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House Hansard - 217

44th Parl. 1st Sess.
June 20, 2023 10:00AM
Context: House Hansard - 217 - Jun/20/23
Mr. Brad Vis
  • Jun/20/23 9:06:38 p.m.
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  • Re: Bill C-42 
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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