Madam Speaker, just to be clear, I am not speaking about Bill C-18, nor am I speaking about any purported amendments to Bill C-42. Rather, I am speaking about Bill C-42, an act to amend the Canada Business Corporations Act.
The bill does a number of things. Its stated goal is protecting Canadians against money laundering and terrorist financing, deterring tax evasion and tax avoidance, and making sure that Canada is an attractive place to do business. Those are all laudable goals.
We know that money laundering in Canada is a serious issue. It is so serious that we have earned our own nickname as the land of snow washing. That is not a badge of honour. In 2022, the Canadian Anti-Fraud Centre reported $530 million in victim losses, a 40% increase over 2021.
These are vulnerable Canadians being preyed upon by fraudsters, who are destroying lives. It is important that, as parliamentarians, we come together to deal with these problems and do our best to protect Canadians and their retirement savings.
In 2016, the Financial Action Task Force said that Canada was completely deficient in many areas. One of its main criticisms, in fact, was our lack of a beneficial ownership registry. That was seven years ago, and we are only getting to it today. Establishing such a registry would be a major step forward, and Conservatives certainly support that. The problem, as always, is that the devil is in the details.
In committee, Conservatives tried to strengthen the bill in a number of ways. One glaring problem with the bill is that the corporate and personal fines for failure to provide required information were too low under the CBSA. The fine was only $5,000 for corporations and only $200,000 plus six months' imprisonment for individuals. I was happy to see the INDU committee increase personal fines for individuals to $1 million plus five years' imprisonment, as well as fines for corporations to $200,000. Of course, Conservatives supported those amendments, as did Liberals on the committee. We can see that when Conservatives and Liberals vote together, amendments actually pass at committee.
There were, however, a number of other Conservative amendments related to thresholds, real estate, interoperability, law enforcement, access, searchability and the use of post office boxes, of all things, which would have made the bill more effective. They were all voted down by Liberal committee members.
I want to touch on a few of them now. Currently, under the CBSA, the threshold for what is called a “significant interest” is 25%. This means that corporations only have to disclose those shareholders who have at least a 25% interest in the outstanding shares of a corporation. This poses a problem, because if we really want to crack down on money launderers and terrorist financiers, the threshold should be lower. For instance, the Ontario Securities Commission threshold is 10%.
At committee, Conservatives proposed this amendment. However, it was rejected, even though the RCMP felt it was necessary. It was rejected by Liberal members of the committee, who purport to want this legislation to be effective. It is hard to understand why they would not want to lower the threshold. James Cohen, executive director of Transparency International Canada, said that it should go down as well.
Conservatives proposed another amendment that would have brought real estate holdings into the registry. In 2018, money laundering funded $5.3 billion in British Columbia real estate purchases alone, further driving up the cost of homes in that province. The amendment said, “The corporation shall prepare and maintain...a register of individuals with control over the corporation and its real property”; it was a very important amendment that would have gone a long way in helping to control money laundering in Canada through real estate acquisitions. This amendment would have expanded the scope of the registry to make it similar to British Columbia's land ownership transparency register.
Another amendment called for interoperability with provincial registries. The fact of the matter is that most corporations in Canada are provincial. As this bill only governs federally incorporated companies, it misses out on bringing in the provinces, which would make it far more effective.
Another amendment that was defeated had to do with law enforcement access. This amendment would have added specific language to the bill to ensure that law enforcement and organizations like FINTRAC could access information from the director rather than having to go to the corporations directly. It would also have removed reference to prescribed circumstances, ensuring that only minors would be automatically exempted.
Another amendment defeated by Liberal members had to do with using post office boxes, of all things. It would have barred individuals from using post office boxes as their address in the registry. This was a specific request of the End Snow-Washing campaign.
On a cautionary note, it is always important to give consideration to stakeholders and their concerns. Small business is the backbone of this country's economy. The Canadian Federation of Independent Business raised a number of concerns, and I want to talk about some of them here.
It raised the issue of privacy and personal security. It said many small business owners are concerned about having their information available to the general public, such as name, place of residence, date of birth, citizenship, telephone number, etc. In fact, individuals in small towns may not want neighbours or acquaintances to know they have a controlling interest in a company. The CFIB talked about fraud and crime risks and how making beneficial ownership registries public could make it easier for criminals to target wealthy individuals or SMEs. Small business owners are often the targets of fraud and could be even more vulnerable than consumers, as they do not have consumer protection acts to help them manage those who want to take advantage of them.
It talked about competitive disadvantage and that requiring SMEs to disclose detailed ownership information publicly might give their competitors a strategic advantage. Rival businesses could gain insight into their ownership structure, investments and so forth. It talked about inaccurate or outdated information and how public registries may not always provide accurate or up-to-date information due to delays in reporting areas or deliberate misrepresentations. It talked about how requiring small businesses to disclose their beneficial ownership information publicly could impose an additional administrative burden and compliance costs, and that this burden might disproportionately affect smaller companies with limited resources.
Also, I want to touch on the Canadian Bar Association, which raised concerns about the risk of identity theft from the registry, potentially undermining its anti-fraud rationale.
I raise these concerns not to say that we should not make this legislation effective but to say that as parliamentarians, it is incumbent on us to listen to the stakeholders and their concerns as we try to craft and fashion legislation that addresses those concerns but still accomplishes the ultimate goal of the legislation.
The reality is that money laundering is a very serious problem. We know from our friend Bill Browder that Canada has been fertile ground for Russian oligarchs to clean their ill-gotten cash.
I mentioned earlier how money laundering has driven up the cost of housing. This is at a time in this country, after eight years of this Prime Minister, that the dream of home ownership is in critical condition. The average mortgage payment has doubled. The average family now needs to spend 62% of its monthly income to own the average home.
The cause is clear: Inflation fuelled by wasteful government spending has fuelled the inflationary fire. Just today, the International Money Fund cautioned that Canada needs to bring back a debt anchor and keep fiscal policy tight. Money laundering makes things even worse.
Finally, I must reiterate how important it is to bring provinces on board. It is a matter of basic federalism. The government will need information-sharing agreements with the provinces if this registry is going to work. It will only be as strong as the provinces willing to co-operate with it, and that means all the provinces, because if one jurisdiction is left out, it will become a hotbed for money laundering.
I will wrap up by saying that although Bill C-42 is far from a perfect bill and has key shortcomings, including leaving in place a high threshold for significant control, failing to bring into force a clause allowing law enforcement back-end access to the registry and failing to ensure interoperability with the provinces, it is clear that it is a step in the right direction, and Conservatives will support it on third reading.
