HomeEquity sells $77 million of reverse mortgages

Bloomberg
Western Investor

HomeEquity Bank sold about CA$100 million of reverse mortgages to Concentra Bank in the firm’s second sale of such loans as it works to build a Canadian market for the instruments.

The sale represents about 12% of the roughly CA$850 million in reverse mortgages that HomeEquity Chief Executive Officer Steve Ranson estimates the firm will originate this year. The bank is targeting sales of 10% to 20% of its annual originations a year, with plans to explore similar transactions with other investors, he said. It sold about CA$75 million of reverse mortgages last year in what was touted as the first such sale in Canada.

HomeEquity Bank, owned by Canadian private equity firm Birch Hill Equity Partners Management Inc., is the country’s largest reverse-mortgage provider, with about CA$4 billion of assets. Reverse mortgages are an attractive asset for Canadian banks because their average term is 10 years or longer, while conventional mortgages in the country typically last five years, Ranson said in an interview.

“It’s a chance to have a portfolio with a much longer life and reasonably attractive loss rates,” he said.

Unlike conventional loans, reverse mortgages — typically marketed to seniors who have built up significant equity in their homes — don’t require loan payments, with the balance due when the borrower dies, moves out or sells the property.

 

Copyright Bloomberg News

Horizon 21 brings vibrant condo residences to sought-after West Coquitlam

Buzzbuzz Staff
Livabl

A new collection of contemporary residences offers more space for more value in an unbeatable location that easily connects residents to the best offerings of West Coquitlam.

Horizon 21 consists of 150 stunning condominiums and townhomes located in the historic district of Maillardville, Coquitlam. Developed by Centred Developments, this 21-storey tower is perched on the hillside, offering stunning views and unrivaled connectedness across Burquitlam and the Tri-Cities. Interest in these spacious units is growing at a feverish rate and they are selling fast.

From now until November 22nd, 2020, buyers can score more space and greater value with Horizon 21’s exclusive promotion on their featured two-bedroom floorplans. With the purchase of a Plan A or K suite you will receive a 3 percent discount, which is equivalent to up to $25,000 off, and a second parking stall for just $1. With working from home becoming more prevalent, these plans offer functional and livable layouts that easily allow you to maintain a work-life balance.

Award-winning DA Architects + Planners harnesses contemporary materials and design elements to create this boutique tower. Located on Blue Mountain Street in a quaint, tree-lined neighbourhood, Horizon 21 caters convenient retail and office space on the ground floor, plus stunning 270-degree views of Fraser Valley, Mount Baker and the Fraser River.

Boasting desirable walkability and a host of outdoor amenities, the sought-after community of West Coquitlam is the perfect locale for Horizon 21. Within minutes, residents can discover a myriad of services, parks and restaurants. Household-name retailers like IKEA, Canadian Tire and Real Canadian Superstore are located a quick drive to the east for handy shopping. Blue Mountain Park, a vibrant community hub less than two kilometres from Horizon 21, features a network of trails, amenities and sports facilities for residents to enjoy. Horizon 21 is due south of the globally-acclaimed Simon Fraser University, in addition to local schools for all ages.

Situated at the corner of Blue Mountain Street and Lougheed Highway, just north of Highway One, Horizon 21 provides convenient transportation to Burnaby, Surrey and beyond. The Braid SkyTrain station is also just a four-minute drive away for easy access to downtown Vancouver.

 

 

These bachelor to spacious three-bedroom suites range from 401 to 1,380 square feet in size. Your living space is extended into the outdoors with the help of expansive patios, terraces and deep-set balconies — the perfect spot for sunrise yoga sessions or simply relaxing in the sun.

These exquisite residences come to life with two designer-selected colour schemes — Dusk and Dawn — that are paired with nine-foot ceilings, engineered laminate flooring, and large windows for a burst of natural light. Whip up your favourite recipes in the gourmet kitchens, where you’ll find contemporary cabinetry, ambient under-cabinet lighting and designer appliances. Modern chrome plumbing fixtures and matte marble-inspired porcelain tile flooring in the bathrooms create a serene retreat alongside quartz countertops and undermount sinks. 

Future residents won’t have to look far to find convenient amenities thanks to Horizon 21’s on-site facilities. The third-floor outdoor patio spans over 7,000 square feet and showcases south-facing views of the Fraser River. Make use of the multifunctional amenity room complete with a full kitchen, or work up a sweat in the well-equipped fitness centre.

Interested buyers are invited to learn more about this community by contacting the sales team at 604 423 4222 or sending an email to [email protected]. The presentation centre is located at 218 Blue Mountain Street in Coquitlam, and is open from Saturday to Thursday between noon and 5pm.

For the latest news and updates, register today at horizon21living.com.

 

© 2020 BuzzBuzzHome Corp.

Fraser Valley rolls to record real estate numbers

Frank O?Brien
Western Investor

SkyTrain extension, lower real estate prices and super job creation lure homebuyers, investors, workers and developers to the Fraser Valley

 

 B.C. home sales rose nearly 43 per cent in August, year-over-year, according to the British Columbia Real Estate Association (BCREA), but were up 55.9 per cent in the Fraser Valley and soared 63 per cent higher in Chilliwack to lead the entire province.

The Valley housing boom, which continued into the fall, reflects a switch in housing demand that has seen people opting to move from central urban cores to suburban locations as more are working from home and others seek more housing space for less money.

The average home price in the City of Vancouver is now $1.07 million, while it is

$820,000 in the Fraser Valley and in the $585,000 range in Chilliwack and Mission, the BCREA reports.

There is also the attraction of employment as Surrey – the fastest growing city in B.C. – continues to post impressive job gains.

This year, Surrey’s biggest companies recorded the largest one-year increase in their average number of employees since 2017: up 8.6 per cent from 2,653.6 in 2019. This surge was more than double the annual average employment growth experienced over the past two years for Surrey’s largest businesses.

Prospera Credit Union, which recently built a new headquarters in Surrey, had the highest one-year employment growth in the city. It increased 50.9 per cent to 649 employees in 2020. 

The City of Surrey had the highest five-year public-sector growth in job creation. The municipality increased its employee count to 4,000 in 2020.

Other major employers include the Fraser Health Authority, the local school district and Kwantlen Polytechnical University, all of which have seen at least a 15 per cent increase in staff over the past five years.

 

Industrial

Four of B.C.’s five largest industrial land transactions in the first half of 2020 were in the Fraser Valley, according to Avison Young, including the largest, a $10 million sale of 4.8 acres in Langley.

Surrey and Delta are leaders in industrial development, highlighted by the $190 million, 470,000-square-foot World Commodity Trade Centre now under construction in Surrey’s Campbell Heights industrial zone, part of China’s global Belt and Road initiative.

 

Flowing east

A surge in investment has also been fired up by the new $3.1 billion Surrey-Langley SkyTrain extension, recently approved, that has triggered one of the largest land plays in British Columbia.

Projections are that the SkyTrain corridor will spark a population increase of at least 120,000 people over the next two decades. Land prices in the corridor have soared. In September a half-acre Langley site zoned for high density and close to a proposed transit station, sold for $4.5 million. 

Real estate action is also flowing east.

On September 21 the District of Mission passed a bylaw designating nearly 300 acres of Mission riverfront land for comprehensive development under an Official Community Plan. This plan process is expected to take two years, but Martini Group of Vancouver has a conceptual plan for 87 acres in the District Waterfront Revitalization Project, which Martini wants to develop sooner into a large industrial project, including manufacturing sites, which the company claims would generate at least 1,000 new jobs.

Meanwhile, land in Mission is already selling at record high prices.

Earlier this year, two acres of waterfront industrial land in the waterfront district sold for $3.2 million, according to Jag Cheema, a real estate agent with Royal LePage Wheeler Cheam Realty in Mission,

“We are seeing a lot of buyers coming from Greater Vancouver,” Cheema said, and it is not just for industrial property. The veteran Mission agent noted that a 0.89-acre Mission residential site, zoned for single-family housing, sold in September for $1.1 million after receiving multiple inquiries.

Abbotsford and Chilliwack were touted last year as “emerging as destinations for new industrial development and subsequent sales and leasing activity” Avison Young.

Chilliwack, where the new Molson’s-Coors brewery moved into last year after leaving Vancouver, is seeing a surge in residential and commercial investment.

There has been a recent upswing in multi-family rental sales – average per-door prices are in the $150,000 range based on recent transactions reported to Western Investor – and when the 1.9-acre Cascade retail centre was listed this year it sold at the full asking price of $4.5 million.

One of the largest Valley residential projects is Creekside Mills at Cultus Lake near Chilliwack, a 79-acre “agri-hood” development with 129 detached houses, now selling from $700,000 by Frosst Creek Developments Ltd.

 

Copyright © Western Investor

Fraser Valley rolls to record real estate numbers

Frank O’Brien
Western Investor

SkyTrain extension, lower real estate prices and super job creation lure homebuyers, investors, workers and developers to the Fraser Valley

 

B.C. home sales rose nearly 43 per cent in August, year-over-year, according to the British Columbia Real Estate Association (BCREA), but were up 55.9 per cent in the Fraser Valley and soared 63 per cent higher in Chilliwack to lead the entire province.

The Valley housing boom, which continued into the fall, reflects a switch in housing demand that has seen people opting to move from central urban cores to suburban locations as more are working from home and others seek more housing space for less money.

The average home price in the City of Vancouver is now $1.07 million, while it is

$820,000 in the Fraser Valley and in the $585,000 range in Chilliwack and Mission, the BCREA reports.

There is also the attraction of employment as Surrey – the fastest growing city in B.C. – continues to post impressive job gains.

This year, Surrey’s biggest companies recorded the largest one-year increase in their average number of employees since 2017: up 8.6 per cent from 2,653.6 in 2019. This surge was more than double the annual average employment growth experienced over the past two years for Surrey’s largest businesses.

Prospera Credit Union, which recently built a new headquarters in Surrey, had the highest one-year employment growth in the city. It increased 50.9 per cent to 649 employees in 2020. 

The City of Surrey had the highest five-year public-sector growth in job creation. The municipality increased its employee count to 4,000 in 2020.

Other major employers include the Fraser Health Authority, the local school district and Kwantlen Polytechnical University, all of which have seen at least a 15 per cent increase in staff over the past five years.

 

Industrial

Four of B.C.’s five largest industrial land transactions in the first half of 2020 were in the Fraser Valley, according to Avison Young, including the largest, a $10 million sale of 4.8 acres in Langley.

Surrey and Delta are leaders in industrial development, highlighted by the $190 million, 470,000-square-foot World Commodity Trade Centre now under construction in Surrey’s Campbell Heights industrial zone, part of China’s global Belt and Road initiative.

 

Flowing east

A surge in investment has also been fired up by the new $3.1 billion Surrey-Langley SkyTrain extension, recently approved, that has triggered one of the largest land plays in British Columbia.

Projections are that the SkyTrain corridor will spark a population increase of at least 120,000 people over the next two decades. Land prices in the corridor have soared. In September a half-acre Langley site zoned for high density and close to a proposed transit station, sold for $4.5 million. 

Real estate action is also flowing east.

On September 21 the District of Mission passed a bylaw designating nearly 300 acres of Mission riverfront land for comprehensive development under an Official Community Plan. This plan process is expected to take two years, but Martini Group of Vancouver has a conceptual plan for 87 acres in the District Waterfront Revitalization Project, which Martini wants to develop sooner into a large industrial project, including manufacturing sites, which the company claims would generate at least 1,000 new jobs.

Meanwhile, land in Mission is already selling at record high prices.

Earlier this year, two acres of waterfront industrial land in the waterfront district sold for $3.2 million, according to Jag Cheema, a real estate agent with Royal LePage Wheeler Cheam Realty in Mission,

“We are seeing a lot of buyers coming from Greater Vancouver,” Cheema said, and it is not just for industrial property. The veteran Mission agent noted that a 0.89-acre Mission residential site, zoned for single-family housing, sold in September for $1.1 million after receiving multiple inquiries.

Abbotsford and Chilliwack were touted last year as “emerging as destinations for new industrial development and subsequent sales and leasing activity” Avison Young.

Chilliwack, where the new Molson’s-Coors brewery moved into last year after leaving Vancouver, is seeing a surge in residential and commercial investment.

There has been a recent upswing in multi-family rental sales – average per-door prices are in the $150,000 range based on recent transactions reported to Western Investor – and when the 1.9-acre Cascade retail centre was listed this year it sold at the full asking price of $4.5 million.

One of the largest Valley residential projects is Creekside Mills at Cultus Lake near Chilliwack, a 79-acre “agri-hood” development with 129 detached houses, now selling from $700,000 by Frosst Creek Developments Ltd.

 

Copyright © Western Investor

Condo buyers feel the bite as CMHC’s warning on low-down payment condo purchases comes true

Ephraim Vecina
Mortgage Broker News

 Canadians who have made the minimum down payment for their condo purchases half-a-year ago are likely to have much reduced equity now, according to analysis by real estate information portal Better Dwelling.

“In April, [CMHC] warned first-time buyers about buying a condo at this time. Despite the warning, many went ahead and bought one in May,” Better Dwelling said in a new analysis of the Crown corporation’s figures.

Assuming a mortgage rate of two percent, a 25-year payment term, and benchmark prices, buyers in Toronto are “virtually underwater” as of October, Better Dwelling said.

“Across Greater Toronto, the return on investment with a minimum down payment currently stands at a loss of 112.36%,” Better Dwelling estimated. “For condos in the City of Toronto, it’s even higher at a loss of 125.09%.”

Toronto condo buyers had roughly $3,863 in equity in May (0.66% of the benchmark), which fell to a minuscule $20 in October.

Vancouver posted comparatively better numbers.

“Across [the Real Estate Board of Greater Vancouver], the return on the minimum down payment for a typical condo is a loss of 56.49%,” Better Dwelling said. “Vancouver East stands at a loss of 82.53%, and Vancouver West works out to a loss of 80.82%. While not as bad as Toronto, a similar observation can be made: city units are doing worse than suburban ones.”

Vancouver condo owners had about $23,541 of equity on a typical condo, about 3.44% of the benchmark. The figure was estimated to be $12,709 (2.16%) in Vancouver East and $17,673 (2.26% equity) in Vancouver West.

 

Copyright © 2020 Key Media

New Gastown retailers boot up a recovery

Frank O?Brien
Western Investor

Is your brokerage’s code of conduct still relevant in 2020?

Clayton Jarvis
Mortgage Broker News

It’s hard to get through a day in the mortgage world without coming across certain concepts – innovation, adaptation, flexibility – four or five hundred times. It’s an industry that, despite its reputation for being old-fashioned, welcomes change as the impetus for learning, as an opportunity to improve.

Some changes – regulatory updates, market fluctuations, the odd global pandemic – require immediate action on the part of brokers and lenders if they wish to stay in business. Others, though, are far less tangible, their effects imaginable but hard to quantify.

One such change has rocked much of mainstream society in 2020: the growing realization that bias – gender, racial, or other – is a pervasive, destructive problem that must be eradicated if a country, and its people, are to meet their full potential. This particular shift in philosophy may have nothing to do with the selection of mortgage products, but it certainly speaks to a variety of consumer demand.

Broker demand, too. Mortgage professionals, like anybody else, want to work in environments where they feel respected and safe. That’s why Veronica Love, senior vice president of corporate development at TMG The Mortgage Group, says the company updated its Employee Policies and Procedures document earlier this year.

“We already had a great policy and procedures guide,” Love says, “but in January, when diversity became even more of a concern and we realized that there is still a lot of work to be done in Canada, we reviewed and updated it.”

In addition to signing off on TMG’s guidelines around ethical mortgage brokering and interactions with consumers, employees must also agree to meet the company’s standards when it comes to accepting their co-workers and treating them with respect.

“I want to ensure that our core values remain very much intact with no place for racism, sexism, or harassment at TMG,” company CEO Mark Kerzner said in a recent statement to the company’s employees.  

While Love can’t speak for other brokerages’ codes of conduct, she thinks it unlikely that all of them have been updated to reflect new priorities like inclusion and diversity.

“I would imagine that if you’re a brokerage that’s been operating for thirty years like we have, that you are still using pretty archaic policies and procedures,” she says, suggesting that broker owners review and update their codes of conduct each year to “make it more inclusive for everybody.”

Love says TMG’s new policy document refers to “making employees feel safe and empowered” and includes language that states there is no room for behaviour that demonstrates racial or gender bias.

“We made that statement very clear. We’ve actually written it down and put it into both our employee handbook and our policies and procedures,” Love says. Both new hires and long-time TMG employees have been asked to review and acknowledge the current document.

The results of having a code of conduct that explicitly encourages employees to be more respectful have so far been positive. The company’s monthly town hall meetings have become a platform for progressive, respectful discussions where TMG-ers feel comfortable expressing themselves. Love says these open forums have become an “an amazing way to stay more engaged with the agents and brokers of TMG.”

Where there are rules, there must also be consequences. Love says employees that transgress the new guidelines are dealt with swiftly. Those who make their colleagues feel uncomfortable or disrespected at company events, for example, are pulled aside and spoken to by management, sent home, and put on probation.

“If you set the standard, then I believe people think twice before disrespecting fellow colleagues,” Love says.

Obviously, TMG is not the only brokerage where inclusion and acceptance have become priorities where agent behaviour is concerned. Love gives kudos to other brokerages and to lenders who she knows have taken strong stances for respectful behaviour at their events.

Equitable Bank vice president Paul von Martels says EB’s code of conduct is “a direct reflection” of the company’s values and a means of holding its employees accountable to one another.

 

Copyright © 2020 Key Media

Vancouver home sales, price gains set for another strong month in November

Sean MacKay
Livabl

 After a record-breaking October, the Vancouver region’s housing market is set to continue its stellar run in November as the factors underpinning its strength are showing no signs of changing.

Writing in response to the Real Estate Board of Greater Vancouver’s October data published last week, Central 1 Credit Union Deputy Chief Economist Bryan Yu said that while high unemployment and uncertainty over the pandemic persist, low mortgage rates, high savings levels and steady incomes for higher earners have ensured the region’s market remains on a tear.

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With mortgage rates not expected to meaningfully rise for months, or even years, Yu said that there are few signs of a change in trend for the market in November.

As has become increasingly common across major markets this year, detached homes and townhomes continue to substantially outperform high-rise condos on the sales volume and pricing fronts. Yu said that the former markets tightened further in October, resulting in “strong sellers’ market conditions.”

The economist did acknowledge the weakness observed in the condo market, but even here Yu sounded upbeat about a turnaround as the pandemic’s effects eventually subside.

“Relative weakness in the apartment condominium sector is expected to be temporary as borders re-open for students and substantially higher immigration targets for the coming three years which will drive both homeownership and rental demand,” Yu wrote.

The impact of 2020’s sharp drop in immigration on the future of the housing market has been a major area of concern, but the federal government’s recently announced annual immigration target increases appears to be soothing some of these worries.

While November is expected to post solid home sales figures, Yu said that activity will likely slow moving into the winter as pent-up demand is satisfied and the second wave of COVID-19 puts a damper on the market.

In a market update email last week, Dexter Realty Managing Partner Kevin Skipworth quipped that every month the end of the Vancouver market’s run is forecast, but it still has yet to materialize.

“Of course, as we go through a typical year of market cycles, November, December and January see activity slow down,” wrote Skipworth.

“While this hasn’t been a typical year, it is safe to assume we’ll see this trend playout for the next three months as we come off the highs we’ve experienced. This shouldn’t be surprising nor indicative of anything more,” he continued.

 

2020 BuzzBuzzHome Corp

Show us the spending, demand MPS

JESSE SNYDER
The Vancouver Sun

 OTTAWA• Opposition members of Parliament grilled Treasury Board Minister Jean-yves Duclos about the government’s COVID-19 measures, after a recent report lamented Ottawa’s “lacking” transparency on its massive emergency spending plans.

In a study that NDP MP Matthew Green called a “bombshell report,” the Parliamentary Budget Officer on Wednesday said that Treasury Board officials had declined to provide crucial details to the PBO in its review of the Liberal government’s pay equity program, which aims to level out pay disparities between men and women in the public service.

A second report by the PBO, also released Wednesday, found shortcomings in the level of detail provided on $79 billon in proposed government spending, making it “more challenging for parliamentarians to perform their critical role in overseeing Government spending and holding it to account,” the report said.

On Wednesday evening, Green and other members of the Government Operations and Estimates committee called on Duclos to justify the findings in those reports, and to provide more detailed accounts of COVID-19 spending measures thus far.

“With a Treasury Board and a government that claims to be open by default, how do you justify not getting to the PBO the critical information allowing them to provide back to Parliament the critical analysis on the federal pay equity?” Green asked Duclos.

The PBO report said that Treasury officials “refused to share” data on the costs of the program, which it estimates will cost $621 million per year to cover additional wages and pensions for almost 390,000 public servants. Those estimates did not include the other 900,000 employees in federally regulated industries like airlines, telecoms, banking and public broadcasting.

The findings come as PBO officials and other observers share growing frustrations around Ottawa’s willingness to track its spending plans months into the pandemic.

“This language, that you refuse to disclose information or data is damning, sir, and I’d like for you to answer why you wouldn’t cooperate with,” Green told Duclos in committee.

The minister provided few answers as to why they did not provide data on the pay equity measures, saying only that his office needed to be “respectful both of our relationship with bargaining agents and our relationship with people.”

In a response to questions from the National Post, Treasury officials claimed that providing detailed information about the estimated costs of the program would undermine negotiations with agencies and Crown corporations. They said cost estimates for the Pay Equity Act will be released after negotiations come to an end.

Conservative MP Kelly Mccauley questioned why the government has not yet posted detailed spending accounts of its COVID-19 measures online, where it can be easily viewed by the public.

Duclos said spending accounts had already been made available online, a claim that Mccauley said was “the opposite of what the highly esteemed Parliamentary budget officer stated” in its recent report.

The PBO said that while broad spending commitments have been kept up to date online, those vast pools of cash have not yet been broken down into finer details for professionals or the public to view.

“As of the publication of this report, there is currently no public document published by the Government which provides a complete list of all measures announced to date, or updated cost estimates,” the report said. “There is also no consistency to which organizations publicly report on the implementation of these measures. Some organizations have proactively published this data, while others have not.”

Those concerns over the transparency of federal funding come as the projected deficit in 2021 is expected to stretch well over $343 billion, easily the highest on record. Projected deficits in the years following are projected to narrow substantially.

 

© 2021 Montreal Gazette

CRA goes after client details of major Canadian cryptocurrency marketplace in battle against ‘underground economy’

Christopher Nardi
other

 In 2018, the CRA established a dedicated cryptocurrency unit that conducts audits focused on “risks related to cryptocurrencies.” Photo by Adrian Wyld/The Canadian Press

OTTAWA – The Canada Revenue Agency wants to know the identity of every client of a major Canadian cryptocurrency trading platform as part of its effort to fight tax fraud and the underground economy.

In a September filing to the federal court, Canada’s tax agency is asking a judge to force Toronto-based crypto trading platform Coinsquare to hand over information and certain documents about all its clients since the beginning of 2013.

In its filing — the first of its kind involving a Canadian cryptocurrency exchange — the CRA says it needs all the information to ensure that Coinsquare’s customers have “complied with their duties and obligations” under Canadian tax laws.

In other words, CRA wants to make sure that the firm’s clients have declared all their income, paid their fair share of taxes and haven’t used cryptocurrencies to hide assets.

The details contained in the few documents available from the federal court are scarce, but all this likely means that CRA wants to know which Canadians have been trading on Coinsquare’s platform, and then compare it to their past tax filings.

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If a Canadian trader on Coinsquare has not declared any cryptocurrency revenue or trading to CRA, then the agency may decide to further audit that person or organization, said David Piccolo, a tax lawyer at Tax Chambers.

“CRA could use this information to essentially try to verify or to match certain transactions with what was reported” in Canadians’ tax filings, Piccolo said in an interview.

“Then CRA does their internal risk assessment (to determine) whether these are worth pursuing in audit.”

Because the case is in front of the federal court, CRA spokesperson Charles Drouin refused to comment on the Coinsquare request specifically.

The agency also refused to say if the decision to seek Coinsquare’s client list has anything to do with significant penalties imposed by the Ontario Securities Commission on the company and several of its executives earlier this year.

The provincial regulator imposed $2.2 million in sanctions and costs against the firm for having significantly faked its trading volume, then tried to cover it up all the while firing a whistleblower that flagged the issue internally.

But as a general comment, Drouin says the CRA considers that there is a “high” risk of tax fraud, evasion or any other type of tax crime within cryptocurrency trading.

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There is also no doubt for CRA that cryptocurrencies are a growing part of the underground economy.

“Given the pseudo-anonymous nature of cryptocurrencies, the scope of non-compliance with Canadian tax obligations is difficult to measure; however the CRA presumes the opportunity for non-compliance to be high,” the CRA spokesperson said in an email.

Some of our investigations have a cryptocurrency component

According to Piccolo, CRA’s move is significant because it’s the first known time the agency has actively sought out such an extensive amount of information from clients of a cryptocurrency trading platform.

But he says it will also be a test of the agency’s ability to process the likely massive amounts of data that generally accompanies cryptocurrency transactions. If all goes well, he says we can expect more of these kinds of requests from the tax agency.

“What’s actually relevant is Coinsquare apparently has about 200,000 plus accounts,” Piccolo explained. “CRA can approach these kind of large-scale projects because they’ve been increasing their capacity to handle large chunks of information.”

The tax expert also says this kind of request, if successful, can be a strong deterrent to other Canadian traders who think CRA won’t ever find out they’re engaged in virtual currency trading if they never declare it themselves. Regardless of how Coinsquare responds, the agency’s demand needs to be approved by a federal court judge.

Lately, the CRA has been increasingly warning “crypto” users and traders that they would be subjected to much more scrutiny because of virtual currencies’ potential use to hide revenue, launder money and ultimately dodge paying taxes.

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In 2018, the CRA established a dedicated cryptocurrency unit that conducts audits focused on “risks related to cryptocurrencies as part of a broader Underground Economy Strategy,” the CRA said.

In early 2019, the agency told Montreal-based Journal de Montréal that it was working on 54 criminal investigations related to offshore tax evasion, and that virtual currencies were a growing part of the alleged offenders’ strategies.

“The phenomenon has begun. Some of our investigations have a cryptocurrency component, like in cases where a person’s revenues were put into a cryptocurrency wallet,” the newspaper quotes Stéphane Bonin, then the CRA’s director of criminal investigations.

In a statement, Coinsquare CEO Stacy Hoisak said that they were reviewing the CRA’s request and had not yet decided if they would fight it before the court.

“Coinsquare maintains a robust customer verification process, and we understand our customers comply with all applicable Canadian laws relating to their cryptocurrency trading activities,” she added.

• Email: [email protected] | Twitter: ChrisGNardi

 

© 2021 National Post