Commission of inquiry into Money Laundering in British Columbia ‘The Honourable Mr, Justice Austin F, Cullen, Commissioner Application for Standing on Behalf ‘of the Ministry of Finance. 1. The Ministry of Finance ("MOF") applies for standing before the Commission of Inquiry into Money Laundering in British Columbia (the “Commission’) A Facts 2. MOF plays a central role in the management of Governments fiscal, financial, and taxation policies and is governed by the provisions of the Financial Administration Act, RSBC 1996, c. 138, 3. The key responsibilities of MOF include: development of forecasts of the provincial economy; development and monitoring of Government's capital plan and three year fiscal plan; performance and financial management audits of ministry, agencies, and Crown corporation programs; policy development, regulation and enforcement for financial services, capital markets, mortgage broker sectors, pension plans, and real estate services, business corporations, cooperatives, societies; and accountability for the BC Securities Commission, Partnerships BC, the Real Estate Council of BC (‘RECBC’) and the British Columbia Financial Services Author, 4. The MOF is also responsible for tax policy development, administration and revenue collection in the province. 5. The MOF's key strategies include working with the federal goverment, the real estate industry and the financial and corporate sector to address money laundering and to strengthen consumer protection in B.C.'s real estate market. 6 The Office of the Superintendent of Real Estate (the "OSRE"), which reports to the Minister of Finance, is a regulatory agency of the B.C. government that protects ‘consumers who are buying, selling or renting a home. OSRE provides oversight and regulation of the real estate industry in B.C. Under the Real Estate Services Act, SBC 2004, c, 42 the Real Estate Development Marketing Act, SBC 2004, ¢. 41 and theStrata Property Act, SBC 1998, c. 43, the OSRE exercises statutory jurisdiction and takes enforcement action against misconduct 7. The Policy and Legislation Division within the Ministry is responsible for providing advice and recommendations on changes to the legislative and regulatory frameworks for the real estate, financial, and corporate sectors in British Columbia, including the Real Estate Services Act, the Financial Institutions Act, the Business Corporations Act and the Securities Act. 8. Pursuant to its Terms of Reference ("TOR"), the Commission is empowered to conduct hearings and make findings of fact and recommendations respecting: fa, the extent, growth and evolution of money laundering in certain sectors, including |. real estate; li, financial institution and money service, including unregulated entities and persons who provide banking-Ike services; Wi, corporate, in relation to the use of shell companies, trusts, securities and financial instruments for the purposes of money laundering: and iv. luxury goods. b. the acts or omissions of regulatory authorities or individuals with power, duties or functions in respect of the sectors under review, to determine whether those acts or omissions have contributed to money laundering in British Columbia and whether those acts or omissions have amounted to corruption; ©. the scope and effectiveness of the powers, duties and functions carried out by such regulatory authorities or individuals; and 4. the barriers to effective law enforcement respecting money laundering in British Columbia 8. The TOR also require the Commission to consider, among other material, the following reports (collectively, the “TOR Reports’)8. Vancouver at Risk — Tuming the Tide ~ An Independent Review of Money Laundering in B.C. Real Estate, Luxury Vehicle Sales & Horse Racing dated March $1, 2019; b. Real Estate Regulatory Structure Review (2018), Dan Pertin (the “Perrin Report’); and ©. Combatting Money Laundering in 8C Real Estate, Maureen Maloney, Tsur Somerville and Brigitte Unger, dated March 31, 2019 (the "2019 Panel Report), B, MOF ought to be granted participant status in the Commission of Inquity 10, Pursuant to Rule 8 of the Commission's Rules for Standing and s, 11(4) of the Public Inquiry Act, $.8.C. 2007 , 9, in assessing MOF's application for participant status the Commission must consider whether and to what extent MOF’s (including its offices’ and agencies’) a. interests may be affected by the findings of the Commission; . participation would further the conduct ofthe inquiry; and . patticipation would contribute to the faimess of the inquiry. 11. The MOF holds key responsibilties with respect to the regulation of the real estate and financial industries in British Columbia. As a result, its interests (and those of the regulators who directly report to the MOF) are directly engaged by the Commission's TOR, which require it to consider, infer alia, acts or omissions of regulatory authorities in respect of real estate and corporate and financial sectors in the Province and the scope and effectiveness of the powers, duties and functions carried out by such regulatory authorities. The regulatory regime relating to these areas is ikely to be both the subject of, and affected by, the Commission's findings of fact and recommendations. 12. The Commission's TOR also require it to consider the TOR Reports, The 2019 Panel Report reports on how regulation related primarily to the corporate and financial ‘sectors can be used to combat money laundering and market abuse related to the real estate market. The Perrin Report reviews and makes recommendations respecting realestate regulation in the province. A number of the recommendations in the TOR reports affect the regulation of sectors for which the MOF has responsibilty 13. ‘The MOF has taken and continues to take steps to restructure regulation in the ‘eal estate and financial sectors, The MOF expects that information regarding such initiatives may be of interest to the Commission, 14. Finally, the MOF is uniquely positioned to participate in the Commission in terms of its ability to provide documents and information in respect of regulation of real estate ‘and corporate and financial sectors in the Province. MOF staff also provided support to the Expert Panel on Money Laundering in 8C Real Estate, In the circumstances, MOF submits that its participation would enhance both the efficent conduct and faimess of the Commission. © Conclusion 18. In the result, the MOF respectfully requests that it be granted full participant status in the Commission through its legal counsel. 16. If granted patticipant status, MOF presently expects to focus its participation on those aspects of the TOR that relate to its mandate, namely policy development, regulation, enforcement and oversight of the real estate, financial and corporate sectors in the province, ALL OF WHICH RESPECTFULLY SUBMITTED, Date at Vancouver, British Columbia this 20” day of September, 201 ‘Counsel for Ministiy a Jacqueline D. Hughes/J. Cherisse Friesen ‘THIS DOCUMENT WAS DELIVERED BY Ministry of Attomey General Legal Services Branch 1301-865 Hornby Street Vancouver, BC V6Z 263 Tel: 604.880.4602 ‘Attention: Jacqueline D. Hughes/J. Cherisse Friesen Email: Jacqueline Hughes@gov be.ca and Cherisse.Friesen@ov.be.ca