Canada’s squeaky clean reputation took a nosedive, according to an anti-corruption watchdog. This week, Transparency International (TI) released its annual Corruption Perceptions Index for 2021. The index shows Canada continues its spiral lower, having fallen out of the top 10 in 2019. Extensive money laundering and opaque institutions are amongst the reasons for the decline.
Corruption Perceptions Index
The Corruption Perceptions Index (CPI) measures the perceived level of public sector corruption. The data is from professional surveys on their perception of the issues. It’s collected by independent organizations like World Bank and the World Economic Forum. Each country gets a score between 0 and 100, with lower scores being worse. It’s important to stress that this isn’t the opinion of Transparency International. It’s how professionals perceive the local situation, and it tends to skew higher.
A country with a low level of perceived corruption isn’t necessarily corruption-free. It’s just not seen as corrupt due to the lack of visibility. This can be due to various reasons, such as an opaque government or a lack of desire to prosecute. No conviction means it didn’t officially happen, right? In other words, it can skew positive if the public can be convinced it doesn’t exist. We’ll revisit that in a second.
Corruption In Canada Might Be Getting Worse
Canada’s lowering the wrong kind of CPI, with corruption perception rising sharply. The country’s score fell to 74 points in 2021, down 3 points from the previous year. Canada now ranks 13th, falling two places from last year. According to Transparency International Canada (TI Canada), the country fell out of the top 10 in 2019. Over the past five years, the country has dropped eight points.
“The problem of money-laundering in Canada and other corruption scandals have been headline news in recent years dragging down the perception of Canada as a clean country,” said TI Canada executive director James Cohen.
Canada’s Money Laundering Estimates Are Now At $113 Billion
Cohen attributes the drop to money laundering, no whistleblower protections, and an opaque government. Recent estimates show between $43 and $113 billion are laundered per year in Canada. Whistleblowers receive no protection, leading to consequences for those that report a crime. Then there’s freedom of information.
Most democracies offer some access to public information. However, experts have said the country is more opaque than many tax havens. Freedom of information requests exist, but with examples of the state requesting 80 years to prepare the documents, they’re making a mockery of the access. The measures exist only in theory.
TI Canada says the country is taking steps towards improving its situation. More resources are promised for anti-money laundering (though they may only be replacing what was cut). Promises of a beneficial ownership registry are also a big step forward. Though it won’t be ready until 2025.
“We’re hearing some of the right things from the federal government and some provinces, but political will to address Canada’s gaps needs to be ramped up,” said Cohen.