Canada has had a reputation as an open, transparent, trustworthy society, which operates on the principles of “peace, order and good government.”
But when it comes to stopping billions of dollars of illicit money funnelling into Canadian real estate, our elected officials don’t deserve their status.
The governments of Canada and B.C. have consistently failed to protect Canadians from unsavoury, tax-evading speculators in real estate, who have made Metro Vancouver and Toronto housing unaffordable.
Even though most Canadians remain unaware of the complex world of dark money, Vancouver-based financial researcher Adam Ross makes clear Metro Vancouver and Toronto have become hot spots for shady global real-estate deals.
Because of lax rules in Canada and B.C. it is easy for rich investors in real estate to hire accountants and lawyers to hide their identities.
Offshore speculators can therefore avoid detection by their own governments, including the rising giant of China. And they can avoid or evade taxes in Canada.
Specifically, they can also dodge the 15 per cent tax on foreign buyers of residential properties in Metro Vancouver and Toronto.
Ross believes ending runaway money laundering in real estate is an election issue for British Columbians.
Even though the illicit money transfers could be greatly reduced, elected officials have turned a blind eye. The problem is worse than most think, suggests Ross, who consults for Transparency International, a renowned anti-corruption organization.
The Berlin-based agency recently released a report that pinpoints Canada, and especially Metro Vancouver, as hot spots for a global “corrupt elite” intent on making their dirty wealth look clean by laundering it through real estate.
“Governments must close the loopholes that allow corrupt politicians, civil servants and business executives to be able to hide stolen wealth through the purchase of expensive houses in London, New York, Sydney and Vancouver,” said Jose Ugaz, chair of Transparency International.
The report on money-laundering in Canada, the U.S., Britain and Australia recognizes housing is becoming out of reach for locals in large part because real estate has become an easy place to hide hundreds billions of dollars of dirty currency from police and tax authorities.
“As long as the status quo persists with respect to opaque ownership here in B.C., efforts to curb foreign real estate investment will fall short,” says Vancouver-based financial researcher Adam Ross, consultant to Transparency InternationalReal estate accounted for 30 per cent of criminal assets confiscated worldwide between 2011 and 2013, according to the Financial Action Task Force (FATF).
Instead of praising Canada for responsible governance, Transparency International criticizes Canada and other English-speaking countries for failing “to deliver on their anti-corruption commitments … (which) feeds poverty and inequality while the corrupt enjoy lives of luxury.”
Stronger anti-money laundering rules are desperately needed for B.C. and especially Metro Vancouver, where governments can’t identify the owners of almost half the region’s 100 most valuable homes, according to Ross, owner of White Label Insights, which specializes in corporate risk management.
Attempts by police or immigration authorities to track down illicit financial transactions in Vancouver, Toronto and other parts of Canada consistently lead to “dead ends,” says Ross.
