Canada’s current stance of hospitality to all comers has inherent weaknesses that authorities need to address immediately, analysts warn
.jpg)
While Canadian real estate remains a highly desirable destination among enterprising investors and hopeful home owners alike, the main component of its success—namely, its openness, especially when compared to Trump’s vision of the U.S.—might actually prove to be its undoing in the long term.
In a January 25 contribution for the Toronto Star, Transparency International Canada interim executive director James Cohen and corporate investigator Adam Ross argued that even if Canada’s robust public institutions and in-built rule of law have helped it stand as the 9th least corrupt country in the world (out of 177), officials have no reason to rest on their laurels.
“Canada does not yet have a reputation abroad for being a haven for money laundering and tax evasion, but the conditions are there for it to become one,” the duo wrote. “[Look] beyond Canada’s low corruption ranking and within its institutions, real threats hide in plain sight.”
“There are few places on Earth where it is easier to set up an anonymous company,” Cohen and Ross explained. “That makes Canada an attractive place for people looking to avoid the scrutiny of law enforcement or tax authorities. A corrupt foreign politician can come to Canada and have a nominee set up a company or trust for their benefit, and make it nearly impossible for anyone to determine its true ownership.”
And while the Canadian government has promised at the G8 and G20 to address the loopholes in anonymous ownership, it has yet to make any meaningful reforms.
“In the absence of beneficial ownership disclosure on property titles, Canada is seeing widespread use of nominees on titles in order to take advantage of principle residency tax exemptions and to avoid foreign ownership taxes,” the analysts said. “Trusts are also being widely used to avoid tax obligations.”
A possible solution that won’t require major regulatory revisions would be the immediate implementation of a public registry of companies, trusts, and their beneficial owners, Cohen and Ross suggested.
“It will cut down on red tape in police investigations, save the government money, reduce business risk and make it more difficult for criminals to launder money and remain anonymous.”
Related stories:
Money laundering in real estate needs more federal attention - observer
Proposals for cracking down on tax evasion in hot
In a January 25 contribution for the Toronto Star, Transparency International Canada interim executive director James Cohen and corporate investigator Adam Ross argued that even if Canada’s robust public institutions and in-built rule of law have helped it stand as the 9th least corrupt country in the world (out of 177), officials have no reason to rest on their laurels.
“Canada does not yet have a reputation abroad for being a haven for money laundering and tax evasion, but the conditions are there for it to become one,” the duo wrote. “[Look] beyond Canada’s low corruption ranking and within its institutions, real threats hide in plain sight.”
“There are few places on Earth where it is easier to set up an anonymous company,” Cohen and Ross explained. “That makes Canada an attractive place for people looking to avoid the scrutiny of law enforcement or tax authorities. A corrupt foreign politician can come to Canada and have a nominee set up a company or trust for their benefit, and make it nearly impossible for anyone to determine its true ownership.”
And while the Canadian government has promised at the G8 and G20 to address the loopholes in anonymous ownership, it has yet to make any meaningful reforms.
“In the absence of beneficial ownership disclosure on property titles, Canada is seeing widespread use of nominees on titles in order to take advantage of principle residency tax exemptions and to avoid foreign ownership taxes,” the analysts said. “Trusts are also being widely used to avoid tax obligations.”
A possible solution that won’t require major regulatory revisions would be the immediate implementation of a public registry of companies, trusts, and their beneficial owners, Cohen and Ross suggested.
“It will cut down on red tape in police investigations, save the government money, reduce business risk and make it more difficult for criminals to launder money and remain anonymous.”
Related stories:
Money laundering in real estate needs more federal attention - observer
Proposals for cracking down on tax evasion in hot
