The Canadian province of Nova Scotia has issued a release announcing new beneficial ownership reporting requirements with effect from 1 April 2023. According to the news release, the provinces of British Columbia, Manitoba, Ontario, Quebec, New Brunswick, Prince Edward Island, and Newfoundland and Labrador have also proclaimed similar legislation.

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New Rules to Help Prevent Use of Companies for Criminal Activities

Nova Scotia is joining other provinces in reducing the potential for companies to be used for money laundering, tax evasion and other crimes.

Changes to the Companies Act that take effect April 1 will require more transparency

about who owns companies and new measures to help prevent people from using companies incorporated in Nova Scotia for illegal activities.

"It's important that businesses and the legal community have time to get ready for the new reporting requirements that are there to help prevent illegal activities," said Service Nova Scotia and Internal Services Minister Colton LeBlanc. "These changes are consistent with many of our neighbouring provinces to support a level playing field for businesses."

Companies will be required to collect, maintain and update information about who owns, controls or benefits from the company and the income it generates. Law enforcement agencies and tax authorities will be able to access this information from the company as they investigate crimes like international tax evasion and avoidance and money laundering.

The Province has been working with federal, provincial and territorial counterparts since 2017 to increase corporate transparency and combat terrorism financing, money laundering and tax avoidance.

Quick Facts:

• an incorporated company or corporation is a legal entity separate from its owners and is incorporated through the Companies Act
• a beneficial owner is the person who directly or indirectly owns, controls or benefits from a company and the income it generates
• at the December 2017 federal-provincial-territorial finance ministers meeting, ministers agreed in principle to put safeguards in place to prevent the misuse of corporations and other legal entities for illegal activities
• British Columbia, Manitoba, Ontario, Quebec, New Brunswick, Prince Edward Island and Newfoundland and Labrador have proclaimed their legislation

Additional Resources:

News release – Amendments to the Companies Act will Protect Citizens and Strengthen the Economy: https://novascotia.ca/news/release/?id=20200225007

Information on the finance ministers' 2017 agreement to strengthen beneficial ownership transparency: https://www.canada.ca/en/department-finance/programs/agreements/strengthen-beneficial-ownership-transparency.html