Money laundering is back in the news today with the release of two B.C. government-commissioned reports.

The Expert Panel on Money Laundering report determined that laundered funds drove up home prices by five percent in 2018.

This is despite the fact that the composite house price index actually fell 2.7 percent in 2018. The single-family house price index was off 7.8 percent.

“Our housing market should be used for housing people, not for laundering the proceeds of crime,” Finance Minister Carole James said in a news release. “The amount of money being laundered in B.C. and through real estate is much more than anyone predicted. Our government is tackling the housing crisis head-on and taking action to combat the money laundering that has been allowed to drive up housing costs for British Columbians for far too long.”

Combatting Money Laundering was commissioned by the Minisry of Finance and concluded that more than $5 billion was washed through B.C.  real estate in 2018. 

It noted that "data limitations make it difficult to estimate the level of money laundering make it even more challenging to estimate the allocation to specific economic sectors, such as real estate and the impact of that estimate on house prices".

The second report, Dirty Money—Part 2, by former RCMP deputy commissioner Peter German, mentioned that there are thousands of properties that were "high risk" for potential money laundering and/or tax evasion.

"Wealthy criminals and those attempting to evade taxes have had the run of our province for too long, to the point that they are now distorting our economy, hurting families looking for housing and impacting those who have lost loved ones due to opioid overdose,” Attorney General David Eby said in a news release. “By closing loopholes and enforcing improved laws, our government will ensure British Columbians will live in a province where families who work hard and play by the rules are rewarded, and those who break the law face appropriate consequences for their illegal activities.”

More than $2 billion more through luxury car purchases and casino transactions, according to German's two reports.

Across Canada, the Ministry of Finance-commissioned report estimated that $46.7 billion in illicitly obtained money was laundered through the economy.

It includes 29 recommendations, including one calling on B.C.'s minister of finance to urge other finance ministers "to implement beneficial ownership of land registries that are consistent with best practices".

Another section deals with the role of lawyers "as witting or unwitting enablers to disguise beneficial ownership behind the veil of solicitor-client privilege".

"This inhibits the ability of law enforcement and other investigative agencies to gather information and evidence," the report notes. "However, the regulator of the legal profession, the Law Society of BC, has strong powers to investigate individual lawyers' activities."

It recommends that "coordinating mechanisms should adopt a principle that investigations be referred to the agency best able to apply its own proprietary information and investigative powers to the case, including tax authorities and the Law Society of BC".