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Money laundering report a wake-up call for Canada, but some provinces skeptical

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VANCOUVER — The authors of a report that found $47 billion was laundered across Canada last year debated whether to include a graph that indicated Alberta, Ontario and the Prairies were hotspots for dirty money, says the lead writer.

Maureen Maloney said her expert panel used the best mathematical model available to reach the estimates, but it’s more reliable at a national level than a provincial one, so they questioned whether to publish the figures.

“But we thought, ‘No, we need to do this, because people need to know it’s not just a B.C. problem,’ ” said Maloney, the province’s former deputy attorney general and a public policy professor at Simon Fraser University.

“It’s a big B.C. problem, but it’s everybody’s problem. And to the extent that B.C. starts fixing our problem or at least makes our province less enticing to money launderers, they’re going to go elsewhere. They’re not going to disappear.”

The report, one of two recently released by the B.C. government, aimed to sound a nationwide alarm about money laundering. But some provinces have reacted with skepticism, as Alberta questioned the numbers and Ontario said it will monitor the issue.

Maloney said there is no reliable data on money laundering in Canada, so the panel used what’s known as the gravity model, which estimates the flow of dirty money between countries based on characteristics including GDP per capita and crime rates. The panel divided Canada into six regions and treated each region as a country.

The panel estimated that Alberta led the country for money laundering in 2015 with $10.2 billion, followed by Ontario with $8.2 billion and the Prairies — Saskatchewan and Manitoba combined — with $6.5 billion.

To the surprise of many, B.C. came in fourth with $6.2 billion, scuttling its reputation as the money laundering capital of Canada.

The authors noted that the relatively high estimates in Alberta and the Prairies might arise from the importance the model places on crime rates and GDP levels, which were high prior to the oil downturn.

“If money laundering in Alberta and the Prairies have been overestimated … that implies that money laundering in B.C., Ontario and Quebec have likely been underestimated,” the report said.

Still, the panel concluded that money laundering is corroding “the very fabric of society” across Canada, and laid out a vision for it to become a national priority. Multiple recommendations call for the B.C. government to persuade its provincial and federal partners to take action.

Other provinces have yet to confront the issue with the zeal of B.C., which announced this week it will hold a public inquiry.

Alberta Justice Minister Doug Schweitzer said the province takes criminal activity seriously, but the figure presented in the report is the product of modelling that may not be completely reliable.

“We use intelligence from front-line law enforcement agencies, not data we can’t verify. We will continue to work with our law enforcement partners to protect law-abiding Albertans,” he said in a statement.

Money laundering is nearly impossible to quantify because, by nature, it’s hidden, but the report’s estimate for Alberta seems high, said Greg Draper, a national lead of valuations, forensics and litigation support with law firm MNP LLP and a former RCMP investigator based in Calgary.

“I would expect that Vancouver has a bigger issue than Alberta, which is not to say that Alberta does not face its own money laundering risks,” he said, adding illicit money is being washed through the province’s casinos, housing and cash businesses.

Ontario’s real estate association was so alarmed by Maloney’s report that it contacted its provincial government to call for a beneficial ownership registry. B.C. has already announced plans for such a registry, which collects the names of people buying property using corporations, trusts and numbered companies.

“Today, drug lords, gun runners and other criminals can hide behind the veil of Canada’s privacy laws,” said Tim Hudak, chief executive officer of the Ontario Real Estate Association and a former provincial Progressive Conservative leader.

Ontario Finance Minister Vic Fedeli wasn’t available for an interview and in a statement his department didn’t indicate it was planning to take any urgent action.

“What I can tell you is that we are discussing this issue with our federal and provincial partners — most recently at the last meeting of Canada’s finance ministers. This is something we will continue to monitor,” said spokesman Peter Spadoni.

Both Saskatchewan and Manitoba said they are taking measures to combat money laundering and pointed to their civil-forfeiture programs, which enable provinces to seize assets believed to be the proceeds of crime without laying criminal charges.

Saskatchewan added that it will pursue legislative amendments to ensure that corporations hold accurate and up to date information on beneficial owners. But it noted it was difficult to draw conclusions about the province from the Maloney report.

“The report itself states there are limitations on the methodology, so it isn’t clear what proportion of the Prairie figure in the report applies to Saskatchewan,” it said.

Jason Childs, an economics professor at the University of Regina, said he would expect money laundering to be worse in B.C. due to its sky-high real estate market, but Saskatchewan’s gaming industry is extremely vulnerable.

“We have a lot of comparatively small casinos that are going to be operating with different levels of oversight,” he said. “And then you’ve got, also, a lot of cash business going on in Saskatchewan still.”

As for the federal government, Prime Minister Justin Trudeau described the reports as “alarming” and said his government has strengthened audits on real-estate transactions and is working with provinces to do more.

Maloney said better data is needed, but if anything, the panel’s estimates might actually be lower than the reality.

“Our numbers are not definitive. Nobody’s numbers can be definitive. But we think at the moment, given the data that is available to us, this is probably the best guesstimate there is,” she said.

“But I would say if we were erring on any side, it would be on a cautious, conservative side.”

— Follow @ellekane on Twitter.

Laura Kane, The Canadian Press


Alberta

Orange Shirt Day – Acknowledging the Lasting Legacy of the Canadian Residential School System

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The year 2020 marks the 24th anniversary of the final closure of the last operating Canadian residential school, located in Punnichy, Saskatchewan, in the year 1996. 

Originally established in the late 1800’s, more than 130 residential schools operated across Canada for over 120 years. During this time, more than 150,000 First Nations, Metis and Inuit children were forcibly removed from their homes and placed into the schools (1). 

Jointly operated by the Government of Canada and religious organizations across the nation, the residential school system was a violent and corrupt approach towards the total assimilation of Indigenous children and the ultimate erasure of Indigenous culture. The methods used by the schools to pursue this goal, as officially documented by the Canadian Truth and Reconciliation Commission (CTRC), were abhorrent acts of violence and humiliation against children that would raise a legacy of trauma and pain spanning generations. 

The exact number of children who died during their time at the residential schools remains unclear, but is estimated to be greater than 6000 (2). The CRTC documents that many students succumbed to disease and malnourishment exacerbated by abysmal living conditions, while others died as a result of abuse and experimentation. Records show many children perished in fires when a number of schools burned down over the years, and others died by suicide, or while trying to escape (3).  

“Children were abused, physically and sexually, and they died in numbers that would not have been tolerated in any school system in the country, or in the world.” Summary of the Final Report of the Truth and Reconciliation Commission of Canada (4)

Since the final closure of the residential schools in 1996, steps towards national reconciliation – such as the launch of the Canadian Truth and Reconciliation Commission in 2008 – have been based in the acknowledgement and commemoration of the painful legacy of the schools across Canada. The documentation, preservation and dissemination of the residential school experience as told by the survivors is essential to understanding and accepting the implications of this dark and extensive period in Canadian history. 

Among many ongoing discussions and dedications to the survivors and victims of the Canadian residential Schools, Orange Shirt Day is an annual recognition of the ongoing pursuit of reconciliation and affirmation in Canada. 

Orange Shirt Day was born in Williams Lake, BC in May 2013 as a legacy of the St. Joseph Residential School Commemoration Project and Reunion. The project was founded by former student Esketemc (Alkali Lake) Chief Fred Robbins in an effort to bring together those whose lives had been negatively impacted by the schools. Specifically, “Events were designed to commemorate the residential school experience, to witness and honor the healing journey of the survivors and their families, and to commit to the ongoing process of reconciliation” (5).

Orange Shirt Day was founded as a result of the St. Joseph project, when former student and spokesperson for the Reunion group, Phyllis (Jack) Webstad, shared the experience of her first day at the residential school, “when her shiny new orange shirt, bought by her grandmother, was taken from her as a six-year old girl” (6).  

September 30th was chosen as the annual Orange Shirt Day to coincide with the returning school year, and to commemorate the time of year in which children were originally taken from their homes to attend the residential schools. 

On September 30, 2019, The National Centre for Truth and Reconciliation (NCTR) hosted a ceremony in honor of Orange Shirt Day at the Canadian Museum of History in Gatineau, Quebec. A list commemorating the names of 2,800 Indigenous children who died while attending the residential schools was presented on a 50-metre-long-ceremonial cloth. This ceremony represented an important first step, according to the NCTR, however, there is still a long way to go towards the proper recognition and memorialization of all who were lost to the schools. 

Since 2013, Orange Shirt Day has continued to foster ongoing investigation and dialogue surrounding the history and lasting legacy of the residential school system within the Canadian historical landscape. It is a public call to listen, share, and remember those who suffered and now carry the lasting wounds of the government mandated Canadian residential school system, as well as those who never returned home at all. 

 

For more stories, visit Todayville Calgary.

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PETER SUTHERLAND SR GENERATING STATION POWERS NORTHEAST ONTARIO

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PETER SUTHERLAND SR GENERATING STATION POWERS NORTHEAST ONTARIO

On the Abitibi River in northeastern Ontario, the Peter Sutherland Sr. Generating Station (GS) powers 25,000 homes and businesses with renewable waterpower. The development was a partnership between Ontario Power Generation (OPG) and Coral Rapids Power: a wholly-owned company of the Taykwa Tagamou Nation (TTN). The development is named after a respected elder from TTN. The $300-million project was completed in 2017.

On the Abitibi River in northeastern Ontario, almost two years of construction and eight years of planning have culminated in a new hydroelectric station capable of powering 25,000 homes and businesses with clean, renewable, and affordable power.

The 28-megawatt (MW) Peter Sutherland Sr. Generating Station (GS), located about 80 kilometres north of the town of Smooth Rock Falls on the New Post Creek, went into service on April 2017, well ahead of its scheduled 2018 target. In addition, the $300- million project stayed on budget.

That’s a testament to the solid planning and execution between OPG and its partner in the  development,  Coral  Rapids  Power, a wholly-owned company of the Taykwa Tagamou Nation (TTN). The development, which is named after a respected elder from TTN, has already had a positive impact on the First Nation community.

“We had about 50 TTN members working on the project at one point or another, which was significant for our First Nation partner,” said Paul Burroughs, Project Director at OPG. “They were part of the project team working to help make this a success.”

As part of the project agreement, Coral Rapids Power has a one-third ownership in the facility, meaning they will receive a share of profits from the station and be a partner for life over the 90 or so years the plant  is expected to operate. As TTN’s first foray into hydro development, the project took several decades to get off the ground before the First Nation agreed to partner with OPG in 2007 as part of a past grievances settlement. Construction of the station began in 2015.

Construction work on the Peter Sutherland Sr. Generating Station

The project provides the TTN community with a long-term investment opportunity and a sustainable economic base. Further, it provides spinoff benefits for the entire northeast region.

“The relationship we’ve built with OPG is based on a foundation of respect, trust, and all working toward a common goal,” said Wayne Ross, President of Coral Rapids Power. “There have been many benefits from this project for our community, including good-paying jobs, transferable skills and a long-term revenue stream.”

In addition, approximately $53.5 million in subcontracts were awarded to TTN joint- venture businesses during the construction phase of the station.

“The partnership is about creating a lifelong relationship with the First Nation,” said Burroughs.

The project has created skilled jobs and unique learning opportunities benefitting TTN members who will pursue work in a range of different career fields. Labour needs included engineers, equipment operators, labourers, drillers, cement workers, ironworkers, electricians, welders, carpenters, and camp support services.

At the peak of construction, there were about 220 workers employed on the project, many of whom reside in the local community.

“Our partnership is about more than just megawatts,” said Mike Martelli, President, Renewable Generation. “It’s also about creating skilled jobs and ongoing revenue that will benefit this community for years to come.”

In addition to the direct employment opportunities, existing local businesses and the regional economy benefitted from contracting work, as well as local project purchasing and expenditures. The estimated sales multiplier associated with the project is $1.50 – that is for every dollar expended an additional $0.50 was spent in northern Ontario.

The new station is operated by OPG’s northeastern operations control room in Timmins and is maintained by technicians located at a nearby work centre at Abitibi Canyon.

Inside the completed Peter Sutherland Sr. Generating Station

Peter Sutherland Sr. GS is the latest asset in OPG’s clean energy portfolio, which includes successful joint ventures with other First Nations. In early 2015, OPG and the Moose Cree First Nation celebrated the completion of the Lower Mattagami Hydroelectric Project, northern Ontario’s largest hydroelectric project in 50 years.

Ontario’s 58 northeastern hydroelectric facilities provide a clean, renewable, and reliable source of power to Ontarians year- round. Their combined capacity is over 3,000 MW.

Thanks to Todayville for helping us bring our members’ stories of collaboration and innovation to the public.

Click to read a foreward from JP Gladu, Chief Development and Relations Officer, Steel River Group; Former President and CEO, Canadian Council for Aboriginal Business.

JP Gladu, Chief Development and Relations Officer, Steel
River Group; Former President & CEO, Canadian Council for Aboriginal Business

Click to read comments about this series from Jacob Irving, President of the Energy Council of Canada.

Jacob Irving, President of Energy Council of Canada

The Canadian Energy Compendium is an annual initiative by the Energy Council of Canada to provide an opportunity for cross-sectoral collaboration and discussion on current topics in Canada’s energy sector.  The 2020 Canadian Energy Compendium: Innovations in Energy Efficiency is due to be released November 2020.

 

Click below to read more stories from Energy Council of Canada’s Compendium series.

INDIGENOUS CONSULTATION AND ENGAGEMENT AT CANADA’S ENERGY AND UTILITY REGULATORS

COASTAL GASLINK PIPELINE PROJECT SETS NEW STANDARD WITH UNPRECEDENTED INDIGENOUS SUPPORT AND PARTICIPATION

Hydro-Québec takes partnerships, environmental measures and sharing of wealth to new levels

Read more on Todayville.

 

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