The End Snow-Washing Coalition (Transparency International Canada, Publish What You Pay Canada, and Canadians for Tax Fairness) enthusiastically applauds the announcement by the Federal Government and The New Democratic Party (NDP) to fast-track the delivery of a publicly accessible beneficial ownership registry by 2023.
“Countries around the world are picking up speed on publicly accessible beneficial ownership registries as critical tools to fight illicit financial flows, and it’s great to see Canada accelerate its timeline,” said James Cohen, Executive Director of Transparency International Canada. He continued, “The goal is for Canada to establish the best publicly accessible beneficial ownership registry possible.”
Canada originally pledged a publicly accessible registry by 2025. This new announcement accelerates this timeline by two years.
The End Snow-Washing Coalition strongly recommends that Canada’s publicly accessible beneficial ownership registry be designed with world-class open-data and deterrence features:
- No paywalls, and easily accessible for all;
- Machine readable and downloadable data;
- Staffing and mandate for a Registrar to independently verify information, collect and securely store ID, and pursue instances of non-compliance;
- Strong penalties for false declarations, including for third-parties attesting to documentation;
- Use of Open Ownership’s Beneficial Ownership Data Standard;
- Unique identifier numbers for all beneficial owners.
As provinces and territories possess the vast majority of registered incorporated entities in Canada, a pan-Canadian framework, led by the Federal Government, is needed as the natural next step to make the registry fulfill its anti-money laundering objectives.
“Many provinces have been awaiting federal guidance on this file and a pan-Canadian agreement will make the registry cover as many incorporated entities as possible. Canada can start with a group of willing provinces to begin with, and we expect other provinces will join in given the due-diligence benefits of a registry,” said Sasha Caldera, Campaign Manager at Publish What You Pay Canada.
Further details on how to technically and legislatively implement a publicly accessible beneficial ownership registry, including working in Canada’s federated system, are outlined in the Coalition report, Implementing a Publicly Accessible Pan-Canadian Registry of Beneficial Ownership.
Experts in Canada estimate that between $45-$113 billion is laundered through Canada. These are stolen funds by criminals and corrupt foreign officials, including Russian oligarchs with ties to President Putin, who launder money through secret shell companies to finance their operations. Without a comprehensive beneficial ownership registry that is publicly accessible, criminals can avoid detection even if they are on sanctions lists. Money laundering of this volume perpetuates Canada’s opioid crisis and undermines government tax revenues worldwide. Laundered funds also distort Canada’s housing market by artificially increasing housing prices and taking away supply.
“Snow-washing has no economic benefit to Canada, so the government is doing the right thing by moving more quickly on a public beneficial ownership registry,” said Dr. DT Cochrane, economist with Canadians for Tax Fairness. “There’s no excuse for depriving other countries of their own tax bases or ignoring the secrecy that leads to so many problems, both here and abroad.”