The Alberta government is casting doubt on the findings of a new report commissioned for the B.C. government that warns money laundering is widespread across the country.
The report released last week from British Columbia’s expert panel on money laundering in real estate concluded that almost $47-billion worth of dirty money – the proceeds of criminal activity – was washed through the Canadian economy last year. Of that, more than $7-billion is believed to have flowed through B.C.'s economy, distorting the housing market and feeding the opioid crisis.
The report estimates that Alberta had the greatest amount of dirty money washing through its economy – $10-billion.
But Doug Schweitzer, Alberta’s Minister of Justice and Solicitor-General, said the conclusions are based on questionable data.
“The figure presented for Alberta appears to be the product of economic modelling that may not be completely reliable. We use intelligence from front-line law-enforcement agencies, not data we can’t verify," he said in a statement.
B.C.’s expert panel adopted the “gravity model” used in the Netherlands to estimate how much dirty money Canada is laundered within the country and how much moves between Canada and other countries. The panel describes its estimates as cautious and noted the model used by the International Monetary Fund – known as the “wet finger estimate” – provides a range of estimates between $43-billion and $147-billion a year in Canada.
“Money laundering is a national issue requiring a combined federal and provincial response that involves all of the provinces across the whole country,” the Maloney report stated.
Law professor Maureen Maloney, the chair of B.C.'s expert panel on money laundering in real estate, acknowledged the limits of the modeling in an interview on Monday. The gravity model “is a good model, for the country,” she said. But the regional breakdown outside of B.C. is less granular. “None of our estimates are definitive,” she said, “but they are within a range.”
In the report, the panel cautioned that the variety and complexity of money laundering activities make estimates difficult.
But B.C. Attorney-General David Eby, who has spearheaded the money-laundering file for his government, told reporters Monday that other Canadian provinces would be wise to take the findings seriously.
The province now has released three major reports on money laundering since last summer, showing that large-scale, transnational money laundering by organized crime is taking place throughout the provincial economy − an estimated $5-billion just in the real estate sector last year.
Mr. Eby said it is only as a result of these probes that his government learned that the RCMP team responsible for money-laundering crimes in British Columbia is running with a skeleton staff that doesn’t conduct criminal investigations.
“Albertans know best about what’s happening in Alberta, and it’s not for me to comment on what’s happening there or what isn’t," Mr. Eby said. "But I would caution any other provincial government that in terms of what the B.C. government knew going into this process, we knew hardly any of this.”
A draft research brief created by the federal money-laundering watchdog, FinTRAC, used the model in Prof. Maloney’s report and four other ways of estimating the scale of the problem across the country. Ultimately, the report could not settle on a single model to best sketch the contours of the problem, with its estimates ranging from $5-billion to $40-billion.
Denis Meunier, an anti-money-laundering consultant and deputy director of financial intelligence at FinTRAC from 2008-11, questioned why provinces such as Alberta were criticizing the new estimates from B.C. when they had not done any of their own modelling into this serious problem.
“Whatever model you use you have to use it consistently,” the Ottawa-based consultant said. “So, really, it’s not the absolute amount that’s important – it’s the relative amount growing over time and whether or not the measures you take to combat money-laundering have had any effect.”