Record Capital Outflows to Canada

Hong Kong families are looking to move to Canada

 

If skeptics are wondering if Hongkongers really are leaving their hometown, then perhaps they can follow the money.

According to electronic fund transfers recorded by Fintrac, Canada's anti-money laundering agency, about CAD$43.6 billion (US$34.8 billion) moved from Hong Kong banks to Canada last year, the highest level on record.

Fintrac, which reports transfers above CAD$10,000, has been recording outflow amounts since 2012. 

Some people are looking to move to Vancouver

One Canadian lender, Equitable Bank, confirmed to Reuters it had seen a surge in deposits from Hong Kong just after the national security law was introduced in late June 2020. 

However, the Hong Kong government claims it has not seen significant capital outflows since the anti-government protests in 2019 which were sparked after the extradition bill was first introduced.  

The record transfers are happening when Hong Kong police froze the bank accounts of several people linked to the pro-democracy protests, triggering concern among some residents about asset safety.

Perhaps the Hong Kong government considers the capital outflows as minimal, as they only represent 1.9 percent of the city's total bank deposits in 2020. But Fintrac's data does not include transfers via cryptocurrencies, between financial institutions, or under CAD$10,000.

Some may move to Canada's biggest city

And then there are lawyers, immigration consultants, and real estate agents fielding lots of enquiries, and say many families are ready to move to Canada along with millions of dollars as soon as the pandemic is under control. 

Canadian visa applications excluding visitors's visas rose 10 percent to 8,121 in 2020, with other highly favoured destinations like the UK and Australia.

There are also about 300,000 Canadian citizens living and working in Hong Kong. Some who immigrated to Canada before 1997 have returned to Hong Kong; however the implementation of the new security law has made people concerned about eroding rights and freedoms and want to move children abroad for better education. 

The UK government is expecting as many as 320,000 Hong Kong residents to migrate there in the next five years.

Harvey has seen five-fold increase in clients

Jean-Francois Harvey is a Canadian lawyer based in Hong Kong who specializes in immigration for high net-worth individuals. He has seen a five-fold increase in clients seeking to move to Canada since mid 2020. His clients have transferred at least CAD$1 million, typically between CAD$5 million to CAD$10 million in the last 12 months.

"There has been an incredible increase in demand especially for Canada in Hong Kong, so much that in the middle of Covid-19, I had to double the team and the size of the office in Hong Kong," said Harvey, worldwide managing partner for Harvey Law Group.

"This is more than a spike. It's a wave."