Canada needs to do a better job cracking down on shady foreign investors, many of whom may be laundering ill-gotten cash through real estate purchases. That’s according to a new report by Transparency International, a Berlin-based watchdog group.
Lax standards in Canada, as well as countries like the U.S. and China, make it easy for billions of dollars of shady money to pour into cities like Vancouver, according to the Vancouver Sun.
Former Prime Minister Stephen Harper promised to toughen regulations at various G20 summits, but right now finance rules are lax enough that it’s hard to determine whether foreign “money launderers and other corporate kleptocrats” are snatching up properties in Toronto and Vancouver, Transparency International Canada President Peter Dent told the Sun.
“Right now we don’t have a mechanism in place to actually test the veracity of those claims,” he said.
According to the Sun, in 2014 Harper and other G20 leaders adopted principals meant to ensure that wealthy people couldn’t hide their money through shady investments. However, “Canada does not fully comply with any of the G20 principals,” the Transparency International report stated. In fact, Canada’s framework for controlling such shady foreign investments ranked below Mexico, Indonesia and Saudi Arabia.
The lax framework makes it “incredibly difficult to stop a corrupt politician from buying a luxury mansion with money stolen from public coffers,” according to the report.
The report comes on the heels of numerous allegations from people like former ambassador David Mulroney that “hot” foreign money is pushing Vancouver housing prices into the stratosphere, according to the Sun. And a recent report by researcher Andy Yan found that in some high-end Vancouver neighbourhoods, two thirds of new homes may have been purchased by Chinese nationals. And although the average price of those homes was more than $3 million, about 32% listed the owner’s occupation as “homemaker,” while another 4% were students.
Vancouver immigration lawyer Richard Kurland told the Sun he supported the report’s recommendation for tougher rules.
“This is about ‘following the money,’” he said. “Canadians should be grabbing the moral high ground, and the report shows we can do better.”