Create a publicly accessible registry of beneficial owners (true owners) of properties and companies

Submitted By
Sasha Caldera

Criminals and tax evaders use legitimate Canadian investments like real estate to ‘clean’ dirty money, and this is called snow washing. Canada has become an international destination for setting up secret companies to “snow wash” illicit funds from all over the world. Housing bubbles in Vancouver and Toronto are allegedly being fuelled in part because of secret owners who buy properties to launder money.

In Canada, the true owners of companies and properties can remain entirely anonymous – their identities can be concealed even from the government agencies entrusted with enforcing laws. This makes it easy for money launderers, tax evaders, and those financing terrorism to hide and launder money in Canada -- and makes it hard for law enforcement and banks to enforce Canada’s existing anti-money laundering and anti-terrorist financing laws.

Canada needs to create a publicly accessible, registry of true (e.g., beneficial) owners of companies in an open, searchable format. This would serve as a deterrent to criminals and would facilitate access to information for law enforcement, financial institutions, civil society, and journalists.

Comments

Mark - May 28, 2018

Privacy is valuable. Before contributing to this debate, ask yourself if you would want your tax return or bank account, or spending habits available to your neighbours to scrutinise. In the case of fraud, money laundering and tax evasion and any other criminal activity, the beneficial owners of the company are readily available to the investigating authorities. FINTRAC, CRA, RCMP and local police all have quick access to who owns a company. What is added by making ownership totally public? Well we know what is lost - privacy which is something we all prize isn't it. You would have to make a stronger case that the public needs to know who owns every company in Canada. Money laundering, tax evasion, financial crimes are already covered, leaving only curiosity and a desire to out people who are otherwise entitled to live private lives.

Sasha Caldera - June 10, 2018

Hi, just to reply:

First, I'd never want my tax return, bank account, or spending habits to be made available to neighbours and neither should anyone except for someone running for office, yet I don't see how this point is related to what I am proposing.

To clarify, FINTRAC, CRA and the RCMP do not have quick access to ultimate beneficial ownership information because this sort of information does not exist. Next, there's a difference between public and publicly accessible. In the latter, there can be certain information that is made available to FINTRAC and the RCMP for investigative purposes, while realtors for instance can access a separate tier of information to carry out due diligence checks. A beneficial ownership registry is useful for real estate transactions because the vast majority of money laundering in Canada is occurring through real estate and having a registry will make it easy for small realtors to carry out checks and ensure they are not doing business with criminals. Third, we need to recognize that having this information available serves as a deterrent to those seeking to launder money through shell companies and properties because their names are now attached to a register. Fourth, a register complements Canada's existing efforts to tackle tax avoidance and curb terrorist financing -- both initiatives which rely upon sharing information with other jurisdictions. Finally, Canada's current privacy commissioner has stated in principle that a registry does not compromise privacy rights.

Anonymous - March 26, 2018

I'm a third generation Canadian and I support this because lack of transparency has hurt the Canadian family. Average incomes are no longer able to sustain a healthy life with a place to live and helicopter money IE: universal income is NOT the answer. Read about the Panama papers and snow washing.

Ian McNeill - March 24, 2018

In the investment industry one is required to establish beneficial ownership in order to open an investment account for a corporation or trust, so why shouldn’t the same standard be applied to the real estate industry?

Michelle Travis - March 24, 2018

It is time for Canada to adopt a public registry of beneficial ownership much like the UK and the EU have done. This tool will help Canada more effectively combat "snow washing". Canadians want the government to take more aggressive steps on tax avoidance and evasion and adopting a public registry is a critical step in that fight.

Joseph Kraus, The ONE Campaign - March 23, 2018

Developing countries lose an estimated $1 trillion each year as the result of corrupt and shady practices, many involving the use of anonymous shell companies. Such entities are frequently used by the criminal and corrupt to siphon away public funds that could otherwise be spent to improve infrastructure, education and health systems, and the lives of people living in extreme poverty.

We urge the Canadian government to commit to create public beneficial ownership registers to help put an end to the corporate secrecy that enables bad actors to act with impunity.

Jeff Geipel - March 23, 2018

As someone from Vancouver - a city being ripped apart by a housing crisis that in part stems from shady money being parked in real estate - it is beyond past due that Canada implements meaningful beneficial ownership rules.

Dennis Howlett - March 21, 2018

A public registry would make it much easier for law enforcement, tax authorities and financial institutions who need to do checks of account holders for FINTRAC to do their job. It would help businesses to know who they might be doing business with or getting into joint ventures with. And it would help civil society and media researches to uncover crime. But most importantly it would act as a deterrent for those who have nefarious motives. It would help to curb money laundering and real estate speculation and criminals who want to hide the proceeds of crime.

Rayleigh Lee - March 21, 2018

Companies should be required to disclose the identity of its beneficial owners at the time of incorporation/change in ownership, in forms that are accessible to the public and verifiable by legal entities. Disclosure requirements should not only be legally binding but enforced strongly with dissuasive and proportional sanctions in cases of incompliance.

Kevin Comeau - March 20, 2018

According to Statistics Canada, as of September 30, 2017, Canadian household debt as a percentage of disposable income was 173%. In the United States, as of the same date, such debt was 105% and at its peak stood at 133% at the end of 2007, shortly before the US housing crash that crippled the financial world.

Almost as surprising, Canadian indebtedness has been above 150% since 2009. Yet the Canadian housing market continues to rise? How is this possible? If Canadian buyers are tapped out, who is driving the Canadian real estate market so high that a whole generation of Canadians can no longer afford to buy a house in the cities or towns they grew up in?

One highly likely explanation is that foreign buyers have been buying up Canadian houses and artificially inflating the market. And given Canada’s almost non-existent anti-money laundering protections of real estate, it is also likely that a good chunk of that foreign money is dirty. But neither the Canadian government nor its people know the extent of foreign buying or which foreigners are doing the buying because Canadian laws do not require disclosure of beneficial ownership of real estate.

A publicly-accessible registry of beneficial ownership of real estate and private corporations would not only allow the Canadian government and its citizens see exactly who is buying up Canadian real estate, but it would also allow the rest of the world—particularly those persons who have suffered financially and politically from corruption, bribery and extortion in their own country—to help Canadians spot the foreign money launderers and terror financiers that are using Canada’s real estate markets to snow-wash their dirty money.

Bishop - March 21, 2018

Only canada plates after arrival in canada and license to drive must pay full per vehicle and regristrations and if back and forth tranportations and canadian borders securtiy wages increase for there hard devoted work to canada workers 30% per annual yr from working for canada borders and canada agencies, security agencies, Commioneers, and all canadian army workers why cause the right to be a free canadian

Bishop - March 21, 2018

only have benefits to our country Family Benefits will be declared 1 set of parents per household born canada one gst per postal box and direct deposit form per born canadian.One house,one suit/apt number apartment,property owners mailaddress and visa credit canadian bank owned authorized only stamped by finance canadian banks, investment RRSP,RRP, GIC TFSA and canadian property gain to provide all canadians to be safe and provide our rights to be born canadian for any benefits act and employment insurance but showing our rights has a free country no tourism acts threats nor identity threats to any person in canada. No race or predjedice is call in canada

Madison Hopper - March 19, 2018

I highly endorse this idea.

Christa Renneberg - March 19, 2018

There are way too many numbered corporations buying real estate in hot markets across Canada. Homes should be for people, not for companies to anonymously park their money. Companies should be encouraged to invest in people and infrastructure in Canada not buy up prime real estate as a high return investment and avoid taxes as a foreign owner. Transparency in home ownership would be a good first step in limiting this kind of speculation in the real estate market.

Michael Lenczner - March 17, 2018

My company, Ajah, uses government-collected, administrative data about the nonprofit sector to offer commercial services to nonprofits. We use publicly available tax filings about charities to help fundraisers and executive directors access the capital they need to make lives better for all Canadians. Also, because that information is not made available in other countries, we have a competitive advantage to develop next generation services in our field. For the most part, Canada's incorporation registries are not accessible or affordable for commercial use. If we can access the information in those incorporation registries, my company will be able to develop advanced services to offer the Canadian nonprofit sector and will be able to continue to extend its advantage over companies in other jurisdictions.

Secondly, the nonprofit our company started, Powered by Data, advocates for access to information useful to the nonprofit sector. Incorporation registries have already been identified as containing crucial information about the nonprofit sector that could be used for improved policy making and improved collaboration between the NP sector and government(s). If Canada adopts the current best practices in public benefit registries, that information will be available for those uses.

Denis Meunier - March 16, 2018

The European Union and its 28 member states are leading the world in addressing concerns about money laundering, terrorist financing, tax evasion, and corruption. They are making it mandatory for all member states to implement a publicly accessible registry of beneficial ownership information, likely by the end of 2019. Europeans are reacting rightly and realistically to the need to protect their society from the damages of money laundering and tax evasion and to enhance security from terrorist attacks. Canada is among the worst (ranked 21st worst ) secrecy jurisdictions in the world out of 112 jurisdictions evaluated, according to the Tax Justice Network's 2018 report on financial secrecy. That's nothing to boast about. We're in the pack with Switzerland, the US and the Cayman Islands that top the list as the worst 1st, 2nd, and 3rd jurisdictions for financial secrecy. Dirty money flows to the path of least resistance. The US is not a model to follow on this issue, the EU is. On this issue, the US has lost its credibility and leadership status in the world and as a neighbour. What's wrong with federal, provincial and territorial governments in not addressing these problems by providing law enforcement, the business community, the public and journalists with a tool such as publicly accessible beneficial ownership registry of corporations and trusts (with commercial implications)? As the people's representatives, do they truly understand the impacts of these crimes to our society? The misuse of corporations and trusts by anonymous owners/beneficiaries has been identified by the Department of Finance as being among the highest risks for money laundering and terrorist financing in Canada. The federal government has been extremely slow to act. International standards on beneficial ownership have existed for many years, none of which Canada is compliant with. There have been many pronouncements by the federal government and promises made at the G20 Summit in 2014, but no concrete action has taken place. Provinces and territories, except B.C., have said nothing or done little to address these problems yet it is in these jurisdictions where 91% of corporations are set up. As Canadians who pay taxes and comply with laws, do we want to be indolent punching bags for money launderers, terrorist financiers, tax evaders and the corrupt, or do we want to stand up? All governments need to implement a publicly accessible registry of beneficial ownership information for legal entities and legal arrangements as a tool, among others,to help prevent and deter these crimes.

Anonymous - March 15, 2018

The only real excuse I’ve heard for secret ownership is to protect against being targeted by criminals. It really doesn’t hold water, though, unless kidnappers or blackmailers, for example, are likely to search corporate registries to find potential victims, rather than just picking people who are obviously wealthy and vulnerable. Also, these are not exactly a big thing, compared with fraud, tax-dodging, and money laundering.

Courtney Bolinson - March 15, 2018

As a young family in Canada, our greatest stress comes from finding affordable housing in the cities where we can find compelling work. All of our friends and relatives are in the same boat - we can't afford to live in the cities we grew up in, or where our parents are. This is a problem on so many levels - the biggest in my mind is the loss to the cities of young, innovative, hard-working Canadians who can no longer make a life in them. This brain drain, creativity drain, family drain...all of it! We rely on our government to do everything it can to improve the housing situation. This is a key way for you to do it!

Kady Seguin - March 15, 2018

As a country committed to combatting corruption both domestically and internationally, it is essential that the Government of Canada create a public beneficial ownership registry for Canadian companies. Without this information, legitimate businesses cannot conduct reasonable due diligence on the actors they are doing business with, and illegitimate actors, including money launderers and tax evaders, can take advantage of an unnecessarily opaque system. There are no significant advantages to legitimate businesses being able to hide their ultimate ownership, and these would no less be outweighed by the significant overall benefit to citizens of making this information publicly available. If Canada is serious about combatting corruption, we need to provide the tools for individuals, governments and companies to do so.

James Cohen - March 15, 2018

Canada is an international laggard on beneficial ownership transparency. While we drag our feet, our partners overseas move ahead with the UK already establishing a public registry of corporate beneficial owners, and the EU having just mandated its members to establish the same. As Canada continues to fall behind, we become an ever more attractive destination for snow washing. Implementing a public registry of beneficial ownership will be good for Canadian security, good for Canadian business due diligence, and good for Canada to close off one more parking place for global illicit financial flows.

Adam Ross - March 14, 2018

Canada has become a choice destination for international money laundering - so much so that criminals refer to 'snow washing' their dirty cash through Canadian companies, banks and real estate. We make it easy for tax evaders, money launderers and other criminals by allowing them to set up companies anonymously, giving them full access to our banking system and real estate markets. In the words of one Toronto lawyer who laundered money for an undercover police officer posing as a member of a South American drug cartel: Canada is 'la la land', where there is virtually no chance of getting caught and even less chance of being punished.

If we are to make it more difficult to launder money, evade tax and perpetrate other financial crimes in Canada, we need to collect information on the beneficial owners of companies, trusts and property - thereby removing their anonymity. That information should be made available not only to law enforcement, regulators and tax authorities, but to the general public so that journalists and members of civil society can investigate suspected wrongdoing and so the private sector can do their due diligence before completing transactions or taking on new clients.

Many other countries are far ahead of Canada in making ownership of companies and assets more transparent. It is time we catch up and enact beneficial ownership reforms, for the sake of our national reputation and the well-being of Canadians.

Kevin Comeau - March 14, 2018

With access to a national registry of beneficial ownership, every Canadian will be able to pull back the curtain and thereby more quickly and accurately know exactly who they are dealing with when they enter into a business relationship and when there is a change in the ownership of the other party. This increased access to information not only better enables both the general public and businesspersons to minimize reputational risk and avoid unwitting involvement with criminals and other unsavoury characters, but it also greatly reduces the present costs of obtaining similar, yet less reliable, information from private sources.
Law societies and other professional governing bodies will, through access to a beneficial ownership registry, be able to conduct more meaningful audits of their members, allowing them to better identify (and where appropriate expel from membership) those who have facilitated money laundering, terror financing and tax fraud.
Journalists and other members of the fourth estate with access to a national registry of beneficial ownership will be able to more easily gather information to expose political and financial corruption, thereby better protecting the integrity of our democracy and financial system.
With access to Canada’s national registry of beneficial ownership, persons from around the world—including those living in countries where institutionalized bribery and extortion by government officials condemn its citizens to a life of poverty—will have greater ability to trace and recover stolen assets. The World Bank estimates businesses and individuals pay more than $1.5 trillion in bribes each year —10 times the value of overseas development assistance—and in many developing countries the poor pay the highest percentage of their income in bribes (e.g., 12.6% in Paraguay, 13% in Sierra Leona). By making its national registry of beneficial ownership publicly accessible, Canada would be making a great contribution to the world’s persecuted and poor.
Simply put, making beneficial-ownership information available to the public decreases the power of those who game the financial system and increases the power of those who suffer most under that system.
Canada, let's do the right thing and create a publicly-accessible registry of beneficial ownership.

George Kranz - March 14, 2018

We also understood that unchecked growth was not a good thing. We embraced ideas such as ZPG (zero population growth) as a target, health care and pension systems for all citizen.

Unfortunately, around 1980, as things got better and the greedy ones in our population wanted to be richer (and thought they were smarter and were entitled to more wealth), used the democratic governments as a way to reduce rules and restrictions placed on capitalism. This resulted in a system like our present one, which proclaims to be democratic but is in fact a capitalistic system. No one seems to realize or admit that a system of unchecked growth cannot be sustained by our small planet, and we are using up its limited resources at an alarming rate.

Examples: are what we have done to our oceans, we have almost completely emptied them of fish, some of the oceans are badly polluted by plastic waste. We have polluted the air that we need to breathe to such an extent that we have caused climate change to melt much of the North Pole, and part of the South Pole, certain parts of Africa are deserts which only a few years ago sustained farmers and ranchers and was home to many animals which are starting to die and become extinct. Many cities are now in danger of being unable to supply enough water for its citizen, (example: Cape Town, South Africa).

George Kranz - March 14, 2018

Canada:
1. We need one system of health care for the whole country. We can’t afford all the duplication and variations resulting from Provincial Autonomy. It is wrong that a person from Quebec cannot get health care in BC because of the differences in systems.
2. We need to outlaw the sale and private ownership of handguns and assault weapons. These need to be strictly controlled and allowed only to authorized personnel.
3. We need to renovate/review our voting district allocation/distribution. This was studied many years ago and found to be out of date. Subsequent governments have promised that during elections and then each one has obviously “forgotten” it.
4. We need to toughen our laws to protect this country’s valuable resources which include water, air and all the wealth in our land. Foreign companies such as Nestle stealing our water needs to be stopped.
5. We need to find a better way of selecting our “leaders”. The present way based on popularity or wealth is not working to select the most qualified people.
6. We need to limit the powers of our leaders from implementing laws or making other important decisions that are not in Canada’s interest.
7. We need to secure the pension funds of all companies from acts resulting in sale/take-over/bankruptcy such as what happed when Sears Canada sold off all assets, which then declared bankruptcy with the new owner becoming wealthy with the pension fund being left empty.

Add new comment