VANCOUVER—B.C.’s NDP government tabled legislation today that aims to lift the veil on secretive property ownership in the province.

Currently, land owners can hold property using structures like corporations and trusts or can hold land indirectly, concealing who the true owner is (also known as the beneficial owner). All of those structures can hide the true owners of real estate, raising the risk that property can be used for money laundering, fraud or tax evasion.

“There will be requirements to identify the true owners ... and there will be fines in place for people who are not complying,” said Carole James, B.C.’s finance minister.

“And then if there are investigations that need to be done, the information will be there, it’ll be available, and I think that’s the critical piece here. When there are loopholes, there are illegal activities that can take place.”

But an organization that represents estate planners is warning that the public registry could put land owners’ safety at risk.

In a submission to the B.C. government during the public consultation process for the proposed legislation, the Society of Trust and Estate Practitioners wrote that a property owner who has family in, or regularly travels back to, a country where kidnapping is common could have a good reason to keep information about their assets private.

Read more:

Who owns these multimillion-dollar properties in Vancouver? With this new registry, the public could soon find out

Dirty money is driving up Toronto real estate prices, report says

B.C. presses for federal resources on money laundering

Disclosure could also be detrimental to a property owner’s business interests, or “vulnerable adults may be preyed upon by individuals with access to the information in the registry,” the society wrote.

Ron Usher, general counsel for BC Notaries, said real-estate ownership needs to be more transparent and his organization supports the creation of the registry.

But, he warned, questions remain about how much bureaucracy the new disclosure rules will add to property transactions and whether they’re targeted at the right activity. Trusts and corporate ownership are used properly, and without nefarious dealings, by many land owners, Usher said.

“We’re going to be very focused on (property) ownership, but from a money laundering and crime point of view, shouldn’t we be more concerned about the source of funds?” he asked.

If the Land Ownership Transparency Act passes, B.C. will be the first jurisdiction in Canada to require the public disclosure of land ownership.

The register will be administered by B.C.’s Land Title and Survey Authority, which already provides a publicly accessible registry that shows information like who is listed on property titles and details about the mortgages on properties.

When the registry is up and running, it will also be possible to look up the names of all corporate interest holders, beneficial owners or partners, as well as citizenship and the primary residents. More detailed information, such as date of birth, social insurance numbers and individual tax numbers, will be available to law enforcement, the Canada Revenue Agency and other regulatory agencies.

Corporations, trusts and partnerships that don’t disclose their owners could face fines of up to $100,000 or 15 per cent of the assessed value of the property, whatever is greater. Land owners who hold property through companies or trusts registered in offshore tax havens won’t be exempt from the rules requiring them to disclose ownership.

James said that recent revelations about the extent of money laundering that went on in the province’s casinos for many years have spurred public interest and concern in closing loopholes like secretive property ownership.

Earlier this week, James’ ministry and B.C.’s attorney general received two separate reports on money laundering in the real-estate sector. After the ministries review the reports, they plan to publicly release them later this spring, James said.

Transparency International Canada, an anti-corruption organization, and other anti-money laundering experts have warned that other provinces and the federal government need to follow B.C.’s lead to make sure that illegitimate activity doesn’t travel to less lenient jurisdictions.

Loading... Loading... Loading... Loading... Loading... Loading...

In the latest federal budget, the government proposed changing the Canada Business Corporation Act to make beneficial ownership information “more readily” available to the Canada Revenue Agency and law enforcement. That information will not, however, be available to the public, as B.C.’s proposed registry would be.

In 2016, Transparency International Canada released a report that included an analysis of the 100 most expensive residential properties in British Columbia. That analysis showed that nearly half of those properties were held in shell companies, trusts or through nominee owners (that is, the title holders’ occupations did not match with the incomes required to buy real estate valued in the tens of millions).

Transparency International Canada recently released a followup report looking at real-estate ownership in Toronto. That report tracked 1.4 million real-estate sales over a 10-year period and showed that in that time, private companies — which do not have to disclose their owners — have bought $28.4 billion in real estate.

James said those two reports “certainly raised red flags” about secretive property ownership in British Columbia.

Read more about: