Industry Committee on June 5th, 2023

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

We have a cross-referencing section. As we amend other laws.... If banks, for example, were to find a material difference in their records for a business in the registry, they would have to notify us. There are a number of systems in place to ensure the integrity of the registry and to make sure we detect that discrepancy. We'll have a risk-based system to make sure we can investigate and ensure the information in the registry is accurate and reliable.

There were also some questions about the power given under the law to adopt regulations. That's to keep up with the international standards. Today we're talking about date of birth and citizenship, but maybe two years from now, we will find out—to your point—that we should collect another piece of information. As you know, the bad guys always try to outsmart us, so we need to have the flexibility in the law to say, “This law is going to be there for the long term.” Let's make sure that if the international standard moves, we're going to move with it in the regulations to ensure we capture that and make the life of bad guys as difficult as it can be.

[Brian Masse, NDP, Windsor West, ON]

I see I'm running out of time, Mr. Chair, but I want to say that I'm really interested in getting this bill through as quickly as possible.

I've been pushing fraud issues for a long time, and this is part of this repertoire of changes that are important, so thank you for tabling this bill.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I want to thank the member.

Chair, I know unanimous consent is not something you find often in this House, but if there were a way to move that legislation more quickly, I think Canadians would applaud us in moving forward on it.

[The Chair, Liberal, Joël Lightbound]

We find it quite often here in this committee, Mr. Champagne. I appreciate the willingness of Mr. Masse to move quickly. That's music to my ears on this bill.

Mr. Généreux, the floor is yours.

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

Thank you, Mr. Chair.

Minister, my question will be brief, and I'd appreciate a brief answer as well.

What about Quebec's Registraire des entreprises, formerly the Inspecteur général des institutions financières, or IGIF, as regards correspondence concerning business registrations?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Pardon me, Mr. Généreux, but I didn't understand the first part of your question.

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

I'm referring to the correspondence between this bill and Quebec's Registraire des entreprises. Will amendments have to be made in Quebec, somewhat as is the case in British Columbia, to achieve interoperability?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

To my knowledge, that's one of the main reasons why we made sure to do that. As far as I know, there will be a form of interoperability between the regime we're proposing and the business registry in Quebec, without any amendments being necessary. That's what I understood. It's why the Beneficial Ownership Data Standard was initially established, and it focuses on all the provinces and territories. What we're proposing will be compatible with what's been done in Quebec and British Columbia.

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

All right.

The registry was initially supposed to be implemented in 2025, but, as I understand it, you want that to be earlier. I imagine the main reason is so we can try to catch the bad guys, as at were.

Have any groups opposed the bill to date?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

We've begun a consultation, and we hope it will be in place by the end of 2023. That's why we'd like to be able, with the cooperation of members of this committee, to proceed quite quickly with the bill. One of the reasons is we want to play a leading role in the G20 in the fight against money laundering and definitely terrorism financing.

As to potential opposition to this kind of registry, I believe Mr. Schaan can tell you more about that. However, we have consulted approximately 80 organizations across the country. From what I've heard, people were broadly in favour of the registry we're proposing, first of all because there'd be interoperability between it and other existing registries.

In addition, this measure meets the standards adopted by the Organisation for Economic Cooperation and Development, the OECD, and within the G20. We're really up to the international standard. We meet all the criteria. I'd even say we exceed the international criteria that have been established. I can't imagine there could be any problem with lawyers and accountants. It's the international standard. I believe we're in good position to become global leaders in this area.

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

Have we established a budget and assessed the costs associated with this registry?

I remember a certain registry that was established at one point. Costs were estimated at $2 million but ultimately amounted to $2 billion.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

We contacted Corporations Canada, which is part of my department, and increased its budget. I don't know if you remember, but it was more of a directory in that people just supplied information. Now Corporations Canada will obviously have to have agents who are able to guarantee information integrity and eventually to investigate.

We definitely had to acquire more powers, but, as I recall, that didn't entail funding along the lines of what you mentioned. We use a structure that's already in place. First, we change the IT tool so it's compatible, obviously. Then we'll have agents who will ensure information integrity.

[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?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

It's definitely a good question. With your permission, we'll answer you in writing. As you may understand, as minister, I don't have all of the information I need to answer the question specifically, particularly as regards the coming into force. I'll be pleased to answer you in writing with the help of our officials.

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

From what I understand, we're considering an amendment to a section that isn't yet in force. That's a bit strange. It seems to me you either include the section or delete it.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Since you asked me the question, our officials have heard it, and I'm sure they'll have an answer to it in the next hour. Otherwise we'll answer you in writing.

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

I thought you knew everything, Minister.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Mr. Généreux, thank you for thinking I know everything, but I forget things at my age.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Généreux.

Go ahead, Ms. Lapointe.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Mr. Chair.

I will be sharing my time today with my colleague, MP McKinnon.

We are glad to have you here today, Minister.

What are businesses' new obligations? How will the government limit red tape?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you, Ms. Lapointe. It's always a pleasure to appear before the committee.

Businesses will be required to gather two new pieces of information. As you know, businesses were already gathering information such as the owner's name and date of birth. Under the proposed bill, they'll now be required to gather two additional pieces information: their residential address and the address they use to send information to the corporation, as well as citizenship information. Two pieces of that information—name and address—will be published in the database. Date of birth and citizenship information will not be made public. However, the various agencies that are required to ensure compliance with the act will have access to it.

We've achieved what I consider a good balance because the Canadian Business Corporations Act already requires businesses to file an annual report. Businesses are also required to inform Corporations Canada when a new director is appointed within 15 days of that appointment.

Since businesses are already required to file an annual report, we've established that the coming into force would be on the date of incorporation. There will be no additional obligation. Once the act comes into force, businesses will have to gather the two additional pieces of information that I mentioned earlier.

The vast majority of Canadian businesses are small and medium-sized businesses, or PMEs. We haven't increased their administrative burden because we want to keep this simple. We also want information in the registry to make it possible to identify individuals who may wish to engage in unlawful activities, for example.

I think those are the reasons why we have a good balance for the country's businesses.

[Viviane LaPointe, Liberal, Sudbury, ON]

How does the proposed regime compare to national and international best practices?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you for that question.

Quebec and British Columbia have already demonstrated leadership in this area. The registry we're proposing is appealing because it's consistent with international best practices that have been established by the G20. The registry we want to put in place is comparable to what will be done in the United States, Europe, Japan and England.

We've followed best practices, and I'd even say we've exceeded them. I would remind you that Canada is a founding member of the Financial Action Task Force, or FATF. Once again, Canada has demonstrated leadership, which is why we've asked our colleagues in the provinces and territories to follow the example of British Columbia and Quebec. By the way, the Minister of Finance and I sent out a letter to that effect this morning.

Since we've been working on benefcial ownership with our provincial and territorial colleagues since 2017, I'm satisfied that they'll follow suit and that we'll one day have a national beneficial ownership registry.

[Viviane LaPointe, Liberal, Sudbury, ON]

Thank you, Minister.

[Ron McKinnon, Liberal, Coquitlam—Port Coquitlam, BC]

Thank you, Minister, for being here today.

As a former IT professional, I'm already building this in my head, and I'm wondering about the search capability. I'd like to build on what Mr. Vis and Mr. Lemire said. They said the complexity of corporate ownership can be quite vast. It can involve companies owning companies that own themselves. I'm wondering if this public search tool will be able to drill down through that kind of structure and in fact accrue the actual beneficial ownership per person through that whole structure.