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If we can make it harder for terrorists and organized crime to fund their activities, we reduce the risk to the public. Politicians who aren't willing to support a public registry of the beneficial owners of companies are lying if they turn around and pretend to be tough on crime or terrorism.
Ottawa (16 Nov. 2018) — A report this week from the House of Commons Standing Committee on Finance missed an important opportunity to push for an effective tool to deal with the problems of funding for terrorism, money laundering by organized crime, and tax dodging.
A public registry of the real owners of companies and trusts is seen by experts as the “gold standard” when it comes to stopping people from using shell companies and trusts to hide illegal financial transactions. The report from FINA does recommend a registry of persons and entities with at least 25% ownership or voting rights in companies, which is a step forward, but refused to recommend that the registry be public.
The report, Confronting Money Laundering and Terrorist Financing: Moving Canada Forward, was a statutory review of the Proceeds of Crime and Terrorist Financing Act.
NDP minority report calls for a public registry
The committee split along party lines on the issue of a public registry. Liberal and Conservative members opposed it, while the NDP issued a minority report calling for a public registry.
What makes the Conservative position on the issue particularly disappointing is that a few months ago they acknowledged that a public registry was a very effective tool in the fight against organized crime. During the debate on legalizing cannabis, Conservatives supported an amendment to the legislation that would have created a public registry showing who controlled companies involved in cannabis production.
Experts agree that public registry more effective
Experts on fighting corruption and tax fairness who appeared before the Committee agreed that a registry showing the real owners of companies or trusts need to be public. Canadians for Tax Fairness pointed out that a public registry “would make it much easier for tax authorities and law enforcement to go after criminals.” A public registry would also ensure greater scrutiny, and when there are concerns that the police and Canada Revenue Agency (CRA) resources are already stretched, that is vital.
Canadians pay high price for not having a public registry
As has been widely reported in Canada, it’s easier to set up a secret company than get a library card. Without a public registry that won’t change. It will continue to be very hard to catch individuals engaged in financing terrorism, money laundering or tax evasion.
If we can make it harder for terrorists and organized crime to fund their activities, we reduce the risk to the public. Politicians who aren't willing to support a public registry of the beneficial owners of companies are lying if they turn around and pretend to be tough on crime or terrorism.
A public registry of beneficial owners will also make it easier to crack down on tax evasion. Just one part of the problem of tax havens — corporations using tax havens — costs Canada between $10 billion and $15 billion a year. That plus other money Canadians are losing because of tax evasion are desperately needed for things like health care, education and public infrastructure.