Corporate registries combat money laundering

At its peak, Mexico’s Sinaloa cartel took in $275,000 in cocaine sales in Winnipeg in a single day, according to Andrew Hogan, a former U.S. Drug Enforcement Administration agent who helped investigate the cartel.

That is an extraordinary amount of money being generated by cocaine in a single Canadian city.

The figure comes from the cartel’s own accounting: Joaquin (El Chapo) Guzman required his Canadian lieutenant to send nightly sales reports to Mexico. Even a multinational criminal enterprise, it seems, has to account for its sales.

But knowing how much cocaine the Sinaloa cartel was selling tells us little about who ultimately profits from the trade or where the money goes. Criminal organizations need ways to move and conceal their proceeds without revealing where the money came from — or who controls it. Increasingly, corporations are providing that cover.

Corporations allow people to hold property, move money and conduct business through legal entities rather than in their own names. This separation can make it difficult to identify who ultimately owns or controls assets. Shell corporations, often little more than companies on paper, can further obscure who is behind a business and where its money comes from.

In Canada, shell corporations are involved in 70 per cent of money-laundering cases, according to the Financial Transactions and Reporting Analysis Centre of Canada, the country’s anti-money-laundering agency.

Criminals are exploiting Canada’s reputation as a safe place to do business. The practice is known as “snow-washing,” using that reputation to make illicit money and opaque corporate structures appear legitimate.

The End Snow-Washing Coalition, which advocates for greater corporate transparency, found that overseas firms were marketing Canadian companies as vehicles for concealing offshore ownership. This can obscure who ultimately owns a company and provide a way to move criminal proceeds through Canada.

Manitoba has taken steps to address the problem. In 2019, it passed legislation requiring most Manitoba corporations to maintain records identifying individuals with significant control. In 2024, the Kinew government strengthened those provisions, requiring most corporations to provide the records to police and certain government officials on request.

But the information remains in companies’ own records. Manitoba has no centralized public registry identifying the people who ultimately own or control them. That is a significant gap in a province with more than 100,000 active corporations.

A September 2026 assessment by the Financial Action Task Force, a global watchdog on money laundering, found that Canada was only partially compliant with international standards on corporate ownership. It cited uneven implementation across provinces and territories, a lack of central registries, and inconsistent verification and penalties.

One Winnipeg case shows how the proceeds of crime enter the legitimate economy. In February 2022, a man who would later plead guilty to trafficking fentanyl and laundering the proceeds brought a bag stuffed with $300,000 in $100 bills into Winnipeg’s Club Regent Casino. At the cashier’s cage, he exchanged the cash for chips. Investigators allege he used money cashed out at local casinos to buy multiple properties.

In the country’s first national security strategy in more than 20 years, released last week, Prime Minister Mark Carney identifies money laundering and financial crime as significant threats to Canada’s security.

Ottawa has also been calling on provinces and territories to advance a co-ordinated approach to beneficial-ownership transparency. Manitoba should join that effort — and ensure its registry is publicly accessible.

Quebec is currently the only province with a public registry in place. British Columbia has passed a law to create one, and Ontario plans to establish one by 2027.

But a registry is only as useful as the public’s ability to scrutinize it.

In Manitoba, beneficial-ownership information can be obtained by certain government agencies on request, but is not available to the public. A public registry would allow journalists, researchers, businesses and members of the public to examine corporate ownership, identify connections between seemingly unrelated companies and flag information that appears inaccurate or misleading. That broader scrutiny makes it harder for criminals to hide behind a web of companies.

Manitoba should establish a centralized registry identifying the people who ultimately own or control corporations. The information should be publicly accessible, verified, kept up to date and backed by meaningful penalties for false or incomplete disclosures.

At a recent Winnipeg symposium convened by Canadian Mennonite University, Massey College and Inner City Youth Alive, participants discussed ways to deter the recruitment of vulnerable youth to drug-trafficking gangs. One way is to break up the drug lords’ empires by shining a light on the true ownership of a shell corporation.

The goal isn’t simply to catch criminals after they’ve made their money. It’s to make it harder for them to hide and use that money in the first place.

Following the money means knowing whose money it is.

Mary-Jane Bennett is a former Winnipeg lawyer who was commissioned by Toronto’s Massey College to examine and report on money laundering across Canada. Thomas S. Axworthy is public policy chair at the college.