Criminal elements taking advantage of Toronto's lax laws

Criminal elements taking advantage of Toronto's lax laws

Criminal elements taking advantage of Toronto

Criminal organizations might be taking advantage of the loose disclosure regulations in the Greater Toronto Area to hide illegitimate funds – amounting to billions of dollars – in the region’s residential property, according to Transparency International Canada.

“Canadian real estate has attracted the attention and money of corrupt government officials and organized crime syndicates from across the globe,” the independent anti-corruption coalition said in its report released late last week, as quoted by The Canadian Press.

The report – which analysed more than 1.4 million residential property transactions – warned that approximately $28.4 billion in residential purchases in Canada were conducted through corporate bodies since 2008.

Transparency International Canada stated that these entities are often used as mechanisms by unscrupulous buyers who want to evade taxes, local laws, and federal anti-money-laundering obligations.

Read more: Weak laws pulling in money launderers like moths to a flame – report

In addition, during the same time frame, around $25 billion in mortgages used for home purchases were sourced from unregulated lenders, which are at present not required to adhere to laundering reporting requirements.

Another $9.8 billion in residential purchases did not involve mortgages at all, which makes it even more difficult for Canadian authorities to determine who the beneficial owners are, as well as the provenance of their funding.

The study cautioned that this criminal activity might be adding fuel to the fire in Toronto’s long-running affordability saga.

“By allowing criminals to invest in Canadian real estate, we are exacerbating crises in cities where housing is unaffordable and in short supply.”