Author Archives: Techtonik Legal

Canada Considering Creating a Database of Beneficial Owners of its Corporations

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CBC is reporting that the Canadian government is mulling over the possibility of emulating jurisdictions trying to curb the problems of the individuals who can (still a little too easily) hide behind corporations, by creating a public register of  beneficial owners. The Federal government may thus amend the statute that governs corporations created under the federal regime (as opposed to this incorporated under provincial statutes), so as to force them to disclose who the real owners are.

To be clear, yes the federal statute at issue already says corporations created under the CBCA must create and maintain a register stating who the real owners are, and logging a modicum of info as to each, including date of birth, etc. However, until now, this info can remain secret (even IF the register is actually created and maintained), locked in a minute-book that no one ever sees, so to speak. The change that the government is now contemplating would make such information part of a PUBLIC register, thereby taking this info from entirely private to public -of course subject to hiding really private info.

As to this, I’d say that with everything I have seen over the years, with individuals declaring false names and addresses (e.g., PO boxes, etc.), holding shares for somebody else (under scrutiny or investigation), declaring an other lawyer’s office at the domicile of a shareholder, etc., it’s not a moment too soon! I think we could definitely do with a little more transparency as to Canadian corporations. The current regime is simply too naïve to lead to a system that one can rely on to know who’d really behind any private corporation. Want an example? Check out this story in this morning’s paper (in French), about a security company that the Federal government apparently regularly hires. Blink, blink… yes, I know.

Mind you, rules are fine, but having rules that are serious enough (with strong enforcement behind them) is something else. Not sure the current set of rules is quite adequate to convince overly creative (read scumbag) businessmen, fraudsters and mafiosi to play by them whenever they use corporate vehicles to do their dirty work.

Meanwhile, Québec is doubling down on its own efforts to curb this kind of problem. Starting next month, corporations registered in the province will have to provide more info on their owners, provide IDs of directors, etc. Québec is also starting to require corporations to determine who the real owners are, and to collate that info, internally at least. Apparently, starting next year, the REQ register will also include info on beneficial owners behind the ones listed as shareholders, and even start allowing searches of the REQ database to identify what entities any given individual is involved in. Not a moment too soon!

It’s February: Time to Implement a Security Freeze on Your Credit?

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The province of Québec adopted the Credit Assessment Agents Act a while back, so as to better protect consumers against the practices of credit agencies such a Equifax. When that particular law came into effect, however, the legislator opted to wait before implementing one particular section dealing with what is generally referred to as a “security freeze”.

Good news on that front: since February 1st 2023, Section 8 of the act is now in force, thereby providing Quebecers who wish to do so with the possibility of effecting a credit freeze. As described in the act, a  security freeze prohibits any credit agency (you know, those which hold your credit report and give you a credit score) from communicating your personal information and your credit report when the information was requested by a business claiming that it needs it to provide you with credit.

When such a freeze is in place, for example, a bank will simply be told by the credit bureau it can’t disclose your credit report as you have previously elected to implement a security freeze. In the normal course of things, the bank will then have to have a talk with you or whoever is impersonating you) about this, thereby stopping the attempt to open credit facilities in your name.

Of course, if you’re shopping around of a new credit card, this may prove an inconvenience for you but if you’re not in the process of hoping to secure more credit in the foreseeable future, this is definitely something you may want to think about doing.

Contrary to some subscription services offered by credit agencies, a security freeze must be available to Quebecers FREE OF CHARGE. Though I’m sure implementing one requires jumping through hoops, it may be worthwhile to avoid the eventual headache of having to deal with identity theft! By the way, so far, the act at issue applies to Equifax and Trans-Union, so you will have to contact both these entities to see about implementing a freeze for yourself.

American Farmers Win Right to Repair their John Deere Tractors -Sort of

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The media’s reporting that the American Farm Bureau Federation signed a Memorandum of understanding -or MoU) with the maker of JOHN DEERE tractors to facilitate maintenance and repair of that kind of equipment in the future, without necessarily going through authorized dealers and technicians.

In today’s world, farm tractors are complicated bits of machinery which can no longer be repaired on-site by farmers themselves. All too often, the documentation, information and specialized tools required to perform requisite maintenance or repairs just isn’t available at large, so that the only possibility for farmers is to obtain the services of technicians authorized by John Deere itself. Contrary to how it used to be, a farmer can no longer hope to service his (her) tractor himself (herself), this is simply no longer possible; even calling upon a local mechanic to do so may be problematic as he (she) may not even have all the information, documentation and tools to get the job done.

Now, further to execution of the recent MoU, the manufacturer should make available to John Deere tractor owners documentation, information, specifications and specialized tools (like software) which may be require to allow or facilitate maintenance or repairs on tractors of that make.

Interestingly, the MoU states it does not force John Deere to disclose any confidential information or trade secrets, something that may very well end-up gutting the right to repair, some feel. After all, little prevents a company from claiming things like detailed specifications and documentation are proprietary and/or confidential or secret.

It will be interesting to see how John Deere goes about this, in practice, and the extent to which this kind of right to repair arrangement may spread to other manufacturers, industries or activities, whether in the U.S. or elsewhere like in Canada. In the meantime, at the very least, this is a step in the right direction.