Business district in downtown Vancouver from a bird’s eye view
“By laundering illicit funds, various organized crime networks can profit from the most dangerous crimes,” including drug and human trafficking, violent crime and fueling the monstrous opioid crisis, the Canadian government wrote last July in a statement to the commission.
A 2020 report from the Canadian Criminal Intelligence Service found that up to $113 billion is laundered annually in the country. The report says that 176 criminal gangs are fully integrated into the Canadian economy, half of which have international ties, with almost half of them involved in the cocaine trade.
The real estate sector is particularly “vulnerable to criminals who seek to legalize the proceeds of illegal activities,” according to a government appeal. It is safe and legal to invest in real estate and obtain the right to live, with the goal of continuing to engage in “criminal activity”.
Transparency International Canada also provided data to the Cullen Commission. James Cohen, chief executive of TI Canada, called on the authorities to take action against money laundering from abroad.
“This is one of the most outrageous and unacceptable reasons for the rise in housing prices – against the backdrop of its general shortage, part of the real estate simply serves as a reliable and liquid asset for drug dealers, scammers and kleptocrats,” – he said.
“We can easily increase the supply in the housing market, we just need to get rid of the dirty money invested in empty apartments and houses”Cohen added.
In 2019, a British Columbia government panel estimated that over $7 billion had been laundered in the province in the previous year alone. At the same time, about 5.3 billion of this amount was laundered through real estate – because of this, housing prices jumped by about five percent.