Industry Minister François-Philippe Champagne said by next year, a new law will create a public registry that names any individuals who own a significant share of federal corporations.
Bill C-42, “An Act to Amend the Canada Business Corporations Act,” was approved by the Senate banking committee and will be law by Christmas, according to an Oct. 23 report in Blacklock’s Reporter.
The bill, which passed unanimously in the House of Commons on June 22, will require that federally registered companies provide the government with the names and addresses of shareholders who hold “significant control” of the corporation, specifically a minimum of 25 percent of shares.
“For too long we had some bad actors who used Canadian corporations in the way that I think Canadians would find very disturbing,” Mr. Champagne said.
He said individuals who don’t pay their taxes, as well as those involved in counterfeit money and organized crime, “will probably not want to come to Canada or at least use corporations in the way we may have seen in the past where people were using our corporations.”
“The bill received the unanimous support of the House of Commons,” added the minister. “I must tell you, it’s not every day that you see that. It sends a strong signal to everyone in this country that we are serious about doing something.”
Fines
Violating the proposed legislation could result in $1 million in fines and five years in jail. The bill applies to any company incorporated under federal law, an estimated 458,790 out of 2,951,629 businesses across Canada.
“Incorporation is a shared jurisdiction in Canada and federal incorporation is less than 15 percent of all incorporations in Canada,” said Justin Brown, senior director at Finance Canada, during a committee hearing on June 12. “This bill would represent an enormous step by implementing a federal registry for corporations. However there remain 85 percent of corporations that would not be covered.”
The registry was planned to be online and searchable by keyword starting in 2025, according to Industry Canada in a May 10 briefing note. Mr. Champagne told the Senate banking committee the registry could be operational by spring of 2023.
Newfoundland Senator Elizabeth Marshall asked if there was a date “when the system is going to be up and running.”
Mr. Champagne said, “We are saying the beginning of the year is the time. The system will be ready.”
Transparency International Canada, an advocacy group, told the Senate banking committee in a March submission that other countries have found registries effective.
“These registries have become more urgent as transnational criminal networks and foreign state actors seek to exploit liberal democracies and hide dirty money. Currently 108 countries have made commitments to publicly accessible registries,” said the group.
