The initiative aims to create greater transparency in corporate ownership and prevent illicit acts
To enhance corporate transparency, the Government of Canada has mandated federal corporations governed by the Canada Business Corporations Act (CBCA) to file their beneficial ownership information with Corporations Canada.
Effective immediately, corporations under the CBCA must submit beneficial ownership details to Corporations Canada, with some of this information set to be publicly accessible through online searches. Beneficial owners, also known as individuals with significant control (ISC), are those who, individually or jointly with others, own, control, or direct at least 25 percent of a corporation's shares.
The initiative, aimed at preventing illicit activities, was announced by François-Philippe Champagne, Minister of Innovation, Science and Industry. Minister Champagne emphasized that the announcement is a culmination of amendments to the CBCA made over the last two years, geared towards bolstering corporate ownership transparency and combating illegal activities.
For the past four years, CBCA-governed corporations have been obligated to maintain an ISC register. However, with the new filing rule, these businesses must now commence filing this information with Corporations Canada on their incorporation day, within 30 days of amalgamating with another corporation or filing their annual return, and within 15 days of any changes to ownership details.
"The new filing rule now in force helps establish a database of beneficial ownership information, which will strengthen the safety and economic interests of Canadians," Minister Champagne said. The ISC database design incorporates insights from public consultations in 2020 and stakeholder outreach in 2022.
With the decision to make certain beneficial ownership information public, the government aims to safeguard against money laundering and terrorist financing, discourage tax evasion and avoidance, and maintain Canada's appeal as a favourable business destination.
The ISC database, resulting from these changes, will take over a year to be substantially complete, with businesses governed by the new rules gradually filing their information over the coming months. The government said it collaborates with provinces and territories to establish pan-Canadian access to beneficial ownership information. Quebec is currently the only province that collects beneficial ownership information, while British Columbia anticipates starting in 2025.
