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.

Access to Information, Privacy and Ethics

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

Madam Speaker, I am pleased to rise to speak today.

I thank my colleague for pronouncing my riding name so well. She did a very good job. Above all, she has a wealth of experience, having been a minister in a previous government, which did a great deal for technology, among other things.

We are talking about a report on facial recognition technology that was tabled two years ago. The reality is that the government has had two years to act on the report's recommendations. Unfortunately, it has done nothing.

Many of our colleagues here have talked about Bill C-27. I have the pleasure of serving on the Standing Committee on Industry and Technology, which is responsible for Bill C-27. It is important to understand that facial recognition is nowhere to be found in Bill C-27. It is a bill on artificial intelligence and privacy, but there is not a single line in that bill that talks about facial recognition.

I would like to review the chronology of events surrounding Bill C‑27. This is important, because it gives us one more opportunity to consider how the government operated. Earlier on, my colleague from Winnipeg North said it was transparent and proactive, that it was doing lots of things, that it had introduced bills, and that it was holding consultations. I have news for him: On June 16, 2022, two and a half years ago, Bill C‑27 was introduced for first reading here in the House. On November 4, 2022, six months later, we debated it at second reading. The bill reached the Standing Committee on Industry and Technology on April 24, 2023, another six months later. However, Bill C‑27 was delayed when other government legislation was given extended consideration, including Bill C‑34 and Bill C‑42. Therefore, to some degree, the government deliberately delayed consideration of the bill.

During the study of Bill C‑27, we heard from numerous witnesses. We learned that 300 groups had been consulted. The problem is that they were consulted after the bill was introduced, not before. Surely, if the minister had consulted the organizations beforehand, he might have been able to include something about facial recognition in his bill. It is good to hold consultations, and we have absolutely nothing against that. It is an important thing to do, but ideally, it should be done before the bill is introduced, to avoid situations like the one we are in now, namely that we are still debating Bill C‑27 at the Standing Committee on Industry and Technology. I think there are roughly 250 amendments, including 55 amendments that the government moved to its own bill. How can such a thing happen? How can the government introduce a bill and then move 55 amendments a year and a half or nearly two years later? Someone somewhere must have done a bad job drafting the bill if, after introducing it, the government ended up consulting 300 groups and moving 55 amendments. We call that working backwards.

On September 26, 2023, we began studying Bill C-27, and we heard from the industry minister, who, we know, is an excellent salesman. I will give him that. Since the member for Winnipeg North told us to try to say nice things about what the government is doing, I will do just that. The government has an excellent Minister of Industry. He is a good salesman. I have no doubt he could “sell fridges to the Eskimos”. It is incredible. That said, I think that as the bill progressed, the minister was put in a position where he should have backed down, in a sense.

Contrary to what my colleague from Beauport—Limoilou said earlier, Bill C-27 does not cover a whole slew of topics. It covers two: artificial intelligence and privacy. The part of the bill on privacy is what we are debating right now. The progress of Bill C‑27 has been hampered because the Liberals want to establish a tribunal, even though no other country in the world has done that. We do not want this bill to establish a tribunal. There are already other authorities that could do this work, such as the Privacy Commissioner. We do not want to create an additional authority because that would require additional funds.

We also want Bill C-27 to move forward. The minister keeps telling us that Mr. Bengio from the University of Montreal is the father of AI in Canada and basically in the world. When Mr. Bengio appeared before the committee, he said that we needed to act quickly. We want to, but the reality is that the bill is ill-conceived. The very first witnesses who appeared before the committee told us that this bill is poorly designed.

First, artificial intelligence should have been addressed in a separate bill rather than bundled together with privacy, even though we agree that these two topics have elements in common. That does not necessarily mean that the two topics needed to be addressed in the same bill.

We moved several amendments to this bill. I must say that the committee is working collaboratively. In some committees, there are attacks, it is very politicized, it is very political and it is very partisan. I must say that at the Standing Committee on Industry and Technology, we all work very collaboratively. We try to move bills through as quickly as possible, but in the case of Bill C‑27, that was unfortunately not possible.

Other events took place in 2023 and 2024. I think we have done an amazing job. At committee, many witnesses came to talk about artificial intelligence itself, and their testimony was very interesting. One witness in particular surprised us a bit. They practically said that we are facing a third world war, a technological war that will be fought not with weapons, but with AI. We were a bit shaken when the witness told us that. We thought they were being a bit alarmist, but the reality is that we heard very solid arguments from the experts from across Canada who also appeared at committee on this topic, at the invitation of the various political parties.

Europe has just passed legislation on artificial intelligence. Here in Canada, if the government had been willing, this bill could have been split up to separate the two subjects. We could still do that. Right now, we could limit ourselves to resolving the issue of AI, in line with what just passed in Europe and what is about to pass in the United States. Their bills have been studied extensively. Quebec already has a law in effect, Bill 25. It is not fully aligned with the legislation that will be created in Canada. A number of legal experts told us that all the provinces' laws absolutely must be consistent with the federal legislation. All of these things come into play.

Facial recognition is a fundamental point when it comes to Canadians' quality of life. We have to make sure that people will not be identified by technology that will allow racial profiling, for example. Obviously, we do not want that anywhere. Just two weeks ago, a former Montreal police chief said that there was racial profiling in Montreal. The City of Montreal will probably be charged for that. Things would be even worse if we had tools to facilitate racial profiling.

I see that my time is up. I am happy to answer questions.

[Charlene Davidson]

Sure. Thank you.

You also mentioned having the proper regulatory authorities for the beneficial ownership registry, and that's really important. The components of that exist in Bill C-42, and we continue to work with ISED on increasing those powers and authorities.

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

Thank you, Chair.

I want to thank our witnesses for being here today as we start our study, which is not quite a legislative review—we would need a motion for that—but a bit of a taste of the work we're going to do. I appreciate your laying out the many steps that have been taken in recent years to address some of the shortcomings in Canada's anti-money laundering regime.

Mr. Brazeau, something you touched on in your opening was some news from earlier this year on the beneficial ownership registry for federally incorporated corporations. This is of course based on Bill C-42, which passed into law last year.

I was hoping you might be able to share with this committee in further detail how getting access to this beneficial ownership information will help the government to better go after money laundering by understanding who the real owners of property are and explain to us how this will work with the beneficial ownership registries that are in other jurisdictions as well.

[The Speaker, Liberal, Greg Fergus]

I have the honour to inform the House that a communication has been received as follows:

Rideau Hall

Ottawa

November 1, 2023

Mr. Speaker,

I have the honour to inform you that the Right Honourable Mary May Simon, Governor General of Canada, signified royal assent by written declaration to the bill listed in the Schedule to this letter on the 1st day of November, 2023, at 4:12 p.m.

Yours sincerely,

Maia Welbourne

Acting Secretary to the Governor General

The schedule indicates the bill assented to was Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts.

[Edgar Lopez-Asselin, Coordinator, Collectif Échec aux paradis fiscaux]

Thank you, Mr. Chair.

Good morning, honourable members.

As the chair mentioned, my name is Edgar Lopez‑Asselin, and I am the coordinator of the Échec aux paradis fiscaux collective. Joining me today is my colleague Philippe Hurteau, who is in charge of research at one of our member organizations. He is also on the collective's coordination committee.

We are here today representing the Échec aux paradis fiscaux collective, a coalition of union and community organizations in Quebec. Our mandate is to foster public debate on the use of tax havens, and to develop and support solutions to shut them down. Our collective has some 20 members, representing a total of 1.7 million people across Quebec.

I'd like to start with a few figures that illustrate the extent of tax avoidance in Canada. According to the Canada Revenue Agency's overall federal tax gap report, released in June 2022, the net tax gap for 2018 is between $18.1 billion and $23.4 billion Canadian. That same report indicates that reporting non-compliance by large corporations alone—and that obviously includes big multinationals—accounts for 70% of the corporate income tax gap.

Our collective looks at the problem from a rather unique perspective. We apply a citizen-centred democratic lens to the fight for tax fairness. To address a problem all too often seen as the exclusive domain of experts, we take an approach built specifically on policy. Our approach can be summed up in three keywords.

First, in order to crack down on tax havens, we need to expose them. That means shining a light on mechanisms that make it possible to engage in tax avoidance.

Second, we need to penalize—use the means available through the criminal justice system to deter those who engage in tax evasion.

Third and finally, we need to collect, in other words, recover the money that tax avoidance represents and use it to fund public services and social programs.

Those three keywords are reflected in a series of recommendations—13, to be exact—that appear in the brief we submitted for the pre-budget consultations in advance of the 2024 federal budget.

I do want to point out that the Parliament of Canada and the Standing Committee on Finance have made progress in a number of areas related to our recommendations. The creation of a Canadian beneficial ownership registry, provided for in Bill C‑42, and the modernization of the much-discussed general anti-avoidance rule represent two of those areas. Those are both measures that our collective has long supported. The bills have yet to be passed, of course, with Parliament still needing to examine an area. Nevertheless, when it comes to cracking down on tax havens in Canada, we see it as a huge step forward that the discussion has reached this stage.

I'll wrap up this short presentation with a few of our collective's priorities for the coming year. I'm referring to two things in particular, the recent legislative consultations and the UN's role in international tax co‑operation.

As far as the recent legislative consultations are concerned, the collective worries about the democratic deficit associated with the recent legislative consultations on tax policy, specifically, consultations on the reform and modernization of Canada's transfer pricing rules and on the implementation of the global minimum tax.

By paving the way for dialogue on a wide range of issues in this area, the federal government has gotten the public used to a more democratic approach. Unfortunately, the recent consultation process largely limited the opportunity for dialogue, focusing on draft legislation informed by OECD discussions instead of a genuine dialogue with civil society stakeholders. However, well-known solutions to address both of those issues already exist and are being discussed at the international level. We feel the Canadian public should be able to debate the issues in an open and democratic forum.

Lastly, with respect to the UN's role in international tax co‑operation, we urge Canada's elected representatives to pay close attention to efforts aimed at strengthening the UN's role in this arena. For its part, the OECD has done a significant amount of work to clean up tax relationships between states, through the base erosion and profit shifting project and the two-pillar solution.

Nevertheless, these efforts have not led to the reforms civil society wants to see. In our view, the talks regarding the UN's taxation initiative are an opportunity to deliver the reforms initiated under the auspices of the OECD. It is our hope that Canada will duly consider the possibilities this renewed momentum opens up.

Thank you.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

We were talking about Bill C-42 last night in the House, which I know you guys are very familiar with. In doing that determination, do you determine on every one of these cases who is the beneficial owner of the acquiring company?

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

This is more of a point of order at this stage than content.

As I read it, adding a new section to section 38, again, is a parent rule issue. Because Bill C-42 does not amend section 38.1, adding a new section is, in my view, and that of some of the legal advice we got from the Library of Parliament, out of order because of the parent rule.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

On a point of order, Chair, while I think I agree with the intent, I think the parent rule applies on this amendment—doesn't it? Bill C-42 does not actually amend this clause in the actual Investment Canada Act, so I'm not sure that the actual proposed amendment is in order. There's no reference to this clause in the bill, as I understand it.

Business of the House

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

Mr. Speaker, I move that notwithstanding any standing order, special order or usual practice of the House:

(a) on the last allotted day in the supply period ending June 23, 2023, the proceedings on the opposition day motion shall conclude no later than 10:30 p.m., the House shall then proceed to the putting of the question on the motion and then, if required, the taking of any division or divisions necessary to dispose of the motion, and the Speaker shall then put forthwith and successively, without further debate or amendment, every question necessary to dispose of the motions to concur in the Main Estimates for the fiscal year ending March 31, 2024, and to the Supplementary Estimates (A) for the fiscal year ending March 31, 2024, and for the passage at all stages of any bill based on the said estimates;

(b) notices of opposed items in relation to the Main Estimates for the fiscal year ending March 31, 2024, and to the Supplementary Estimates (A) for the fiscal year ending March 31, 2024, listed on the Notice Paper be deemed withdrawn;

(c) the recorded divisions on government legislation currently deferred to the expiry of the time provided for Oral Questions today be deemed further deferred to the conclusion of all proceedings in relation to the estimates tonight;

(d) the motion standing on the Order Paper in the name of the Leader of the Government in the House of Commons related to the appointment of Harriet Solloway as Public Sector Integrity Commissioner pursuant to Standing Order 111.1(2) be deemed moved, a recorded vote be deemed requested and deferred after the recorded division on the motion for third reading of Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts;

(e) in relation to Bill C-9, An Act to amend the Judges Act, the amendment to the motion respecting Senate amendments made to the bill be deemed withdrawn and the motion respecting Senate amendments made to the bill, standing on the Notice Paper, be deemed adopted;

(f) Bill S-8, An Act to amend the Immigration and Refugee Protection Act, to make consequential amendments to other Acts and to amend the Immigration and Refugee Protection Regulations, be deemed read a third time and passed;

(g) Bill C-40, An Act to amend the Criminal Code, to make consequential amendments to other Acts and to repeal a regulation (miscarriage of justice reviews), be deemed read a second time and referred to the Standing Committee on Justice and Human Rights;

(h) Ways and Means Motion No. 18, notice of which was tabled on June 16, 2023, be deemed concurred in, a bill based thereon standing on the Order Paper in the name of the Minister of Crown-Indigenous Relations, entitled “An Act respecting the recognition of certain Métis governments in Alberta, Ontario and Saskatchewan, to give effect to treaties with those governments and to make consequential amendments to other Acts”, be deemed to have been introduced and read a first time, deemed read a second time and referred to the Standing Committee on Indigenous and Northern Affairs; and

(i) the written questions dated June 20, 2023, standing on the Notice Paper, be deemed to have been transferred to the Order Paper on Wednesday, June 21, 2023, for the purposes of Standing Order 39.

Canada Business Corporations Act

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Madam Speaker, I will let the House judge, since the Liberals made the judgment in committee. We were proposing to amend clause 15 of Bill C-42 to say the following:

The Director may, with the approval of the Minister, enter into an agreement or arrangement with a provincial corporate registry or with a provincial government department or agency that is responsible for corporate law in the province for the purpose of facilitating timely access to beneficial ownership information that could relate to the commission or potential commission of wrongdoing as described in paragraph (3)(b) [of the bill].

It was not an amendment that was going into provincial jurisdiction. It was an amendment saying that with co-operation of the province, if it were willing to do it, we could share information. Apparently, sharing information and getting a more effective registry was not something that the government wanted to see in this bill.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Madam Speaker, I too rise this evening to speak on Bill C-42, an act to amend the Canada Business Corporations Act.

The bill was tabled about two and half months ago and would create what is known colloquially as beneficial corporate ownership registry. The purpose of that is to make transparent the true and beneficial owners of every federally registered company. A legal owner of a company holds the legal title to that company while the beneficial owner holds certain benefits and rights to company assets, even though the beneficial owner's name may not appear in the legal title.

Corporations in Canada need only register information such as names of directors. They do not have to register who their shareholders are. The current law only requires that lawyers maintain a registry of beneficial owners, so there is no government registry. The lawyers and the companies have to maintain their own sort of self-regulated registry. It is not transparent, it is not visible and it is not even visible to governments unless asked. When police need to find out who the beneficial owner of a company is, they have to contact that company's lawyers, say they are calling from the RCMP and would like to know who the beneficial owner of the company is. The lawyer may say he will get back to the officer and then call the client to say the RCMP is doing an investigation into it.

These are the things that exist now and why we need beneficial ownership registries on who the individuals are, not the corporations, who actually benefit from the ownership of corporations, whether they are federally or provincially incorporated. A beneficiary is the individual or entity, as I said, that will benefit from the transactions or the profits of the remittances of the activities of that corporation.

This bill is a good start, finally, after years and years of discussing it. I think there was a joint press release with the provinces almost six years ago that said we should maybe think about doing this. It has taken the government quite a bit of time to get to this important issue.

The government sets that any individual who owns 25% or more of the shares of a federally incorporated company must provide the information to the registry. What does this mean? There are 4.3 million incorporated companies in Canada and only about 10% of them are incorporated federally. Most corporations are incorporated provincially. Therefore, this bill would have no direct impact on 90% of companies.

With regard to the question earlier from the leader of the Green Party, when 90% of the companies in this country are not included or not brought under the umbrella of a national beneficial ownership registry, it is pretty clear that we are going to still have a significant money-laundering problem.

That is the primary reason, as the minister claimed, the government claims and most interest groups have claimed, we need to have this registry: to deal with money laundering. Other members have mentioned, and I will too, that Canada does not have a very nice nickname around money laundering that has been coined and used internationally to describe Canada, and that is snow washing. We are the place where money goes to get laundered and cleaned up from illegal activities. It describes the flow of dirty money entering Canada.

The registration system for Canada at both the federal and provincial levels is totally shrouded in secrecy, which means that the real owner of a company or a trust can hire a person as a stand-in or substitute to conduct all financial filings and submissions for that company. The practice effectively makes Canada a tax haven, along with countries such as the British Virgin Islands, Panama and the Bahamas. The process has been made even easier since the Canadian government signed tax treaties with 115 countries.

With a form of business organization called a Canadian limited partnership, the only persons who have to declare themselves to authorities are the partners, and if they do not live in Canada, they are exempt from filing taxes in Canada. If stocks of a firm are not traded publicly, the rules require that only the directors of such companies be identified, and these directors are not required to reveal whether they are acting on behalf of someone else or whether they actually own any shares in the company.

How bad is it? Recent estimates have put money laundering in Canada at $133 billion a year. Now, that is a big number. It is 5% of our GDP. It is a huge amount of money from illegal gains that is being cleared through our system in Canada.

Money laundering has its origin in crimes that destroy communities, such as drug trafficking, human trafficking and fraud. These 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 cost of living in the communities where they choose to live.

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 were unfairly gained at the expense of others. If one jurisdiction, such as Ottawa, or even Ottawa and a few of the provinces, as I mentioned earlier, create a corporate beneficial registry that is publicly available but others do not, then money launderers will gravitate towards those jurisdictions within Canada in order to hide their ownership and enable their money laundering.

We have talked a lot in this debate in the few moments that we have had about the issue of money laundering, and I will give another example of a problem that is caused by not having a beneficial corporate registry.

All politics are local. I have 7,000 commercial fishermen in my riding. There are 16,243 fishing licences in Atlantic Canada and in the gulf region of Quebec. There are 5,727 fishing licences in British Columbia. That is a total of about 22,000 commercial fishing licences that have been issued by DFO in Canada. However, do members know that DFO does not know who owns them? DFO does not know who owns them because there is no beneficial corporate registry.

In fact, 17 months ago, DFO went out for the first time to do a survey of the licence holders. They are not necessarily the licence owners, because in British Columbia, the licences can be leased out to someone, who would then be called the licence holder. Do members know what the result is? The result is that DFO now has to hire a forensic auditor to come in and try to figure out what happened with the information they got.

After more than 150 years of the Government of Canada handing out fishing licences, DFO still does not know who owns them, and that is a problem. It is a problem because DFO has policies around who can control a particular fish species or an area of fishing, and we cannot have an uncompetitive situation. We have had evidence in our study in the House of Commons fisheries committee on corporate concentration and foreign ownership in the fishery that there is one particular company that may own up to 50% of all commercial licences in British Columbia. This is way above what the Competition Bureau says is an acceptable concentration for any business, which is about 30% maximum in any industry. One company in B.C. may own half the licences, but we do not know because we do not have an ongoing federal or provincial beneficial registry that can provide that transparency.

It should not be up to a government department to do a survey once every 150 years in hopes of trying to figure this out. This should be something we could search regularly.

This is an issue in industries like the lobster industry. In southwest Nova Scotia, in my riding and in the riding of the member for West Nova, we all know that there was a lot of organized crime and cash. Whenever there is cash flowing and there are untraceable products like seafood, there is the opportunity for money laundering. This is a huge issue in Canada, and even those numbers are probably not included in the $133 billion I talked about earlier.

The bill is a good first step, but it really just plays at the edges when so many corporations provincially are not included in it.

We mentioned earlier that we tried to make a few improvements with the help of the government on this, in a genuine effort, as we are very collegial in the industry committee, to try to get things done. However, we only had two meetings, one hour of outside witnesses, officials for the other one, and then straight into clause-by-clause.

I will give a couple of outlines. In that time, we tried to bring that threshold from 25% down to 10%. That is not uncommon. The government said that this is some sort of international standard. In other areas, the government likes to be the leader around the world, in saying that it is leading everybody on trying to have more NPAs than anybody else in the world, that it is trying to push the envelope. On this one, it would not push the envelope. Moreover, it is not really pushing the envelope, because the Ontario Securities Commission requires that when someone buys 10% or more of a publicly traded company, they have to put out a news release and tell the market that they are doing that.

When they want to go below 10%, once they own those shares, the Ontario Securities Commission actually requires them to put out a news release before they sell the shares. They must actually notify the markets that they are going to sell their shares to below 10%. However, apparently, when it comes to money laundering, 10% is too aggressive for the government. It wanted to keep it at 25%.

When it comes to owners getting influence in a widely held company, if someone holds 20% of the shares of that company and the rest of the shares are widely held, then they are essentially the one that is controlling what happens in that company. The inability of the government to see that was greatly disappointing.

We want, as we have said, to expand it to real property, which is not that difficult. It is just connecting in the registries for property registration. We know that, in Vancouver and Toronto in particular, huge amounts of money laundering have happened around the purchase of residential properties. However, that has been rejected by the Liberals.

Finally, let us say that we have the provinces that, all on their own, go on and do provincial registries. Would that not be great? We put in an amendment saying that if there is a provincial registry, the federal government should go and get an agreement with the province to share the data back and forth, so that they are both searchable on all the data. It should not do it on its own, but it should do it under a federal-provincial agreement with the province. Again, the Liberals, and, I might say in answer to the parliamentary secretary's question, the Bloc Québécois voted against those amendments. The NDP supported them.

I think it is too bad that we have had so little debate, just five hours in the House, and six outside witnesses. This is such an important bill, but it has been rushed through; so much more could have been done for this. Hopefully, in the not too distant future, after the next election, with a change in government, there will be an opportunity to improve this bill much more than the Liberals are willing to do at this location.

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

Madam Speaker, just to be clear, I am not speaking about Bill C-18, nor am I speaking about any purported amendments to Bill C-42. Rather, I am speaking about Bill C-42, an act to amend the Canada Business Corporations Act.

The bill does a number of things. Its stated goal is protecting Canadians against money laundering and terrorist financing, deterring tax evasion and tax avoidance, and making sure that Canada is an attractive place to do business. Those are all laudable goals.

We know that money laundering in Canada is a serious issue. It is so serious that we have earned our own nickname as the land of snow washing. That is not a badge of honour. In 2022, the Canadian Anti-Fraud Centre reported $530 million in victim losses, a 40% increase over 2021.

These are vulnerable Canadians being preyed upon by fraudsters, who are destroying lives. It is important that, as parliamentarians, we come together to deal with these problems and do our best to protect Canadians and their retirement savings.

In 2016, the Financial Action Task Force said that Canada was completely deficient in many areas. One of its main criticisms, in fact, was our lack of a beneficial ownership registry. That was seven years ago, and we are only getting to it today. Establishing such a registry would be a major step forward, and Conservatives certainly support that. The problem, as always, is that the devil is in the details.

In committee, Conservatives tried to strengthen the bill in a number of ways. One glaring problem with the bill is that the corporate and personal fines for failure to provide required information were too low under the CBSA. The fine was only $5,000 for corporations and only $200,000 plus six months' imprisonment for individuals. I was happy to see the INDU committee increase personal fines for individuals to $1 million plus five years' imprisonment, as well as fines for corporations to $200,000. Of course, Conservatives supported those amendments, as did Liberals on the committee. We can see that when Conservatives and Liberals vote together, amendments actually pass at committee.

There were, however, a number of other Conservative amendments related to thresholds, real estate, interoperability, law enforcement, access, searchability and the use of post office boxes, of all things, which would have made the bill more effective. They were all voted down by Liberal committee members.

I want to touch on a few of them now. Currently, under the CBSA, the threshold for what is called a “significant interest” is 25%. This means that corporations only have to disclose those shareholders who have at least a 25% interest in the outstanding shares of a corporation. This poses a problem, because if we really want to crack down on money launderers and terrorist financiers, the threshold should be lower. For instance, the Ontario Securities Commission threshold is 10%.

At committee, Conservatives proposed this amendment. However, it was rejected, even though the RCMP felt it was necessary. It was rejected by Liberal members of the committee, who purport to want this legislation to be effective. It is hard to understand why they would not want to lower the threshold. James Cohen, executive director of Transparency International Canada, said that it should go down as well.

Conservatives proposed another amendment that would have brought real estate holdings into the registry. In 2018, money laundering funded $5.3 billion in British Columbia real estate purchases alone, further driving up the cost of homes in that province. The amendment said, “The corporation shall prepare and maintain...a register of individuals with control over the corporation and its real property”; it was a very important amendment that would have gone a long way in helping to control money laundering in Canada through real estate acquisitions. This amendment would have expanded the scope of the registry to make it similar to British Columbia's land ownership transparency register.

Another amendment called for interoperability with provincial registries. The fact of the matter is that most corporations in Canada are provincial. As this bill only governs federally incorporated companies, it misses out on bringing in the provinces, which would make it far more effective.

Another amendment that was defeated had to do with law enforcement access. This amendment would have added specific language to the bill to ensure that law enforcement and organizations like FINTRAC could access information from the director rather than having to go to the corporations directly. It would also have removed reference to prescribed circumstances, ensuring that only minors would be automatically exempted.

Another amendment defeated by Liberal members had to do with using post office boxes, of all things. It would have barred individuals from using post office boxes as their address in the registry. This was a specific request of the End Snow-Washing campaign.

On a cautionary note, it is always important to give consideration to stakeholders and their concerns. Small business is the backbone of this country's economy. The Canadian Federation of Independent Business raised a number of concerns, and I want to talk about some of them here.

It raised the issue of privacy and personal security. It said many small business owners are concerned about having their information available to the general public, such as name, place of residence, date of birth, citizenship, telephone number, etc. In fact, individuals in small towns may not want neighbours or acquaintances to know they have a controlling interest in a company. The CFIB talked about fraud and crime risks and how making beneficial ownership registries public could make it easier for criminals to target wealthy individuals or SMEs. Small business owners are often the targets of fraud and could be even more vulnerable than consumers, as they do not have consumer protection acts to help them manage those who want to take advantage of them.

It talked about competitive disadvantage and that requiring SMEs to disclose detailed ownership information publicly might give their competitors a strategic advantage. Rival businesses could gain insight into their ownership structure, investments and so forth. It talked about inaccurate or outdated information and how public registries may not always provide accurate or up-to-date information due to delays in reporting areas or deliberate misrepresentations. It talked about how requiring small businesses to disclose their beneficial ownership information publicly could impose an additional administrative burden and compliance costs, and that this burden might disproportionately affect smaller companies with limited resources.

Also, I want to touch on the Canadian Bar Association, which raised concerns about the risk of identity theft from the registry, potentially undermining its anti-fraud rationale.

I raise these concerns not to say that we should not make this legislation effective but to say that as parliamentarians, it is incumbent on us to listen to the stakeholders and their concerns as we try to craft and fashion legislation that addresses those concerns but still accomplishes the ultimate goal of the legislation.

The reality is that money laundering is a very serious problem. We know from our friend Bill Browder that Canada has been fertile ground for Russian oligarchs to clean their ill-gotten cash.

I mentioned earlier how money laundering has driven up the cost of housing. This is at a time in this country, after eight years of this Prime Minister, that the dream of home ownership is in critical condition. The average mortgage payment has doubled. The average family now needs to spend 62% of its monthly income to own the average home.

The cause is clear: Inflation fuelled by wasteful government spending has fuelled the inflationary fire. Just today, the International Money Fund cautioned that Canada needs to bring back a debt anchor and keep fiscal policy tight. Money laundering makes things even worse.

Finally, I must reiterate how important it is to bring provinces on board. It is a matter of basic federalism. The government will need information-sharing agreements with the provinces if this registry is going to work. It will only be as strong as the provinces willing to co-operate with it, and that means all the provinces, because if one jurisdiction is left out, it will become a hotbed for money laundering.

I will wrap up by saying that although Bill C-42 is far from a perfect bill and has key shortcomings, including leaving in place a high threshold for significant control, failing to bring into force a clause allowing law enforcement back-end access to the registry and failing to ensure interoperability with the provinces, it is clear that it is a step in the right direction, and Conservatives will support it on third reading.

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

Madam Speaker, Conservatives are proposing that we amend the motion before the House today, the motion that Bill C-42 be read for a third time, in order to send Bill C-42 back to committee for some important additions, with number one being thresholds.

During our study at INDU, the RCMP officials were clear that reducing the threshold for significant control would strengthen the registry and law enforcement agencies' ability to utilize it in the fight against money laundering. Let me quote Denis Beaudoin, director of financial crime at the RCMP. He stated:

The RCMP standpoint is that the more names and more information, the better. As we're trying to make links in a criminal investigation, it certainly can help.

This was in respect to thresholds.

The End Snow-Washing campaign also pushed for a 10% threshold, though the officials have since suggested it could be done at a later date through the Proceeds of Crime (Money Laundering) and Terrorist Financing Act review, which takes place every five years.

During testimony, the representative from Transparency International, which is tied to the End Snow-Washing campaign, stated:

I don't think, for one, lowering the threshold from 25% to 10% and a risk-based approach are mutually exclusive. I think they actually go hand in hand. I would note that the 25% isn't so much a standard as it was an initial global recommendation that everyone just kind of grabbed on to.

This quote contradicts the point that we have seen raised repeatedly by Liberal members that 25% is an international standard. They argue that moving the threshold away from the standard would hurt interoperability, but I have doubts. Does the government really believe that provinces would not follow suit and align with a new federal threshold? Twenty-five per cent remains far too open to abuse. The lower we bring the threshold, the less opportunity there would be for criminals to circumvent it. As I understand this bill, a sole owner of a small business worth $100,000 in gross profit on an annual basis would be subject to reporting requirements and included in this registry. Meanwhile, a person with a 20% stake in a $100-million corporation would not.

As has been mentioned during debate so far, currently the Ontario Securities Commission requires that any shareholder with a 10% share or more has to be reported. Private corporations should be held to the same standard of transparency and accountability. Frankly, I do not understand or trust public servants who say they are going to follow through on this. I predict that we will be back in this House in less than 10 years, wondering why the threshold was not adjusted to a lower rate in this bill to account for the serious problem of money laundering that we have.

Conservatives are therefore proposing that we send Bill C-42 back to the Standing Committee on Industry and Technology with the aim of reducing the threshold for significant control from 25% to 10%.

The second point I would like to raise tonight relates to interoperability. We are also calling on the industry committee to adopt additional amendments in relation to the interoperability of the registry with provincial and territorial registries.

As of now, penalties for violating requirements in respect to reporting information would only apply to federally registered corporations, which represent less than 15% of private corporations in Canada. As we heard at committee, there is as much as $113 billion being laundered in Canada annually. We must ensure that this registry can reduce that figure as much as possible and end Canada's reputation as a haven for dirty money. To that end, by changing some of the clauses through the Criminal Code, we could achieve a higher standard of interoperability by making sure that provinces that opt in to a federal registry would impose the same penalties as a federally registered corporation.

Other areas for improvement of Bill C-42 were also raised through numerous amendments to strengthen the registry.

With my time here today I will talk about law enforcement. Conservatives also moved an amendment to ensure law enforcement would have back-end access to the registry without having to go directly to corporations. Department staff at committee assured members that there is already a provision for this in place. However, to my understanding this is not the case, based on the bill itself, and what we needed through more committee testimony was clarity through the officials on how that would actually be done.

The Budget Implementation Act, 2022, No. 1, did include an amendment to the CBCA to give law enforcement this access. However, it has never been brought into force.

We moved further amendments at INDU in relation to interoperability as well. The first would have added the jurisdiction of residents and the name of the corporation to the registry, ensuring it could have been searched by these fields. The second would have added specific language to require the registry to be made public in a searchable format.

I will quote Sasha Caldera from Publish What You Pay, which is associated with Transparency International. He said:

Searching by the name of the corporation is a function that the U.K. registry has, and it allows for reverse searching. If you don't know the name of the beneficial owner, you can look up the name of the corporation, for instance. That would be incredibly helpful. In some of our other recommendations, we just want to ensure that all publicly accessible data is searchable.

We wanted to achieve the same objective.

Another amendment we moved was raised by the End Snow-Washing campaign of Transparency International. One of them would have added “mechanisms to prevent beneficial owners from knowingly abusing the PO box system”. Officials outlined at the clause-by-clause debate that this is a regulation that already applies to federally registered corporations.

However, what was not made clear is whether that same regulatory standard would apply to provincially regulated corporations. As a result, we left the amendment stage of the bill not knowing whether P.O. box numbers where provincially registered corporations are held would be subject to the same standard as federally registered corporations if any set agreement was made between the federal, provincial or territorial government in their respective jurisdictions. What I am getting at here is that we just needed a bit more time.

I will quickly touch upon identity verification, another area we wanted to spend a bit more time on. An amendment we were unable to get to the floor in time from the Transparency International campaign related to identity verification. It requested language to require corporations to verify the identity of individuals with significant control. Indeed, there already is a precedent for this in Canada. B.C.'s Business Corporations Amendment Act, 2023, included the following language, which the organization included for reference in its submission to committee the hour before clause-by-clause:

Verification of identity of significant individual

(1) On the request of the registrar, a significant individual, or a person in a prescribed class of persons who can verify the identity of the individual, must provide to the registrar

(a) any prescribed records, or

(b) information or proof the registrar considers necessary

to verify the identity of the individual.

(2) The records, information or proof must be provided under subsection (1) in the prescribed form and manner.

We needed to do so much more for the bill, but I have just been informed by leadership that we will be removing our amendments to the bill, unfortunately, because it looks like we are going to recess for the summer this month. We will not be able to sit this summer and go through this important work.

That said, I still very strongly believe that, when we look at the proceeds of crime and money laundering act, we should revisit the CBCA to ensure we do the utmost to protect Canadians from money laundering. We have so much more work to do on this, and I am sad the Liberals tried to push this through right to the very end. If we just had a few more meetings, the bill could have been so much better.

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

Madam Speaker, I am going to be speaking on Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts.

Before I begin, I seek unanimous consent from the House to split my time with the hon. member for Charleswood—St. James—Assiniboia—Headingley.

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

We are debating Bill C-42.

I thank the hon. member.

Questions and comments, the hon. member for Charleswood—St. James—Assiniboia—Headingley .

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

Madam Speaker, I rise on a point of order. We are not here to debate Bill C-18; we are here to debate Bill C-42. The member was asking about Facebook.

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

Madam Speaker, according to Transparency International, between $43 billion and $113 billion a year is laundered or is lost to tax evasion.

Obviously the Bloc Québécois is in favour of Bill C‑42, which calls for more transparency from businesses in order to determine who exactly is hiding behind these businesses.

My question for my colleague is on the need for co-operation between the federal government and the Government of Quebec. In fact, Quebec has already brought in measures to improve transparency and to prevent tax evasion. How does my colleague see this co-operation?

Business ownership and business ownership law are areas of provincial jurisdiction, not federal jurisdiction. How does my colleague think the federal government will be able to bring this bill into force while securing real co-operation and getting the necessary information, which belongs to and is the responsibility of the provinces, including Quebec?

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

I do not usually do this, but we are talking about Bill C-42 right now and not Bill C-18.

The hon. parliamentary secretary.

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

Madam Speaker, I was on a roll until I was interrupted. I was actually saying some positive things about the Conservative Party.

At the end of the day, it is good, healthy legislation. One of the things to recognize is that Ottawa plays a leadership role on the issue of money laundering that is taking place in Canada and on the other types of illegal financial transactions that we see.

We are not the only level of government that has to play this role. We have to recognize that there are provincial and territorial governments that have responsibility for corporations and small businesses in their jurisdictions. We have seen that some provinces have been more proactive in terms of trying to deal with issues such as money laundering, the funding of terrorism and tax avoidance. They have actually already started the process.

It is not like it is an issue that has been overwhelmed by governments around the world. More and more, we are getting attention paid to this particular issue. One would expect that a government, in recognizing it, would want to bring forward legislation, as this government has. It has done a very thorough job in the development of the legislation, and presented it to the House. I suspect that is one of the reasons we are getting the support that we are from all parties inside the House.

There is a scale within the legislation that would enable Ottawa to incorporate the provincial and territorial participation. I believe we have a couple of provinces in Canada, Quebec and possibly British Columbia, but do not quote me on that, that have actually already come forward with legislation. That legislation would complement the federal registry that we are attempting to put in place through the framework that is being established with Bill C-42.

It is a commitment that we made to Canadians quite a while ago. In fact, it was in budget 2022 that we talked about establishing the framework, or, should I say, establishing the bill. We did not know the number then, but it is Bill C-42. It is a commitment that is being fulfilled by the Prime Minister and the government to support the building of confidence in corporations.

I look at the bigger picture. We often hear how important small businesses are, and the biggest corporations often start as small businesses. In the last year, I have been to a number of announcements of small businesses, and even medium-sized businesses, opening up in Winnipeg North. They have contributed to the overall success of our economy over the years. We can talk about small businesses being the backbone of the Canadian economy, creating the hundreds of thousands of middle-class jobs that are so very important.

Many of those small businesses are going to be the medium-sized and larger businesses of the future. They are the businesses that ultimately believe in the importance of issues such as trade and international trade. At the end of the day, as I indicated in previous speeches, trade is very important to Canada.

As a country that is so dependent on trade, it is important that we send a message around the world that we take money laundering seriously. We take the issue of funds that could indirectly or even directly go to terrorist organizations seriously.

By doing that, I would argue we are demonstrating leadership not only from within our national boundaries, but even beyond them. It is not an easy task. As I say, at the end of the day, within this legislation, we provide enough scale to allow for provincial jurisdictions. Those numbers are actually even larger, in terms of the number of corporations and businesses, than what we would have in Ottawa. I suspect, if we were to canvass these jurisdictions, we would find that all of us benefit if we can pool the resources and get everyone onside in the form of a larger national registry, and that is what this legislation is doing.

Corporations do a lot of amazing things. There is no doubt about that in the business community, but there is a percentage of those companies that do a great disservice. Those are the ones that continue to seek out ways, directly or indirectly, to launder money or to cause issues related to real estate, such as speculation of property, tax avoidance or even tax evasion. There is a difference.

We also see the issue of terrorism being financed, all through illegal money. Members should be aware that money laundering takes many different forms. I know British Columbia is a good example of it in terms of the casinos. Illegal money comes in, gets washed and then somehow exits as clean, filtered or cleansed money. That has cost millions of dollars.

We can talk about cryptocurrency. A number of months ago, there was an article in the Winnipeg Free Press on the police department cautioning people about fraud taking place with cryptocurrency. These are the types of things we need to be aware of. That is why we need to be careful.

I know we often mock the leader of the Conservative Party because of his attitudes toward endorsing cryptocurrency. He talks about it being a good way to fight inflation. At the end of the day, we have to be very careful. It is one of those possible tools that can, in fact, be used for unethical financial exchanges.

We are very dependent on our financial institutions and the protections that we put into place to track money that is flowing into Canada, and even money that is not flowing into Canada but has been acquired in an illegal fashion. We need to be cognizant of that fact. That is why, if someone goes into a bank and makes a deposit of more than $10,000, there is an obligation to report it.

There are many outstanding Canadians who work at our financial institutions who are very aware of the types of things to watch out for. We need to watch out for certain behaviours that take place. They also play a critical role in terms of protecting the integrity of our system.

From my perspective, and I would ultimately argue in the best interests of Canadians as a whole, the government takes actions where it can, like it is doing regarding Bill C-42, with the idea of establishing additional confidence in the public regarding corporations.

There is something that I should make a quick reference to, as I felt quite good about it a couple of budgets back. The federal government found that we had a lot of people outside of Canada investing in real estate who were driving the costs up. In particular, cities like Vancouver and Toronto were being subjected to all forms of speculative investments. There were also issues surrounding money-laundering allegations and so forth in real estate, in particular in condo developments. I heard about some of the empty units. Imagine building a unit that is worth $2 million-plus and no one is living in it. After I talked to some people, I found out that a huge percentage of the overall new condos being developed in communities like Toronto and Vancouver were empty. They were sitting empty. One of the measures the government put in place to try to deal with that issue was a special tax for non-residents.

Like many others, I think housing should be all about homes for people. However, they are becoming more of an investment, and a lot of the investments are driving up costs, especially with some of the vacancy rates across the country. It could be that or just a mindset that is often referenced about corporations in general: Corporations are greedy, and there is a lot of corruption, laundering and tax evasion or avoidance. A lack of trust is often found among the public in regard to corporations.

That is why when looking at the very heart of Bill C-42, what we are really talking about is corporate accountability and public trust in our corporate institutions. We see this because of the requirement to have a public, searchable ownership registry. That is at the core of the Canada Business Corporations Act and the amendment the government is proposing today. One could ultimately argue that the industry itself has been saying it wants to see this legislation.

The other day when I was speaking to this legislation, it was interesting. I was one of the individuals expecting to see the legislation ultimately pass unanimously or very close to unanimously. That will depend on what the leader of the Green Party and its other members do. That is the type of support potential it has.

I often suggest that members see the legislation for what it is worth and listen to the comments being made at the committee stage. If members really want to help restore confidence in our corporations, one of the best things they can do is get this legislation passed so we can make a very strong statement. That statement deals with the beneficial ownership that individuals have in corporations, which would have to be part of a registry. Individuals could then find out about ownership when someone has a major portion of that ownership. I know that some want to see a lower percentage and that others might want to see a higher percentage. However, at the end of the day, what we are seeing, which I think is 25%, is an acceptable percentage for now.

At least let us get the legislation through. By doing that, we are establishing the framework. I would then hope to see more discussions taking place at the different provincial legislatures in support of it.

I talked about smaller businesses in our communities and the impact they have. I do not want to in any way try to imply that corporations as a whole need the legislation as much as it is important that the legislation is there to support corporations. We will find that law-abiding corporations and businesses are actually very supportive of the legislation. They understand the need for it. It is the idea that we have a registry that would enable consequential penalties. I would like to cite one in particular. By passing this law, to use a very specific example, corporations that fail to provide their beneficial ownership information to Corporations Canada may be prevented from obtaining a certificate of compliance.

Keep in mind that if they cannot get that certificate of compliance, that has an impact on their ability to borrow funds. If a corporation wants to expand and go to a bank, they will need that certificate, in good part because without that certificate, chances are they will not be able to get financing. This is not to mention exports. Many corporations today are dependent on exports. To get those exports and have the market, these certificates are absolutely critical.

If I look at it from that perspective, I think of my own community of Manitoba and some of the corporations that have done exceptionally well. The other day I talked about Hylife. Hylife is a company located in Neepawa, Manitoba, that creates hundreds of direct jobs, not to mention hundreds of indirect jobs. We can find out who those beneficial owners are, which is really important. It is the same thing with New Flyer Industries. These are in provincial jurisdiction, but some are in federal jurisdiction.

We are talking about millions of dollars in transactions. If we look at New Flyer Industries, a huge corporation—

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

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

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 third time and passed.

Online News Act

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Madam Speaker, I am pleased to rise today in this place to speak to Bill C-18, An Act respecting online communications platforms that make news content available to persons in Canada, which has been returned to the House by the Senate with amendments.

Before I begin my speech, I would like to point out once again the hypocrisy of the Liberals, who imposed time allocation on this bill for a second time earlier today. If that was not egregious enough, yesterday a member of the government interrupted a member of an opposition party in the middle of their speech to give notice that it would be moving a time allocation motion on Bill C-18 today. The government then switched debate to Bill C-42, forcing that opposition member to finish their speech this afternoon. Perhaps it is understandable that the government is in such disarray as it stumbles from scandal to scandal, mismanaging its agenda in the House so poorly that it must now rely on these heavy-handed measures at the end of this session, although it can always count on the blind support of its NDP backbench to bail it out.

Moving on to the bill, this bill will require digital platforms such as Google and Facebook to pay Canadian media outlets for sharing their news content. Digital giants will have six months to negotiate private deals to compensate Canadian media outlets before being required to enter into arbitration. The proposed legislation will also create a framework for the arbitration process.

This is yet another ill-conceived bill from the NDP-Liberal government. Subject matter experts have raised numerous questions and concerns about it, including the impact it will have on news media, the Internet in Canada and the benefit or lack thereof to Canadian media.

Some questions remain unanswered: Why was the CRTC selected to be the regulator? Does the CRTC have the knowledge and expertise capacity to do the job properly? Does the CRTC have the capacity to enforce the regulations once they are created? The answers to these questions and others are impossible to know, because they will stem from the regulations that will follow if this bill is passed into law.

Essentially, what the government is asking of us is to grant them these new powers and just trust that it will be fair in its application. It is a ridiculous thing to ask for. The government has been chronically plagued with introducing deeply flawed and deliberately vague legislation, leaving the details to be fleshed out by the bureaucrats through regulation, which does not get the kind of public scrutiny that bills do through a debate in this place.

It is not only that: The government has also been chronically plagued with scandals and cover-ups. How can it be trusted to do the right thing when it has shown time and time again that it is prepared to abuse its position of power to help out its friends?

The fact that the CRTC, which is a government entity, will decide which news outlets qualify under this legislation is effectively a form of indirect funding. This bill allows the CRTC to pick winners and losers by determining which news businesses are included and will get to bargain for compensation and which news outlets will be left in the cold. Conservatives proposed amendments to level the playing field but were voted down by the other parties. While the government may suggest that the CRTC is independent, I am not reassured. The WE Charity scandal came out of a supposedly independent process. The SNC-Lavalin scandal came out of that same supposedly independent process. For the Liberal government, an independent process is independent in name only.

Another flaw in the conception of this bill is the idea that hyperlinks possess monetary value. While 99.9% of Canadians may not be aware of it, a case decided by the Supreme Court of Canada in 2011 dealt with this very issue. In the case of Crookes v. Newton, the Supreme Court stated clearly in their decision that hyperlinks are akin to footnotes. Since footnotes do not carry a monetary value when used in publications, why should hyperlinks? Although access to the information behind the link is much faster than having to look up the reference in a footnote, the two are considered to operate in the same way.

The Supreme Court was quite clear in their findings on this case. Experts are asking why the government is ignoring the Supreme Court in this matter and whether it planning on challenging this decision from over a decade ago. How does it reconcile what is in this bill with the Supreme Court’s ruling in 2011?

Another flaw in thinking that links have monetary value is that often publishers and sellers are paying to feature their links at the top of search engines or to boost their outreach on Facebook. It is interesting that when organizations are paying to feature their links on these sites more prominently, the government now turns around and says that it is the one that should be getting paid.

Initiating this “link tax”, as it has been called, can open the door to other issues, such as the ability of larger organizations to take less money per link than smaller organizations, making the larger organizations a more attractive partner for big corporations. That raises the question of how smaller websites will be able to compete.

The reality of media marketing is that organizations pay money to push links to their sites on platforms like Google and Facebook all the time. They spend quite a bit of money to do this. This boosting of their links is essentially an advertisement for their respective websites. Does providing access to these sites not boost user engagement with their articles? If Google or Facebook were taking the articles of Canadian news outlets and republishing them as their own, then we would have a real issue, but it is an issue that can already be addressed through existing laws and legislation. However, that is not the issue at hand. Anyone who has used Google would know that search engines do not republish articles in this way. If I were to search for an article, I would need to click through to the article in order to access the content behind it.

Another deep concern with this legislation is that the CBC would be the largest beneficiary of the provisions in this bill. The Parliamentary Budget Officer reported that the majority of the money—three-quarters of it, to be exact—would go to the CBC, Rogers and Bell, with less than a quarter left for newspapers. After the larger newspaper businesses take their share, very little, if any, would be left for local and ethnic media.

Canadians already give over $1 billion to the CBC each year. If the purpose of this bill, as the government purports, is to support smaller domestic media sources, why include the CBC? Again, Conservatives proposed an amendment to exclude the CBC so that more money would go to local and independent news sources, but it was voted down by the NDP-Liberal coalition and the Bloc.

In conclusion, I am very concerned that rather than helping Canadian news outlets, this bill would harm them by restricting their reach, as I have mentioned. Independent media are foundational to Canadian democracy. Experts in the field have raised the concern that this legislation would negatively impact this principle in Canada. When the government creates criteria for access to funds, even media organizations may self-censor to ensure they qualify. This could lead to Canadians having less information, fewer options and an unbalanced media field.

Once again, I am unable to vote for this bill in its current form.

Canada Business Corporations Act

[The Speaker, Liberal, Anthony Rota]

It being 3:20 p.m., pursuant to order made on Thursday, June 23, 2022, the House will now proceed to the taking of the deferred recorded division on the motion at report stage of Bill C-42.

Call in the members.

The House resumed from June 19 consideration of Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts, as reported (with amendments) from the committee, and of Motion No. 1.

Online News Act

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

Madam Speaker, I do plan to expand on that point shortly, but before I do that, I want to provide a bit of a different perspective on how important Bill C-18 is. It needs to be placed in the real world context to see how it would protect our national community news agencies and media. It is so very important.

I often will go to a lot of events, as members on all sides of the House do. Often it is the community news people who are at those events, taking pictures, doing interviews and so forth. If it is a local basketball game or championship game at a local high school, it will be the local newspaper that highlights it.

I go to many different types of ethnic events. Whether it be the Pilipino Express News Magazine, Filipino Journal, Punjabi Today or CKJS radio, these community-driven news agencies, newspapers, radio and media are reporting on the things taking place. There are pictures and everything else incorporated.

While visiting constituents in their homes, I often see that they have a newspaper produced in the community. They will show me where their son or daughter's name is in that community newspaper or where a local community event is being profiled in the paper.

It does not matter whether people are from urban or rural communities, whether they are from the east or the west or up north, these small news agencies play a critical role in our community development and society as a whole and, absolutely, 100% with respect to our democracy. One of the fundamental pillars to a healthy democracy is to have a healthy media. That is why the minister of heritage has often talked about the importance of supporting journalism, supporting those news media outlets.

I believe the minister referenced the year 2008, a year when just under 500 media outlets of different sizes from different areas of the country completely disappeared. We should all be concerned about that. Local media is how we often find out about the birth of a child, or that someone has died or an announcement about a parade to be held in our community It is often how we will hear about grand openings and so many other things. Not to mention that elected officials will often take political accountability by providing writing or commenting through local media.

I want people who are following the debate to understand just how important it is that we as a government are here to support our media. We are not the first government in the world to do so. We have heard about Australia and France. I believe that many countries around the world are following the debate on Bill C-18.

I am disturbed by the Conservative Party's approach to this legislation. All of us should be. Is it working with the giant tech companies ? Has it been intimidated by the giant tech companies?

The member for Kingston and the Islands raised a quote. I would like to reinforce that. For my Conservative colleagues across the way, I suggest they look at that election platform, the platform that they shared with millions of Canadians in the last federal election.

Page 155 of the 2021 Conservative platform, which has a picture of the former leader on the front of it, says, “Canadian media is in crisis. The loss of digital advertising revenue to American tech giants like Google and Facebook is putting local newspapers out of business, costing Canadian jobs, and undermining our ability to tell local, Canadian stories.” I agree with that. In fact, if I did not tell people it was coming from the Conservative platform, I would feel very comfortable making that statement.

I will continue to read from the Conservative platform. It says, “Canada’s Conservatives don’t believe that the solution is for the government to provide direct funding to hand-picked media outlets”, and I disagree with that as I see the value in CBC and I will provide further comment on that shortly, “something that undermines press freedom and trust in the media. Instead, we will secure a level playing field for Canadian media, ensuring that Canadians are paid fairly for the content they create while encouraging the creation of more Canadian media and culture.” I have some difficulty with some of the things in that statement, but the Conservatives raise the importance of the issue.

It goes on to say, and this is the platform's bold statement, “Canada’s Conservatives will: Introduce a digital media royalty framework”, and that is what we are debating in Bill C-18, “to ensure that Canadian media outlets are fairly compensated for the sharing of their content by platforms like Google and Facebook.” If members were to review Hansard and the debate we have had on this, what are the two platforms we are talking about? Google and Facebook. This legislation is, in essence, taking what is in the Conservative platform.

It goes on to say, “Adopt a made in Canada approach that incorporates the best practices of jurisdictions like Australia and France.” Members on this side of the House have said that. The legislation and establishment of the framework is based on what has come out of Australia and France. Our legislation goes even further. It would ensure there is a higher sense of accountability and transparency.

Let us go back to the last federal election. In that election, Conservative candidates, 338 of them, had a platform document. Every one of them campaigned on that. The legislation we are debating, what we are proposing to do with this legislation, is fulfilling something they committed to doing. I would have thought the Conservative Party would have supported Bill C-18.

Why are the Conservatives not supporting it? We listened to the critic. We listened to a few other Conservatives. We get the impression that they have been intimidated by giant tech companies like Facebook and Google. What is the other option? That they agree? What about the commitment they made to Canadians? This is in opposition to that.

This is not the first time. They did the same thing on the price on pollution. They made a commitment and they broke that.

I would argue that this is not the same Conservative Party from the past. This is very much a Reform Party and maybe even further to the right than the Reform Party was. This is what Canadians need to be aware of.

Why would the Conservatives not want to protect the national interest and give more strength to our democracy by supporting Bill C-18? They have gone out of their way to protect those giants. I would be disappointed if the government were to back down because Facebook says it is going to pull its news ads. I am not a computer tech person. I know there are all sorts of things people can do through the computer and maybe they have ways they can pull out the news ads; I am not 100% sure how that works. However, what I do know is that I am not going to be intimidated, whether by Google or Facebook. If Facebook operators believe that they do not need those stories in order to sustain the type of growth that they have experienced and wealth that has been generated because of journalism that has been utilized through their companies at no cost, I will stand by Canadians. I am going to stand by our democracy. I am going to stand by the jobs and the importance of that industry because I recognize its importance.

The Conservatives have now said they are going to pull all stops out. They do not want this legislation to pass and they have been very clear on that.

I had posed a question in regard to the budget implementation bill when the leader of the Conservative Party had a big press conference. In the press conference, he said he was going to speak and speak. He has unlimited time on the budget implementation bill. He was going to continue to speak until ultimately the Prime Minister backed away and changed the budget, even though hundreds of millions of dollars are flowing through the budget implementation bill in order to support Canadians. A few hours later, that kind of fell flat. Why was that? It was because not only did the Liberals see through the charade, but opposition parties outside of the Conservatives saw the charade and the propaganda stunt that the leader of the Conservative Party was trying to pull off.

Just yesterday, with respect to Bill C-42, the corporations bill, the Conservative Party actually supported the legislation. Everyone supports the legislation. However, the Conservatives want to apply that very same principle in terms of what they want to apply to Bill C-18, and that is to prevent government legislation from passing. Therefore, the Conservatives continue to put up members to speak and if it were not for time allocation, again, that legislation would not have been able to pass.

Now, the Conservatives are shocked or at least surprised that the government has brought in time allocation on Bill C-18. They should not be surprised. After all, they just need to look at their record; they try to frustrate the House of Commons, to deny Canadians the opportunity to have legislative measures that are going to protect their interests. We have consistently seen that from the Conservative Party. The Conservatives put their political party and their fundraising ahead of the interests of Canadians.

Let us listen to the first question, when the Minister of Heritage was answering questions as to why time allocation was necessary. The first person up for the Conservative Party asked why the government was bringing in time allocation, saying that they should be allowed to have all of their members speak to the legislation.

They should do the math. If every member speaks, that means how many hours of debate? How many more hours are there before the summer recess? It is not a question of whether the Conservatives will allow the legislation to pass before the summer break, they want to kill the bill. They do not want the bill, period, end of story. That is their intention.

That is why I posed a question to my Bloc friend. The essence of the question was whether the member believes that the Conservatives, had we not brought in time allocation, would have allowed this bill to pass before the summer recess. If the member from the Bloc were to be honest with the chamber, he would probably recognize that the Conservatives have no intention whatsoever to pass this legislation, definitely not before the summer break. If we did not have at least one opposition party supporting what we are doing, this legislation likely would not see the light of day in terms of its passing.

I need to remind the Conservatives, as they like to remind us, about the last election and there being a minority government. In a minority government, we have to continue to be focused on Canadians, delivering legislative and budgetary measures and working with the opposition. Fortunately, most opposition parties have a more co-operative attitude and recognize that they too have a role to play in a minority government. It is not just the government's responsibility.

The only party that has failed to recognize that fact is the Conservative Party of Canada. It continues to believe its only role is to prevent legislation from passing. Then it criticizes us for bringing in time allocation motions and trying to limit debate on important pieces of legislation or budget measures. It is hard to take Conservatives seriously on things of that nature when we see them delay time and time again, such as with concurrence in committee reports. One of my favourites is when a Conservative stands and moves a motion for another Conservative to speak. Then there is a vote, which causes the bells to ring. Instead of debating, they try to determine which Conservative member should filibuster or they decide we are done for the day and move a motion to adjourn, again causing further delay. These are the types—

Canada Business Corporations Act

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

Mr. Speaker, I thank my colleagues, and I want to take a moment congratulate all of the young folks. In fact, everyone is taking the opportunity to thank everyone else because of the short time we have left in the House of Commons. I would like to take a minute to thank and congratulate all of the young people who found a summer job in all of the ridings, mine in particular. These young people are contributing to the regional economy of our communities and embracing work. As I see it, work is an extremely important value to instill in young people to help them rise to the challenges of the future and gain experience through summer employment.

I am very pleased to rise in the House this evening to speak to Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts. This bill is one phase of the government's plan to create a national registry of individuals with significant control over corporations in Canada pursuant to the Canada Business Corporations Act, or CBCA. Of course, we are talking about federally regulated companies.

The purpose of this bill is to require Corporations Canada to make public some of the information collected under the 2022 amendments to the CBCA. The bill also introduces whistle-blower protections, introduces exemptions for certain individuals, adds new offences and gives Corporations Canada additional powers with respect to inquiries, data validation and information sharing. For one thing, these powers allow Corporations Canada to share information with provincial authorities. We know that Quebec already has a registry. Since I am an entrepreneur myself, my name is on this registry, as are the names of my company's shareholders. I think it is important for the public to have access to this information.

According to what the government is saying, this bill basically seeks to protect Canadians from money laundering and terrorist financing, deter tax evasion and tax avoidance, and make sure Canada is an attractive place to conduct business. I completely agree up to that point. It is a worthwhile initiative. Money laundering and terrorist financing do a lot of harm.

Unfortunately, Canada has a poor record when it comes to fighting these modern scourges. Canada is known as an easy target for criminal groups and as an epicentre of money laundering and tax evasion. According to a 2020 investigative report published by Criminal Intelligence Service Canada on money laundering and fraud in Canada, the estimated extent of money laundered in Canada is between $45 billion and $113 billion. That is a huge amount of money, and it is good that the government is doing something about that.

The Conservative Party has agreed to vote in favour of Bill C‑42, but not because it is perfect, far from it. The review process in committee was rushed. There were only two meetings. I am a member of the Standing Committee on Industry and Technology, and I would say that everything happened quick as a flash, leaving members and stakeholders little time to develop and debate amendments to improve this bill. We also proposed amendments that were unfortunately rejected, and that is what I want to focus on.

The first amendment we proposed that was rejected had to do with share acquisition thresholds. We proposed: “(a) any number of shares that carry 10% or more of the voting rights attached to all of the corporation's outstanding voting shares; or (b) any number of shares that is equal to 10% or more of all of the corporation's outstanding shares measured by fair market value.”

This amendment would have added a new clause to the bill, amending the parts of the CBCA that define significant control to lower the threshold from 25% to 10%. We know that there are several categories of shares in a business. In this case, we are talking about voting shares, those with decision-making authority.

James Cohen, the executive director of Transparency International, made the following comment regarding our proposal, and I quote:

I don't think...lowering the threshold from 25% to 10% and a risk-based approach are mutually exclusive. I think they actually go hand in hand. I would note that the 25% isn't so much a standard as it was an initial global recommendation that everyone just kind of grabbed on to. There is room to go down to 10% and provide more information for the RCMP.

The amendment that we proposed would have enabled the RCMP to cast a much wider net in terms of tax avoidance in particular, and also money laundering.

We also moved an amendment to make it easier for law enforcement to access information during investigations. This amendment would have added specific wording to the bill to ensure that law enforcement and other investigative bodies such as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, could access information from the director rather than having to approach companies individually. It would also have removed the reference to prescribed circumstances with regard to exceptions, ensuring that only minors are automatically exempt from having their information disclosed and that everyone else must apply for an exemption to prove that it is necessary. Once again, this amendment was rejected. This bill could have been improved, but the NDP-Liberal coalition said no.

Not only were our amendments rejected, but, as I said earlier, the bill was rushed, to put it mildly, through the Standing Committee on Industry and Technology, on which I sit. In fact, we had just one meeting to hear from departmental officials, and we heard from justice experts on the same day that the clause-by-clause process took place.

Briefs from interested organizations such as the anti-money laundering campaign and the Canadian Bar Association were received the day after amendments were submitted. There were several amendments, and several of these briefs were received after the presentation of certain amendments. It is strange because we received some very interesting briefs from law firms, which had some significant reservations about this bill.

It is truly unfortunate, but that is how this government operates. It waits to take action and then, at the last minute, it acts hastily and imposes time allocation, which is what we have been experiencing for practically two months in the House of Commons. Time allocation is introduced time and time again. I will take this opportunity to point out that the NDP has now adopted almost 55 time allocation motions, which it never, or almost never, did before. This demonstrates the extent of the government's hold over that political party.

As I was saying, by colluding with the NDP, the government is getting its way with obviously shoddy results. Canadians expect the federal government to combat money laundering and the proceeds of crime in a way that aligns with our economic and security partners around the world. Canada must shed its reputation as a haven for dirty money. A future Conservative government will make it happen.

In 2021, the Conservative Party committed to establishing a federal registry of beneficial owners for residential properties and implementing comprehensive changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to give FINTRAC, law enforcement and prosecutors the tools they need to identify, arrest and prosecute money launderers and, ultimately, stop illicit funds from making their way into the real estate market. This is the kind of policy our government will bring in to really tackle the problem of money laundering and tax evasion. Particularly in the Vancouver area where my colleague lives, absolutely huge sums of money are being invested by outside entities that launder money directly through real estate acquisitions.

The provincial and federal registries must be harmonized. In Canada, about 15% of corporations are in federal registries, while 85% are in provincial registries. The two types of registries therefore need to be harmonized so that the provinces and the federal government can work together. As I was saying, Quebec has a great registry that works very well, but it was recently amended. The federal registry could have been even better had the time been taken to study it.

[Frank Caputo, Conservative, Kamloops—Thompson—Cariboo, BC]

Mr. Speaker, it is always a pleasure to rise on behalf of the people of Kamloops—Thompson—Cariboo.

It seems as though we were supposed to be debating Bill C-18, which is legislation that deals with online news. It is interesting that, in this House, Liberals have accused Conservatives of playing partisan games, then half an hour before the debate on that bill begins they tell us we will be debating Bill C-42, so clearly these games are going both ways, but they probably do not want to admit that.

Before I begin, I want to acknowledge the life of Ms. Kathleen Beauchamp from Kamloops—Thompson—Cariboo. She was my grade 5 teacher who later went on to become the principal at Our Lady of Perpetual Help Catholic Elementary School where I went to school. I ran into her a couple of years ago as I was getting into politics and I remember she gave me a really big hug. It was nice to see somebody with so much life, exuberance and vitality. She was volunteering into her nineties. I found out about her passing recently and I want to recognize her life because it was a life well lived. She was a model for the people of Kamloops—Thompson—Cariboo. May perpetual light shine upon her and may she rest in peace.

I also want to recognize the life of Jared Larkin, the brother of a constituent and friend Sean Larkin. May perpetual light shine upon him and may he rest in peace.

Today, we are debating Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts. It is always nice to get up to learn about areas that might not be one's area of expertise. Despite being a lawyer and having some corporate law background, the Canada Business Corporations Act is far from being my area of expertise. However, I know a bit about some of the areas, particularly when we talk about money laundering and how that has impacted corporate crime and the Canadian economy.

I recall being a young criminology student, about 20 years old, and having a professor who told us to put down the sports section and pick up the business section. It was then I realized that corporate crime costs society much more than street-level crime. The problem with corporate crime is we do not always see it. It happens through things like price fixing and illegal influencing. We do not always see these types of things and sometimes, because it almost always happens behind closed doors, it is really hard to detect.

As a former prosecutor I can say that part of what the police authorities have to do is connect the dots and sometimes build what is called a circumstantial case, which is when they take facts from here and there and paint a picture. Each piece of evidence is like a piece of the puzzle. This is obviously an important aspect when we talk about a registry under the Canada Business Corporations Act. It is something law enforcement is asking for and really does need.

Again, as has been said repeatedly in this House, this bill is required, but it could have gone further. I was speaking with our shadow minister, the member for Mission—Matsqui—Fraser Canyon, and I believe he spoke about this in the House this morning. He said that there were witnesses at committee and within minutes of hearing from them the committee went into a clause-by-clause analysis. In other words, the testimony of those witnesses who had information to give that was directly germane to the bill at hand was not fully incorporated into this legislation, because the government seems to have been in a rush to deal with this.

I believe four speakers were put up at report stage and then the government moved closure. It is a government that has repeatedly moved closure to stymie debate by saying it needs to get legislation through. I understand that there is a legislative objective, everybody understands that, but it should not push legislation through this way; rather, it should be done co-operatively.

This is a government, as I understand it, that said it would not use closure and time allocation. I am sure it was highly critical of Stephen Harper when he did it. We now see the Liberals and the party that is supposed to be the conscience of Parliament, the NDP, backing them up at every step of the way. I cannot remember a bill, controversial or not, for which we have not seen some sort of time allocation or closure invoked by the Liberals; their coalition partners, the NDP, just go along with it. What happened to being the conscience of Parliament and to hearing debate?

Yes, the government wants things to go through quickly. Here we are at the end of June. It is not Canadians' problem. It is not everybody in the House's problem that the government did not manage its time effectively and has not been conciliatory in terms of addressing things that would be of mutual interest. The Liberals say they want to work together. I am just not seeing that when we see these types of actions.

I will move on to some of the elements of this bill and the necessity for it. For me, as a British Columbian, the necessity comes when I review the Cullen commission. The Cullen commission was authored by Austin Cullen, from British Columbia; I believe he was associate chief justice at the time. He found that money laundering had risen to an unacceptable level in British Columbia. The province and law enforcement not only were not keeping up with it, but enforcement and shining a light on these types of issues had also become secondary.

This is a timely issue to be dealing with. The Cullen commission report, I believe, came out in the past couple of years. However, we have to remember that we should not be rushing these types of things in order to simply get them through, when more things could be done.

One thing that stood out to me was that the threshold for share ownership for being listed in the registry is at 25%. That is actually a high threshold. When we look at other corporate legislation, if memory serves me from when I was studying, there is a threshold of 10%. When somebody owns 10% of shares, that is enough to trigger a warning system.

Therefore, 25% of shares seems inordinately high. I would suggest that we perhaps move back to 10% of shares. As I understand it, the RCMP was supportive of this. Its view is that 10% would get more names into this registry, and the more names, the better. With more names on the registry, more dots can be connected for the police. Moreover, the police will have more tools to combat money laundering.

Before I go any further, I just want to highlight a couple more things from the Cullen commission, because I think they are really important to this discussion. There are unexplained wealth orders. I believe they would probably be an issue for the provinces, but while we are talking about commercial crime and Canada as a whole being a safe haven for money laundering, the provinces should really explore this issue in conjunction with the federal government as we enact this legislation. They could be used in conjunction with civil forfeiture and things of that nature.

The Cullen commission made a number of recommendations and really came up with things that the government should be doing. It looked at how money laundering was occurring in British Columbia. For instance, it was occurring by laundering money through casinos; the commission looked at how this impacted the real estate market.

Before I end, I want to recognize a news anchor, Bill O'Donovan, who received the RTDNA career excellence award in broadcasting. I am the godfather to his granddaughter. Bill is a great human being and a great broadcaster. Congratulations to him.

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

Mr. Speaker, in regard to Bill C-42, we were approached by the Canadian Federation of Independent Business, or CFIB, which asked us to determine how we could help businesses, because one of the challenges is all the red tape that comes with this.

We definitely agree that there should be more transparency, but at the same time we must ensure that this burden is not shouldered by all businesses, which are already struggling to survive because of all the paperwork. How can we strike a balance in this case? How can we help small and medium-sized businesses with Bill C-42?

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

Mr. Speaker, I appreciate the speech that the member from the Bloc made. However, I would like the record to show how interesting this is in the light of the negotiations that go on to create orders and speaking lists and whatnot. That was meant to be an NDP speech, in the midst of what I thought was the confidence and supply agreement the NDP has with the Liberals. I did not think the NDP members were big fans of bringing in what is known as “scab labour”.

I am concerned that there are certainly some parties in this place that do not seem to be taking this seriously. The Bloc Québécois members obviously want to take those spots, as do Conservatives. They want to take spots to speak about the fact that Canada has become a haven for money laundering. I think it is important that the record does show that the NDP members are not taking advantage of the spots that were allotted to them.

Specifically, my question to the member from the Bloc Québécois is this. Canada has become known around the world as a haven for money laundering. I understand that in money laundering circles, it has been coined as “snow washing”, and it represents more than $100 billion a year in economic activity. I am wondering if the member believes that this bill goes far enough. Is there more that needs to be done beyond what is contained in Bill C-42?

I know that some things were discussed in committee, but certainly there are a whole host more in addition to those. Is there more action that needs to be taken to combat money laundering in our nation?

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

Madam Speaker, with regard to Bill C‑42, if we were to talk to our constituents today about money laundering and ask them what it is, how it works and how to stop it, I am sure they would have fairly clear and strong opinions about it.

However, some would think that we are still living in the time of Al Capone and that money laundering is actually done through laundries. Times have changed, but I will come back to that. Everyone would agree that money laundering is unfair and unethical. It is unfair to honest workers, to those who start and run honest businesses and pay their taxes.

It is unfair to all those who see that their health care system is struggling for various reasons, but I will not get into that. It is unfair to all those who are wondering how many billions of dollars a year are not going into the government coffers in Canada because of money laundering and whether those billions of dollars could be used to improve the health care systems in Quebec and the other provinces. These people are right to wonder about those things. They are right in thinking that it is unfair for some people to fly below the radar and launder the proceeds of crime or even just money that was not declared. Everyone would also agree that the governments need to do more, be stricter and put in place laws to better control money laundering.

Bill C‑42 is a step in the right direction. This bill amends the Canada Business Corporations Act while respecting what is already in place in Quebec and the Canadian provinces, while respecting the agreements already reached between Quebec and the Canadian provinces, which is certainly a good thing.

Bill C‑42 also amends the Access to Information Act, the Income Tax Act, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, and the Budget Implementation Act, 2022, No. 1. A number of laws are being amended, but there is one that is not, specifically the Criminal Code. Perhaps we need to think about that, and I will come back to that.

As I was saying, when we talk about organized crime, people often think of Al Capone, outlaw biker gangs, street gangs and the various mafias that exist today. However, we forget that criminals can be found outside of the groups I just named. There are also white collar criminals who often fly under the radar. However, their sources of income are not necessarily any more legitimate.

As I said, some people may still think that laundering money requires a laundromat. The many ways of laundering money have been modernized, and it is important for our laws to be modernized as well. A lot of water has flowed under the bridge since the days of Al Capone, but money laundering is as lucrative as ever. It may be more insidious, but it is no less lucrative for criminals. It is a different story for our society, however.

In the U.S. alone, an estimated $300 billion per year is generated by illegal activities. This amounts to about $1,000 per U.S. resident. In Canada, the same $1,000 would add up to $40 billion in illegal activities unaccounted for in Canada and absent from the treasury. This $40 billion is only $14 billion more than Quebec and the Canadian provinces are requesting in health transfers.

That is a huge amount of money. Let us imagine what we could do by regulating this.

Transparency and the obligation of transparency are excellent means of countering organized crime. This is what Bill C‑42 proposes. If forced to name themselves or be included in a registry, people and businesses that want to launder money will perhaps think twice before trying to do it themselves or hiring investors whose purpose is to launder money. No self-respecting company wants to see its name and reputation dragged through the mud. It takes a long time to build up a reputation, but not long for it to be torn down.

However, the current law only mentions directors. Only directors can be named. Even if all the saints in heaven are sitting at the boardroom table, a company will not be cleaner or more legal if the investors and owners are demons from hell. The ideas will not be any better and the money will not be any less criminal. Naming the owners explicitly in the registry will remove the temptation for criminals to invest in businesses.

What is happening right now? We often learn about scandals from whistle-blowers. Unfortunately, they may be taken to court, have their lives threatened or, in some cases, even be imprisoned. We need to ensure that these whistle-blowers are protected because they are valuable to society.

Today's crime requires the collaboration of professionals who are very familiar with the flaws in the system. Those flaws allow them to help criminals to launder money. One of the flaws in Bill C‑42 is that it does not cover the people who knowingly help criminals launder their money or those who are forced to do so. That is an improvement we need to think about making in a future bill.

Right now, I also see that, if a company commits an offence, then it has to pay a fine of $100,000. If they refuse or fail to add certain names to the registry, then they may be fined a maximum of $100,000. For some companies $100,00 may be a lot, while for others it may be very little. It seems like a rather arbitrary amount to me. I think that perhaps we should look at other ways of calculating the fine. Perhaps, instead, the fine should be based on profits declared. We should look into that. However, as I have already said, this is still a good start.

This bill, while not perfect, is an excellent step towards greater transparency and greater honesty, and it will allow Canada to be a role model rather than a dunce. I also want to say again that this is an excellent example of co-operation rather than intrusion into the jurisdictions of Quebec and the Canadian provinces, which is quite exceptional these days. However, it is a good idea.

The Bloc Québécois will vote in favour of this bill, despite some minor flaws that can be corrected over time.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Mr. Speaker, money laundering in Canada is a big problem, and it is a very big problem because it has a worth. That worth, as we heard in committee, is $113 billion a year. It is a staggering number.

The UN estimated that Canada's has up to 5% of the world's money laundering. Canada has become known, unfortunately, across the world as a place to park dirty money. There is even a name for Canada's ability to hide money. It is called snow washing. I think there are advertisements in some circles. It is theft, plain and simple.

While Bill C-42 aims to combat this $113-billion problem, it falls short of combatting the future of money laundering and relies on the provinces to do most of the work. The bill may do some of the work for today, and certainly in this House we can support a lot of that, but there is a lot of work to do as we move forward.

I sit on the Standing Committee on Industry and Technology, and we dealt with this very rushed bill. It came through very suddenly. We were talking about how it is tackling things not only today but tomorrow. As we went to the witnesses, we heard how it fails to address the problems of tomorrow and money laundering.

Money laundering became very popular after the 2016 release of the Panama papers. The Panama papers revealed trillions of dollars of money laundering, and there were certain lessons we were meant to learn from that. One was that there was a widespread scope. The Panama papers showed a vast scale of global money laundering and tax evasion. They exposed offshore financial activities of individuals and entities from around the world, including politicians, but we will not talk about that today.

The Panama papers exposed the use of shell corporations. They exposed the widespread use of shell companies and offshore entities to conceal the true ownership of assets and facilitate money laundering. It was of a cross-border nature. When we looked at how money was being laundered, it was being done across state lines and country lines across the world. The papers also brought attention to the role of professionals, such as lawyers, accountants and financial intermediaries, in facilitating money laundering. In other words, it was widespread.

When we talked about this with regard to Bill C-42, there were a couple of lessons the bill probably has taken into account that we can learn from. One is the need for transparency. Another is public awareness and the fact there are shell corporations using their own entities to launder dirty money.

We looked at the benefits we wanted to see from this bill in bringing it from committee to Parliament. The Conservative Party stands behind the fact that we need to combat money laundering. When it comes to certain aspects of the future of how money is going to be laundered, including blockchain technologies, the use of AI, decentralized exchanges, privacy enhancing technologies, and smurfing and layering, this bill falls short in addressing those things.

Furthermore, many people do not understand that when we look at the way we are going to collect data from these businesses when tackling money laundering, which is through the Canada Business Corporations Act, or the CBCA, it is only on 15% of businesses in Canada, meaning that we will rely on the provinces to do the work for the remaining 85%. If any last holdout province, for instance, does not want to join the registry and all of a sudden we see a certain province's limited partnerships start to skyrocket as other provinces' go down, there is pressure to be put on that particular province: Why do they want to be Canada's last secrecy jurisdiction?

This follows what we saw with the U.K. registry, where Scottish limited partnerships dropped by 80%. One way to mine the data once the registry comes online is to look for movement shifts, because of course crooks are going to go where the weakest link is. That is why it has to be a harmonized approach, not just a federal approach.

The CBCA governs the incorporation and operation of businesses at the federal level, setting the framework for corporate governance, accountability and transparency. By enforcing strict obligations on corporations, directors and officers to maintain accurate records and disclose information, the CBCA enhances transparency and hinders criminals from exploiting corporate structures for illegal purposes. Additionally, the CBCA empowers regulatory bodies, law enforcement agencies and courts to investigate suspected money laundering activities within corporations.

We heard from the RCMP at committee. One of the concerns we had was about how strict the rules are that protect whistle-blowers. We need whistle-blowers to identify where illegal activity is happening. As a small business owner myself, I have about four corporations that govern different parts of my business. Members can understand that without the ability to protect whistle-blowers, it is really easy sometimes for a small business owner to hide money and find different loopholes to hide it. I normally rely on an accountant to do that for me, but there is a reason that Canada has been able to hide $113 billion a year: It has become very easy.

One of the main aspects of this is that we have to be able to protect whistle-blowers. We asked questions of the RCMP on whether that is going to happen. This bill was so rushed that it went through committee in only two meetings, which included clause-by-clause and having testimony alongside the clause-by-clause. Some of the experts could not even get back to us, including the RCMP, on how effective this bill would be in protecting whistle-blowers, and that is a big concern.

When it comes to the future of money laundering, there was also testimony on the fly during clause-by-clause, with questions that I tried to get witnesses to answer, but the witnesses did not really have the right answers. For cryptocurrencies and blockchain, for instance, criminals may increasingly turn to cryptocurrencies for money laundering purposes. The anonymous nature of certain cryptocurrencies and the decentralized nature of blockchain technology can make it more challenging to trace and monitor transactions.

We saw that in a study we finished on blockchain technology. Blockchain is really good for Canada and good for the future. We employ 16,000 employees in blockchain, and it is worth over $2 billion. However, as we have seen blockchain for good, there is also blockchain for bad. This is certainly one aspect in the future where criminals will try to hide and launder money, and this bill would do nothing to address that.

When we talk about decentralized exchanges, criminals might explore those exchanges to launder money. DEXs, as they are called, operate on blockchain technology and facilitate peer-to-peer transactions without centralized oversight, making it more difficult for authorities to track and identify suspicious activities. We just had an incredible blockchain study, but at the same time as this bill would not address the criminal element of blockchain technology, we are not looking at the good. That is something the government is not embracing. Most times, it would rather slag cryptocurrencies and blockchain as a whole, even though we should be looking at deregulation and ensure they are part of money laundering bills.

On privacy-enhancing technologies, criminals may utilize emerging privacy-enhancing technologies that aim to provide increased anonymity and obfuscation of transactions. Those technologies could make it harder for authorities to trace the origins and destinations of funds involved in money laundering. Smurfing and layering involves breaking down large amounts of money into smaller, less conspicuous transactions.

That brings me to an amendment we brought forward that was turned down by the government. Instead of looking at ownership that was only 25% or higher, it should go as low as 10%. The technologies of the future are going to allow companies to hide more money easily, and 10% is something that we found should have been easily amended in this bill and was not.

It is important to address the potential regulatory gaps and weaknesses and make sure that this bill addresses the system that criminals may wish to exploit. As regulations evolve, criminals may identify new vulnerabilities or target regions with less robust anti-money laundering frameworks. Strengthening international co-operation and collaboration among governments and financial institutions is crucial to countering the global nature of money laundering effectively.

The Conservatives can support this bill. This bill would address the $113-billion problem. We just wish it was not so rushed. We wish that we had been able to address some of the amendments that went further. What the bill would not address is the future of money laundering, which will include blockchain and advanced technologies. This bill would just address today and would not address tomorrow.

I know that a Conservative government, which will be in power in the next few years, will be able to address that. I look forward to contributing to it to make sure that we bring down the $113-billion theft of Canadian money and work toward a better future where we have less snow washing in Canada.

[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.

[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 harmonizaton 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.

[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.

[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, as always, it is an honour to be able to enter into debate on the important issues that Canadians are facing in this country and, specifically, those issues that impact Battle River—Crowfoot.

However, I was celebrated, along with so many in this place and fathers across this country, this past weekend on Sunday, as our nation recognized fathers. If I could for a brief moment, before I get into the substance of what is a very substantive debate, I would just like to pass along my greetings, officially on the record, to my father, all fathers across the country and those grandfathers who have impacted us. Although I do not have grandfathers alive anymore, I know the significant role they played in my life. I wish a happy belated Father's Day to all the fathers represented across our country from coast to coast to coast.

We are debating Bill C-42 here this evening. Although, unfortunately, it seems that the government did some tricky manoeuvring to change the debate from Bill C-18 to Bill C-42, this is an important issue that bears fulsome and comprehensive discussion in this place.

I will back up a bit and talk about something that is probably not on the radar of many Canadians, because when it comes to the idea of money laundering, most Canadians do not really understand the significance of what it is. For example, I know the Panama papers are part of the discussion that has surrounded this bill in particular. I will enlighten us on the challenge that brought us to the point that we would be debating this here this evening. I will then get into what is proposed and where I think some additional items need to be challenged, discussed and addressed, when it comes to the larger issue of what the bill is trying to accomplish.

Most people who have spent much time watching Hollywood movies will have heard of the Cayman Islands, Switzerland or other jurisdictions that are known for hiding money. Criminal enterprises, gangs and thugs store money there, access it in a secretive manner and ensure they could take dirty money that was earned by some nefarious process, whether that be the sale of something illegal, the proceeds of crime or whatever the case is. They go through a process where the money comes out, and it might not be clean on the other side, but at least it is not traceable to the original way that it was earned. This is why we call it “laundering”.

Things like the Panama papers and other news articles make headlines on occasion, and specifically, they often only make headlines when there are significant figures that are involved. This may happen if there is a businessperson or a politician who has some notoriety and is named in these sorts of releases. However, one of the really unfortunate realities is that Canada has become a place where we are known for being able to have money laundering take place.

That is incredibly concerning, especially in a world where digital technology, artificial intelligence and the dynamics associated with some of these things are incredibly complex. We have not had a great deal of time to discuss artificial intelligence in this place. The fact that Canada has become something of a safe haven for money laundering and the proceeds of crime is incredibly concerning.

Some of those proceeds would be from criminal activities that take place on Canadian soil, but the unfortunate signal that has been sent to the criminal enterprises that exist around the world is that Canada seems to be the place where one can see money laundered, regardless of where those proceeds are from. This is something that definitely needs to be addressed.

This has a few unintended consequences as well that I think bear mentioning. Just to highlight for those watching, one of the things that has been highlighted that would be a possible way to see this happen is through the purchase of real estate. At a time when we already have some of the lowest per capita housing availability in the developed world, it is incredibly concerning that some of the pressures that exist there would be for purposes that are nefarious and certainly not benefiting Canadians for the pricing structure that exists. Especially when we have a price point that is determined in a market that is not based on the product and its availability, laundering artificially inflates it. This is something that definitely needs to be addressed.

That is the problem. Now we have Bill C-42, which is a step in the right direction to address some of those things. The question is whether it goes far enough, and I will get to the ways that I do not think it does. However, it does address some of the challenges and attempts to ensure that some of the currently existing loopholes that allow Canada to be this safe haven, as I mentioned, are addressed.

One thing is to ensure that there is greater accountability for those who are purchasing businesses that have those large financial interests in this country. The reason this is important is to ensure that there is that registry and that ability to have accountability at every stage of the corporate process. For those who have no reason to hide their actions, of course, this is not something that will concern them. There may be some reporting requirements through financial institutions and whatnot, but if a person is not doing anything wrong, these burdens are not something that would be part of the daily life of the accounting of a business's operations; that is valuable.

When it comes to the fines, and we have certainly heard a lot about the fines as we have had debate about this issue, there would be an increase in the penalties, both monetary penalties and possible prison sentences. Certainly, I think that is important, although I will note the irony that it seems as though the Liberals have this habit of being soft on crime in many regards, but they want to send a signal through the legislation, it would seem, that Canada is willing to get tough when it comes to white-collar crime. However, there are certainly some challenges when it comes to the crime that is affecting so many Canadians.

There are a number of aspects that build on some of the actions that have been taken by the previous Conservative government under Prime Minister Stephen Harper, which saw this as a challenge and started to make some of those changes. Notably, back in 2014, I believe, there were some significant changes that the Harper government made to ensure that it would tighten up some of the areas that were loopholes at that point in time. A number of steps have been taken over the last number of years.

I believe my colleague for Wellington—Halton Hills said it well when he talked about a chain being only as strong as its weakest link. We are seeing that there could be some holes plugged in the challenges that Canada faces when it comes to money laundering. However, it is fundamentally important to ensure that we do not stop here.

A lot of this discussion took place at committee, and I know folks who are watching are interested in seeing some of that. The work that the committee did highlighted some opportunities that existed in terms of strengthening this legislation, and we saw a few amendments pass. However, a whole host of other amendments could have made this legislation stronger.

To address some of this strange occurrence that happens increasingly with the government, it seems to be quick to rush everything through, because it is a crisis. This is unfortunate; as it is rushing things through, it often ends up having to go back and fix the challenges or the gaps that could and should have been addressed in the earlier stages of the process. At the industry committee, there were some challenges brought up, including from some senior public servants who were concerned about the possibility of challenges when it comes to implementation. There are privacy concerns that the Liberals have to address, and this is simply another part of those areas.

To conclude, it is incumbent on us all in this place to do our utmost to ensure that every bill that comes forward is debated thoroughly and that we have engagement from the affected stakeholders. When it comes to something like this, it may not be on the forefront of many Canadians' minds, but it is fundamentally important that we get it right, so that we can stop Canada from being a safe haven for money laundering in this world.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Madam Speaker, I am rising today to speak to Bill C-42, which is the government's proposal for a beneficial ownership registry.

I would like to critique this registry, because this is an incredibly important issue. The fact of the matter is that Canada has become a haven for global money laundering. In fact, do not take it from me. Here is just some international reporting on Canada. In the New York Times, just a few months ago, on March 25, an article written by Ian Austen, the Times journalist who covers Canada, begins with the sentence, “Canada is such an attractive place for money laundering that there’s even a special name to describe the activity here: ‘snow washing’.”

The U.S. State Department, in 2019, designated Canada as a “major money laundering country”. In fact, I pulled up the State Department's report from March 2022, titled “International Narcotics Control Strategy Report”, volume 2. The report says, under “Canada”, that it is estimated that between “$36 billion [and] $91 billion is laundered annually in Canada”. Assuming those are U.S. dollars, that represents, roughly, between $50 billion and $120 billion a year that is laundered through this country. One hundred and twenty billion dollars a year is roughly 5% of our GDP. Five per cent of our GDP consists of money laundering.

That March 2022 report says, “Noted deficiencies include limited oversight of the domestic non-profit sector, gaps in [customer due diligence] responsibilities for [designated non-financial businesses and professions], and a lack of beneficial ownership transparency for trusts and similar legal mechanisms.” Therefore, not only has our status as a money-laundering haven and, by consequence, a sanctions-avoiding haven and a proceeds-of-international-crime haven become documented in The New York Times; it has also been noticed by the State Department.

It is not just internationally that it has been documented. In the province of British Columbia, there was a huge commission of inquiry into money laundering. Its final report was published in June 2022 by the Honourable Austin Cullen, who was the commissioner. The commission found that billions of dollars were being laundered through British Columbia companies, British Columbia real estate and British Columbia trusts, and that this was having a deleterious impact on people living in British Columbia. This report came out just last year, highlighting the problems with money laundering in just one province, which represents roughly 10% of Canada's population. It is clear that we have a problem with money laundering and that, by consequence, we also have a problem with becoming a destination for the proceeds of sanctions evasion and a destination for the proceeds of international criminal activity. The government introduced this legislation, in part, to try to respond to these very real concerns, but the problem with the legislation in front of us is that it is deeply flawed.

I asked the Library of Parliament to do some research on the number of federally incorporated entities in Canada. The information it provided for me was that, for the year 2020, the most recent year for which data have been provided, the number of CBCA corporations, federally incorporated entities, is 421,301. The problem is that there are some 4.3 million businesses in Canada, of which only roughly 10% are CBCA corporations.

Ninety per cent of businesses in Canada are incorporated under 10 different provincial statutes, of the ten different provinces, and these corporations and trusts would not be included in Bill C-42's beneficial ownership registry. The Liberal government would say that it is working with the provinces to encourage them to create a beneficial ownership registry. The problem is that one province, Alberta, has not made any moves to create one. The problem with the other provinces is that their beneficial ownership registries have major loopholes in them. The only beneficial ownership registry in the country that is worth the paper it is written on is that of the province of British Columbia. That proposed registry includes provincially incorporated entities, trusts and real estate; it is capturing all of that in its registry. As a result, that provincial registry, combined with the federal one, would include all companies in the province of British Columbia. The problem for the other nine provinces is that they are not including real estate, which the Cullen commission in British Columbia identified as a major asset through which money, international money in particular, is being laundered.

The registry in front of us would only be as good as the weakest link in the entire system, and at least eight of the 10 provinces are not including real estate in their beneficial ownership registry. As a result, people overseas trying to avoid sanctions enforcement and trying to launder the illicit proceeds of crime and terrorism would be able to use Canadian real estate in eight out of 10 provinces to continue to launder their money, just like the Cullen commission identified in the province of British Columbia. Those individuals overseas and outside of Canada who want to avoid sanctions or want to launder the illicit proceeds of their crimes or terrorism could do so through provinces where a beneficial ownership registry for provincially incorporated entities has yet to be proposed. It is clear that the proposed beneficial ownership registry that the government has put in front of us today would not solve the problem of Canada's status as a destination for snow washing, a destination for international money laundering.

What the government should have done is to have used the broad and deep criminal powers accorded to it in the Constitution, which courts in this country, through various rulings, have long upheld as being broad and deep, to create a national beneficial ownership registry that would have included all companies in Canada, whether they are incorporated under the Canada Business Corporations Act or whether they are incorporated under one of 10 provincial statutes. It should have included all trusts in Canada, whether they were incorporated federally or provincially, and it should have included the beneficial owners of all real estate, real property in Canada, in order to ensure that we start cracking down on those who would use our country as a haven for money laundering for the proceeds of terrorism or for the proceeds of crime. The Liberal government did not proceed down that path, so, once again, we would have implementation of a good idea from the government in a very flawed manner, as it has been with so many things that the government has made announcements about.

I will finish here. The beneficial ownership registry in front of the House today would not plug the hole that has allowed this country to become such a haven and such a destination country for sanctions evasion for the proceeds of crime, for the proceeds of terrorism and for money laundering in general that landed us, in March, on the front page of the New York Times, and in the State Department's assessment of global havens for money laundering.

The House resumed from June 16 consideration of Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts, as reported (with amendments) from the committee, and of Motion No. 1.

Bill C-42—Time Allocation Motion

[Mike Morrice, Green, Kitchener Centre, ON]

Mr. Speaker, I want to start by recognizing that there are plenty of partisan games being played in our Parliament right now and that the governing party has every right to advance its legislative agenda.

When it comes to limiting debate on Bill C-42, though, we just began it last sitting day. I believe there have been four speeches so far. That is fewer than the number of parties represented in this House. If we take a further step back, this is the eighth time that debate will be limited since May 1. In fact, I could only find four instances where we have not had debate limited.

Is it not a concern to the minister and others in the governing party that by moving forward in this way and by mismanaging the agenda to this extent, it is enshrining an approach that allows others to do the exact same thing when are be power?

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

Mr. Speaker, to my knowledge, I am the only member in this chamber who participated in the amendment stage of Bill C-42. I will point out that we worked in good faith with all members of this House of Commons to put forward common-sense amendments to the legislation.

The hour before we had clause-by-clause, we had some of the most critical witnesses appear on this bill. They were from Transparency International. One of their key recommendations, in the hour before we had the amendment stage, was to adopt language from Bill 20, the Business Corporations Amendment Act, 2023, of British Columbia, which would have strengthened the provisions in the legislation regarding identity, specifically noting, “The records, information or proof must be provided under subsection (1) in the prescribed form and manner.” It also would have required that the bill strengthen the ability of the director of Corporations Canada to receive information on identity and citizenship so the bill could work clearly.

What is problematic in this case is that we wanted to bring forward good amendments. The NDP even brought good amendments forward, but the government voted against them simply because it had witnesses appear the hour preceding clause-by-clause. If we are going to have good legislation, we cannot have a parliamentary practice where witnesses appear the hour before. We limited ourselves from making the bill as good as it could have been simply because of that tactic by the government.

No, we have not stalled on the bill. We have worked in good faith to get the best legislation possible for Canadians, even to achieve the government's objectives of better interoperability, better standards and better threshold requirements. However, unfortunately, the government voted against all that and is now bringing in closure at the last minute instead of getting the bill right.

Whatever has been said by the minister and the parliamentary secretary so far has been false. We have been there to move the legislation along, and the government has used tactics to delay work to get the best clauses possible and to improve it in good faith for all Canadians.

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Mr. Speaker, I thank the member for his wise leadership in the House.

I agree with the member's comment. It is not just the dilatory tactics and the wasting of time. It is that the Leader of the Opposition is relishing in that in front of the media, being proud of the fact he is trying to grind Parliament down to a stop to prevent good pieces of legislation from moving forward. These are bills such as this one, Bill C-42, and Bill C-40, which I mentioned an hour ago. Over the last month, we have witnessed, time and time again, the misuse of time, the use of delay tactics and the real negativity these bring to the House of Commons.

We want to move forward with this bill because it is a positive bill for Canadians. We want to move forward with this bill because it would help us fight organized crime, money laundering and terrorist financing, and would give us better principles of corporate governance. We rely on the market to do many things in our country and in our economy. For that market to function properly, we need corporate governance structures that are transparent and that allow proper corporate decisions to be made, for the purposes of not only shareholders but also the Canadian public, to the extent that we allow the market to regulate these kinds of issues.

It is an important bill, and we need to pass it.

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

Mr. Speaker, having spent my life in opposition, I do know that the one tool the opposition has is time. We have the time to speed things up and the time to slow things down. However, at the end of the day, time is about serving the Canadian people.

I see Bill C-42, which has the beneficial ownership registry. It is legislation to deal with Russian oligarchs. We could be debating that. Instead, we have been having to witness Conservatives with their long litany of whining, perceived slights and imagined microaggressions. It is always about them and their feelings. I get a feeling that European soccer teams might hire them over the summer to give them lessons on how to do the theatrics of lying on the grass and holding a knee.

Meanwhile, we have legislation to get done. We are staying until midnight, night after night. Instead of the Conservatives standing up for their constituents and talking about legislation that needs to get passed, they are talking about themselves, how bad they feel and how their feelings have been hurt.

I would ask the hon. member to give us a basic sense of the level of importance of getting this legislation through.

Bill C-42—Notice of Time Allocation Motion

[Kamal Khera, Liberal, Minister of Seniors]

Mr. Speaker, an agreement could not be reached under the provisions of Standing Order 78(1) or 78(2) with respect to the report stage and third reading stage of Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts.

Under the provisions of Standing Order 78(3), I give notice that a minister of the Crown will propose at the next sitting a motion to allot a specific number of days or hours for the consideration and disposal of proceedings at the respective stages of the said bill.

Motions in Amendment

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

Madam Speaker, it is my pleasure to rise today to speak to Bill C-42 at report stage. I will be talking about themes that have already been explored today.

One of the reasons a public beneficial ownership registry is so important is because Canada, notoriously, is losing tens of billions of dollars in tax revenue ever year as a result of tax havens. That is where Canadian corporations are able to declare their revenue in other jurisdictions, and then either bring that money back into the country or not, without paying any sort of tax. That means, despite corporations doing their business and raising their revenue here in Canada, they are finding ways out of paying their fair share.

That is from a more general point of view and about paying into general revenue that then goes to paying for things such as the Canada health transfer and other important sources of funding that ensure Canadians have access to health care, education and the other important services they depend upon. It is also because these companies are making use of a fair amount of Canadian infrastructure, which Canadians pay for through the public purse, to create the profits they are getting. It is only right that they pay their fair share.

If we look at the share of government revenue that comes from business and corporate tax over the last number of decades, that share has been decreasing considerably against the share that working Canadians are paying. We do end up in a difficult situation that is not financially tenable, where corporate Canada is no longer paying as much of the bill as it used to for government services.

One of the tools to do that is to better define the extent to which tax revenue is being avoided or escaped by corporate players in Canada. Part of that puzzle is lifting the veil of secrecy that so often covers various business arrangements and makes it hard to tell who needs to be held to account for their business practices.

Even though I think it is an interesting idea to have a global minimum tax, which is not to say that means Canada has to have a minimum corporate tax, we have a lot of other competitive advantages that make us an attractive place for investment, and Canada should not sell itself short in that regard.

Nevertheless, even if we did have a world minimum corporate tax, it is not going to address the issues of secrecy that a public beneficial ownership registry rightly addresses. It is also important to say that, in the current context and over the course of the last year or so, the arguments for a beneficial public ownership registry have become even more urgent because there is another side to this story.

When I talk about the veil of secrecy around corporate actors and ensuring they are paying their fair share, that is just one part of the story. We also know that there are malignant actors who are not just getting out of paying their fair share of taxes, but who are doing far more. I think of some of the Russia oligarchs who are known to be close associates of Vladimir Putin, who is currently waging an illegal and unjust war in Ukraine. Canada, unfortunately, is one of the places where they have seen fit to stash some of their cash and assets.

To be able to properly enforce sanctions against people like that, we have to lift the veil of secrecy around corporate ownership because those are the spaces where these kinds of folks are hiding. That is why we have seen so many of Canada's allies across the world, in the last 18 months or so, really accelerate their own programs for beneficial public ownership registries. This is why Canada cannot be left behind.

My understanding is that, to implement this registry, it will take some time after the legislation passes to do that. That is why I believe it is important this legislation pass before we break for the summer. That gives about six months to the end of the year for officials to, with a legislated mandate from Parliament, begin to put this registry into effect.

That is one thing we can do to support Ukraine and ensure that Canada is not a haven for those that would do Ukraine harm. It is why this has to pass with urgency.

I take some of the points that were made earlier in debate about the imperfections of the process at committee. What I am hearing is that there is some goodwill around this bill and a willingness, I hope, as we move forward, to look at some of the weaknesses of the bill and improve upon it in the future. However, I would rather see us improving upon something that is in place than continuing to talk about what might come to be in a context where the buddies of Vladimir Putin are having a relatively free run here in Canada because we do not have the information we need to adequately track those sanctions.

I will give an example. There has been talk about lowering the ownership threshold under the public beneficial ownership registry. That is an idea I am quite open to, but I am also mindful that, if this registry is going to be a success, we need to have participation from the provinces. My understanding is that, where provincial registries already exist, the threshold is around 25%, so that is a conversation the federal government needs to have to work with the provinces to bring everyone along together in order to lower that threshold. If we end up with a federal registry with a lower threshold and some provinces decide not to participate, or to delay their participation, I do not think we will be doing ourselves a service.

That is why, while there is room for legitimate criticism and an opportunity to do better as we learn more about public beneficial ownership registries, it should not delay this legislation's passing before summer, so this can be brought into place in a timely way. Then Canada would be able to begin applying more pressure, as it rightly should, to folks who are supporting Vladimir Putin and his illegal war in Ukraine.

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

Madam Speaker, as previously stated, the Bloc Québécois supports Bill C-42. This bill will reveal who is really behind shell corporations. The bill will make it easier to fight tax evasion, money laundering and the financing of illegal activities.

Furthermore, the process that resulted in this legislation is beyond reproach and respects the jurisdictions and autonomy of Quebec and the provinces. This approach is becoming increasingly rare in Ottawa, and we applaud it in this case. Finally, I would like to remind the House that Quebec already has its own registry.

However, for anyone who believes in tax fairness, surely it is high time we cracked down on tax havens. As members know, by using them, the ultra-wealthy are evading taxes like never before, and so are the big banks, multinationals and web giants. These companies justify their actions on the grounds that their schemes are legal, even though their greed is completely immoral.

I would now like to refer to two economists, Emmanuel Saez and Gabriel Zucman, who clearly illustrate the method in their book The Triumph of Injustice.

First, they explain that the legal framework for multinationals has changed little since they were first developed in the 1920s. Subsidiaries of the same multinational are treated as autonomous entities. For example, “Apple Ireland must be considered for tax purposes as a firm of its own, distinct from Apple USA.” Since Ireland's tax rate is half that of the United States, it is in the multinational's interest to transfer its profits there to pay half the tax.

In theory, subsidiaries must exchange goods and services at market value, on an arm's-length basis, as if the entities were independent of each other. In practice, however, they have considerable leeway to shift profits to tax havens.

The principle, which has barely changed, was developed in the 1990s by tax optimization consultancies. It involves the sale between subsidiaries of assets that have no market price, such as logos, brands, management services or financial services.

The economists give some examples:

What's the price of Apple's logo? It's impossible to know: This logo has never been sold in any market. What's the price of Nike's iconic “swoosh”? What's the price of Google's search and advertisement technology? Since these logos and trademarks and patents are never traded externally, firms can pick whatever price suits them.

The firms sell all-in services, that is, a creative intragroup transaction accompanied by a certified “correct” transfer price. Saez and Zucman explain what this means:

Thanks to the proliferation of intragroup transactions conducted at doctored prices, high profits [in the hundreds of billions of dollars] end up being recorded in subsidiaries where tax rates are low, and low profits in places where they are high.

The economists estimate that $800 billion U.S. in multinationals' profits is transferred to tax havens. That represents 40% of their global profits and 60% of the profits of U.S. multinationals.

Variations on these schemes are made available throughout the world by the Big Four accounting firms, Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers.

It is always the same thing. Here are two examples provided by the authors:

In 2003, a year before it was listed as a public company in August 2004, Google sold its search and advertising technology to its own “Google Holdings,” a subsidiary incorporated in Ireland but for Irish tax purposes a tax resident of Bermuda, an island in the Atlantic where its “mind and management” are supposedly located.

Transfer pricing was kept secret, but it was certainly low. Otherwise, it would have had to be declared to the Securities and Exchange Commission. Saez and Zucman estimate the figure at $700 million U.S., tops, when the same algorithms have, for example, enabled Google Holdings to report $22.7 billion U.S. for doing business in Bermuda in 2017 alone. That is 30 times more for a single year. Talk about the goose that lays the golden eggs.

Economists have pointed out that, in Asia, Singapore is the location used instead of Bermuda. Its tax rate for multinationals is also nil, or zero.

Here is the second example. In 2004, Skype, which was founded by a Swede and a Dane, transferred the better part of its technology to its Irish subsidiary. However, thanks to LuxLeaks, the leak of confidential documents from PricewaterhouseCoopers in 2014, we know the details of that transaction. The cost of the technology transfer was estimated at 25,000 euros, which is scandalous, given that Skype was bought by eBay a year later in 2005 for $2.6 billion U.S., over 100,000 times the price of the transfer. Saez and Zucman explain that corporate tax dodging schemes are quite simple. They said the following:

At its core, it involves manipulating the price of intragroup transactions in goods (like iMacs), services (as when a US firm buys “management advice” from an affiliated party in Switzerland), assets (such as Google selling its search and advertisement technology to its Bermuda subsidiary), or loans (as happened during the Netherlands Antilles frenzy of the early 1980s).

In that regard, the Netherlands Antilles frenzy was a sort of dress rehearsal for the use of tax havens. It started in the late 1970s and was banned in the late 1980s. This new corporate tax evasion industry fits within the context of the emergence of the neo-liberal ideology, which occurred at the same time as the boom in tax havens for individuals. Saez and Zucman illustrated that as follows, and I quote:

Here is how it worked. A US firm would set up a subsidiary on the island of Aruba, Bonaire, or Curaçao. It would then have this affiliate borrow money from a European bank at the prevailing interest rate, around 3%, and lend it back to the US parent company at a much higher interest rate, around 8%.

The difference in rates helped shift the profits from the United States to the Caribbean.

As we know, the use of tax havens really took off in the 1990s. With the fall of the Berlin Wall, neo-liberalism triumphed. The new generation of executives focused their corporate role on serving the shareholders exclusively. In the meantime, the share of profits earned overseas doubled from 15% to 30% for American multinationals.

The response from wealthy states was to lower the corporate tax rate, which did not help repatriate their profits. Between 1985 and 2018, the average corporate tax rate was halved, going from 49% to 24%. As the two economists point out, in the early 1950s, corporations paid as much in taxes as individuals. Today, with the tax cuts and the use of tax havens, this ratio has changed dramatically. Businesses contribute 10 times less than individuals. Back home, in Quebec, this imbalance has been documented extensively by Professor Lauzon.

Multinationals now reign supreme; they artificially relocate their profits to tax havens to avoid paying taxes. The profits they do not relocate are taxed at half the rate they were 30 years ago. Not to mention that they outsource their real activities to countries where the people are underpaid, allowing their profits to swell even more.

The solution to this injustice is first and foremost political. In fact, that is the pretext that multinationals use. According to their rhetoric, all of this is legal. What is more, they undertake a colossal amount of lobbying to keep it that way. Saez and Zucman take issue with that:

It's a weak defense: nothing of substance happens in Bermuda, so it stands to reason that Google has booked $22.7 billion in revenue in that island to avoid taxes, in violation of the economic substance doctrine.

The authors conclude it will take a revolution in how things are done if we want to change the game, saying, “In need of a Copernican revolution, [the OECD has] been busy refining the Ptolemaic model”.

I therefore invite the House and this government to be the revolution the world needs.

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

Madam Speaker, I rise today to offer a few thoughts on Bill C-42, which proposes amendments to the Canada Business Corporations Act, or CBCA, and would make consequential changes to other statutes to create a federal beneficial ownership registry. This registry would be, arguably, the most important tool we could utilize to better detect, deter and prosecute money laundering, tax evasion, fraud and terrorist-financing activities.

First of all, I want to congratulate all members of the Standing Committee on Industry and Technology for their hard work. They studied a bill with more than 20 clauses, dealing with a highly complex subject matter, and heard from numerous stakeholders who represent a spectrum of views.

Among other factors, the committee heard that the interoperability of the registry is a key concern and is, in fact, a key ingredient to the success of a pan-Canadian beneficial ownership registry. Certain witnesses appearing before committee emphasized the need to ensure adequate alignment, both domestically and internationally. The need for this is obvious, given the transnational nature of organized crime and the complexity and sophistication with which actors can conceal the true owners of different assets. We need to be able to work together to counter this.

Interoperability has many dimensions, but it generally means that Canada not only respects international best practices on thresholds and uses the best available data standard but is also similarly aligned with domestic best practices. Thus, provinces are enticed to join a pan-Canadian registry and information can be shared seamlessly to trace illicit activities across jurisdictions. That is why Canada has adopted the beneficial ownership open data standard, which is an internationally accepted open standard for modelling and publishing information on the beneficial ownership and control of companies. It is used for collecting, sharing and using data on beneficial ownership. Canada's use of this standard would ensure that our registry could communicate and speak using the same technical language as beneficial ownership registries around the world do, as well as communicating with our provincial and territorial partners.

The standard would also mandate that corporations provide information about individuals who have significant ownership stakes and control in any corporation, thereby empowering law enforcement, the CRA, banks, journalists and the general public to accurately ascertain the true owners of any given company. This will help prevent criminals from using anonymous, numbered corporations, or shell companies, which are sometimes spread across multiple jurisdictions as a shield to conceal the true owners of companies.

Furthermore, I want to highlight the work of the committee in increasing the maximum penalties for those found to have failed to comply with the legislation, with fines now up to $1 million. This will ensure that there is a sufficient deterrent effect for individuals frustrating the important purpose of the legislation.

The provinces and territories have a major role to play here, because the vast majority of companies are in fact incorporated provincially. That is why I am pleased to see my home province of British Columbia taking a leadership role in response to widespread allegations of money laundering in the province. B.C. has tabled legislation to create its own beneficial ownership registry for corporations, and it has already created a beneficial land ownership registry, which is now in effect.

It is easy to see why action is important. A 2018 report estimated that money laundering has played a role in increasing housing prices by approximately 5% in British Columbia. The lack of knowledge regarding the true owners of over half of the top 100 most-expensive properties in B.C. not only worsens the problem of housing affordability but also raises further concerns about potential tax evasion related to the treatment of principal residences. Furthermore, clear ties have been made between money laundering and the devastating health crisis we are facing in B.C., the opioid epidemic, where illicit funds garnered from the sale of fentanyl and other illegal drugs are laundered through real estate and other opaque means, contributing to the problem.

That is why, in addition to Canada's adoption of the beneficial ownership open data standard, the federal government has worked and continues to work alongside its provincial and territorial counterparts to continue to move the needle ahead on ensuring beneficial ownership transparency in Canada. This collaboration began at the officials level in 2016 and was formalized in a 2017 agreement among federal, provincial and territorial finance ministers. They agreed, in principle, to pursue legislative amendments to their respective corporate statutes that would require corporations to hold accurate and up-to-date information on beneficial owners, as well as to eliminate the use of bearer shares.

In 2019, finance ministers further agreed to “cooperate on initiating consultations on making beneficial ownership information more transparent through initiatives such as aligning access through public registries, while respecting jurisdictional responsibilities with respect to corporations.” The ongoing collaboration has resulted in, among other things, the majority of the provinces making amendments to their corporate statutes to create and maintain a beneficial ownership registry of their individuals with significant control. These amendments largely emulated the 2019 legislative amendments made to the CBCA. This means that, for most businesses operating in Canada, there will be information available on their beneficial owners.

Our ongoing collaboration with the provinces has also culminated in the establishment of a common platform called the multi-jurisdictional registry access service, or MRAS for short. MRAS is a common front-end portal that provides access to all the corporate registries in the country. It was a project adopted many years ago among the provinces, the territories and the federal government, and it represents one of the options to build on in creating a pan-Canadian registry.

Our efforts to harmonize federal and provincial beneficial ownership regimes are an ongoing initiative. To illustrate this, it is notable that, on June 5, Minister Champagne and Deputy Prime Minister Freeland sent a joint letter to their respective provincial and territorial ministerial counterparts, asking them to once again join the federal government's effort to create a pan-Canadian beneficial ownership registry and seeking specifically to understand each—

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

moved:

That Bill C-42 be amended by deleting the long title.

Mr. Speaker, it is a pleasure to rise on Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts. I outlined the amendment because we really did not study or work on too many other acts.

Earlier last week, when we finally had time to debate this bill and study it extensively at committee, it was very unfortunate that we had our committee witnesses appear the hour before we were to discuss amendments and go through clause-by-clause of the bill. There were some aspects of the bill that could have been improved had we had more time.

An example is the threshold for significant control. While the government repeatedly claimed that 25% is the international standard, witnesses made clear that it was only a guideline and that Canada could be a leader by reducing it. James Cohen, executive director of Transparency International, noted:

I don't think, for one, lowering the threshold from 25% to 10% and a risk-based approach are mutually exclusive. I think they actually go hand in hand. I would note that the 25% isn't so much a standard as it was an initial global recommendation that everyone just kind of grabbed on to.

Furthermore, when asked if a lower threshold would create unnecessary administrative complications, Superintendent Denis Beaudoin, director of financial crime for the RCMP, stated, “The RCMP standpoint is that the more names and more information, the better. As we're trying to make links in a criminal investigation, it certainly can help.” Both Conservative and NDP members of the committee tabled amendments to reduce the threshold for significant control from 25% to 10%. However, they were blocked by the Liberal and Bloc Québécois members.

The next aspect of the bill that could have been improved had we had more time to go through the amendments and hear from expert testimony relates to searchability. The Conservatives tabled two amendments to improve the searchability of the public registry, which were both raised by Transparency International in its submission. The first would have required that the jurisdiction of residence for tax purposes and the name of the corporation be included for each individual listed on the registry. The second would have added specific language to the bill requiring that the registry be made available to the public in a searchable format. Other good-faith amendments that were rejected included the inclusion of real estate in Bill C-42 and interoperability measures that could have improved the ability to work with the provinces and territories to have all the data that our law enforcement needs to go after white-collar crimes.

The next clause that was deleted that I think could have improved the bill related to law enforcement access. This amendment would have added specific language to the bill to ensure that law enforcement and other investigative bodies like FINTRAC could access information from the director rather than having to go to corporations individually. It also would have removed a reference to prescribed circumstances in relation to exceptions, ensuring that only minors are automatically exempted from having their information disclosed and that all others must apply for an exemption and prove that it is necessary.

There was a good-faith amendment brought forward by the Conservatives and recommended by Transparency International related to post boxes. This amendment would have barred individuals from listing a post office box as their address to be made in the public registry. Transparency International and the End Snow-Washing campaign requested that this be included in the bill. Ministry staff assured members that disallowing the use of post boxes is already standard practice at Corporations Canada and that including this language in the bill would be unnecessary. However, that analysis did not account for fact that the provincial registries may have different guidelines. If we are to truly seek interoperability and go after white-collar crime, we have to be more open to explicit language in legislation like this to give law enforcement the tools it needs and to close as many loopholes as possible.

Another good-faith CPC amendment was related to penalties on provincially registered corporations. This amendment would have changed the definition of a corporation in the context of offences to include provincially regulated corporations. This was important to ensure that when we reach a stage of interoperability with all registries, either provincial or federal, all people who are in contravention of the bill, and hopefully future law, are subject to the same penalties and convictions under the Criminal Code of Canada. I will note that the Conservatives, in good faith, did support an amendment that we also tabled to increase the fines for people committing an offence under the corporations act and it was supported. It was one positive aspect of the process at committee.

However, overall, while enemy cannot be the perfect of the good, I think the bill could have used just a few more meetings to hear from witnesses to get it at a stage where we could be really assured that we made the necessary and appropriate amendments. I say that because there was a good-faith commitment from all parties on this legislation to move quickly. I will repeat that it is not good parliamentary practice to have serious witnesses appear an hour before we are doing clause-by-clause, especially when they are bringing forward substantive amendments and have very little time to present.

I will go over some of the positions of the Canadian Bar Association, which had concerns with public access to the beneficial ownership registry and ensuring that Bill C-42 complies with the Canadian Charter of Rights and Freedoms. It noted this in a letter to me:

Individuals have legitimate personal and business reasons for not publicly disclosing sensitive personal information of beneficial owners. Canada should be mindful that businesses will look carefully at the requirement to make information public and determine how and in which jurisdiction they want to structure their corporations.

Public disclosure of additional corporate information may deter corruption and money laundering, and frustrate the efforts of fraudsters to use sham corporate vehicles for criminal purposes. However, it may also increase identity theft...which could undermine the anti-fraud rationale of the registry.

I think we needed to hear more from the Canadian Bar Association to get the balance between personal information being disclosed publicly and the need for law enforcement to have the necessary tools to do its job effectively. Indeed, the letter from the Canadian Bar Association said that a key aspect of this bill is balancing public interests and privacy rights. It noted:

In 2022, the Court of Justice of the European Union (CJEU) examined an anti-money-laundering directive...establishing a Register of Beneficial Ownership where some information on the beneficial owners was accessible to the general public. The CJEU held that the directive was invalid because the public’s access to information on beneficial ownership constituted a serious interference with the fundamental rights to respect for private life and to the protection of personal data.

Although witnesses did appear before committee, they had very limited time to bring forward all of their amendments. In fact, we only received amendments from Publish What You Pay Canada, Transparency International and Canadians for Tax Fairness on June 8. They outlined a number of really key amendments, some of which we were able to get on the floor at the very last minute. However, again, had there been a week in between hearing from serious witnesses and going through the amendment process in clause-by-clause, the bill could have been a bit better.

For example, Transparency International outlined the verification of identity of a significant individual. It recommended for “the Government of Canada to review Division Two and consider amendments requiring corporations to provide identity documents to the registrar upon request for the specific purpose of verification.” Transparency International outlined the need to improve intergovernmental corporations, which was a big aspect of the work we did to study the legislation. It also pointed out, especially in the context of a place like British Columbia, where we see a lot of foreign investment or at least a lot foreign money entering our real estate market and local businesses, that more needed to be done to ensure that the country of residence, the name of a corporation and valid government ID be part of these registries moving forward. As I outlined earlier, it mentioned that post office boxes should be included and should not be used as a place to do business in Canada.

Overall, we did get some good work done on this bill, but a lot more could have been done.

Speaker's Ruling

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

There is one motion in amendment standing on the Notice Paper for the report stage of Bill C-42. Motion No. 1 will be debated and voted upon.

The House proceeded to the consideration of Bill C-42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts, as reported (with amendments) from the committee.

Business of the House

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

Mr. Speaker, I am very glad to respond on behalf of the government.

This afternoon we will continue debate on Government Business No. 26, concerning amendments to the Standing Orders. When debate concludes later this evening, we will consider Bill C-35, respecting early learning and child care, followed by Senate amendments to Bill C-9, concerning the Judges Act.

Tomorrow we will consider Bill C-42, respecting the Canada Business Corporations Act, at report stage and third reading, and Bill S-8, respecting sanctions.

The priorities for next week shall include Bill S-8, on sanctions; Senate amendments to Bill C-18, respecting online news; Bill C-40, concerning the miscarriage of justice review commission act, also known as David and Joyce Milgaard's Law; and Bill C-33, which strengthens the port system and railway safety.

Thursday shall be an allotted day.

Finally, I request that the ordinary hour of daily adjournment for the next sitting be 12 midnight, pursuant to order made Tuesday, November 15, 2022.

Industry and Technology

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Speaker, I have the honour to table, in both official languages, the following three reports of the Standing Committee on Industry and Technology.

I am tabling the 14th report, entitled “Domestic Manufacturing Capacity for a COVID‑19 Vaccine - Prevention is Better than Cure”, and the 15th report, entitled “Blockchain Technology: Cryptocurrencies and Beyond”. Pursuant to Standing Order 109, the committee requests that the government table a comprehensive response to each of these two reports.

I also have the honour to table, in both official languages, the 16th report of the Standing Committee on Industry and Technology concerning Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts. The committee has studied the bill and has decided to report it back to the House with amendments.

I would like to take this opportunity to thank the analysts, the interpreters and our clerk, and now our new clerk. Their work was instrumental in the committee's successful presentation and tabling of these three reports.

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

Yes. I'd like to move CPC-73, which would amend Bill C-42 (a) by adding after line 26 on page 7 the following:

(2.1) The Director may, with the approval of the Minister, enter into an agreement or arrangement with a provincial corporate registry or with a provincial government department or agency that is responsible for corporate law in the province for the purpose of facilitating timely access to beneficial ownership information that could relate to the commission or potential commission of wrongdoing as described in paragraph (3)(b).

In (b), it would add after line 34 on page 7 the following:

(4) In this section and in sections 21.1 to 22, corporation includes a corporation that is incorporated under a Act of the legislature of a province that has entered into an agreement under subsection (2.1).

Of the approximately 4.3 million businesses in Canada, just 400,000 are incorporated federally and subject to CBCA regulations. Businesses incorporated provincially would be included in this public registry. Once an agreement between the province and the federal government is reached, however, they would not be subject to the penalties for non-compliance. This amendment will ensure that provincially incorporated businesses, in agreement to be part of the registry, face the same penalties as those incorporated federally.

Thank you, Mr. Chair.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Mr. Chair.

This is another one that's not in the main package but is being distributed now. It was emailed to you earlier. It's number 12517956. The clerk is emailing it now.

In essence, what this does, it's about searchability. I move that Bill C-42, in clause 4, be amended (a) by deleting lines 17 and 18 on page 3, and (b) by replacing lines 20 to 22 on page 3 with the following: “(2) The Director shall make the information referred to in subsection 21.1(1) that was sent to the Director under section 21.21 available to the public in a searchable format.”

We're trying to get a more usable searchable format for public disclosure and transparency as a condition here in the act.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I'll give everyone a chance to catch up to CPC-19.

As written, Bill C-42 does not require the director of Corporations Canada to share information collected from the registrars of corporations with their provincial counterparts, as we read it.

The Liberals talked about interoperability of the federal public registry, but I think it has to be a little more specific in this bill. Provinces and the federal government must be on the same page in information sharing, if possible. We're proposing this amendment to try to make sure that we're better tied on that sharing of information.

I actually wouldn't mind having the officials comment on this.

[Brian Masse, NDP, Windsor West, ON]

I have an amendment that Bill C-42, in clause 2, be amended by replacing line 32 on page 2 with the following: “$100,000”.

[The Chair, Liberal, Joël Lightbound]

Colleagues, I call this meeting back to order.

Again this week we are blessed with the presence of Mr. Schaan, who's now almost a permanent member of this committee. He's always here.

Thank you very much for being here with us to answer our questions as we go through clause-by-clause on Bill C-42.

He's accompanied by Martin Simard, who is the senior director, strategy and innovation policy sector at ISED.

Thanks to both of you.

Without further ado, dear colleagues, we will begin clause-by-clause consideration of Bill C‑42.

There is a new clause, clause 0.1.

Go ahead, Mr. Perkins.

[Justin Brown]

I can't give you any details. I know that the government signed an agreement with the provinces and territories in 2017, and it was further to those discussions that the 25% threshold was established. That's where the threshold in Bill C-42 came from.

[Supt Denis Beaudoin]

I don't think anything glaring is missing from Bill C-42. To repeat what others have mentioned, I think it's important to ensure that the regime is pan-Canadian. That's the most important thing, especially when you consider the fact that the share percentage varies from province to province. In some places, it's 25%, and in others, it's 10%. Criminals will go to areas or countries that don't have these kinds of rules. Corporations that are under criminal investigation by the RCMP or that are being used to launder money will be incorporated in those jurisdictions.

That's why the most important thing is to ensure that the legislation applies to the entire country. The provinces and territories have to be brought in, whether through this regime or an independent one.

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

That really leaves leaves an impression. It would be easy to find the money to fight money laundering if we could catch it at the source, when the fraud is being committed.

Do you think Bill C-42 gives the Department of Finance enough tools to recover that money? Does it give you additional tools to address the problem? How would you like to see the bill improved?

[Supt Denis Beaudoin]

Sorry, but I'm not sure I understood your question. We already work with other police services. As I understand Bill C-42, it will give all police services access to the information on the criminals. We already have very smooth co-operation with most police services in Canada. The bill will strengthen that co-operation, because they will have access to the information as well.

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

Indeed, I think alignment between the federal, provincial and Quebec governments is key, under the circumstances.

How does the RCMP operate now, and how will it operate once Bill C-42 is passed? What additional powers does it give you, in terms of co-operation?

[Supt Denis Beaudoin]

Bill C-42 will provide the powers required to find criminals that use corporations as a front to commit fraud. Sometimes, they are Canadian companies incorporated in other countries—usually the same ones, in fact. Bill C‑42 will give us the ability, further to an independent process, to identify those corporations involved in fraud.

In my opening remarks, I stressed the importance of paying attention to provinces and territories, to prevent criminals from choosing those where incorporation practices are not transparent.

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

Bill C-42 obviously seeks to strengthen the tools to take action. Will it also give the RCMP more powers, and if so, which ones?

[James Cohen, Executive Director, Transparency International Canada]

Mr. Chairman and members of the committee, thank you for inviting me to speak to you today. My name is James Cohen, and I am the executive director of Transparency International Canada.

TI Canada is a registered charity and is the Canadian chapter of Transparency International, the world's leading anti-corruption movement.

TI Canada, a member of the informally known “end snow-washing coalition”, along with Publish What You Pay Canada and Canadians for Tax Fairness, is enthusiastically supportive of Bill C-42, which will establish a publicly accessible corporate beneficial ownership registry at the federal level in Canada.

Not only are we pleased with the government's introduction of Bill C-42, but we are greatly encouraged to see the cross-party support for the principles of the bill. All parties should be proud to work in this co-operative manner to achieve a win for Canadians in the fight against global corruption.

The term “snow washing” was coined in the Toronto Star and CBC's 2016 investigations into the Panama papers. Essentially, it means bring your dirty money to Canada and it will be cleaned like the pure white snow. Why? First, who thinks of Canada as a destination for illicit funds? Importantly, second, our laws have had transparency gaps and weak enforcement.

TI Canada led a coalition report in 2022, called “Snow-washing, Inc”, where we looked at the websites of foreign corporate service providers. Their sales pitches are shocking in how blatant they are, letting potential clients know that a Canadian or provincial limited partnership is a great vehicle for funds to not be noticed. One website went so far as to say, if you think the U.K. has become too transparent thanks to their registry of significant control, why not try Canada?

While a public beneficial ownership registry is not a panacea for solving money laundering, it is a critically important tool in the fight to end snow washing. As an example of its effectiveness, the civil society organization Global Witness conducted research where they observed that Scottish limited partnerships, which were notorious for being abused by criminals, saw a steady increase of incorporation from 2011 to 2016. In 2016, when SLPs became subject to a registry of significant control disclosure in the U.K., their incorporation rate dropped by 80%. Transparency International has also documented numerous cases of civil society organizations working across borders to help identify kleptocrats and their stolen assets.

On the content of Bill C-42 itself, TI Canada is pleased to see a number of features that the coalition called for, such as zero pay for search, protection for whistle-blowers, and a tiered system for data for the public and for law enforcement.

I would also add that the justification for Bill C-42, which is not just to fight money laundering but also as a form of corporate due diligence, will hopefully bolster the beneficial ownership registry from legal challenges like we saw in Europe last year, where anti-money laundering directive five only justified registries from an AML perspective.

Where the real merit of the registry will come will be its implementation. We urge the government to provide the necessary funding for the registry so that it may be staffed, so regular risk-based approaches to data reviews can take place and so that a dependable form of data verification can be set in place.

Of course, as everyone knows, the provinces and territories need to work with the federal government to make this registry truly effective. I implore provincial representatives who are following these hearings to respond to Minister Champagne's and Minister Freeland's letters to co-operate. Do not be the holdout secrecy jurisdictions in Canada. It's not a reputation that you want.

After years of being an international laggard on this front, Canada now has a foot to stand on, diplomatically, to bring holdout countries up to our standard on beneficial ownership transparency. We encourage the Canadian government to do just that, especially at the Conference of State Parties to the UN Convention Against Corruption later this year. The more the good guys co-operate on this, the more the bad guys lose and we can work toward ending snow washing.

Thank you. I am happy to take any questions from the committee.

[Supt Denis Beaudoin, Director, Financial Crime, Royal Canadian Mounted Police]

Thank you, Mr. Chair.

I'm pleased to appear before the committee today. I am Superintendent Denis Beaudoin, and I am the director of financial crime in federal policing criminal operations at the Royal Canadian Mounted Police, or RCMP.

I want to say first that the RCMP welcomes the measures to implement a beneficial ownership registry. The resulting transparency and disclosure of information will enhance our efforts to combat financial crime.

As you know, keeping beneficial ownership information hidden is a technique used for money laundering and terrorist financing. Front companies or shell corporations make trade-based money laundering much easier by separating illicit actors from their activities. When information about a company's beneficial owners is concealed, it increases the risk of tax evasion, sanctions evasion, and the domestic and international movement of proceeds of crime.

Without transparency around verified beneficial ownership, our ability to prevent and combat financial crimes is undermined. Not being able to quickly identify the beneficial owners of a company without their knowing can slow criminal investigations, prevent police from tracing suspects, witnesses and evidence, and hinder the identification and seizure of suspected proceeds of crime.

The importance of beneficial ownership transparency is well recognized internationally, and beneficial ownership registries are increasingly the international norm. They have existed in the U.K. and in the EU countries since 2016 and have proven a useful tool for law enforcement in deterring the misuse of corporations for illicit finance activities.

Evolving global anti-money laundering standards now expect countries to make these registries accessible to, at a minimum, competent authorities, with the majority of Canada's G7 and Five Eyes counterparts having implemented these registries to put them in place.

In 2021, G7 finance ministers and central bank governors agreed that beneficial ownership registries are an effective tool to tackle illicit finance. The Financial Action Task Force, which is the global money laundering and terrorism financing oversight mechanism, recently adopted new requirements with respect to beneficial ownership registries. Canada is a founding member of the FATF, and the RCMP is a full participant in the Canadian delegation.

With Canada making efforts to address beneficial ownership gaps, including through Bill C-42, we are showing that we are contributing to the global fight against financial crime.

Identifying beneficial owners of corporations means lifting the veil of anonymity on the people behind the transactions and account activities. Beneficial ownership registries are an effective tool for law enforcement. When we combine the information in the registry with other evidence and investigative practices, we are better able to track illicit funds. Registry information serves to complement other evidence-gathering methods, which can take longer and potentially alert suspects to an ongoing investigation. Lastly, this measure will improve the application of sanctions here and abroad, and make it easier to track and freeze financial assets.

Although the RCMP welcomes the bill, the legislation will apply only to a small percentage of companies in Canada, since most of them are incorporated under provincial statutes. In order to prevent illicit actors from exploiting vulnerabilities, it is necessary to address beneficial ownership transparency across the country if we want the registry to be useful. Otherwise, criminals will use provinces without registries to launder the money their criminal activities generate. The full co-operation of provincial and territorial governments is vital.

While a transparent corporate registry is a step in the right direction, it will not resolve all the challenges law enforcement faces in its fight against financial crime. The RCMP welcomes the recent changes announced in the budget, such as the criminalization of the unregistered money service business and the addition of a structuring offence.

Looking at our international partners, Canada's AML regime could benefit from better information-sharing legislation between private and public organizations and tools to investigate professional money launderers. We're working with our AML partners to address these information-sharing gaps and challenges.

Thank you for the opportunity to be here today. I welcome any questions.

[Sasha Caldera, Campaign Manager, Beneficial Ownership Transparency, Publish What You Pay Canada]

Mr. Chair and fellow committee members, thank you for inviting me to speak today.

My name is Sasha Caldera, and I am the beneficial ownership transparency campaign manager at Publish What You Pay Canada. Publish What You Pay Canada is part of the global “publish what you pay” movement of civil society organizations working to make oil, gas and mineral governance open, accountable and responsive to all people. For the past five and a half years, I've been leading a coalition of three civil society organizations to advocate for a public beneficial ownership registry with our partners Transparency International Canada and Canadians for Tax Fairness.

Bill C-42 will deliver a critical blow to criminals who desire to take advantage of corporations governed under the CBCA. We applaud Minister Champagne's commitment to ensuring that Canada's beneficial ownership registry is publicly accessible, free of cost, searchable and scalable with provinces and territories.

As Canada is a G7 country with an advanced service economy and an AAA credit rating, experts estimate that approximately $45 billion to $113 billion is laundered annually into the country. Canada's publicly accessible registry is in line with the G20 and Five Eyes countries that are deploying these tools as part of national security strategies to prevent corrupt foreign officials from hiding dirty money in liberal democracies. Currently, 108 countries around the world have made commitments to implement publicly accessible registries.

Bill C-42 is a positive step, and we recommend the following legislative amendments to strengthen the deterrence capability of Canada's registry.

First, allow anyone to have the ability to search by country of residence and name of corporation.

Second, ensure all publicly accessible data fields are searchable.

Third, forbid post office boxes to act as the service address.

Fourth, add hybrid offences to subsection 21.1(1) or 21.31(1) of the CBCA.

Finally, require beneficial owners to submit non-expired, government-issued photo ID numbers to corporations for safekeeping and future ID verification.

These amendments will improve the searchability of the registry, penalize sophisticated offenders who have the financial resources to absorb current offences and add mechanisms to prevent beneficial owners from knowingly abusing the PO box system or providing false information to corporations.

We are pleased to hear there are efforts on behalf of Minister Champagne and Minister Freeland to reach out to provinces and territories. To bring provinces on board, we recommend the federal government strike an agreement with provinces and territories that allows provincially registered corporations to send beneficial ownership information directly to the federal registry. Provinces would need to pass legislation in their own business acts, yet this harmonization approach was used during the first beneficial ownership agreement in 2017.

The federal government can also suggest that provinces can choose to implement their own beneficial ownership registries using the same design parameters and with the beneficial ownership open-data standard to ensure they are interoperable with the federal government. Through a flexible approach, smaller provinces would not have to devote resources to upgrading their own business registries, while larger provinces can follow the lead of early adopters like British Columbia and Quebec.

As someone who was born and raised in Richmond, British Columbia, I think this registry will mean a lot for my hometown and the province of B.C. Richmond is one of the entry points for money laundering in Canada, and the harm to the province has been well documented by the B.C. Cullen commission. From the fentanyl crisis and increased gang violence in broad daylight to underground casinos and artificially inflated real estate, my hometown has changed.

The impact of Bill C-42 will be felt beyond Canada's borders. Should Canada pass this legislation, this registry will be cheered on by communities around the world that are relying on these tools to track down officials who are looting tax dollars from national treasuries or stealing vital foreign-aid dollars for personal gain. This registry will be a game-changer in the global fight against tax evasion, organized crime, corruption, bribery and terrorist financing. I am proud to see Canada taking this decisive step today.

Thank you so much for your time, and I am happy to take your questions.

[The Chair, Liberal, Joël Lightbound]

Good afternoon.

I call the meeting to order.

Welcome to meeting number 80 of the House of Commons Standing Committee on Industry and Technology.

Today's meeting is taking place in a hybrid format, pursuant to the House order of June 23, 2022. Pursuant to the order of reference of Thursday, June 1, 2023, we are continuing our study of Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts.

I would like to welcome the witnesses and thank them for their patience. We are getting started a bit late because of voting in the House.

We have with us today Justin Brown, senior director, financial crimes policy, governance and transparency, Department of Finance; Annette Ryan, deputy director, Financial Transactions and Reports Analysis Centre of Canada; Sasha Caldera, campaign manager, beneficial ownership transparency, Publish What You Pay Canada; Denis Beaudoin, director, financial crime, Royal Canadian Mounted Police; and James Cohen, executive director, Transparency International Canada.

Thank you all for making time to meet with the committee to discuss this important bill. As you know, you will each have five minutes for your opening statement.

Without further ado, I will turn the floor over to Ms. Ryan for five minutes.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Albas.

I want to thank the officials for being with us this afternoon. It's much appreciated. Thank you for taking the time.

Just before I let you guys go, as you know, next Monday we are doing clause-by-clause study on precisely this bill, Bill C-42. With your permission, I'd ask for additional resources and maybe one more hour for the meeting so that we could have a full panel of witnesses and then do clause-by-clause study. I think that would be useful for this committee.

If that's okay, that's how I'll proceed. I'm not sure if the House will provide the resources, but I'll ask on behalf of the committee.

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

What would happen if Bill C‑42 weren't adopted? What would be the economic or fiscal consequences of that?

[Mark Schaan]

The object of Bill C‑42 is somewhat different. Trade agreements are normally reached between governments and concern taxes or free trade. Instead, this bill concerns the directors and officers of business corporations.

Directors and officers have a positive duty to name the human individual at the end of the chain. That includes persons outside the country and in foreign countries where there's a lack of transparency. This is really something other than a trade agreement. The directors and officers in Canada have a duty to provide the required beneficial ownership information even if the actual person at the end of the chain is located in Jersey or on a tropical island.

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

Thank you.

As regards the fight against tax havens, do we currently have any free trade agreements with a country that one would call a tax haven?

Would Bill C‑42 help provide bargaining tools to renew those trade agreements and ensure that transparency is a necessary criterion in allowing a Canadian corporation to do business with a less cooperative country?

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

Is Bill C‑42 really binding enough? Considering what's happened in recent years with the Panama Papers or the Paradise Papers, for example, could we have avoided that kind of scandal if we'd had provisions such as those proposed under Bill C‑42?

[The Chair, Liberal, Joël Lightbound]

Colleagues, we're going to resume this meeting on Bill C-42. Thank you for your patience, and we apologize for the suspension. This is the kind of thing that happens at this time of the year in Parliament.

We now have the officials with us to answer your questions. I understand that there are no preliminary remarks, given that the minister has done that already.

We are now going to the Conservatives. Go ahead, Mr. Vis.

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

Yes, Quebec created its beneficial business owners registry, which it adopted in December 2020. Bill 78 contains provisions for the creation of that beneficial ownership registry and to make it public.

How will we make sure it's interoperable? What issues will the province face in cooperating with the other provinces as a result of Bill C‑42.

What are the stumbling blocks? Are there only advantages?

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

Allow me to ask you a question that comes from our analysts.

Subclause 2(2) of Bill C‑42 would amend section 21.21 of the Canadian Business Corporations Act to allow the director appointed under the act to determine the information he or she wishes to receive among that appearing in the registry, rather than receive all the information appearing in the registry. However, section 21.21 of the act still appears under the heading "Amendments Not in Force" in the act. No order appears to have been made providing for division 30 of Budget Implementation Act, 2022, No. 1, clause 431 of which creates a new version of section 21.21 in the Canadian Business Corporations Act, to come into force.

When will section 21.21 come into force?

Why does Bill C‑42 make an amendment to a provision that isn't yet in force?

I think that's a good question. Can you tell us more about that?

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

Thank you, Mr. Chair.

Minister, thank you for being with us. Thanks as well for mentioning in your opening remarks the mythic village of Clova, in your region, which was hit by the fires. We're in a similar situation in Abitibi-Témiscamingue, and I understand the feeling of being on alert. I offer all my sympathies and support to the people in your riding, particularly the forest workers and outfitting operators. An entire economic sector is being threatened.

I also want to re‑extend our invitation to meet with us again to discuss the 2023-2024 supplementary estimates in accordance with our order of reference. That's a meeting that committee members always appreciate, as you know.

First, I'd like to address a few points. Bill C‑42 would introduce a new social and environmental responsibility regime for business corporations. I want to emphasize that businesses would be required to consider environmental, social and governance factors in their business decisions and measures. The purpose of this provision is to encourage businesses to adopt a long-term vision and to make a positive contribution to society in addition to generating profits. In the Bloc Québécois' view, these are positive elements. I also want to note that you accepted our recommendation to increase transparency and to ensure greater shareholder accountability by increasing the responsibilities of corporate officers.

However, certain questions remain unanswered. Perhaps you can provide us with some clarification. For example, if business A belongs to corporation B, which in turn belongs to corporation C, is it possible to determine who is the beneficial owner, the one who makes the decisions, if the business is established in a less cooperative country, and if information isn't automatically disclosed to Canada? I am thinking of tax havens, for example.

Would Bill C‑42 help identify the actual owner of a business that has assets in Canada?

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Minister.

To start this discussion on Bill C-42, I'll turn it over to Mr. Vis for six minutes.

The floor is yours, Mr. Vis.

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

Thank you, Mr. Chair.

Good afternoon, colleagues.

Allow me first to express my thoughts for the people of Clova, in my community and the riding I represent in northern Mauricie, whose town has been overwhelmed by fire.

It's a pleasure for me to appear before the committee today to discuss Bill C‑42.

As you can see, I am accompanied by Mark Schaan, who will also be with you to answer more detailed questions in the next hour.

As colleagues would know, 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.

I'm pleased to note, Mr. Chair, that I've heard that in principle all the parties are in agreement that this is the way forward for the country.

I think that Canadians who are watching us today would agree that a creating a free, public and searchable registry of beneficial owners of federally regulated Canadian corporations will increase corporate accountability and improve public trust in corporate institutions.

I'm delighted that all the opposition parties support the principle of Bill C‑42, and I'm satisfied that, based on our discussions and those that the committee has had with the experts, we can find a consensual path on which to move forward together.

In that regard, I thought I would use my limited time today to underscore a few characteristics of the bill that are likely of particular interest to the members of this committee. The first point I would like to make is that the amendments proposed in Bill C‑42 are based on the amendments made to the Canada Business Corporations Act, or CBCA, in 2018, 2019 and 2022.

Corporations already gather information on their beneficial owners. What we want to do today, Mr. Chair, is increase the amount of data that will be collected and ultimately published.

What we are doing is ensuring that the information is transmitted to the government and that a limited and reasonable amount of that data is published for transparency purposes.

The definition of control under the CBCA, which is 25% of voting rights—I know that committee members have discussed this from several angles and that the issue has also been raised in the House of Commons—stems from these previously made amendments, and it is entirely consistent with Canadian statutory provisions on money laundering, but also with the registries adopted around the world, particularly in the United Kingdom, the European Union, the United States and even Quebec.

The amendments proposed in Bill C-42 will require the CBCA corporations to collect and send additional information about their individuals of significant control in the form of residential addresses and citizenship.

Bill C-42 will also require Corporations Canada to make publicly available a portion of this information. It is important to note that individuals will continue to have the option to provide an address for service. When they do so, it is that latter address that will be made public.

Citizenship, like the date of birth, will be available to law enforcement, but, to protect the privacy of Canadians and to prevent fraud and discrimination, it will not be made public.

The bill also introduces an exemption regime for certain at-risk individuals. These exemptions are required to ensure our regime is charter compliant, targeted and, importantly, limited to public disclosure.

I want to be clear to all Canadians watching today that law enforcement will have full access to all the data collected.

Among other things, Bill C‑42 contains very strict compliance provisions, and sanctions for simple non-compliance, whether due perhaps to ignorance or forgetfulness, for example, are consistent with other similar penalties provided for under the Canadian Business Corporations Act. However, penalties for willful non-compliance—and I emphasize the word "willful"—to conceal other offences, for example, will be among the most severe in the world.

Bill C‑42 also provides for effective administrative sanctions and whistleblower protections.

Finally, Mr. Chair, the government has committed to making the beneficial ownership registry searchable and scalable to allow access to beneficial ownership data held by the provinces and territories that agree to participate.

In that vein, I'm happy to report to this committee that the Minister of Finance and I wrote to the ministers of finance for the provinces and territories this morning, asking them to join in this big endeavour so that we can cover as many corporations in Canada as possible. We have a long history of pan-Canadian collaboration on beneficial ownership transparency. Through this collaboration, we are looking to maximize coverage and ensure that the registry reaches its full potential. We will notably do so through the adoption of an international data standard that will facilitate interoperability.

Thank you, Mr. President.

I'm now ready to answer questions from my colleagues so we can proceed as quickly as possible to adopt this bill.

[The Chair, Liberal, Joël Lightbound]

Good afternoon, everyone.

I call this meeting to order.

Welcome to meeting No. 78 of the House of Commons Standing Committee on Industry and Technology.

Today's meeting is taking place in a hybrid format, pursuant to the House order on June 23, 2022.

Pursuant to the order of reference of Thursday, June 1, 2023, we are beginning our study ofC‑42, An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts.

I would like to welcome today's witnesses. First, we have Mr. Champagne, Minister of Innovation, Science and Industry, who is back before the committee.

Welcome, Mr. Champagne.

He is accompanied by Mark Schaan, Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector.

Thank you very much for being with us, Mr. Schaan.

Without further ado, Minister, I give you the floor for five generous minutes.

[Mark Waddell]

To my understanding, the preponderance of corporations that are found within all fisheries nationally are registered within their provincial area of jurisdiction. They would be registered under provincial law. There has been a heightened effort across the country, with a number of jurisdictions undertaking work on beneficial ownership and establishing or seeking to establish beneficial ownership registries akin to what is pursued through Bill C-42.

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

That sort of begs the question, are you going to become familiar with Bill C-42? In light of the recommendations that came out of the 2019 report, and in light of the conversation we've had today, would DFO be prepared to wade into a committee study or debates on Bill C-42 to see if it needs amendments to be more effective?

[Mark Waddell]

I am wracking my brain as to the extent of knowledge I hold on Bill C-42, which is not sufficient to address the question that you're putting to me, I'm afraid.

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

I know. It's getting onerous, Mr. Chair.

Mr. Waddell or Mr. Davis, I wonder if you're aware of Bill C-42, which would amend the Canada Business Corporations Act to basically require beneficial ownership in Canadian corporations to be identified.

Canada Business Corporations Act

[The Speaker, Liberal, Anthony Rota]

It being 3:13 p.m., pursuant to order made on Thursday, June 23, 2022, the House will now proceed to the taking of the deferred recorded division on the motion at second reading of Bill C-42.

Call in the members.

The House resumed from May 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.

[Ed Fast, Conservative, Abbotsford, BC]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Business of the House

[Ginette Petitpas Taylor, Liberal, Minister of Official Languages and Minister responsible for the Atlantic Canada Opportunities Agency]

Mr. Speaker, when we return the Monday after the week in our ridings, the agenda will include debate at third reading of Bill S‑5, an act to amend the Canadian Environmental Protection Act.

Tuesday and Thursday will be opposition days. On Wednesday, we will resume debate at second reading of Bill C‑42, an act to amend the Canada Business Corporations Act.

On Friday, we will begin debate on Bill C‑40, miscarriage of justice review commission act, also known as David and Joyce Milgaard's law.

I would also like to take this opportunity to inform members that we have posted the position of law clerk and parliamentary counsel in the House of Commons. I encourage members to share that job posting so that we can be sure to find a permanent law clerk as soon as possible to support the important work that we do as parliamentarians.

Again, we have done the process in French and English.

With that, I would like to wish all parliamentarians a wonderful constituency week. I know that we are going to be busy in our ridings.

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

Mr. Speaker, I thank my hon. colleague on the other side for the question and the opportunity to illuminate the government's agenda for the coming week.

On Monday, we will resume report stage debate of Bill S-5, which would amend the Canadian Environmental Protection Act.

On Tuesday morning, we will call Bill C-42 regarding the Canada Business Corporations Act and then return to debate on Bill S-5 in the afternoon.

On Wednesday and Friday, we will call Bill C-13, an act for substantive equity of Canada's official languages.

Finally, I would like to inform the House that Thursday, May 11, shall be an allotted day.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

For the Diefenbaker government, I was not there. I never met John Diefenbaker, but I knew his executive assistant. MP Maguire met John Diefenbaker.

He was first elected prime minister in 1957 in a minority, but he had an overwhelming, smashing victory in 1958, winning many seats. He was only to be surpassed in the number of seats by Brian Mulroney's victory in 1984.

Apparently, in 1958, with the election of the Diefenbaker government:

...greater use was made of standing committees; for the first time, a member of the official opposition was chosen to chair the Public Accounts Committee—

Imagine that. The Conservative government of John Diefenbaker expanded the roles of committees and said examining the spending of government accounts by the public accounts committee is not something that should be chaired by a government member. They, in government, said, “We should have an opposition member chair the public accounts committee.”

Is that a dedication to ministerial accountability? That's a belief in our parliamentary system like we don't see these days.

Again, I will read it, “for the first time, a member of the official opposition was chosen to chair the Public Accounts committee and the Committee began to hold regular meetings”. That's a good concept.

In 1968 there were more significant reforms made to House procedures, including the following—and remember, I don't know what time of the year it was in 1968 that it happened. It could have been under Prime Minister Pearson, or it could have been under newly elected Prime Minister Trudeau, who was fresh faced, and there was Trudeaumania. If it was under him, with all the world before him to change the world and use government for good with an unusual respect for Parliament for the Liberals, in 1968 they made a series of significant reforms to House procedures, including the following three key changes.

The estimates were no longer considered by a committee of the whole of the House but were sent to standing committees. That was a good reform. It gave those expert committees the ability to scrutinize the spending of the departments that the minister is responsible for, i.e. the Fisheries minister in the fisheries committee or the Industry minister in the industry committee.

The second significant reform, according to Treasury Board, that was made in 1968 was that the opposition was given a total of 25 days when it could choose a topic of a debate. Those are colloquially called opposition days, when we get to propose a motion for the House to debate and move and, for the general part in this government, for the government to ignore the vote or, in some cases, vote against it, as they did recently on several opposition days. We were thankful that they voted to send China interference, which the government has been aware of for two years, I believe, yesterday, to the procedure and House committee. Thanks to some of these reforms, those things can happen.

The third thing was that most bills were referred to standing committees. I was talking with MP Blaikie the other day about bills going to standing committees, and talking about the time.... Again I'm going to give a story. There is a standing order that is still on the books today, little used, that committees could be freed up from the arduous work of dealing with legislation, which can throw off the important subject studies that standing committees do. For example, we now have three government bills before the industry committee, which has stopped, halted, right in the middle of the important study we were doing on a Bloc motion to have the electronics and recycling ecosystem studied by the industry committee to understand all types of things. That has been stopped because we now have three bills, Bill C-27 on privacy, Bill C-34, changes to the Investment Canada Act, which I'm sure all members here are very interested in, and Bill C-42, a bill to create, finally, a beneficial corporate ownership registry.

There is a standing order that still exists today that says you can refer bills to legislative committees. These are special committees that get set up for each bill. They exist for a bill, then disappear.

During the days when I was a young legislative assistant to a minister, that's where all bills went. They didn't go to standing committees, except for the budget. They didn't go to standing committees; they went to specially constituted legislative committees that would be set up, for example, to deal with Bill C-21, which changed the Firearms Act. It wouldn't go to security, SECU, as we call it. It would go to a special committee of MPs set up from all parties, and it would have its own budgets, its own clerks and its own travel budgets and then, when the bill was reported back to the House with or without amendments, that legislative committee would disappear.

For example, Mr. Chair, look at the biography of a former chair of this committee whom I knew well, Don Blenkarn, an irascible fellow from Mississauga who was elected and chaired this committee, I believe, for six years during the Mulroney government. He wasn't always a person who followed the government rules, I can tell you, much to the chagrin of then finance minister, Michael Wilson. When you look up his bio, you will see legislative committee after legislative committee after legislative committee listed by bill, because when a finance bill came out of second reading in the House, the legislative committee would set up, and Don Blenkarn would always be one who wanted to be on those bills to examine them.

While this reform in 1968 referred it to standing committees, I know personally that there were further reforms to the Standing Orders to allow for more flexibility. It is something we should use a little more today, those legislative committees, but, like I've said before, I've gone a little off topic from this, but I still think it's about how we hold ministers to account in Parliament.

There are different ways to do it under the Standing Orders, and some are effective, but the key part of it, whether it's a standing committee, a legislative committee, public accounts, the finance committee or two of my favourites, industry and fisheries, is that ministers come because it's a courtesy on both sides.

It's a courtesy to ask the minister to come and explain why this is such a great legislative initiative, but it's also generally polite—like when you get a dinner invitation to somebody's house—to go. I won't say to you, Mr. Chair, since I expect I will get an invitation to dinner with you sometime, “Well, I can only go for half an hour.” I know you want to talk to me about the insights I've provided the committee on ministerial accountability for more than that over dinner and maybe a few glasses of wine.

The Canada Business Corporations Act

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

Madam Speaker, if the member for Winnipeg North wants to see the bill proceed faster, maybe the government should not schedule it for Friday sittings. That is just my opinion.

There is an offence and punishment section in Bill C-42. It lists that corporations found guilty of an offence can be liable for a fine not exceeding $5,000. The punishment for individuals can be as high as $200,000. Of course, the whole purpose of this bill is to uncover individuals who may be using corporate entities to hide themselves.

That being said, does the hon. member think $5,000 is a sufficient deterrent to prevent corporations from doing this, or would he see value in maybe increasing it to make it commensurate with the offence of the transgression?

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

Madam Speaker, overall, as the member for Winnipeg North summarized, we have been having a pretty comprehensive debate on Bill C-42. There have been suggested amendments from each party, with broad unanimity that we need to take further action to combat money laundering in Canada and its impact on the housing market. I was particularly pleased that a number of members on all sides raised the Cullen commission and the impact crimes are having, especially on British Columbia.

The future public beneficial registry will be a tool to combat the use of illicit funds in our economy. Is the Liberal Party open to providing further clarification as to the extent of the power of law enforcement to use it? What other tools can we give our law enforcement agencies to make sure that money laundering is finally combatted in the way Canadians expect us to do?

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

Madam Speaker, it is a pleasure to rise to speak to Bill C-42 today. I think it is very important for us to recognize that, as time goes by, we have had, very much, a heightened sense of awareness on such an important issue. If I reflect back to a number of years ago, very rarely would we hear about the types of situations that are being debated today inside the chamber.

We are very much aware of things, such as the Paradise papers and issues surrounding corporations, the issues surrounding money laundering and so many other issues. Canada and other countries around the world are looking at ways we can deal with the issue of beneficial ownership and the impact it is having. We are looking at a registry and trying to improve the system.

Listening to the many comments today from members across the way, and members within the Liberal caucus, we find that there seems to be fairly widespread support. Yes, I respect that opposition members and others do have questions about the legislation. I suspect that will be the opportunity, once we get into the committee stage, to look at what possibilities there might be to strengthen the legislation.

I have actually been encouraged by the debate thus far on the legislation. I have had the opportunity to ask a few questions, and I would like to be able to highlight a few concerns, in a broad way, that I have.

If I were to respond to the debate today, there are a couple of things that come up. In particular, the NDP made reference to the whole issue of tax fairness and lost revenues. I think that, if we were to canvass Canadians as a whole, we would find that Canadians do not mind paying their taxes, as long as there is a sense of fairness to it.

People want to pay or are prepared to pay their fair share. That is the reason why, if we take a look at it, over the last number of years, virtually since we have been in government, the government has taken a number of actions to build on the fact that Canadians' expectations are that we improve and make the system better for all. I do not know how many times I have had the opportunity to talk about some of the initial initiatives we have taken as a government.

I would like to start off from the particular point that, shortly after being elected, in recognizing Canada's middle class and supporting Canada's middle class, there were a number of tax initiatives taken, as well as actions by the government.

I would like to amplify a couple of those initiatives. The first one that comes to mind, of course, is the tax reduction legislation we brought forward at the beginning of the mandate for the middle class. It was a piece of legislation, very clear, to ensure there is a higher sense of tax fairness by enabling a break for the middle class.

At the same time, if we will recall, there was an additional tax that was put on Canada's wealthiest 1%. That is something we recognize is an issue in tax fairness. We have also seen other budgetary measures.

I mentioned the issue of tax avoidance and those individuals who go out of their way in order to pay their fair share of taxes. This is something that, I would suggest, we can look at through a lens of tax fairness. However, if we are going to be true to our word, we need to properly resource the CRA to go after those individuals, groups or corporations that are trying to avoid paying taxes in questionable ways.

There was a significant amount of money allocated to CRA over a couple of budgets. Prepandemic, we saw an additional investment of hundreds of millions of dollars. Do not quote me on this, but I believe if we were to combine the total investments that the federal government has put in supporting CRA in going after individuals or corporations trying to avoid paying their fair share of taxes, it is likely just over $1 billion. The expectation for CRA is to look at ways to recover money from lost taxes.

The last time I looked, the number of records being looked at was well over 1,000. Pre-2015, it might have been fewer than 100. So we know that CRA is in fact much more proactive today than it has been in the past. Again, from my perspective, it is about looking at ways to ensure that there is a higher sense of tax fairness.

In the recent budget, we have a sense, in terms of taxes, with respect to banks and insurance companies where inappropriately high profits were taken. We have seen taxes being put onto those sectors in the most recent budgets, again, with the goal of ensuring that there is a higher sense of tax fairness.

The member for Elmwood—Transcona also made reference to the whole issue of corporate tax. I noticed that he tried to group the Liberals and the Conservatives together by saying that whether it was Liberals or Conservatives, we believe in giving corporate tax breaks. Yes, there have been corporate tax breaks. I am not one who believes in the trickle-down theory of corporate tax breaks personally, but I would suggest to the member that when the NDP has had the opportunity to govern, particularly in my home province of Manitoba when I was in opposition during NPD Premier Gary Doer's administration, there were corporate tax reductions. I think we have political parties of all stripes that have implemented corporate tax deductions. However, Canadians are very concerned when they hear of that, especially if they are having to pay their taxes when there are all sorts of inflationary demands.

So, if we take a look at the comments I just put on the record, there is a need for Bill C-42.

Bill C-42 is an attempt by the government to do a number of things. It is not only ensuring that there is tax fairness, but also a higher sense of transparency and accountability.

As has been pointed out, money laundering is a very serious issue in Canada, in some provinces more than others. It has caused a great deal of hardship. The best example is likely the one the member across the way mentioned in regard to housing.

We have speculators and people who want to launder money using housing as a tool. Not everyone who invests in housing in Canada is necessarily money laundering. I am not trying to say that, but we do know that money laundering does take place in our residential communities and in the development of condominiums.

The member made reference to Vancouver and British Columbia. We know it goes far beyond any one province. We can talk about what is taking place in Toronto and find that there is laundering and speculation. That does drive up the cost of housing.

With the budgetary measures that we have taken in the past and the budget implementation bills in the past, we have tried to put in some restrictions in order to prevent that foreign ownership, or even put a tax on individuals who are not living in or a resident of Canada, with the idea of having a fairer share of taxation.

The issue with respect to the transparency and accountability of corporations really does kick in here. At the end of the day, when we look at the Canada Business Corporations Act, it is all about the modernization of that legislation to ensure there is a higher sense of corporate transparency and accountability.

From my perspective, if we take a look at the primary tool, we are going to have a registry that is open and public, and quite searchable for ownership information or beneficial ownership. By doing that, I believe there will be a huge difference.

If we look at what the Canada Business Corporations Act does, it enables certificates of compliance, as an example. If a corporation is not in compliance with the legislation, we would have a tool that would ensure that the corporation might not get that certificate. That can have a profound impact on the corporation itself. Without that certificate of compliance, it would have difficulties with things such as loans and suppliers.

At the end of the day, I believe the passage of this, and the establishment of a public, searchable beneficial ownership registry, would ensure there is a lot less money not taken into account, so less money laundering and less money being used in illegitimate forms. For me, that is something we need to recognize within the legislation.

The government has been committed to a robust and effective regime to combat money laundering and terrorist financing to improve the public trust in our corporations. It does not take much for a corporation to fall on the wrong side of the whole issue of money laundering and the impact it has on the corporate community. A vast majority of our corporations are in fact good entities that contribute in many different ways. It is not just jobs. It is all forms of opportunities, community development and so forth. Because of the bad apples that are out there, it does leave a negative stain.

Therefore, when we talk about the legislation trying to minimize issues like money laundering and improving accountability and transparency, a vast majority of corporate stakeholders do not have any problem with this. The consultation that has taken place goes back to 2020, going right into 2022 where there was a great deal of consultation with different stakeholders and interest groups. There were even foreign consultations with other nations.

We want to make sure that we get it right. We appreciate the privacy issues and that has been raised here. With respect to what had taken place in Europe, there was a court decision in regard to the issue of privacy, so we do want to tread carefully on that particular issue. However, it is absolutely critical that we continue to see the legislation move forward because it would make a difference.

There are some provinces that have actually gone further than other provinces. Quebec has passed its legislation and I believe it has been implemented. I am not 100% sure of that. Because in a federal system we have to take into consideration that there are jurisdictional issues, we have to be aware that some provinces still need to do a whole lot more than other provinces. Therefore, taking a pan-Canadian approach to looking at best practices and looking at the legislation that we are bringing forward today would go a long way in ensuring that not only those federally regulated corporations that are registered through the Canada Business Corporations Act but also those in provincial and territorial jurisdictions will have that obligation of ensuring that there is more transparency and accountability.

In looking at the legislation and listening to the comments, I believe I have a fair reflection in terms of many of the comments that were said earlier today. I would encourage members to view the legislation in part in terms of the commitment that has been made to try to get this passed before the end of this year, which is faster than we had initially indicated. However, in order to do that, we look to opposition parties to follow through on some of the words that they have stated today in terms of that tentative principled support that they are providing and allow the legislation to go to committee. I would think that would be a positive thing, given that all parties seem to support the principle of the legislation.

Therefore, I would encourage members to take the issues, as I know they have, of money laundering and of ensuring more accountability and transparency within a very important sector, in the name of making sure that there is a higher sense of tax fairness. Again, that, to me, is what it is all rooted in. Canadians do not mind paying their fair share of taxes and it is very upsetting when they hear of the money laundering that takes place, or of individuals or corporations wanting to get off the hook for paying their fair share of taxes.

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

Madam Speaker, I thank my hon. colleague for his very interesting speech. We obviously agree on Bill C‑42. With regard to the fight against tax havens, my colleague talked about the Panama papers scandal. Does he agree with me that, despite all the money that has been invested and all the laws that are in place to give us the power to intervene, Canada is still lagging behind other countries on this?

The Canada Revenue Agency recovered less money than Revenu Québec. Let us compare the numbers. The United Kingdom recovered $317 million, Germany recovered $246 million, Spain recovered $209 million, France recovered $179 million, Australia recovered $173 million, and Canada recovered $21 million. Is that acceptable?

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Speaker, today I rise to address the chamber on Bill C-42, which would amend the Canada Business Corporation Act, or CBCA, and make consequential changes to other statutes.

We are here to discuss this proposed legislation because a lack of beneficial ownership transparency is impairing Canada's ability to combat serious financial crimes, such as fraud, money laundering and tax evasion. It also limits our capacity to enforce domestic and international sanctions and to effectively trace and freeze financial assets. Finally, it is impacting the trust of Canadians and foreign investors in our marketplace.

Our inability to quickly and quietly identify a company's beneficial owner delays criminal investigations; denies law enforcement leads to potential suspects, witnesses and evidence; and impairs the identification and seizure of suspected proceeds of crime. It also reduces the ability of private businesses to protect themselves.

Bad actors have long used corporate vehicles to obscure the ownership and control of assets to the detriment of Canadians' and other's confidence in private businesses. A public beneficiary ownership registry would complement the existing tools of law enforcement, while facilitating the identification of changes of ownership without the risk of alerting the suspects of an ongoing investigation. In turn, this would help prevent the dissipation of criminal assets subject to investigation or freezing orders.

The need for this type of registry has, by now, been well established, notably by public consultation held by the Government of Canada in 2020, as well as the Commission of Inquiry Into Money Laundering in British Columbia more recently. Such registries have, moreover, existed in the United Kingdom and many countries since 2016 and have proven a useful tool in deterring misuse of corporations for illicit financial activity by law enforcement, journalists and civil society.

In 2018, for example, Transparency International found that the then Czech prime minister was the sole beneficiary of two trust funds owning shares of a Czech conglomerate in receipt of EU subsidies. In a significant conflict of interest, Slovakia's public registry showed that the prime minister remained the ultimate owner of these trusts.

In 2019, the department responsible for the U.K. registry, the world pioneer, published a review of lessons learned so far. All law enforcement organizations the department spoke to had used the registry to inform criminal investigation, with most reporting using it at least weekly and noting the positive effect it had on their work. According to other resources, the U.K. registry was accessed more than two billion times a year.

More recently, the OpenLux investigation by journalists who had compiled and analyzed data from the Luxembourg's public beneficial ownership registry uncovered politically exposed persons, criminal organizations, an arms dealer and oligarchs linked to Luxembourg companies.

A beneficial ownership registry would also serve tax authorities here and abroad, who would be able to use the information to track and fix tax evasion and aggressive avoidance. The Panama papers, as well as other mass leaks, have shown that private players look for places with weak beneficial ownership transparency and then layer ownership of corporate entities across those jurisdictions to obscure personal ownership interests and income. The longer the chain of entities between the income and the beneficial owners, the harder the truth is to ascertain.

We should not underestimate the significant burden tax evasion and avoidance have on the Canadian economy. More generally, placing beneficial ownership information in an accessible registry would provide criminal and civil intelligence value, helping law enforcement and regulators stay abreast of evolving fraud cases, trends and ways corporations may facilitate these trends.

This awareness supports actionable intelligence to generate investigative leads. Certain government authorities may also have a bonafide interest in identifying the beneficial owner of the corporations they do business with, licence or oversee.

Making beneficial ownership information publicly available further supports good governance and trust. All businesses can check who they are doing business with by reviewing the registry of potential suppliers and customers, and businesses regulated for anti-money laundering purposes can consult the registry to support their due diligence.

Registries and the transparency they foster further serve as a deterrent to illicit actors. When reporting and disclosure requirements are tightened against a particular sector, product or service, prospective criminals will shift their tactics to find alternative ways of laundering funds. By depriving owners of their anonymity, registries will make Canada a less desirable jurisdiction to commit financial crime, forcing them to use more risky criminal vehicles or to go somewhere else entirely.

All in all, it is clear that the registry proposed by the bill would significantly improve Canada's ability to fight financial crime. It would help public authorities verify owners across corporate layers, help businesses better validate the identity of their trading partners, fight money laundering, fight tax aversion, and render more difficult the use of corporations for illicit activities. I hope all members of the House will join us in supporting the passage of this bill.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, obviously the question is not part of Bill C-42 that we are debating.

I would like to take this opportunity to solicit the support of the Bloc Québécois to pass this important legislation that we are debating today.

[The Acting Speaker, Green, Mike Morrice]

I will remind members that there is a lot of latitude in debate, but we are meant to be speaking to Bill C-42 at this time.

That being said, I will allow the hon. member for Nepean to respond.

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

Canada Business Corporations Act

[Chandra Arya, Liberal, Nepean, ON]

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

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

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

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

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

I will quote from an article published in New Internationalist:

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

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

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

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

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

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

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

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

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

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

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

[Greg McLean, Conservative, Calgary Centre, AB]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[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.

Business of the House

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

Mr. Speaker, let me join with my hon. colleague, the opposition House leader, in wishing everyone a joyous Easter. I hope that members who are celebrating Easter take time with their families. This is also a very busy time for many of our other faith communities as we recognize Vaisakhi. We are in the holy month of Ramadan right now and we have Passover. This is a time that is very rich, one when I know people will be visiting churches, mosques and temples in our communities to share with the rich faith traditions in our constituencies. I hope all members are able to profit from those opportunities to be with their constituents and families.

With respect to Bill C-11, I will simply state that I do not think there is any amount of time that would satisfy Conservatives. In fact, I would challenge the opposition House leader to indicate just how many days of debate he would like. I do not think there is any end. Conservatives have indicated they want to obstruct this bill. This bill has had more time in the Senate than any bill in history. It was in the last Parliament and it is in this Parliament. It is time our artists get compensated for their work and that the tech giants pay their fair share.

Tomorrow, we will start the second reading debate of Bill C-42, an act to amend the Canada Business Corporations Act, and then we are going to be switching to Bill C-34, the Investment Canada Act.

When we return, we will continue with the budget debate on Monday, Tuesday and Wednesday.

On Thursday, we will start the day with a ways and means vote relating to the budget implementation act. Following the vote, we will proceed to the debate on Bill C-27, the digital charter implementation act, 2022, followed by Bill C-42.

Finally, on Friday, we will commence debate on the budget bill.

Canada Business Corporations Act

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

moved for leave to introduce Bill C‑42, An Act to amend the Canada Business Corporations Act, and to make consequential and related amendments to other Acts.

(Motions deemed adopted, bill read the first time and printed)