It is now overwhelmingly clear that money laundering has been a huge problem in BC for years, affecting not only our casinos but also our real estate market, contributing to skyrocketing home prices.
The Decade of Dirty Money happened largely because the government at the time refused to act and chose to look the other way. This neglect on the part of the BC Liberals has cost BC families billions.
We now know that in 2018 alone, the $5 billion laundered through real estate increased the cost of buying a home by at least 5%. With the composite price for homes in Metro Vancouver at just over $1 million, 5% is an average of $50,000 on top of every home purchase.
This is a massive increase for my constituents, who for many, $50,000 represents their entire annual income! How was money laundering allowed to fester and push the dream of home ownership even further away?
The former head of the Integrated Illegal Gambling Enforcement Team (IIGET), Fred Pinnock, said that when it came to money laundering, the BC Liberals knew it was going on, but they did nothing because they didn’t want to disrupt the flow of money into government coffers. (Global)
Take a look at the timeline and you can judge for yourselves:
- 2009: IIGET sounds the alarm about BC casinos being susceptible to money laundering -> The BC Liberals eliminate their funding, disbanding the unit.
- 2013: The head of gaming enforcement investigations, Joe Schalk, sends an email identifying the extent of money laundering in BC -> He is fired without cause.
- 2015: The money-laundering crisis reaches its peak. The BC Lottery Corp sends the ‘Section 86’ report to the BC Gaming Enforcement Branch -> The BC Liberals do nothing.
- 2016: The BC Liberals hire an accounting firm that produces a report recommending changes to anti-money laundering practices -> The BC Liberals never make the report public.
- 2018: The BC Liberals said they did “everything we could” to combat money laundering, so the Attorney General asks them to waive Cabinet privilege on relevant documents so we can avoid repeating mistakes. -> The BC Liberals refuse.
Over and over again, the previous government was told that there was a serious problem. Over and over again, they neglected to act.
Money laundering isn’t a victimless crime. It keeps gangsters in business, making our streets unsafe with shootings and gang violence. It aides the flow of fentanyl and carfentanyl-laced drugs into BC, which have killed thousands. And it leads to out-of-control housing prices, as launderers pour billions into real estate, pricing hard-working, law-abiding British Columbians out of the market.
In 2017 our government took over and began doing things differently.
The first thing we did was make public the 2016 report the BC Liberals tried to bury. Then in September 2017, Attorney General David Eby commissioned an independent review of BC’s anti-money-laundering policies and practices. Peter German released his report the following March and we’ve already put a number of reforms in place that have substantially reduced suspicious transactions in BC casinos.
In September 2018, our government launched a two-pronged review aimed at shutting down avenues for money laundering in real estate and other sectors.
The Ministry of Finance’s Expert Panel on Money Laundering was tasked with looking into money laundering in the real estate market. They recommended rules to shut loopholes in the real estate market and increase transparency on who owns property in BC. But we didn’t wait to act: before their report was made public, we introduced their top recommendations – the Land Owner Transparency Act and the Business Corporation Amendment Act.
The Land Owner Transparency Act is world leading, and will make BC the first jurisdiction in North America to reveal the true ownership of all properties. It will help bring an end to the days when our province could be used by shell companies and others to anonymously hide wealth, evade taxes, and launder money.
Over the past two weeks, three more independent reports were released, and our government is taking action to stop money laundering in the luxury car sales and export market, as well as the real estate sector. We will continue to take action and make needed reforms as more problems and loopholes are identified.
Good government is about making the right decisions even if those decisions are tough ones to make. The previous BC Liberal government chose to ignore the issue and bury reports in favour of keeping the revenue flowing.
Our government is making different choices, and we are going to get results for British Columbians. Not only because it’s the right thing to do, but because BC deserves better.