A top lawmaker in the Canadian province of British Columbia says the government will bring in new, concrete measures to “close loopholes” that a major Canadian newspaper has alleged have permitted “lenders connected to the fentanyl trade” to launder money, through the granting of “large cash loans and mortgages to Vancouver-area property owners”.
The lawmaker, BC attorney-general David Eby, was quoted by the Toronto Globe and Mail as saying that the measures under consideration include requiring private lenders to provide proof of how the money they are loaning was obtained, and provide more information about who they are, before they will be permitted to register a mortgage or make a claim against real estate.
Fentanyl is a powerful opioid drug that has been linked to numerous overdose deaths.
In a story posted on the Globe and Mail‘s website on Sunday, Eby was quoted as saying that in British Columbia, “for too long it’s been too easy to do business under a cloak of secrecy”.
“I can reassure British Columbians we are fully engaged in this issue. We are formulating the policy work to ensure that our responses are as bullet proof as possible.”
Eby’s pledge came, the article added, in the wake of a Globe and Mail investigation that “revealed how 17 local residents, most associated with drug trafficking, are effectively parking millions of dollars in Vancouver-area real estate”.
Their target customers were said to be “wealthy newcomers from China, who already own property in Canada” but who were looking for extra cash. Although they often had money outside of Canada, they are typically unable to transfer it onshore because of the Chinese government US$50,000 cap on the amount its citizens are able to take out of China each year.
Three of the lenders, it said, had been found to be carrying more than C$600,000 in fentanyl-laced cash in 2016, and had collectively registered more than C$20m in mortgages and other debts “against multi-million-dollar homes in recent years”.
Eby is quoted by the Globe and Mail as saying that ending such practices without delay was a “massive priority” for the government, and that he had instructed his former RCMP deputy commissioner Peter German, who is investigating money laundering in casinos, “to expand his probe to include real estate lending”.
Vancouver is well-known for being Canada’s most expensive market for housing, fueled, it’s said, by investment by mainland Chinese property buyers. This led the province of British Columbia to become the first Canadian province to impose a 15% tax on foreigners buying homes in and around Vancouver.
Nevertheless, in January Vancouver was ranked the world’s third most expensive housing market among 293 major metropolitan regions in an annual ranking, the Demographia International Housing Affordability Survey, just as it was the previous year, behind Hong Kong (in first place for the eighth year in a row) and Sydney.
To read the story on the Globe and Mail‘s website, click here.