Canada is known around the world as a place with solid institutions and low levels of corruption. Apparently that claim is made with little data, since few people have ever seen it. The Organized Crime and Corruption Reporting Project (OCCRP) outlined their recent experience in a blog post. They were hoping BC’s money laundering reports can provide a jump start diving into real estate data. Instead, they found Canada rivals notorious tax havens when it comes to transparency.
Canadian Real Estate Data Isn’t Easy To Find Without Deep Pockets
The first hurdle these journalists encounter is seeing data.. In 2019, Dirty Money 2: Turning the Tide – An Independent Review of Money Laundering in BC. Real Estate, Luxury Vehicle Sales & Horse Racing was released by the BC government. It was an independent analysis of money laundering in BC, conducted by former RCMP Deputy Commissioner Peter German. OCCRP journalists figured the report’s data would be a good starting point.
The data is available, but there are prohibitive barriers large enough it might as well not be. Initially OCCRP said the government was “eager” to release the information. At some point BC realized they needed a release from BC Assessment to do so. While it’s the government’s data, the state-owned land registry controls it.
So the BC government directed them to BC Assessment (BCA) to request a release. BCA told journalists Jared Ferrie and Katarina Sabados they could have it at a cost of $93,000. A prohibitive amount for a for-profit entity to pay for a data set, never mind journalists for a story.
Those unfamiliar with Canada might think this sounds like creative incompetence from politicians. This is the process where everyone says they can’t provide help, but never does. Having had the opportunity to help with Dirty Money 2 and a similar Transparency International report, it isn’t. Canadian real estate data is notoriously hard to access. When you get access, you’re required to stick to the analysis that was agreed upon. Any out-of-scope insights need to die with you. RIP secrets about Canada’s money launderers.
Canadian Real Estate Data Has Few Quality Checks
Even if you can get the data, don’t expect to find dirt on anyone but the most brazen of criminals. Canada’s lack of a beneficial owner registry means it doesn’t know who owns anything. Disclosure of company ownership is completely voluntary, just like any dodgy tax haven.
Canadian companies only require disclosure of one director. That director may have a relationship with the company, but you might just as easily be looking at a lawyer. Sometimes it’s just a nominee director, paid to be the director. OCCRP highlights this point as problematic for obvious reasons. Also a pretty good reason not to drop $93k on data of questionable quality.
The lack of ownership transparency is a well-known issue for Canada. Organizations like Transparency International have pushed the country in the right direction. The problem is most measures get watered down until they’re ineffective, found OCCRP.
Canadian Real Estate Data Has Few Quality Checks
For instance, BC’s Land Owner Transparency Registry was created to eliminate anonymous owners. OCCRP research found none of the data is ever verified for the beneficial owner. No identification is collected, which experts say can mean anything can be input. Good thing criminals never lie, or this could have been a problem.
Caught lying on the beneficial owner registry? The OCCRP found the penalties are unlikely to be a deterrent. Those caught don’t face criminal charges, but just a monetary penalty. Since this is money laundering, fines are the cost of doing business. I’m sure Deutsche Bank can tell you all about it.
“If organized crime were to create a country, it would look a lot like Canada,” one crime expert told them.
Foreign buyers, vacancy taxes, money laundering — all depend on the same opaque system. It’s unavailable for analysis to anyone but those with deep pockets, making it faith based. Of course, the issue will be addressed with more registries with questionable data quality.
The best part is Canada argues it’s an issue of privacy. Privacy costs $20/pop apparently, since they’ll give you the data if you pay for the record.
I thought this would an issue exclusive to private land registries, but I forgot Crown corporations pay their executives based on revenue performance, not public good will. Also the issue with the CMHC which is a series of investment bankers masquerading as public servants.
Good article, but it’s also 100% the politicians too. This could be resolved by the government making real estate data and land registry information more publicly available. They don’t since they don’t actually want the issue resolved, it’s just political firepower. +
I could not agree more, if there is one thing in Canada with more misinformation and twisted narrative than covid, its real estate. I have seen 2 articles published in the same paper 1 day apart with totally different “facts”. Many opinion pieces written by real estate professionals quoted as fact, often with bizarre “forecasts”. What data is released is very poor quality and usually, partial and selective to support narrative. Sales over fact, nominal GDP over standard of living.
Try deposit more than $10k cash in your bank account and you will find it heavily regulated and the anti money laundering folks will come running, Yet housing they all turn a blind eye on.