Good morning, members of the committee. Thank you for the invitation to appear here today.
By way of a brief introduction, the Vancouver Anti-Corruption Institute, VACI, was established in 2021, in the wake of money laundering and other disclosures within British Columbia. It's an integral part of the International Centre for Criminal Law Reform and is located at the University of British Columbia. We have a distinguished board of advisers, many of whom would be known to you. We are non-profit and do project work internationally, as well as research and writing, and host conferences and workshops.
On a personal note, I'm a former deputy commissioner of the RCMP and of Corrections Canada. I also authored two reports for the Attorney General of British Columbia, who is now its premier, entitled “Dirty Money” and “Dirty Money—Part 2”.
I do not profess to have any experience in fishing or the fisheries. Mine lies in the areas of money laundering, organized crime and corruption.
The work of this committee is vitally important to Canada's fisheries, to coastal communities and to individual fishers. As an addendum to the terms of reference that I received from B.C.'s Attorney General in 2017, I was asked to review the issue of money laundering in the context of the purchase and sale of fishing licences and quotas. We spoke to several individuals, reviewed documents and included our findings in “Dirty Money—Part 2” at chapter 5-1.
It is worth noting that the linkage between fisheries, organized crime and money laundering is a subject that has been studied internationally, including by the UN Office on Drugs and Crime. When you do not have a transparent ownership system in which the public is able to see who are the ultimate beneficial owners of fishing licences and quotas, you are vulnerable to the involvement of state actors, organized crime and money launderers.
In our research, the high degree of concentration of ownership of fisheries licences and quotas on the west coast was alarming. Equally alarming was the high degree of ownership by foreign entities and non-citizens. We were advised that the top four visible owners of groundfish trawl, halibut and sablefish quotas were foreign entities or individuals, amounting to 50% of B.C.'s quotas for those species.
The move to a beneficial ownership registry in B.C. for land ownership and the federal government's recent commitment to a beneficial ownership registry for corporations reflect the importance of transparency. The same should apply to the fisheries. We cannot simply allow our fishery to be sold to unknown persons using unsourced funds.
This brings me to the money. Money laundering is the back office of organized crime and walks in tandem with it: how much, from where and why are critical questions. We refer to three stages in a money-laundering cycle: placement, layering and integration. The intent is to obfuscate the paper trail. Virtually all countries have anti-money-laundering laws. Few actively enforce them. In Canada, our record has been spotty, although budget 2023 and initiatives in B.C. do offer hope, as does civil forfeiture in the provinces.
Determining the source of funds or wealth used to purchase licences and quotas is incredibly important. Is the source of funds legitimate or are the fisheries being used as part of a broader attempt to invest money obtained through crime, or money avoiding overseas capital controls or money evading taxes? Inadequate vetting of the source of funds entering our casinos led to the casino debacle in B.C. With much stricter rules and thresholds now in play, the issue within our casinos has been reduced dramatically. However, dirty money must be laundered, and it will inevitably move to areas of less resistance.
We must also be alive to the fact that fish quotas and boat sales are not reportable to FINTRAC, Canada's financial intelligence unit. This is regrettable, as it eliminates an important source of intelligence for investigators seeking to ensure that the fisheries are not being used by organized crime.
I will end by noting that solutions require strong legislation and cross-agency co-operation. However, there is no point in creating regulations if they are not enforced, or if those tasked with enforcement do not have the necessary skills and resources.
Members of the committee, yours is a particularly important task. I thank you for your work, and I'm happy to answer any questions you may have.