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

[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.