Industry Committee on June 12th, 2023

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

Does that impede the registry at all?

[Mark Schaan]

Yes. New paragraph (c.2), as it stands now would, at least from an implementation perspective, sow confusion, because I don't know what it's asking for. If it's asking for the name of the corporation that the individual of significant control is investing in, that's how you get to it in the registry.

If I'm Mark Schaan Incorporated and my beneficial owner is Mark Schaan, the name of the company is Mark Schaan Incorporated, which you already clicked on to get to the individual of significant control. The individual of significant control is the natural person at the end of it, who is Mark Schaan. That's what we're asking for.

We're not asking for the name of the company. What we're asking for are humans, not corporations, because corporations by their very nature.... Then, we're in a rabbit hole of trying to figure it out.

[The Chair, Liberal, Joël Lightbound]

Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

I'm trying to follow this.

I read this.... Am I wrong? It wouldn't name also the person.

Let's say it was Loblaws. It wouldn't name the person. That's what I—

[Mark Schaan]

The obligation on the registry is to provide the natural person at the very end of the chain. It is not to provide the corporation that has individuals who have significant control. It's the natural person who controls that. Otherwise, you could end up in this endless loop, where corporation one is owned by two, which is owned by three, which is owned by four and by five.

What our law asks for is this: Who is the human, the natural person, at the very end of the chain who is actually exercising control? If that person is exercising greater than 25% of control, that's whose name appears in the individuals of significant control registry.

[Brian Masse, NDP, Windsor West, ON]

Okay. If it were corporations, though, would it not then have to list every single corporation that was part of that scheme? I understand your point here. This is—

[Mark Schaan]

It would list the individual with significant control at the very end of that.

Let's imagine that “Mark Schaan Inc.” was a conglomerate, and I was owned by 900 affiliate companies, but the ultimate controller of that organization was Mark Schaan. I would put “Mark Schaan”. If it was ultimately owned by a grouping of individuals, if there's a collection of natural persons actually at the back end of that, I would list the collection of natural persons. If my family dynasty owns this conglomerate, we would list the “Mark Schaan dynasty”, which does not exist, as the natural persons who own said dynasty.

[Brian Masse, NDP, Windsor West, ON]

I've been here long enough to know the “Mark Schaan dynasty”. We've been here together a long time.

[Voices]

Oh, oh!

[Mark Schaan]

We have indeed.

[Brian Masse, NDP, Windsor West, ON]

Thanks for explaining that so clearly. Actually, I get where it's gotten complicated.

Thank you, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Masse.

I see Mr. Van Bynen.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

I heard some conversation earlier with the experts. The term raised was “reverse search”. I'm wondering if this is what they're trying to accomplish. Is it possible to do a reverse search? Can we tell what corporations the “Mark Schaan dynasty” owns?

[Mark Schaan]

You'll be able to search by beneficial owner or by individual with significant control, and you'll be able to search, as you can now, by corporation. Both of those features will exist.

In terms of being able to “reverse search” details about that individual, there are limited details about the individual that will allow you to be able to search by the parameters that are public and, by that, potentially uncover additional information.

[The Chair, Liberal, Joël Lightbound]

I don't see any more comments on the amendment 12517837 proposed by Mr. Perkins.

Let's move to a vote.

(Amendment negatived: nays 7; yeas 4)

Are there any further amendments?

Mr. Perkins.

[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.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Perkins.

Mr. Vis.

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

Thank you, Mr. Chair.

This was put forward by Transparency International. It was interesting that they put this forward, because they didn't see, despite comments made by the minister, that the register would be free and would be available to the public in the actual legislation.

I think this amendment just simply clarifies the point that it would do what the government said it would do.

Thank you, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Vis.

Are there any comments or questions on the amendment ending with 956 proposed by Mr. Perkins?

Seeing that there are no comments, I would ask for a vote.

(Amendment negatived: nays 6; yeas 4)

We're still on clause 4.

Mr. Perkins.

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

Thank you, Mr. Chair.

Again, on the ones distributed, for the clerk, it's the one ending in 8066.

This is an amendment that Bill C-42, in clause 4, be amended by replacing line 23 on page 3 to line 2 on page 4 with the following: “(3) A post office box shall not be used as an address for service.”

I guess this is pretty self-evident. If you want something traceable to enable investigation beyond money laundering or criminal activity.... Post office boxes are used quite often for corporate entities and the register. This would say that this is not allowed.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Perkins.

I'll recognize Mr. Vis, and then Mr. Gaheer.

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

Again, the #endsnowwashing campaign put this forward, because in my province this is a common tactic used by criminals and an easy loophole to exploit. I hope in good faith we can have support for this important and simple amendment from a lot of good people, who are only trying to make us a safer country.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Mr. Gaheer.

Mr. Lemire will be next.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I want to ask the officials about the impact of this amendment.

[Mark Schaan]

It is currently the situation, with Corporations Canada, that a residential address for service cannot be a postal box, except in cases where the jurisdiction is only served by a post box. That is for the purposes of protecting individuals for whom a rural route or a post box is the only means by which to address service. That is the current practice of Corporations Canada. This would actually remove the current exception, as we would see it, that allows for the post office box to serve in those jurisdictions where it is the only means by which service can be rendered.