Sunday, December 29, 2019

What's Wrong with the GTEC (环球贸易会展中心怎么了)?


(Attributed to Troy Fleece of Regina Leader-Post)

I.                   Background
On the 10th of November 2019, a story titled “Chinese Woman Seeking Canadian Immigration...” by a CBC reporter, Geoff Leo, caused an uproar of attention in Saskatchewan. The article refers to the Global Trade and Exhibition Centre (GTEC), which was developed by Brightenview Development International Inc. and built by PCL Construction. The content of the story highlighted the developer’s failure to refund a customer and the existence of a ‘secret cooperation agreement’ between the developer and the Saskatchewan Government (please note that no such cooperation agreement has been found between Brightenview and the provincial government though the reporter has such a speculation). The customer Amber Zhang was declined a full refund after being declined a work visa application. Amber Zhang wrote to Brightenview, if their money is not in her account in two days, she would accept the reporter’s interview. She didn’t care whether his motives were political or not, and she would reach the effect of what she wanted. They should consider how to avoid her $120,000 affecting their $1.2 million or $12 million income[i]. The CBC article criticized the GTEC for having an imperfect business model and coined it as, “a megamall of immigration”[ii]. In an email message from Brightenview’s lawyer, CBC was said being used and manipulated by the customer so as to defame GTEC and Brightenview[iii]. On 12 November 2019, another article was published by CBC raising the megamall issue again on the same day Premier Scott Moe expressed his dissatisfaction with Ottawa after the Federal election. After this, CTV had several interviews and reports on the GTEC on November 12th, 14th, and the 17th expressing different views. On 2 December 2019, there were 2 pages of articles published on Regina’s Leader-Post covering the GTEC[iv].

The relationship of Amber Zhang with her stakeholders is described as follows. After Amber Zhang started her immigration application at Global Fortune, Gobal Fortune referred her to the GTEC project. Then Zhang made a deposit for owning a store at GTEC. When CIC declined her work permit and visa application, Zhang made a complaint to ICCRC. However, Zhang was sued by MLG for default on contract and slander on Brightenview. As the GTEC project is one catering to business immigrants opening stores at GTEC and meeting government immigration requirements while conducting business at the same time, the GTEC issue is both a immigration issue and an economic one. Mr. Leo has reported on the fraud of a Chinese immigration company Canmax Group (which was later changed to Wilson Legal Consulting) before, and that company is also linked to Brightenview the same way as in this case, besides the fact that Brightenview and Canmax had the same founders and that a founder Feng Niu was chased by an Interpol Red Notice from China. This does not ensure that Brightenview is illegal or the project developed by Brightenview should be cancelled. With the case of land sale at GTH (the place where GTEC is located) at which the provincial government bought and sold two pieces of land and ended up losing $10 million, there seems a conflict of interest between a public and a private position, which caused the previous Minister of Economy Bill Boyd to resign.

II.                Disputes
1.      Megamall Model
Brightenview says GTEC is modeled after the wildly successful wholesale markets in China. One of them, Yi Wu (near Shanghai), is billed as the largest market of small wholesale commodities in the world, featuring tens of thousands of suppliers. Buyers from a wide range of industries fly from all over the world to shop there. Instead of businessmen flying to Shanghai, Beijing or elsewhere the centre will enable North American wholesalers, retailers, contractors to access the Chinese factory direct products right here in Regina. However, immigration lawyer Kurland said, "hindsight shows that the model delivered real estate benefits to real estate developers but little or no tangible benefits for provincial immigration programs." He said a permanent wholesale market in a smaller city like Regina is untenable. Potential immigrants were lured with provincial government endorsement and no requirement to operate a business and live in SK as asserted in the article by Leo mentioned at the beginning though just 60% of applications have been approved by Ottawa to start their business at GTEC. According to the CBC reporter, a store owner Sonya said she could not see one visitor in a day and that her English was poor[v]. Nevertheless, a business entity that has been operated by 70 new immigrants for less than a year creating things like, an investment of more than 42 million Canadian dollars, nearly 150 job creations, about 11 million in taxes, and more than 32 million in living expenses in the provincial capital with an annual GDP of 14.173 billion and a population of 230,000, has actually made indelible economic contributions[vi]. Though Yiwu has the population 5 times bigger, there is no data showing that the model cannot be borrowed.

Though evidence shows no existence of a ‘secret cooperation agreement’ between the developer and the Saskatchewan Government, Immigration and Career Training Minister Jeremy Harrison said the GTEC wasn’t “setting up newcomers in this business model for success in the way that we could have been in another sort of scenario”, and the province changed its immigration investment rules cancelling eligibility under that program for the GTEC and similar “multi-business retail condo” projects (note that Multi-business retail condos and business incubators are now on a list of ineligible businesses that also includes co-operatives, home-based businesses and property rental activities) within 2 days after the CBC article came out. Mr. Harrison also said, “there probably is going to be litigation from tenants that would be coming out of that towards companies.”[vii] The columnist Murray Mandryk compared this to the NDP government’s investment in Spudco, which was eventually resolved in court — a $36-million-plus loss for Saskatchewan taxpayers[viii]. The NDP leader Ryan Meili raised the question: “What will be done to help those who are damaged by this?”[ix] No data showed that the provincial government invested heavily into the GTEC project, and these two projects are overseen by two different governments.

The Yiwu Model is quite successful in China with a county selling C$10 billion (with 40% manufactured locally) exporting C$6 billion annually. Moreover, it has been spread to Sweden bringing up local employment and tax revenues, with more than 400 Chinese businesses having moved in. With introduction of the model’s low-tax, a good product mix and specialized division of labor combined with use of modern technology and e-commerce, Regina could well benefit from it[x].

2.      Immigration
The basis of many of Zhang’s comments was that she was unable to obtain a work permit, which she blames on Brightenview contractual obligation to refund. In fact, Zhang had applied and obtained her work permit using her business investment plan out of GTEC. Zhang concealed this fact while speaking to CBC Geoff Leo in her interview[xi].

The fact that the Chinese immigration company Global Fortune provided misleading information should not be used as a reason to prevent Chinese business immigrants. Actually, except for providing misleading information and promising to potential immigrants on the result, nothing else has been found yet to charge the company. Also, Brightenview should be allowed to continue to operate unless direct evidence has been found showing that Brightenview is plotting together with the involved immigration company. To date, the Saskatchewan government has approved more than one hundred GTEC applications from foreign nationals. The province said its policy shift doesn't affect those people. It only applies to future applications. CEO Joe Zhang of Brightenview commented that this policy change decision of the government was not based on verified facts and evidences in terms of risk assessment and economic impact, and he raised the question that many restaurants and convenience stores were for sale and being flipped just for the sake of eligible business investment for the SINP applicants. However, the province said this policy change would help to promote increased connections with the local business community and help entrepreneurs obtain new business skills and expanded networks[xii].The GTEC business owners stated that the most disappointing thing for them was the constant negative assertion from the media. “We have not done anything wrong, why are we always being attacked? We have brought tangible economic contributions to the local area. Why are we still not welcome? We are the owners of the GTEC mall, we bought the property to operate our business in the mall, and the mall is involved in an inexplicable political debate for us to experience these unfair treatments.”[xiii] The private discussion between the developer and the customer should not be used to question the business model of the GTEC mall. Also, reporters should verify the source’s authenticity and validity before reporting as the denial of work visa application is concerned[xiv].

As to the assertion of taking a short-cut to immigrate and not operate, it was rebutted by the store owners there saying that they had a clear understanding that they needed to run a specific business to obtain their immigration status[xv].

Furthermore, as commented in Regina Leader-Post, Canada, as a country often described as a melting pot, has people from all ethnic groups to contribute to its rapid growth. With the help of local employees, language should not be a determining factor for foreigners to advance and succeed in their entrepreneurial attempt. The GTEC owners made this very clear.[xvi] The point is that businessmen from India, Pakistan, Malaysia, the Philippines and other countries or regions should also be encouraged to come to this mall so as to bring more diversified products and technology to Regina.

3.      The Market
GTEC owners said they were interested in talking face-to-face with the lady named Sonya, who said there had been no one in one day as reported also in the article by Leo, because the news report seriously deviated from reality. Moreover, they were questioning whether a low turnout of visitors would mean poor management[xvii]. Danyi from Shanghai is one of the 70 owners, mainly engaged in home textiles, ranging from bath towels, towels to down comforters. She said that the GTEC is a collective where everyone is working together to contribute to the economy of Saskatchewan. Her products are in short supply right from the start[xviii].

III.             Reflections
While the SINP should verify the genuineness of entrepreneurs’ intent to immigrate and their performance to conform to the BEP and BPA, business immigrants should be encouraged including all honest hard-working Asian people. Immigration fraud of a private business should not be taken as something the provincial government should be responsible (though both the Federal and provincial government have to set up clear measurable and enforceable rules to prevent and punish it), and economic development should always be the government’s focus for reason of both growth and keeping up with the expenses. Though the government should avoid running businesses on its own, it should cut down on business taxes, increase expenditures on public utilities, and create a fair, open, competitive and equitable business environment. Direct investment into businesses and endorsement on any private business should be refrained. As long as the GTEC operates in compliance with laws and regulations and follows all Saskatchewan business practices, and as long as the GTEC is not involved in the bad immigration practice directly, it should be allowed to continue to operate and develop. Immigration applicants who cheated or provided misleading information on their application or on media or social media should be put in a black list and banned from reapplying. Immigration companies that provide misleading information and make false promises to clients should be heavily penalized. Businesses under SINP review and relevant business providers that do not abide by the rules should also be heavily penalized, but business models should not be restricted, and eligible business immigrants from all countries and regions should be welcome.



[i] Elirons International Consulting Inc: Going to court? GTEC developer Brightenview said...(in Chinese), North American Business Guide, 7 Dec 2019,  please view the complete article from https://mp.weixin.qq.com/s/dhMuw7mtUyr5zvybugNqug.
[ii] An unverified report, an unwarranted charge, Regina Leader-Post, 2 Dec 2019.
[iii] Geoff Leo: Chinese woman seeking Canadian immigration caught in shadowy, confusing world of government-supported megamall, CBC News, 10 Nov 2019. Please view the whole article from https://www.cbc.ca/news/canada/saskatchewan/brightenview-mall-shadowy-world-1.5341635.
[iv] Elirons International Consulting Inc: What’s wrong with the GTEC? The newspaper Leader-Post has something to say (in Chinese), North American Business Guide, 6 Dec 2019, please view the complete article from https://mp.weixin.qq.com/s/BogIkwBzZy6nqkACl9cLrQ.
[v] Geoff Leo: Chinese woman seeking Canadian immigration caught in shadowy, confusing world of government-supported megamall, CBC News, 10 Nov 2019.
[vi] lirons International Consulting Inc: What’s wrong with the GTEC? The newspaper Leader-Post has something to say (in Chinese), North American Business Guide, 6 Dec 2019, please view the complete article from https://mp.weixin.qq.com/s/BogIkwBzZy6nqkACl9cLrQ.
[vii] Arthur White-Crummey: NDP blasts 'immigration scam at the GTH' after ministry drops mega-mall from program, Regina Leader-Post, 12 Nov 2019.
[viii] Murray Mandryk: GTH and GTEC mess frighteningly similar to NDP's Spudco, Regina Leader-Post, 15 Nov 2019.
[ix] Arthur White-Crummey: NDP blasts 'immigration scam at the GTH' after ministry drops mega-mall from program, Regina Leader-Post, 12 Nov 2019.
[x] The Yiwu Model (in Chinese), MBA Library, please check the information by clicking https://wiki.mbalib.com/wiki/%E4%B9%89%E4%B9%8C%E6%A8%A1%E5%BC%8F; the Yiwu Model moved to Sweden, and a Chinese trade city appeared in North Europe (Chinese), http://finance.sina.com.cn/g/20070810/15313871766.shtml.
[xi] Elirons International Consulting Inc: Going to court? GTEC developer Brightenview said...(in Chinese), North American Business Guide, 7 Dec 2019,  please view the complete article from https://mp.weixin.qq.com/s/dhMuw7mtUyr5zvybugNqug.
[xii] Geoff Leo: Brightenview asks Sask. government to reverse ban on megamall immigration applications, CBC News, 12 Dec 2019, please also take time to read the complete article https://www.cbc.ca/news/canada/saskatchewan/brightenview-asks-sask-government-to-reverse-ban-on-megamall-immigration-applications-1.5394578.
[xiii] We hope there is a voice that can speak for us, Regina Leader-Post, 2 Dec 2019.
[xiv] A purchase agreement dispute between private parties leads to negativity towards the GTEC business model? Regina Leader-Post, 2 Dec 2019.
[xv] Businesses don’t need to be actively managed or operated? Regina Leader-Post, 2 Dec 2019.
[xvi] Poor English will lead to business failure? Regina Leader-Post, 2 Dec 2019.
[xvii] Does low mall visitors equal poor management? Regina Leader-Post, 2 Dec 2019.
[xviii] Elirons International Consulting Inc: The GTEC will be the last copy? The owners and the media met face to face (in Chinese), North American Business Guide, 21 Nov 2019, please view the complete article from https://mp.weixin.qq.com/s/R8-FJzMvY8HEkG4R63XITA.

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