Bill C-42

An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts

This enactment amends the Canada Business Corporations Act to, among other things,
(a) require the Director appointed under that Act to make available to the public certain information on individuals with significant control over a corporation;
(b) protect the information and identity of certain individuals;
(c) add, or broaden the application of, offences and provide the Director with additional enforcement and compliance powers; and
(d) add regulatory authority to prescribe further requirements in certain provisions.
It also makes consequential and related amendments to other Acts.

Canada Business Corporations Act

[François-Philippe Champagne, Liberal, Minister of Innovation]

moved that Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts, be read the second time and referred to a committee.

Madam Speaker, I am pleased to be here this morning to talk about Bill C-42, which is a very important bill. I am pleased to have the opportunity to speak to Canadians about the important role Bill C-42 will play in combatting money laundering and bringing greater transparency to corporate Canada.

Today, I am proud to speak to Bill C-42, which deals with amendments to the Canada Business Corporations Act as well as other acts, to create a public beneficial ownership registry for businesses incorporated federally. Our government is committed to a robust and effective regime that will combat money laundering and tax evasion, improve Canadians' trust in the marketplace and make Canada a leader in corporate transparency. Creating a free, public and searchable registry of beneficial owners of federally regulated Canadian corporations would increase corporate accountability and improve public trust in corporate institutions.

Why do we need a public beneficial ownership registry?

Corporations are the driving force behind our economic growth, innovation and competitiveness. They are the primary source of jobs and prosperity for Canadians. They are the means for entrepreneurs to make strategic investments and take calculated risks without jeopardizing their financial stability.

Unfortunately, bad actors can misuse the legal structures of corporations to engage in illicit activities such as money laundering, corruption and tax evasion. Corporate entities can be misused to avoid economic sanctions and to impair the tracing or freezing of assets. This reprehensible conduct can in turn have serious negative consequences for Canadians, notably impacting crime rates and tax revenues. For these reasons, Canada's federal and provincial finance ministers agreed in 2017 to pursue legislative amendments to improve transparency with regard to the individuals who ultimately control businesses incorporated in Canada.

Shortly thereafter, the Canada Business Corporations Act was amended to require federal corporations to hold accurate, up-to-date information on their beneficial owners. Additional changes were enacted to allow law enforcement and tax authorities to requisition this information when they believed it would be relevant to an investigation. All of these changes came into force in 2019. Since then, nearly all provinces have followed suit and enacted similar amendments in their respective jurisdictions, and now our government is taking a significant step toward a more transparent marketplace.

Through this bill, we are seeking to implement a pan-Canadian registry of the beneficial ownership information collected by corporations. This is a bold and significant undertaking that we are doing as a government.

First and foremost, it would strengthen Canada's efforts to prevent and combat financial crimes by providing law enforcement agencies with timely leads on potential suspects, witnesses and evidence. The registry would also facilitate tax administration and the identification and seizure of suspected proceeds of crime and terrorism financing. More generally, the registry would improve corporate accountability and thus help protect the public, improve trust in business institutions and ensure a well-functioning marketplace.

Simply put, increasing beneficial ownership transparency will enhance Canada's good international reputation as a safe, fair and competitive place to do business and provide even greater legitimacy to law-abiding Canadian businesses.

Unfortunately, over the years, some individuals have managed to take advantage of Canada's corporate framework to try to hide assets and hide other criminal activity. We need to work together to tackle this unacceptable practice.

In budget 2022, our government announced plans to accelerate the creation of a public beneficial ownership registry. Obviously, since corporate law is a shared jurisdiction, the registry will apply to the approximately 500,000 entities governed by the Canada Business Corporations Act. However, in developing the registry, we will ensure that provinces and territories that agree to join forces with us to combat tax evasion will have access to that shared data.

I will note what Bill C-42 would amend.

The amendments proposed in Bill C-42 represent the second series of changes to the Canada Business Corporations Act in relation to the creation of the registry. The first series of amendments, which were adopted by Parliament last June, would require federally incorporated companies to proactively submit information on their beneficial owners to Corporations Canada on an annual basis or when a change of control occurs. They would also allow Corporations Canada to disclose all or part of that information to an investigative body, the Financial Transactions and Reports Analysis Centre of Canada, otherwise known as FINTRAC, and other prescribed entities.

Furthermore, the amendments proposed in Bill C-42 would require corporations to collect and send additional information about their individuals of significant control, namely residential address and citizenship. They would also require that Corporations Canada make publicly available a portion of this information, while introducing an exemption regime for certain at-risk individuals, including minors. The bill also includes protections for whistle-blowers, bolsters investigation powers of Corporations Canada and creates new penalties to ensure robust compliance with the new regime.

Bill C-42 further proposes consequential amendments to other federal statutes, namely the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act, to facilitate information sharing and data validation in order to maintain the accuracy of the information in the registry.

Let me elaborate now on a few key features of the upcoming registry that deserve highlighting.

First, Bill C-42 would adopt a charter-compliant, made-in-Canada balance between corporate transparency and the protection of privacy. A number of key elements of information, including the name and address of each individual with significant control, would be publicly accessible and searchable. Other more sensitive data points, such as date of birth and citizenship, would only be available to law enforcement and certain authorized entities.

In addition, Bill C-42 proposes to permit exemptions from publication for minors as well as individuals who are incapacitated or who fear for their safety. All in all, this would ensure the registry is useful to foreign law enforcement agencies and regulated entities under anti-money laundering legislation, as well as media and not-for-profit organizations, while ensuring that it is not being misused for fraud, discrimination or other nefarious activities.

Second, the government is making a significant effort to ensure the integrity of the data available to law enforcement and the public. The experience of other jurisdictions has shown that the value of a registry is directly correlated to the accuracy of the data it contains. If the information is not current or reliable, police, tax authorities and financial intelligence analysts will stop relying on it, which would defeat the purpose.

For that reason, the government is proposing a rigorous system to ensure compliance, and it will include administrative and criminal penalties.

For example, companies that fail to provide information about beneficial ownership to Corporations Canada may be prevented from obtaining a certificate of compliance, which is often required to support a loan application or to enter into a contract with a supplier or even a potential buyer.

Corporations Canada also has the power to carry out the administrative dissolution of a business, which is a powerful deterrent to repeated and extended lack of compliance.

From a criminal law perspective, an administrator or manager of a business who knowingly violates the requirements for beneficial ownership transparency could be fined up to $200,000 or be sentenced to six months in prison. These are among the harshest penalties in the world for this type of offence.

The government is also taking a robust ecosystem approach to data verification and validation. The director of Corporations Canada would, to begin with, be empowered to request proof of the steps taken by a corporation to verify its beneficial ownership information, enabling the creation of a risk-based audit system. Whistle-blowers would be explicitly protected to incentivize the disclosure of corporate wrongdoings, and consequential amendments would ensure that the information can be cross-referenced with relevant data collected by the government pursuant to the Income Tax Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Third, I want businesses to know that we have made and will continue to make every effort to limit the administrative burden of the new requirements. The government is well aware that the vast majority of business corporations are small and law-abiding and wants to ensure Canada remains a place of choice to invest and grow.

The bill would minimize the administrative burden by leveraging existing intake and reporting mechanisms that businesses incorporated federally are already familiar with. Corporations would, for example, have to report their beneficial owners on an annual basis, which aligns with the annual updates they are already required to file on other corporate matters. The requirement for corporations to report information within 15 days of a change also aligns well with the requirement already in place for directors.

The government would also assist corporations by publishing guidance documents and engaging in education efforts to ensure corporations are not unwittingly failing to comply with their new obligations.

Now let us talk a little about collaboration with the provinces and territories.

We started working on beneficial ownership transparency with the provinces and territories just over five years ago, and that successful collaboration continues to this day.

We recognize that corporate law is an area of shared jurisdiction and that any legislative amendment to facilitate the collection of information on beneficial ownership under that umbrella would ultimately be up to the discretion of each legislature within the Canadian federation.

That being said, we are very aware of the importance of maximizing coverage to ensure that the pan-Canadian registry reaches its full potential.

That is why we are working hard to ensure that the federal registry is scalable and provides access to the beneficial ownership data held by provinces and territories that agree to participate, as we committed to doing in budget 2022.

I am pleased to see that the Government of Quebec will soon launch its own beneficial ownership registry, and my department is in regular contact with the Quebec teams to ensure the interoperability of our registries.

One of my colleagues in the House even told me that the registry was online as of today. We will do the same with all of the provinces and territories that have this same objective of enhancing corporate transparency.

Let me say a word about international best practices. Canada is working closely with many of its international counterparts that have introduced or are about to introduce a beneficial ownership registry. The majority of the G7 and Five Eyes countries, as well as 112 other countries, have promised to put this in place, but few have finalized the implementation. With financial crimes being increasingly cross-border, which I think all colleagues can agree on, we need to contribute to the global fight against these crimes.

Indeed, as a founding member of the Financial Action Task Force, which is the intergovernmental standards-setting body for financial transparency led by the G20, it is incumbent upon Canada to act in tandem with other countries and international partners to stem further proliferation of illicit corporate activity. Strengthening beneficial ownership transparency, as we are doing through this bill, would allow Canada to do its part in the global fight against financial crimes and align with international best practices.

Let me conclude with a few remarks.

The government has committed to protecting Canadians from money laundering, terrorist financing and tax evasion and avoidance, while ensuring that Canada remains an attractive place to do business.

Making beneficial ownership information publicly available supports broader corporate transparency, good governance and trust. Police and tax authorities will have ready access to the data they need to enforce the law; regulated entities such as banks and realtors will have a new tool to support their due diligence obligations; investigative journalists and NGOs will be better equipped to trace ownership across entities and jurisdictions; and entrepreneurs and consumers will know whom they are doing business with, injecting more trust in the marketplace.

We are already hearing from transparency organizations that this bill would be a massive blow to money launderers. I call on my colleagues in the House from all sides to join forces and support it. I think Canadians expect that from all of us.

I encourage all parties to support Bill C-42 and work with the government to ensure that it is passed quickly. I think that is necessary and it is exactly what Canadians want. The sooner the legal framework is in place, the sooner we can launch the registry and reap the benefits of enhanced transparency.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Madam Speaker, Canada is a safe haven for money laundering. It is a known fact, and it is getting worse by the day.

Would the minister be able to advise us of the following? First, how much would this bill limit or downsize the money laundering market in Canada and, second, what is the amount of money laundering in Canada that is known to the minister or the government?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Madam Speaker, my hon. colleague knows I have enormous respect for him, and I take it from his comments that he will be supporting Bill C-42.

The genesis of Bill C-42 is to combat money laundering. It is to make Canada best in class. It is to make Canada a leader in the G7. The faster this House can pass Bill C-42, the better off we will all be. I dream that we could even do that by unanimous consent so that we can move to phase this in very quickly. The reason is that the longer we wait, the less we will be capable of fighting the fight that we need to fight, not only domestically but internationally. We want the public registry to be operational by the end of 2023.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I thank the hon. minister for this important bill and for his speech, which was very informative. We learned a lot, which is good. Obviously, the Bloc Québécois supports Bill C-42, and we are prepared to do what it takes to get it passed more quickly.

We were concerned about respect for jurisdictions and the different securities, but everything is there. As the minister said, this has been a successful collaboration. As I told him, the registry has been online in Quebec since 9 o'clock this morning. The Government of Quebec is the first government in North America to do this.

I have a bit of a technical question. If company A is owned by company B, which is owned by company C, then we can track down who the beneficial owner is, but what happens if a company is in another less co-operative country where there is no automatic information sharing, such as a tax haven? Will Bill C-42 make it possible to identify the real owner?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Madam Speaker, I want to thank my colleague. Every one of his colleagues holds him in high esteem, and he is always there to defend Quebec's interests and to help advance all financial matters and tax measures in the House.

On behalf of the government, I want to note his support for Bill C-42, which is important, because the more time that goes by, the longer we delay implementing measures to combat fraud and various crimes.

To answer his question, I will say that there are now 112 countries that have committed to implementing similar measures to combat illegal activities—that is, various types of fraud—and to ensure greater rigour and enable different organizations to identify the beneficial owners.

The act provides for measures requiring heads of corporations to trace beneficial owners with a positive obligation to ask questions and obtain that information.

It is clear that we will need to continue working with our partners around the world.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, we know that a well-designed registry is needed to facilitate the enforcement of sanctions, as in the case of Vladimir Putin and his Russian oligarchs.

We also know that it is important to ensure that the most wealthy Canadians pay their fair share. I am very pleased to see progress in that regard. We also know that the participation of the provinces and territories is vital to the success of this type of registry. Could the minister provide an update on the state of negotiations between the federal government and the provinces and territories?

Does he have some idea of when all the provinces and territories will be contributing to the federal registry?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Madam Speaker, I thank my colleague for his important question. This is an esteemed colleague who, I believe, is also prepared to move this bill forward quickly. As I was saying, it is in Canada's best interest for us to adopt such a framework.

My colleague will have noticed that we ensured that this registry would be capable of what is known as interoperability. We chose to adopt a standard, in fact, the international standard, to enable this interoperability, not only with the registries that we hope the provinces and territories will adopt but also with international registries.

As my colleague was saying earlier, there may be businesses located in other administrative regions. Canada is positioning itself as a leader. Obviously, the House will send a strong message to the provinces and territories. Consequently, I implore my colleagues from all parties to support this bill. I think we will be able to count on support from the NDP and the Bloc Québécois, as well as, I hope, our Conservative colleagues to take a step in the right direction so that we have measures to ensure transparency and allow us to fight tax evasion.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, proposed subsection 21.‍303(3), “Exemption on application”, notes, “the Director may choose to not make it available to the public, subject to any terms that the Director thinks fit”. Under proposed subparagraph 21.‍303(3)(b)(iii), at the top of page 4, it says, “prescribed circumstances apply to the individual.” There is a lot of leeway in the bill, as it is currently written, for the director of Corporations Canada to determine what information could be exempt.

I am wondering if the government is open to some clarification or any type of schedule that we could develop to ensure that the maximum number of corporations that should be in the registry are in fact covered. I would also note that the points on interoperability with the province will likely need some clarification as well, just to ensure that the registry is in fact pan-Canadian.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Madam Speaker, I would like to thank my esteemed colleague for his contribution, and I think his words lead us to believe that the Conservatives will be supportive.

On the first issue, there are some exemptions. One that comes to mind is around minors, for example, and other people who could be at risk when providing that information. What we need to know is that what would be public and searchable would be the name and address of the beneficial owner. What law enforcement authorities would have access to, in addition to that, would be the date of birth and citizenship. We can have a split to make sure that we provide as much relevant information as possible to the public and other entities to be able to search, but I would be open to see what we can do on that, with the caveat that we go fast. The number of exclusions is very limited and they are based on consultation.

With respect to interoperability, my colleague will have noted that we developed and used the beneficial ownership data standard, or what we call BODS, which is the international standard, exactly to make sure we can have as many people as possible be able to contribute and ultimately provide the level of accuracy and searchability that we would want to see.

I welcome the member's contribution.

[Chandra Arya, Liberal, Nepean, ON]

Madam Speaker, corporations exist basically to allow individuals to channel their capital for the benefit of making profits. I think the corporation as we know it came into existence in the 1844 act in Britain, and the shareholders were granted limited liabilities in 1855. In 1866, the United States code declared that a corporation is a natural person.

The key thing that I want to focus on is the tax evasion and tax avoidance. Supreme courts around the world have ruled on the difference between tax avoidance and tax evasion and identified that if there is any transaction in the process followed by an individual or a corporation that does not have any impact other than to reduce or eliminate tax, the transaction can be declared null and void.

Coming back to the corporations here, why should the public not be aware of individuals who are investing money into corporations, including their citizenship being known? It is not the fundamental right of any individual that he or she can be a shareholder. It is a privilege offered by the states through various acts, so why should the public not be aware of individuals who are the shareholders, including their citizenship—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

I have to give the minister time to answer.

The hon. minister.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Madam Speaker, my hon. colleague is a key member of our team and is always there to make sure that when it comes to financial matters, this government listens to different stakeholders.

What we see is a kind of compromise that we have been able to draw based on best practices, also with the OECD. What is going to be made public is the name and address. What law enforcement authorities will have access to is date of birth and citizenship.

There are reasons for that in terms of discrimination and misuse of information. I think that, on balance, we strike the right balance in the act, but I take the member's point and I want to thank him for his contribution. He is a very esteemed member of our team.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, I thank the minister for tabling this bill today.

We are here today to debate Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts. The government's stated objective in introducing this legislation is to protect Canadians against money laundering and terrorist financing, deter tax evasion and tax avoidance, and make sure Canada is an attractive place to conduct business.

The Conservatives support the concept of a national public registry of beneficial owners of companies. This is an important tool in the fight against money laundering and terrorist financing. The Cullen commission in British Columbia has also called for the creation of such a registry. Created in 2019 by Premier John Horgan in response to four reports highlighting the alarming number of money laundering cases in my province, the Cullen commission made 101 recommendations. Recommendation 52 called on the province to work with its federal, provincial and territorial partners to ensure that, by the end of 2023, a publicly accessible, pan-Canadian corporate beneficial ownership registry is in place.

However, much can be done to improve this bill and guarantee that it is effective. The Conservatives believe that in order to reach the objectives of this registry, the bill must be amended. First, the government must work with the provinces and territories to ensure that it is a pan‑Canadian registry. Second, there must be harsher sanctions for contravening the Canada Business Corporations Act, or the CBCA. Third, the threshold for significant control must be lowered. Fourth, the functionality of the public registry must be clarified.

In budget 2018, as the minister noted, the government amended the CBCA to introduce requirements for corporations to maintain a registry of individuals with significant control of the corporation. “Significant control” is defined as someone owning or controlling at least 25% of a corporation's shares. Budget 2022 added a requirement that corporations provide their registers to the government every year and to report any new information to the registry within 15 days. This bill would require Corporations Canada to make public some of the information collected under the 2022 reporting requirements.

Conservatives have long called for more action to combat money laundering and terrorist financing, so it is good to see the bill tabled in Parliament today. However, as I noted in French, there are many gaps in the legislation, and it is our objective to see some concrete amendments and considerations brought forward to this bill at the committee stage.

I wanted to take a minute to talk about the impact and history of money laundering. For far too long, Canada has had a reputation as a safe haven for dirty money. Our current laws that in place to combat money laundering and the proceeds of crime are perceived internationally as being weak. This has led to a wave of dirty money being laundered in Canada, particularly in my home province of British Columbia. Casinos, real estate, businesses and more have long been used to launder money in B.C., and the RCMP, local law enforcement and FINTRAC, in some cases, have been almost powerless to stop it.

When the Panama papers were leaked in 2016, it was exposed that international criminals have long exploited the gaps in Canada's corporate beneficial ownership regulatory scheme to engage in corrupt conduct through federally, provincially and territorially administered corporations. Organizations such as Transparency International have been calling on Canada to create a public registry of corporate beneficial ownership for a long time. As I noted in French, the Cullen Commission in B.C. has also called for this registry. Among the recommendations was a pan-Canadian registry to be established in 2023.

The commission's report highlighted how drug dealers utilize numbered corporations to stash death money from the fentanyl trade, then take that drug money and put it into the housing market in British Columbia, which has led, in some cases, to prices being driven up. Had a registry been in place sooner, perhaps less money from drug deals would have been laundered and perhaps it could have prevented lives from being lost. A corporate registry does have a lot of consequences, and that is why our party supports it.

Now I will briefly get into some of the shortcomings we see in this bill. The first is the lack of any requirement of the government to seek information-sharing agreements with the provinces and territories so the registry can be effective. The corporate registry will be only as strong as the provinces and territories that opt into it. Without them on board, this registry would only apply to about 5% of corporations in Canada. Thankfully, some provinces and territories have already taken the lead on this front and have been implementing registries since the changes to the CBCA were announced in last year's budget. Without all of them on board, criminals will just take their dirty money to the jurisdiction with the least strongest regulations.

It is my hope that, at committee, amendments will be adopted to ensure the federal government is required to pursue agreements with the provinces and territories on information sharing to ensure the registry is truly pan-Canadian and interoperable. I can note that, with many of the registries in place, there is a varying degree of information shared. Many do follow the amendments put forward in budget 2022, but I still think there is a lot of work we can do to make sure our registry is comprehensive.

The second is that we need to look at strengthening some of the penalties. Parliament needs to consider the registry in the context of the ability of law enforcement to combat the use of illegal funds. The current penalties under the CBCA, and the new ones proposed in Bill C-42, may be too weak to have the desired effect. We must ensure that corporations are compliant with the rules for the registry to be effective. The government should consider strengthening the penalties and making some offences indictable. Many of the fines could simply now be perceived by some corporations using illicit funds as the cost of doing business.

Another issue with the penalties is that they do not punish corporations that violate the act nearly as strongly as they do individuals. All of the offences that currently exist, and those proposed in this bill that apply to corporations, are punishable by a fine of I believe $5,000. However, the strongest penalty applying to individuals is found under section 21.4 of the CBCA, which has a fine not exceeding $200,000 and a term of imprisonment of six months, as the minister also mentioned. We must ensure that corporations that do not comply with these regulations are held just as accountable as the individuals involved. A $5,000 fine would be chump change for some people who would be affected under this proposed bill.

We need to also look at the threshold for disclosure. The CBCA currently defines significant control under section 2.1 as an individual who owns or controls a significant number of shares in a corporation, which is defined as 25% or more. This is quite a high threshold. Currently, security regulators in Canada, for example, Ontario Securities Commission, have a set threshold of just 10% for public disclosure requirements. Regardless of where we set the threshold, people will try to avoid reporting by ensuring their ownership or control is slightly below it. There are lots of ways for individuals with significant control to pass by the threshold. However, a lower threshold means fewer opportunities for criminals to simply slip under the radar.

We also need to be cognizant of how this will apply in the context of stacked ownership structures and trusts. It would be wise of the House to consider aligning these regulations with those currently imposed on publicly traded companies by amending this bill to change the threshold to 10% and look at the impact of trusts in very close detail at the committee stage.

We also need to look at the functionality of the registry. When it comes to how this registry will work and what information will be made available to the public, this bill is concerningly quiet. It does outline in section 21.303:

(1) The Director shall make available to the public the following information sent to the Director under section 21.‍21 for each individual with significant control:

(a) their name;

(b) their address for service, if it has been provided to the corporation;

(c) their residential address, if their address for service has not been provided to the corporation;

(d) the information referred to in paragraphs 21.‍1(1)‍(c) and (d); and

(e) any other prescribed information.

The first issue here lies in paragraph (e). What exactly does it mean by “prescribed information”? This needs clarification, as the information made publicly available must keep in mind privacy interests. I will note the minister did partially answer my question during his debate when he said citizenship would not be required in the registry. I will take a moment to comment on that.

What if an individual in another country who does not reside in Canada has a corporation in Canada? Should citizenship information in the context of a foreign owner of a Canadian corporation apply or, as another member in the House of Commons mentioned, in the case of a stacked corporation where certain shares of the company are owned by an individual in another country, should citizenship information be applied in that context? In the context of terrorism and money laundering, perhaps it would be to our benefit in some cases where citizenship is, indeed, known.

I look forward at the committee stage to really delve into this in detail because I think everyone in Canada wants to get this registry right. Everyone in Canada wants to give our law enforcement the tools it needs to finally begin combatting money laundering. We have seen the impact of it in British Columbia. We have seen the empty condos and the illicit funds from the drug trade being used, through corporations, to launder that money. We need to move away from what many people call the “Vancouver model” to take action right now. The commitment of the Conservative Party is to work with the government to ensure that our laws are strengthened, and that fewer lives are lost because of the drug trade, by establishing some form of a beneficial ownership registry.

Finally, I would like to touch upon how the registry would function. The bill is very vague in what prescribed circumstances would be. Will law enforcement still be able to access the information of those exempted for the purposes of an investigation? Another issue with the guidelines for the registry are the exemptions that have been put in place. We do know, as the minister mentioned after my question, that it would not apply to people 18 years of age or younger, but we need to strengthen the language around exemptions.

In closing, this bill is a good first step. That is why the Conservatives will be supporting it at second reading. However, key oversights must be addressed during the committee process. We must ensure that the penalties for violating the act are strong enough, and I am not certain that summary convictions are strong enough. We must ensure that law enforcement and FINTRAC have the ability to easily access the information they need to track down those laundering money and financing terrorism. We must ensure that corporations involved in criminal activities are held just as accountable as individuals, and for the registry to be effective, we must make the participation of provinces and territories a key priority.

I look forward to working with my colleagues on the industry committee to strengthen this bill and ensure it truly provides transparency to the public and gives law enforcement the tools necessary to track down money launderers and those funding terrorism. More must be done to reduce the risk of corporations being misused for illicit activities such as money laundering and tax evasion.

[François-Philippe Champagne, Liberal, Minister of Innovation]

Madam Speaker, my hon. colleague mentioned a number of things that are really fundamental in illicit money being used in real estate, for example, in the city of Vancouver, which he mentioned.

I want to thank the member for being on board with Bill C-42. The best way to do more to combat illegal activities and increase corporation accountability is to adopt Bill C-42. How quickly are the Conservatives prepared to work with the government to put an end to money laundering in Canada and adopt Bill C-42?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, the objective of the Conservative Party on this legislation is to have a robust debate, in good faith, at second reading. There are a lot of experts in every party who have information on corporate trusts and how corporations are structured in Canada, and I think every party has something to contribute on that. We want to move quickly on this bill, but we also want to have a robust debate.

Our objective is to get the bill to committee where we can have a robust study. I could perhaps share more with the minister, and maybe our House leaders can determine what the priority of the House of Commons is with respect to seeing this bill pass.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I thank my colleague for his speech. I want to point out that his French is very good, and tell him that I really appreciate the fact that he gave part of his speech in French.

I was also impressed with the quality of his speech and the research and thought that went into it. Like him, I recognize that Bill C‑42 is a step in the right direction, but that there is still much to do to tackle money laundering, crime and the use of tax havens.

My colleague raised certain concerns. He spoke about possible amendments to be made to Bill C‑42 to improve it. I would like him to present them again and provide a brief explanation.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, some of these amendments would seek to determine the role of the provinces and territories in guaranteeing the interoperability of this registry. We must also study the Canada Corporations Act threshold.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, I would like to thank the hon. member for Mission—Matsqui—Fraser Canyon for his remarks, both for their substance as well as for their tone. So far, this morning's debate has been a great example of what we could accomplish as legislators if we avoided the temptation of hyperbole and we focused on the content of legislation.

The member talked a little about penalties and judging whether the penalties that are in the initial draft of the legislation are adequate. I wonder if he wants to speak a little more to that question. Perhaps he could give the House some sense of whether there are existing standards he thinks we should be looking to in order to come up with appropriate penalties and how we might determine adequate penalties.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, regarding penalties, I want to think of the worst-case scenarios. For years, we have heard so many stories in British Columbia about why the Cullen Commission was put in place, about the impact of money laundering and the billions of dollars that have been laundered into corporations, largely at the provincial level.

I do not want any fees or penalties to be seen as the cost of doing business for certain corporations. We need to look at strengthening those penalties. We need to hear from a suite of experts in law enforcement, maybe experts from FINTRAC and law enforcement at CSIS, to ensure that we get this right and that we use this tool to provide some trust for Canadians in our law enforcement institutions to be able to make a difference.

I do not have specifics. All I know is that, at $200,000 or in some cases $5,000, it would be seen as the cost of doing business. We want to make it actually hurt when someone tries to break the law in Canada.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Speaker, there are a number of areas of clarification, in my mind, that need to be addressed, and perhaps it would be done through committee.

One is the type of asset that is caught by this legislation. For example, a beneficial owner is someone for whom an asset is held in trust. There could be shares of a corporation held in trust by a shareholder for someone else, whether that shareholder is an individual or a corporation. Also, the assets of a corporation could be held in trust for an owner or a group of owners.

One of the things that I would like to have clarified is whether this just applies to shares being held in trust for beneficial owners or if it actually applies to the assets of a corporation that are held in trust for owners. What happens, for example, when those beneficial owners, in turn, decide to set up trust arrangements with other people holding their beneficial ownerships in trust for others?

Second, there are 500,000 corporations under the CBCA. There could literally be tens of millions of these trust arrangements in existence across the country. What resources would be dedicated to making sure we could track them?

Finally, I was a little concerned that personal addresses would be published. Most of these trust arrangements are legitimate business practices and a much smaller number are for money laundering. I just want to highlight that—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

I have to give the hon. member for Mission—Matsqui—Fraser Canyon the time to answer.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, I appreciate that very important question from my colleague from Winnipeg. One of the big gaps in this legislation is in clarifying the relationship between significant interests and the role trusts play in corporate structures at all levels of corporate registries in Canada right now and the impact that would have on the interoperability and the overall effectiveness of a corporate registry as we move forward. The member also pointed out the significance of this registry in the context of those provincial bodies. We need to make sure that there is interoperability, of course, to ensure its effectiveness in completing its stated goals.

[Chandra Arya, Liberal, Nepean, ON]

Madam Speaker, I agree with my hon. colleague on the question of disclosing the citizenship of the shareholders of a corporation. There should not be any legal protection offered to foreigners who invest in Canadian corporations. We have been seeing that corporations are being incorporated with no other purpose than to have transactions and processes that lead to nothing but tax avoidance and, in some cases, even to money laundering.

I want to touch on something the member mentioned about the significant shareholding and the threshold, which is 25% in some jurisdictions and 10% in some jurisdictions. As the member very clearly stated, that is a loophole where, very easily, five people could form a corporation with 20% each or 11 people could form a corporation. Therefore, should there be any threshold at all that prevents the disclosure of the beneficiary?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, I appreciate that my colleague from Nepean outlined the issue that probably needs to be studied the most in this legislation, and that is significant interest. I do not have a specific answer to his question right now, but we need to have that debate in Parliament about the impact of significant interest and corporate stacked ownership structures that need to be viewed in the light of money laundering and tax avoidance or tax evasion.

I will just quickly touch upon the impact of addresses as well, which is another point of this bill, and it relates to citizenship. We need to clarify our charter obligations regarding individual privacy, but we also need to make sure to be practical that in some cases Canadian corporations are used for illicit purposes and in some cases we should know the citizenship of those individuals who are using said corporations.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, what do the Panama papers, the Pandora papers and the Paradise papers all have in common? They are leaks that revealed who was hiding behind shell corporations in tax havens, those anonymous companies for which it would be otherwise impossible to determine actual ownership. Without those leaks, it was only possible to identify the names of the administrators, typically a big corporate law or accounting firm.

By lifting the corporate veil, these leaks helped identify wealthy fraudsters hiding money from the tax man or criminals hiding dirty money out of sight. When it is impossible to identify who is hiding behind a shell company, that opens the door for profiteers and fraudsters of all kinds, people who refuse to pay their fair share of taxes at the expense of everyone else, people who recirculate ill-gotten gains in the real economy by hiding behind secret companies. It is not normal to need to rely on leaks, whistle-blowers, hackers or journalists to find out what is behind these companies. That information should be public.

There is nothing like transparency for combatting fraud. That is essentially what Bill C-42 addresses. It amends the Canada Business Corporations Act to force the directors of federally incorporated businesses to report their real owners to Corporations Canada. Then, Corporations Canada can create a registry of the real company owners, a public registry that anyone can consult. Bill C‑42 will introduce a bit of transparency, which is a good thing. The Bloc Québécois supports the principle of Bill C‑42, and I encourage all parliamentarians to do the same.

Before I get into the details of the bill, I want to tell members a secret. When I saw that the government had introduced a bill to amend the Canada Business Corporations Act, I was worried. As members know, business ownership and property rights fall under provincial jurisdiction. In Quebec, these things are governed by the Civil Code. Every province has its own securities commission. In Quebec, we have the Autorité des marchés financiers.

However, over the last several years, Quebec and the provinces decided to coordinate and harmonize their respective laws. Since they all have very similar legislation, registration with the Autorité des marchés financiers is automatically recognized by all of the provinces. That means that a Quebec company can easily raise capital and do business outside Quebec through mutual recognition under what is known as the passport system.

Since this works well, Ottawa has no reason to interfere, there is no need for federal securities regulations, and Quebec's jurisdiction over financial matters would be respected. Without that respect, we would likely see Toronto become the centre of financial activity at the expense of Quebec, particularly Montreal's financial sector.

However, this is viable only if governments continue to work together and essentially harmonize their laws. That is why I was concerned when I saw that the government wanted to change the Canada Business Corporations Act. If Ottawa acts unilaterally, as this government all too often does, if it has not aligned its efforts with Quebec and the Canadian provinces, if the laws are no longer similar, the mutual recognition system will not be as successful. Ottawa will then have the excuse it is looking for to justify its desire to centralize everything, as it has been trying to do for three decades.

However, I did breathe a huge sigh of relief when I saw Bill C-42. As I mentioned earlier, Bill C‑42 will establish a searchable public registry of the real owners of businesses. This commitment to transparency reflects a unanimous decision made at the G20. It has been implemented properly in Canada in a manner that respects each party, so I say bravo. The federal government and the finance ministers of Quebec and all the provinces have coordinated their efforts and agreed to work together, while respecting one another's independence.

In 2017, they all independently agreed to change their respective laws to require companies to collect, in their own registries, the data needed to identify the real owners. At the federal level, this was done in June 2022 with the passage of Bill C-19, a budget implementation bill. This data is beginning to be collated and made available to the authorities in the event of suspected fraud.

In 2018, they came to an agreement on how companies were to share this data with their respective governments and how the governments were to make the data public. That is what we are debating today. There was no need for federal standards where Ottawa would put itself in charge and tell Quebec what to do. Everything was done respectfully.

The National Assembly of Quebec passed Bill 78 in June 2021. This legislation reflects the agreements made in 2017 and 2018. Quebec was the first government in America to pass such legislation. It is interesting that this debate is being held today, on March 31, 2023, because Quebec's Bill 78 goes into force today. Since nine o'clock this morning, the registry of real owners can be consulted in Quebec on the site of the Enterprise Registrar.

Since not all businesses have provided their information as yet, the search engine is not yet active, but it will be soon. It will be operational within the year. With the passage of Bill C‑42, the federal government will do the same for federally incorporated businesses. The provinces have passed or are preparing to pass similar legislation.

I see that members' statements will commence momentarily. I will continue my speech once we resume debate on this bill.

The House resumed from March 31 consideration of the motion that Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts, be read the second time and referred to a committee.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I would first ask for the consent of the House to share my time with my friend, the one and only member for Abitibi—Témiscamingue.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Does the hon. member have the unanimous consent of the House to split his time?

[Some hon. members]

Agreed.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, during the first part of my speech, in March, I spoke in favour of this bill. It is a good bill. It is a step toward transparency that will help fight tax evasion and fraud.

The bill is respectful of the provinces. In fact, Quebec's registry has been in place for almost a month.

However, the tax cheats who were exposed in the Paradise papers did not create their shell companies in Canada; they created them in tax havens. The bill does nothing to address that. The work has only just begun.

Cracking down on fraudsters who use tax havens requires a global registry—not just a registry of the real company owners, but also a registry of real beneficial owners of trusts. I am thinking, for example, of the real beneficial owners of the Isle of Man trusts that KPMG Canada created for Canadian tax evaders, the ones who were granted amnesty by the Canada Revenue Agency. It sounds like a huge undertaking, but it is not. In fact, this registry already exists to a large extent, and it is maintained, for one, in Luxembourg by a consortium of financial institutions. Even tax cheats like their banks to know they have assets somewhere; it is good for their credit.

This registry is available to financial institutions, but not to governments that want to go after fraud. I think we can all agree that there is something wrong with that. Transparency, public registries and so on are excellent tools against fraud, but they do nothing against profiteers, against those who take advantage of all the loopholes in the Income Tax Act to use tax havens legally. Those individuals do not need to hide their income. All they need is a good accountant to make sure their income is not taxable, even when it is declared.

The United States forced Canada's hand by imposing its idea of endorsing a 15% minimum global tax rate at the G20. The latest budget introduces Joe Biden's minimum global tax rate. Using tax havens will become less attractive, but the government is doing the bare minimum to fight tax havens. Income repatriated from tax havens that have information exchange agreements with Canada remains tax-free. This has to stop.

Yes, we will support Bill C-42, but it does not go far enough. A registry is good, but tax fairness is better.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, a part of dealing with the issue is bringing in legislation, but there are also budgetary measures that the government has taken in the last few years. We have beefed up the resources for CRA: A few budgets back it was close to half a billion dollars, and several hundred million dollars followed that.

I am wondering if my colleague could provide his thoughts. Yes, the legislation is really important, but along with that legislation one has to establish, as we have, the financial resources, in good part, to be able to deal with the issue at hand.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I have a simple answer: Yes, but all that is not enough.

I want to talk about the example I gave at the end of my speech. In committee we looked at the issue of who really profited from the Isle of Man trusts created by KPMG for Canadian tax cheats. We worked for a long time on that issue.

In the United States, when the same thing was done, there were investigations, criminal prosecutions and even jail time. The IRS, the Canada Revenue Agency counterpart, put a stop to it. Here, there have been no criminal prosecutions and no jail time. Even though we have laws, even though we have the funding, we do not have the will. The minister refuses to use her discretionary authority to make the CRA do more.

We must change the way things are done by this government and the CRA, because we can see that our laws and funding are still not enough.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Speaker, allow me to return to the KPMG issue and the tax fraud scheme for which it faced criminal charges in the United States but was cleared of wrongdoing by the Canada Revenue Agency.

At the time, we reminded the Minister of National Revenue that she had the power, by law, to launch an investigation that would have been led by a Tax Court of Canada judge. The minister still insists that the CRA is independent and that she cannot launch an investigation. Clearly, she is unfamiliar with the law.

Despite all these lofty legislative initiatives, I wonder what my colleague thinks about the message this is sending about Canadian leadership in fighting international tax fraud.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I thank my colleague and friend from Mirabel for the question.

The minister came to committee and told us that she did not want to get involved in this, that she considered the Canada Revenue Agency to be independent. However, Mr. Lareau, a global tax expert, came to committee and told us that the minister was the only person in the country who had the power to launch an investigation. She has the power but is choosing not to use it, while the government is choosing to leave her in her position. It is not good enough, and it is unacceptable.

We are seeing some progress being made worldwide under the leadership of the United States. The Biden administration is saying enough is enough. The wealthy need to pay a minimum of 15%. Now the G20, the OECD and other groups of rich countries are following suit.

From day one, Canada has systematically been lagging behind others. It also does the minimum and maintains this system of impunity. The message being sent to KPMG and potential beneficial owners is that there will be no consequences if they try; at best, they will pay less taxes, at worst, they will have to pay it back. The message that is being sent is unacceptable.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, we know that the federal registry is not enough to fight money laundering because most small and medium-sized businesses in Canada are regulated by the individual provinces and territories.

Does my Bloc Québécois colleague think that the Government of Quebec could enter into an agreement with the federal government to improve the federal level's capacity to fight money laundering while respecting Quebec's jurisdictions?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I thank my hon. colleague for his question, which he asked in excellent French. I really appreciate that.

In my opinion, what we are seeing in this bill is a possible harmonization with the provinces. It seems to be respectful of the rights of the provinces. For example, Quebec has had its own registry for a month now. This will require collaboration and information sharing, as with all countries around the world, but things seem to be on the right track. Obviously, we must always do more to fight against money laundering, and our job is to remain vigilant to ensure that everything works well and that we can do more.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, I rise today to speak to a bill that is of crucial importance to the Quebec and Canadian economies, specifically, Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts.

Bill C-42 was introduced in the House of Commons to modernize the Canada Business Corporations Act and make it more competitive and adapted to the current needs of businesses. The amendments to the act seek to enhance the transparency, responsibility and sustainability of Canadian businesses while ensuring their competitiveness on the international stage.

The bill has several important provisions. First, it introduces an obligation for corporations to declare their real economic interests to enhance transparency and fight money laundering and terrorist financing. This provision will also help prevent corporations from hiding their true ownership behind opaque structures and improve the public's confidence in the integrity of the corporate system.

The bill also brings in a new corporate social and environmental responsibility strategy. Corporations will be held accountable for social, environmental and governance factors in their decisions and their trade action. The purpose of this provision is to encourage businesses to adopt a long-term vision and make a positive contribution to society in addition to generating profits.

My colleague from Joliette, who is also our finance critic, had questions the last time this bill was introduced. His question was the following: If business A belongs to company B, which belongs to corporation C, can we find out who the beneficial owner is? What happens when a business is in another, less co-operative country where information is not automatically shared, like in a tax haven? Will Bill C‑42 allow us to identify the true owner?

This question needs to be answered. Countless reports and investigations on multinational corporate activities indicate that organizational charts and operational structures are not always clear. The takeover of national security sensitive sectors or sectors that might jeopardize our supply chains is a real concern for our party.

The example we are talking about here of a company that is owned by a chain of other companies can create a situation where it is difficult to identify the real owner, particularly if one or more of the companies are located in countries that do not have automatic information-sharing agreements.

For example, I am thinking of two places in particular from a case I was looking at recently, where, at the centre of the company's complex structure were shell companies located in Labuan, a territory of Malaysia, and the British Virgin Islands, two places where strict laws and secrecy prevent the public and foreign courts from accessing information about the real owners of these companies.

The two shell corporations were involved in transactions in France, Brazil and the United States. How are those countries managing this issue right now? Does the existing legislation provide tools for better monitoring and more flexibility in dealing with the challenges of the ongoing technological transition? I hope so.

Although the new provisions of the bill improve the transparency of Canadian companies, they do not necessarily make it possible for Canadian authorities to identify the real owners of Canadian companies owned by entities located in uncooperative countries or tax havens.

In such cases, Canadian authorities may have to rely on other methods to identify beneficial owners, such as requesting information from foreign authorities, using agreements for mutual legal assistance or relying on other sources of information such as media reports or leaked documents. It is therefore important that the teams monitoring and conducting assessments are well equipped.

In February 2020, the Quebec government announced its intention to create a registry of beneficial owners of companies. Bill 78, an act to modernize legislative provisions respecting legal auditing, was introduced in the Quebec National Assembly in June 2020 and passed in December of the same year. Bill 78 contains provisions to create a registry of beneficial owners and make it public.

We could take a closer look at the challenges of setting up such a registry and determine where the various provinces stand on this issue. How will the registry work? I look forward to hearing from officials on this issue.

It is important to note that Canada has a number of information exchange agreements with other countries, including tax information exchange agreements that would allow Canadian authorities to access information from foreign companies operating in Canada.

These agreements have made it easier for Canadian authorities to identify beneficial owners, even in cases where companies are owned by entities located in uncooperative jurisdictions or tax havens. I would really like to have a chance to hear the opinions of experts, as well as some recommendations for conditions that could be considered for the next round of negotiations with certain countries.

The bill also includes amendments to strengthen shareholders' rights. It gives shareholders the right to vote on executive compensation and management succession plans. This provision will ensure greater transparency and accountability to shareholders, while increasing board members' accountability. We are pleased that some of our recommendations caught the attention of the department and have been included in Bill C‑42.

Finally, the bill introduces amendments to facilitate access to capital for Canadian corporations. It simplifies the process for issuing shares and eliminates some existing restrictions, making it easier and more efficient for companies to raise capital. In short, the act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts is a crucial bill for the future of our economy in Quebec and in Canada.

The proposed amendments aim to strengthen the transparency, accountability and sustainability of Canadian companies, while enhancing their ability to compete internationally. As a member of Parliament, I am certain that this legislation is necessary to protect the interests of Quebeckers and Canadians and to ensure long-term economic growth.

In conclusion, I would like to draw a comparison related to my duties as critic for sport, a field in which good governance has been raised as an issue. Governance and accountability are key factors in sport. Governance refers to the way sport organizations are managed and led, while accountability refers to the way actors involved in sport are held accountable for their actions.

In terms of governance, sport organizations must be managed transparently, effectively and fairly. Decisions must be democratic, and all stakeholders must have a say in the decision-making process. Governance structures must also be accountable to their members and to stakeholders.

Accountability in sports has to do with how those involved are held responsible for their actions. That can include the responsibility of athletes when it comes to fair play and following the rules and the responsibility of coaches and the heads of sports organizations when it comes to keeping players safe and promoting a healthy sports environment.

In the end, good governance and accountability are essential to ensuring the integrity and durability of sports. Sports organizations must be transparent in how they operate, accountable to their stakeholders and held responsible for their actions in order to maintain the trust and respect of fans and sports communities. It is unfortunate that the funding was established without a full understanding of what sports organizations would have to do to demonstrate real change. Obviously, I am thinking here of the government restoring funding to Hockey Canada.

We need to ensure that the intentions of Bill C‑42 live up to expectations, particularly those that will be expressed before the Standing Committee on Industry and Technology.

I therefore call on all members of the House to support this important bill and to work together to pass it as quickly as possible.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, creating a public, searchable corporate registry would ensure a much higher sense of accountability, and the government over the last number of years has expressed its interest in ensuring that everyone is paying their fair share when it comes to taxes and that there is more transparency. However, it is also important to recognize, as I did in the previous question I asked the member's colleague, that there have been significant amounts of financial resources allocated to the CRA. That money is there to support the idea of looking at who the people are who are paying taxes.

I am wondering if my colleague could provide his thoughts. It is great that Ottawa is doing it and the Province of Quebec is moving forward on it, but it is really important that we see consistency from coast to coast, with other provinces and territories also providing similar legislation.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, everyone must collaborate, but the federal government must show leadership and set an example on the international stage. It must send the message that it will no longer tolerate tax havens and fraudulent actions. For me, that is a problem. Let us take the Panama papers, for example. Quebec showed leadership. It recouped more money than the federal government, so yes, collaboration is important.

I have looked at Quebec laws. The co-operative financial sector, Desjardins for example, is governed by Quebec's laws, and I find that it is much more effective in fighting these types of situations. There are things to think about, of course, but the federal government must be able to set the example and put an end to tax fraud.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Madam Speaker, I know that the Bloc Québécois will be supporting this bill. I would like to know if they are open to accepting some amendments to protect the privacy of small and medium-sized businesses and individuals, in certain cases, and to create more rules so that this work is not left to the civil servants after the bill is passed.

Is the Bloc Québécois open to protecting confidentiality in some cases?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, I cannot help but think of a debate that my colleague raised in the Standing Committee on Industry and Technology. The question was whether we were entitled to know the details of an $8‑billion to $13‑billion federal investment in a Volkswagen project. That element of transparency was at the heart of our discussions.

I can also draw a parallel with sport. Confidentiality agreements keep athletes silent and force them to keep quiet when they are victims. Confidentiality is a very delicate issue. It is always arbitrary. I think we need to be able to really reflect on that.

I am counting on my colleague to bring experts on this issue to committee so that we can come to an agreement and come up with the best possible amendments to this legislation, to make it as robust as possible.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, my colleague very clearly outlined the problems and what more needs to be done, especially by Canada and the international community, about the sheer amount of wealth we lose out on every year to tax evasion and dirty money funnelling through the system.

One of the parts in the bill to ensure compliance is a $5,000 penalty for corporations and up to $200,000 for individuals. I respect the fact that the legislation is trying to uncover the identity of the individual, but what does the member think about the paltry $5,000 fine for corporations? We know there are lots of avenues open to people to hide their wealth in corporate structures. Does he think that this particular financial penalty may need to be looked at and perhaps stiffened to ensure better compliance with the legislation?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, I think harsh penalties are needed. We must not give criminals a chance in life. Like my colleague, I am a progressive person who believes in sharing the wealth.

It is pretty rich for the federal government to claim that it cannot provide decent health transfers because it does not have the money. We know where that money is. At the end of day, it means that our seniors, people aged 65 and older, cannot increase their income, and it means that our emergency rooms are overflowing. That is because our money is sitting in tax havens. Firm action is needed.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am happy to rise today and speak to Bill C-42. There is a lot of talk in this place about government gatekeepers, and rightly so. There are a lot of important decisions made within government that have an impact on Canadians' lives, and Parliament is a place to hold the decision-makers to account and to press for better decisions. Elections are the place to press for better decision-makers. This is the place to press for better decisions.

I think the case that the New Democrats have been trying to make throughout this Parliament and many others is that there is not just the problem of government gatekeeping; there are actually a lot of private sector gatekeepers. Too often, the leader of the Conservative Party and this government are either ignoring them or working with them behind the scenes to try to create more room for their power and their influence, which is not regularly held to account by a democratically elected Parliament, and to allow their power to flourish. If we look at our economy, there are a lot of ways in which they are able to do that, including a lot of rules around commercial secrecy and other ways. There are people who own significant chunks of our economy, whether that is our land, our real estate, our manufacturing or our resources, and we do not actually have a good way of knowing who those people are.

That creates a lot of problems for Canadians, who feel the pinch of that power acting in the economy, through unjustified price hikes, for example, the likes of which we have seen a lot of in the last few years in Canada. A significant contributor to inflation has been outsized price increases in a number of industries. There are also people who are hiding behind corporation numbers and making important land-use policy decisions because of the power of their own ownership. Yes, municipalities have a role to play in zoning but we also know that ownership matters a lot and people can choose to do a lot of things with their property. In some cases that has a real impact on communities, and we do not even know who is doing the work. That is why something like a public beneficial ownership registry is so important, because it will actually allow us to put names to the people who have an important controlling stake in certain parts of our local economies and our national economy.

That is important for any number of reasons. One is that we know that Canada is known internationally as a place where a lot of money gets laundered. I think it is a sad fact about Canada's reputation and Canada's actions in the world that we have allowed ourselves to be a place that people look to in order to launder the proceeds of crime. That is something that has been going on for a long time. In fact, the Canadian banking industry had an important role to play in setting up tax havens in other places.

Canadian bankers could go to places like the Bahamas or the Caicos Islands, where it was advantageous to say, “Oh, we are not like those Americans; we are allied with the Brits.” They could do that and get their hands into the local economy there and set up a banking infrastructure that would serve their interests and the interests of their clients, when it suited them better to say, “Oh, well, one cannot bank directly with the Americans but one can bank with us and we are buddy-buddy with them.” They did that too, and they actually helped create the international infrastructure of tax havens that is now costing Canadians anywhere from $30 billion to $40 billion a year in lost taxable income because they are pushing it out of the country. As I say often, it has been hard even to know who some of the beneficiaries of these things are. When it comes to money laundering, if we want to get serious about taking action, it is important to be able to identify the beneficiaries of various corporate holdings. A public beneficial ownership registry would help with that.

When it comes to Russia's completely unwarranted and illegal invasion of Ukraine, we saw Canada come out of the gate quickly with a lot of strong words about sanctions, but the follow-up, in terms of enforcement, has been rather pathetic. There is no evidence of Canada actually doing a lot of meaningful work to follow up on those sanctions and to make Russia hurt. One of the reasons why that is the case, and I think there is more that the government can do under the existing rules, is that it needs tools like a public beneficial ownership registry in order to be able to effect that work well. That will help identify the natural persons behind the corporate persons and make it easier for us to pursue those folks in the appropriate way.

I talked a bit about tax havens already, and I have talked about the problem of money laundering. The fact of the matter is that when we talk about the people at the top, who make the most money, we are not just talking about salaries. Usually the wealthiest do not make most of their money through an annual salary. They make most of their money in rent off various kinds of assets, whether real estate assets or other kinds of assets. They get dividends; that is a form of rent on the capital that they invest in companies. That is how they make their money.

If we accept the findings of the Parliamentary Budget Officer, from a year and a half or two years ago, about wealth distribution in Canada, this follows a trend for a lot of western countries. The Parliamentary Budget Officer says that now 40% of Canadians are sharing 1% of Canada's wealth, and 1% of Canadians own and control 40% of Canada's wealth. If members think that is completely out of whack, I agree completely.

That is part of what is driving many of the problems that most Canadians, who are not in that top 1%, are experiencing. Those are the folks who are really struggling with inflation. Those are the folks who cannot find a home. Those are the folks who do not know how they are going to get to work because they cannot afford the car they have.

That is not just a function of the carbon tax, which the Conservatives would have people believe. What is wrong with accepting that narrative is that it does not appreciate the problem, so it does not offer a real solution. Cutting the carbon tax is not going to fix those structural deficits. It is not the carbon tax that has led to massive wealth inequality, and it is not the way we are going to solve it.

One way we might solve it is by having a tax, not just on high income, but on high wealth. In order to do that, we need to be able to track the wealth of the 1% that owns and controls 40% of Canada's wealth. The way to do that is through a public beneficial ownership registry, which would make it easier to identify the real people, who are far fewer than the many corporate personas across the economy. If we could trace it back, we would find that it is a much smaller number of people who are behind and who are the recipients of so much of Canada's wealth and resources. A public beneficial ownership registry is important in that respect.

Partly because of the conflict and the illegal war in Ukraine, many of our international partners are moving forward quickly on public beneficial ownership registries. This legislation is important because it keeps Canada well within the international norm, which, on this issue, is moving in the right direction. This is not something Canada should be falling behind on, so I am pleased with the bill.

Folks at Publish What You Pay Canada have done some excellent work, first of all, suggesting what a public beneficial ownership registry should look like, and then following up and providing useful feedback on the legislation. The good news is that they are largely satisfied, and I think a lot of folks who follow this kind of issue feel that this is pretty good legislation.

There has been discussion in the debate so far in the House about how so-called stacked ownership structures or different corporate ownership structures could be used to evade the public beneficial ownership registry. I think that is an important thing for us to look at in committee.

New Democrats are certainly open to discussions about how to improve the legislation, but I feel it is important that we do keep this moving at a good pace so that we keep up not only with our international partners, who have accepted the wisdom of having this kind of registration, but also with many provinces within Canada, which have seen the wisdom of that and have been acting in their own jurisdictions to implement a public beneficial ownership registry.

One of the good components of the design of this federal registry is that it is meant to be a registry that can be compatible with provincial efforts and allow provinces to onboard at different times as they have their own debates and pass their own legislation in their provincial legislatures. I understand the government is working on this. I commend it for that effort; I think that is a good thing. The hope is that we will eventually have a registry in every province and territory that will contribute seamlessly to the public beneficial ownership registry of Canada, and that is a very good thing.

With all those reasons for having a public beneficial ownership registry in mind, and some optimism about the course that this bill has taken and the good work done so far, I am very much looking forward to voting in favour of this at second reading and sending it to committee, so that we can enhance the bill where possible and ensure that Canada quickly joins the ranks of countries across the world that have public beneficial ownership registries.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I appreciate a number of the comments the member has made. The issue of tax fairness is really important to Canadians. It is one of the reasons why one of the very first actions this government took upon being elected back in 2015 was to establish an increase in the tax on Canada's wealthiest 1%. We see that as a very strong positive. At the same time, we enhanced the tax break for Canada's middle class and those aspiring to be a part of it. Through the years, we have been able to invest a great deal of money, in the hundreds of millions of dollars, to ensure the CRA has the financial resources to reinforce the issue of tax fairness and go after individuals who are trying to avoid paying taxes.

What are the member's thoughts with respect to other provincial legislatures across the country and the important role they play in passing legislation of a similar nature?

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, as I was saying in my concluding remarks, it is very important that the provinces be on board. Many provinces are showing leadership already. I think it is one of the virtues of the way the government is proceeding on this that provinces will be able to onboard and provide information out of their own registries into the federal registry. I understand there has been a lot of discussion between the federal government and the provinces.

What I would say with respect to the tax fairness points that my colleague raised is simply this. As Canadians, we look around at other jurisdictions and see revelations like the Panama papers and others. We hear the government talk about investing in recovering some of those funds, but the record is that Canada has not and other jurisdictions have. When we hear about the resources given to the CRA, they seem to be spent more on chasing the poor to recover CERB funds, which they were encouraged to get by this very government, while the big tax cheats are getting away with it, either through tax havens or through the Canada wage subsidy program, from which the government has not even deigned to try to recover a dime.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, I wonder if the member opposite has given any consideration to the kind of amendments he would want to see made to this bill in order to improve it.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, one thing that has emerged from debate in the House is that the question of stacked ownership structures is something we need to look at. I will not prejudge the outcome of that study by already thinking I know the answer to that, but I certainly think this is something the committee should be looking into. I hope that, in its wisdom, the committee will find some recommendations that make sense and can improve the bill in that regard.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Madam Speaker, in the past, it has been common for the government to pass imperfect but still useful legislation and then tell us that it has done everything it can, it has taken action and there is nothing left to do.

This was true in the case of the whistle-blower legislation, which was passed 17 years ago. It is full of flaws, but for 17 years, we have been told that the job is done, even though there is no protection.

I have a question for the member for Elmwood—Transcona. Once we pass the bill that is before us today, will the job be done? What are the next major steps for the government if it really wants to get tough on tax evasion, especially internationally?

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, the short answer is no. The work will not end with the passage of this bill.

I would say it is not a matter of resources, because the Canada Revenue Agency has a lot of resources, but rather a matter of resource allocation. The agency is heavily focused right now on recovering CERB overpayments from Canadians who are already experiencing financial hardship.

When it comes to the high rollers with deep pockets, however, the agency leaves them alone. It really is a resource allocation issue. The Agency needs to focus on these high rollers. It has to stop chasing after people who do not have the means to repay the CERB—that is not a wise investment. It should be chasing down people who have the money to pay back what they owe.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Madam Speaker, I really appreciated my colleague's remarks regarding the Conservatives' crusade against carbon pricing, because he is right. If we were to get rid of carbon pricing tomorrow, it would do nothing to change the structural deficit that exists in our economy and the fact that we have a system today where 40% of Canadians control 1% of the wealth, and 1% of Canadians control 40% of the wealth. There has been a massive hoovering of wealth from a large group of Canadians to a very small group. That is why we need a beneficial registry; we need to see who is benefiting from these obscene amounts of wealth.

Over the decades that this has been occurring, what has that structural deficit led to? What could Canada of today have been had we tackled these problems several decades ago? What does that mean to people's overall health, their well-being and their ability to access services? This is the structural problem that is fundamental to our policy direction today.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, one of the big watershed moments was in the mid-1990s when the federal government decided to cut services massively and pushed the burden of spending down onto provinces. Many of them then pushed it down onto municipalities, and ultimately it has landed on the shoulders of Canadians because we do not have the same level of funding of social infrastructure that we had over 30 years ago in Canada. If we look at the corporate tax rate, in the year 2000 the corporate tax rate was 28% and today it is 15%. If we look at the percentage of government revenue that is paid by large corporations, that is down in proportion.

Conservatives and Liberals both said that they were going to cut corporate taxes and that it was going to allow business owners to invest in their businesses, it was going to raise productivity and it was going to generate a lot more economic activity than would holding the corporate tax rate where it was to be able to fund social services. However, a common complaint of Conservatives these days if we listen to them at committee, as well as private sector economists and a lot of people in the business sector, is that Canadian business investment is pathetic compared to our peers and our productivity is not keeping pace, because that money was never invested back into their businesses. It was shunted out into tax havens or paid out in dividends, which, frankly, are not taxed enough, and all sorts of other things.

Therefore, the promise of the big tax cuts for the fat cats never came home to roost. This is why we should change what we are doing instead of doing the same thing and hoping for different results.

[Mike Morrice, Green, Kitchener Centre, ON]

Madam Speaker, we have heard from many across the country that one of the ways to address the $30 billion in corporate tax loopholes from last year alone is to put in place a minimum tax on reported profits; that is, the profits that some of the largest corporations in the country report to their shareholders. Canadians For Tax Fairness estimates that this could recoup $11 billion of that $30 billion every year. The governing party chose not to do that in budget 2023. Could my colleague from Elmwood—Transcona share more about that?

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Madam Speaker, we absolutely need to be engaging in the enterprise of trying to ensure that this tax revenue is not lost, to go out of the country or to go to people who already own and control 40% of Canada's wealth as part of that small 1%.

I have a private member's bill requiring that if people want to benefit from the tax advantages of these tax treaties that Liberal and Conservative governments have put in place over the years, they have to have some economic substance to their business. Right now, what counts as a business is just a business number and a small mailbox somewhere in Barbados. Requiring that business to actually have something like a manufacturing facility or a desk and a computer with somebody hired to do some work seems like a pretty bare-minimum requirement for any legitimate business.

There is what my colleague suggested, and then there are some other ideas about how we can ensure that people are not just paying a lawyer somewhere else to set up a fake company in order to get massive tax benefits.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, I will be splitting my time with the member for Calgary Centre.

It is a pleasure to rise today and speak to Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts.

Bill C-42 amends the CBSA to require Corporations Canada to make public certain information regarding those with significant control or ownership of federally regulated private corporations in Canada, creating a national registry of these individuals. In this case, “significant control” is defined as someone owning or controlling at least 25% of the corporation's shares. The bill will also better protect whistle-blowers, add new offences and give Corporations Canada additional inquiry, data validation and information-sharing powers.

The government has stated that its goal with this bill is to protect Canadians against money laundering and terrorist financing, deter tax evasion and avoidance, and ensure that Canada is an attractive country in which to conduct business. The bill's title, while literal, does not speak to the good the bill would do to combat money laundering and criminal financial activity in our country. Because of this, the Conservatives support the bill in principle, with important amendments recognizing the sheer need for action on money laundering in Canada. I will talk about the amendments later. First of all, I need to outline just how serious financial crime is in Canada and, thus, speak to the need for this bill.

Money laundering in Canada is so well known in the world that criminals call it “snow-washing”. While it is a problem throughout the country, the worst of the issue is concentrated in British Columbia, especially in the Vancouver area. As stated in the Cullen commission's final report on the issue of money laundering in British Columbia, money laundering has, as its origin, crime that destroys communities. This includes drug trafficking, human trafficking and fraud. Such crimes victimize the most vulnerable members of society. Money laundering is also an affront to law-abiding citizens, who earn their money honestly and pay their fair share of the costs of living in a community. There can be few things more destructive to a community's sense of well-being than a governing regime that fails to resist those whose opportunities are unfairly gained at the expense of others.

Under the Liberal government, and going back into certain governments in the 1990s, Canada became a haven for money laundering. Specifically, in the nineties, the British Columbia provincial NDP government changed regulations that governed casinos. Five-dollar bets became $500 bets at baccarat tables and private gambling salons, and the bets only grew from there.

The Cullen commission report indicates a stunning growth in cash transactions in B.C. casinos; first flagged by investigators in 2008, transactions continued unabated until at least 2014, when casinos accepted more than $1.2 billion in cash transactions. Many of the transactions matched the indicators for criminal funds, where bricks or even duffle bags of cash were delivered to casinos. The commission indicated that these criminal transactions involved loan sharks delivering bundles of $20 bills, which had been packaged in a way that was consistent with the proceeds of drug trafficking, to high-profile foreign gamblers. These gamblers had travelled primarily to Canada to play baccarat in secluded areas of the casino. These high rollers often paid back the loan sharks the funds they gambled via transactions in their country of origin. In this evolution, B.C. gambling, real estate and luxury items became favourite tools of criminals to launder illicit foreign funds.

It is ironic that it is the Liberal government strengthening money-laundering bills. I am glad to see it, but if we look at the history even since I was elected, there was Joe Peschisolido, who was accused of money laundering. Then we had Raj Grewal, who asked questions about money laundering to FINTRAC at committee just before being arrested and charged with fraud. We also have another backbencher who is flipping real estate, even though we know that real estate is one of the key ways in which money laundering is happening. As I said, it is ironic that they are bringing this forward, but I certainly agree that we need to do something to rein in out-of-control money laundering.

The commission also found that, in B.C.'s economy, casinos, real estate dealings, banks and law offices face big money-laundering risks and that the failures of the federal RCMP and FINTRAC allowed money laundering to grow. The report indicated that FINTRAC's reporting regime is essentially wasteful and that the RCMP's lack of attention has allowed for the unchecked growth of money laundering since at least 2012.

The report states:

One of the primary criticisms of the federal regime is the ineffectiveness of FINTRAC.... While...there is a statutory threshold that must be met before FINTRAC can disclose information to law enforcement, the number of disclosures to law enforcement is [allegedly] not commensurate with the volume of reports that FINTRAC receives, nor with the scale of money laundering activity in British Columbia.

That is according to Cullen and his team. He suggests:

Law enforcement bodies in British Columbia cannot rely on FINTRAC to produce timely, useful intelligence about money laundering activity that they can put into action.

It is true that FINTRAC receives an enormous volume of reports from public and private sector reporting entities, but it produces only a modest number of intelligence packages that actually go to law enforcement. For example, in 2019 to 2020, the Cullen commission found that FINTRAC received over 31 million individual reports. In that same year, it disclosed only 2,057 intelligence reports to law enforcement agencies across Canada and only 355 to law enforcement agencies in B.C.

Global News reporter Sam Cooper has been investigating dirty money in B.C. for years. He found that, as of 2016, fully half of the luxury properties in Vancouver were owned through suspicious circumstances. The Prime Minister has known about this for years. The global money-laundering watchdog warned the Prime Minister in 2016 that Canada was a safe haven for money laundering, particularly in our real estate market, and that a registry was needed to help identify and deter this activity. In fact, the watchdog gave the Liberal government a failing grade in five key areas because dirty money was able to slip into our businesses and real estate market undetected, with no questions asked. That was 2016, and it is now 2023; the legislation is pretty late in coming.

The Panama papers data leak in 2016 exposed that international criminals have long exploited the gaps in Canada's corporation beneficial ownership regulatory scheme to engage in corrupt conduct through federally, provincially and territorially administered corporations. Canada is generally perceived as having weak laws to combat money laundering and the proceeds of crime. As a result, in 2018, B.C. launched the expert panel on money laundering in real estate. The panel estimated that in B.C. alone, more than $7 billion of dirty money was laundered in 2018 and between $800 million and $5.3 billion was laundered through the real estate market, raising housing prices by an estimated 5% on already wildly expensive properties.

The Cullen commission report demonstrates that money laundering within real estate often involves the use of loans, mortgages and, in some cases, lawyers' trust accounts in the legal system. It can also involve cash. The report provides this example: A criminal might take out a mortgage with the purchase of a property and repay the mortgage with the proceeds of crime. If the cash deposited for each payment is under $10,000, it will not trigger the requirements for a large-transaction report to FINTRAC. Over time, criminals may accumulate multiple properties or higher-value real estate using this strategy. The properties can then be sold, often at a significant profit in the Vancouver real estate market, with the criminal property owner receiving clean funds from the purchaser to complete the money-laundering process.

Law-abiding Canadians across the country have been suffering as a result of this issue. Since the Trudeau government was elected, the price of a home in Canada has—

[The Assistant Deputy Speaker, NDP, Carol Hughes]

I would remind members not to use the first or last names of MPs in the House.

The hon. member for Sarnia—Lambton.

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, I apologize.

The price of a home under the Liberals has doubled, and many Canadians have entirely given up on the dream of home ownership. Most young people now believe that owning a home is unachievable. Even if the money-laundering problem is adequately combatted by the passing of this bill, it is years too late. Therefore, it is not enough to stop the snow-washing in our housing market that is escalating costs for Canadians.

I have concerns about the bill; not only does it exclude real estate in the scope, even though we know that this is a major place for money laundering to happen, but it also covers only federally regulated businesses. Many business owners are provincially regulated, so if the provinces do not come on board, then there are many ways that this could slip through the cracks.

In terms of amendments, Conservatives would like to see amendments to protect privacy rights in the registry. We also want the registry to achieve the government's stated goal and have the capacity to do so. Will the bill give law enforcement enough necessary tools to capably combat money laundering and terrorist financing?

Conservatives have some recommendations. The new and existing penalties for violating reporting requirements under the CBCA should be strengthened, corporations should be held accountable as individuals, and if the act is violated, there needs to be clarification on who can and cannot be exempted from the regulations.

This bill is a critical update to our laws, and I look forward to seeing it at committee, where we can make amendments to improve the bill and eliminate money laundering in Canada.

The House resumed consideration of the motion that Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts, be read the second time and referred to a committee.

[Greg McLean, Conservative, Calgary Centre, AB]

Madam Speaker, it is my honour today to rise in the House to talk about Bill C-42. “Money laundering” is the short description. Canadians would be surprised to know that, aside from the soft reputation our country has on the international scene, Canada is increasingly known as a popular safe haven for criminals to launder and hide their money.

In 2022, Canada ranked 14th on Transparency International's corruption perceptions index, with a score of 74 out of 100. Canadians would be in their right minds to ask why our country's score is not higher, especially since this problem with lack of transparency has been known for a long time, for the past seven years, to be exact.

People will remember that, in 2016, the Panama papers leak exposed the fact that international criminals had been exploiting the gaps in Canada's corporate beneficial ownership regulatory scheme to engage in corrupt conduct through federally, provincially and territorially administered corporations.

That same year, the Financial Action Task Force, which acts as the world's international money-laundering watchdog, warned Canada that it was being used as a safe haven for money laundering and that a registry was needed to help identify and crack down on this activity. However, since then, under the current government, Canada has been slow to act, and when it did, it failed to go far enough. It took until 2018 for the Liberal government to begin introducing requirements to increase transparency around who exerts significant control over corporations and assets in this country. In 2021, the Financial Action Task Force indicated that Canada had made improvements but remained only partially compliant in five areas and wholly non-compliant in one. Laundered money was still able to find its way into our country with no questions asked.

Now, here we are in 2023, introducing measures that are long overdue to tackle a problem that should have been dealt with years ago by the government. Unfortunately for Canadians, while the Liberals were in no hurry to tackle the issue of money laundering throughout all those years, it has had a very real and devastating impact on a sector of our economy that affects everyone, one that keeps being mentioned extensively as of late. I am referring to the housing market.

Since the government took office, the price of a home in Canada has doubled, leaving citizens across the country to give up on the dream of home ownership. The situation is dire: Seven in 10 Canadians now believe owning a home is financially reserved for those who are wealthy. Part of this phenomenon of housing growing increasingly out of reach for Canadians is explained by criminals using real estate as a vehicle to launder their money in Canada. This is enabled by the fact that Canada's anti-money-laundering compliance regime is itself least compliant with international standards, when it comes to supervising real estate agents and identifying the buyers of property. For young Canadians looking to start a home and a family, this pushes prices up and puts their dreams of home ownership farther out of reach. Why is this? It is partly because they have to compete against criminals who wish to use real estate to hide their dirty money. It is supply and demand.

The situation is especially problematic in British Columbia. In 2018, the province launched the expert panel on money laundering in real estate. That panel estimated that, in B.C. alone, more than $7 billion in dirty money was laundered across the economy in 2018, and that up to $5.3 billion of that money was laundered through the real estate market, raising housing prices by an estimated 5%. It is no secret that housing is exceptionally unaffordable in cities like Vancouver, and criminal activity plays a non-negligible part in aggravating the situation.

The situation is so dire that the number of British Columbians moving to Alberta reached a 20-year high in 2021-22, and for most, the main reason was affordability. Alberta is proud of its strong economy. It is one that welcomes Canadians from across the country with open arms and offers opportunity and affordability to its citizens. However, due to the Liberals' weak approach to money laundering in Canada, the problem that plagued British Columbians is now following them across the Rocky Mountains. Calgary, the city I represent here in Parliament, is now also being used as a hub for the criminal network of money-laundering groups that has grown across Canada under the current government.

I knocked on a lot of doors during elections in Calgary Centre, and I knock on doors between elections. When I go into the large condos that have recently been developed, sometimes I will find a condo where half of the units are empty. Nobody lives there, yet they are all sold. There has been a lot of construction in Calgary, with a lot of vacant suites, yet there is no one living in these buildings. It is quite clear that it was foreign owners who bought those properties. Whether it is legitimate foreign ownership because people are actually moving their money out of where they live and want to make sure they have some safety elsewhere, or whether it is connected with the criminal element that has also increased the illicit activity of drug addiction in Calgary, is another question entirely. It is a mix between the two. That is something we need to address here, going forward.

My constituents are particularly concerned about it because of the effects it has across society, not just on the housing market; housing is only one part of the problem. The broader issue at hand is the fundamental question of who owns what in this country. Are Canadian assets held by hard-working and law-abiding Canadians or by criminals using them as a means to engage in offshore money laundering? As someone who worked in the financial industry for decades, I understand the importance of transparency and accountability, two things that are currently lacking when it comes to the ownership of assets in this country.

In last year’s budget, the government committed to finally implementing a national public registry by the end of 2023, ahead of the previously committed year, 2025, but this acceleration of the timeline in the Liberal agenda was not prompted by the housing affordability crisis and its heart-wrenching impact on Canadians. Rather, it was the public concern about the misuse of nominee and corporate ownership by Russian oligarchs that led to the acceleration of this timeline.

That is why I support this bill, but I also believe that it should be more ambitious in its reach right now, as opposed to when the next international crisis forces the government to act. The fact remains that we are perceived internationally as having weak laws to combat money laundering and the proceeds of crime. Our Five Eyes partners see us as a laggard on corporate transparency. This is why Conservatives not only support the additional measures being introduced by Bill C-42 but also call on the government to do a number of things.

I will interject here and talk about my experience. I acted in the financial industry for years. I actually represented a number of investors who had their money laundered through a bunch of different vehicles. That was a manipulation of the legal process by several parties involved. This happens all the time in Canada. The laws are set out now. I know that since 9/11 in 2001, the government tried to get more transparency through the legal mechanisms, the legal profession, to try to make sure they disclosed when they had transactions of $10,000 or more coming into their accounts. That was overturned by the Supreme Court of Canada in 2015. It ruled that, in fact, lawyers had the right to withhold that information from governments. What I have seen personally is that those lawyers give good advice on how to launder money through accounts in Canada, whether it is offshore accounts or whether it is Canadian “quasi-criminals”. It is hard to call them criminals until they have actually been convicted. That is the direct experience I have had.

There are things we need to do. Of course, we need to change the offences outlined in the bill and the existing offences under the Canada Business Corporations Act from summary convictions to Criminal Code offences, which would then rank money laundering on par with the most serious offences under the Criminal Code in Canada, as it should be. We also need to change the threshold for significant interest at which disclosure is required, from 25% control of shares to 10%. That is a threshold already used by the Ontario Securities Commission for public disclosure requirements. Reducing the currently suggested threshold would further reduce the ability of criminals to hide their activities.

We need to clarify the degree of back-end access to the registry of law enforcement, in relation to the proceeds of crime and money laundering. Under the bill right now, in its current form, law enforcement, as well as the Financial Transactions and Reports Analysis Centre, or FINTRAC, would require an affidavit to access all of the information contained in the registry.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, I was fascinated to hear the hon. member talk about some of the transactions between lawyers, because we know that transactions between lawyers' trust accounts are not captured by FINTRAC. Is he strongly in favour of changing that?

The other thing I would ask him to comment on is the beneficial ownership of broadcast outlets in Canada, because there are concerns about Chinese meddling. We have heard, at least anecdotally, that their control over radio and television and cable stations, if it is not ownership, is certainly something else. Is that also worth a closer look in connection with this bill?

[Greg McLean, Conservative, Calgary Centre, AB]

Mr. Speaker, I will not address the Broadcasting Act, because I am not sure that should be covered here or should be covered in a different bill, but I will address what the member talked about regarding lawyers' trust accounts. Lawyers' trust accounts are not held to the same standard as financial transactions. I remember that, in the financial industry, if $10,000 in cash came into one's account, one had to report that to FINTRAC authorities immediately. If one was at a brokerage, $1,000 of cash was actually the hurdle. Money laundering actually happens at places like currency exchanges, where people walk in with a thousand bucks and will exchange $999 and effectively do it that way. We do need to include the trust from lawyers in here. We will watch them fight it again in the Supreme Court, but making sure we bring them under the umbrella of what is acceptable for money-laundering mechanisms in Canada is very important.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague for his very interesting speech. I think we share rather similar points of view on this bill.

His colleague from Sarnia—Lambton, who spoke before he did, brought up the Panama Papers scandal in her speech to illustrate the fact that the government is not doing enough.

I would like to remind the House of some of the figures from that scandal. While the government brags about how much it is doing, the Canada Revenue Agency has recovered less money than Revenu Québec has. By way of comparison, the United Kingdom recovered more than $317 million; Germany, $246 million; Spain, $209 million; France, $179 million; Australia, $173 million and Canada, $21 million. That is 10 times less than the others.

Does my colleague agree that the government needs to be doing a lot more?

[Greg McLean, Conservative, Calgary Centre, AB]

Mr. Speaker, I thank my colleague for his good question.

He is right. The CRA's weakness internationally is appalling. Every other country in the world says that it has recovered more “dirty money”, as it is called, from the money laundering that is done in countries like Panama.

I am sure that the Canada Revenue Agency should be producing better results.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, I agree with the hon. member on the need to combat money laundering and tax evasion. On the disclosure norms, I think he mentioned the threshold of 10%. He seems to agree with that. My concern is this. Why should we have any threshold of any percentage before the names of the shareholders are made public? It is very easy to work around this owner threshold.

[Greg McLean, Conservative, Calgary Centre, AB]

Mr. Speaker, we should have a beneficial owner threshold that actually says who controls these companies. A lot of them will be in separate nominated accounts that might have the same person behind them, but eventually we need to see our way to who those people are. As my colleague is, I think, alluding to, if there are 11 people owning 9% of a corporation, none of those has a full 10%. In that case, the beneficial ownership should be quite clear that it is the same entities that control that corporation. He is right; we should capture making sure we are talking about beneficial ownership of at least 10% or more. There comes a point in time when one is just a passive investor, but at 10%, one is actually a participant, in my opinion.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, I will be sharing my time with the hon. member for Richmond Hill.

I rise to speak to Bill C-42, which would implement a public and searchable beneficial ownership registry of corporations governed under the Canada Business Corporations Act.

We have an issue with money ‎laundering and terrorist financing. To deal with this, we need tools and mechanisms in Canada that are in line with international best practices. Creating a public and searchable registry would increase the transparency of beneficial owners of federally regulated Canadian corporations, which would increase corporate accountability and improve public trust in corporate institutions.

These measures would help protect Canadians against money laundering and terrorist financing, deter tax evasion and tax avoidance, and make sure Canada remains an attractive place to conduct business.

I will take a moment to mention what corporations are. Corporations exist basically to allow individuals to channel their capital for the benefit of making profits. The corporation, as we know, came into existence in the 1844 act in Britain, and the shareholders were granted limited liabilities in 1855. In 1866, the United States court declared that a corporation is a natural person. Basically, while the corporation channels the resources for investment in a commercial enterprise, it limits the liability of the person to the capital contributed.

I will quote from an article published in New Internationalist:

What is a corporation? Ambrose Bierce's Devil's Dictionary defines it as “an ingenious device for obtaining profit without individual responsibility”. It is a legal construct, a charter granted by the state to a group of investors to gather private funds for a specific purpose. Originally, charters were granted in the service of a public purpose, and could be revoked if this were not fulfilled. The relationship between state and corporation is a complex one. Over the past 400 years corporations have conquered territory and brought in resources for the state, breaking laws put in place to constrain them and gaining in power and privilege. History shows a repetitive cycle of corporations over-reaching, causing such social turmoil that the state is forced to rein them back in through regulation.

Now, corporations are being created for no other purpose than to evade or avoid taxes. Supreme courts around the world have ruled on the difference between tax avoidance and tax evasion, and mentioned that if there is any transaction followed by an individual or a corporation that does not have any impact or consequence other than to reduce or eliminate tax, the transaction can be declared null and void.

We need to take all steps to rein back and plug the loopholes that are exploited by individuals and corporations to avoid or evade paying their fair share of taxes.

In budget 2022, we committed to implementing a public and searchable registry of beneficial ownership information. The registry would cover corporations governed under the Canada Business Corporations Act and would be scalable to allow access to the beneficial ownership data held by provinces and territories that agree to participate. The objective of the registry is to provide relevant authorities with timely access to accurate and up-to-date information about the true controlling individuals of corporations in order to combat illegal activities, including money laundering, corruption and tax evasion.

Greater transparency would also improve corporate accountability more generally and thus help protect the public, improve trust in corporate institutions and ensure a well-functioning marketplace. As it currently stands, corporations are already obligated to compile some beneficial ownership information. Upon the entering into force of this new piece of legislation, corporations would need to collect additional information from their beneficial owners, like citizenship and residential address, and send the information in their register of individuals with significant control to Corporations Canada on an annual basis and within 15 days of the day on which a change is recorded in their register.

There are a couple of shortcomings in the current bill, which can be overcome. One is with respect to fully publicly disclosing the names and citizenship of shareholders or members of corporations. The fundamental question is this: Why should the public not be aware of who is investing in a corporation, including their citizenship being known? It is not the fundamental right of any individual that he or she can be a shareholder. It is a privilege offered by the state through various acts, so why should the public not be aware of individuals who are shareholders, including their citizenship?

I do understand the need for their privacy of information like the address of the shareholder, which is something that has been addressed, but there is no reason why the names and citizenship of the shareholders of any corporation should be kept from becoming public. Especially, we Canadians should be aware of foreign nationals investing in Canadian corporations; disclosing their citizenship is a must.

There is another solution, which is that the information may be disclosed only if a threshold of ownership is significant and exceeds a certain mark. For significant shareholding, the threshold is 25% in some jurisdictions and 10% in other jurisdictions. However, using a threshold to limit disclosure requirements creates a loophole that can easily be exploited. If the threshold is fixed at 25%, five people could form a corporation with 20% each or 11 people could form a corporation if the threshold is 10%.

On the positive side, through this bill, we have sought to limit administrative burden by leveraging existing intake and reporting mechanisms that federal corporations are already familiar with. For example, federal corporations are already required to update Corporations Canada within 15 days after a change of directors occurs and to file an annual return.

We have carefully considered domestic and international best practices in developing the proposed beneficial ownership registry regime, including the U.K. system. We also made sure the proposed model would meet and exceed the standards for beneficial ownership transparency maintained by the Financial Action Task Force, a global anti-money laundering and anti-terrorism financing body of which Canada is a founding member.

In closing, I want to reiterate that this is a good bill that is very much required. We have to bring Canadian standards in line with international best practices. However, there are certain shortcomings, which I think should and must be addressed at the committee stage. I am sure that with the co-operation of all parties in this House, this bill will get passed and will become legislation sooner rather than later.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Mr. Speaker, the member for Nepean raised two areas of amendment: on disclosure of information, such as citizenship, and on the significant interest threshold, which members on our side have raised during the debate today as well.

I would like the member's opinion about whether the Liberal Party is open to further amendments on the penalties for corporations and individuals. In some cases, penalties in the legislation go up to $200,000, but are as low as $5,000 in other cases for corporations. Would the member opposite be open to further amendments to ensure that people who seek to launder money in Canada and have a registered corporation at the federal level would be accountable to higher penalties?

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, first on the question of disclosure of information, my understanding is that the bill does disclose citizenship and other details to various law enforcement agencies. However, my view is that citizenship information must be available to the public, too.

On the question of imposing penalties, personally I am in favour of changing the penalties if they are too lenient. We have to make it worthwhile. Penalties for the people who break the law should be sufficiently high to cause at least some pain.

The House resumed from April 28 consideration of the motion that Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts, be read the second time and referred to a committee.

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Mr. Speaker, I am here today to talk about Bill C-42, an act to amend the Canada Business Corporations Act, to create a beneficial ownership registry to combat money laundering.

I have the honour today of sharing my time with my friend and colleague, the member for North Okanagan—Shuswap.

Canada has a big problem with money laundering, and nowhere is that more evident than in metro Vancouver where my community of Langley—Aldergrove is located. Now, this is well known around the world. People have given Canada's very accessible money laundering streams a special name. They call it “snow washing”.

Generally speaking, Canada is known to have a stable government and economy, and to be a safe place to invest, so honest people make assumptions that money coming from or going to Canadian-registered corporations must be legitimate, but sadly that is not always the case. We need to work hard to maintain that favourable impression that the world has of us. It is easy to ruin one's reputation. That is sadly what is happening.

According to a 2017 analysis by Transparency International, Canada is tied with South Korea for the weakest corporate transparency rules among G20 nations. That is why I welcome this legislation, Bill C-42, which is going to create a beneficial shareholder register so that crooks cannot hide behind a veil of secrecy, complexity and confusion. We want things to be transparent. We want to know who owns what.

B.C. has been taking the lead in building transparency rules to combat money laundering. In March 2019, in a report entitled “Combatting Money Laundering in BC Real Estate”, an expert panel appointed by the B.C. government had this to say about the problem of money laundering. It focuses on British Columbia, but of course it applies right across the country. It reads:

Money laundering significantly damages our society and causes ongoing harm, not limited to the real estate sector or other economic sectors. Money laundering is a contagious, corrupting influence on society...It facilitates other criminal activities, contributing in particular to drug trafficking and the violent crime and opioid deaths that result, as is sadly so evident in [British Columbia].

The report goes on to say that, given the secret nature of money laundering, it is very difficult to estimate how much damage it is doing to our economy, but they do estimate that somewhere around $50 billion in dirty money is pumped into our national economy every year. This activity is estimated at 5% of real estate prices in British Columbia, feeding into the housing unaffordability crisis.

The expert panel recommended several anti-money laundering tools, starting with implementing a land ownership transparency register, which is in effect at the moment in British Columbia. They were of the opinion that transparency in real estate would be the single most effective tool in the anti-money laundering arsenal, but they also acknowledge that money laundering touches on more than just real estate transactions.

I think it is informative to understand what money laundering is. It is effectively the process of making illegally gained proceeds appear to be legitimate. These proceeds can come from monstrous activities like fentanyl trafficking, for example, but sometimes it is much less nefarious than that. For example, it could be legally earned and obtained money which has been brought illegally into Canada by evading the originating country's arbitrary capital controls.

All of this activity is illegal. Actors become very creative in hiding their trails by creating layers of complexity, but it all follows the same basic process. It is usually done in three phases: first of all, placement; second, layering and third, integration.

Placement is the introduction of cash into the legitimate payment system. Layering is conducting multiple levels of complexity for no purpose other than to hide the paper trail. Integration is working the money back into the legal system. Money properly laundered, and I use the term loosely, can be very difficult to trace.

One of the layering tools that professionals like to use is secret trusts. This is where somebody owns something, but that is the front person. They are the registered owner, but they are not the real owner. They are holding it in trust for somebody who is working in the shadows. The real owner is invisible to law enforcement agencies.

Today we are talking about amendments to the Canada Business Corporations Act to create a share ownership transparency register to eliminate this layering tool that professionals like to use. How can this be beneficial? Let us take a look at what some provinces have done.

British Columbia is really taking the lead. It bears to note that every province in Canada has its own corporate registry, as there is a federal registry, so it is very important that the provinces and the federal government work together. There needs to be a pan-Canadian approach. Otherwise, we would be encouraging forum shopping among professional crooks. They are going to go to the province with the most relaxed and most permissive laws. I am happy to say that Bill C-42 at least attempts to tackle that.

British Columbia has implemented a requirement that all British Columbia-registered companies keep a beneficial owners register at their corporate records office. This is an early version of a beneficial shareholder register and it is a good start, but it is not enough, and that is recognized. It is not a very useful tool for law enforcement because it does not allow law enforcement agencies to work undercover. The register is not free. It is not publicly accessible. It is not centralized, and it is too bureaucratic. It is also too difficult for law enforcement agencies to use and therefore it needs to be amended.

I am happy to say that is in the works. By 2025, there should be a centralized register in British Columbia that is readily searchable by law enforcement agents without the police coming to the registered office and saying they want to see their corporate records, which gives too much notice to the crooks. Quebec and Ontario are following a trajectory similar to British Columbia's.

The United Kingdom is really taking the lead with its people with significant control register for all registered companies in that country. It is free, and it is publicly accessible, but so far it is presenting only mixed results in being an effective tool for law enforcement. Bill C-42 needs to go past second reading to go to committee, where it needs to be studied in detail. I hope that we would have witnesses coming from United Kingdom to tell us what is good about their system and what is lacking so we can learn from their successes and their mistakes.

Bill C-42 is the federal government's attempt to tackle money laundering, tax evasion and other illegal activity. The minister, in his speech when he introduced this legislation, said, “Simply put, increasing beneficial ownership transparency will enhance Canada's good international reputation as a safe, fair and competitive place to do business and provide even greater legitimacy to law-abiding Canadian businesses.” Those are all very laudable objectives, which I support.

This bill should go to committee where it could be studied in detail. I will be looking there for efficiencies and effectiveness, and how adaptable it would be so that provinces can adopt it as well. As I said, the solution needs to be pan-Canadian.

[The Deputy Speaker, Conservative, Chris d'Entremont]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Sherwood Park—Fort Saskatchewan, Democratic Institutions; the hon. member for North Okanagan—Shuswap, Carbon Pricing; and the hon. member for Spadina—Fort York, Democratic Institutions.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, I concur with the member in that there are a number of issues related to money laundering and the impact it has on Canadian society, in many different ways. One could talk about that very strong criminal element and how it gets into our communities. Therefore, it is an issue that needs to be dealt with. I am glad to hear that the member is anxious to see the bill go to committee.

Does the member or the Conservative Party already have a sense at this time of some amendments they would be proposing, or are they going to wait until committee stage?

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Mr. Speaker, ultimately, we will be waiting to see what comes up at committee and what the study will be, but a couple of things come to mind.

One is that this system has to be efficient. It cannot be overly bureaucratic. Before I was elected to Parliament, I was practising corporate law. I was talking to my law partners the other day, and they were saying that the rules are just too complicated, making it time-consuming and expensive, as the costs are passed on to their clients, so I will be looking for efficiency.

Also, my understanding is that the threshold for having to register someone as a beneficial owner is 25%. I suspect that is too high. It probably has to be a lower number, like 10%.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Mr. Speaker, Bill C‑42 is unquestionably an important step forward in terms of greater transparency and in knowing who really owns businesses registered in Canada. However, there are limits to that. Perhaps my colleague could speak about that.

For instance, if a company registered in Barbados, in a tax haven or in any other country in which the laws do not require the same transparency around the beneficial ownership of businesses, transparency ends when there is no transparency. If the business is held in a location where there is no transparency, that ultimately limits the possibility of obtaining all the information.

Does my colleague have any ideas about what could be done to resolve this problem in the future?

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Mr. Speaker, the member's question underlines how complicated it can be to tackle the problem of money laundering.

If I understand the question correctly, it relates to money coming into Canada from a foreign corporation that is registered, let us say, in Barbados, which maybe does not have the same transparency rules that we have. However, we have FINTRAC rules, so the money coming in would have to go into a bank, and if it were over a certain amount, the bank would be required to report it according to the FINTRAC rules. It is probably not enough, but we do have something, and this bill is another step in the right direction.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I listened with interest to my colleague. The issue with money laundering is severe in Canada. There is an international expression called “snow washing” because Canada is known as a jurisdiction to dump dirty money from the drug cartels, terror gangs, and all kinds of illicit activity. It can be moved through casinos to be cleaned. It is also being used to purchase real estate.

This issue is concerning. We know that, in 2018, there was $47 billion of illicit money snow washed in Canada, and it could have been as high as $100 billion, which has an impact on affordability. People cannot afford to buy in the real estate markets of Vancouver, Toronto or Montreal because they are being used as safe zones to hold money.

Does my hon. colleague think we should look at the impact of snow washing and using Canadian real estate as a zone to clean money that should actually be exposed as dirty money, given the fact that people cannot even afford to live in the cities they love?

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Mr. Speaker, that is a good question. It goes right to the very heart of what the problem is and what this bill is trying to tackle and remedy.

I agree with the member's analysis that snow washing and pumping money into the Canadian economy is forcing up real estate prices for the people who want to get into a home. We already have a housing affordability crisis. This is making it so much worse, and it needs to be tackled. It is a complex problem, and the solution will be multi-faceted. Bill C-42 is a step in the right direction. We need to deliver this for Canadians.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Mr. Speaker, it is an honour to rise today as the member for North Okanagan—Shuswap, one of the most beautiful areas in the world at any time of year, and especially as we turn from spring to summer.

I rise today to speak to Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts. I would like to thank the member for Langley—Aldergrove for splitting his time with me and for his thoughtful intervention.

The government has stated that the objective of Bill C-42 is to protect Canadians against money laundering and terrorist financing, deter tax evasion and tax avoidance, and make sure Canada is an attractive place to conduct business. One has to ask why the Liberal-NDP coalition has taken so long to act, when it has been evident for years that change is needed.

While I believe there is support for the concept of a national public registry of beneficial owners of companies, I also believe we may need to look at extending the transparency of beneficial ownership of other assets. For example, at the Standing Committee on Fisheries and Oceans, or FOPO as it is known around Parliament Hill, we have been hearing testimony from witnesses who are extremely concerned about the purchase and control of fishing licences and quotas by foreign entities, and even unknown entities. That is right: unknown entities. Let me take us back in time to explain what I am referring to. In 2019, the FOPO committee tabled a report titled “West Coast Fisheries: Sharing Risks and Benefits”. This report was the result of a study initiated partly out of concern at that time, over four years ago, over the situation of local fish harvesters unable to compete with unknown entities bidding higher prices for access to Canada’s fisheries resources, a common property resource for the benefit of Canadians. Now, over four years later, can members guess what is being studied at FOPO, the Standing Committee on Fisheries and Oceans? It is foreign ownership and corporate concentration of fishing licences and quotas.

I will go back to my earlier question about why the Liberal-NDP coalition taken so long to act. Here we are; it is four years after that report, and even longer into the government’s mandate, since the concerns were first raised by stakeholders. Here we are, restudying almost the same issue, hearing that the same issues and concerns still exist, and the government has failed to take steps to ascertain that Canadians are the primary beneficiaries to access to Canada’s common property resource, Canada’s fisheries. It was somewhat shocking to hear testimony over four years ago, and now to hear similar testimony over recent weeks, that there is no real method of tracking beneficial ownership of fishing licenses, quotas and possibly vessels on Canada’s west coast. Although some have tried to track beneficial ownership, in some cases the web becomes so tangled that no one can clearly identify who owns what.

The 2019 report I referred to contained a number of recommendations to the government. In fact, there were 20. However, there were a few key recommendations related to foreign ownership that the government should have acted on, but it has been slowly dragging its feet, with almost no response. I will refer to some of the recommendations quickly, and talk about what should have been done and what has not been done.

Recommendation 2 from the report stated, “That based on the principle that fish in Canadian waters are a resource for Canadians (i.e. common property), no future sales of fishing quota and/or licences be to non-Canadian beneficial owners based on the consideration of issues of legal authority, and international agreement/trade impacts.” What has been done on this? Little to nothing has been done. There is nothing that the committee has been made aware of.

Recommendation 4 is somewhat similar. It states, “That, to increase the transparency of quota licence ownership and transactions, Fisheries and Oceans Canada determine and publish, in an easily accessible and readable format, a public online database that includes the following”. Has that been achieved? Certainly not.

Recommendation 5 states, “That Fisheries and Oceans Canada prioritize the collection of socio-economic data for past and future regulatory changes and make this information publicly available.” Again, there has been no action that the committee is aware of.

Recommendation 14 states, “That Fisheries and Oceans Canada develop a new policy framework through a process of authentic and transparent engagement with all key stakeholders". For example, some of the key stakeholders are:

Active fish harvesters (or where they exist, organizations that represent them) in all fisheries and fleets including owner-operators, non-owner-operators, and crew;

First Nations commercial fish harvesters (or where they exist, organizations that represent them);

Organizations representing licence and quota holders that are not active fish harvesters, including fish processing companies.

The last recommendation was a key one, and there has been very little action by the government that the committee restudying the same issue has been made aware of.

I am going to cut my time a little shorter today to make sure there are opportunities for other members to speak, but I will repeat what I said earlier. We have heard from some who are most impacted by the potential of foreign investment and foreign ownership of our common property resources here in Canada, yet there has been little or no action with respect to who the beneficial buyers and owners are.

I will close by saying that there is merit in a registry of individuals with significant control of corporations in Canada. If this is done, it must be done in ways that protect personal privacy and also protect the common resources for the benefit of Canadians.

I look forward to following the debate on Bill C-42 as it goes through the process, to see if it accomplishes the stated objectives without unintended consequences.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, the member, in his concluding remarks, talked about unintended consequences, and at the beginning of his speech, he said it has taken a number of years to get the bill to this stage. One of the reasons it has taken the time it has is so we could do the proper consultation necessary. We need to allow civil servants to do what they do best in terms of ensuring that we have something of substance, in good form, so it can go to a standing committee to see if there are ways we can improve upon it there. Issues such as individual privacy are of great concern; there is no doubt about that.

My question, as I posed to his colleague, is this: Does the member, having looked at the legislation, have any specifics about where he, personally, would like to see some changes?

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Mr. Speaker, as this bill works its way through the process, we may see amendments at committee stage. I look forward to possibly being able to participate.

The issue I raised is that it has taken over four years, and the government is eight years into its mandate. The issues I raised within the fisheries sector have been very clear, but there was little to no action until stakeholders really started pressing the government. We are finally starting to see some very slow, initial steps being taken, steps that should have been taken years ago.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Mr. Speaker, I commend my Conservative colleague. We sit on the Standing Committee on Fisheries and Oceans together. We work very well together. It is a pleasure to work with him. He is thorough, skilled and always diligent. I want to take this opportunity to thank him for his work.

Time is money. Everyone knows that. My colleague mentioned the time it takes to get a reaction from the government. We are studying foreign investments in fisheries, and we hear that there are even people who are asking to testify in camera, which is very troubling.

I would like my colleague to talk about how effectively and quickly we need to act if we do not want to essentially lose ownership of our fishery resources.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Mr. Speaker, I thank the member for the kind mention of my work at FOPO. We have heard from witnesses. Some have asked to appear in camera, with their names not divulged, because they were afraid of repercussions. We have heard of other harvesters who are concerned, but, out of fear of repercussions, simply will not testify. It is very concerning to us as members, and to me as a parliamentarian, to hear that there are those kinds of threats and concerns being brought. Sometimes, the only way people and their families feel safe is through back doors. I think it is a bigger issue that we as parliamentarians owe a duty to Canadians to fully investigate, to fully make sure we retain beneficial ownership of Canada's resources for Canadians.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Mr. Speaker, there is one thing I want to ask my colleague about. The bill would put the threshold for significant control at 25% or more of the company shares. For it to be truly effective, I think, and a lot of my Conservative colleagues would agree with me, the threshold would need to be lower, like, for example, what is used by the Ontario Securities Commission, which is 10%.

I wonder if the member could comment on that.

[Mel Arnold, Conservative, North Okanagan—Shuswap, BC]

Mr. Speaker, certainly, the threshold of 25% seems to be quite high, especially when tracking of that foreign ownership may not be all that clear in other countries. That 25% threshold, I believe, should be lowered, and we may see that amendment at the committee stage.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I am thankful for the opportunity to engage in this debate.

The reason I find this so important is that I am from the beautiful province of British Columbia and from the city of Abbotsford, which is nestled between majestic Mount Baker, at 10,500 feet high, and, on the other side, the mighty Fraser River. We live in a wonderful community in a wonderful region of the country. However, one of the challenges we have had over the years is that Canada, and more specifically British Columbia, has become the locus, the very heart, of money laundering in our country.

Just so Canadians understand what money laundering is, I will note that it is not benign activity engaged in by Canadians who want to avoid taxes or something like that. Money laundering is about taking the proceeds of crime, channelling them into what appears to be a legitimate business or a legitimate asset and trying to make those proceeds seem legitimate. It is a great way for criminals to hide the proceeds of crime. The last thing I believe Canadians want to do is aid and abet criminals to commit their crimes in our country, yet that is what has been happening for many years.

This legislation is not the be-all and end-all. Bill C-42 is simply a part of the solution. What it would do is establish a beneficial registry, an ownership registry, that would allow Canadians to see who actually owns the companies into which money might be directed from the proceeds of crime. This is not going to solve the whole problem of money laundering. Our police have their hands full in trying to track these criminals down, trying to identify the proceeds of crime and trying to get convictions.

Here is another problem. Money laundering has contributed significantly to the inflationary impacts on prices of land, real estate and homes that Canadians want to buy. These criminals know that if they can get money channelled into a house, it will be less likely for the police to identify that asset as being a proceed of crime. They also channel these proceeds of crime into legitimate businesses, like small and medium-sized enterprises. They channel this money into hard assets. They may be boats or expensive cars. At the end of the day, this costs Canadians big time.

There is another reason this is important to British Columbians. It was in British Columbia that the Cullen commission was established to investigate this very challenging problem to our criminal justice laws and to the broader issue of how much money laundering costs the average Canadian.

The Cullen commission made a long list of recommendations, most of which implicated the provincial government. It called upon the provincial government to act. However, there was one recommendation that stood out, which was that the federal government establish a pan-Canadian beneficial ownership registry for corporations. I believe Justice Cullen really intended for this to cover all companies in Canada. The problem is that the criminal justice law is federal law, so we as a Parliament have jurisdiction over it. Here is the problem: The large majority of Canadian companies are incorporated not at the federal level but at the provincial level, implicating every one of our 10 provinces and our territories.

How do we cobble together a pan-Canadian foreign ownership registry program with all of these different players at the table? The bill would, at least in the immediate term, establish a corporate beneficial ownership registry for federally incorporated companies, which is a good start. However, I believe the Cullen commission's intent was for the Liberal government to engage the provinces and territories to expand this to include the provincial regimes in federal legislation so that we can go after the money launderers in every corner of our country.

There is a reason this has come to our attention as lawmakers. Back in 2016, the Panama papers exposed how vulnerable Canada was to money laundering. Those papers made it clear that Canada was a laggard on the international stage when it came to addressing money laundering and interdicting the criminals who were taking proceeds of crime, filtering that money through legitimate enterprises and assets and then getting away with their crimes.

In 2017, it was the Liberal government's finance minister, Bill Morneau, who said we needed a beneficial registry to help combat money laundering in our market to determine the true source of funds and ownership in the acquisition of firms. He was right at that time, and that was 2017.

What happened in the intervening years? Nothing. From 2016 to 2023, we had eight years of inaction on the part of the Liberal government. This is pretty shocking, since the government, through its finance minister, at the very least had become aware that this was a very important issue for Canadians and nothing was done.

I will say that I am pleased that at least this has now come before us as Bill C-42, and it looks like we will see a beneficial ownership registry passed and implemented in our country. However, as the bill goes through committee review and comes back to the House, we are going to be asking a lot of questions. For example, how will this registry protect Canadians' privacy rights? We want to interdict criminals as they try to undertake their criminal enterprises, but we also want to make sure that the privacy of Canadians is protected.

I do not have great confidence that the government will actually protect our privacy, and here is why. We recently debated Bill C-27 in the House, which is all about privacy rights. We have been asking the government to actually include privacy as a fundamental right in Canada that Canadians can depend on. Sadly, Bill C-27 did not include that, so we have a right to be concerned.

We also want to ask who will have access to the information in the beneficial registry. Is it the police? Is it the ordinary citizen? It is business people? None of that is clarified in this legislation. We need to know that. Will the bill give law enforcement the necessary tools to combat money laundering and terrorist financing?

To conclude, I believe there is all-party agreement, so I am asking for unanimous consent to request a recorded vote on Bill C-42.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Does the hon. member have unanimous consent?

[Some hon. members]

Agreed.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

Pursuant to order made on Thursday, June 23, 2022, the division stands deferred until Thursday, June 1, at the expiry of the time provided for Oral Questions.