The BC government officially announced today that it will hold a public inquiry into money laundering that has “distorted British Columbia’s economy, fuelled the overdose crisis, and driven up housing prices.”
The decision to proceed with a commission of inquiry follows three independent reviews that found extraordinary levels of money laundering in BC’s real estate market and other sectors of the economy.
“From day one, our government has been working to tackle the housing crisis and fraud that went unchecked for over a decade, hurting people and BC’s economy,” said BC Premier John Horgan. “We have taken decisive actions to combat money laundering, but questions remain and people in BC deserve answers.”
That, he said, “is why we have decided to proceed with a public inquiry into money laundering in the province of British Columbia.”
BC Supreme Court Justice Austin F. Cullen has been appointed to head the inquiry, which will look at the full scope of money laundering in British Columbia, including real estate, gaming, financial institutions, and the corporate and professional sectors.
He will also examine regulatory authorities and barriers to effective law enforcement against money laundering activities. He will have the ability to compel witnesses and order disclosure.
The inquiry “will bring answers about who knew what, when, and who is profiting from money laundering in our province,” said David Eby, BC’s Attorney General. “The Honourable Justice Cullen will have the mandate, authority, and resources to seek answers, perhaps most importantly among people and organizations who refuse to share what they know unless legally compelled to do so.”
The Commission of Inquiry into Money Laundering in British Columbia will deliver an interim report within 18 months and a final report by May 2021.
The Expert Panel on Money Laundering in Real Estate estimates that more than $7 billion in dirty money was laundered in BC in 2018 and that dirty money increased the cost of buying a home by about 5%.
However, this number could be significantly higher — upwards of 20% — in areas like Metro Vancouver where there is more money laundering activity, the panel noted.
“People are understandably shocked and upset about money laundering, and it’s not right that homeowners and renters are carrying the costs of crime,” said Minister of Finance Carole James. “We’ve already taken action to make our real estate market more fair and transparent with our 30-point housing plan. Moving forward with this public inquiry reinforces our commitment to stamp dirty money out of our province and out of people’s lives.”
In his 2018 report, entitled Dirty Money, Peter German described a history of money laundering and criminal activity in Lower Mainland casinos. His recently released follow-up report into money laundering in real estate, luxury cars, and horse racing found thousands of specific properties worth billions of dollars were owned by individuals or entities with service addresses in “high risk” jurisdictions for money laundering.
He also found that there was no agency or police force with adequate oversight or resources to investigate these suspicious activities.
The province said it is acting on the findings of the Dirty Money report. Nine of the 48 recommendations from the 2018 Dirty Money report have been completed, plus two additional interim recommendations from December 2017.
Half of the recommendations are expected to be complete by this summer.