With a solid ranking of 14/180 in the most recent Corruption Perceptions Index, Canada may not seem like a place where financial crime or money laundering are big issues. However, unlike many other Western liberal democracies, Canada’s parliament has only committed to a national publicly accessible registry of ultimate beneficial owners in the last few months via the C-42 bill. This comes after many years of non-profit organisations and industry professionals attempting to bring attention to the practice of “snow-washing” whereby the weak corporate transparency rules in Canada are used to create shell companies and laundromats. The upcoming bill will no doubt greatly assist in the fight against financial crime in Canada by exposing malicious offshore structures, but with many disparate provincial registries with varied filing standards, it may take some time for the impact to show.
Company data
Canada’s company registry structure is complicated, with fragmented provincial- and federal-level registers. Regardless of where a company is registered in Canada, a basic registry extract will be available online, though the information available can vary from full incorporation details, director details and shareholder information in a province like Quebec, down to just company name, number and status in Manitoba.
Bill C-42 has just received royal assent and will lead to the creation of a publicly accessible register of ultimate beneficial owners for federal corporations, around 15% of the companies in Canada. A federal corporation has the right to conduct business across Canada under one name, and being registered federally makes conducting business in multiple provinces a bit easier, although a provincial corporation can still operate in multiple provinces with the right extra-provincial registration. The Canadian government hopes that reform of the federal register will encourage similar reforms at a provincial level.
Across the provinces there are varying levels of progress toward public and transparent ownership databases. For example, British Columbia currently compels firms to provide UBO information but does not allow the public to view this data. British Columbia has also announced its plans to build a public beneficial ownership database by 2025, which would make it one of the most transparent provinces in the country. Currently, the most transparent province is Quebec, which recently introduced requirements for its public registry of beneficial owners. The name, address and type of control a person has over a corporation is fully available to the public and searchable, and notably Quebec does not just require this of corporations registered in Quebec, but compels any company that carries out business there to do so even if they are based in another province.
The majority of Canadian provinces have a requirement for companies to file beneficial ownership information but do not make this publicly available. Manitoba, New Brunswick, Newfoundland, Prince Edward Island, Saskatchewan, Ontario and Nova Scotia follow this system, although the upcoming federal legislation will result in transparency similar to that of Quebec.
Alberta, Yukon, Nunavut and the Northwest Territories do not require a company to register any beneficial ownership information at present. Given their sparse population and low percentage of national GDP this may be less of an issue, but some commenters have expressed concern about Alberta’s apparent opposition to a beneficial register given its status as the third in the rankings of provincial GDP. Alberta has been trying to transition away from it’s traditional oil and gas industries for some time, and the resistance to a transparent beneficial ownership register appears to be part of a drive to attract new types of business to the province, with many claiming it is an attempt to create a “Delaware of the North”, a reference to the US state’s disproportionate levels of corporate registration and lack of transparency. While many have celebrated the tactic as a key business-friendly move to encourage new investment, the prevalence of Albertan Limited Partnerships used in “snow-washing” could be cause for concern.
Litigation
Compared to many other global jurisdictions, retrieving legal records in Canada is relatively simple, but again provincial fragmentation can make lower-level court records harder to retrieve. The records of Federal Courts can be searched online and provide decisions and judgements from the Supreme Court of Canada, the Federal Court of Appeal, the Federal Court of Canada and the Tax Court of Canada.
At a provincial level, access tends to be more restricted, and the disclosure of documents to anyone not involved in the case is heavily supervised with access approved by a judge on a case-by-case basis. Looking at the court disclosure restrictions for British Columbia, for example, we can see that each type of document has different access requirements, and given each provincial court can vary, the situation can become even more complex. Provincial legal research can require real time and effort, as well as a boots-on-the-ground presence to consult records at more rural courts.
Media
Canada has a good record of media freedom and is ranked at 15/180 in the Reporters without Borders 2023 press freedom index. An independent state-funded broadcaster, the Canadian Broadcasting Corporation, is generally held in good standing and there are strong laws to protect journalists and sources. However the Royal Canadian Mounted Police are currently being sued by an independent news outlet, the Narwhal, following the arrest and 3-day detention of one of their journalists while covering an anti-pipeline protest in 2021. The dispute mainly concerns the validity of a court-ordered injunction that the RCMP were enforcing at the time and whether it applied to registered journalists. While Canada’s media standards remain good on the whole, many are watching this case to see how it is likely to affect the future of reporting in the country.
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Please note all information contained in this blog is accurate at the time of writing.