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Commissioner Austin Cullen listens to introductions before opening statements at the Cullen Commission of Inquiry into Money Laundering in British Columbia, in Vancouver, on Monday, February 24, 2020.DARRYL DYCK/The Canadian Press

B.C. Attorney-General David Eby says a public inquiry into money laundering is being hampered by the refusal of the BC Liberal caucus to hand over confidential documents from their time in government.

Mr. Eby made it plain on Monday, the first day of public hearings at Federal Court in Vancouver, that a key objective of the money-laundering inquiry, led by commissioner Austin Cullen, is to look into whether or how the former Liberal government let B.C. become a hotbed for the sophisticated crime.

However, Liberal House Leader Mike de Jong, who is in charge of managing the request from the commission, said he is in the process of handing over a batch of documents dating back to 2001, when his party began a 16-year stint in office, and beyond. He added these documents will be unredacted and that he, if asked, would testify before the commission as a witness.

“I am mystified as to why the Attorney-General, having required the government to establish an independent public inquiry, thinks it’s his role to decide what’s relevant, thinks it’s his role to decide who should be testifying,” Mr. de Jong, a former finance minister and attorney-general, told a scrum of reporters in Victoria.

Mr. Eby says the Cullen Commission “might really struggle to fill some key parts” of its work if the Liberals will not agree to turn over confidential cabinet documents that relate to money laundering.

“The commission must be fearless, because the consequences of failure to address this crisis, to hold those responsible for its expansion and duration, are serious and ongoing,” he told reporters in Victoria.

The consequences include an overdose crisis with deaths so numerous that the life expectancy of the entire province has been reduced, he said, while families have been driven out of a real estate market that was overheated by “tax evaders and criminals.”

Senior commission counsel Brock Martland said many parties have freely provided his team with requested documents and, in a “whole bunch of other cases,” the inquiry lawyers had to obtain that information through a summons. He would not identify which parties his team has had to compel to give up documents using this legal power.

“In very short order that will come into view,” he told The Globe and Mail during the lunch break in the hearings Monday.

The B.C. NDP government called the inquiry last May after three independent money-laundering reviews, including two by former deputy commissioner of the RCMP Peter German. Mr. German concluded that crime groups were funnelling billions of dollars in British Columbia through real estate, luxury cars and other parts of the economy. According to a report from B.C.'s expert panel on money laundering in real estate, approximately $5-billion was laundered through that sector in 2018, increasing housing prices by at least 5 per cent that year alone.

As the hearings began, Mr. Martland asked lawyers for some of the 17 parties given special status to include in their opening statements direction on where the commission should focus its efforts, stating “we certainly don’t have any fixed view about where the evidence will take us.”

First up was Jacqueline Hughes, a lawyer for the B.C. government, who told the courtroom that money laundering is not a crime without victims and has significantly affected ordinary residents over the past decade. She said the accounts of millions of dollars flowing through casinos in shopping bags have become well known and the public deserves answers to its questions.

“Was there willful blindness to what was going on in favour of income generated for public or private persons? Are there legislative barriers that prevent prosecution?” she asked.

A federal government lawyer next detailed the patchwork of agencies tasked with combating money laundering, followed by counsel for the Law Society of B.C., which regulates lawyers in the province, who told the commissioner that the body does lots to mitigate the risks to its profession and stamp out misconduct – despite lawyers not having to report suspicious client activity to the federal money-laundering watchdog after winning a 2015 Supreme Court of Canada case.

With a report from The Canadian Press