ADAM OLSEN: The focus has been largely on the bags of cash dragged into the casinos to be laundered... but ... as we found out ... the problem extends to real estate and luxury cars
Since the beginning of the Spring 2019 session, the
BC Green Caucus, has been asking government about money laundering in British
Columbia.
The focus has been largely on the bags of cash
dragged into the casinos to be laundered by so-called "whale"
gamblers. But, as we found out with
Peter German's report, the problem extends to real estate and luxury cars.
Apparently, you can buy a multi-million-dollar
house in British Columbia with cash. Few checks and balances and little
enforcement.
I asked Minister's Eby and James about these
troubling issues again today in Question Period. We must go further, and push
harder than we are. Here is a Transcript
from Question Period:
A mind-numbing
line of questioning coming from the other side this morning, almost as
mind-numbing as the despicable rot that we've been uncovering in British
Columbia over the last couple of weeks.
Global's
reporting last fall estimates as much as $5 billion has been laundered through
Vancouver's real estate market since 2012. This dirty cash is distorting
housing prices, and it's playing a large role in the housing crisis gripping
our province today. Add this to the allegations of money laundering in our casinos,
and this is painting an ugly picture.
According to
these reports, over a billion dollars worth of Vancouver property transactions
in 2016 alone had links to Chinese organized crime. Hidden ownership of B.C.
real estate makes money laundering harder to find and prosecute.
Ending the
use of the bare trust loophole is one policy that my colleague from Oak
Bay–Gordon Head has been calling on government to act on for years in this
Legislature. The Attorney General, himself, has flagged this as an issue that
masks the source of money in real estate transactions.
My question
is to the Minister of Finance: how is this government continuing to allow the
laundering of billions of dollars through our real estate sector?
Hon. David Eby: Thank you,
Mr. Speaker, and thank you to the member for the question.
He will know
that you find a lot more when you have your eyes open than when you have your
eyes closed. So, when we asked Dr. German to have a look at what was happening
in the casinos and he came back and he said, "Wow, you know the
overwhelming majority of people bringing bulk cash into casinos list their
occupations as being real estate-related.
Maybe we
should have a look at whether this money is making its way into the real estate
market as well," we sent him off to do that work. Simultaneously, the
Minister of Finance assembled a team of experts on the issue of money
laundering and real estate to identify measures we could take right away.
She's got a
white paper out on beneficial ownership to move forward with legislation to
establish a beneficial ownership registry so we actually know who owns the real
estate. Transparency International Canada— when they looked at 100 of the most
valuable properties in Vancouver, for almost half, they couldn't figure out who
owned them, because they were owned by offshore trusts, numbered companies,
students, if you could imagine — the most expensive residential real estate in
Vancouver.
That's why
we're taking this really seriously. That's why we're taking steps even in
advance of the reports being brought in, because we know we have gaps in the
system. We have our eyes open on this, and we're taking action.
Mr. Speaker ... Saanich North and the Islands on a supplemental.
Adam Olsen:
Eyes wide
open.
Last year,
the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC — I
talked about it last week — released the results of 130 examinations done
between 2015 and 2017 in the real estate sector in British Columbia. They found
that there were significant or very significant deficiencies in the
anti-money-laundering controls at roughly 88 percent of the real estate
entities that they examined. Few controls in the real estate sector and little
enforcement.
Rampant
money laundering left unchecked by the former B.C. Liberal government helped
fuel the housing crisis that is the cause of the deepening sadness in this
province. The reports commissioned by this government, due next week, will no
doubt daylight more issues, but what is needed is immediate, concrete action to
stem the tide of dirty cash polluting our real estate market.
We cannot
afford to wait, so my question again is to the Minister of Finance: what is the
ministry going to do to further act on these issues that continue to come to
light?
Hon. Carole James ... Thank you to the member for the question.
I think all
of us, when we see the housing crisis and know the kinds of loopholes that were
completely ignored in this province, know that we need to get on with the
action, and we've begun already. I'm very proud to announce that, in fact,
today we started Canada's first registry around condo flipping and strata
flipping, again, to gather information.
This will be
a first across the country, and as the Attorney has said, it's critical to
shine a light on the behavior that's going on. That's the first step. Then
further action will be taken. We will be looking at the beneficial trust. We
will, in fact, be putting together a registry, publicly searchable, that will
disclose who's behind corporations, who's behind partnerships, to ensure that
there's that transparency there.
We're
already starting to see that having some action in the Lower Mainland, in
particular, when we look at housing prices. But we know much more needs to be
done. We're looking at all the financial institutions, all of the real estate
areas. Our expert panel will be reporting in March.
I look forward to further action, because housing
should be there for people, not for speculators and not for money launderers.
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