Land Owner Transparency Act White Paper

The Government of British Columbia has published a White Paper  setting out draft legislation that would require registration of interests  in land in land that do not appear on title. You can read the White Paper here.

Comments are due by August 19, 2018, and you may send your comments as follows:

fcsp@gov.bc.ca
or mailed to: Financial and Corporate Sector Policy Branch Ministry of Finance PO Box 9418 Stn Prov Govt Victoria BC V8W 9V1 

On my initial reading of this legislation, it does not appear well thought out, or well drafted. The introduction by the Minister of Finance includes the following Trumpian rhetoric:

For too long, people have used legal entities to hide the true ownership of real estate in B.C. The use of entities such as numbered companies, offshore and domestic trusts, and corporations has made it difficult to expose tax frauds and those engaged in money laundering. 

This problem is well documented. In 2016, Transparency International Canada released a report indicating that of the 100 most valuable residential properties in Greater Vancouver, nearly one-third were owned by shell companies. Furthermore, data leaks such as the Panama Papers and the Paradise Papers have provided examples of Canada’s reputation as an attractive place to create anonymous companies and hide wealth.  

The reality is that the vast majority of corporations and trusts that have an interest in land have nothing to do with tax evasion or money laundering.  I rather doubt anyone engaged in money laundering is going to register if this legislation is passed. It will primarily affect ordinary business persons who legitimately incorporate their businesses, and  ordinary people who use trusts for estate planning to provide for their spouses, children and grandchildren. It is unnecessarily intrusive and bureaucratic.