11/12/20

CANADA: Province will force companies to reveal who controls them.

As published on cbc.ca, Thursday 10 December, 2020.

New Brunswick has committed to adopting beneficial ownership, the minister responsible for Service New Brunswick announced Thursday.

Mary Wilson revealed the decision after Green Party MLA Kevin Arseneau asked about the issue during Question Period.

"Corporations will have to maintain a register of individuals who have significant control in their companies and make that information available to law enforcement and taxing authorities," Wilson said in the Legislature.

"This will increase ownership transparency and assist in exposing activities such as money laundering and tax evasion."

The pledge comes after a CBC News/Radio-Canada investigation in September found the province has lax corporate rules that make it difficult to tell who really owns and controls corporate entities.

The legislative change would bring the province in line with the federal government and five other provinces that have passed similar amendments.

But it doesn't appear to go as far as jurisdictions such as the United Kingdom, where the public can search the beneficial ownership registry for free.

Arseneau believes the public should be able to access New Brunswick's registry, not just law enforcement and tax authorities.

"It's a question of transparency," Arseneau said in an interview with CBC News.

"It's a question of understanding who is reaping profit from certain activities. It's understanding the corporate web that's being used."

Three years ago, the previous government signed on to the "Agreement to Strengthen Beneficial Ownership" aimed at combating "money laundering, tax evasion and terrorist financing."

Then, in September, Premier Blaine Higgs said he'd asked staff to review the province's corporate rules.

But Thursday marked the first clear indication that the government plans to go ahead with beneficial ownership.

Just a few weeks ago, Finance Minister Ernie Steeves appeared to question whether such changes were necessary.

"We have committed to look at the beneficial ownership," Steeves said during Question Period on Nov. 20.

"So far, what we have found is that it is not hurting anybody in New Brunswick, but it is certainly something — an irregularity — that we have to look at."

"I'd argue it actually is hurting New Brunswickers," Arseneau said.

"Even if it wasn't, this still isn't an excuse. [Those are] the kind of arguments that tax havens will have. 'Well, we're profiting from it, so we don't want to be too strict on that.'"

When Arseneau raised the issue in Question Period again Thursday, he questioned whether the province's lax rules and hot housing market could make the province "the next target for outside investors looking to invest in the real estate market, driving up the prices of housing and apartments in New Brunswick."

He cited British Columbia, where billions of dollars are estimated to have been laundered through the province in 2018, including $5 billion through the province's hot real estate market, as an example.

The New Brunswick government hasn't offered a timeline for when it will introduce the legislative amendments.

"They are not on the schedule for the current sitting as they are still in the development/approval process," government spokesperson Valerie Kilfoil wrote in an email.