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Corporate Transparency: Quebec Moves Forward with Its New Ultimate Beneficiary Disclosure Regime

By Howard Levine and Paul Martel and Michael Bantey
January 7, 2021

Quebec’s Minister of Labour, Employment and Social Solidarity, Jean Boulet,  recently tabled Bill 78An Act mainly to improve the transparency of enterprises (Bill or Bill 78), before the Quebec National Assembly.

The Bill seeks to amend the Act respecting the legal publicity of enterprises (ALPE) and improve corporate transparency. These proposed changes follow the recommendations made by Quebec’s Minister of Finance in pages B.31 and following of the 2020–2021 Budget (Budget).

The Bill will require that corporations disclose information on “ultimate beneficiaries” to the Quebec enterprise registrar, for entry in Quebec’s enterprise register (register), while allowing the information to be searched by the name of a natural person and ensuring adequate protection of personal information.

These measures are the culmination of a consultation process launched in October 2019 by Quebec’s Minister of Finance in its consultation paper entitled Corporate Transparency (for more information, please see our December 2019 Blakes Bulletin: Corporate Transparency: Which Path Will Quebec Take?). 

In a recent press conference, Minister Boulet stated that these measures follow international initiatives aimed at countering tax havens, tax evasion, abusive tax avoidance, criminal activities and corruption, and position Quebec among the most transparent jurisdictions, alongside the United Kingdom and most Member States of the European Union. According to Minister Boulet, Quebec’s register will be the only one of its kind in North America to allow for free public access to information on ultimate beneficiaries and businesses.

The new transparency regime introduced by the Bill will be similar to the ones implemented in other Canadian jurisdictions, but will differ in at least two respects:

  1. Under this new regime, all forms of enterprises doing business in Quebec, regardless of their incorporating jurisdiction, will be subject to the ultimate beneficiary disclosure regime

  2. The information disclosed will be generally available to the public. Several important issues remain to be clarified, notably through accompanying regulations whose drafts have yet to be published

The following is an outline of the new ultimate beneficiary disclosure regime as proposed by the Bill.


The ALPE now includes a definition of “ultimate beneficiary” that is similar to that of an “individual with significant control” in the Canada Business Corporations Act (CBCA). An ultimate beneficiary is defined as being a natural person who meets any of the following conditions:

“(1) is the holder, even indirectly, or beneficiary of a number of shares or units of the registrant conferring on the person the power to exercise 25% or more of the voting rights attached to the shares or units;

(2) is the holder, even indirectly, or beneficiary of a number of shares or units the value of which corresponds to 25% or more of the fair market value of all the shares or units issued by the registrant;

(3) exercises control in fact of the registrant; or

(4) is a general partner of a limited partnership.”

This definition provides for the concepts of direct and indirect holding of 25 per cent or more of the voting rights or the fair market value of shares, as well as the exercise of control in fact of a corporation, and also extends to shares or units of other types of businesses (Registrants), such as cooperatives, contractual corporations and trusts operating a commercial enterprise. It is unfortunate that the definition requires determination of 25 per cent or more of the fair market value of shares given the burden such a determination creates for small businesses, and given that these concepts are not applied in Europe or the United Kingdom, nor even in British Columbia.

The Bill also provides for the concept of “beneficial ownership” under the designation of “beneficiary”, which is not defined in the ALPE or the Bill, but is defined in Quebec’s Business Corporations Act as being the “holder of a security entitlement issued by a corporation, or any other person who has rights in a security that is registered in a corporation’s securities register in the name of another person, such as an administrator of the property of others or a mandatary”.

It would have been preferable that the ALPE set out its own definition of “beneficiary” to make it applicable to shares of corporations that are not Quebec companies and to shares and units of other types of enterprises.

Furthermore, while the Bill does not address the unclear and problematic concepts of “direct or indirect control”, “direction” and “direct or indirect influence” found in the CBCA, this does not mean that the Quebec legislator has abandoned these concepts. Indeed, under the Bill, the Quebec legislator has retained discretion to determine “other conditions according to which a natural person is considered to be an ultimate beneficiary”, and “the terms relating to the declaration of the type of control exercised by each ultimate beneficiary”. We will therefore have to wait for the publication of the new regulations related to the ALPE to find out the true scope of the term “ultimate beneficiary”, as the Budget announced that the concept of ultimate beneficiaries “makes it possible to target situations where ownership or control is held through a chain of ownership or by any means of control other than direct control, including nominees or trusts”.

Another noteworthy difference between the ALPE and the CBCA is the clearer and more restrictive definition of the concept of “joint holders” provided by the ALPE:

“If natural persons holding shares or units of the registrant have agreed to jointly exercise the voting rights attached to the shares or units and the agreement confers on them, together, the power to exercise 25% or more of those voting rights, each of those natural persons is considered to be an ultimate beneficiary of the registrant.”

The Bill does not exclude from its definition of “registrants” not-for-profit corporations or “reporting issuers” within the meaning of the Quebec Securities Act. Is it appropriate to apply the ultimate beneficiary disclosure regime to these entities? One might doubt it, given that the Budget provides for their exclusion from the regime, more specifically with respect to reporting issuers (public companies whose shares are typically traded on a stock exchange). These companies are already subject to a publicly available information system (via the System for Electronic Document Analysis and Retrieval, commonly known as “SEDAR”) that requires them to disclose the names of shareholders who exercise control or direction over 10 per cent or more of the voting securities. Also, insiders of such companies, including shareholders of 10 per cent or more of the voting securities, are themselves subject to a publicly available information system (via the System for Electronic Disclosure by Insiders, commonly known as “SEDI”) that requires them to report certain information, including their control or direction over the securities. These disclosure regimes ensure transparency for investors and prevent the manipulation of capital markets. Excluding reporting issuers from the Quebec transparency regime would be consistent with other similar regimes in Canada, the UK and Europe, and would avoid regulatory overlap.


Any “registrant” subject to the ALPE will have to indicate in its declaration of registration:

“(2.1) the names, domiciles and dates of birth of the ultimate beneficiaries as well as, according to the terms determined by regulation of the Government, the type of control exercised by each ultimate beneficiary or the percentage of shares or units each one holds or of which each one is a beneficiary;

(2.2) the date on which a natural person became an ultimate beneficiary and, as applicable, that on which the person ceased to be an ultimate beneficiary;”

Subsequently, the registrant will be required to update this information within 30 days of the date of the change.

Under the new regime, registrants will be required to take reasonable measures to locate their ultimate beneficiaries and ascertain their identities. However, holders of an enterprise subject to this regime (e.g., the shareholders of a corporation) will not be required to provide information to this enterprise regarding the ultimate beneficiaries of shares or units registered in their names, consistent with the CBCA.

Unlike the CBCA, which provides for particularly severe penal sanctions (a fine of up to C$200,000 and imprisonment for a term of up to six months) for corporate directors who allow their corporation to breach its record-keeping and disclosure obligations with regard to “individuals with significant control”, as well as for shareholders who fail to provide to the corporation the requested information regarding these individuals, the ALPE will not provide for specific sanctions in respect of information on ultimate beneficiaries. It will instead rely on its general penal provisions, which provide for a maximum fine of C$25,000. This is surprising, given that in the Budget, the Quebec government stated that “administrative sanctions will be incorporated into the legislation to foster the quality of information” and that the Bill, according to Minister Boulet, seeks to give to the disclosure of ultimate beneficiaries in the register a significant deterrent effect on intentions to use businesses for criminal purposes. Furthermore, the United Kingdom’s transparency model, which is preferred by the Quebec legislator over models from other Canadian jurisdictions, imposes even stricter sanctions (e.g., imprisonment for a term of two years) to offenders, including the ultimate beneficiaries themselves, which as mentioned, are not covered by the CBCA or the ALPE.


Like the CBCA, the Bill requires that information on ultimate beneficiaries include their domicile and date of birth (contrary to the announcement in the Budget to the effect that only the month and year of birth would be required).

To that end, two innovative amendments will be made to the ALPE. First, all individuals whose identification is required by law (including partners, shareholders, directors and officers) will be required to disclose their date of birth. In this regard, ultimate beneficiaries will therefore not be subject to stricter disclosure requirements than those applicable to others who are subject to the ALPE.

Second, natural persons whose domicile must be disclosed will be permitted to also declare a single professional address, so that information relating to their residential address may not be made publicly available. However, Minister Boulet stated that the registrar will continue to collect personal addresses, but these will only be made available to entities with investigative powers.


Information on ultimate beneficiaries, namely their names, domiciles and dates of birth, and the type of control exercised by each ultimate beneficiary or the percentage of shares or units each one holds, or of which each one is a beneficiary, as well as the dates on which they became or ceased to be ultimate beneficiaries, will be part of the information that may be set up against third persons and invoked by third persons in good faith.


Like the Quebec enterprise register, the information on ultimate beneficiaries will be publicly available. However, Quebec breaks ranks with other Canadian jurisdictions whose private registers are only available to public authorities and follows the total transparency approach adopted by the UK and EU.

Certain disclosures, however, will not be publicly available. It may be determined by regulation that other information contained in the register would not be accessible to the public, as is the case for the residential address of a person who also declares a professional address.


The Bill will amend the ALPE, which currently prohibits the registrar from providing a compilation of information containing the name and address of a natural person, or based thereon, except to certain organizations referred to in the Act respecting Access to documents held by public bodies and the Protection of personal information.

As a result, the registrar will be permitted to provide to any interested person (including the media and civil society bodies, as well as individuals and businesses that want to know with whom they are doing business) with a compilation of information based on the names and addresses of natural persons, as long as the information disclosed complies with the ALPE (i.e., the personal address of a person for which a professional address was declared, as well as any other information prescribed by regulation as not being subject to consultation must be omitted).

The protection of personal information will be considered through the lens of this regulation. Therefore, according to the guidance provided by Minister Boulet, a natural person’s date of birth as well as the identity of ultimate beneficiaries who are minors would fall into this category. Also, the registrar’s power under the ALPE to prevent consultation of a person’s personal information, if such consultation poses a serious threat to the safety of that person, will be maintained.


Bill 78 will need to follow the parliamentary process before becoming law, which could occur in the spring or fall of 2021. The Quebec government stated that the new ultimate beneficiary disclosure regime, as well as searches by name, will come into force one year after the legislative amendments have been adopted. Before its implementation, the new regime will have to be completed by the introduction of regulatory provisions to which it refers. The devil being in the details, the new regime will have to be closely examined. It is hoped that it will be modelled after the user-friendly regulations adopted by the United Kingdom or British Columbia.

We can only hope that at the end of this legislative and regulatory process, Quebec will have a clear and efficient disclosure regime on ultimate beneficiaries of businesses that will be easy to manage for businesses and their counsel.

In the interim, it will be interesting to see whether the direction officially taken by the Quebec government in Bill 78 will influence the more modest approaches taken at this time by the federal government and other provinces with regard to corporate transparency.

For further information, please contact:

Howard Levine 514-982-4005

or any other member of our Corporate & Commercial group.