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Why is it "bad" when illegal money is brought into Canada?

  • Last Updated:
  • Sep 28th, 2020 1:22 am
[OP]
Member
Feb 8, 2015
347 posts
289 upvotes
Manotick, ON

Why is it "bad" when illegal money is brought into Canada?

I am not understanding the line of logic.

Say Pablo Escobar, the notorious drug lord, wants to bring his ill gotten money into Canada because he wants to buy Canada Goose jackets, Canadian maple syrup, seasons tickets to Raptors/Maple Leafs, real estate, Canadian beef, etc
How is this a bad thing for Canada?


It would be like if someone owned a store, do they really care how each customer got obtained the money? I have never once been asked how I obtained my money when making a purchase...
77 replies
Deal Addict
Jan 22, 2003
4626 posts
180 upvotes
Austin/Markham
Its the laundering that's problematic. If someone buys a bunch of maple syrup to resell or corner the market to launder the cash, it'll mess up the supply demand curve. Imagine someone buying all the videocards for 2 years, causing GPU prices to rise. Same with Toronto real estate. Folks paying over MSRP, for GPUs, sometimes 2X to get one.

If its an unlimited supply, like say bottled water, ya it doesn't matter .

Its only bad because the whiners are complaining that there's ppl richer than them.
__
demandez-lui si elle dormira avec vous pour un LED keychain
Deal Addict
Apr 30, 2011
3266 posts
384 upvotes
RICHMOND HILL
webdoctors wrote: Its the laundering that's problematic. If someone buys a bunch of maple syrup to resell or corner the market to launder the cash, it'll mess up the supply demand curve. Imagine someone buying all the videocards for 2 years, causing GPU prices to rise. Same with Toronto real estate. Folks paying over MSRP, for GPUs, sometimes 2X to get one.

If its an unlimited supply, like say bottled water, ya it doesn't matter .

Its only bad because the whiners are complaining that there's ppl richer than them.
I think the key point here is prices are being driven up because the illegal money must be laundered somewhere. With our real estate prices there's also the issue of our governments becoming too reliant on taxing real estate. Should foreign governments manage to restrict the outward flow of capital, then prices will drop significantly and the market will be in trouble. The foreign market will benefit as there will be more money circulating in their economy, not ours.

I think people need to put this influx of money into perspective. Should say, the Norwegians suddenly decide to invest their vast pool of money into Canadian markets, there's going to be a smaller but similar kind of effect on prices. There would be a more pronounced effect if it was the Saudis, who also have vast reserves of capital. Neither country is known for money laundering, and the majority of its citizens (read citizens, not population) are very wealthy because of resource exports. So the illegal money is merely a scapegoat. The real issue is simple - people here are not wealthy enough to compete.
Last edited by loserga on May 1st, 2019 11:08 am, edited 1 time in total.
Deal Addict
Oct 6, 2015
2463 posts
1361 upvotes
There is very little to no evidence of money laundering into Canada in any significant manner. In fact, the facts point more closely to Canadian dollars leaving Canada and being hoarded in foreign central banks.

A few very ignorant people, usually with a racist agenda, are running around claiming that successful Chinese-Canadians are buying housing in Vancouver/Toronto, not with money they saved/earned/borrowed, but rather, with funds they illicitly and covertly acquired. As a rationalization of extreme housing prices. Nothing could be further from the truth. It is very well accepted, by legitimate economists, that excess speculation by Canadians (particularly Canadians who hoard a lot of real estate using credit), and unduly inexpensive credit is the root cause of high housing market valuations. As well as shifting attitudes towards home ownership amongst non-traditional groups that have driven ownership ratios to record highs.
Should foreign governments manage to restrict the outward flow of capital, then prices will drop significantly and the market will be in trouble.
Since there's no evidence of inflows of capital to Canada, any foreign government restrictions would accordingly have no impact. But Canada's bubble has popped simply because housing is extremely overvalued relative to other asset classes.
Deal Addict
Apr 30, 2011
3266 posts
384 upvotes
RICHMOND HILL
burnt69 wrote: There is very little to no evidence of money laundering into Canada in any significant manner. In fact, the facts point more closely to Canadian dollars leaving Canada and being hoarded in foreign central banks.

A few very ignorant people, usually with a racist agenda, are running around claiming that successful Chinese-Canadians are buying housing in Vancouver/Toronto, not with money they saved/earned/borrowed, but rather, with funds they illicitly and covertly acquired. As a rationalization of extreme housing prices. Nothing could be further from the truth. It is very well accepted, by legitimate economists, that excess speculation by Canadians (particularly Canadians who hoard a lot of real estate using credit), and unduly inexpensive credit is the root cause of high housing market valuations. As well as shifting attitudes towards home ownership amongst non-traditional groups that have driven ownership ratios to record highs.



Since there's no evidence of inflows of capital to Canada, any foreign government restrictions would accordingly have no impact. But Canada's bubble has popped simply because housing is extremely overvalued relative to other asset classes.
Who are these non-traditional groups?
Deal Addict
Oct 6, 2015
2463 posts
1361 upvotes
loserga wrote: Who are these non-traditional groups?
Students. Unmarried people in their 20s. Senior citizens (ie: buying into condo-ized assisted living complexes). Newcomers to Canada (who mostly arrive with little to only modest funds, but creative financing and co-signing within ethnic communities gets them into ownership much more quickly than traditionally was the case when a full downpayment had to be saved up.).
Sr. Member
Apr 19, 2017
866 posts
688 upvotes
Its not bad.

Ask those Chinese students how they obtained $50 million for their mansions.

Image
Stack
Deal Addict
Oct 6, 2015
2463 posts
1361 upvotes
sandeep8g wrote: Its not bad.
Ask those Chinese students how they obtained $50 million for their mansions.
If Canada's economy actually created wealthy people in any significant numbers, you'd probably see the same, Canadian kids buying condos in foreign countries that have the 'best' schools, etc. With money from their families.

But that's not proof, at all, of money laundering. Lots of wealth has been created in China over the past few decades. Only those who have no clue what 'communism' means in the context of China run around claiming that wealth created by Chinese businesspeople is 'ill gotten'. Or that there's a lot of internal corruption. China is, by far, one of the most capitalistic and economically free countries on Earth right now.
Sr. Member
Apr 19, 2017
866 posts
688 upvotes
burnt69 wrote: A 'report' that's well over 20 years old and is basically full of unsubstantiated innuendo. With little fact.
1.Old doesnt mean its not true.
2.They exposed the spider web with names of people, the companies they're connected to, and the activities of the companies.
3. The federal Liberals tried to expunge the report.
Stack
Sr. Member
Dec 26, 2005
588 posts
146 upvotes
burnt69 wrote: There is very little to no evidence of money laundering into Canada in any significant manner. In fact, the facts point more closely to Canadian dollars leaving Canada and being hoarded in foreign central banks.

A few very ignorant people, usually with a racist agenda, are running around claiming that successful Chinese-Canadians are buying housing in Vancouver/Toronto, not with money they saved/earned/borrowed, but rather, with funds they illicitly and covertly acquired. As a rationalization of extreme housing prices. Nothing could be further from the truth. It is very well accepted, by legitimate economists, that excess speculation by Canadians (particularly Canadians who hoard a lot of real estate using credit), and unduly inexpensive credit is the root cause of high housing market valuations. As well as shifting attitudes towards home ownership amongst non-traditional groups that have driven ownership ratios to record highs.



Since there's no evidence of inflows of capital to Canada, any foreign government restrictions would accordingly have no impact. But Canada's bubble has popped simply because housing is extremely overvalued relative to other asset classes.
Definitely no money laundering going on here. When all else fails just play the good old racism card.

B.C.'s money laundering problem may involve billions of dollars, documents say

British Columbia’s money laundering is an emergency.

Chinese Fetanyl Kingpins Laundered Over $5BN Through Vancouver Homes Since 2012

Vancouver is drowning in chinese money


Deal Addict
Apr 14, 2017
1897 posts
610 upvotes
DT Calgary
Ahh yes, you're racist if you mention that a significant amount of Chinese money is ill-gotten or by corrupt means. Interesting.

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