Tag 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!

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.

Canada One Step Closer to Adopting C-27 and IA-specific Legislation

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The Canadian government reiterated last week that we’re collectively moving forward with the revamp of the country’s federal privacy legislation, including an offshoot meant to curb (better control, some would say) rampant and unrestricted adoption of artificial intelligence (“AI”) throughout. At the same time, the bill at issue (named C-27) moved to the second reading stage, bringing us one step closer to a formal adoption of this piece of legislation.

Bill C-27 will reinforce personal information protection throughout Canada but updating a law that is now more than 20 years old and, many would say, quite outdated. The new version of the personal information protection statute at issue will include provisions meant to generally empower individuals in a way that allows them to exercise control over their data, something the current version of the legislation has largely failed to do. Though it’s not quite GDPR, many see this new version of the Canadian privacy legislation as a much needed shot in the arm for our federal privacy regime.

At the same time, this project will likely also include Canada adopting a whole new statute meant to better control the use of AI (e.,g. by businesses), including new rules to try and minimize scenarios where AI is implemented in a way that is incompatible with personal rights and freedoms as well as Canadian values.

The Canadian government clearly says it intends to move forward with all of these. Now, it’s mostly a question of going through the rest of the legislative process, but there’s little doubt that this thing will become law before long. Stay tuned.