Thursday, May 30, 2013

Who's policing dishonest BC Realtors?

Lots of disscusion in our posts (see here and here) about CTV-BC's coverage of realtor Marco Vincenzi's forging of signatures and altering documents.  Apparently this was done in order to increase his commission on the sale of a yaletown condo.

In their third instalment of their coverage, CTV-BC asks 'Who's policing dishonest BC Realtors?' It's a poignant question, particularly in light of the MAC Marketing scandal we covered earlier this year.

After admitting to altering documents and other improper behavior, MacKenzie’s realtor (Marco Vincenzi) was ordered to pay a $1,250 fine, take a remedial course. He was also suspended for 120 days. The council took 16 months to make its decision. Said MacKenzie:
"To see this long drawn out secretive real estate council process that finally resulted in something that I think is just a slap on the wrist is insulting and angers me. It calls into question for me the actual ability of the real estate council to do their job and their mandate and uphold the public interest, rather than giving the perception that they're protecting the realtors."

What is particularly frustrating is the fact that MacKenzie also went to the Vancouver Police Department, who declined to proceed with a criminal investigation. Her case was ultimately reviewed by the Financial Crime Unit which felt the situation was better handled through a regulatory process rather than a criminal one.

And we've just seen how effective that was.

Even more galling was the fact that Vincenzi was allowed to continue selling real estate after the complaints were filed.  In virtually any other professional field, an individual accused of misconduct is placed on some form of administrative leave until individual is cleared of wrongdoing... and with good reason.

If the accused individual is, in fact, committing fraudulent acts... are you really going to let that person carry on committing the same (or worse) offences against innocent/unwitting members of the public?

It brings to mind the liars from the MAC Marketing scandal, who just so happened to dupe CTV-BC,  Despite having committed specific violations of the Realtor Code of Ethics, the infamous 'Chris Lee' is still selling real estate as the RECBC supposedly investigates (see here and here).

As MacKenzie says, it all "calls into question the actual ability of the real estate council to do their job and their mandate and uphold the public interest, rather than giving the perception that they're protecting the realtors."

It's gratifying to see CTV-BC finally begin to look at these issues.  But more needs to be done.

We asked Lynda Steele of CTV-BC about the status of the MAC Marketing investigations.  Here is our twitter exchange (click to enlarge):

She says she thinks it's worth taking another look at. If you agree, let her know on twitter  or via email at

Make your voice heard.


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Tuesday, May 28, 2013

Dishonest realtor's punishment questioned by victim - CTV BC

Meet Janet MacKenzie.

She's the condo buyer we told you about yesterday who made an offer on a Yaletown property that was listed with a reduced realtor's commission.

Her realtor, Marco Vincenzi, tried to make a deal behind her back that would compensate him for the money he stood to lose on that reduced commission. To accomplish this, he forged documents on MacKenzie's behalf that resulted in direct financial gain for himself.

When MacKenzie was made aware of what he was doing, she went to Vincenzi's real estate office in Coquitlam and demanded a meeting with his boss, Jason Watson. Watson insisted in a recorded conversation that Vincenzi’s days as a realtor were done.
"Ultimately by the end of the day, I can't say it will be tomorrow, but probably by Monday he won't have a license," said Jason Watson, managing broker at Sutton Group – West Coast Realty."
But rather than see MacKenzie take her concerns about Vincenzi to police for formal charges, CTV-BC reports that Janet Watson, the managing broker at Sutton Group - West Coast Realty, told MacKenzie not to call police.

Instead MacKenzie was urged to allow the Real Estate Council of BC (RECBC) to handle the matter. CTV-BC reports Mackenzie was assured the RECBC would see that Vincenzi would lose his license permanently.

In a ruling that surprises no one who follows this blog though, the RECBC didn't revoke Vincenzi's real estate license.

Vincenzi was found to have committed professional misconduct. The RECBC ordered him to pay $1,250, take a remedial course and gave him a measly 120 day suspension.

Vincenzi's explanations for his actions?
Vincenzi told the Real Estate Council he was in the running for a platinum award given to realtors who secure $100,000 in commissions for the year. The council's ruling says, "at the time of the transaction he had earned approximately $90,000 and he states that there was a lot of pressure of him to put him over the $100,000 threshold."

Vincenzi also told the council he was facing "a great deal of financial pressure" because of his upcoming wedding.
So Vincenzi claims he forged his client's documents because he's publicity hungry for a realtor award. There's also the small matter that hes desperate for cash to pay for a upcoming wedding... and this is justification not to ban him from selling real estate forever?

Says MacKenzie:
"The idea of saying, ‘well, because I was under financial pressure, that's okay, somehow makes this okay,’ it doesn't. It's not acceptable. Knowing right from wrong is kind of a basic principle."
No kidding.

It's the same basic principle that doesn't excuse one from going on TV to lie to about Asian buyers  during Chinese New Year.

These are the actions of a few that tarnish and destroy the reputations of an entire industry.  Why is the RECBC even tolerating this behaviour?

What rankles even more is that Vincenzi's suspension doesn’t kick in until June and it appears the Metro Vancouver realtor is still in business, accepting calls on a current listing from a CTV intern posing as a potential customer. 

CTV-BC consumer reporter Lynda Steele went to Sutton Realty in Coquitlam to see what Vincenzi's boss, Jason Watson, had to say about his employee's professional misconduct, but she was told Watson was in a meeting and not available.

It reminds us of the liars from the MAC Marketing Solutions scandal who are still out selling real estate while under investigation for their transgressions. Does the RECBC not appreciate the optics of their inaction?

CTV-BC says they are airing a third part to this story tomorrow.

For the sake of the public at large, and the industry as a whole, let's hope they continue to pursue this issue.


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Monday, May 27, 2013

RECBC decisions come under media spotlight with latest realtor misconduct

Meet Marco Vincenzi.

He's the latest realtor to gain notoriety for wrongdoing as the market continues it's slump. 

A slumping market means less sales, and less sales mean less commissions. Do desperate times require desperate measures?

According to CTV's coverage of the story last night, realtor Marco Vincenzi has admitted to forging condo documents, drafting and presenting documents without his client's knowledge, changing offer amounts without permission and keeping his client out of the loop on negotiations... all part of a ploy to increase the size of his realtor sales commission.

According to CTV, Vincenzi's client was making an offer on a Yaletown condo that had languished on the market.  What sparked an offer on the property?  The fact the condo was now being offered with a reduced commission.

Vincenzi took his client's offer, but then tried to make a deal behind her back that would compensate him for the money he stood to lose on that reduced commission.

The client, Janet MacKenzie, was alerted to these shenanigans when the seller's realtor brought them to her attention.
"The way that I found out what had happened was actually when the sellers' realtor had contacted me because she had noticed some discrepancies on the documents with my signatures," said MacKenzie.
MacKenzie went to Vincenzi's real estate office in Coquitlam, and demanded a meeting with his boss, Jason Watson, who insisted in a recorded conversation that Vincenzi’s days as a realtor were done.
"Ultimately by the end of the day, I can't say it will be tomorrow, but probably by Monday he won't have a license," said Jason Watson, managing broker at Sutton Group – West Coast Realty.
This would be a just fate considering these actions appear to be fraud and theft. Which begs the question, were the police called and criminal code charges laid?

Interestingly MacKenzie claims that Janet Watson, the managing brooker at Sutton Group - West Coast Realty told her not to call police.

Watson wanted MacKenzie to let the Real Estate Council of BC handle the matter instead. Mackenzie was assured Vincenzi would lose his license permanently, a punishment she (MacKenzie) felt he richly deserved.

Now faithful readers have commented frequently that the punishments handed out by the RECBC are often nothing more than a minor slap on the wrist, a cost of doing business.

So what happened to Vincenzi?

Originally, a hearing with the Real Estate Council of BC was scheduled for late March, but it was cancelled after Vincenzi agreed to a consent hearing, where he would admit to wrongdoing and agree to accept the council’s punishment.

After 16 months, CTV reports the council finally made a decision, but CTV doesn't reveal what that decision was in today's news story. Presumably that will be the topic of Part 2 to be aired tomorrow.

A quick search of the RECBC disciplinary decisions internet page doesn't reveal any announced decision yet.

Will Vincenzi get the the standard 21 day suspension, requirement to attend training and a $1000 fine? 

Or will he have his licence permanently revoked, a fate this client Janet MacKenzie believes is a punishment he "richly deserves"?

Guess it depends what sort of faith you have in the RECBC.

(hat tip anonymous in comments section of yesterday's post)


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Saturday, May 25, 2013

Reality continues to enter marketplace

Sorry for the lack of posts... it's been a busy week.

May continues to churn along with weak sales.  As Observer notes over on VCI, May 2012 was one of the most dismal in a decade and May 2013 is on track to be just as bad:

Seller's across the board are slowly acknowledging the slowdown by significantly adjusting their wild asking prices.

The latest such example comes to us on Vancouver's east side.  This is 7888 Nanaimo Street:

This 6 bedroom, 6 bathroom 2,600 square foot McMansion was built in 2009 and is currently assessed at $1,152,000.  

So why has it languished on the market? Probably because the seller has been asking an insane $1,999,999.

Last week the seller finally accepted reality and the asking price was slashed 40%.  That's $800,000 chopped off someone's redevelopment gamble.


The new asking price is now $1,199,999, still priced over assessment but someone's fantasy has clearly hit the wall of realistic expectations.


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Wednesday, May 22, 2013

Janet Frost RECBC Suspension Update

In our last post we told you how Janet Frost, MAC Marketing's Director of Sales, had been suspended for 21 days by the Real Estate Council of BC (RECBC), a ruling that was released last week.

Frost has been with MAC for eleven years according to her LinkedIn profile, first as a sales associate and then as Director of Sales. It's an employment career with MAC that has spanned eleven years from 2002-2013.

During that time, however, she also spent a year with Maverick Real Estate Ltd in 2006-2007 - apparently working two jobs at the same time. The RECBC suspension cites the infractions as occurring when Frost was licensed with Maverick. 

In our last post we asked, incredulously, if this suspension could really be for actions from five years ago when Frost was listed as being with Maverick (2006/2007) and whether Frost was working with MAC, Maverick or both.

Today we were contacted from one of the buyers who launched the RECBC complaint:
I am one of the buyers that contacted the RECBC in regards to this deal. There are several of us that lost a lot of money on this deal as the developer went bankrupt and under Alberta laws, $30K of the deposit is released to the developer which we all lost.
This buyer tells us Frost was working for Maverick Real Estate at the time of the infractions and not MAC Marketing (even though Frost's LinkedIn profile states she was a sales associate with MAC during this time period).

If we get further details, we'll update you.


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Monday, May 20, 2013

MAC Marketing's Director of Sales suspended by RECBC for misconduct. But the RECBC order doesn't identify her as being associated to MAC Marketing?

This is turning out to have been quite the week for MAC Marketing Solutions.

In our last post we told you how one of their former sales managers had been disciplined by the Real Estate Council of BC (RECBC)  for misconduct on April 15, 2013.  As we covered in our post, it's not clear if she was working in association with a MAC project at the time of the infractions.

Two days later, on April 17th, Janet Frost (Director of Sales for MAC Marketing Solutions) was ordered suspended by the RECBC for twenty-one days.

The RECBC order of discipline says Frost:
  • (a) marketed and sold Alberta development units in British Columbia, without a disclosure statement for those units filed with the Superintendent of Real Estate in British Columbia;
  • (b) received deposits in British Columbia, from British Columbia residents and forwarded them to the developer’s Alberta sales centre with the expectation that they would be provided to an Alberta lawyer, rather than ensuring that the deposits were held in a trust account in a savings institution in British Columbia;
  • (c) failed to act in the best interests of the buyers and disclose all known material information about the property, including the fact that the development was being marketed in British Columbia without a disclosure statement filed with the Superintendent of Real Estate or that their deposit monies might be at risk once the deposits were paid out of the trust of the developer’s lawyer to the developer, contrary to sections 3-3(1)(a) and 3-3(1)(f) of the Council Rules;
  • (d) failed to disclose the nature of the representation that she was providing to the buyers, whether she was providing real estate services on behalf of the developer and receiving remuneration from the developer, contrary to section 5-10 of the Council Rules;
  • (e) failed to disclose, in writing, prior to the buyers entering into contracts for the purchase of the property, the source and amount of the remuneration she received or anticipated receiving, contrary to section 5-11 of the Council Rules;
  • (f) permitted A.H.’s name to be placed on each of the contracts she wrote when A.H. was not providing real estate services to the buyers prior to the acceptance of the buyers’ contracts for purchase of the properties, contrary to section 3-4 of the Council Rules; and
  • (g) failed to submit the trade records for the D.R. and R.R. transaction, the D.M. and M.M. transaction and the Y.H. Inc. transaction to the brokerage, contrary to section 3-2(1) of the Council Rules.
For this she has been suspended for twenty-one days, from June 12, 2013 to July 2, 2013 (inclusive), she must successfully complete the Real Estate Trading Services Remedial Education Course; and she must pay enforcement expenses to the Council in the amount of $1,000.00.

But here's the rub.

The RECBC order doesn't identify Janet Frost as working with MAC Marketing Solutions at the time of the misconduct. Instead it links her to Maverick Real Estate Corporation of Delta:
Issue: Janet Marie Kathleen Frost, representative, entered into a Consent Order with the Council that, while licensed with Maverick Real Estate Corporation, Delta, she committed professional misconduct within the meaning of section 35(1)(a) of the Real Estate Services Act in that she failed to act with reasonable care and skill, in relation to a development in Calgary.
A quick check of Frost's LinkedIn profile reveals that her she hasn't worked with Maverick Real Estate Corporation since 2007, and even then she is only listed with Maverick for one year from 2006-2007. More significantly, during the period she was with Maverick, Frost was also a sales representative for MAC Marketing Solutions.

According to Frost's LinkedIn profile Frost was a sales representative for MAC Marketing from 2002-2009 and MAC's Director of Sales from 2009 to Present:

So what gives here? 

Is the RECBC only now getting around to ruling on misconduct Frost committed in 2006/2007? If that's the case, were her activities with Maverick separate from her duties as a MAC Sales Representative/Sales Director from 2002-2013? 

It's certainly beneficial for MAC that their Sales Director receives a suspension but in the RECBC announcement she isn't tied to their corporate brand.

It makes you wonder if, when the RECBC finally gets around to announcing the results of their investigation into MAC's February fake asian buyer scandal, the guilty parties will be identified as MAC employees? Or will their real estate licences tie them to another entity?

On thing is for sure, at the rate that current and former MAC associated agents are being disciplined by Real Estate governing boards, we might have to add a tote board to our sidebar just to keep track.


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Friday, May 17, 2013

Former MAC Marketing sales manager disciplined by RECBC. Was she working for (or with) MAC at the time?

Meet Sharon Matsumoto.

According to the RECBC, Sharon Tomoko Matsumoto - currently unlicensed - entered into a Consent Order with the Council that, while licensed as a representative with Multiple Realty Ltd., Vancouver, she committed professional misconduct within the meaning of section 35(1)(a) of the Real Estate Services Act in that she:
  • (a) contravened section 7(3)(a) of the Real Estate Services Act in that she was employed as a sales manager with, and provided real estate services in that capacity for, a developer, all of which real estate services were provided to the developer separate and apart from the brokerage; and
  • (b) contravened section 7(3)(b) of the Real Estate Services Act in that she accepted, independent of the brokerage, remuneration paid to her directly from the developer, in relation to the real estate services provided to the developer.
The RECBC ruled that she: (a) be reprimanded; (b) successfully complete the Real Estate Trading Services Remedial Education Course; and (c) pay enforcement expenses to the Council in the amount of $1,250.00.

Not being too familiar with the legalese here, we note the passage that says while she was a representative of Multiple Realty Ltd she committed professional misconduct by being "employed as a sales manager with, and provided real estate services in that capacity for, a developer, all of which real estate services were provided to the developer separate and apart from the brokerage"

And that she "accepted, independent of the brokerage, remuneration paid to her directly from the developer, in relation to the real estate services provided to the developer."

What exactly does that mean? 

It seems to suggest while she was working for Multiple Realty Ltd., she was also working as a sales manager selling real estate for someone else - for a developer.

It's the term 'sales manager' that caught our eye. Faithful readers will recognize that as one of the titles from the players in the MAC Marketing fiasco back in February. Naturally we felt compelled to googled the terms "Sharon Matsumoto" and "MAC Marketing Solutions." 

Guess what comes up?

Click on that google link that says 'Sharon Matsumoto of MAC Marketing Solutions Inc is a REALTOR' and you are taken to a real estate agent data base that lists Matsumoto and the address for MAC Marketing Solutions:


What does LinkedIn tell us:

Matsumoto is listed as Sales Manager for Ledingham McAllister, a developer, and has worked for them since January 2012 to present. She also just happens to have been a Sales Manager for MAC Marketing Solutions from 2007 to 2009.

Okay... so maybe the real estate data base simply contains out-of-date data. Maybe she used to work for MAC but now works for the developer.

Curiously when you do a google search. you come across a number projects in which Ledingham McAllister and MAC Marketing Solutions are listed together, projects like Aviara in Burnaby:

You have to wonder... if it's a Ledingham McAllister development that's the centre of the RECBC disciplinary decision, you don't suppose it's one that MAC was also marketing do you?

If so was Matsumoto indirectly working for MAC Marketing when this breach of conduct was committed? Was she leading the MAC sales team at the development?


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Thursday, May 16, 2013

Lessons Part 1: BC NDP

British Columbia has a proud tradition of bare-knuckle, drag-'em-out election campaigns. No other province can match B.C.'s flamboyant leaders, its salacious scandals and the trench warfare between free-enterprisers and socialists.

If there is a lesson for the BC NDP from this election it is to never, NEVER, forget the omnipresence of that idealogical battle.

The 1969 BC General Election had been a contest the BC NDP were expected to win, but didn't. In a case of ballot box reckoning, BC voters couldn't bring themselves to turf the stagnating Social Credit government of W.A.C Bennett. BC NDP leader Tom Berger stepped down, the party quickly drafted Dave Barrett as leader and Barrett was able to assuage the public's concerns raised by W.A.C's warnings against voting for the socialist hordes. Aiding Barrett was the fact W.A.C's collations of free-enterpriser's had fractured with defectors to the Conservative and Liberal Parties.

A split free-enterprise vote and a toned down 'socialist agenda' propelled the BC NDP to power in 1972 for one term.

The BC NDP were out of power until 1991 when Mike Harcourt, a moderate within the ranks of his social democratic party, led the NDP back to power. That time around, the decaying and corrupt Social Credit party was bitterly divided due to the leadership contest which saw Rita Johnson defeat the highly favoured Grace McCarthy.

Johnston's long association with the scandal-plagued Bill Vander Zalm significantly hampered her prospects of winning election in her own right. Many moderate Socreds switched their support to the previously moribund Liberals. The Socreds lost more than half their popular vote from 1986 and were cut down to seven seats, falling to third place in the Legislative Assembly behind the NDP and Liberals.

The split free-enterprise vote would be repaired when Gordon Campbell hijacked the BC Liberals away from leader Gordon Wilson. But in the first attempt at gaining power, Campbell suffered from voter ballot box reckoning too.

The Liberals entered the election leading in polls, due to a fundraising scandal in the NDP.  And while Campbell's party gained 16 seats and won a slight majority of the popular vote, the NDP retained enough seats to continue a majority government.

In 2001 a fully unified free-enterprise campaign almost wiped the BC NDP off the electoral map.

12 years after that disastrous outcome,  it appeared the BC NDP might rise again.

Complacent and arrogant, as long time governments always seem to become, voter dissatisfaction with the BC Liberals was high as scandal after scandal rocked the party. Dissension in party ranks was splitting the free-enterprise coalition.

What the BC NDP needed, at this crucial juncture, was an eloquent leader (like Barrett) and a business friendly moderate (like Harcourt).  What they got was Adrian Dix.

The election of Dix as party leader was the major blunder that cost the BC NDP the 2013 election, not the 'positive' campaign run by Dix.

Who did the party choose to run a campaign against the corrupt and scandal ridden government of the BC Liberals? The chose an equally scandal ridden member of the very government the BC Liberals had trounced from power.

On March 16th, 1999, during an RCMP investigation into the ‘Casinogate’ affair plaguing the BC NDP government of Glen Clark, Adrian Dix's office and computer were searched as the authorities hunted for evidence in the case.

From 1996-1999 Dix served as Chief of Staff to BC Premier Glen Clark. As the 'Casinogate' scandal closed in on Premier Clark, Dix faked a “memo-to-file” to make it appear that Premier Glen Clark had distanced himself from the decision to grant a casino licence in Burnaby. It was a manipulative attempt to absolve his friend, boss and roommate from having had any role in the decision to grant the Burnaby casino licence.

When confronted about what he had done, Dix lied and covered up the fact that the memo was a fake.

On March 24th, the day he was fired by Glen Clark, when asked by media about the fake memo, Adrian Dix lied again and said, “The memo is authentic, so I can’t comment on the police investigation.”

14 years has passed since those events, an eternity in the world of politics.  But was Dix the best man to go head to head with a corrupt, scandal plagued government?

If the election, as all BC elections seem to do, devolved to a bare-knuckle, drag-'em-out campaign... could "pot calling kettle black" back-fire on the BC NDP as ballot box reckoning gripped the electorate?

The fateful election of Adrian Dix only needed a spark to bring this scenario to fruition.

And that spark was provided by Charlie Wyse's fracking moratorium revelation and the subsequent Kinder Morgan announcement. There were two media interviews where Dix completely lost his composure when dealing with reporters. As one political reporter noted:
It was bad. If you can't deal with aggressive reporters asking questions it conveys a bad message to those watching. Doesn't matter if he doesn't have much experience with that, he should have been coached and he should have practiced because he did not know how to deal with it well.

The Kinder Morgan announcement was a killer for many - I would equate it to handing over a loaded weapon to your enemy. Didn't matter when or if he actually made the decision earlier, fact is he didn't share that with many people or the public so it came across as completely an election ploy to everyone who is not a die-hard NDP voter.

It is also an unfortunate reality that Dix did come with a lot of baggage via the memo, Moe Sihota and "the horrible 90′s". I cringed when he said "I was 35." Seriously. Thirty-five is not 19. Many people are married at 35, have kids, a mortgage etc, 35 is responsibility time, not excuse time.

Dix backed himself into a corner with this entire positive, nice-nice, err on the side of caution theme. The Liberals provided so many moments for the NDP to gain real ground factually but again, the complacency for most of the campaign was stunning. And when Dix did begin fighting back it was just too late and it was then looking extremely hypocritical. Much like doing the ad buy of the 24hrs cover looked after mocking the Liberals for doing the same thing.
And that's the crux. The whole candidacy of Adrian Dix was hypocritical. 

Dix's actual ideological platform was in stark contrast to the mantra he was preaching.

"Chance for the better, one practical step at a time" was a trojan horse. In the heat of the campaign, the deception was revealed. What made the outcome so shocking was the fact that the deception didn't get revealed until near the very end.

Once it was, the election was over.

Moreover, his baggage from the 'Casinogate' affair made it impossible for him to call out the BC Liberals on their scandals. Hence the reason for the non-negative campaign... it was the only strategy to avoid a battle in which he simply couldn't gain the moral high ground.

After the NDP revelations regarding fracking and Kinder Morgan, the gap between the NDP and the Liberals narrowed dramatically as voters became fearful of the NDP.

Support for the B.C. Liberals seemed to materialize out of nowhere and galvanize, a trend that was very noticeable in the final 72 hours.

The BC NDP may well have blown a once-in-a-generational chance with this election. What they needed, what they still need, is a moderate leader who understands that increased social spending comes from greater revenue created by a vibrant and growing economy.

The lack of this understanding is what cost the BC NDP this election, not the negative campaigning of the BC Liberals.

The BC Liberals had been running a negative campaign since Dix became party leader and it wasn't getting them anywhere. Once the trojan horse agenda was exposed, and lacking a leader with the moral authority to combat it, the BC Liberals merely capitalized.

This is the central lesson of this election for the BC NDP.

Right now the party is flailing, blaming the media, the greens, the voters... and everything that moves for their loss.

There are a few, hard and crucial years ahead for this party. Will they learn the lessons they need to from this defeat?

Time will tell.

Next: Lessons Part 2 - BC Liberals


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Wednesday, May 15, 2013

Shock. And people ask, "what happened?"

The British Columbia general election of 1996 was the thirty sixth provincial election in the Province of British Columbia. Called on April 30, 1996, and held on May 28, 1996. Voter turnout was 59.1% of all eligible voters.

The election was supposed to be a slam dunk for the BC Liberal Party. Most observers and voters had anticipated the Liberals taking power.

New Democratic Party leader and provincial premier Mike Harcourt had resigned as the result of a fundraising scandal involving one of the members of his caucus and Glen Clark was chosen by the party to replace Harcourt.

On the Liberal side, Gordon Campbell had become leader after Gordon Wilson had been forced out of the position because of his relationship with another Liberal member of the legislature, Judi Tyabji. After Wilson was defeated by Campbell in the convention to choose a new leader, he and Tyabji left the Liberal Party to establish the Progressive Democratic Alliance.

A total of 15 registered parties contested the election that year – only four running more than 65 (of 75) candidates. The problem for the BC Liberals was that there were three major parties: the BC Liberals (75 candidates), Reform BC (75 candidates) and the breakaway Liberal – Progressive Democratic Alliance (66 candidates) who managed to split the rightist vote in the province – a phenomenon exaggerated further by 17 Libertarian, 38 Social Credit, 14 Family Coalition, 8 Conservatives and 5 Western Canada Concept candidates also in the race.

Although the Liberals won a larger share of the popular vote, most of their votes were wasted in the outer regions of the province; they only won eight seats in the Vancouver area. This allowed the NDP to win reelection, eking out a six-seat majority government.

The result was a shock to most observers and voters. So what happened that year?

The voters knew the NDP were corrupt and scandal plagued, but they had severe doubts about Gordon Campbell.  Was he a raging conservative who would slash government services as the NDP fear-mongered? 

While those doubts would be erased four years later (when the BC Liberals swept all but 2 of the Provinces 79 seats, virtually wiping the NDP off the political map), in 1996 voters were unsure. Polls predicted a BC Liberal victory, but ballot box remorse led voters to choose the devil they knew over the one they didn't.

Last night's election bore a eerie similarity to that 1996 election, but in reverse.

This time around it was the scandal plagued BC Liberal's who were the governing party fighting for re-election.

They had a new leader, Christy (aka Krusty) Clark, paralyzed by party infighting and on-going scandals. Krusty had failed to move on the results of the HST referendum, a mistake in judgement that was already haunting her leadership. Had she quickly implemented the voter's wishes and called a snap election, most observers believe the BC Liberals would have easily won an overwhelming victory.

But factions in her party wanted her to delay and find loopholes for the tax.  More scandals emerged. Bitter factions from the Leadership race began fleeing the sinking ship with plans to oust Krusty after the election. Infighting and scandals were serving the election to the New Democrats on a silver platter.

So how did it all go so wrong for the NDP?

A decade before the BC Liberals came to power, another BC NDP party was angling to replace a scandal plagued BC government.  Leader Mike Harcourt recognized the concerns in the voters minds and assuaged them by seeking middle ground.  He minimized the socialist agenda to recognized the need to support business and it's place in the economy.

The first mistake the BC NDP made in the 2013 campaign was not adopting a similar strategy in the years leading up the the election. They chose Adrian Dix as their leader, a candidate with severe baggage from the scandal-ridden Glen Clark government.

Their strategy for the election? 

Mitigate the negative elements of Dix's history by running a 'positive' campaign. But 'positive' is a misnomer.  The campaign the New Democrats planned was a trojan horse. What they called "change for the better: one practical step at a time" was a weak attempt to soft pedal the tax and spend agenda that always strikes fear in the minds of the electorate.  

Dix planned to speak of glowing generalities, avoid the blunt tax and spend message and avoid the notorious "memo to file" affair that erupted 14 years ago when the police were breathing down then-premier Glen Clark's neck in the so-called casinogate case.

It was a bland, head in the sand campaign; keep the message vague and allow the public's rabid distain for the BC Liberals record to bring them down.

And it was working because the BC Liberal base was torn apart.

Unhappy BC Liberal voters were looking to the Conservatives as an emerging factor and the Greens were stealing some support as well. Just like in 1996, the vote was splitting.

But voters remained undecided about who they would vote for and were very leery of the Opposition NDP.

In this milieu it seemed the BC NDP could easily cruise up the middle. Keep it safe, don't make any mistakes.

This 'safe' approach all started to unravel when Charlie Wyse, the NDP candidate in Cariboo-Chilcotin, made a stunning statement at an all-candidates in Bridge Lake.
“The position of the NDP is that there will be a moratorium put on fracking for the next two years while the science will be brought together to find out the effect, if anything, that fracking has on the water table.”
These comments were in direct conflict with the BC NDP election platform.

Energy Minister Rich Coleman played audio of Mr. Wyse’s statement at a news conference Monday morning, using it to further the B.C. Liberal narrative that an NDP government would not grow the economy.
“Right now, in northeastern B.C., there are companies spending hundreds of millions of dollars drilling for natural gas to build the basis for this resource,” Mr. Coleman said. “They’ve just been told by the NDP that they intend to shut them down.”
Adrian Dix was forced to do damage control and claim that Mr. Wyse had simply “misspoke” about the matter.
“The words in our platform are clear, the words we have expressed for a number of years are clear,” he said at a campaign event in Vancouver. “We don’t support a moratorium on hydraulic fracking. One candidate made a mistake. The fact is, what we’re proposing is a science-based review [on fracking].”
But the explanation rang hollow and that's when the trojan horse nature of the BC NDP campaign began to crystallize in the minds of the wayward Liberal voters. There would be a 'review', no doubt.  And it would lead to a ban.

The NDP position on major energy initiatives began garnering a substantial amount of attention. Leonard Krog, the NDP candidate in Nanaimo, tweeted that the party wants a review of the existing Kinder Morgan pipeline. The next day, he clarified the party’s position, saying the NDP would not review the existing pipeline.

While never stated in the press, that image of a trojan horse campaign gained even more traction in the minds of those disaffected BC Liberal voters.

Dix was pressed by reporters for not being clear on where he stood on the Kinder Morgan pipeline project, despite saying earlier in the week he was opposed to it. This lack of clarity was the turning point for the election.

On one hand you had the lying devil's you knew in the BC Liberal's. On the other, a party clearly lying  about their campaign platform whose leader had, 14 years ago, left in disgrace for lying.

The BC Liberal's seized on this and moulded their message around it.

As for the Conservatives, several wing nut candidates now shook the resolve of the BC Lib disaffected. 

For the fractured Liberal vote it was decision time.  Choose a protest vote by going with the Conservatives, Independents or Greens... or worse, the NDP.

Or hold their nose, bite their tongues and vote BC Liberal.

The polling data was showing all of this.  The gap between the parties was dramatically shrinking and the BC Liberal message ramped up: a strong economy or change, you couldn't have both.

Dix's vague, 'positive' message now came across as completely fake and contrived.

The hand wringing of the electorate was being measured by pollsters in the rapidly closing gap. What the pollsters couldn't measure was the hand-wringing of those wayward Liberal supporters those undecided.  These voters now feared what their protest vote could do: split the vote and hand the election to the BC NDP.

As these voters entered polling stations on election day, many made their final decision in the polling booth. Ultimately they decided to hold their nose and vote BC Liberal.

Pundits and reporters were oblivious to the wide spread vacillation. Even as the polls closed, most were expecting an NDP coronation with up to 60 seats for Adrian Dix's party.

It was ballot box reckoning that sunk the BC Liberals in 1996. And it was identical ballot box reckoning that reached out to bite the BC NDP in 2013.

They say 'hope clouds observation', and observation was severely clouded yesterday.

There is an old sports adage that says,"that’s why they play the game.”It means the game isn’t decided on paper. One team might have more talent and might be favoured to win the game by oddsmakers, but when the game is actually played there is no certainty that the favourite will always win. “That’s why we play the game to see who’ll win”

On twitter it comes across as #itaintovertilthefatladysings.

Next post we'll look at the message for both parties.


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Tuesday, May 14, 2013

Wed Post #3: BC NDP pull a Maple Leaf like collapse as BC Liberals declared winners with majority

Presumably the appropriate twitter hashtag is: #aintovertillfatladysings.


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Wed Post #2: Is this an activity which constitutes campaigning outside a polling station?

UPDATE: Reader confirms violation. See end of post. 

Interesting question raised by faithful reader GJ via email.

Above is a picture of the entrance to a polling station in Surrey. It's Sanford Elementary School to be precise, located in the  Surrey-Newton riding - a seat currently held by Harry Bains of the BC NDP.

At the far right of the picture is a woman wearing an orange/blue golf shirt.  It is apparently embroidered with the BC NDP logo  and says "BC NDP 2013"

According to GJ, she is a volunteer driver for the Bains campaign and has given a Bains voter a ride to the polling station.

GJ's concern?
"The volunteer has driven the voter to the polling station, which is a common practice of candidates, but then she stands outside of the entrance to the polling station wearing a bright orange/blue golf shirt emblazoned on the front with "BC NDP 2013". She is there for over 20 minutes as voters walk into the polling station. Is this not considered campaigning outside a voting station? I thought there weren't supposed to be ANY election signs or paraphernalia promoting any party within a certain radius of the voting stations?

Given the generic nature of the golf shirts (BC NDP 2013), is this being repeated at every voting station in the Province by volunteers for the BC NDP (or other parties)? Is this allowed or is it a violation of the voting act?"
Interesting question and I'm not sure of the answer. Are volunteers allowed to wear party logos and stand outside of voting stations? Are all the political parties doing this?

Anyone out there know?

UPDATE: Reader in comments section (hat tip Jesse) confirms this action is a violation of BC Election rules. 

Sec 234 (2) (c) While advance voting or general voting is being conducted at a voting place, an individual or organization must not do any of the following in or within 100 metres of the building where the voting is being conducted:
  • carry, wear or supply a flag, badge or other thing indicating that the individual using it is a supporter of a particular candidate or registered political party.
If anyone else has seen similar irregularities by any of the political parties, forward them and we will post.


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Wed Post #1: It's election day

It's election day in the Province of BC.

As the Vancouver Sun noted four weeks ago, if you turn on any radio talk show you hear callers complain bitterly about the government. But increasingly fewer are taking advantage of the one opportunity they have to do anything about it.

In the 2009 provincial election, voter turnout dropped to a modern-day record low of 55% of registered voters.

Today it will be the people who vote that matter. The people who don’t, the folks that political scientists and commentators worry about, won’t be heard from.

Make sure you make the time to cast a ballot. You can go to the Elections BC website to find polling stations.


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Monday, May 13, 2013

OFSI confirms it's considering mortgage amortization changes

On Thursday we asked "Are 30 and 35 year mortgages about to be banned in Canada?", a question triggered by Garth Turner's reported inside information that federal Finance Minister Flaherty was about to implement this significant change.

The speculation has triggered a firestorm of interest in the real estate community.

And now comes confirmation that the Office of the Superintendent of Financial Institutions Canada (OSFI) is indeed looking at the issue of limiting amortizations to 25 years on conventional mortgages (those with 20%+ equity).

Canadian Mortgage Trends has verified this with the OFSI.
A spokesperson from Canada’s banking regulator, The Office of the Superintendent of Financial Institutions Canada (OSFI), verified that it is looking at the issue of limiting amortizations to 25 years on conventional mortgages (those with 20%+ equity). Currently, those “low-ratio” mortgages can have amortizations up to 35 years.

OSFI is “doing some preliminary consultation with financial institutions” on the matter, said the spokesperson.

Those communications appear to be behind the scenes with banks and federally-regulated trust companies. OSFI will not be issuing a public statement in the very near term (i.e., next week).

The regulator added, “We are working to determine the desirability of some changes given current conditions in housing markets and recent trends in household indebtedness.”

“A decision in that regard would be taken once we hear back from the industry. Any proposed changes to our mortgage guideline that may result from this work would be subject to a public consultation process.”

Officials from OSFI, the Department of Finance (DoF) and the Bank of Canada have been working together closely. Their aim is to stabilize housing, moderate debt levels and reduce economic exposure to rising rates.

When implementing the last set of mortgage changes in 2012, Finance Minister Flaherty made it crystal clear that he considers it “desirable” to make home buying more difficult.

In December, he told reporters: “Less demand, lower prices, modestly, in the housing market are much better for Canadians than a boom followed by a bust. So I'm all for a soft landing.”

But real estate has been more resilient than many expected. And some at the DoF are not satisfied that housing is slowing fast enough.
Presumably we will now see the real estate industry go into hyper-lobby mode to mitigate the changes as much as possible.


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Saturday, May 11, 2013

Confirmation the rumours of banning 30-35 year mortgages true?

On Thursday we asked "Are 30 and 35 year mortgages about to be banned in Canada?", a question triggered by Garth Turner's reported inside information that federal Finance Minister Flaherty was about to implement this significant change.

This has caused quite the fervour in the real estate community, particularly given Turner's predictive track record.

The blog Canadian Mortgage Trends followed up on the rumour by contacting various banking sources. The Banks confirmed something was afoot. CMT then contacted the Department of Finance directly:
We've contacted the Department of Finance (DoF) for comment. Banking sources have confirmed reports of the DoF contemplating amortization guideline changes for conventional mortgages. But there's no confirmation on what, if any, moves will be made. Assuming the DoF acts on this issue, an alternative possibility is that conventional borrowers be made to qualify at a 25-year amortization, but still be allowed to set payments at a longer amortization.
CMT reports the Department of Finance responded:
"As a matter of course, the Department does not comment on what specific measures it may or may not be considering. However, we can confirm that no announcements from the Department of Finance related to uninsured mortgages are planned."
Given the indirect confirmation from banking sources, CMT ruminates:
Turner says the guidance would likely be sent directly from OSFI to the banks with less fanfare than a big public announcement. At least one bank we spoke with earlier is currently considering tightening conventional amortization rules. It's unclear if that is on the asking of OSFI or just an internal bank decision.
Clearly this unexpected turn of events has the real estate industry in a tither.

CMT speculates on the impact:
If true (with emphasis on the word "if"), this news could:

  • Increase monthly payments on new conventional mortgages by about $53 per $100,000 of mortgage, other things being equal. 
  • Potentially impact even smaller non-bank lenders (e.g., First National, Street Capital, MCAP,…). That’s because, as Turner adds:“Regulated financial institutions will also be prevented from buying any securities which are made up [of mortgages] with 30-year ams.” Virtually all non-deposit-taking lenders rely on securitization and/or selling mortgages directly to banks. 
  • Make provincially-regulated credit unions the only game in town for amortizations over 25 years. That would provide credit unions who keep long-amortization mortgages on their balance sheets with another advantage versus the banks. CUs already sidestep federal mortgage rules by offering HELOCs above the federal 65% loan-to-value (LTV) maximum, higher LTV stated income mortgages and mortgages with lower qualification rates.

As noted, none of the above has been confirmed. So the above should be considered speculation until it is. We’ll do more digging and report back.
It could be an interesting week.


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Thursday, May 9, 2013

Are 30 and 35 year mortgages about to be banned in Canada?

Garth Turner is out this evening with intriguing speculation that Canada's federal finance minister is getting ready to end 30 and 35 year amortization mortgages in Canada.

As you already know, CMHC insured mortgages are now limited to 25 year amortization. But 30 and 35 year mortgages still exist, provided borrower's put 20% down and bypass CMHC insurance.

Turner asserts borrower's ability to do this is about to end:
Last week the CEOs of the monster banks were given a clear message that 30-year mortgages need to be wiped away. Completely. In fact, they’ll be banned. That letter will go out next week, the result of a decision made jointly by the Department of Finance, OSFI (the bank regulator) and the Bank of Canada. Regulated financial institutions will also be prevented from buying any securities which are made up on mortgage with 30-year ams.
Stunning news to be sure, and it's estimated such a move will shave 5-10% off already dismal real estate sales.

It continues the theme we talked about on Tuesday when the Financial Post that told us "the federal government and policy makers are scrambling to engineer a soft landing for the country’s overheated housing market."

It also adds credence to Marc Faber's recent comments that there could be significant depreciation in real estate values ahead.
Faber says... he’s observed a significant disconnect between selling prices of homes relative to what they really should be worth.

The precarious state of the housing market has made Canadian banks more risky investments. Dr. Faber doesn’t follow the Canadian banks that closely, but observed that Canada, like Australia, has higher household debt than in the U.S. “With the higher leverage in Australia and Canada, I think I’d be very careful about any lending institution,” he said.
The Federal Government is determined to unwind the housing bubble without raising interest rates, a move that would be harmful to the overall economy.

Is a return to a minimum 10% downpayment the next move for the Feds?


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Wednesday, May 8, 2013

Take your lumps, or buy useless insurance: the state of the real estate market in BC

The Vancouver Island Real Estate Board (VIREB) is out with their stats for the month of April.  And as with all the real estate boards, they try to pretty-up the ugly stats.

Nanaimo home sales are up by 12 per cent screams the news headline.
Real estate sales were up 12 per cent in Nanaimo last month and seven per cent on the Island north of the Malahat, compared to a year ago, according to new sales figures from the Vancouver Island Real Estate Board.
Happy days are here again? Not quite.
Prices fell six per cent, on average in the VIREB region, and nine per cent in Nanaimo during the same period.

Those are averages only; sales fell by as much as 24 per cent in the Comox Valley and grew by as much as 46 per cent in Campbell River, while prices dipped as much as 14 per cent in Port Aberni-West and rose two-per cent increase in Campbell River.

But on average, "prices are down compared to last year," said Cathy Koch, Nanaimo VIREB spokeswoman.
And that's the dig... prices are down on the Island.

It's final act as a bubble starts to unravel in a negative feedback loop and the condition the Industry pumpers fear the most.

So what do they recommend on the Island? Well... realtors don't make money unless there's a transaction happening.  And sales won't happen unless sellers accept reality and cut prices.

Ergo Ms Koch comes out with this tidbit for sellers...
Sellers need to price accordingly, and be ready to make less on the sale, which they'll likely make up on their next purchase.
Acceptance of what's coming on the Island?

Over in the Lower Mainland, were not quite there yet. But the fear of falling real estate prices is palpable.

Hence this little promotion: Buyers’ insurance policy protects homeowners from price drops. Garth Turner chimed into today with his take on this little marketing ploy:
You know the market’s in trouble when houses get the same treatment as flat screen TVs. But this is exactly what desperate realtors are reduced to these days. The so-called Buyer Protection Plan is sweeping through the Vancouver real estate biz, with about a hundred agents so far signed up.

You buy a sexed-up, web-smart TV at Best Buy and then find it cheaper at Costco? No probs, says BB. We’ll refund the difference.

You’re scared to buy a million-dollar fixer-upper in a Van hood because houses are falling? No worries, say the realtors. We’ll protect you. Sort of.

The bold idea: if the house you buy today is worth less in a year (almost a 100% certainty in most of the Lower Mainland) then up to 5% of the purchase price is refunded. For this to happen you need (a) a realtor offering the plan, (b) a seller willing to put 5% of the purchase price into a trust account for a full year and pay a lawyer to do so, (d) a premium payment of $299 and (c) statistical evidence of a price drop – not in the value of that house, but in average prices as determined by the real estate board.

So, it’s useless. Every house is unique. A buyer might only benefit if the home were appraised independently in a year, but that could easily (and legally) be challenged by the seller before funds were handed over. And a limit of five per cent? Pshaw. If I were buying in Van these days I’d want something closer to 20% – and no buyer alive is going to put $300,000 into a non-performing trust account upon unloading a $1.5 million house.
Clearly the Spring market has failed to respond as hoped.  So the advice today on one side of the Georgia Straight is take you lumps and take less for your house.  On the other, go ahead and buy at the higher prices and "buy protection."

Alrighty then.  What gimmick comes next?  Getting Vince to promote real estate?


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