Canada has fallen from its coveted position within the top 10 least corrupt countries on Transparency International’s annual Corruption Perception Index (CPI) published today.
Canada slipped four points in one year to the number 12 position, with a score of 77 out of 100. This position leaves us trailing behind peers like the Germany, the Netherlands, and Norway.
How did this happen to a country that the rest of the world sees as a beacon of good governance and democracy? The truth is, our decline in the CPI has been gradual since 2012 and gained pace in 2019.
Last year, issues surrounding corruption came to the forefront in Canada and grabbed international headlines that let the world know that our modest, polite country had nefarious dealings. We at Transparency International Canada were less shocked as we had been sounding the alarm for quite some time. So, what happened?
First, it turned out that Canada the pure is an easy place to launder dirty money (or ‘snow wash’ as it’s known here). The national money-laundering alarm siren went off in British Columbia with two separate government-commissioned reports detailing the extent of the problem in real estate, casinos and luxury goods.
While the scale of money laundering was acknowledged by Prime Minister Trudeau’s Liberals and other political parties in election platforms, it was largely treated as a local BC problem. But experts have warned that money laundering does not stay west of the Rocky Mountains and is in fact a national issue. It was encouraging to note that fighting money-laundering was mentioned in the December 2019 Speech from the Throne, but the news a few days ago that the RCMP had quietly disbanded its financial crime unit in Ontario at the end of the year is a concern.
The story that dominated headlines last year was the bribery charges under the Corruption of Foreign Public Officials Act (CFPOA) against SNC-Lavalin. The case would spiral into a major political crisis. SNC-Lavalin would eventually settle in a plea deal, but not before the resignation of the Attorney General, a cabinet minister, and an Ethics Commissioner report citing violations by the Prime Minister. The state of the affair even garnered a passive warning from the OECD which monitors enforcement of signatories to its anti-bribery convention.
While on a day to day level, Canadians do not face the same demands for bribes as so many citizens of countries that fare much worse on the CPI Index, the events of 2019 rattled the image of Canada as a squeaky clean country.
Canada has been cited by international peers and oversight bodies including the OECD and the Financial Action Task Force for not doing enough to address bribery overseas and money laundering. Transparency International’s own reports have shown decline and stagnation on both issues respectively.
But Canada can reverse course. Countries usually take the biggest hit on the CPI when long festering corruption issues come to light in explosive ways. But this can also be the best time for officials to roll up their sleeves and finally tackle the problems. While the way Canada’s remediation agreement regime came into effect troubled many people, the legal tool itself should play a positive role in greater CFPOA enforcement. Additionally, momentum on a publicly accessible beneficial ownership registry can lead to a major crackdown in money laundering.
The worst thing Canada could do is shrug off the fall on the CPI and continue to rest on an unwarranted reputation. A drop in the CPI is not only a blemish on Canada, it signifies that we are not doing our part to protect ourselves and the world from corruption.
Read the full Corruption Perception Index here.