We need to get tougher to tackle real estate’s dirty money

by Steve Randall07 May 2019

The issue of money laundering in Canada’s real estate industry is not adequately addressed by current policies.

The CD Howe Institute says that Canada has some of the weakest anti-money laundering protections among western liberal democracies allowing the country to receive a high share of dirty money.

“While it is impossible to estimate the exact amount of money laundering, a realistic estimate of the magnitude of dirty money laundered in Canada each year likely lies in range of $100- $130 billion,” says report author Kevin Comeau.

The report “Why We Fail to Catch Money Launderers 99.9 percent of the Time,” published May 7 supports the creation of a publicly accessible registry of beneficial ownership, and mandatory declarations of beneficial ownership with meaningful sanctions for false declarations.

“Anonymity and invisibility could be reduced by implementing a publicly accessible registry of beneficial ownership of companies, trusts and real estate,” he says. “Structured properly, a public registry would offer a two-way flow of information – communication of beneficial ownership information to the world and communication of foreign-based information to Canadian authorities – which would bring more bad guys into the light of day.”

But the report highlights that neither the House of Commons Standing Committee on Finance in its November 2018 report on money laundering, nor the December 2018 amendments to the Canada Business Corporations Act, included either of the two tougher measures.

“Obstacles to following the dirty money could be reduced by creating a new criminal offence: a false declaration of beneficial ownership, whether made on a public registry or submitted by a customer to a Reporting Entity. Not only would such an offence bring more integrity to the beneficial-ownership information being disclosed; it would also provide a solid base

from which law enforcement agencies could conduct investigations of suspicious transactions,” explains Comeau.

The full report is at cdhowe.org

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