'Bad guys' go free while compliant Canadians get burdened with new trust rules

financialpost.com:

Countries around the world have been racing to introduce transparency requirements in many different areas of the law. Examples include corporate shareholder registries, required disclosure when implementing certain tax transactions and trust beneficiary reporting requirements.

Canada is not immune from this trend. In recent years, the country has expanded some of its existing laws by increasing the amount of information that is required to be disclosed on existing forms (such as the ownership of certain foreign property under forms T1135 and T1134). It has also introduced a new federal corporate ownership registry (other provinces like Ontario and British Columbia have followed suit), mandatory disclosure of certain tax transactions, the debacle that is the Underused Housing Tax and trust reporting rules. All the new rules are accompanied by significant penalties for non-compliance.

The Canadian government states the usual rhetoric that the proposed rules are being introduced to comply with “international best practices,” reduce money laundering, assist with the enforcement of proper tax compliance, etc. But do these types of rules actually do that? Or do they encourage even more non-compliance?

One can debate the pros and cons of these types of rules forever, but put me on record as stating that the “bad guys” will never comply with such requirements and, accordingly, the rules will miserably fail at achieving their objectives.

In the meantime, these massive new reporting requirements are pushed onto the average tax-compliant taxpayer who wants to comply with the law. Unfortunately, the amount of required disclosure to comply is often voluminous, may not be available and may lead to a significant increase in