The SNC-Lavalin headquarters is seen in Montreal on Tuesday, February 12, 2019. The veil of Canadian corporate secrecy that helps fuel global corruption is slowly lifting, but not fast enough for some critics. THE CANADIAN PRESS/Paul Chiasson

Canada slowly pushes for corporate transparency as part of anti-corruption push

A beneficial ownership registry is coming into force in June

The veil of Canadian corporate secrecy that helps fuel global corruption is slowly lifting, but not fast enough for some critics.

Canada, criticized in the past by the Organisation for Economic Co-operation and Development (OECD) and others as a laggard on anti-corruption policies, has taken steps in recent years to catch up to its more advanced peers, including new measures set to come into force in June.

The recent changes and initiatives have been encouraging to those working to stamp out bribery and other forms of corruption.

“We’ve made a number of strides in the last few years,” said Pat Poitevin, who investigated corruption with the RCMP before co-founding the Canadian Centre of Excellence for Anti-Corruption.

READ MORE: RCMP says its stretched thin on B.C. money laundering

“I should be the biggest pessimist in the world, 35 years in the RCMP dealing with a whole bunch of crimes, but I see a change.”

One of the biggest areas Poitevin and others have been calling for action on is a beneficial ownership registry, so investigators can better track the money and find out who is benefiting from bribes, money laundering and other illicit activity.

That registry is coming into force in June, when corporations have to start disclosing who has “significant control” (or more than 25 per cent control) of the entity, rather than use a nominee name that can be easily be bought to hide true ownership.

The registry, however, will mostly be restricted to regulator access, falling short of the public registry pioneered by the U.K. and that the EU has mandated, said James Cohen, executive director of Transparency International Canada.

“The current amendments will do a little bit, but not very much.”

The registry, which will require trusts to start disclosing ownership in 2021, is part of “tepid” action and resources devoted to stamping out corruption by Canada, said Cohen.

“Our capacity is still short, and our general interest tends to be not sufficient in combating the issue.”

He said too often bribery is seen as a victimless crime, when the cost is quite high. The UN estimates global cost of corruption is at least US$2.6 trillion, or five per cent of the global gross domestic product

Canada has moved slowly on some files in the past. It was only in 2017 that small-scale “facilitation” bribes were added to what’s banned by the Corruption of Foreign Public Officials Act.

There have been efforts to increase disclosures in the resource sector, including the Extractive Sector Transparency Measures Act enacted in 2014.

The act, which requires resource companies to disclose what they pay to governments, has been somewhat effective in identifying some suspicious gaps in money trails, said Jamie Kneen at MiningWatch Canada.

But the push for transparency only goes so far in a fight against complex international financial schemes and a high bar for convictions, Kneen said.

“The bar is very high, and investigations are very difficult, especially if the RCMP have to go to another country and gain the co-operation of police there.”

The challenge in conviction is part of what motivated the federal government to introduce the deferred prosecution agreement (DPA) option that came into force last year, that would allow companies to avoid a criminal trial and allow for quicker resolution.

DPAs have been mired in controversy since it was revealed that federal officials had pressured former attorney general Jody Wilson-Raybould to grant one to SNC-Lavalin, but anti-corruption campaigners hope the government will go further to allow administration and civil enforcement options for even more flexibility, and encourage more self-reporting by companies on an issue that is notoriously difficult to prosecute.

“Ultimately, corporations can’t do jail time,” said Joanna Harrington, a law professor at the University of Alberta.

“So if it is difficult to prove, difficult to find out about, typically investigators are relying on someone within the company telling or disclosing, and that leads to the situation of what can you offer in return.”

Non-trial is certainly the norm for OECD countries, with close to 80 per cent of the nearly 900 cases that have come up in the last 20 years resolved through non-trial resolutions.

However, the effectiveness is questionable.

Last year, Kinross Gold Corp. settled with U.S. regulators for about US$1 million for repeatedly failing to have enough safeguards in place to prevent corrupt activity in its Mauritanian subsidiaries, which, given the company spent billions of dollars investing into country, raises concerns on the potential leniency of the system, Kneen said.

“It does have its upsides; whether it’s an adequate deterrent I don’t know,” said Kneen.

Companies themselves are, however, seeing the importance of stamping out corruption as hits to reputation, insurance, financing and other costs rise on mere accusations of wrongdoing, said Poitevin.

“I’m looking at the change in the corporate mentality. So there’s more people and corporate entities that are recognizing well, it’s actually costing me money to get ensnared in corrupt conduct.”

Junior resource companies, meanwhile, need to show active compliance programs to make sure they satisfy risk assessments by the majors they hope to be acquired by, Poitevin said.

He said that much like it took time and effort to curb habits around drunk driving, perceptions around bribery and corruption will take time to change, and while slow and frustrating, the push for transparency is helping.

“With corruption, it’s going to take a while to change the corporate social norms, the corporate organizational norms, around corruption. Because before 1999, bribery was tax deductible.”

Ian Bickis, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Campbell River karate instructor takes lessons outside the dojo

Northwest Shito-Kai’s Nigel Nikolaisen embracing alternative teaching methods during pandemic

Nine passengers on first flight after Campbell River airport reopens

Pacific Coastal flight 715 arrived from Vancouver on Tuesday morning

Danger tree removal work in progress along Sayward Highway 19

Delays up to 30 minutes expected between 7 a.m. to 1 p.m. on June 5

Zeballos approved for emergency preparedness funding to install generator

Under the Community Emergency Preparedness Fund, the village will receive $25,000 to install generator

Cortes Island affordable housing project hangs by a thread after SRD defers hearing

Regional decision makers resort to COVID-19 concerns despite virtual meeting option and push hearing to September

March dental conference key to many of B.C.’s COVID-19 cases

Early infections from China, Iran were quickly contained

Facing changes together: Your community, your journalists

The COVID-19 pandemic has changed the world in ways that would have… Continue reading

Mirror business directory and map

If you’d like to be added to the list, shoot us an email

Vancouver Island First Nations gather to remember woman fatally shot by police

Nuu-chah-nulth Tribal Council requests an independent investigation

MAP: Dr. Henry reveals which B.C. regions have seen most COVID-19 cases

B.C. health officials release a first look at how the novel coronavirus has reached all corners of the province

North Island recreation camping site closed due to vandalism

Damage happens every year, forcing site manager to reallocate improvement budget to repairs

Tla-o-qui-aht First Nation woman, 26, fatally shot by police in Edmundston, N.B.

Police were conducting a well-being check at the time of the incident

Seniors to receive up to $500 in promised COVID-19 emergency aid in early July

The Liberal government first promised the extra help in mid-May, but had to create a new system to deliver the aid

VIDEO: Revelstoke bear wanders into Animal House pet store

Staff got ready to chase it out with a broom

Most Read