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Bill C-42

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First Session, Forty-fourth Parliament,

70-71 Elizabeth II – 1 Charles III, 2021-2022-2023

HOUSE OF COMMONS OF CANADA

BILL C-42
An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts
FIRST READING, March 22, 2023

MINISTER OF INNOVATION, SCIENCE AND INDUSTRY
 
91126


SUMMARY

This enactment amends the Canada Business Corporations Act to, among other things,

(a) require the Director appointed under that Act to make available to the public certain information on individuals with significant control over a corporation;

(b) protect the information and identity of certain individuals;

(c) add, or broaden the application of, offences and provide the Director with additional enforcement and compliance powers; and

(d) add regulatory authority to prescribe further requirements in certain provisions.

It also makes consequential and related amendments to other Acts.

Available on the House of Commons website at the following address:
www.ourcommons.ca


1st Session, 44th Parliament,

70-71 Elizabeth II – 1 Charles III, 2021-2022-2023

HOUSE OF COMMONS OF CANADA

BILL C-42

An Act to amend the Canada Business Corporations Act and to make consequential and related amendments to other Acts

His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

R.‍S.‍, c. C-44; 1994, c. 24, s. 1(F)

Canada Business Corporations Act

2018, c. 27, s. 183

1 (1) Paragraph 21.‍1(1)‍(a) of the Canada Business Corporations Act is replaced by the following:

  • (a)  Insertion start for Insertion end each individual with significant control,

    • Start of inserted block

      (i) their name and date of birth,

    • (ii) their residential address, and

    • (iii) their address for service, if it has been provided to the corporation;

  • (a.‍1) the citizenship of each individual with significant control;

    End of inserted block

2018, c. 27, s. 183

(2) Subsection 21.‍1(2) of the Act is replaced by the following:

Updating of information

(2) The corporation shall, Insertion start at the following times Insertion end , take reasonable steps to ensure that it has identified all individuals with significant control over the corporation and that the information in the register is accurate, complete and up-to-date:

  • Insertion start (a) Insertion end  at least once during each financial year of the corporation;

  • Start of inserted block

    (b) on the request of the Director; and

  • (c) at the times provided for in the regulations.

    End of inserted block

2022, c. 10, s. 431

2 (1) The portion of subsection 21.‍21(1) of the English version of the Act before paragraph (a) is replaced by the following:

Sending of information to Director

21.‍21 (1) A corporation to which section 21.‍1 applies shall send to the Director

2022, c. 10, s. 431

(2) Paragraphs 21.‍21(1)‍(a) and (b) of the Act are replaced by the following:

  • (a) on an annual basis, the information Insertion start determined by Insertion end the Director Insertion start from among that Insertion end in its register of individuals with significant control over the corporation, in the form and within the period that the Director fixes; and

  • (b) the information Insertion start determined by Insertion end the Director Insertion start from among that recorded Insertion end under subsection 21.‍1(3), within 15 days after the day on which it Insertion start is recorded and Insertion end in the form that the Director fixes.

2022, c. 10, s. 431

(3) Subsection 21.‍21(2) of the Act is replaced by the following:

Sending of information — certificates issued

(2) On or after the date shown on a certificate referred to in section 8 Insertion start or Insertion end subsection 185(4) or 187(4), a corporation to which section 21.‍1 applies shall send to the Director the information Insertion start determined by Insertion end the Insertion start Director from among that Insertion end referred to in paragraphs 21.‍1(1)‍(a) to (f), in the form and within the period that the Director fixes.

(4) Section 21.‍21 of the Act is amended by adding the following after subsection (3):

Offence

Start of inserted block
(4) A corporation that, without reasonable cause, contravenes subsection (1) or (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000.
End of inserted block

2018, c. 27, s. 183

3 Subsections 21.‍3(2) to (6) of the Act are repealed.

4 The Act is amended by adding the following before section 21.‍31:

Provision of information by Director

Start of inserted block
21.‍302 The Director may provide all or part of the information received under section 21.‍21 to a provincial corporate registry or a provincial government department or agency that is responsible for corporate law in that province.
End of inserted block

Information available to public

Start of inserted block
21.‍303 (1) The Director shall make available to the public the following information sent to the Director under section 21.‍21 for each individual with significant control:

  • (a) their name;

  • (b) their address for service, if it has been provided to the corporation;

  • (c) their residential address, if their address for service has not been provided to the corporation;

  • (d) the information referred to in paragraphs 21.‍1(1)‍(c) and (d); and

  • (e) any other prescribed information.

    End of inserted block

Exception

Start of inserted block
(2) Subsection (1) does not apply in respect of an individual who is less than 18 years of age or an individual to whom prescribed circumstances apply.
End of inserted block

Exemption on application

Start of inserted block
(3) If an individual with significant control or the corporation over which they have significant control applies to the Director to have any information referred to in subsection (1) in relation to the individual not made available to the public, the Director may choose to not make it available to the public, subject to any terms that the Director thinks fit,

  • (a) if the Director reasonably believes that making it available presents or would present a serious threat to the safety of the individual; or

  • (b) if the Director is satisfied that

    • (i) the individual is incapable,

    • (ii) the information is to be kept confidential under subsection 27(8) of the Conflict of Interest Act or a similar provision of an Act of the legislature of a province, or

    • (iii) prescribed circumstances apply to the individual.

      End of inserted block

2019, c. 29, s. 100

5 Subsection 21.‍4(1) of the Act is replaced by the following:

Offence

21.‍4 (1) Every director or officer of a corporation who knowingly authorizes, permits or acquiesces in the contravention of subsection 21.‍1(1), Insertion start 21.‍21(1) or (2), 21.‍3(1) Insertion end or 21.‍31(1) by that corporation commits an offence, whether or not the corporation has been prosecuted or convicted.

2001, c. 14, s. 105(1)

6 (1) Subparagraph 212(1)‍(a)‍(iii) of the Act is replaced by the following:

  • (iii) is in default for a period of one year in sending to the Director any fee Insertion start or any Insertion end notice, document or Insertion start other information Insertion end required by this Act, or

2001, c. 14, s. 105(3)

(2) Subsection 212(3.‍1) of the Act is replaced by the following:

Payment of incorporation fee or sending of information

(3.‍1) Despite anything in this section, the Director may dissolve a corporation by issuing a certificate of dissolution if the required fee for the issuance of a certificate of incorporation has not been paid Insertion start or if the corporation has not complied with subsection 21.‍21(2) Insertion end .

7 Section 237 of the Act is replaced by the following:

Inquiries

237  Insertion start (1) Insertion end  The Director may make inquiries of any person relating to compliance with this Act Insertion start and may, as part of any inquiry, require the person to provide any records or other documents or information Insertion end .

Response

Start of inserted block
(2) A person shall respond to any inquiry made under subsection (1).
End of inserted block

2001, c. 14, s. 124; 2018, c. 8, s. 36(1)

8 (1) The portion of section 258.‍1 of the Act before paragraph (b) is replaced by the following:

Content and form of documents

258.‍1 The Director may establish the requirements for the content and fix the form, including electronic or other forms, of notices, documents Insertion start or Insertion end other Insertion start information Insertion end sent to or issued by the Director under this Act and, in so doing, the Director may specify, among other things,

  • (a) the notices, documents Insertion start or other information Insertion end that may be transmitted in electronic or other form;

2018, c. 8, ss. 36(2) and (3)‍(E)

(2) Paragraphs 258.‍1(b) and (c) of the English version of the Act are replaced by the following:

  • (b) the persons or classes of persons who may sign or transmit the notices, documents Insertion start or other information Insertion end ;

  • (c)  Insertion start the manner of signing, whether Insertion end electronic or otherwise, or the actions that are to have the same effect as their signature; and

2018, c. 8, s. 36(4)‍(F)

(3) Paragraph 258.‍1(d) of the Act is replaced by the following:

  • (d) the time and circumstances when electronic notices, documents Insertion start or other information Insertion end are to be considered to be sent or received, and the place where they are considered to have been sent or received.

2001, c. 14, s. 135 (Sch.‍, s. 85)‍(E)

9 Subsection 259(1) of the Act is replaced by the following:

Proof required by Director

259 (1) The Director may require that a document or a fact stated in a document Insertion start or in any information Insertion end required by this Act or the regulations to be sent to the Director shall be verified in accordance with subsection (2).

2018, c. 8, s. 38(2)

10 Paragraph 261(1)‍(b) of the Act is replaced by the following:

  • Start of inserted block

    (a.‍2) prescribing what constitutes

    • (i) for the purposes of paragraph 2.‍1(1)‍(b), direct influence, indirect influence or control in fact, and

    • (ii) for the purposes of paragraph 21.‍31(3)‍(c), direct influence or indirect influence;

      End of inserted block

  • (b) requiring the payment of a fee in respect of the receipt, examination, filing, issuance or copying of any document Insertion start or other information Insertion end , or in respect of any action that the Director is required or authorized to take under this Act, and prescribing the amount of the fee or the manner of determining the fee;

2018, c. 8, s. 39

11 Section 261.‍1 of the Act is replaced by the following:

Payment of fees

261.‍1 A fee in respect of the receipt or copying of any document Insertion start or other information Insertion end shall be paid to the Director when it is received or copied, and a fee in respect of the examination, filing or issuance of any document Insertion start or other information Insertion end or in respect of any action that the Director is required or authorized to take shall be paid to the Director before the document Insertion start or other information Insertion end is examined, filed or issued or the action is taken.

2018, c. 8, s. 42

12 Section 262.‍2 of the Act is replaced by the following:

Publication

262.‍2 The Director must publish, in a publication generally available to the public, a notice of any decision made by the Director granting an application made under subsection 2(6), 10(2), Insertion start 21.‍303(3) Insertion end , 82(3) or 151(1), section 156 or subsection 171(2) or 187(11).

2001, c. 14, s. 129

13 (1) Paragraph 263.‍1(1)‍(a) of the Act is replaced by the following:

  •  

    (a) has sent to the Director a document Insertion start or other information Insertion end required to be sent under this Act;

2001, c. 14, s. 129

(2) Subsection 263.‍1(2) of the Act is replaced by the following:

Director may refuse to issue certificate of existence

(2) For greater certainty, the Director may refuse to issue a certificate described in paragraph (1)‍(c) if the Director has knowledge that the corporation is in default of sending a document Insertion start or other information Insertion end required to be sent under this Act or is in default of paying a required fee.

2018, c. 8, s. 44

14 Subsection 266(1) of the Act is replaced by the following:

Examination

266 (1) A person who has paid the required fee is entitled during usual business hours to examine and make copies of or take extracts from a document Insertion start or other information Insertion end — except Insertion start an application referred to in subsection 21.‍303(3) and any related document and Insertion end a report sent to the Director under subsection 230(2) — that is required to be sent to the Director under this Act or that was required to be sent to a person performing a similar function under prior legislation.

15 The Act is amended by adding the following after section 266:

Information not to be made available

Start of inserted block
266.‍1 (1) The Director shall not make available any information that could reasonably be expected to reveal the identity of a person who, on their own initiative, provides information relating to the commission or potential commission of a wrongdoing, or any information provided by the person in relation to the commission or potential commission, unless the person providing the information consents to its being made available.
End of inserted block

Exception — investigations

Start of inserted block
(2) Despite subsection (1), the Director may provide information referred to in that subsection to an investigative body referred to in subsection 21.‍31(2), the Financial Transactions and Reports Analysis Centre of Canada or any prescribed entity.
End of inserted block

Definition of wrongdoing

Start of inserted block
(3) In this section, wrongdoing includes

  • (a) a contravention of any provision of this Act or the regulations;

  • (b) the formation of a corporation for a fraudulent or unlawful purpose; or

  • (c) any fraudulent or dishonest actions of persons concerned with the formation, business or affairs of a corporation.

    End of inserted block

Consequential and Related Amendments

R.‍S.‍, c. A-1

Access to Information Act

16 Schedule II to the Access to Information Act is amended by adding, in alphabetical order, a reference to

Start of inserted block
Start of inserted block

Canada Business Corporations Act

Loi canadienne sur les sociétés par actions

End of inserted block
End of inserted block

and a corresponding reference to “subsection 266.‍1(1)”.

R.‍S.‍, c. 1 (5th Supp.‍)

Income Tax Act

17 Subsection 241(4) of the Income Tax Act is amended by striking out “or” at the end of paragraph (s), by adding “or” at the end of paragraph (t) and by adding the following after paragraph (t):

  • Start of inserted block

    (u) provide to an official of the Department of Industry, solely for the purpose of verifying and validating the data required to be sent under section 21.‍21 of the Canada Business Corporations Act in respect of a private corporation (in this paragraph referred to as the “particular corporation”), the following information:

    • (i) for each corporation (in this paragraph referred to as the “subject corporation”) that is related to or associated with the particular corporation in a taxation year,

      • (A) the name of the subject corporation,

      • (B) the jurisdiction of residence of the subject corporation,

      • (C) the business number of the subject corporation,

      • (D) the relationship between the particular corporation and the subject corporation,

      • (E) the number of shares of each class of the capital stock of the subject corporation that are owned by the particular corporation, and

      • (F) the percentage of all the issued and outstanding shares of each class of the capital stock of the subject corporation that are owned by the particular corporation, 

    • (ii) for each shareholder that holds at least 10% of any class of the capital stock of the particular corporation in a taxation year,

      • (A) the name of the shareholder,

      • (B) whether the shareholder is a corporation, partnership, individual or trust,

      • (C) as the case may be, the shareholder’s

        • (I) business number,

        • (II) partnership account number,

        • (III) social insurance number, or

        • (IV) trust account number, and

      • (D) the percentage of all the issued and outstanding shares of each class of the capital stock of the particular corporation that are owned by the shareholder, and

    • (iii) the taxation year to which the information described in subparagraphs (i) and (ii) relates.

      End of inserted block

2000, c. 17; 2001, c. 41, s. 48

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

2017, c. 20, s. 434

18 Paragraph 73(1)‍(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act is replaced by the following:

  • Start of inserted block

    (c) respecting the verification of the identity of persons and entities referred to in section 6.‍1 and requiring the reporting to government institutions or agencies of any discrepancies in information on the beneficial ownership or control of an entity arising out of that verification;

    End of inserted block

2022, c. 10

Budget Implementation Act, 2022, No. 1

19 Section 434 of the Budget Implementation Act, 2022, No. 1 is repealed.

Coordinating Amendment

2022, c. 10

20 On the first day on which both section 433 of the Budget Implementation Act, 2022, No. 1 and section 14 of this Act are in force, section 266 of the Canada Business Corporations Act is replaced by the following:

Examination

266 (1) A person who has paid the required fee is entitled during usual business hours to examine and make copies of or take extracts from a document or other information — except any information sent under section 21.‍21, an application referred to in subsection 21.‍303(3) and any related document and a report sent to the Director under subsection 230(2) — that is required to be sent to the Director under this Act or that was required to be sent to a person performing a similar function under prior legislation.

Copies or extracts

(2) The Director shall, on request, provide any person with a copy, extract, certified copy or certified extract of a document that may be examined under subsection (1).

Coming into Force

Order in council

21 (1) Subject to subsections (2) and (3), the provisions of this Act, other than section 20, come into force on a day or days to be fixed by order of the Governor in Council, but that day or those days must not be before the day on which section 1 comes into force.

Order in council

(2) Sections 1 and 19 come into force on a day or days to be fixed by order of the Governor in Council.

Order in council

(3) Sections 2, 4 to 6 and 17 come into force on a day to be fixed by order of the Governor in Council, but that day must not be before the day on which section 431 of the Budget Implementation Act, 2022, No. 1 comes into force.

Published under authority of the Speaker of the House of Commons


EXPLANATORY NOTES

Canada Business Corporations Act
Clause 1: (1) Relevant portion of subsection 21.‍1(1):

21.‍1 (1) The corporation shall prepare and maintain, at its registered office or at any other place in Canada designated by the directors, a register of individuals with significant control over the corporation that contains

  • (a) the names, the dates of birth and the latest known address of each individual with significant control;

(2) Existing text of subsection 21.‍1(2):

(2) At least once during each financial year of the corporation, the corporation shall take reasonable steps to ensure that it has identified all individuals with significant control over the corporation and that the information in the register is accurate, complete and up-to-date.

Clause 2: (1) to (3) Existing text of subsections 21.‍21(1) and (2):

21.‍21 (1) A corporation to which section 21.‍1 applies shall

  • (a) on an annual basis, send to the Director the information in its register of individuals with significant control over the corporation, in the form and within the period that the Director fixes; and

  • (b) within 15 days after the day on which it records information under subsection 21.‍1(3), send the information to the Director, in the form that the Director fixes.

(2) On or after the date shown on a certificate referred to in section 8, subsection 185(4) or 187(4), a corporation to which section 21.‍1 applies shall send to the Director the information referred to in paragraphs 21.‍1(1)‍(a) to (f) in relation to individuals with significant control over the corporation, in the form and within the period that the Director fixes.

(4) New.
Clause 3: Existing text of subsections 21.‍3(2) to (6):

(2) Shareholders and creditors of the corporation or their personal representatives, on sending to the corporation or its agent or mandatary the affidavit referred to in subsection (3), may on application require the corporation or its agent or mandatary to allow the applicant access to the register of the corporation referred to in subsection 21.‍1(1) during the usual business hours of the corporation and, on payment of a reasonable fee, provide the applicant with an extract from that register.

(3) The affidavit required under subsection (2) shall contain

  • (a) the name and address of the applicant;

  • (b) the name and address for service of the body corporate, if the applicant is a body corporate; and

  • (c) a statement that any information obtained under subsection (2) will not be used except as permitted under subsection (5).

(4) If the applicant is a body corporate, the affidavit shall be made by a director or officer of the body corporate.

(5) Information obtained under subsection (2) shall not be used by any person except in connection with

  • (a) an effort to influence the voting of shareholders of the corporation;

  • (b) an offer to acquire securities of the corporation; or

  • (c) any other matter relating to the affairs of the corporation.

(6) A person who, without reasonable cause, contravenes subsection (5) is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months, or to both.

Clause 4: New.
Clause 5: Existing text of subsection 21.‍4(1):

21.‍4 (1) Every director or officer of a corporation who knowingly authorizes, permits or acquiesces in the contravention of subsection 21.‍1(1) or 21.‍31(1) by that corporation commits an offence, whether or not the corporation has been prosecuted or convicted.

Clause 6: (1) Relevant portion of subsection 212(1):

212 (1) Subject to subsections (2) and (3), the Director may

  • (a) dissolve a corporation by issuing a certificate of dissolution under this section if the corporation

    • .‍.‍.  

    • (iii) is in default for a period of one year in sending to the Director any fee, notice or document required by this Act, or

(2) Existing text of subsection 212(3.‍1):

(3.‍1) Despite anything in this section, the Director may dissolve a corporation by issuing a certificate of dissolution if the required fee for the issuance of a certificate of incorporation has not been paid.

Clause 7: Existing text of section 237:

237 The Director may make inquiries of any person relating to compliance with this Act.

Clause 8: (1) to (3) Existing text of section 258.‍1:

258.‍1 The Director may establish the requirements for the content and fix the form, including electronic or other forms, of notices and other documents sent to or issued by the Director under this Act and, in so doing, the Director may specify, among other things,

  • (a) the notices and documents that may be transmitted in electronic or other form;

  • (b) the persons or classes of persons who may sign or transmit the notices and other documents;

  • (c) their signature in electronic or other form, or the actions that are to have the same effect for the purposes of this Act as their signature; and

  • (d) the time and circumstances when electronic notices and documents are to be considered to be sent or received, and the place where they are considered to have been sent or received.

Clause 9: Existing text of subsection 259(1):

259 (1) The Director may require that a document or a fact stated in a document required by this Act or the regulations to be sent to the Director shall be verified in accordance with subsection (2).

Clause 10: Relevant portion of subsection 261(1):

261 (1) The Governor in Council may make regulations

  • .‍.‍.  

  • (b) requiring the payment of a fee in respect of the receipt, examination, filing, issuance or copying of any document, or in respect of any action that the Director is required or authorized to take under this Act, and prescribing the amount of the fee or the manner of determining the fee;

Clause 11: Existing text of section 261.‍1:

261.‍1 A fee in respect of the receipt or copying of any document shall be paid to the Director when it is received or copied, and a fee in respect of the examination, filing or issuance of any document or in respect of any action that the Director is required or authorized to take shall be paid to the Director before the document is examined, filed or issued or the action is taken.

Clause 12: Existing text of section 262.‍2:

262.‍2 The Director must publish, in a publication generally available to the public, a notice of any decision made by the Director granting an application made under subsection 2(6), 10(2), 82(3) or 151(1), section 156 or subsection 171(2) or 187(11).

Clause 13: (1) Relevant portion of subsection 263.‍1(1):

263.‍1 (1) The Director may provide any person with a certificate stating that a corporation

  • (a) has sent to the Director a document required to be sent under this Act;

(2) Existing text of subsection 263.‍1(2):

(2) For greater certainty, the Director may refuse to issue a certificate described in paragraph (1)‍(c) if the Director has knowledge that the corporation is in default of sending a document required to be sent under this Act or is in default of paying a required fee.

Clause 14: Existing text of subsection 266(1):

266 (1) A person who has paid the required fee is entitled during usual business hours to examine and make copies of or take extracts from a document, except a report sent to the Director under subsection 230(2), that is required to be sent to the Director under this Act or that was required to be sent to a person performing a similar function under prior legislation.

Clause 15: New.
Income Tax Act
Clause 17: New.
Proceeds of Crime (Money Laundering) and Terrorist Financing Act
Clause 18: Relevant portion of subsection 73(1):

73 (1) The Governor in Council may, on the recommendation of the Minister, make any regulations that the Governor in Council considers necessary for carrying out the purposes and provisions of this Act, including regulations

  • .‍.‍.  

  • (c) respecting the verification of the identity of persons and entities referred to in section 6.‍1;

Budget Implementation Act, 2022, No. 1
Clause 19: Existing text of section 434:

434 On the first day on which both section 44 of An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act and the Competition Act, chapter 8 of the Statutes of Canada, 2018, and section 433 of this Act are in force, section 266 of the Canada Business Corporations Act is replaced by the following:

 

266 (1) A person who has paid the required fee is entitled during usual business hours to examine and make copies of or take extracts from a document, except any information sent under section 21.‍21 and a report sent to the Director under subsection 230(2), that is required to be sent to the Director under this Act or that was required to be sent to a person performing a similar function under prior legislation.

 

(2) The Director shall, on request, provide any person with a copy, extract, certified copy or certified extract of a document that may be examined under subsection (1).


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