Financial Underworld Thrives in Canada, Says New Book
A vast financial underworld is operating in Canada, committing fraud and other financial crimes without punishment, corroding communities, undermining democratic institutions, and even the country’s prosperity, according to a new book.
A Preferred Destination for Laundering Ill-Gotten Gains
The authors of “Dirty Money: Financial Crime in Canada” claim that Canada is a preferred destination for laundering ill-gotten gains with impunity. They argue that numerous investigations have revealed weak legislation and an under-resourced enforcement regime that is manifestly not fit for purpose.
The Consequences of Inaction
- Dirty money drives up the cost of housing
- Aggravates gang violence and related shootings
- Finances nuclear weapons proliferation by rogue states
- Helps malicious countries evade international sanctions
The book includes chapter contributions from leading financial crime fighters from English and French Canada, exploring:
- Money laundering
- Underground banking
- Real estate transactions
- Trade-based money laundering
- Cryptocurrency laundering
- The state of money laundering regulation and enforcement
A Lack of Clear National Commitment
According to University of Calgary assistant law professor Sanaa Ahmed, Canada’s anti-money laundering efforts have generated dismal results due to:
- Lack of clear national commitment
- Missteps
- Shifting priorities
- Resource shortfalls
Ahmed claims that money laundering has emerged as an industry within the broader Canadian political economy, with the federal and provincial governments’ commitments and pronouncements against money laundering being of questionable worth.
The Scale of the Problem
The book estimates that between $46.7 billion and $54 billion per year is sloshing around in Canada’s financial system, equivalent to the size of Nova Scotia’s GDP in 2018. It also claims that over 2,000 organized crime groups across the country are involved in money laundering activities.
Response from FINTRAC
In response to the book’s findings, FINTRAC, Canada’s anti-money laundering agency, has issued a statement claiming:
- Its financial intelligence was both valuable and actionable
- Feedback from law enforcement and national security agencies indicated that 96% of its feedback was valuable
- It provided over 2,000 financial intelligence disclosures last year to support money laundering and terrorist activity financing probes across Canada and the world
The Need for Stronger Legislation and Enforcement
The book’s findings are likely to spark controversy and debate about the state of Canada’s financial crime fighting efforts and the need for stronger legislation and enforcement.