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Anti-Money Laundering

CPAs can help companies adapt to new beneficial ownership rules, experts say

Corporate legislation improving transparency—introduced to help counter money laundering—puts pressure on Canadian businesses to voice who owns what

Two women standing behind glass, drawings and adhesive notesCPAs can play a role by guiding companies through the new requirements as beneficial ownership legislation settles in and expands across provinces and territories, eventually evolving into anticipated country-wide requirements (Getty/10’000 Hours)

As Canada’s private businesses adjust to new federal beneficial ownership requirements, CPAs can play a key role in the transition, experts say. 

Under legislative changes to the Canada Business Corporations Act (CBCA), effective since mid-June, the government aims to increase corporate transparency and counter the country’s money-laundering, terrorist financing, tax evasion and aggressive tax avoidance issues. Although these changes will generally apply to federal private corporations, the provinces have agreed to enact similar rules provincially, with some already moving forward. 

Obligated corporations, under the CBCA, are now required to track and record individuals who have significant control of the corporation in a register—such as a logbook, database or spreadsheet. At least initially, this register must be on hand as opposed to reported to the government. Significant penalties—including fines up to $200,000, and imprisonment up to six months—can apply if a register is not created, kept up-to-date and available upon request. 

Individuals with significant control (“ISCs”) are generally those who own, control or direct a certain number of shares, or have substantial influence over the corporation without owning any shares. The CBCA now defines the level of share ownership that is the threshold for significant control as either 25 per cent or more of shares with voting rights, or 25 per cent or more of all the shares based on their fair market value. For each ISC, the register must include name, date of birth, address, country (where they are a resident for tax purposes), date control started and ended (i.e. when shares were bought and sold) and a description of the ISC’s control.

Though a step in the right direction helping position Canada as a safe and stable place to invest and do business, the impact—logistical and financial—on businesses is significant, says Ken Griffin, CPA and partner with PwC. “This is another regulatory burden for business owners to comply with,” he says. 


CPAs can play a role by guiding companies through the new requirements as the legislation settles in and expands across provinces and territories, eventually evolving into anticipated country-wide requirements, adds Michele Wood-Tweel, CPA Canada’s vice-president of regulatory affairs. 

“[Many] positions (controller, CFO, owner, director, chair, committee or board member) are held by CPAs and they have different responsibilities attached to them,” she says. “And those individuals, as CPAs in various roles, will now have new responsibilities to consider as affected companies are required to comply with these new requirements under the CBCA.”

Here are three key challenges business can expect to face and how CPAs can assist.


As the beneficial ownership requirements passed into federal law in December 2018 and came into effect in 2019, the pressure mounts for companies to prepare, respond and comply with the new requirements, says Wood-Tweel. 

“It happened rather quickly…that obviously can be very good in terms of strengthening the regime that aims to combat money laundering and terrorist financing, but it also means the rubber is hitting the road as affected companies have the responsibility to comply,” she says.

Limited direction on how to comply with the legislation, and accurately extract the information needed, also presents challenges, adds Griffin. 

CPAs, as business owners, senior financial employees and/or service providers, will be at the forefront of this evolving issue taking in any new communications from governments, both provincial and federal, and delivering and reacting to any necessary updates, as required.

“CPAs have an important role to play in helping clients become aware of the rules,” says Griffin. “It’s a new requirement that isn’t automatically on the radar screen.” 


Deciphering exactly who owns what in a company, and at what value, could be straightforward to complex, dependent on the organization’s size and structure, says Wood-Tweel.

The many ways an individual can control or influence an organization, from owner to board member to shareholder, complicates the assessment process, says Griffin.  Furthermore, ascertaining what amount of control one has—such as share value or number of votes—may be fluid, requiring ongoing updates. 

“For many private corporations, there is no market value in the same way that public corporations have, so it’s a new requirement that is at least in theory difficult to comply with properly because the information is not readily available,” he says.   

One common complication will be where a corporation has issued fixed-value shares. Although the corporation’s value will fluctuate, the value of these shares may not.

Whether they are a beneficial owner themselves or are helping a business establish who is, CPAs are well equipped to determine beneficial ownership across an organization and to assist in determining the ISCs.   

“[Practitioners] may quickly find out that they need to be able to provide advice or even assist with calculations, depending on the nature of their practice and client services that they are involved in,” says Wood-Tweel. 


Regardless of a company’s size or structure, a process should be in place to comply with the legislation, suggests Wood-Tweel. This, she says, requires determining what the system will need to include, such as what information will need to be gathered and from whom (shareholders, creditors, board members, etc.), and how the information obtained will be stored, updated, maintained and accessed.

“Companies have a new process to run, they’ve got information to get that they may not already have on hand, and they may, as well, require assistance in pulling together the information because it may not be simple,” she says.   

Here CPAs can use their expertise and attention to detail to help companies establish a seamless, well-planned and executed process that involves the right players and addresses the key issues, including keeping information on record accessible, accurate and up-to-date as required by the CBCA.

“Clearly we have an important role in helping with the compliance and recognizing it’s a new requirement that isn’t at the moment automatically linked with services currently being provided in corporate financial statements or tax returns,” adds Griffin. 


Find out what Canada’s beneficial ownership legislation means for the accounting profession with What Ottawa’s corporate reporting overhaul means for CPAs.


As Canada works to establish beneficial ownership requirements for all jurisdictions, companies should stay attuned as the landscape develops, says Michele Wood-Tweel, CPA Canada’s vice-president of regulatory affairs.

British Columbia, Manitoba, Saskatchewan and Quebec have already taken steps forward. In May, B.C. was the first province to enact its own legislation requiring registers of beneficial ownership information for provincially incorporated companies. B.C.’s rules will begin to apply on May 1, 2020. Manitoba enacted their rules in October, which come into force on April 8, 2020 or earlier if a date is fixed by proclamation*. Saskatchewan is set to amend legislation this fall with its legislative assembly now in session. Additionally, Quebec recently announced an online consultation process to strengthen corporate transparency where until December 15, organizations, companies and citizens can offer insights under three categories: how businesses will obtain and report the information, how landowners will declare information and accessibility of a register.

“This isn’t going to be a once and done story,” says Wood-Tweel. “This is going to be a continuing theme because the anti-money laundering and anti-terrorist financing regime is being enhanced in Canada. The experience with this is going to evolve. Members are going to need to stay engaged and remain alert to developing information and new requirements.”

As a CPA, watch out for these developments:
• Introduction of provincial and territorial legislation, and whether it aligns with other jurisdictions in Canada.
• How beneficial ownership information, presently held by organizations, will be requested, accessed and used by authorities such as the CRA, law enforcement, creditors and so on.  
• Creation of registries, external to the companies, that would store information and be accessible to authorities, and whether these registries become publicly accessible.  
• Additional requirements for businesses already affected or more businesses impacted by new legislation down the line.

“Consistency is clearly important…for advisers who need to assist businesses,” says Ken Griffin, CPA and partner with PwC. “Hopefully, we will have some time to learn the system and have some feedback from the government in terms of interpretation, before there’s a move to broaden in terms of an external registry concept.”

*The article has been updated to correct the date Manitoba's rules will come into force.