Home prices increased about 5 percent in Canadian province British Columbia last year thanks to money laundering.
According to a report in The Wall Street Journal citing government reports, the increase in money laundering is raising the prices in one of the most in-demand areas of the real estate market. About $3.71 billion of dirty money went through the real estate market in 2018, including in Vancouver. Billions more were spent in casinos, on luxury cars, and at horse racing tracks. The reports underscore the less-than-stellar enforcement efforts on the part of Canada. Prime Minister Justin Trudeau’s Liberal Party government earlier this year said they will spend $120.64 million during the next five years to enhance monitoring and enforcement of money laundering. Its also looking at legislation to go after illegal funds in trade transactions and to monitor real estate transactions.
The paper noted it may take more than that to stop the flow of laundered money into Canada. Money laundering experts point to the convictions the country has had compared to other G-7 nations. In the sixteen years from 2000 to 2016, Canada convicted 316 on money laundering charges. In 2017 the U.K. convicted 1,435 that were charged with money laundering. Canada has one of the most advanced economies but is still been a target of criminals because of regulatory loopholes that make it no issue to send money through the banking system. “Organized crime will go through the lane of least resistance, and Canada has become that,” Garry Clement, a former officer for the Royal Canadian Mounted Police and current consultant on financial crimes, told The Wall Street Journal.
A Canada public safety department spokeswoman told the paper the government is responding to the concerns of British Columbia in regard to enforcement of money laundering. “This includes enhanced outreach and examinations in the real estate and casino sectors with a particular focus on British Columbia,” said the spokeswoman.