The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Bahamas “has never been more attractive for Canadian investment than it is now”, government ministers have told Tribune Business, describing as “an isolated incident” the dispute that prompted an advisory to be issued against this nation.

Seeking to minimise any negative fallout arising from the warning about Bahamian real estate transactions, which was published on an official Canadian government website, both Ryan Pinder, minister of financial services, and Khaalis Rolle, minister of state for investments, said it would have “no impact” on investor confidence and perceptions of this nation.

Pointing to the Bahamas’ Tax Information Exchange Agreement (TIEA) with Ottawa, which allows Canadian companies domiciled in this nation to effectively repatriate their profits tax free, Mr Pinder said this nation was better placed than all its rivals to attract Canadian foreign direct investment (FDI).

He added that the draft Foreign Investment Act, which aims to codify the existing National Investment Policy into statute, would further bolster investor confidence by providing “the necessary transparency and going beyond international best practices”.

Similarly, Mr Rolle pointed to last week’s agreement between Hutchison Whampoa and the Sunwing Travel Group for the re-opening of the Grand Lucayan’s Reef property as evidence that Canadian investment had not been deterred by their government’s warning.

He added that “thousands of real estate transactions”, involving buyers and sellers from across the world, were concluded every year without incident. While describing the Oceania Heights situation as representing a minimal percentage of these deals, Mr Rolle promised that the Government would look into the matter to see what help it could provide in bringing resolution.

Tribune Business revealed last week how lobbying by disgruntled Canadian homeowners at the $52 million Exuma-based development had induced their government to issue an investment warning about the Bahamas via the website for their Department of Foreign Affairs and International Trade.

The advisory, which was located by Tribune Business, sits on the Department’s page of ‘Travel Warnings and Advisories’ for the Bahamas. It reads: “ Canadians interested in purchasing property or making other investments should seek legal advice from appropriate professionals in Canada, and in the Bahamas, before making commitments.

“Disputes arising from such activities could be prolonged and costly to resolve.”

Real estate is a key driver for the Bahamian economy, yet the sector has been singled out by the Canadian government. The way the warning is written implies that disputes are relatively commonplace in the Bahamas, and that resolving them will require ‘plenty money’ and time in the court system.

In respose, Mr Pinder told Tribune Business that while he did not know the details of the Oceania Heights dispute, “this appears to be an isolated incident”.

Noting the “longstanding” business and trade relationship between the Bahamas and Canada, which started when Royal Bank of Canada established itself in Nassau more than 100 years ago, the Minister said the ties between the two nations had lasted “probably longer than any countries in the world”.

“We believe the Bahamas is positioned perfectly for Canadian investment, given the TIEA and preferential tax treatment of Canadian companies operating in the Bahamas, being able to repatriate surplus earnings on a tax-free basis,” Mr Pinder told Tribune Business.

“We believe the Bahamas has never been more attractive for Canadian investors and businesspeople than it is now. We believe the Bahamas is in a position above all to attract Canadian investment.”

Noting that Oceania Heights’ developers were themselves Canadian, Mr Rolle told Tribune Business: “My only comment is that there are thousands of transactions taking place annually that involve Canadians, Europeans, Asians and Americans, and of the thousands of transactions that occur, these represent a barely measurable percentage.

“I don’t believe that [the advisory and dispute] has any impact on the legal system or the climate for investment in the country. If you look at some of the large investments announced lately, particularly the Sun Wing Travel Group, that is indicative that investing in the Bahamas is still a prime option for individuals, who have confidence and comfort in us.”

Asserting that the Bahamas had a “transparent and predictable investment regime”, and that there was a “strong track record of safely investing in the Bahamas”, Mr Rolle reiterated: “We’re not going to be overly concerned that the investment climate for the Bahamas is compromised because of an isolated incident.

“I think this [the Oceania Heights dispute] has been floating around for some time, and people are still confident and investing in this country.” While describing the Canadian government advisory as “unfortunate”, Mr Rolle told Tribune Business: “We think our investment regime is extremely effective and efficient.”

Acknowledging that “every investor should be protected”, the investments minister said given the volume of real estate transactions that occurred in the Bahamas, it was inevitable that a few would end up in dispute.

Still, Mr Rolle said the Government would look into the Oceania Heights situation and assess whether its intervention was necessary and could succeed. “Every issue has to be taken seriously, and we will address every issue,” he said.

Tribune Business has also seen e-mail evidence indicating that the Oceania Heights homeowners are pushing the Canadian government to raise their plight in the ongoing negotiations with CARIFORUM (which includes the Bahamas) for a new trade agreement.

However, Mr Pinder, who has ministerial responsibility for the issue, said: “It would be fair to say that this specifically has not been raised and brought to the Bahamas government’s attention during these trade negotiations. The Bahamas government doesn’t anticipate there will be any adverse impact on the trade negotiations.”

Mr Pinder added that his Ministry’s Trade and Industry Unit was working closely with the Bahamas Investment Authority (BIA) over the drafting of the Foreign Investment Bill.

“We believe legislating foreign investment provisions will provide the necessary transparency, and goes beyond international best practices,” Mr Pinder told Tribune Business. “We’ll likely go beyond what the previous administration just started out with.”

He added that the draft Bill would “serve the country well”.