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Going Back to the Drawing Board - Public Consultations on Regulatory Proposals for the ISC Register under the CBCA

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Mergers and Acquisitions Bulletin

Since June 13, 2019, corporations governed by the Canada Business Corporations Act (CBCA) have been required to establish and maintain a register of individuals with significant control (the ISC Register). The federal government and an increasing number of provincial and territorial governments[1] are introducing such transparency requirements aimed at, notably, lifting the curtain on tax evasion and money laundering. For more information on the ISC Register requirement under the CBCA, please see our bulletinPower and Influence: New CBCA Registration Requirements for Private Companies.

There has been much uncertainty surrounding how the ISC Register regime is to be implemented. Now, nearly nine months after such changes came into force, Innovation, Science, and Economic Development (ISED) is consulting with the public on whether to adopt regulations to clarify the obligations of CBCA corporations in order to shed some light on several provisions of the CBCA.  Members of the public are invited to provide feedback – the consultation period runs until May 12, 2020.

Questions for Consultation

ISED is requesting feedback and suggestions on three issues:

    A. Whether to exempt certain additional classes of corporations from the obligation to establish and maintain an ISC Register

    B.  Whether to prescribe steps to follow if a corporation cannot find any individuals with significant control

    C. Whether to prescribe "reasonable steps" that a corporation must take to update its ISC Register

A. Exemptions for Additional Classes of Corporations

Presently, only corporations whose shares are publicly held are exempt from the ISC Register requirement. The CBCA does not provide the Director of Corporations Canada with the authority to exempt any corporation or individual from being listed in an ISC Register, but allows for classes of corporations to be exempted by regulation.  ISED is considering exempting the following classes of corporations:

    a) corporations that are wholly-owned subsidiaries of a corporation that is exempt from the ISC Register provisions; and

    b) Crown corporations. 

ISED is also open to suggestions on any other class of corporation that should be exempted.

B. Clarifying Steps to Follow if No Individuals with Significant Control

The CBCA currently does not provide guidance on what steps a corporation is to take if it is unable to locate any individual with significant control (ISC), either because no individuals qualify, or because the corporation is unable to obtain the necessary information from its shareholders. 

ISED is considering whether, in such situations, to require a corporation to enter in its ISC Register that there are no ISCs and/or any information it has obtained or confirmed regarding its ISCs and the steps taken to obtain or confirm the remaining ISC information.  Another significant issue identified by ISED is whether to require corporations to enter in the ISC Register the name of a director or senior manager involved in the governance of the corporation if it is unable to find an ISC, or whether to impose any other requirements that would apply in such situations.

C. Guidance on "Reasonable Steps" to Update the ISC Register

The CBCA requires corporations to take "reasonable steps" annually to ensure information in the ISC Register is accurate, complete and up-to-date.  ISED is considering prescribing certain obligations that a corporation must take (at minimum) to constitute "reasonable steps".  This could include requiring the corporation to send a notice to all registered shareholders, ISCs, and any other person that the corporation thinks would have relevant knowledge of information that should be included in the ISC Register, and/or other steps. 

Participation in the Public Consultation

Submissions regarding the questions for consultation may be sent to Corporations Canada by email at or by mail to:

Corporations Canada
Innovation, Science, and Economic Development Canada
235 Queen Street, Floor 7
Ottawa ON  K1A 0H5

Fasken will provide its comments to Corporations Canada within the prescribed period. If you would like to share your views on the questions for consultation with us, please contact:

Vancouver: Dierk Ullrich (

Montreal: Guillaume Saliah (

Toronto: Dana Gregoire (

[1] Canada's provincial and territorial governments have undertaken to introduce similar provisions into their respective equivalents of the CBCA. See, for example Bill 24 in British Columbia, which will come into force on May 1, 2020.


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