ISC Must Be Disclosed

Firstly, legislators have stated that this does not constitute a “privacy invasion” and is not unconstitutional.

Secondly, this is not a new regulation. Both the Canada Business Corporations Act (CBCA), which governs federal corporations in Canada, and the Ontario Business Corporations Act (OBCA), which governs corporations in Ontario, have long stipulated that individuals with significant control over a company must disclose their personal information to the government during the company’s annual return.

The federal and provincial governments’ interpretations are largely aligned, specifying that:

1. An individual holding 25% or more of the ordinary shares of a company is considered to have significant control.
2. If one holds shares and participates in the management of the company, this is even more indicative of significant control.
3. Even without share ownership, if an individual has practical control over the company’s direction, they are also deemed to have significant control.

The following information about ISC is reported to the government during the company’s annual return but is not disclosed publicly:

• Date of birth
• Nationality
• Country of Tax residency

Given that both federal and Ontario laws require reporting, why is it that in practice, Ontario companies are not yet required to report during their annual review?

This discrepancy arises because the federal corporate IT department, following the amendment of the OBCA in 2023, took only one year to implement a system and webpage for reporting “significant controller information” within the Corporations Canada system.

However, although Ontario’s legislation was also amended in 2023, the province’s IT department has yet to develop a corresponding system. The reason is as straightforward as that.