Are unexplained wealth orders the right tool to combat money laundering?

May 19, 2023 | 42-4, Bills, Blog, Governance, Legislature, Sessions, Video | 0 comments

In April, I responded to Bill 21, the Civil Forfeiture Amendment Act, which would permit unexplained wealth orders to combat money laundering. The B.C. Civil Liberties Association has raised serious concerns about this legislation, suggesting it will violate the Canadian Charter of Rights and Freedoms. Critical reflection is needed to ensure British Columbians’ constitutional rights are upheld, while still tackling organized crime.


A. Olsen:
I appreciate the opportunity to stand and speak today to the Civil Forfeiture Amendment Act. These amendments came as a result of the Cullen commission’s investigation and subsequent recommendations to combat money laundering in the province.

Proposed amendments make it easier for authorities to seize property they suspect helps facilitate illegal activity. It also makes it easier for authorities to bust illegal cannabis operations and to seize financed vehicles. Finally, it creates unexplained wealth orders, which can force organizations with large amounts of unaccounted-for wealth to explain themselves to government or face seizure of property. This last point, unexplained wealth orders, would make this the first legislation of its kind in Canada. But unexplained wealth orders only apply to property stored in British Columbia.

The Cullen commission into the money laundering in June 2022 recommended that unexplained wealth orders be implemented in B.C. to “remove the profit incentive for organized crime.” Unexplained wealth orders do not require a clear link to crime, unlike criminal forfeiture, which typically comes after a conviction, and a civil and administrative forfeiture, which do not require criminal charges or a conviction.

It’s important to note that there are some concerns with unexplained wealth orders that have been recorded. B.C. Civil Liberties Association has been very clear that they are staunchly against these changes, saying that “they’re an unnecessary expansion of government power and an unacceptable infringement of Canadians’ rights to the presumption of innocence and due process and privacy.” The director of litigation for the BCCLA said that the legislation would “create a situation where British Columbians were going to have to go to court to prove that they are not criminals, and that’s unconstitutional.”

These are serious concerns that are raised by the B.C. Civil Liberties Association. And if these amendments are passed, they’re raising the concerns that they will violate the Canadian Charter of Rights and Freedoms and the presumption of innocence, which is a fundamental pillar of our judicial system.

It would be interesting to hear from the minister. I know that the Premier has said that he has “no doubt” that this legislation will be challenged in court but that he believes that he “will be successful” and that we “need to address these issues for British Columbians.” A point, the last point there, which I absolutely agree with.

It will be interesting to see the discussion that unfolds here at the committee stage and how the government is balancing, of course, the recognition that there has been an extreme amount of wealth that has been generated from illegal activity: lots of expensive vehicles and houses and other items purchased in that glorification of crime — you know, the fast cars and the big houses. So there is a balance, absolutely, that needs to be struck here, and it will be interesting to hear the discussion.

Also, I want to just raise the issue around the potential use of the funds and where the seized assets may end up. Civil forfeitures in our province go through the B.C. civil forfeiture office, which is entirely self-funded. This means that the proceeds of forfeitures go back to that office, not into government revenue.

This was actually part of the Cullen commission’s recommendations, where the commissioner suggested that the provincial government transition the civil forfeiture office from a self-funded agency to a government-funded agency so that the revenue flows back to government. Otherwise, it exists as a punitive arm but offers no economic benefit to the average British Columbian. It also creates an incentive for the office to go after high-value assets, not necessarily the cases that would impact the greatest amount of organized crime.

If unexplained wealth orders flow through the civil forfeiture office, it appears that proceeds of that wealth won’t end up in government revenue, meaning no new services. Those resources won’t be available for British Columbians. We’ll be interested, of course, at the further stages of these debates, to understand how these unexplained wealth orders will operate within the context of everything that I just said.

Unexplained wealth orders are already in place in the United Kingdom. Since 2018, four unexplained wealth orders have been issued in the U.K., with a value of £143 million. In October 2020, property worth an estimated £10 million was recovered following the use of an unexplained wealth order. Those are not insignificant sums, but I do wonder how those recovered funds compare to the administrative costs of going to trial.

It should be noted that there are already different mechanisms under which the province can seize assets believed to be related to a crime — criminal forfeiture, civil forfeiture and administrative forfeiture — as I’ve said. Virtually all forfeiture cases in British Columbia settle in the province’s favour. The legal costs are often higher than the value of the property being seized, so people don’t fight it. While B.C. has a civil forfeiture regime intended to ensure that proceeds of crime are intercepted, unfortunately, the value of the assets seized through the regime does not amount to the volume of illicit funds generated each year.

It’s true that B.C. needs to do…. That’s going to make No Context BC for sure, guaranteed. I’m spiralling. It’s true that B.C. needs to do more to address money laundering and to ensure that our province is a fair and a just place to live and thrive.

I appreciate the opportunity to read these concerns into the record. I appreciate the minister bringing this forward and giving me an opportunity to make it to No Context BC. I look forward to canvassing these issues as they come up in the next stages of the debate.



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