According to the 2019 International Narcotics Control Strategy Report, Canada is one of the world’s major money laundering areas. Transnational organized crime groups are laundering money from “drug trafficking, fraud, corruption, counterfeiting and piracy, and tobacco smuggling”.
The challenge for these criminals is to make their illegal gains seem legitimate. They have to convert dirty money into clean money in order to spend it without drawing the attention of law enforcement. Often this is done through the gambling, real estate, and luxury car sectors.
British Columbia has been seen as the money laundering capital of Canada. However, according to the Combatting Money Laundering in BC Real Estate Report, the magnitude of the problem spreads beyond BC.
The report estimated that $47 billion was laundered in Canada last year, and it cites Ontario as the second worst province for money laundering.
One money laundering strategy is to use the proceeds of crime to purchase expensive real estate. Ontario’s real estate association has recommended our province require all real estate identify the beneficial owner.
Currently real estate can be owned by a trust or corporation which can be used to disguise the true owner. BC has already announced its plans to create a registry that will identify all owners of real estate regardless of how the property is registered.
Crime affects us all. Successful money laundering leads to more crime, and in the case of real estate, soaring prices.
If the Canadian federal government and all the provinces work together at closing the current ability of proceeds of crime being made legitimate, that will have a great impact on reducing criminal activity.
From a business perspective this is a simple strategy to make the benefits from crime less beneficial.
If we as individuals or as society are less threatened by crime, that is a very positive outcome.
Money laundering is a serious problem in Canada, and it is to everyone’s advantage to implement ways to decrease the motivation for crime.