The high-profile effort to combat money laundering in British Columbia will likely fall flat, warns a new report from the C.D. Howe Institute.
The Toronto-based think tank issued a report arguing that B.C.’s new public land registry, which is being introduced in an effort to fight the funnelling of dirty money through the province’s real estate market, is fatally flawed.
The report said that the registry has been stripped of “almost all its potential power and functionality.”
Among other things, the report warned that the registry’s identification information isn’t actively verified, that the searchability and discoverability of information is “unreasonably restricted,” and that the penalties for filing false information are unlikely to serve as a meaningful deterrent.
As a result, it warned that the registry “will likely do little to stop money laundering in B.C. real estate. And, once again, Canada will have failed to show it is serious about combatting money laundering.”
The report makes a number of recommendations for addressing the perceived flaws in the new registry, including beefing up identity verification, imposing prison sentences for filing false information, and introducing a confidential whistleblower tip line to allow reporting of suspicious activity to both law enforcement and regulators, such as the Canada Revenue Agency (CRA).
“As it currently stands, the information on the registry will be unreliable, difficult to access, difficult to process and, even if it helps a searcher spot a falsely declared beneficial owner, the ability to communicate that discovery to Canadian law-enforcement officials and their ability to leverage it to catch criminals will be curtailed,” the report’s author, Kevin Comeau, said in a release.
“The good news is that all these flaws can be fixed. In doing so, the B.C. government will revolutionize the way we combat money laundering,” he added.
The report said that adopting its recommendations to fix the registry would help combat money laundering, while reducing upward pressure on housing costs and generating significant government revenue.