WATCH: Dirty money pouring through B.C.’s housing market means if you bought a home here, it cost more. Five percent more. Mary Griffin explains how money laundering distorts the industry and impacts all of us.
Two reports, “Combatting Money Laundering in BC Real Estate”, and “Dirty Money – Part 2”, paint a scathing picture on the scope of money laundering in British Columbia. Finance Minister Carole James said the extent of the criminal activity is more than predicted.
“The amount of money being laundered in BC is more than anyone predicted. Conservatively, $7.4 billion was laundered in our province alone,” James said.
The reports lead authors, Maureen Maloney, and Peter German, found $5 billion of dirty money in BC’s real estate market added five percent to the price of a house last year. And examples of criminal activity are not hard to find. Attorney General David Eby said the numbers are shocking.
“They found a $3.5 million Gulf Island property acquired with funds allegedly embezzled from a $90 million loan fraud in India. Owned through a company, registered in a high-risk jurisdiction, using a post office box address for service,” Eby said.
According to 2019 BC Assessment data, a single family home in Vancouver is priced at more than $2.3 million. On the island, in the Capital Region a single family home is assessed just under $883,000, and on the mid-island $533,000. Over the past five years, prices rose, at times, in the double digits annually in these markets.
“I certainly believe that money laundering played a part in that. I think that’s what the report really points out,” James said.
There are 29 recommendations in total. The government is going ahead with the Land Owner Transparency registry, that would end hidden ownership. Another recommendation is the creation of a financial intelligence unit.
“The party is over. It may be spring. But winter is finally coming for those who rely on bulk cash transactions in their business model,” Eby said.
The provincial cabinet is still debating whether or not to call a public inquiry into money laundering.
Read the Expert Panel on Money Laundering in Real Estate’s full report:
https://news.gov.bc.ca/files/
Read Peter German’s report:
https://news.gov.bc.ca/files/
For more information about the Land Owner Transparency Act: visit:
https://news.gov.bc.ca/
Mary Griffin
