Money laundering is Canada's problem — not just the West Coast's, expert warns
Maureen Maloney's report estimates that $46.7 billion was laundered through Canada's economy last year
The author of a report on money laundering in Canada says dirty money isn't unique to British Columbia, and needs to be addressed on a nationwide scale.
"Everybody thinks it's a B.C., problem… But I don't think the other provinces or the federal government can put their heads in the sand and say 'Well, it's not our problem, it's B.C.'s problem,'" said Maureen Maloney, professor at the School of Public Policy at Simon Fraser University.
"It really is a Canada-wide issue that has to be dealt with."
The report, Combating Money Laundering in B.C., Real Estate, featured estimates based off of an "economic and mathematical model" of the annual flow of illegally-procured money.
It estimated that last year, roughly $46.7 billion was laundered via the Canadian economy, with B.C. responsible for roughly $7.4 billion of that total.
B.C.'s real estate market makes up about 72 per cent of the $7.4 billion figure.
"If B.C., is only — 'only' being a shocking amount — [having] $7.4 billion being money laundered, where's the rest of the money going?" Maloney told Anna Maria Tremonti on The Current.
The report ranks several regions based on their flow of illegal money, placing B.C., in fifth place behind Alberta, Ontario, Saskatchewan and Manitoba.
Maloney's report, in tandem with similar reports revealing equally shocking numbers, have spurred B.C. Premier John Horgan to announce a public inquiry into the crime's pervasiveness.
"It became abundantly clear to us that the depth and the magnitude of money laundering in British Columbia was far worse than we imagined when we were first sworn in, and that's why we established the public inquiry today," Horgan said on Wednesday morning.
A dangerous ripple effect
Maloney estimates that the province's house prices have inflated roughly five per cent due to the flow of dirty money into the industry, but says such damage could be the tip of the iceberg.
"The more we allow money laundering to take place, the more we're inviting criminals to come here. So we'll increase in crime. The drug problems will only escalate, and we'll have more horrendous deaths from fentanyl or other drugs. We'll have more organized crime which can lead to more corruption," she said, adding that all of these factors could contribute to the distortion of B.C. and Canada's international reputation.
If any other province starts ignoring that they have a very big issue … They're going to have a much bigger issue.- Maureen Maloney
Doug Schweitzer, Alberta's Minister of Justice and Solicitor-General, has publicly questioned the report's findings, which put Alberta at the top of the list for the flow of laundered money. In a statement to CBC News, he said the data is unreliable and unverifiable.
Maloney says denying the findings will do more harm than good.
"Let's see his reliable data. I think that we have the best estimates," she countered.
"I'm not saying they're definitive by any means, but I think if any other province starts ignoring that they have a very big issue … they're going to have a much bigger issue if B.C. starts dealing with it and people start moving money laundering out of B.C. into different provinces."
To discuss the prevalence of money laundering in B.C., and Canada, Tremonti spoke to:
- Maureen Maloney, professor at the School of Public Policy at Simon Fraser University and chair of the expert panel that produced the report Combating Money Laundering in B.C. Real Estate.
- Garry Clement, money laundering investigator, former head of RCMP's Proceeds of Crime Program.
Click 'listen' near the top of this page to hear the full conversation.
Written by Émilie Quesnel with files from CBC News. Produced by Julie Crysler and John Chipmann.