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Canada To Create Public Beneficial Ownership Registry

By Kevin Pinner · 2022-03-22 18:34:38 -0400 ·

Canada's government will create a public beneficial ownership registry by the end of 2023, Prime Minister Justin Trudeau said Tuesday in a news release announcing an alliance between two major parties to keep him in power until 2025.

Trudeau said the concrete measure to create tax transparency is part of an agreement between his Liberal Party and the New Democratic Party in the Canadian Parliament. The agreement represents the two parties forming a coalition to keep Trudeau in power until 2025, saying they've agreed to work together over the next three years to change taxes on financial institutions that profited during the pandemic as well.

"Politics is supposed to be adversarial, but no one benefits when increasing polarization and parliamentary dysfunction stand in the way of delivering," Trudeau said in the news release.

Trudeau said voters gave Parliament "a clear mandate and do not want to endure needless delays in this important moment." Voters want to support their families with "green jobs and climate action, more housing and child care affordability and stronger health care," he said.

The agreement contains many policy ideas in broad strokes, including a brief section on creating "a fairer tax system" that says the parties have agreed to create a publicly accessible beneficial ownership registry. They've also agreed on "moving forward in the near term on tax changes on financial institutions who have made strong profits during the pandemic."

Tax activists have suggested creating a global beneficial ownership registry in the wake of the war in Ukraine to clamp down on tax avoidance and evasion. Ian Gary, executive director of the Financial Accountability And Corporate Transparency, or FACT, coalition told Law360 that the Canadian government's decision is part of a watershed moment.

"We are seeing the dam break and what was once considered politically impossible — cracking down on anonymous and illicit finance — is now happening around the world," Gary said. "We applaud this Canadian commitment to create a public registry of the true owners of companies by the end of next year."

Gary added that the U.S. should "not fall behind global progress and instead, quickly implement our own Corporate Transparency Act this year."

The U.S. Congress enacted the Corporate Transparency Act in early 2021 as part of the Anti-Money Laundering Act within the National Defense Authorization Act. The transparency act, aimed at preventing shell corporations from moving dirty money, asks the U.S. Department of the Treasury's Financial Crimes Enforcement Network to produce a database showing who owns them, which would require companies to disclose that information.

Trudeau said Canada's move was related to the war in Ukraine.

"Canadians are working hard to overcome the challenges of the global pandemic and now face a world made less secure because of Russia's criminal war in Ukraine," Trudeau said.

The Organization for Economic Cooperation and Development said in a March 17 report that it expects the war between a major energy exporter in the Russian Federation and a major grain exporter in Ukraine to push the world off course for a strong economic recovery from the COVID-19 pandemic.

Ukraine grows enough food to feed 400 million people and provides 50% of grain used by the World Food Program, the United Nations food agency that won the 2020 Nobel Peace Prize, according to comments made by WFP Executive Director David Beasley during a live World Economic Forum panel Monday.

In August, Trudeau pledged to raise corporate taxes on large banks and insurance companies and introduce a new pandemic recovery dividend to raise CA$2.5 billion ($1.99 billion) for his housing program before winning re-election in September.

The prime minister's office did not immediately respond to a request for further information.

--Editing by Neil Cohen.

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