Over $7 billion was laundered in BC last year alone, with $5 billion of that laundered through the real estate market.
Those are the latest findings from a newly-released report today, from BC’s Expert Panel on Money Laundering in Real Estate.
The panel’s report – which was released along with the remaining chapters of Peter German’s review into money laundering in real estate, luxury cars and horse racing – estimates that a total of $7.4 billion was laundered in BC in 2018.
“As a conservative estimate, we’re looking at money laundering on the scale of $7.4 billion in 2018,” said Maureen Maloney, chair of the Expert Panel on Money Laundering in Real Estate. “That’s just for BC, let alone the rest of Canada.”
BC’s Minister of Finance Carole James said the amount of money being laundered in BC – particularly through through real estate “is much more than anyone predicted.”
And money laundered in real estate hiked the cost of buying a home by about 5%, the report found. With the composite benchmark price for homes in Metro Vancouver at just over $1 million, 5% is an average of $50,000 for every home purchase.
In response to the findings, James said the provincial government is “tackling the housing crisis head-on and taking action to combat the money laundering that has been allowed to drive up housing costs for British Columbians for far too long.”
BC’s housing market, she added, “should be used for housing people, not for laundering the proceeds of crime.”
German’s report found thousands of specific properties worth billions as “high risk” for potential money laundering, tax evasion or both.
The report also found that there was no agency or police force with adequate oversight or resources to investigate these suspicious activities.
This builds on German’s first report into money laundering in casinos and his work on luxury cars, demonstrating the pervasiveness of dirty money throughout B.C.’s economy.
“Wealthy criminals and those attempting to evade taxes have had the run of our province for too long, to the point that they are now distorting our economy, hurting families looking for housing and impacting those who have lost loved ones due to opioid overdose,” said BC Attorney General David Eby.
The panel’s report and recommendations address many of the troubling practices and problems German’s findings identify.
James and Eby both said they are reviewing the findings from both reports and will take further action to get dirty money out of BC.
“By closing loopholes and enforcing improved laws, our government will ensure British Columbians will live in a province where families who work hard and play by the rules are rewarded, and those who break the law face appropriate consequences for their illegal activities.”