Hon. Joseph A. Day (Leader of the Senate Liberals):
Minister, my question also relates to housing.
We’re seeing more and more articles in the newspaper and in the press about housing and how it has been transformed from a home or a shelter for families to a commodity for investors.
In a 2017 Globe and Mail article, it was noted that, in the past 30 years, housing prices in Toronto have increased by 425 per cent while family income has only grown by 133 per cent.
More and more families are finding it very difficult to acquire housing, especially in certain urban areas, as you have just discussed with my colleague. When housing is treated as a commodity, it is not only investors who reap the rewards; there are others who are attracted to investing and that’s what I would like to direct your attention to.
Last week, the Government of British Columbia released two reports which estimated that the total amount of money laundered in Canada exceeded $40 billion, and much of this was in the real estate market. Last week, the C.D. Howe Institute released a report and said that money laundering in Canada could be as much as $130 billion. It called on the federal government to create a publicly accessible registry of beneficial ownership, with serious penalties for making false declarations. British Columbia, I understand, has a similar type of legislation in place now, entitled the Land Owner Transparency Act.
Minister, do you agree that money laundering is a serious problem in Canada, particularly in relation to real estate matters? What steps should the federal government be taking in this regard?
Hon. Bill Morneau, P.C., M.P., Minister of Finance: Thank you, again, for the question.
Like others, I was obviously very concerned to see those reports. We have been looking at challenges around money laundering during the time that we have been in office. It is obviously something that we think is critically important for us to get at.
I can’t speak for the numbers that were in either the B.C. report or the C.D. Howe Institute presentation, but I think it’s fair to say that this is something we need to continue to focus on.
At the international level, there is a significant focus on money laundering and anti-terrorism financing, as there should be. It’s a concern that actually fuels some of the worst parts of our society and those that might actually do us harm. It is an issue of significant concern.
In terms of what we should be doing, I think, first and foremost, we first need to be working together across the country to ensure we have the information that we require in order to get at this. Frankly, from my very first meeting with the provincial finance ministers in this role, I’ve been working on this issue around beneficial ownership information.
We need to know who owns companies in order to make sure we can actually track what’s going on. The reality, however, is that only 7 per cent of companies are federally registered. Ninety-three per cent are registered in the provinces, so to have a beneficial ownership approach that works, we need to be working together with the provinces. That’s why we have been pushing the provinces hard to get to an agreement on an approach to having that beneficial ownership information available.
We have made significant progress. The provinces are all on board. Some, like British Columbia, are ahead of the others in talking about not only having the beneficial ownership information but making it public, as is done in the United Kingdom, for example. That might be a place that we get to. We need to get to it together with the provinces because it’s not an exclusive federal area of jurisdiction.
There is more, though, that the federal government needs to be doing and there’s more that we’ve done. In the budget this year, we talked about the need to put more money into funding for federal agencies so we can actually deal with money laundering. We put together what we called an ace team of investigators from different parts of the government from FINTRAC, CRA and other parts of the government to ensure we’re getting at this.
We need to put in place tools for prosecutors so they can best get at the people who are potentially doing the money laundering in whatever form that it might be going on. There are multiple things we need to be doing.
The one I was most directly involved with this year was putting more money in funding so we can get at this, and we will need to continue to work with the provinces to get at this issue.