While the rest of the country debates privacy issues, British Columbia has boldly proclaimed that all owners of land in the province will have to publicly reveal their identities.
In a budget revealed Tuesday in Victoria, finance minister Carole James announced the country’s first public register of land owners, which will require those behind numbered companies to reveal themselves.
“Lack of transparency in the land registry means it is not clear who owns nearly half of Vancouver’s more expensive properties. This is wrong,” states the provincial budget document. “The concealment of beneficial ownership can be part of international webs used to facilitate tax evasion, money laundering, corruption and other criminal activities.”
“Having a registry means we’ll know who owns what,” the budget states.
While B.C.’s announcement falls short of a public registry of all corporate owners, which is currently available in the U.K. and will soon be implemented across the EU, it is the first time those who own real estate in Canada will not be allowed to hide behind numbered companies or private family trusts.
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Richard LeBlanc, a professor of corporate governance at York and Harvard Universities, called the announcement “long overdue” in Canada.
“It shows leadership, especially in the real estate market where owners can withhold their name,” he said. “This puts pressure on key provinces such as Ontario, Quebec and Alberta to follow suit, not in years but in months. The sooner that all 10 provinces, three territories and the federal follow suit, the better.”
In line with a joint federal-provincial announcement last year, B.C. will only require numbered corporations in the province to keep information on the identities of its true owners on hand, so it is available should the authorities ever ask for it.
This falls shorts of the kind of full transparency needed, Leblanc says.
“I would suggest that the corporate registry information be available to the media and stakeholders. Media tends to be independent and stakeholders have a right to know as well.”
James Cohen, director of policy and programs at Transparency International Canada, read the announcement with tepid optimism.
“There is no corporate (beneficial ownership) registry here,” he said. “It’s great to see they’re taking the ramifications of Vancouver property sales and alleged money laundering seriously. They could have gone further on corporate beneficial ownership.”
Breaking the beneficial ownership log jam could push others to take even broader steps forward, Cohen says.
“Now that one province has stepped up on its obligations, that will hopefully show goodwill to the federal government to move ahead and maybe be a little bit bolder.”
Sasha Caldera, who leads the beneficial ownership program at Canadians for Tax Fairness, said B.C.’s plan only attacked the most visible part of money laundering that ends up in real estate.
“Money launderers can create shell companies and buy anything, not just real estate. That’s a risk not only in B.C. but across Canada.”
The beneficial land ownership registry was announced as part of a package of housing reforms in B.C. that also included increases to the foreign buyers’ tax from 15 to 20 per cent and the introduction of a speculation tax on foreign and domestic homeowners who don’t pay income taxes in B.C.