Snow washing refers to hiding illegitimate financial transactions often for purposes of

tax evasion Tax evasion or tax fraud is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to red ...

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...

. The term is an amalgam of the words ''snow'' referring to Canada having cold snowy winters and ''washing'' referring to

money laundering Money laundering is the process of illegally concealing the origin of money obtained from illicit activities (often known as dirty money) such as drug trafficking, sex work, terrorism, corruption, and embezzlement, and converting the funds i ...

. It is easy under Canadian law to set up a company, even for a fee as low as C$200, while shielding the identities of the firm's real owners from the eyes of tax authorities. The global elite, as well as criminals and foreigners avoiding economic sanctions, can set up shell companies to "make suspect transactions seem legitimate" under the cover of Canada's reputation for fiscal integrity. Downtown Vancouver

The registration systems for Canadian companies, at both the federal level and the provincial level, are shrouded in secrecy, which means that the real owner of a company or a trust can hire a person as a stand-in substitute to conduct all financial filings and submissions. The practice effectively makes Canada a

tax haven A tax haven is a term, often used pejoratively, to describe a place with very low tax rates for Domicile (law), non-domiciled investors, even if the official rates may be higher. In some older definitions, a tax haven also offers Bank secrecy, ...

along with countries such as the

British Virgin Islands The British Virgin Islands (BVI), officially the Virgin Islands, are a British Overseas Territories, British Overseas Territory in the Caribbean, to the east of Puerto Rico and the United States Virgin Islands, US Virgin Islands and north-west ...

Panama Panama, officially the Republic of Panama, is a country in Latin America at the southern end of Central America, bordering South America. It is bordered by Costa Rica to the west, Colombia to the southeast, the Caribbean Sea to the north, and ...

and the

Bahamas The Bahamas, officially the Commonwealth of The Bahamas, is an archipelagic and island country within the Lucayan Archipelago of the Atlantic Ocean. It contains 97 per cent of the archipelago's land area and 88 per cent of its population. ...

. The process has been made even easier since the

Canadian government The Government of Canada (), formally His Majesty's Government (), is the body responsible for the federal administration of Canada. The term ''Government of Canada'' refers specifically to the executive, which includes ministers of the Crown ( ...

has signed tax treaties with 115 countries. With a form of business organization called a ''Canadian Limited Partnership'', the only persons who have to declare themselves to the authorities are the partners, and if they do not live in Canada, they are exempt from filing taxes in Canada. For firms whose stocks are not traded publicly, the rules require that only the directors of such companies be identified, and these directors are not required to reveal whether they are acting on behalf of somebody else. There was a report in ''

The Economist ''The Economist'' is a British newspaper published weekly in printed magazine format and daily on Electronic publishing, digital platforms. It publishes stories on topics that include economics, business, geopolitics, technology and culture. M ...

'' suggesting that the overheated market for private property in the Canadian city of

Vancouver Vancouver is a major city in Western Canada, located in the Lower Mainland region of British Columbia. As the List of cities in British Columbia, most populous city in the province, the 2021 Canadian census recorded 662,248 people in the cit ...

may be partially the result of purchases by unidentified persons, possibly foreign criminals and corrupt officials, as a way to launder dirty money. One estimate in 2009 by the national police was that 15 billion dollars was being laundered annually in Canada because of the opaque disclosure requirements.

References

{{Reflist Tax evasion Money laundering Economic history of Canada Real estate bubbles of the 2010s Economy of Canada Immigration to Canada Real estate Housing in Canada Inflation in Canada Infrastructure in Canada Real estate in Canada