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

[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—

[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.

[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.

[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.

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.

Business of the House

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

Mr. Speaker, tomorrow we will resume second reading debate on Bill C-42, regarding the Canada Business Corporations Act.

On Monday, we will continue to debate Bill C-47, the budget implementation act.

On Wednesday, we will commence report stage debate of Bill S-5, regarding the Canadian Environmental Protection Act.

Tuesday and Thursday will both be opposition days. In order to assist the Table, I will ask my friend, the hon. Minister of Families, Children and Social Development, to confirm their designation following my statement.

Budget Implementation Act, 2023, No. 1

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Mr. Speaker, it is an honour to rise today in this House and speak to budget 2023 and, more important, Bill C-47, an act to implement certain provisions of the budget tabled in Parliament on March 28, 2023.

The budget this year comes at a time when Canada had the fastest-growing economy in the G7 last year and is projected to be the second-fastest-growing this year and when we have near record-low unemployment rate, having created an additional 865,000 jobs compared to what it was before the pandemic. However, we know those lofty numbers do not mean much for a lot of Canadians who are struggling right now. We have had high inflation since last year, peaking in September at 8.1%. It is now down to about 4.3%, but that has come as a result of the work of the Governor of the Bank of Canada in raising interest rates. We know that many Canadians right now are struggling with the high cost of living.

That is why the budget would make some important investments to help many folks with affordability measures. Key to this is a new grocery rebate, which would help 11 million low-to-modest-income Canadians with up to $467 per couple to help with the rising cost of food. For students right now, as of April 1 of this year, we have eliminated all interest on student loans and we have increased the Canada student grants by 40%. We are also creating a new project and expanding a project to create automatic tax filing for Canadians, because we know it is really important for Canadians to file their taxes so they can get some of the benefits that I was just speaking about.

This budget would also make historic investments in health care: almost $200 billion over 10 years, which would be key for areas like mine, where access to a family health practitioner is a very big challenge. We are also expanding Canada's dental care program for families earning under $90,000. Last year, we started it with children 12 and under. This year, it would be for Canadians who are 18 and under and those over the age of 65. There are also some very important investments that would be made to tackle the opioid epidemic, which has struck B.C. very hard.

There are also some major investments in this budget in creating the good jobs of today and the good jobs of tomorrow. We know the world is rapidly transitioning to a cleaner economy, and that is why this budget would make significant investments in supporting renewable electricity projects right across the country, not just for the private sector, but also working with Crown corporations and provinces to do that.

There are new tax credits for clean hydrogen. I know this is going to be very important for companies in my riding like Quantum Technology, which is involved in projects for the purification and liquefaction of hydrogen. There are also some major investments being made in zero-emissions manufacturing. With the creation of new funds like the Canada growth fund, we would be able to crowd in private capital for projects just like the one that was announced last week with Volkswagen, to create a massive new battery-manufacturing plant in Canada.

Because it is National Tourism Week this week, I would be remiss if I did not mention that this budget would make some significant down payments on the launch of Canada's new tourism growth strategy. There is over $100 million that would go toward the regional development agencies to support local projects. There would be about $50 million going to Destination Canada to attract international events to Canada, and there would be investments made to speed up the operations at airports, including investments in improving the protection of passenger rights.

With that, I will turn to the budget implementation act, which is where the rubber hits the road on a lot of these measures.

I mentioned passenger rights. Right now, we have a backlog of about 30,000 people who are waiting for their cases of delayed flights or cancelled flights to be adjudicated. We would change the process that we utilize for this by switching the onus so that it is not on the travellers to prove that they should be refunded, but on the airline itself to prove that they should not. This would greatly speed up the process and get passengers the refunds they deserve.

As I am a British Columbia MP, there are a couple of areas of this implementation act that are very important to me. The issue of money laundering in B.C. has really been put in the spotlight with the Cullen commission, which the Province of British Columbia commissioned and which delivered its report relatively recently. This report highlights many of the vulnerabilities that we have in Canada in tackling money laundering.

Canada has the dubious distinction of being a haven for this, a process called snow-washing. It is because we have a system without the necessary checks in it and a very well-respected financial system. This budget implementation act would make some very important changes to help us better control this challenge. In particular, it would criminalize the operation of unregistered money services businesses; it would create an ability to freeze and seize virtual assets with suspected links to crime; it would improve the financial intelligence, information sharing and strategic analysis of FINTRAC; and it would create a new offence for structuring financial transactions to avoid FINTRAC reporting. Importantly, a commitment has been made to implement all of the recommendations that are listed by the Cullen commission.

These measures also dovetail to other measures that we are currently debating in this House. We introduced Bill C-42 to create a national beneficial ownership registry so we will know who are the people behind a lot of the numbered companies, which are sometimes using this to evade paying taxes, evade sanctions or do money laundering. Importantly, this system would work very closely with beneficial ownership registries that the provinces are implementing, where the vast majority of companies are incorporated. There is also a commitment made in this budget to work with provinces and territories to look at things like unexplained wealth orders, which would greatly enhance the tools that law enforcement has to be able to locate and seize assets that could be from proceeds of crime.

As I am a coastal MP, there are a number of measures in this budget that I was very happy to see, particularly the new vessel remediation fund and changes to the abandoned boats program. This measure was introduced in 2017 by my former colleague Bernadette Jordan, and it created a fund to clean up boats that had sunk to the bottom of the ocean and were polluting the ocean. This was incredibly important and actually removed a lot of boats from waters around my riding. However, we need to go a step further, because it is much more effective to take those boats out of the water before they sink rather than having to clean them up once they have already sunk.

In the budget implementation act, we are establishing a new vessel remediation fund, which would be boat owner-financed, to provide the resources so we can do some of this very important work. There would be the creation of an allowance for financing of preventative measures, such as voluntary vessel disposal activities, so that vessels at risk of becoming dilapidated, wrecked or abandoned can access funding to repair, secure, move or dismantle and sell them. This is very important because it would save a lot money, reduce the amount of pollution we are seeing in the bottom of our oceans and help a lot of folks I know in my riding, like Don MacKenzie, who, out of the goodness of his own heart, has taken it upon himself to clean these boats up.

I want to talk about something that I think we can all agree on in this House, and that is changes to the alcohol excise tax. As of April 1 this year, the alcohol escalator tax was supposed to increase by over 6%. Through measures that have been introduced in the budget implementation act, we have capped this at 2%. I know this will be a hugely important measure for the breweries in my riding, over a dozen, to be able to provide their products at a cost that is much lower than it would have been. It is really important that we do things like this and support small businesses, which, like all Canadians, are facing rising costs.

The last thing I will mention is that there is a commitment in the budget this year to lower the credit card swipe fees. There is an agreement with Visa and Mastercard to lower credit swipe fees by 27%. This would save businesses thousands of dollars. It is a really important measure to support small businesses in Canada, so they, in turn, do not have to pass on some of the additional costs they would face as a result of those credit card swipe fees.

With that, I would encourage all members of this House to vote in favour of this important piece of legislation so we can make some of these great changes and put them into effect.

Business of the House

[Mark Holland, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, first, I echo my hon. colleague's statements. The next nine of the 10 weeks the House will be sitting is a long time away from families, and our families do sacrifice a lot, which is a really important point to emphasize. He and I could have a longer discussion about the Ethics Commissioner. We are both very anxious to see that important position filled, and I am sure he and I could work together on that.

With respect to the business of the House, tomorrow morning we are going to start second reading of Bill C-47, the budget implementation act.

On Monday, Tuesday and Thursday of next week, we will continue with debate of the budget bill.

On Wednesday, we will call Bill C-13, concerning the Official Languages Act, at report stage and third reading.

On Friday, we will resume second reading debate of Bill C-42 regarding the Canada Business Corporations Act.

Finally, there have been discussions among all parties and if you seek it, I am certain you will find unanimous consent for the following motion:

That, notwithstanding any standing order, special order, or usual practice of the House:

(a) on Thursday, May 4, 2023, when the House adjourns, it shall stand adjourned until Monday, May 8, 2023, at 11 a.m., pursuant to Standing Order 24(1), provided that, for the purposes of any standing order, it shall have deemed to have sat on Friday, May 5, 2023;

(b) on Thursday, May 18, 2023, when the House adjourns, it shall stand adjourned until Monday, May 29, 2023, at 11 a.m., pursuant to Standing Orders 24(1) and 28(2), provided that, for the purposes of any standing order, it shall have been deemed to have sat on Friday, May 19, 2023; and

(c) any standing, standing joint, special, and special joint committees, as well as their subcommittees, shall not be empowered to sit on both Fridays.

Canada Business Corporations Act

[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.

[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.

[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, 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, 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.

[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.

[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.