$5 billion laundered through B.C. real estate in 2018, driving up home prices | CTV News
VICTORIA — An independent report estimates that $5 billion was laundered through British Columbia’s real estate market last year and increased the cost of buying a home by five per cent.
Some $7.4 billion overall was laundered in B.C. in 2018, out of a total of $47 billion across Canada, concluded the report by an expert panel led by former B.C. deputy attorney general Maureen Maloney.
“Wealthy criminals and those attempting to evade taxes have had the run of our province for too long, to the point that they are now distorting our economy, hurting families looking for housing, and impacting those who have lost loved ones due to the opioid overdose (crisis),” Attorney General David Eby told a news conference Thursday.
“The party is over,” he added.
The provincial government commissioned two reports last September to shed light on money laundering by organized crime in the province’s expensive real estate market, following last June’s report on dirty money in casinos by former deputy RCMP commissioner Peter German.
German was then tasked to write a second report on real estate, and he says in the document that the infusion of illicit money into the B.C. economy led to a frenzy of buying that raised the assessed values of homes throughout much of Metro Vancouver.
There are thousands of specific properties worth billions at high risk for potential money laundering, German’s report says.
“His findings are stark evidence of the consequences of an absence of oversight, the weakness of data collection, and the total indifference of governments until now to this malignant cancer on our economy and our society,” said Eby.
Eby frequently took aim at the former B.C. Liberal government for allegedly turning a blind eye to the crisis.
Michael Lee, Opposition Liberal critic for the attorney general, issued a statement Thursday saying the government now needs to turn its attention to action.
“The BC Liberals are calling on John Horgan and the NDP to carefully consider the reports and move quickly to engage with the federal government and take action to ensure that those who break the law are prosecuted and ultimately convicted.”
An international anti-money laundering agency said last year that organized criminals were laundering about $1 billion annually in the province. But Maloney’s report estimates far more cash was filtered — though the total amount laundered in B.C. was a relatively small portion of the Canada-wide estimate of $47 billion.
Eby said he was under no illusions that the problems the province faces are unique.
“To me, this issue feels like a national-level crisis,” he said. “I hope that is a message that Ottawa is receiving as well.”
He added that he feels he has a partner in the current federal government.
Federal Organized Crime Reduction Minister Bill Blair has said he and Eby have met several times this year and are working together to fight money laundering.
Eby said B.C.’s cabinet is currently deciding whether to call a public inquiry. Green Leader Andrew Weaver said German’s report lays out a “direct rationale” for such an inquiry.
“Namely, that it would improve public awareness, play a crucial role in fault finding, and would help to develop full recommendations,” Weaver said in a statement.
Maloney’s report makes 29 recommendations, including calling for B.C. to launch a financial investigations unit.
Finance Minister Carole James said all the recommendations look critical, but the government wants to ensure it’s prioritizing the most important ones, while also noting that action already underway in the legislature on some solutions.
B.C. has tabled legislation aimed at preventing tax evasion and money laundering by shining a spotlight on anonymous real estate owners hiding behind shell and numbered companies.
Portions of German’s latest report were previously released, including on the limited police resources dedicated to fighting money laundering in B.C. and links to luxury vehicle sales and horse racing.
Eby said earlier this week he was shocked to hear some criminals laundering money through B.C.’s luxury car sector are getting provincial sales tax rebates.
The attorney general said the government will move to plug tax loopholes to prevent the provincial sales tax rebate that cost the province almost $85-million dollars since 2013.
Several regulatory and professional agencies anticipated the findings of the reports and put anti-money-laundering policies in place last month.
The B.C. Real Estate Council said it would be partnering with the federal Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, to identify and deter money laundering and terrorist financing in the industry.
The B.C. Real Estate Association, the body that serves 23,000 realtors in B.C., said in April that it would join with four other agencies to keep the proceeds of crime out of real estate.
The other participating organizations include the Appraisal Institute of Canada, BC Notaries Association, Canada Mortgage Brokers Association and the Real Estate Board of Greater Vancouver.
Each organization has committed to sharing information, accepting only verified funds and making anti-money laundering education mandatory for its agents.
This content was originally published here.