One of the most valuable properties ever forfeited in B.C.'s Lower Mainland was valued at $1.2-million. It was used as a marijuana grow operation.Rafal Gerszak/The Globe and Mail
Criminals are using ill-gotten gains to purchase houses, cars, gold bars and other assets with near impunity by exploiting gaps in Canada’s patchwork of provincial and territorial laws.
That is why legal experts are urging the provinces and territories to establish or expand civil asset forfeiture programs that deprive criminals of property tainted by illegality and deter them from engaging in jurisdictional arbitrage.
Civil asset forfeiture is a legal tool that is used by governments to seize property and other assets that are linked to illegal activity, including by organized-crime groups.
Confiscation, though, is not predicated on a criminal conviction. Instead of focusing on the suspected perpetrator of a crime, this type of civil action targets the property itself.
“It is a scalpel designed to chase just one thing; it’s designed to simply chase property,” Phil Tawtel, executive director of British Columbia’s Civil Forfeiture Office, said at the Vancouver Anti-Corruption Institute’s conference on asset forfeiture this week.
“Whereas on the criminal side, you have to chase the person and you chase the property.”
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The standard of proof for civil forfeiture is “a balance of probabilities” that the property is connected to illegal activity. (That is a lower bar than “beyond a reasonable doubt,” which is used in criminal law.)
Although the Supreme Court of Canada ruled in 2009 that non-conviction-based forfeiture is a legitimate tool that complies with the Constitution, it is still underutilized by provincial and territorial governments.
Nine have civil-forfeiture laws on their books but there is a notable divide among this group. B.C. and Manitoba are leaders, while Ontario is a laggard even though it was the first province to adopt such a law.
“The civil-forfeiture program in Ontario might gently be described as a complete tire fire. It’s a disaster out there,” said Jeffrey Simser, the former director of civil forfeiture at Ontario’s Ministry of the Attorney-General.
Mr. Simser, who created Ontario’s program some 25 years ago, was also the first director of a civil asset forfeiture office in Canada.
“It absolutely saddens me because we used to be best in class,” Mr. Simser said, adding that Ontario’s wavering commitment risks giving a “free pass to organized crime.”
Meanwhile, the list of holdout jurisdictions with no law in place includes Prince Edward Island, Newfoundland and Labrador, the Northwest Territories and the Yukon.
That lack of uniformity allows criminals to game the system.
For example, if a criminal opens a bank account in St. John’s but moves to Vancouver, the B.C. civil-forfeiture office is blocked from accessing it – even in the digital age.
“If that criminal is now doing drug trafficking in B.C., but he opened up his account in a province that doesn’t have civil forfeiture, that’s a gap,” explained Melinda Murray, executive director of Criminal Property Forfeiture in Manitoba. “We need to rectify that.”
B.C. and Manitoba are leaders in civil forfeiture, while Ontario is a laggard even though it was the first province to adopt such a law.DARRYL DYCK/The Canadian Press
These disparities are problematic for other reasons, too.
U.S. President Donald Trump has launched a trade war with Ottawa on the false premise that Canada is a major source of fentanyl exports to his country.
The provincial mishmash on civil asset forfeiture could be viewed as another obstacle to Canada’s fight against fentanyl.
But this issue is far bigger than Mr. Trump and his illogical trade war.
The United Nations Office on Drugs and Crime estimates that countries intercept and recover less than 1 per cent of global illicit financial flows. That’s why all countries, including Canada, should aim to take a common approach to solving this problem.
“In a global economy, money moves across international borders,” said Stefan Cassella, who has previously held leadership positions in the asset-forfeiture and money-laundering sections of both the U.S. Attorney’s Office in Baltimore, Md., and the U.S. Department of Justice.
Part of the solution, he says, is internationalizing law-enforcement powers by way of countries adopting similar legislation and systems to seize assets.
“That’s never been more important than it is now with respect to the advent of cryptocurrency because we don’t even know where the cryptocurrency is,” Mr. Cassella added.
As he and others noted, the Financial Action Task Force, the global body assessing Canada’s ability to combat financial crime, is also urging countries to implement robust asset-recovery programs.
Separately, the Cullen Commission of Inquiry into Money Laundering in British Columbia recommended expanded operational capacity for civil-forfeiture authorities as part of its final report. Although that proposal was specific to B.C., experts say it is a best practice for all provinces.
Canada, though, is making some progress. As of April 1, the Financial Transactions and Reports Analysis Centre of Canada is authorized to disclose its financial intelligence to provincial civil-forfeiture authorities. That could be a gamechanger.
Experts want a similar information-sharing arrangement with the Canada Revenue Agency.
It’s a smart idea. Canada’s privacy laws were never intended to give criminals cover.
Ms. Murray said it best: The goal of civil asset forfeiture is to get ahead of the criminals, not run behind them.