Jan 14th, 2021
Dec 16th, 2020
By Daniel Frajman
Quebec released on December 8, 2020 its bill meant to harmonize with the CBCA’s 2019 rules on “individual with significant control” . Although it is just a bill at this point, generally we see that: Quebec is going to be calling a controlling individual an “ultimate beneficiary” (we will have to get used to that term), and this will be posted publicly on the Quebec Enterprise Register (the “REQ”) for each registrant on the REQ, including corporations from elsewhere in Canada and from around the world that have activity in Quebec, so this will eventually go right to the front burner. For such corporations from elsewhere in Canada, where public corporate control registers do not exist, the new public register on the REQ may be seen as Canada’s de facto public ultimate beneficiary register.
As in the CBCA, the Quebec bill that was just released has a 25% in votes or fair market value, or control in fact, rule, but the Quebec bill has wording that appears even vaguer than the CBCA, so it seems to us that Quebec will eventually issue regulations detailing who is an ultimate beneficiary (perhaps as in the UK where they have regulations detailing when someone goes on their public register for this). It may be that such Quebec regulations will drag in discretionary trust beneficiaries as people who have to be named, as Quebec’s March 10, 2020 budget said that would happen, although that is not explicitly mentioned in the Quebec bill. The CBCA has no regulations providing detail which has made it hard to comply with the rules for the CBCA register which is mostly internal to the company and not public.
The March 2020 Quebec budget mentioned that there would be a one-year transitional period once the Quebec bill would come into force. We will continue to monitor developments relating to this.
Please feel free to contact me should you have any questions on this or other matters.