Summary
The goal of this report is to provide options on legislative and technological models to implement a pan-Canadian publicly accessible registry of beneficial ownership as a key tool to prevent money laundering.
Canada has much work to do to stop and repair the damage caused by ‘snow-washing’; the laundering of funds from illegal activities through Canadian legal entities and arrangements, taking advantage of our weak corporate transparency rules to conceal beneficial owners. As this report is published, Canada – and much of the world – finds itself in an unprecedented time of massive funds being disbursed rapidly with little oversight. Beneficial ownership transparency could mitigate funds from being exploited by anonymous companies for procurement fraud of relief fund hoarding. In turn mitigation against abuse will save time, livelihoods, and lives.
The coalition of Transparency International Canada, Canadians for Tax Fairness, and Publish What You Pay Canada believes that Canada must adopt a pan-Canadian publicly accessible beneficial ownership registry to address this issue.
Canada’s federated nature presents the question of how such a registry could be implemented. Key points of consideration include the federal government working unilaterally or with provinces and territories; legislative amendments to create a registry; and technologies to use for such a registry.
We considered these questions in the development of this report to address these concerns which different stakeholder groups have raised in recent years regarding a pan-Canadian publicly accessible beneficial ownership registry. The resulting report explores the pros and cons of options to implement a pan-Canadian registry of beneficial owners in Canada in order to help move discussions amongst stakeholders forward.
In summary, we make the following recommendations for public officials to consider as they study implementation of a pan-Canadian publicly accessible registry of beneficial ownership:
- Examine making a beneficial ownership registry separate from existing jurisdictional corporate registries, but using complementary information;
- Collect standardized beneficial ownership data across jurisdictions that follows global data collection standards;
- Legislate a registry through the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA);
- Work towards incorporating digital IDs into the registry for data verification; and Develop a registry as a centralized architecture.
Report
[This report was originally published on the website of Transparency International Canada, in collaboration with Publish What You Pay Canada. Our three organizations collaborate as The End Snow-Washing Coalition to fight tax-dodging, money-laundering, corruption and financial crime.]
TABLE OF CONTENTS
- Executive Summary
- Introduction
- Defining a Beneficial Ownership Transparency Strategy
- Priorities for a Pan-Canadian Publicly Accessible Beneficial Ownership Registry
- The Trouble with Canada’s Current Beneficial Ownership Transparency Strategy
- Looking Outside Canada: The U.K.’s Companies House
- Framework and Components of a Registry
- Canadian Beneficial Ownership Registry Framework Options
- The Legislation
- The Technical Toolbox
- The Solution Architecture
- Summary
- Annex A: Methodology
- References
Download the full PDF report above.
ACKNOWLEDGEMENTS
Transparency International Canada, Publish What You Pay Canada, and Canadians for Tax Fairness are grateful to Open Society Foundations for supporting the research and writing of this report. The ideas, opinions, and comments within this publication are entirely the responsibility of its authors and do not necessarily represent or reflect the Open Society Foundations.
We would like to thank Eugene DiMira and Holly Wu for technical inputs during the development of this report. We are particularly grateful for the support and guidance offered by the members of TI Canada’s Beneficial Ownership Working Group: Charlene Cieslik, Kevin Comeau, Peter Dent, Eric Hansen, Dr. Vanessa Iafolla, Jonathan Légaré, Michael Lenczner, Denis Meunier, Alesia Nahirny, Lida Preyma and Adam Ross.
Author: Rob Davidson, Veracify
Design: Deana Oulianova, DIMA Design Studio
Every effort has been made to verify the accuracy of the information contained in this report. All information was believed to be correct as of May 2020. Nevertheless, TI Canada cannot accept responsibility for the consequences of its use for other purposes or in other contexts than those intended. Policy recommendations reflect TI Canada’s opinion. They should not be taken to represent the views of the individual members of the Beneficial Ownership Working Group or other stakeholders, unless otherwise stated.
