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FINA Committee Report

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NDP Dissenting Report on the Statutory Review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act

Restoring public trust with increased transparency: Establishing a public register of beneficial owners

The Liberal government promised to focus on openness and transparency in order to restore public trust in our institutions. During this study, numerous witnesses told the Committee that establishing a public register of beneficial owners of corporations and trusts would be an effective way of combatting tax evasion and money laundering. This register would also help rebuild Canadians’ trust in our tax system and laws.

The Honourable David Eby, Attorney General of the Government of British Columbia, argued that this kind of register is needed, in part by citing a study from Transparency International Canada. The study showed that it is impossible to determine the true owners of more than half of real estate properties for sale. He also pointed to British Columbians’ lack of confidence in the enforcement of tax laws and added that the public must have access to the register in order to remedy this crisis of confidence.

In addition, Canada would benefit from drawing on the European approach to a public register by including any person with significant control of 10% or more of a corporation or trust. The testimony heard from individuals in the United Kingdom further confirmed that an easily accessible public register is the right option for Canada.

Marc Tassé, Senior Advisor with the Canadian Centre of Excellence for Anti-Corruption at the University of Ottawa, noted the following: “With public access to the beneficial ownership information, the Act should also be amended to require all reporting entities to verify the identity of the beneficial owner; verify if their customers are politically exposed persons or their family members or associates; and identify the beneficial owner and verify their identity with government-approved ID before opening an account or completing a financial transaction.”

It is important to remember that, like the many witnesses who appeared before the Committee, the government committed to fighting tax cheats and the fraudulent use of tax havens. One way to achieve this goal is obviously to increase transparency through the rules governing corporations and trusts so that beneficial owners can be identified and authenticated.

Furthermore, as did most of the witnesses, Denis Howlett of Canadians for Tax Fairness emphasized that the register must be “in an open, searchable format. That’s our main recommendation.” Barrister-Solicitor Mora Johnson added that a transparent public register would enable those searching the database to track the most common methods taxpayers use to avoid paying their fair share of taxes and to find individuals involved in money laundering.

The vast array of testimony that the Committee members heard was unequivocal: the federal government needs to co-work with the provinces to establish a central public register that would provide the identity of the beneficial owners of corporations and trusts.

The Liberals and Conservatives chose to join forces and ignore the recommendation of the majority of the witnesses that a public register be established. We were discouraged to discover that the Liberals and Conservatives refuse to work closely with civil society to provide transparent, accessible and reliable information to Canadians. The NDP is disappointed that it must submit this dissenting opinion in order to highlight the blatant discrepancy between the testimony heard and the Committee’s final recommendation regarding a register of beneficial owners of Canadian-registered corporations.