Category Archives: Legislation

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.

Even More Changes Coming for the Competition Act and a Story About Rental Rates Shenanigans Illustrating Why It May Be Needed

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Not content with the 2022 changes to the Competition Act, Canada was announcing this week that it will be looking into making even more changes, based on a consultation it has now undertaken. Use of technology is changing how society is going about things and the economy is of course following suit. In a context of constant changes, it’s not very surprising we also need to keep updating our statute that deals with preserving competition between businesses.

Canada will be looking to make changes such as those discussed in a recent document published by the government and which provided us with a fair indication as to what may be in store for the Competition Act, moving forward.

This is happening in Canada but other countries like the U.S. are experiencing the same kind of thing.

In a story that seems a good example of what we’re talking about, the Verge was reporting a story earlier this week about the U.S. Department of Justice (DOJ) looking into practices by some American landlords (lessors) potentially fixing prices for rental space (to a degree), by using the RealPage software to collaborate.

The story at issue relates to the fact that, nowadays, large landlords often subscribe to a platform called YieldStar (connected to RealPage) that easily allows them to share part of the data about their rental rates, in various markets. Over time, the system has enough data to suggest possible rentals rates to landlords looking to rent premises, as compared to other deals in the same area for such premises. In practice, this may lead to higher rates than would otherwise have been the case, had landlords not shared info like this.

In essence, if every landlord ends-up sharing data with other landlords in the market (in this instance, through use of a specific software), we may end-up with a coordinated effort that results in an increase in rental rates across the country. If this amounts to collusion, then legally there may be an issue of competition law, by the sheer use of RealPage and YieldStar, including certain message boards that are part of that offering. That’s the question the DOJ is looking into anyway.

Interesting fact pattern that’s symptomatic of the interaction which technology can have with competition law. Sharing is fine, but cartel-like practices may be crossing a line.