Evidence of meeting #48 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was gender.
A recording is available from Parliament.
9:45 a.m.
Barrister and Solicitor, Publish What You Pay Canada
Yes, that's another example.
Typically, the risk with the bearer shares, of course, is that if they're in the hands of, say, organized crime, they're like currency. They can be traded with organized crime groups, and there is no incentive for those who are using them in such a way—
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
Ms. Johnson, the way it's drafted right now, if I'm a...or let's say, if someone is a criminal, they can maintain the anonymity that the bearer shares provide them. This law does not reach in and stop that when they go to exercise.
9:45 a.m.
Barrister and Solicitor, Publish What You Pay Canada
That's the way I read it, that companies cannot issue new bearer shares—
9:45 a.m.
Liberal
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
—and you've added this second paragraph. Is that right?
9:45 a.m.
Barrister and Solicitor, Publish What You Pay Canada
Yes, that's right.
The other thing is, of course, that corporations may not even know who possesses them, by their very nature, so you can't expect corporations to—
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
The only way we can proactively enforce it is that, when they come up, we seize them.
9:45 a.m.
Liberal
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
There's no way I can tell a corporation to go out and change everybody. They don't know who has them.
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
But whenever they come up, at that point we want it enforced, not to be a right of a shareholder. They must convert them.
How does that align with other jurisdictions?
9:45 a.m.
Director, Publish What You Pay Canada
That's a good question. I don't know, because some other jurisdictions have eliminated bearer shares in the past. As to going through the process of elimination, I have to be frank. I'm not sure how other bearer shares have started to eliminate shares.
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
But the concept of the elimination of bearer shares is accepted in all G7 countries, is that correct?
9:45 a.m.
Director, Publish What You Pay Canada
Yes, and it extends much further, actually.
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
Much further, and the intent of this bill is to eliminate them. You're just saying that we haven't quite closed the little door. Is that right?
9:45 a.m.
Director, Publish What You Pay Canada
Exactly. There's a big loophole, essentially, right now in the legislation, in the sense that there can still be individuals who can exercise rights associated with bearer shares.
9:45 a.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
The spirit of the law is to remove the bearer shares and take them away, but we've left one door open where we're not forcing someone to convert them. You would suggest we close that door.
9:45 a.m.
Director, Publish What You Pay Canada
Yes. We would recommend that in order to ensure that Canada is doing everything it can to implement the FATF recommendations, to fulfill its global obligations around money laundering, that we take that extra step and close the door, so that if a hypothetical criminal does want to vote or cash in, or pledge shares, they just have to register them.
9:50 a.m.
Barrister and Solicitor, Publish What You Pay Canada
I'll just add something. I have in front of me the Financial Action Task Force recommendations that have been accepted by all FATF countries, including Canada and dozens of others. Recommendation 24 requires that bearer shares not be misused for money laundering or terrorism financing purposes. This is something that Canada is being held to internationally.