TORONTO — NDP Housing critic Jessica Bell (University-Rosedale) is re-introducing legislation with MPP Bhutila Karpoche (Parkdale-High Park) to crack down on money laundering and tax fraud in Ontario's housing market — one of many measures needed to rein in skyrocketing home prices.
The NDP’s bill would end the practice of numbered companies buying up swaths of homes while shielding themselves from transparency. The Anti-Money Laundering in Housing Act would create a provincial public land registry that would require corporations, trusts, and partnerships that own real estate to disclose individual owners, with failure to comply resulting in fines of up to $100,000.
"To ensure Ontario’s homes are affordable for people and families, we need to follow B.C.’s example and establish a public land registry to stop anonymous investors from outbidding families who just want to own one home," Bell said.
"While individual buyers are required to publicly register the property they own, investors can set up numbered corporations, trusts and partnerships that are allowed to buy and sell property anonymously, making Canada a global hotspot for money laundering and fraud," said Karpoche.
"Doug Ford has done nothing to crack down on shady real estate deals including money laundering, tax evasion and rampant housing speculation."
Between 2008 and 2018, privately-owned corporations in the GTA spent $28.4 billion on luxury residential homes and failed to include information on beneficial owners, according to a report by Transparency International Canada. A whopping $25 billion in residential mortgages are filed by unregistered lenders that aren't subject to money-laundering provisions.
The Ford government's current rules fall short because the registry is inaccessible to the public, and some corporations, such as trusts, joint partnerships, and businesses incorporated outside of Ontario will not be required to register at all, keeping the loophole for tax cheats and money launderers wide open,” Bell said.
James Cohen, Executive Director, Transparency International Canada:
“This is needed legislation, given the huge risk of money laundering in Ontario real estate. At TI Canada, we hope all parties work together to move this important initiative forward.”
Tim Hudak, CEO, Ontario Real Estate Association (OREA):
“Report after report have shown that money laundering is a major problem in Canada’s housing market. While other jurisdictions like British Columbia and the United Kingdom have implemented laws to deter money laundering, Ontario’s robust housing market and lack of transparency in public land registries have created the ideal environment for international criminals to anonymously flow money through residential real estate.
Ontario REALTORS® don’t want to see a single dollar of dirty money being used to snap up homes that could be purchased by law-abiding Canadians. The Ontario Real Estate Association (OREA) commends NDP MPPs Jessica Bell and Bhutila Karpoche for bringing forward legislation that supports the creation of a public and searchable beneficial ownership registry requiring home purchasers to identify themselves to land title authorities.
A lack of transparency is having a direct impact in Ontario: an estimated $30 billion of laundered money infiltrated the housing market between 2008 – 2018 alone. A publicly accessible beneficial ownership registry is essential to put a stop to money laundering and strengthen public and economic trust in our province.
By eliminating the opportunity for criminals to hide behind numbered companies to buy up Ontario homes, the government and law enforcement will be given an important tool to investigate suspicious transactions, leaving more homes on the market for Ontario families."