British Columbia’s finance minister says that province’s transparent land registry will push dirty money to real estate markets in other parts of Canada — and Toronto’s at risk.

“If you’re a money launderer, provincial lines don’t matter,” Carole James told the Star in an interview Thursday. “Money launderers don’t look at borders, they look for opportunities.”

“If one province puts something in place and the other provinces don’t ... it provides an opportunity,” she said.

B.C. is in the process of implementing Canada’s most transparent land registry as part of a wide-ranging effort to tackle its housing affordability crisis.

Across Canada, criminals have been able to buy property with dirty money by masking their identities behind numbered companies, and this has helped drive up real estate prices, especially in Vancouver and Toronto.

B.C.’s new registry will compel numbered companies and trust funds that buy property to reveal their true owners in an effort to cut off the flow of illicit cash.

Read more:

Toronto real estate is vulnerable to money laundering

Real estate investigation is next for author of B.C. casino money laundering report

How the laundering of ‘dirty money’ in B.C. casinos was exposed

“Transparency is a critical piece of closing loopholes that people use to money-launder, closing the opportunity to people who want to take advantage of not paying their taxes,” James said.

“You shouldn’t have the ability to hide behind a numbered company, to hide the ownership of property in British Columbia.”

In Vancouver, drug money has been finding its way into the property market. At the same time, it is nearly impossible to determine the extent of foreign ownership of houses and condos — and whether capital gains taxes are being paid — because it is impossible to determine their real owners.

These factors contributed to a housing crisis that was the biggest issue in B.C.’s 2017 election. Housing prices in Vancouver had risen more than 75 per cent in the previous five years while vacancy rates were near zero — yet many homes were sitting empty.

“When you have buildings where you can wander by in the evening and see two thirds of the building’s dark because nobody lives there, that has a huge impact on the community,” James said.

“If we don’t have teachers, or nurses or firefighters who can afford to live in your community, we’ve got big problems as a society.”

Premier John Horgan’s NDP government developed a 30-point plan to address the housing crisis. It included incentives to get affordable housing built, as well as vacancy and foreign-buyer taxes to discourage rampant real estate speculation.

“We’re doing everything we can to end any kind of misuse of our real estate system. You know, homes should be there for people. They shouldn’t be there for people to use as a stock market, or to be used for nefarious purposes,” James said.

While the federal government announced in this year’s budget an anti-money laundering task force that will work with police in Ontario and B.C., the few controls on money laundering that currently exist aren’t working.

A Star investigation last fall showed that real estate agents have been widely flouting a law intended to foil money laundering.

Loading... Loading... Loading... Loading... Loading... Loading...

A report from Transparency International Canada this spring revealed that an estimated $20 billion in untraceable money has been used to buy GTA real estate in the last decade, much of it by anonymous numbered corporations.

B.C. has been sharing the details of its approach with other provinces, none of which have made any moves to emulate them.

“We’re the first jurisdiction,” said James. “This is a bold move. But in some ways, this is just a matter-of-fact approach ... to assure there’s fairness across the board.”

Read more about: