Hi, everyone. My name is Justin Brown. I'm the senior director of financial crimes, governance and transparency at the Department of Finance. I'll provide an overview on behalf of the Department of Finance as well as of my colleague Annette Ryan from the Financial Transactions and Reports Analysis Centre of Canada.
In addition to the proposed amendments to the Canada Business Corporations Act, which would stand up a federal publicly accessible registry of beneficial ownership information, the government is putting forward consequential amendments to the Income Tax Act and to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
While Corporations Canada would maintain responsibility for the federal beneficial ownership registry, the government seeks to use additional mechanisms to help support the accuracy of the registry by cross-referencing beneficial ownership information held by other sources.
The Income Tax Act restricts the provision of and access to taxpayer information. Specific exemptions must be enacted in order to share taxpayer information. Clause 17 authorizes the sharing of information relating to shareholdings and to corporate ownership structures of private corporations collected by the Canada Revenue Agency. Providing access to this information would enable officials at Innovation, Science and Economic Development Canada, and at Corporations Canada, to verify and to validate data reported by private corporations to the corporate beneficial ownership registry.
The taxpayer information on shareholdings and on corporate ownership structures would not be published through the corporate beneficial ownership registry and would be shared for the sole purpose of verifying and validating data reported by private corporations to the corporate beneficial ownership registry.
Clause 18 would give the Governor in Council the power to make regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act respecting the reporting of discrepancies in information obtained on the beneficial ownership and control of an entity.
Persons and entities regulated under that act, including banks, credit unions, life insurance companies, money services, businesses and real estate businesses, are all required to implement measures to detect and deter money laundering and terrorist financing. On meeting certain conditions, these include requirements to obtain and confirm the accuracy of beneficial ownership information when doing business with a client that is a corporation.
A public registry would provide reporting entities with a tool to help confirm the accuracy of the beneficial ownership information they obtain from clients. Upon becoming aware of material discrepancies between the beneficial ownership information in their records and that filed with the registry, reporting entities would be required to inform Corporations Canada.
The proposed regulation-making authority would allow the government to proceed with regulations setting out the terms and the conditions of a discrepancy-reporting requirement. These regulations would specify the details necessary for implementing the scheme, such as when a discrepancy should be reported, information to be provided in a discrepancy report, record-keeping requirements and consequences for non-compliance.
To conclude, this cross-referencing of beneficial ownership data would supplement Corporation Canada's compliance efforts and would help improve the data integrity of the registry.
Thank you.