Photo: James Bombales

Canada’s financial laws and regulations have left the door wide open for money launderers, according to a new report from the C.D. Howe Institute.

“Organized crime, tax evaders and money launderers don’t stand still. Their dirty money flows on a path of least resistance to the safest harbour,” writes Denis Meunier, the report’s author.

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According to Meunier, Canada is seen by many as the “destination of choice” for funnelling the proceeds of crime. One area of particular interest? The Canadian housing market.

Current regulations mean that property doesn’t need to be publicly identified, which Meunier says heightens the risk of laundering the country’s hottest housing markets.

“[Real estate is] among the most highly vulnerable sectors for money laundering and is off the hook for identifying beneficial owners,” he writes. “That’s a critical gap when one considers the many reports of suspicious transactions in hot real estate markets such as Vancouver.”

He also adds that provincial governments should take the issue more seriously, and consider policy that would make it more difficult for bad actors to benefit from the sector.

“Knowing that the vulnerability to money laundering is high in the real estate sector, it is alarming that other governments, especially in the Greater Toronto Area, have remained passive about identifying the ultimate beneficial owners of corporations and trusts involved in real estate transactions,” he writes.

While Meunier acknowledges it is impossible to know exactly how much money is being laundered annually, according to a 2013 report from the Senate Committee on Banking and Trade the number could range from between $40 to $100 billion. Meanwhile, the RCMP estimated that between $5 and $15 billion was laundered in 2011.

While the federal government has promised to work with provinces to tighten disclosure rules, no official policy has been announced.

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