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B.C.’s Land Owner Transparency Registry is a system that collects the actual names of people who buy land on Canada’s West Coast through shell companies or other legal structures designed to hide the identities of property owners.DARRYL DYCK/The Canadian Press

For Ron Usher, investigating crime and misconduct in British Columbia’s pricey housing market is both a personal passion and part of his professional duties as general counsel for the Society of Notaries Public of B.C., whose members sign off on thousands of real estate transactions a year.

He has many tools at his disposal for probing the market’s underbelly, but lately he has been using a new one: B.C.’s Land Owner Transparency Registry, a system that collects the actual names of people who buy land on Canada’s West Coast through shell companies or other legal structures designed to hide the identities of property owners.

The registry is the first database of so-called “beneficial owners” in the country. It is only partially filled with names, because existing owners have until the end of November to file their information. Still, members of the public have been able to access the registry for the past year at a cost of $8 per search, taxes included. And a few months ago, a handful of regulators gained the ability to search at no cost. Unlike members of the public, officials can view sensitive details like a property owner’s citizenship, social insurance number and last known address.

Mr. Usher used the registry to map the ill-gotten gains of a fraud ring linked to the suspicious death of a notary who was found slumped in his Richmond office in 2019. With beneficial ownership information, Mr. Usher was able to uncover some of the dozen properties the ring had purchased in and around Vancouver through numbered companies. He has forwarded the evidence to the RCMP and fraud investigators with the Vancouver Police Department.

The registry, he said, “has been very useful to dig into this trio of fraudsters pulling off these cons.”

He is not alone in finding value in plumbing the database. Lawyers, law enforcement officials and regulators both inside and outside of B.C. appear to be learning to use the newly available information for their own purposes.

In the first eight months of the registry’s existence, it was searched by the public more than 3,700 times. Officials with wider access to the system have made a further 351,000 searches. The provincial finance ministry, which oversees the registry, said it is prohibited by law from disclosing the names of the government bodies that are accessing the information, or how frequently they are doing so.

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Vancouver lawyer Richard Kurland, who has been helping international clients immigrate to B.C. for 25 years, said he knows tax authorities make regular use of the database. Canadian visa offices are also searching the registry to verify the assets of employers seeking work permits for newcomers, he added.

The Law Society of B.C. said in a statement that it is using the registry for misconduct investigations. Brian Kladko, a spokesperson for the B.C. Securities Commission, said the registry is currently of limited use for the investment regulator, but that once it is fully populated, it will be a useful tool for gathering intelligence about market misconduct.

The Civil Forfeiture Office, which has had full access to the registry for six months, said in a statement from B.C.’s Ministry of Public Safety and Solicitor General that it anticipates the database becoming more useful for tax and legal authorities as it matures.

The registry was supposed to be fully in effect by November, 2021. The province delayed its full implementation by a year as a result of heavy lobbying by B.C. lawyers. They have said the province’s definitions of beneficial ownership are unclear, and that there are problems with how much personal information the registry reveals.

Despite the delay, new real estate deals have, since late 2020, had to include transparency reports that identify all new owners. As of last week, according to a finance ministry statement, the database captured information on nearly 46,000 owners and a total of 73,000 properties. That’s a tiny fraction of the province’s 2.2 million titles, most of which belong to ordinary people who don’t bother to obscure their ownership.

B.C. passed legislation to create the registry in 2019, the same year a report commissioned by the provincial finance ministry estimated that at least $5-billion in dirty money had been laundered through real estate on Canada’s West Coast the year prior. The report also estimated that money laundering had boosted the benchmark price of a typical home (including detached houses, condos and townhouses) in the Vancouver region by $50,000 in 2018.

The report, written by a team of experts led by Maureen Maloney, the province’s former deputy attorney general, said “disclosure of beneficial ownership is the single most important measure that can be taken to combat money laundering,” but noted that the measure had been underused in Canada and internationally. A 2016 report from Transparency International found that nearly half of the 100 most expensive homes in and around Vancouver were held by legal structures, often shell companies, that hid the names of their actual owners.

B.C. Attorney General David Eby, who also handles the provincial government’s housing portfolio, said it’s hard to gauge the success of the registry because it’s still very new and not yet fully populated with information. But he is confident it will become a tool in the fight against money laundering.

“We haven’t even scratched the surface of the potential of this registry,” he said in a recent interview.

For owners who are required to file with the registry, not doing so can mean substantial financial penalties: $25,000 for an individual, or $50,000 for a corporation – or, in either case, 5 per cent of the assessed value of the property, whichever is greater.

But no penalties have been imposed yet. Although the provincial finance ministry may eventually create an enforcement officer position, right now the director of the registry has this responsibility.

“Based on experience with previous tax and regulatory changes, we know that compliance improves over time when the necessary outreach and education are in place,” the finance ministry said in an e-mailed statement. “And that’s what we are making sure happens here.”

Still, critics argue that a lack of serious enforcement will hamper the registry’s success.

Adam Ross, a Vancouver-based partner with Templeton Research, which works for institutional investors and financial institutions around the world, said he used the registry to trace the assets of a man who allegedly defrauded a bank and a number of investors. Mr. Ross found two B.C. properties bought by the man’s daughter, but they did not turn up in the registry.

“Her money is their dad’s money, so the dad is almost certainly the beneficial owner of the property, but because it’s held by an individual and not a corporation or a legal entity, it’s very easy for them to avoid complying,” he said. “So I wasn’t surprised to see that there wasn’t a listing for that property.”

Properties bought this way with family wealth are technically an “expressed trust” and should be disclosed to the registry, he said.

“That’s the Canadian model,” Mr. Ross said. “On the whole come out strong with legislation and regulation, but put very little into enforcement.”

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