44th Parl. 1st Sess.
June 20, 2023 10:00AM
- Jun/20/23 8:57:19 p.m.
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I do not usually do this, but we are talking about Bill C-42 right now and not Bill C-18.
The hon. parliamentary secretary.
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Madam Speaker, I do not mind commenting on Bill C-18.
Bill C-18 is wonderful legislation, and I am very glad the member and the NDP are supporting it. It is unfortunate that the Conservative Party is like a fish out of water and flip-flopped once again—
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- Jun/20/23 8:57:46 p.m.
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We are not being relevant to the bill being discussed right now.
The hon. member for Saanich—Gulf Islands.
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Madam Speaker, I am going to put the hon. parliamentary secretary out of any sense of suspense over how I will vote on this bill. I will probably vote for it.
The reason I waffled was that I was so impressed the other day by the speech from the hon. member for Mission—Matsqui—Fraser Canyon, who took us through, as a collective, what it was like to be in committee and to have the evidence from Transparency International put forward minutes before clause-by-clause amendments. Those improvements could have been made.
Transparency International is the gold standard, and Canada has been falling behind. Obviously we need the beneficial registry. We need this legislation, and we should have had it years ago. However, it is not great to be famous, as a country, for being a great place for money laundering, and we could have done better. I just wanted to explain that to the parliamentary secretary.
I do not how the member for Kitchener Centre will vote. We do not whip votes here. We find it liberating for people to represent their constituents. In any case, I will be voting for it, but with some considerable regret that the bill was pushed through without entertaining good amendments based on witness testimony.
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Madam Speaker, I would not underestimate the member's influence over her colleague, her seatmate, and I highly recommend that she recommend to him that he join her in supporting this legislation, because it is good legislation.
One thing that I hope I have emphasized at great length is recognizing that Ottawa plays a strong national leadership role. I would like to emphasize and re-emphasize how important it is that Ottawa continue to work with provincial jurisdictions, in particular, to ensure that we can expand the registry so that all Canadians will be that much more emboldened to feel we have public confidence and trust in corporations. The bill would ultimately add more value to our economy, because even corporations want to see this type of legislation.
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Madam Speaker, according to Transparency International, between $43 billion and $113 billion a year is laundered or is lost to tax evasion.
Obviously the Bloc Québécois is in favour of Bill C‑42, which calls for more transparency from businesses in order to determine who exactly is hiding behind these businesses.
My question for my colleague is on the need for co-operation between the federal government and the Government of Quebec. In fact, Quebec has already brought in measures to improve transparency and to prevent tax evasion. How does my colleague see this co-operation?
Business ownership and business ownership law are areas of provincial jurisdiction, not federal jurisdiction. How does my colleague think the federal government will be able to bring this bill into force while securing real co-operation and getting the necessary information, which belongs to and is the responsibility of the provinces, including Quebec?
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Madam Speaker, it is important we recognize that the legislation establishes a searchable public ownership registry of a scale that the provinces that want to be able to participate in it can participate. I do not know all of the nuances. I know Quebec has been very progressive in advancing some legislation already. I would like to think that all provinces and municipalities would. In fact, members of this House can talk to their provincial counterparts and recommend that. After all, we all benefit if there is one registry that enables us to tap into it. When I say all, I am talking about the communities that we represent and corporations in general.
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Madam Speaker, we had two committee meetings on this bill at the industry committee, one with officials and the minister and the other with a couple of witnesses, including the RCMP and Transparency International. As the leader of the Green Party said, Transparency International proposed a number of important changes. I put forward those amendments and the government voted against every one of them.
It is interesting that the parliamentary secretary mentioned real estate and provincial co-operation. I put forward amendments proposing that residential or real estate assets be included and the Liberal Party voted against them.
I put forward an amendment where, if a provincial government has a provincial beneficial registry, the federal government would enter into an agreement so they could share the data back and forth and the Liberals voted against it.
Therefore, I hear the words, but I do not see the votes, and I wonder if the parliamentary secretary could explain that.
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Madam Speaker, what the member does not necessarily indicate is that this a minority situation, so if he was losing votes at committee, that means it was not just the Liberal Party but the majority of the committee membership did not support the Conservative amendments, so it is not fair for him to say that it is the Liberal Party.
What I have witnessed is that this government has no objection to adding strength to legislation if a bill or amendment can add true value to it. It is up to the critics of the parties to work within the committee to maybe do a bit of lobbying with the minister, which never hurts, and if there are things we can do to make the legislation more sound and better in a timely fashion we are always open to those ideas. Keep in mind that one always needs a majority, even at committee, in order to pass an amendment. We do not have a majority, but maybe we will after the next election.
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Madam Speaker, Facebook's decision to block Canadian news targets major media outlets—
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- Jun/20/23 9:04:29 p.m.
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The hon. member for Mission—Matsqui—Fraser Canyon is rising on a point of order.
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Madam Speaker, I rise on a point of order. We are not here to debate Bill C-18; we are here to debate Bill C-42. The member was asking about Facebook.
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- Jun/20/23 9:04:44 p.m.
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We are debating Bill C-42.
I thank the hon. member.
Questions and comments, the hon. member for Charleswood—St. James—Assiniboia—Headingley .
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Madam Speaker, I want to go back to one particular issue that has to do with the significant interest clause, which the member discussed during his speech. He said that it was okay for now, which leads me to think he might think it should be lower. The fact of the matter is it should be lower and is a major hindrance to making this legislation as effective as it could be. I wonder why the committee did not support that.
Your argument earlier made no sense at all. If the Liberals had voted for it, it would have passed with the Conservative votes.
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- Jun/20/23 9:05:28 p.m.
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I want to remind the hon. member that it is not my argument.
The hon. parliamentary secretary.
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Madam Speaker, what I was attempting to say is this. There were some who would have liked to have seen it lower and some who may have wanted to see it higher. I believe 25% is what they agreed to and that is what was passed at committee.
As I indicated to the previous—
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- Jun/20/23 9:05:52 p.m.
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I am sorry, but we have to resume debate.
The hon. member for Mission—Matsqui—Fraser Canyon.
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Madam Speaker, I am going to be speaking on Bill C-42, an act to amend the Canada Business Corporations Act and to make consequential and related amendments to other acts.
Before I begin, I seek unanimous consent from the House to split my time with the hon. member for Charleswood—St. James—Assiniboia—Headingley.
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- Jun/20/23 9:06:19 p.m.
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I have heard from all recognized parties that they are in agreement with this request.
Does the hon. member have the consent of the House to split his time?
Some hon. members: Agreed.
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Madam Speaker, Conservatives are proposing that we amend the motion before the House today, the motion that Bill C-42 be read for a third time, in order to send Bill C-42 back to committee for some important additions, with number one being thresholds.
During our study at INDU, the RCMP officials were clear that reducing the threshold for significant control would strengthen the registry and law enforcement agencies' ability to utilize it in the fight against money laundering. Let me quote Denis Beaudoin, director of financial crime at the RCMP. He stated:
The RCMP standpoint is that the more names and more information, the better. As we're trying to make links in a criminal investigation, it certainly can help.
This was in respect to thresholds.
The End Snow-Washing campaign also pushed for a 10% threshold, though the officials have since suggested it could be done at a later date through the Proceeds of Crime (Money Laundering) and Terrorist Financing Act review, which takes place every five years.
During testimony, the representative from Transparency International, which is tied to the End Snow-Washing campaign, stated:
I don't think, for one, lowering the threshold from 25% to 10% and a risk-based approach are mutually exclusive. I think they actually go hand in hand. I would note that the 25% isn't so much a standard as it was an initial global recommendation that everyone just kind of grabbed on to.
This quote contradicts the point that we have seen raised repeatedly by Liberal members that 25% is an international standard. They argue that moving the threshold away from the standard would hurt interoperability, but I have doubts. Does the government really believe that provinces would not follow suit and align with a new federal threshold? Twenty-five per cent remains far too open to abuse. The lower we bring the threshold, the less opportunity there would be for criminals to circumvent it. As I understand this bill, a sole owner of a small business worth $100,000 in gross profit on an annual basis would be subject to reporting requirements and included in this registry. Meanwhile, a person with a 20% stake in a $100-million corporation would not.
As has been mentioned during debate so far, currently the Ontario Securities Commission requires that any shareholder with a 10% share or more has to be reported. Private corporations should be held to the same standard of transparency and accountability. Frankly, I do not understand or trust public servants who say they are going to follow through on this. I predict that we will be back in this House in less than 10 years, wondering why the threshold was not adjusted to a lower rate in this bill to account for the serious problem of money laundering that we have.
Conservatives are therefore proposing that we send Bill C-42 back to the Standing Committee on Industry and Technology with the aim of reducing the threshold for significant control from 25% to 10%.
The second point I would like to raise tonight relates to interoperability. We are also calling on the industry committee to adopt additional amendments in relation to the interoperability of the registry with provincial and territorial registries.
As of now, penalties for violating requirements in respect to reporting information would only apply to federally registered corporations, which represent less than 15% of private corporations in Canada. As we heard at committee, there is as much as $113 billion being laundered in Canada annually. We must ensure that this registry can reduce that figure as much as possible and end Canada's reputation as a haven for dirty money. To that end, by changing some of the clauses through the Criminal Code, we could achieve a higher standard of interoperability by making sure that provinces that opt in to a federal registry would impose the same penalties as a federally registered corporation.
Other areas for improvement of Bill C-42 were also raised through numerous amendments to strengthen the registry.
With my time here today I will talk about law enforcement. Conservatives also moved an amendment to ensure law enforcement would have back-end access to the registry without having to go directly to corporations. Department staff at committee assured members that there is already a provision for this in place. However, to my understanding this is not the case, based on the bill itself, and what we needed through more committee testimony was clarity through the officials on how that would actually be done.
The Budget Implementation Act, 2022, No. 1, did include an amendment to the CBCA to give law enforcement this access. However, it has never been brought into force.
We moved further amendments at INDU in relation to interoperability as well. The first would have added the jurisdiction of residents and the name of the corporation to the registry, ensuring it could have been searched by these fields. The second would have added specific language to require the registry to be made public in a searchable format.
I will quote Sasha Caldera from Publish What You Pay, which is associated with Transparency International. He said:
Searching by the name of the corporation is a function that the U.K. registry has, and it allows for reverse searching. If you don't know the name of the beneficial owner, you can look up the name of the corporation, for instance. That would be incredibly helpful. In some of our other recommendations, we just want to ensure that all publicly accessible data is searchable.
We wanted to achieve the same objective.
Another amendment we moved was raised by the End Snow-Washing campaign of Transparency International. One of them would have added “mechanisms to prevent beneficial owners from knowingly abusing the PO box system”. Officials outlined at the clause-by-clause debate that this is a regulation that already applies to federally registered corporations.
However, what was not made clear is whether that same regulatory standard would apply to provincially regulated corporations. As a result, we left the amendment stage of the bill not knowing whether P.O. box numbers where provincially registered corporations are held would be subject to the same standard as federally registered corporations if any set agreement was made between the federal, provincial or territorial government in their respective jurisdictions. What I am getting at here is that we just needed a bit more time.
I will quickly touch upon identity verification, another area we wanted to spend a bit more time on. An amendment we were unable to get to the floor in time from the Transparency International campaign related to identity verification. It requested language to require corporations to verify the identity of individuals with significant control. Indeed, there already is a precedent for this in Canada. B.C.'s Business Corporations Amendment Act, 2023, included the following language, which the organization included for reference in its submission to committee the hour before clause-by-clause:
Verification of identity of significant individual
(1) On the request of the registrar, a significant individual, or a person in a prescribed class of persons who can verify the identity of the individual, must provide to the registrar
(a) any prescribed records, or
(b) information or proof the registrar considers necessary
to verify the identity of the individual.
(2) The records, information or proof must be provided under subsection (1) in the prescribed form and manner.
We needed to do so much more for the bill, but I have just been informed by leadership that we will be removing our amendments to the bill, unfortunately, because it looks like we are going to recess for the summer this month. We will not be able to sit this summer and go through this important work.
That said, I still very strongly believe that, when we look at the proceeds of crime and money laundering act, we should revisit the CBCA to ensure we do the utmost to protect Canadians from money laundering. We have so much more work to do on this, and I am sad the Liberals tried to push this through right to the very end. If we just had a few more meetings, the bill could have been so much better.
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