G to look for a peaceful retreat off our coast — so far, without success.
   His most recent sale was to a couple from Hong Kong who paid $2.45 million for Jenkins Island near Nanaimo — 186 acres with seven beaches, five fresh-water streams and three cabins.
   “They’re going to build a nice home on it, with docks and everything,” says Wark.
   He says buyers in Europe, the U.S. and Asia view B.C.’s island market as undervalued in comparison to other hideaways such as the Cook Islands, the Caribbean, Fiji and the U.S. San Juans.
   “A five-acre island in the San Juans could be $2 million [US],” says Wark. “I’ve got an 11-acre island with city power, city water and the rest of the stuff for less than $1 million Canadian.”
   He’s talking about Helford Island, which he describes as one of the best deals on the market (it can be viewed, along with West Trail Island, at www.bcprivateislands.com).
   “It has a nice little cabin, it’s never been logged and has easy access from the Sunshine Coast,” says Wark. He calls Helford a steal at $895,000.
   His website also lists Clamshell Island, 1.1 acres of pristine beauty just a little too close to the Saltspring Island ferry terminal. It’s not exactly the best location for a prestigious hideaway but, at $195,000, this chunk of exclusivity can be yours for the price of a Coquitlam condo.
   Owning Clamshell would put you in the same club as other private Gulf Island owners such as Tim Boyle, president of Portland, Ore.-based Columbia Sportswear.
   In December, Boyle bought Brethour Island, near Sidney, from a Swiss industrialist. At $6.5 million, he got himself a deal, considering that Brethour has been valued on some island-fantasy websites at as much as $9 million.
   Brethour is known for its harbour seals, its park-like setting and its spectacular variety of birdlife. A previous owner put in a six-hole golf course — now in need of a major overhaul. Nevertheless, it was no doubt a detail that caught the eye of Boyle, an avid golfer, when he visited last year to look for a companion to nearby Domville Island, which he also owns.
   Mark Lester, the Vancouver realtor who sold Brethour, says the Forbes 400-types and the occasional celebrity client he escorts around B.C. islands are looking for more than a sound investment. He says they see this part of the world as a secure hideaway.
   “Even if you’re a very well known individual, you can have total anonymity on your island here,” says Lester. “You can have total privacy. You really are the king of your own domain and, for some people, that’s tremendously appealing.”
   He points out that Americans who bought in on our island boom at the beginning have made huge profits on the Canadian dollar. “When we had a 67-cent dollar it was much easier
for Americans to purchase,” says Lester. “Our real estate was incredibly inexpensive. Now some of those same Americans who purchased then have made an incredibly good lift on exchange alone. They don’t need to be as aggressive with price.”
   Regardless of exchange rates, says Lester, most real-estate analysts estimate the appreciation of coastal islands in B.C. at between eight and 10 per cent per year.
   “The Gulf Islands are a pretty amazing place,” he says. “So is the whole B.C. coast. In the context of the international marketplace, it’s a real hidden gem. If you look at values of the Canadian Gulf Islands and the San Juans, you can pay 15 per cent again at least to get the same property.”
   Retired Seattle-area dentist Norm Culver says he can hardly believe the bargain he got when he decided to buy an island in B.C. He has a permanent home on a shared island in the San Juans but says the proliferation of “Keep Off” and “No Trespassing” signs convinced him it was time to follow his boyhood dream of owning his own island.
   “The San Juans were prohibitively expensive, so I kept going farther and farther north, looking at the websites, until I got to the point where I could afford one,” says Culver.
   He stopped at Dick Island, accessible at low tide by foot from Texada. He paid just $300,000 for a 16-acre island with cabin that would’ve been priced in the millions had it been on the U.S. side of the border.
   “It’s remote and that’s the very thing I wanted,” says Culver. “It has first-growth timber, two eagles’ nests and about a mile of waterfront — just beautiful.”
   Going north might well be how the rest of us can afford to join the club.
   New Westminster realtor Brian Harris says Haida Gwaii is fast becoming the new frontier of recreational real estate. One of his listings on www.landquest.com is Maple Island, a 2.5-acre retreat just 1.6 kilometres from the government wharf in Queen Charlotte City. With an asking price of $125,000, the listing notes that while there’s no cabin on the island, it does have an incredible variety of fossils — perfect for that marine biologist who’s at home with a table-saw and doesn’t mind constant drizzle.
   “The inquiries we’ve had to date have been from fishermen who want a getaway in the heart of B.C.’s best fishing area,” says Harris. “There’ve also been inquiries from people who want to do commercial kayaking and things like that.”
   If you can’t afford your own B.C. island, the next best thing is to get yourself hired as a caretaker.
   For 10 years, Robert Day and his wife Dorothy have looked after Scott Island near Chemainus on behalf of Sir David Wynn-Williams — better known among locals as The Duke of Wales.
   Sir David flies in from the U.K. just once or twice a year.
   Day says island-sitting is not as cushy as it sounds. “A lot of people think there’s nothing to do, but it’s a full-time job,” he says. “You have to maintain boats and lawns and gardens and whatever else is there.”
   Scott Island, too, is on the market — listed at $5.3 million. Sir David, head of a dairy business, is said to be looking for an island a little closer to home.
   Victoria realtor Peter Nash (www.peternash.com) is the man to call if you’re interested in buying this 4.53-acre crown jewel located in a marine area known as “the banana belt.” Scott comes with a five-bedroom house, caretakers’ wing (plus caretakers), tennis courts, six outbuildings, one of the best harbours in the Gulf Islands, a hydraulic crane for unloading supplies, a $250,000 boat and all furniture, fixtures and fittings — right down to the curtains.
   Has anyone called Kenny G?
[email protected] Here are a few other islands in B.C. currently for sale
American Island: 8 acres, $84,900
This is your big chance to own an entire kilometre of spectacular waterfront — not on the coast, unfortunately, but in a corner of Stuart Lake in northern B.C. The island comes with beaches and good moorage bays. “A sporstsman’s dream,” says the listing.
East Point Islet: 3 acres, $299,000
East Point, near Nelson Island on the Sunshine Coast, is described as having a great beach, safe moorage, well water, spectacular views and great fishing and scuba diving. “Priced to sell,” says the listing.
Ring Island: 14.4 acres, $560,000 Here’s your chance to rule an island for less than the average price of a home in North Van. Ring Island is located on the sunny southwest side of Cortes Island and is noted for its fine oysters. But “unspoiled and undeveloped” means you’ll be living in a tent until you get the cabin up.
Ballenas Island: 100 acres, $1,600,000
Located about 50 kilometres north of Nanaimo, Ballenas is just a 20-minute airhop from Vancouver. The listing describes it as “one of B.C.’s world famous coastal islands unrivalled for its rugged beauty, privacy and the sea-life surrounding it.” We’ll take it.

COVER: Hotel-condo dwelling an experiment in blending culturesand income-brackets

Jeani Read
Province

To say L’Hermitage en Ville is simply 204 condos in downtown Vancouver, the way we just have in the above box, doesn’t quite get the measure of this ambitious project

Yes, it is 204 condos, and you could almost say it was creating a new city centre right at the centre of the city, with the Robson and Richards tower rising up smack across the street, the library right on the scene and the Centre for the Performing Arts squished in there as well. But it’s more than that. L’Hermitage is designed to have an exclusive boutique hotel within its structure. The hotel occupies two floors of the condo building, and hotel and condo share an entrance and many of the amenities, including a health club with exercise room and whirlpool spa, library and fireside seating area, and a strolling park and grounds on the fourth-floor roof.

The street level is planned for lots of retail — one prospective client is IGA ,which would really pep up the produce competition and increase the easy-living quotient. One look at the doll-house model makes you want to anticipate a brand new stand-alone Ralph Lauren boutique among the rest of the shops, although that could just be wishful thinking.

Finally, L’Hermitage includes a social experiment — a section of new subsidized housing incorporated into the whole as part of a contract with the city. The developers hope this is a model that will be followed by others, ensuring that the downtown core continues to represent a broad mix not only of cultures, but income-brackets.

If so, from soup to society, this package is so tight and multipurpose as an urban concept it squeaks, right down to the fact that the tone-setting Armani Casa decor items (although likely too big for most of the units) will be available through Inform Interiors, which is using the presentation centre as a showroom.

This upscale, haughty, minimalist stuff will grace the hotel/condo lobby and other common areas. The other features, building design and atmospherics in the presentation centre are also pretty impressive. It’s all about the details, as city life really demands a quiet, luxurious retreat far (up, in this case) from the madding crowd.

Here L’Hermitage really rocks, with some of the coolest detailing we’ve seen in a while. The polished manufactured-stone counter in the display kitchen was a clean relief from the busy look of granite, making the whole kitchen into a kind of stainless-steel-coloured zone that oddly doesn’t look sterile but like a perfectly plausible part of condo life.

The floor-to-ceiling pantry makes the most of minimal space and certainly stores enough for an urban dweller’s culinary repertoire — we’re thinking Friday night pizzas or fancy very late Sunday brunch. Even so, the kitchen sticks to the centre-of-the-world concept of today’s open floor plans. If the kitchen is the new living room, this one (Eggersmann, Bosch, SubZero) is spectacular,with a tight but sufficient work space for serious chefs. No room on the counters for canisters or the butcher block that stores your knives? No worries. Opt for the upgrade drawer with spice jars and canisters built in, or the one for the Henckels.

The bathrooms, too, are a treat — spa-like touches such as gorgeous faucetry, under-mounted oval sinks, deep soaker tubs and frameless glass shower stalls are all set in a calming sea of limestone counters and tiles. New looks? You bet. New concept? Yup. Just enjoy your continental breakfast from the hotel (another available perk) and feel smug.

 

QUICK FACTS

WHAT: L’Hermitage en Ville is 204 condominiums in downtown Vancouver.

WHERE: Richards at Robson streets.

DEVELOPED BY: Millennium Robson Properties.

SIZES: One-bedroom to three-bedroom condominiums, 624 sq. ft. – 2,091 sq.ft.

PRICES: $362,000 – $1,660,000.

OPEN: Noon to 6 p.m. daily, except Fridays, 688 Richards St., 604-605-1118.

© The Vancouver Province 2005

Other

Mortgage Fraud. It’s a crime-wave sweeping the country, and it’s a problem no one wants to talk about – not the banks, not the government, not even the victims.

More than 7.5 million Canadians own their own home. While owning a home may be the Canadian dream and a symbol of financial security, the value of our homes are proving to be an irresistible target for conmen.

The crime goes by many names, like “The Bump” and “The Oklahoma Flip” and it’s proving all too easy to pull off.

Like all of us, Dr. Ramin Dehmoubed, a Toronto dentist, believed that as long as he made payments on his mortgage, his house was his, and no one could take it away. But having your house stolen is possible, and it’s happening virtually every day in this country.

“I just can’t believe something like that can happen,” Dr. Dehmoubed says.

In Dehmoubed’s case, two years after buying the house, he discovered there was a lien on the property and his house was for sale. It was his first house, and it was seemingly chosen at random.

Here’s how it happened: First a conman made up a story about Dehmoubed owing him money. He then filed phony documents and took them to court to prove his claim.

“They had forged my signature to register a false lien on the house and because I wasn’t aware of it, they just enforced it,” Dehmoubed says.

The courts enforced the lien by handing the house over to the conman to cover the phony debt. The conman immediately put the house up for sale. Dehmoubed, meanwhile, had no idea this was happening until the sign went up on his front lawn.

The man responsible for trying to snatch his house out from under him was Gideon Augier. They didn’t know one another, but as soon as Dehmoubed found out what was happening, he called police.

The investigator was Sgt. Phil Hibbelin with the Toronto Police. At first, Augier threatened to sue the officer. When Hibbelin demanded proof that the deal was legitimate, Augier refused to cooperate.

Finally, Augier was charged, but for Dehmoubed the whole process would take four years and thousands of dollars in legal fees to try and sort out. In the end, the courts gave Dehmoubed his house back, but Augier only got a slap on the wrist – 30 days in jail, to be served on weekends. The judge also ordered restitution, but to this day,  Dehmoubed hasn’t seen a dime.

Det. Phil Shrewsbury of the York Regional Police has investigated a number of mortgage fraud cases, including one of Canada’s biggest, a scheme worth nearly $1.5 million. Shrewsbury says that the con could happen to anyone.  And he says you may not know until the banks, or the police, knock on your door.

In many cases, stealing a house is easy. Once a crook sees a house he wants, he simply files transfer of ownership papers at the provincial Land Titles Office. Much of the time, no one there will even verify the signature.

It’s a crime so easy to commit that Shrewsbury says they have a case backlog of about one year to 18 months before police can even start investigating a complaint.

How big is mortgage fraud in dollar terms? No one really knows. There is no central registry in this country, and it’s a crime the banks don’t like to talk about. However, one estimate by the Quebec Association of Real Estate Agents and Brokers says mortgage fraud could be worth $1.5 billion a year.

You might be wondering how the courts have ruled on these cases. A review of previous mortgage fraud cases is not encouraging. While the courts usually return the houses to the victims, they have also ruled that the victims are responsible for the mortgages that were taken out fraudulently.

And while innocent victims are seemingly punished, the con men are, for the most part, getting away with it.

Gideon Augier is a case in point. W-FIVE found Augier has a 20-year criminal record, with no fewer than eight convictions for fraud, mostly related to mortgages. Yet he has served mere days in jail, and to this day is a free man. Augier, who is from St. Lucia, has even been ordered deported from Canada. But he has filed an appeal, so his deportation could yet take years.

Meanwhile, Augier is once again before the courts, charged again with mortgage fraud.

While forged signatures and fake documents can be one way of stealing a home, stolen identity is another.

Jennifer Fiddian-Green knows all too well how that can happen. One day she got a call out of the blue from a mortgage company telling her she was behind in her payments. Fiddian-Green thought he had the wrong number, but the man insisted she had a mortgage.

It turned out that without her knowledge, a fourplex and a house in Brantford, Ont. had been bought in her name and Fiddean-Green owed nearly half a million dollars for the properties she had never seen, and for a mortgage she had never applied for.

“I’m exasperated,” she says. “I mean how can this happen with my name attached to it? They have copies, photocopies of faxes of identity documents that have my name on it, my date of birth on it, my SIN number, a different picture.”

Until she got that fateful call, Fiddian-Green had no idea what had happened. Her identity had been stolen and properties were bought in her name. Mortgages were taken out on the properties, and they walked away with the cash, leaving her on the hook for the mortgage payments.

Fiddian-Green, a forensic accountant, spent hundreds of hours trying to clear her name, and get to the bottom of what happened. One of the things she did was dig up copies of the titles to the two properties bought in her name, and the name of the person who sold them.

She called him, and as she says, “I said my name is Jennifer Fiddian-Green. And after I said that, the phone actually dropped…I don’t know if he was shocked and upset or he was nervous at this point. I don’t know. I do know the phone dropped and I actually got hung up on.”

When W-FIVE contacted the seller, we were given the name of the man who approached him with the deal – Mike Bell. We set out to find Mike Bell. He and a man by the name of Philip Tomlinson ran a company that arranged mortgages out of an office in Brantford. It was called Platinum Financing, but it had recently been closed down.

When W-FIVE tracked Bell down to his home in Brantford, he said he knew the Fiddian-Green deal was rotten from the start, but he denied being a part of it. He pointed the finger at Tomlinson. Bell also claims he acted on his suspicions, tipping off the lawyer and the mortgage broker involved in the deal.

When W-FIVE reached Tomlinson by phone, he denied any involvement.

Tomlinson was charged by police with the Fiddian-Green fraud, but the charges were eventually stayed. Why? Tomlinson told prosecutors he was being conned as well, by a person pretending to be Jennifer. However, when W-FIVE asked Tomlinson to back that up by putting us in touch with that person, he refused.

W-FIVE also discovered that Tomlinson is currently before the courts charged with an identical crime, stealing someone’s identity and using it to get mortgage money.

As for Bell’s story, when W-FIVE called the lawyer and the mortgage broker that he supposedly tipped off, they denied getting any heads-up. The police investigation continues.

While mortgage fraud is on the rise across Canada, Alberta has the dubious distinction of being the mortgage fraud capital of Canada – 2,700 cases of mortgage fraud in one year alone.

In Edmonton, one of the most common scams is “the Oklahoma flip.” In simple terms, it’s about buying a cheap, sometimes rundown house, and flipping it several times, selling it back and forth to yourself or your friends, or in most cases a numbered company you control. No money changes hands, but it allows the con men to inflate the value of the house and get mortgages for well over the value of the property, and then just disappear.

Hal Wright, a building inspector with the City of Edmonton, believes it’s a growing problem – houses on the verge of collapse, picked up for next to nothing, slapped with a few cosmetic repairs, and then over-inflated in value by a crooked appraiser. With the flaws disguised, the false appraisal is taken to the bank, and the con man walks away with the profits.

Wright gets involved because the houses are considered a danger, and if he isn’t condemning them, the whole cycle can happen again and again.

The Real Estate Council of Alberta regulates realtors, mortgage brokers and appraisers — insiders most often involved in mortgage fraud, according to police. Executive Director Bob Myroniuk says all RECA can do to stop mortgage fraud is revoke licences of members it suspects. RECA then passes the information along to police.

But when W-FIVE contacted police in Alberta, we found that whatever industry enforcement might be taking place, it’s hardly making a dent.

W-FIVE found plenty of people involved in questionable real estate deals. One man who has raised some eyebrows is Gohar Pervez, a convicted cocaine and methamphetamine dealer, now into real estate. On a number of his deals, ownership of the houses passes through the same associates and the same numbered companies time and time again. At any time, if Pervez chose to mortgage the houses, he’d be making serious money.

While police describe the pattern as a classic “Oklahoma flip”, Pervez claims he is just a good businessman. “…We are just transferring shares between ourselves,” he says. 

Pervez’s explanation for the repeated transactions: “It’s just giving shares to the person, giving security to the person. This has nothing to do with flipping.”

While Pervez claims to have an eye for a good deal, he is facing more than a dozen civil lawsuits, many from the Bank of Montreal which claims it was defrauded of more than $1 million. Pervez maintains he’s done nothing wrong.

While the banks are after people like Pervez with a vengeance in civil court, they appear reluctant to get the police involved. Det. Mike Shorter of the Edmonton Police is one of a handful of officers across the country working full-time on mortgage fraud. For the last year, he has been working exclusively on mortgage fraud. When asked how many charges he has laid, Shorter says “none.”

Shorter says “in a mortgage fraud, the ultimate victim is the lending institution, and that’s where a lot of times, I’m running into brick walls… My rule of thumb is if the complainant doesn’t want to cooperate, we’ve got enough crime to deal with. We’ll go on.”

The Edmonton Police is accusing the banks of not reporting large-scale fraud. And other police forces told W-FIVE the banks were actually hindering investigations by making it difficult for police to get key documents.

W-FIVE called each of the five major banks and asked for interviews. We wanted to ask them about police allegations that they weren’t being more cooperative in the fight against mortgage fraud. But our interview requests were all turned down, and in each and every case the banks claimed mortgage fraud wasn’t a big problem and that they fully cooperate with the police.

Police believe one of the reasons they are not getting more cooperation is that the banks are able to recover part of their losses. They are able to turn to various provincial funds set up to cover Land Title errors. Many low-equity mortgages are also insured by the Canada Mortgage and Housing Corporation, a federal Crown Corporation. But, when W-FIVE asked CMHC how much they were paying out in claims due to fraud, they refused to tell us and blocked an official Access to Information request we made.

While the Canadians banks are choosing to downplay the problems with mortgage fraud and while Finance Minister Ralph Goodale’s office says it’s not his job to tell the banks how to run their day-to-day affairs, it’s a different story south of the border where the FBI are warning of dire consequences for the entire economy if mortgage fraud is left unchecked.

“We have seen a five-fold increase in our caseload since 2000,” says Chris Swecker, assistant director of criminal investigations for the FBI. “We went from 4,000 complaints a year, from 4,000 referrals a year to 17,000. And we think that’s just the tip of the iceberg.”

Swecker warns of a crisis unless police and bankers and especially the courts act more aggressively against mortgage fraud. “We want to make some very public examples of people by seeing some significant sentences. We want to see some people go to jail. We want the judges to understand these are significant losses and they go beyond just the monetary loss. I mean, these are people’s home and lives.”

In the U.S., the major banks are required by law to report suspected cases of mortgage fraud. But that’s not the case in Canada. Swecker believes mortgage fraud can’t be combated unless the banks are required to report to the police. “If you don’t know about the crime you can’t work it,” he says.