After tax haven controversies, province weighs corporate registry law
The New Brunswick government is looking at a proposal to require corporations in the province to reveal who their owners are.
It's part of an initiative pushed by the federal government in the wake of recent controversies about offshore tax havens.
In December, federal Finance Minister Bill Morneau and all of his provincial counterparts agreed to work on a standardized corporate registration system for the entire country.
If adopted, the changes could shed new light on some of the largest companies operating in New Brunswick.
"This is very encouraging," said Dennis Howlett, the executive director of Canadians For Tax Fairness, a lobby group opposed to offshore tax havens. "Bringing Canada up to global standards is a very important thing to do."
No obligation to disclose
In New Brunswick, Service New Brunswick manages the corporate registry. For a fee, the public can log in and see a company's filings, including a list of its directors.
Directors of companies are often also its owners but not always. Directors can be outside advisers to the corporation who do not own a share of the company.
Service New Brunswick spokesperson Valerie Kilfoil said the staff from the Crown corporation and the Department of Finance are working on the issue along with their counterparts in other provinces.
She did not say when legislation might be introduced.
It's easy to learn who owns companies whose shares are publicly traded on stock markets, but privately held corporations have no obligation to disclose their owners.
Changes could be revealing
The change, if it happens, would reveal the owners of some well-known, privately held New Brunswick corporations.
The Irving companies have a complex ownership structure. As recently as 2016, the various businesses were owned by eight offshore holding companies based in Bermuda, according to a Statistics Canada database.
Those companies were in turn controlled by a Bermuda-based trust. It was dissolved after Irving's three sons decided about a decade ago to divide up the family conglomerate.
It's not clear what those Bermuda companies own today or whether they even still exist.
Arthur Irving, the head of Irving Oil, then established his own trust in Bermuda with Irving Oil as its main asset.
In a 2016 letter to Atlantic Business Magazine, J.K. Irving said that J.D. Irving Ltd. and its associated companies are now "owned and controlled by entities and citizens resident in Atlantic Canada."
Irving Oil's corporate registration lists nine people as its directors, including Arthur Irving, executive vice-president Sarah Irving, CEO Ian Whitcomb, and six outside directors.
J.D. Irving Ltd.'s registration lists three directors: J.K. Irving and his sons, co-CEOs Jim Irving and Robert Irving.
Expert skeptical
Howlett said one of the obstacles to more transparency has been that corporate registries fall under provincial jurisdiction.
"It's hard to get all of the provinces and the federal government on the same page on this issue, but we're encouraged this is being taken seriously now," he said.
But international transparency advocate Don Bowser said he is skeptical that New Brunswick will ever pass legislation to reveal the owners of companies.
"It's a moot point and it's only been lip service paid by the feds," he said. "There has been no serious effort. … I've never seen such an opaque system as we have in New Brunswick."
Howlett said his group hopes to see a user-friendly, public database that consolidates corporate information from all provincial registries into a single searchable service.
