The House resumed consideration of the motion that Bill , be read the second time and referred to a committee.
Mr. Speaker, today I rise to address the chamber on Bill , which would amend the Canada Business Corporation Act, or CBCA, and make consequential changes to other statutes.
We are here to discuss this proposed legislation because a lack of beneficial ownership transparency is impairing Canada's ability to combat serious financial crimes, such as fraud, money laundering and tax evasion. It also limits our capacity to enforce domestic and international sanctions and to effectively trace and freeze financial assets. Finally, it is impacting the trust of Canadians and foreign investors in our marketplace.
Our inability to quickly and quietly identify a company's beneficial owner delays criminal investigations; denies law enforcement leads to potential suspects, witnesses and evidence; and impairs the identification and seizure of suspected proceeds of crime. It also reduces the ability of private businesses to protect themselves.
Bad actors have long used corporate vehicles to obscure the ownership and control of assets to the detriment of Canadians' and other's confidence in private businesses. A public beneficiary ownership registry would complement the existing tools of law enforcement, while facilitating the identification of changes of ownership without the risk of alerting the suspects of an ongoing investigation. In turn, this would help prevent the dissipation of criminal assets subject to investigation or freezing orders.
The need for this type of registry has, by now, been well established, notably by public consultation held by the Government of Canada in 2020, as well as the Commission of Inquiry Into Money Laundering in British Columbia more recently. Such registries have, moreover, existed in the United Kingdom and many countries since 2016 and have proven a useful tool in deterring misuse of corporations for illicit financial activity by law enforcement, journalists and civil society.
In 2018, for example, Transparency International found that the then Czech prime minister was the sole beneficiary of two trust funds owning shares of a Czech conglomerate in receipt of EU subsidies. In a significant conflict of interest, Slovakia's public registry showed that the prime minister remained the ultimate owner of these trusts.
In 2019, the department responsible for the U.K. registry, the world pioneer, published a review of lessons learned so far. All law enforcement organizations the department spoke to had used the registry to inform criminal investigation, with most reporting using it at least weekly and noting the positive effect it had on their work. According to other resources, the U.K. registry was accessed more than two billion times a year.
More recently, the OpenLux investigation by journalists who had compiled and analyzed data from the Luxembourg's public beneficial ownership registry uncovered politically exposed persons, criminal organizations, an arms dealer and oligarchs linked to Luxembourg companies.
A beneficial ownership registry would also serve tax authorities here and abroad, who would be able to use the information to track and fix tax evasion and aggressive avoidance. The Panama papers, as well as other mass leaks, have shown that private players look for places with weak beneficial ownership transparency and then layer ownership of corporate entities across those jurisdictions to obscure personal ownership interests and income. The longer the chain of entities between the income and the beneficial owners, the harder the truth is to ascertain.
We should not underestimate the significant burden tax evasion and avoidance have on the Canadian economy. More generally, placing beneficial ownership information in an accessible registry would provide criminal and civil intelligence value, helping law enforcement and regulators stay abreast of evolving fraud cases, trends and ways corporations may facilitate these trends.
This awareness supports actionable intelligence to generate investigative leads. Certain government authorities may also have a bonafide interest in identifying the beneficial owner of the corporations they do business with, licence or oversee.
Making beneficial ownership information publicly available further supports good governance and trust. All businesses can check who they are doing business with by reviewing the registry of potential suppliers and customers, and businesses regulated for anti-money laundering purposes can consult the registry to support their due diligence.
Registries and the transparency they foster further serve as a deterrent to illicit actors. When reporting and disclosure requirements are tightened against a particular sector, product or service, prospective criminals will shift their tactics to find alternative ways of laundering funds. By depriving owners of their anonymity, registries will make Canada a less desirable jurisdiction to commit financial crime, forcing them to use more risky criminal vehicles or to go somewhere else entirely.
All in all, it is clear that the registry proposed by the bill would significantly improve Canada's ability to fight financial crime. It would help public authorities verify owners across corporate layers, help businesses better validate the identity of their trading partners, fight money laundering, fight tax aversion, and render more difficult the use of corporations for illicit activities. I hope all members of the House will join us in supporting the passage of this bill.
Madam Speaker, it is a pleasure to rise to speak to Bill today. I think it is very important for us to recognize that, as time goes by, we have had, very much, a heightened sense of awareness on such an important issue. If I reflect back to a number of years ago, very rarely would we hear about the types of situations that are being debated today inside the chamber.
We are very much aware of things, such as the Paradise papers and issues surrounding corporations, the issues surrounding money laundering and so many other issues. Canada and other countries around the world are looking at ways we can deal with the issue of beneficial ownership and the impact it is having. We are looking at a registry and trying to improve the system.
Listening to the many comments today from members across the way, and members within the Liberal caucus, we find that there seems to be fairly widespread support. Yes, I respect that opposition members and others do have questions about the legislation. I suspect that will be the opportunity, once we get into the committee stage, to look at what possibilities there might be to strengthen the legislation.
I have actually been encouraged by the debate thus far on the legislation. I have had the opportunity to ask a few questions, and I would like to be able to highlight a few concerns, in a broad way, that I have.
If I were to respond to the debate today, there are a couple of things that come up. In particular, the NDP made reference to the whole issue of tax fairness and lost revenues. I think that, if we were to canvass Canadians as a whole, we would find that Canadians do not mind paying their taxes, as long as there is a sense of fairness to it.
People want to pay or are prepared to pay their fair share. That is the reason why, if we take a look at it, over the last number of years, virtually since we have been in government, the government has taken a number of actions to build on the fact that Canadians' expectations are that we improve and make the system better for all. I do not know how many times I have had the opportunity to talk about some of the initial initiatives we have taken as a government.
I would like to start off from the particular point that, shortly after being elected, in recognizing Canada's middle class and supporting Canada's middle class, there were a number of tax initiatives taken, as well as actions by the government.
I would like to amplify a couple of those initiatives. The first one that comes to mind, of course, is the tax reduction legislation we brought forward at the beginning of the mandate for the middle class. It was a piece of legislation, very clear, to ensure there is a higher sense of tax fairness by enabling a break for the middle class.
At the same time, if we will recall, there was an additional tax that was put on Canada's wealthiest 1%. That is something we recognize is an issue in tax fairness. We have also seen other budgetary measures.
I mentioned the issue of tax avoidance and those individuals who go out of their way in order to pay their fair share of taxes. This is something that, I would suggest, we can look at through a lens of tax fairness. However, if we are going to be true to our word, we need to properly resource the CRA to go after those individuals, groups or corporations that are trying to avoid paying taxes in questionable ways.
There was a significant amount of money allocated to CRA over a couple of budgets. Prepandemic, we saw an additional investment of hundreds of millions of dollars. Do not quote me on this, but I believe if we were to combine the total investments that the federal government has put in supporting CRA in going after individuals or corporations trying to avoid paying their fair share of taxes, it is likely just over $1 billion. The expectation for CRA is to look at ways to recover money from lost taxes.
The last time I looked, the number of records being looked at was well over 1,000. Pre-2015, it might have been fewer than 100. So we know that CRA is in fact much more proactive today than it has been in the past. Again, from my perspective, it is about looking at ways to ensure that there is a higher sense of tax fairness.
In the recent budget, we have a sense, in terms of taxes, with respect to banks and insurance companies where inappropriately high profits were taken. We have seen taxes being put onto those sectors in the most recent budgets, again, with the goal of ensuring that there is a higher sense of tax fairness.
The member for also made reference to the whole issue of corporate tax. I noticed that he tried to group the Liberals and the Conservatives together by saying that whether it was Liberals or Conservatives, we believe in giving corporate tax breaks. Yes, there have been corporate tax breaks. I am not one who believes in the trickle-down theory of corporate tax breaks personally, but I would suggest to the member that when the NDP has had the opportunity to govern, particularly in my home province of Manitoba when I was in opposition during NPD Premier Gary Doer's administration, there were corporate tax reductions. I think we have political parties of all stripes that have implemented corporate tax deductions. However, Canadians are very concerned when they hear of that, especially if they are having to pay their taxes when there are all sorts of inflationary demands.
So, if we take a look at the comments I just put on the record, there is a need for Bill .
Bill is an attempt by the government to do a number of things. It is not only ensuring that there is tax fairness, but also a higher sense of transparency and accountability.
As has been pointed out, money laundering is a very serious issue in Canada, in some provinces more than others. It has caused a great deal of hardship. The best example is likely the one the member across the way mentioned in regard to housing.
We have speculators and people who want to launder money using housing as a tool. Not everyone who invests in housing in Canada is necessarily money laundering. I am not trying to say that, but we do know that money laundering does take place in our residential communities and in the development of condominiums.
The member made reference to Vancouver and British Columbia. We know it goes far beyond any one province. We can talk about what is taking place in Toronto and find that there is laundering and speculation. That does drive up the cost of housing.
With the budgetary measures that we have taken in the past and the budget implementation bills in the past, we have tried to put in some restrictions in order to prevent that foreign ownership, or even put a tax on individuals who are not living in or a resident of Canada, with the idea of having a fairer share of taxation.
The issue with respect to the transparency and accountability of corporations really does kick in here. At the end of the day, when we look at the Canada Business Corporations Act, it is all about the modernization of that legislation to ensure there is a higher sense of corporate transparency and accountability.
From my perspective, if we take a look at the primary tool, we are going to have a registry that is open and public, and quite searchable for ownership information or beneficial ownership. By doing that, I believe there will be a huge difference.
If we look at what the Canada Business Corporations Act does, it enables certificates of compliance, as an example. If a corporation is not in compliance with the legislation, we would have a tool that would ensure that the corporation might not get that certificate. That can have a profound impact on the corporation itself. Without that certificate of compliance, it would have difficulties with things such as loans and suppliers.
At the end of the day, I believe the passage of this, and the establishment of a public, searchable beneficial ownership registry, would ensure there is a lot less money not taken into account, so less money laundering and less money being used in illegitimate forms. For me, that is something we need to recognize within the legislation.
The government has been committed to a robust and effective regime to combat money laundering and terrorist financing to improve the public trust in our corporations. It does not take much for a corporation to fall on the wrong side of the whole issue of money laundering and the impact it has on the corporate community. A vast majority of our corporations are in fact good entities that contribute in many different ways. It is not just jobs. It is all forms of opportunities, community development and so forth. Because of the bad apples that are out there, it does leave a negative stain.
Therefore, when we talk about the legislation trying to minimize issues like money laundering and improving accountability and transparency, a vast majority of corporate stakeholders do not have any problem with this. The consultation that has taken place goes back to 2020, going right into 2022 where there was a great deal of consultation with different stakeholders and interest groups. There were even foreign consultations with other nations.
We want to make sure that we get it right. We appreciate the privacy issues and that has been raised here. With respect to what had taken place in Europe, there was a court decision in regard to the issue of privacy, so we do want to tread carefully on that particular issue. However, it is absolutely critical that we continue to see the legislation move forward because it would make a difference.
There are some provinces that have actually gone further than other provinces. Quebec has passed its legislation and I believe it has been implemented. I am not 100% sure of that. Because in a federal system we have to take into consideration that there are jurisdictional issues, we have to be aware that some provinces still need to do a whole lot more than other provinces. Therefore, taking a pan-Canadian approach to looking at best practices and looking at the legislation that we are bringing forward today would go a long way in ensuring that not only those federally regulated corporations that are registered through the Canada Business Corporations Act but also those in provincial and territorial jurisdictions will have that obligation of ensuring that there is more transparency and accountability.
In looking at the legislation and listening to the comments, I believe I have a fair reflection in terms of many of the comments that were said earlier today. I would encourage members to view the legislation in part in terms of the commitment that has been made to try to get this passed before the end of this year, which is faster than we had initially indicated. However, in order to do that, we look to opposition parties to follow through on some of the words that they have stated today in terms of that tentative principled support that they are providing and allow the legislation to go to committee. I would think that would be a positive thing, given that all parties seem to support the principle of the legislation.
Therefore, I would encourage members to take the issues, as I know they have, of money laundering and of ensuring more accountability and transparency within a very important sector, in the name of making sure that there is a higher sense of tax fairness. Again, that, to me, is what it is all rooted in. Canadians do not mind paying their fair share of taxes and it is very upsetting when they hear of the money laundering that takes place, or of individuals or corporations wanting to get off the hook for paying their fair share of taxes.