Appearance before the Standing Committee on Industry, Science and Technology (INDU) by the Minister of Innovation, Science and Industry - June 5

5 June 2023

Beneficial Ownership Information

Key Messages:

  • The Government of Canada is committed to protecting Canadians against money laundering and terrorist financing, deterring tax evasion and tax avoidance, and making sure Canada remains an attractive place to conduct business.
  • Budget 2022 announced amendments to the Canada Business Corporations Act to implement a public and searchable beneficial ownership registry of corporations governed under the Act.
  • The government has introduced a series of legislative amendments towards fulfilling this commitment in 2022; a second series was introduced in March 2023.
  • The government is working diligently to ensure that the registry is scalable.to allow access to data held by provinces and territories.

Background

Corporate law is a shared responsibility with the provinces and territories, and therefore an area in which national-level priorities must be advanced in collaboration with partners. Approximately 87% of corporations are incorporated at the provincial and territorial levels; strong collaboration and engagement with provincial and territorial governments are vital to establish a coordinated national strategy that prevents regulatory arbitrage and loopholes.

In December 2017, federal, provincial and territorial (FPT) finance ministers agreed in principle to pursue legislative amendments to their respective corporate statutes to require corporations to hold accurate and up-to-date information on beneficial owners, and to eliminate the use of bearer shares. FPT officials also agreed to develop legislative changes through an FPT Working Group.

In 2018, the government amended the Canada Business Corporations Act (CBCA) to require federally incorporated, privately held corporations to create and populate a register of "individuals with significant control". In June 2019, further amendments allowed police and tax authorities to make a request to these corporations to provide information from their registers where authorities believe it would be relevant to an investigation.

In June 2019, most FPT finance ministers convened and agreed "to cooperate on initiating consultations on making beneficial ownership information more transparent through initiatives such as aligning access through public registries, while respecting jurisdictional responsibilities with respect to corporations.". Federally led consultations on registry options were conducted with a variety of stakeholders in the winter and spring of 2020 and will inform next steps. A "What We Heard Report" was produced to reflect stakeholders' key messages and was published in April 2021.

In December 2021, the Minister of National Revenue was directed in her mandate letter to support the Deputy Prime Minister and Minister of Finance and the Minister of Innovation, Science and Industry in their work to implement a beneficial ownership registry.

As of January 2022, the governments of British Columbia, Manitoba, and Prince Edward Island have instituted requirements similar to federal legislation, while Nova Scotia and Saskatchewan have passed legislation that is not yet in force. New Brunswick and Ontario have each publicly announced their intention to pass legislation to implement this type of requirement. Quebec is the only province that has introduced legislation requiring businesses to both gather and retain beneficial ownership information and submit it to a publicly accessible provincial registry.

Budget 2021 provided $2.1 million over two years to Innovation, Science and Economic Development to support the implementation of a publicly accessible corporate beneficial ownership registry by 2025. Budget 2022 proposed to accelerate this commitment, making the registry available by the end of 2023. Scalable

Budget Implementation Act 2022 No.1, which received Royal Assent on June 23, 2022, included amendments to the CBCA that would require private federal corporations to send information on their beneficial owners to Corporations Canada on an annual basis and when a change in control occurs. They would also authorize Corporations Canada to provide all or part of that information to investigative bodies, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and other prescribed entities.

The amendments approved in BIA1 were a first step towards fulfilling Budget 2022 commitment to implement a public and searchable beneficial ownership registry by the end of 2023. A second series of amendments to the CBCA and other statutes, notably with regards to public dissemination, privacy protections and a compliance regime, was introduced in Parliament, as Bill C-42, on March 22, 2023. All CBCA legislative amendments and the contours of the registry regime are informed by national consultations that took place in 2020 as well as targeted stakeholder engagements that took place in June 2022.