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

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, I appreciated being called “young” in this place, although with the rate my hair is turning grey, I am not sure if that is more the job or my age.

I can highlight how this would specifically impact my constituents, although this would not be unique in the context of this discussion. Most people do not understand the intricacies of major business operations, how a corporate registry would affect them, how that would affect the accounting of major multinationals or what reporting requirements banks have.

For example, if the average Canadian were asked on the street what FINTRAC is, most people would probably not know. However, this all has to do with Canadians having confidence in our economy to be able to purchase anything, to go into a bank and trust the fact that the institution is going to have security on its deposits and to ensure that our law enforcement is able not only to pull somebody over for speeding but also make sure that there are consequences for serious crimes, such as laundering money from the proceeds of crime.

This comes back to the very basic principle of ensuring that there is trust in our institutions.

[Maxime Blanchette-Joncas, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Madam Speaker, I would first like to say how disappointed I am with Bell Canada's decision to eliminate jobs back home, in my region, particularly in Rimouski. One of the people who lost his job was an experienced journalist, Martin Brassard. He has 35 years' experience and worked for the Énergie radio station, which he left recently, and then for Rouge FM in Rimouski.

Local and regional information is vital to the development of our communities and also to the health of our democracy. I hope that the government will listen to reason and put in place the solution proposed by the Bloc Québécois of creating a special fund to support regional media.

Members know that the Bloc Québécois supports Bill C-42 because it seeks to foster transparency. We have heard much about the Panama Papers. Is it normal that there are whistle-blowers and people hiding behind corporations, but that we do not have any information about this? Does my colleague agree that there should be more transparency in corporations?

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Madam Speaker, there is a lot to address. I will try to get to all three points.

We need to strengthen whistle-blower protections in this country. That is absolutely essential to ensure that those who are taking risks, whether they are professional risks, risks to the possibility of advancement or sometimes even further risks than that, have those protections. Certainly, I have talked at length about that at the ethics committee here in Parliament.

When it comes to transparency and the need for it, this is absolutely and fundamentally important. That comes back to my response to the previous question. Most Canadians may not understand the intricacies associated with multinational business operations and why money laundering may affect them, but when it comes to trust in our institutions, every Canadian feels that. Unfortunately, we have seen an erosion of trust in the institutions that we all count on.

When it comes to job losses in the member's constituency, I hear his concerns. When the Keystone XL pipeline was cancelled by President Biden, and the Prime Minister refused to do anything about it, I had to face 2,000 constituents who got pink slips. They lost their jobs because of the inaction and political indifference of a party that has wanted to shut down the largest economic driver in our country. I hear that member and the pain associated with so many individuals who face the personal crisis of a job loss, especially when it is a surprise. We need to do more in this country to ensure that we create a business environment that allows for prosperity.

Certainly, the member for Carleton has talked about everything that we have been talking about. We are working diligently to ensure that we can be a country that fosters prosperity again. Together we can do that and bring it home.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, it is a pleasure to rise to speak about Bill C-42 today. It is an honour for me not only because I am speaking on behalf of the good people of Central Okanagan—Similkameen—Nicola but also because it also gives me a chance to recall some of my work as a member of the finance committee in 2017, where we did an extensive review of the money-laundering regime in Canada as it relates to not only money laundering but also to the financing of terrorism.

Let me give a quick shout-out to the former chair of that finance committee, the Hon. Wayne Easter, who basically said that we should travel to places like London and Washington as part of it. I was a member of Parliament who was quite skeptical of junkets in all their forms, but he told me that he thought it was important for the committee to do that, and some of the best testimony we received as a committee on how Canada is seen in the world with respect to things like money laundering was absolutely correct. I have to thank the Hon. Wayne Easter for those observations, because it really showed that Canada is an outlier, and for all the wrong reasons.

We have seen Transparency International talk year after year about how we are slowly becoming a country where money laundering has become a problem. We were once very respected under the Transparency International regime.

Those 2017 recommendations from the committee still stand. It was an all-party report. The Liberals, Conservatives, Bloc members and New Democrats participated in the report and came to many unanimous recommendations, partly as a result of those trips and experiences, because we saw very clearly that Canada had a lot to achieve.

Coming back to Bill C-42, there are a number of things missing from this legislation. For example, recommendation 10 from the 2017 report refers to a rule in the United States.

It states:

That the Government of Canada make it a criminal offence for an entity or individual to structure transactions in a manner designated to avoid reporting requirements. These provisions would be modelled on Title 31 of U.S. code section 5324.

What that means is that while this will capture some of the significant control of a particular corporation's holdings so that someone would be able to find out who had significant control of an asset, such as a piece of real estate, it operates only after the fact. Only then can law enforcement start to draw evidence together to link a particular group, such as organized crime or a terrorism group, with a group of accountants or business owners and lawyers, and through that web be able to trace exactly who is connected to whom and be able to start pulling on those threads.

The Americans have taken a much more proactive approach by making it a crime to help someone to structure their affairs to avoid transparency. This is quite important. While there are many measures in the Criminal Code, it is important that we look at Canada. One of the outcomes of the report is that the legal community is still not within the FINTRAC regime. While we have seen an expansion in recent years, I think partly because of our report regarding FINTRAC, we still do not see everything included, such as lawyers.

Members may ask why that is important. It is because they are the very professionals who structure those affairs so that the money can be laundered in Canada, so I think it is an area still worthy of investigation.

Let us go to the beneficial ownership registry itself. When we went to the United Kingdom, one of the things that struck me there is that it has this beneficial ownership registry online. It is free, and there is very limited information.

First of all, I do not think most Canadians will go to a beneficial ownership registry. There is always a temptation to see what one's neighbour owns and, of course, there could be some abuses that way, but essentially, the people who would be looking at this are law enforcement and Canada Revenue Agency employees working on files that are related to the matter of money laundering. It is absolutely critical that those law enforcement officials, people who are lawfully accessing it for investigate purposes, be able to do so quickly.

However, this registry would only carry just a sliver. Again, for the people at home saying that a beneficial registry sounds good to them, it would only be for those corporations that are registered under the Canada Business Corporations Act. As someone who has lived in British Columbia my whole life, I will say that, from speaking to many lawyers, I know that the bulk of solicitors' work is when they are processing real estate and updating the registry of which a company is kept, and most of that action happens provincially.

As my colleague from Wellington—Halton Hills recently said, this particular measure might offer some good points, but it is only as strong as the weakest link. If we have 10 different registries, we may end up in the tyranny of small differences.

We could take health care as an example. Not all health care information is delivered to the Public Health Agency of Canada in a uniform manner. We find that fax machines are still being used. If one province only gives information under certain forms, it is then very difficult to aggregate that to get a whole picture.

The government, just as it has done in previous agreements with provinces, comes to an agreement on principle, but when it comes time to do the work, unfortunately it does not seem to have a true consensus. I will just harken back to the Canada free trade agreement, which apparently all parties sided with. Half of it was exemptions. One may agree in principle with something, but when it comes to the operability of what comes out of something, it seems that the government is only looking for the big announcement. In this case, it is a beneficial ownership registry that would be transparent.

Again, if it is only a sliver of the activity and it does not necessarily create a uniformity of interoperable registries where everyone can funnel the same information and have aggregated information that is the same, meaning that it is always going have the same basics available, one is going to have that tyranny of small differences. When someone is looking for that information, the last thing we want to do is end up where we do not supply the information to law enforcement in a straight, one-stop shop.

I should also point out that in the U.K., the so-called transparency model has some caveats. When I was at committee, I asked officials about this, and they did say that for persons under 18, their information would not be shared, which probably is for the best, although I would ask how someone under the age of 18 would end up with significant control over a Canadian asset, but we will leave that for another time. Also, there would be exemptions on a case-by-case basis. In the U.K., politicians and celebrities are often taken off. This creates, just like all government systems, a system where someone who is working the registry is now making choices about who is included and who is not.

It is an honour for me to step forward here, and it was an honour to serve on the finance committee. This is an area where I think we can do more. As the Prime Minister likes to say, better is always possible. Unfortunately, we will just have to take what we can get today and hope that a new Conservative government would do the hard work with provinces so that we could really clamp down on money laundering.

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

Madam Speaker, there are a couple of themes I have heard in Conservative speeches about this bill. One is that the ownership threshold is too high at 25%. I think one of the awkward tensions with another line of Conservative argument is that the 25% standard is actually present in most of the provincial registries that currently obtain. I think part of the goal of starting with a 25% ownership threshold was to have more congruence with existing provincial systems.

My concern is that, as we try to resolve these tensions between, as the member rightly pointed out, the importance of collaborating with the provinces and some of the things we might like to see as more stringent requirements in the legislation but that are not congruent with the existing provincial situation, the clock is ticking. There are folks, like Putin's buddies, who are hiding money here in Canada and whom a public beneficial ownership registry would help pursue.

It is not perfect legislation, but can we get the legislation passed before summer in order to ensure that we can begin doing the work to bring those folks to justice?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, that is a very reasonable question. Again, we are essentially putting a line in the sand with this 25% threshold. Let us be clear: It is arbitrary, and it is following the provinces rather than leading on the arguments. Being able to say who is involved and who has significant control over large assets in Canada, particularly from a law enforcement perspective, is quite important.

We have seen that some of the lawyers, accountants and other professionals who have been compromised in this area will use every planning tool possible to evade scrutiny, which is why I made the suggestion that we should follow suit by making it a Criminal Code infringement for those who structure their clients' assets in such a way as to evade transparency. Those are the mechanisms.

While my colleague and I may not agree on the 25% threshold and on whether the federal government is showing leadership, I do understand his point that we need to get moving. I also think we need to send a signal to those who operate in this space that it will not be tolerated.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Madam Speaker, in his speech, my colleague spoke about certain loopholes, particularly with regard to individuals who facilitate money laundering. I am referring to lawyers, notaries and other professionals.

Would my colleague agree that, at some point, we should also legislate so that there is less of an incentive to support businesses and individuals involved in money laundering?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, this is an important issue for Canadians, who understand that the crime rate in this country is high right now. It is also important that the federal government make clear the consequences of criminal activity.

I think that the federal government needs to introduce a new crime bill to crack down on fraud and crime.

I appreciate the member's question. This is how we can convey that to professionals. I also think a reference to the Supreme Court, as was laid out in the 2017 FINA study, so we can clarify what protections there are—

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

I would like to give one more member the opportunity to ask a question.

The hon. member for Mission—Matsqui—Fraser Canyon.

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

Madam Speaker, I thank the member for Central Okanagan—Similkameen—Nicola for his very substantive speech tonight. Can he share with the House how his constituents feel about ending money laundering? What do the great people of Central Okanagan—Similkameen—Nicola think the government should be doing to provide more transparency and accountability as it relates to money laundering?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Madam Speaker, simply put, British Columbians have heard a lot of politicians talk and talk when it comes to money laundering. We have had the Cullen commission, which seemed to talk about many of the activities, but we seem to see a dearth of action from both the federal and provincial governments.

There have been some improvements in casinos. As B.C.'s casinos tightened up, a lot more suspicious activity went on in Ontario. This requires leadership from the federal government. My constituents believe in the law. They want to see the laws enforced.

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

Madam Speaker, before I begin my speech, I want to pay tribute to the people back home, especially those who are helping to fight the wildfires. The town of Normétal has been spared so far, but it is important to mention that the situation there is now critical. As of tomorrow, we are expecting really dry weather. The firebreaks put in place by the SOPFEU should hold, but there is a chance that there will not be enough resources to keep the flames at bay if new fires break out.

I therefore want to say thank you to all the responder units. I am thinking especially of the firefighters from New Brunswick. One of them, Bruno Pelletier, whose name has been in the news, explained all the operational details to me, for example, how a firefighting team takes action on the ground. It is rather impressive to see how they are able to deploy not just to Abitibi-Témiscamingue but anywhere in North America. I want to commend them for their courage, and I am very grateful to them for being there to help with what is to come, because we are still on high alert. We will just have to wait and see what happens in my region and others, obviously.

I am rising to talk about Bill C-42 and how vitally important it is. The bill amends the Canada Business Corporations Act and makes consequential and related amendments to other acts.

I want to begin by noting that this bill is long overdue. It is the result of federal-provincial agreements reached in 2017 and 2018 about collecting and sharing information. During those negotiations, all parties agreed to amend their laws on business corporations to ensure they would remain harmonized. Ultimately, this will make us more effective in the fight against money laundering and terrorism.

Information in the registry of one province is automatically recognized in another, thanks to the similarity of our laws. However, it is important to note that Quebec recently made changes to its law in 2021, through Bill 78, and it is expected that the other provinces will follow suit. Bill 78 contains provisions to create a beneficial ownership registry and make it public.

However, this amendment to Bill C-42 does not stem from an agreement with the provinces and is not intended to maintain this harmonization. It is poorly timed. Obviously, we opposed it in committee.

We need to recognize the importance of maintaining cohesion and respecting the process done previously. I commend the leadership of the Minister of Innovation, Science and Industry, because he was able to put together a bill that took into account harmonization and the priority of the provinces in something like this. As a result, the debates are less tedious, and harmonization is easier to achieve in this kind of context. What is more, Bill C‑42 went through rather quickly at the Standing Committee on Industry and Technology, despite some rather constructive amendments on both sides.

The market relies on investor confidence and that confidence is directly tied to the transparency and good governance of corporations. Businesses also have to fully understand the purpose of the changes made to the business registry.

By passing Bill C‑42, we are strengthening the principles of corporate governance, not only to the benefit of shareholders, but also in the interest of the public as a whole. The whole notion of a registry that will enable us to do searches is something that is very important. We received witnesses from the RCMP who came to tell us how a tool like this could help them in their work, which is far from trivial.

This bill is much more than a simple administrative measure. That is why I am urging my colleagues to move forward with it as soon as possible. The House is about to rise for the summer. It would be really unfortunate if the bill were to die on the Order Paper, because the future is hard to predict at this stage. This is an opportunity to fight organized crime, money laundering and the financing of terrorism.

By strengthening our legal framework, we are creating an environment that is less conducive to illegal activities and that helps protect our fellow citizens and financial institutions. As a result, by rejecting the amendments that threaten the harmonization of the legislation, we are sending a clear message—and that is what the Bloc Québécois has done—that we are determined to fight these scourges and preserve the integrity of our financial system. Obviously, that is the basis of our economy. Maintaining a strong economy depends first and foremost on trust and predictability, as well as on robust laws that are not easily circumvented.

To say that this bill was necessary is an understatement. I wonder why it took so long to present it in the House. A consensus could have been reached in the previous Parliament, or even in the one before that.

It is vital to recognize that corporate governance principles are important for the proper functioning of the market. By encouraging transparency, accountability and informed decision-making, we are bolstering investor confidence and promoting long-term financial stability. We must ensure that our companies have a transparent governance structure that allows for informed, responsible decisions not only in the interest of shareholders, but also in the interest of the Canadian public, obviously. However, shareholder interests are not trivial.

Legislative amendments must never be taken lightly. They have a ripple effect on our entire economic system. If we throw the harmonization of our legislation off balance, we could create disparities and needless obstacles for our companies. This could slow economic growth, discourage investment and detract from the ability of Quebec and Canada to compete internationally.

We are at a pivotal moment. We need to pass Bill C-42 in its current form, after the amendments that were adopted by the Standing Committee on Industry and Technology. I am not talking about the one we are debating right now, which essentially strikes me as a waste of valuable parliamentary time. In fact, I hope that the voters of Notre-Dame-de-Grâce—Westmount are watching our debates right now and will think about this before going to the polls at the last minute. Maybe it will make them think twice about supporting the Conservatives, if they were tempted to do so.

Passing this bill would be an illustration of our commitment to combatting organized crime and terrorist financing, as well as promoting sound corporate governance principles. We will continue to work with the provinces and stakeholders to maintain harmonized legislation and ensure market fluidity.

We must seize this opportunity and take action. Bill C-42 is a positive measure for Quebeckers and Canadians. It is essential that we commit to passing it, recognizing the importance of transparency, corporate governance and co-operation with the provinces to maintain legislation that can provide a robust mechanism to combat money laundering and catch fraudsters.

Together we can strengthen our economy, protect Quebeckers and Canadians, and promote a fairer and more prosperous society for all.

When I think about studying this bill in committee, I think about the day we received the Minister of Innovation, Science and Industry. We were able to question him about a number of things, including how this fight against organized crime is being conducted. I asked questions about how much it costs to fight organized crime, but also how much it costs to not fight organized crime. The figures are staggering. I think that in a society like ours, when we are fighting, when we see the forest fires, when we see the consequences for the economy, when we are forced to keep investing in tax credits for oil companies, I think we are fooling ourselves economically. We need to be able to refocus our investments responsibly. That means having the means to match our ambitions. If we want to make this economic transition a success, we are going to have to come up with the money to do it. That money can be found in tax havens.

We have lists of corporations, but the problem is that we do not know who the real owners of these corporations are. One corporation belongs to another corporation, which also belongs to another corporation and so forth. That is often the problem in the financial world. Who is the true owner? It is all very well to say that there is an ecosystem of 120 or 150 countries that are working together and sharing data, but the fact remains that the threat continues to be that we do not know who the real owners are.

There are companies that want to open mines and process minerals in a region such as mine. However, there is a risk, because a Chinese mining company whose ownership is unknown will have particular interests, and perhaps its sole objective will be to take over our resources and process them in China so they can keep them, or to thwart Canadian companies' growth in order to maintain a monopoly and keep the price of raw materials high.

At some point, there must be a paradigm shift. We must be able to determine who really owns corporations if we are to make the changes needed in our society. Clearly, money has a certain value in our democracy. If we want to continue providing quality social services, we have to go and get the money back from where it is stashed, by fighting against money laundering and tax havens.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, I thank my colleague for his speech. As a member of the Standing Committee on Industry and Technology, I helped analyze this bill. Obviously, it is a very important bill, considering that it aligns with the provinces' legislation, as my colleague pointed out. I would like to ask him a question.

My colleague mentioned Bill 78, which was adopted in Quebec in 2022 or 2021, with respect to the beneficial ownership registry. I would like him to tell me how the legislation we are about to pass aligns with Bill 78. Obviously, no one can object to the value and importance of catching fraudsters, who are unfortunately present in Canada, and more so in some provinces than in others. I think that fraud is a major problem in British Columbia, although it exists in Quebec too.

As a law-abiding business person who follows the rules, I agree with the importance of laws that help us catch fraudsters. I would like my colleague to talk to me about the importance of ensuring that the two bills are interoperable.

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

Mr. Speaker, I thank my esteemed colleague for his intervention and his hard work in committee standing up for the interests of Quebec. We do not always see eye to eye on what is best for Quebec, but I think that we are certainly strong voices for standing up for these interests.

As members know, in February 2020, the Government of Quebec announced its intention to create a registry. Bill 78 was introduced in the National Assembly in June 2020 and was passed in December of the same year. To answer my colleague's question, there were provisions to create this registry of beneficial owners and make it public.

What are the challenges involved in bringing in such a registry and harmonizing it with those of the other provinces? That will become clear over time. If we are careful and create legislation based on what the provinces have already created, then we are more likely to achieve harmonization. There will no doubt be some bumps along the way, but solutions might present themselves.

I think that in a context like this, the provinces have jurisdiction. It is essential that the federal government build on what the provinces are doing and not fight what the provinces are doing. I think that is one of the intentions. Obviously, in Bill C‑42 before us, information sharing and transparency are fundamental.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, I thank my colleague for his speech. I think that we see eye to eye when it comes to fighting tax evasion and the misuse of tax havens. We are on the same wavelength.

The federal government is doing something it has never done before. The Canada Revenue Agency now measures what is known as the “tax gap”, meaning the difference between the tax revenue it should be collecting from individuals and companies, and what it actually collects. It calculated that in 2022, Canada's tax gap was $23.4 billion.

Our shortfall is $23.4 billion. I would like my colleague to tell us what he thinks the Liberal government should do to go after that money.