Only approximately 10 percent of businesses in Canada are required to disclose ownership information to the federal government, as stated in a Department of Industry briefing note. The remaining 90 percent of companies are registered within their respective provinces or territories and are not covered by the current legislation. Consequently, the majority of Canadian businesses are exempt from federal disclosure requirements, which a proposed bill aims to address. Documents obtained by Blacklock’s Reporter indicate that Cabinet’s proposed Bill C-42, “An Act to Amend the Canada Business Corporations Act,” seeks to compel federally registered companies to annually submit the names and addresses of individuals holding at least 25 percent of shares, under threat of penalties such as $1 million fines and imprisonment for up to five years. This information would be publicly available and listed on a federal website starting from 2025.
The briefing note emphasized the importance of collaboration and engagement with provincial and territorial governments to establish a coordinated national strategy to prevent regulatory arbitrage and loopholes. It acknowledged that the current registry is limited without input from the provinces and highlighted that corporate law is a shared responsibility. In March, Industry Minister François-Philippe Champagne introduced legislation to create a corporate beneficial ownership registry, and the Liberal Party’s 2021 budget allocated $2.1 million over two years to support the implementation of this registry by 2025.
Several provinces, including British Columbia, Saskatchewan, Manitoba, Quebec, Nova Scotia, and Prince Edward Island, have already passed or proposed similar legislation. Bill C-42 has passed through the Commons and is currently awaiting Senate approval. Implementing a federal registry for corporations would be an important step, as federal incorporation represents less than 15 percent of all incorporations in Canada, according to Justin Brown, senior director with the Department of Finance.
The briefing note emphasized that a national registry would help curb illegal activity and monitor offshore speculation. It stated that the Government of Canada is committed to protecting against money laundering, deterring tax evasion and avoidance, and ensuring that Canada remains an attractive place for business. Transparency International Canada highlighted in a submission to the Senate banking committee that many countries have successfully implemented public registries to combat transnational criminal networks and foreign state actors seeking to exploit liberal democracies and hide illicit funds. Currently, 108 countries have made commitments to publicly accessible registries.