VICTORIA — The British Columbia government has launched a public inquiry into money laundering, a crime the premier says has distorted the provincial economy, infiltrated casinos, fuelled the overdose crisis and increased the price of real estate.
Premier John Horgan said Wednesday the impact of dirty money in the province was made clear by two reports released last week that the depth and magnitude of the problem was far worse than they had imagined.
``That criminal activity has had a material impact on people: whether it be the rise of opioid addictions, the rise of opioid deaths as a result of overdoses, whether it was the extraordinary increase in housing costs, people were being affected by criminal activity in British Columbia.″
Even with many red flags, the problem of money laundering is bigger than we thought and more entrenched than we hoped.Attorney General David Eby
The government released two reports last week estimating $7.4 billion in illegal cash was laundered in the province in 2018.
One of the reports said $5 billion of that was siphoned into real estate, forcing the costs of homes up by at least five per cent, although it said that figure could be significantly higher _ upwards of 20 per cent _ in Metro Vancouver.
Horgan said a public inquiry will give an understanding of how the problem reached this point and how to eradicate the crime.
Supreme Court Judge to look into ‘crisis’
Attorney General David Eby said B.C. Supreme Court Justice Austin Cullen has agreed to lead the inquiry and he’ll have the power to compel testimony, seize records and obtain search warrants.
``Even with many red flags, the problem of money laundering is bigger than we thought and more entrenched than we hoped,″ Eby told a news conference.
He said money laundering is a “crisis” in the province’s economy.
Watch: B.C. money laundering accounting for up to $5 billion last year in real estate market, report says. Story continues below.
The reports also shed more light on the possibility that money laundering is a larger problem in other provinces.
It said B.C. ranked fourth for the crime among a division of six regions in Canada, behind Alberta, Ontario and the Prairies — collectively Saskatchewan and Manitoba _ for the years 2011 to 2015. It also said B.C. only accounted for 15 per cent of the $47 billion laundered across Canada last year.
After learning of the reports’ conclusions, Prime Minister Justin Trudeau said the information was “extremely alarming,” adding that money laundering is hurting people by disrupting the housing market.
Cullen’s inquiry is expected to deliver an interim report within 18 months and a final report is due by May 2021.