Diane Francis: Foreign home-buyers ban prey to weak financial transparency laws
I spoke last week at a conference in Washington, D.C., about the devastating impact that financial secrecy and corruption have on capitalism, democracy and global security. Dirty money flows out of Russia and other dictatorships and into western countries, including Canada, thanks to enablers such as lawyers, accountants, real estate brokers and secrecy laws that allow investments by anonymous sources.
A new book, “Invisible Trillions,” by anti-corruption activist Raymond Baker describes the scale of the problem. “Over the last half century, capitalism has created the means by which trillions upon trillions of dollars, euros, pounds and other stores of wealth can move and shelter invisibly, out of sight and beyond the control of central bankers, revenue authorities, law enforcement agents and international institutions,” wrote Baker.
“With this level of financial secrecy now available to, and dominating, capitalist operations, riches move inexorably upward, accelerating economic inequality. Rising inequality is directly imperilling — weakening, obstructing and degrading — democracy.”
Vast sums of money have easily flowed into Canadian real estate, particularly in Vancouver and Toronto, which has contributed to unaffordable housing prices. The term “snow washing” has been coined to describe how easily dirty money can be washed clean, like the snow, in Canada.
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