Press Release
September 17, Toronto
A new survey by the Angus Reid Institute finds that a majority of Canadians think money laundering is a problem and want action taken. The survey found:
Three-quarters of Canadians say money laundering is an issue within their own province (74%). Even more, say the [sic] on a national level (81%) it is a challenge that Canada needs to address.
These findings come towards the end of the year when Canada’s money laundering problem, also known as ‘snow-washing’, has made national news, garnered new laws, and funds to address the problem, to the extent that Prime Minister Justin Trudeau characterized Canada’s problem as “unacceptable”.
Canadians also received various estimates as to the scale of the snow-washing problem this year. An expert panel convened by the Government of British Columbia estimated money laundering to be $43 billion in Canada, with a 5-7% average impact on housing prices across BC. A separate report from the CD Howe Institute, authored by TI Canada Beneficial Ownership Working Group member Kevin Comeau, estimates snow washing to be $100-$130 billion.
In March 2019, Transparency International Canada (TI Canada), Canadians for Tax Fairness (C4TF), and Publish What You Pay Canada (PWYP Canada) released the report ‘OPACITY: Why criminals love Canadian real estate (and what to do about it).’ That report showed that between 2008-2018 in the Greater Toronto Area, over $28 billion dollars of real estate transactions took place through companies, many of which have unknown ownership, and over $25 billion of transactions were carried out with unregulated lending services. While these transaction methods are legal, they create a large risk for money laundering in the GTA.
The Angus Reid Institute survey showed that Canadians want action taken on money laundering. A majority of survey respondents in most provinces said they would want an inquiry like the Cullen Commission, which is set to take place in BC following over a year’s worth of headlines on the extent of the province’s money laundering problems.
While the survey did ask about other specific tools to fight money laundering like ‘lifestyle audits’ and eliminating $50 and $100 bills, the survey missed one of the most important tools to end snow-washing, which is the establishment of a publicly accessible registry of beneficial owners
A public registry would unmask the anonymous owners of companies. Anonymous companies, or shell companies, are used by criminals, kleptocrats, tax dodgers, and terrorists the world over to hide their funds. Canada’s poor beneficial ownership transparency has been criticized by international watchdogs and praised by crooked intermediaries resulting in the term snow washing: bring your dirty money to Canada and wash it like the pure white snow. The impact on Canada has been increasing housing prices, the enablement of criminal activity and fueling of the fentanyl crisis, exposing businesses to scams, and undermining Canadian efforts to combat poverty, conflict, and terrorism around the world.
Based on international and domestic pressure, there is momentum for more action to be taken to endsnow-washing. The Federal Government announced more funds and tools forthe RCMP this year in the federal budget, and we are seeing increasedcooperation amongst the provinces, territories, and the federalgovernment to close loopholes, including federal Finance Minister BillMorneau announcing public consultations for a public registry. The B.C.government has also introduced a beneficial ownership registry of landtitles, which is a huge step forward but is, unfortunately, apay-for-access system.
Angus Reid Institute survey caps ayear of growing national concern about money laundering, and a publicregistry of beneficial owners would go a long way to address thesechallenges.
The Angus Reid Institute Survey can be read here: https://www.cdhowe.org/public-policy-research/why-we-fail-catch-money-launderers-999-percent-time
The Expert Panel on Money Laundering in BC Real Estate can be read here: https://www.cdhowe.org/public-policy-research/why-we-fail-catch-money-launderers-999-percent-time
The CD Howe Institute report can be read here: https://www.cdhowe.org/public-policy-research/why-we-fail-catch-money-launderers-999-percent-time
The OPACITY report can be read here.
For more media contact, please contact:
James Cohen
Executive Director, Transparency International Canada
James.Cohen@transparencycanada.ca
416-488-3939
Sasha Caldera
Program Manager, Canadians for Tax Fairness
Sasha.Caldera@taxfairness.ca
647-861-6425