Thank you for the question.
I think it's important to start by saying that when these additional reporting requirements were announced in budget 2018, the objective was to ensure greater transparency with respect to beneficial ownership of trusts. It's important for us, as the tax administrator, to understand who ultimately benefits from particular assets that may be the subject of a trust.
The notion of a bare trust was introduced in 2022, a number of years after the original reporting requirements were announced. The agency recognized that this concept of a bare trust could be broad and difficult to understand. Working with stakeholders, we decided to take an education-first approach, which is why we announced that we would be waiving the filing penalty for bare trusts for all of 2023. Therefore, regardless of when a bare trust was filed in 2023, it would not be subject to a late filing penalty. This was done in recognition of the fact that there were a lot of questions and that we all needed a bit more time.
Unfortunately, that wasn't enough, and the agency felt it was important to continue to act. We recognize that there were unintended consequences in terms of the legislation, and we are working with our colleagues at the Department of Finance to clarify the guidance we can provide going forward so that it is clear.
Beneficial ownership information about trusts, including bare trusts, is important, but we recognize that there were unintended consequences, and we acted as a result.