Landowner Transparency Act would create Canada's first public registry of property owners
The British Columbia government introduced legislation Tuesday aimed at preventing tax evasion and money laundering by shining a spotlight on anonymous real estate owners hiding behind shell and numbered companies.
Finance Minister Carole James said they proposed for the Landowner Transparency Act would create Canada's first public registry of property owners to compel corporations, trusts and partnerships to disclose the owners of the land they currently have and are purchasing.
"It will require corporations, trusts and partnerships to be able to include the information around who is an owner of the land, just as citizens do when they register (at the land titles office)," James said at a news conference after presenting the bill in the legislature.
She said a lack of transparency in some aspects of real estate ownership is one of the challenges the government faces with money laundering and tax fraud. James noted that a 2016 report by Transparency International Canada indicated nearly one-third of the 100 most valuable residential properties in Metro Vancouver were owned by shell companies. A shell company for is a company that does not have an office or any workers, they are usually used for financial maneuvers.
She said the legislation is part of the government's housing strategy to close real estate ownership loopholes and crack down on property speculation, tax evasion and money laundering.
The property registry would give tax authorities, law enforcement agencies and regulators access to more detailed ownership information.
James said she also introduced amendments to the Business Corporations Act to require private companies to hold accurate and up-to-date information about the owners of their shares.
"Requiring companies, trusts and partnerships to disclose their controlling shareholders, beneficial owners and partners protects the public by letting everyone know who they are dealing with in B.C.'s real estate market," said Nancy Merrill, president of the Law Society of B.C. in a statement.
James recently received a report from former deputy attorney general Maureen Maloney examining gaps in the real estate and financial sectors that could be exploited by money launderers.
Former deputy RCMP commissioner Peter German also delivered a report to B.C. Attorney General David Eby that focused on how they are looking to identify the scale and scope of illicit activity in BC's real estate market, and to see if the money laundering is linked to things like horse racing and the sale of luxury vehicles.
The government announced that both reports will be released publicly, yet they have not announced the date of when this will occur.
The B.C. government also cited an RCMP intelligence report that estimated up to $1 billion from the proceeds of crime was used to purchase expensive Metro Vancouver homes.
Eby and Bill Blair, the federal minister responsible for fighting organized crime in Canada, met last week in Victoria to discuss the issue. Blair, who is a former Toronto police chief, said that the federal government's most recent budget includes promises to create a multi-agency task force to fight money laundering.
Blair also noted that money laundering is occurring in Canada, but it is very difficult for law enforcement agencies and governments to determine the extent of the illegal activity because criminals are operating secretly.
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Summarized by: Onur Gul