Finance Minister Bill Morneau says he’s hoping to move forward on legislation that will force private corporations to reveal their ownership information to crack down on money launderers, tax dodgers, terrorists and other criminals.
“I’d like to move forward with concrete action steps,” he told CBC Radio’s The House.
The move comes after months of controversy surrounding assets Morneau held in his own private companies. CBC News revealed that Morneau and his wife are partners in a company that owns a family villa in France, which he did not disclose to the parliamentary ethics commissioner.
Morneau was also criticized for not placing about $20 million worth of shares in his former company, Morneau Shepell, into a blind trust, as he suggested he would when he entered Parliament. Instead, he retained those shares in a numbered company based in Alberta.
Globally, Canada is seen as a laggard on beneficial ownership — a type of company structure that raises questions about who really profits from mysterious corporations that often hide financial affairs behind obscure names and numbers.
Currently, a quilt of loose federal and provincial regimes allows the owners of private corporations to hide their identities, a practice that Britain and the European Union has already cracked down on, forcing the disclosure of beneficial ownership information in their jurisdictions.
The minister said he’ll once again raise the issue when he meets with his provincial and territorial counterparts in Ottawa on Sunday and Monday.
“We need to get at this,” Morneau said. “What we’re now looking to move forward on, is to make sure that we can see who is the actual owner of companies. That is important.”
The Liberal government formally committed to reform in its March 22 budget, saying: “The government of Canada is committed to implementing strong standards for corporate and beneficial ownership transparency that provide safeguards against money laundering, terrorist financing, tax evasion and tax avoidance, while continuing to facilitate the ease of doing business in Canada.”
Reform will require collaborations with the provinces and territories because most companies are registered at the provincial level, Morneau said.
Report calls for tougher legislation
British Columbia Finance Minister Carole James said her province is open to harmonizing its corporate registry with other provinces.
“We’re certainly looking at all issues including money laundering, including tax evasion here in British Columbia as well,” she said.
“We’re happy with any and all initiatives that will address those issues. So whether it’s a common registry, whether it’s getting a registry in each of the provinces as a start, we’re quite happy to move in that direction.”
A recent report called on Ottawa to fix its corporate registry and expose the secret owners of shadowy businesses.
The report Secret Entities was commissioned by the Canadian arm of Publish What You Pay (PWYP), a global coalition that helps citizens have a say in the conduct of resource firms, such as mining companies. The Canadian branch includes Canadians for Tax Fairness and Transparency International Canada as members.
The report’s author, Mora Johnson, found that private firms can apply for a certificate of incorporation from a provincial government, where the corporate name is then listed on a provincial registry.
The group is pressing for tougher and more thorough business registries in Canada, in the provinces and federally, that would compel private corporations to disclose the identities of their secret owners.