Canadian Unclaimed Property
By Andrew Perrine
Our neighbors to the north handle unclaimed property differently than we do here in the states, and the rule differences between provinces are stark. Understanding these differences is useful if you do business in Canada.
One important difference is that federally regulated banks are administered by The Bank of Canada, the country’s central bank. All unclaimed balances are to be reported directly to this central authority after ten years of inactivity. Note that this does not cover credit unions, which are very popular in Canada.
Another important difference is that while in the United States, unclaimed property is almost always held indefinitely by the states (though there are a few exceptions), Canada has true escheat. The Bank of Canada acts as a custodian of the funds for a given period of time, after which the money is definitively transferred to the Receiver General for Canada. For funds under $1,000, this time period is 30 years. For amounts over $1,000, owners and their heirs have 100 years to collect their unclaimed property.
As of today, only three Canadian provinces have unclaimed property laws on the books. They are Alberta, British Columbia, and Quebec. The country’s most populous province, Ontario, has no unclaimed property law, despite a series of halting efforts dating back to 1989.
Alberta has a fairly comprehensive unclaimed property law, and the dormancy periods will seem very familiar (15 years for traveller’s checks, 7 years for money orders, 5 years for a deposit, 1 year for wages). Several property types, including safe-deposit boxes and securities, are currently not accepted, though this may change in the future.
Alberta defines a holder as an entity that keeps or maintains tangible (excluding land) or intangible property for an owner, but limits the application of the law to those holders who keep a net aggregate amount of $250 per owner for intangible property, and $1,000 per owner for tangible property. In other words, if a company is large enough to be holding more than $250 in cash per customer on average, then they need to file unclaimed property reports. The limit is higher for those companies holding tangible property, such as jewelry.
NAUPA files are not supported. The report must be submitted as an XML file that follows Alberta’s format, which is of course generated by FSITrack.
British Columbia’s unclaimed property law only requires credit unions, debt collection agencies, real estate agencies, and companies in liquidation to file reports. Other businesses may file on a voluntary basis. Also, holders whose gross annual revenue is $250,000 or less are exempt. Any individual item of unclaimed property valued at less than $50 is also not required to be reported.
Different property types have different “prescribed amounts” i.e. the threshold at which the property is subject to the unclaimed property law. For example, the prescribed amount for a savings account is $200, while the prescribed amount for a life insurance policy is $1,000. Amounts under these thresholds do not need to be reported. FSITrack has all of the prescribed amounts coded to each property type.
NAUPA files are not supported. The report must be submitted as an Excel spreadsheet provided by the province.
Unlike in Alberta and British Columbia, all unclaimed property, regardless of value, must be reported and remitted to Revenu Québec, the tax-collecting agency of the province.
Québec does not use NAUPA or any other file format. Forms must be completed and either mailed or sent electronically. Contact Revenu Québec for more information:
Email us at email@example.com with “Remise électronique” as the subject. We will send you instructions on how to submit property remittance documents securely and remit the value of the property by direct deposit.Guide For Holders – revenuquebec.ca
One very nice policy that Québec has enacted: all property types are dormant for three years! Too easy!
The provinces and territories that do not have UP laws have a hodgepodge of mechanisms in place to allow owners to be reunited with their money, but there definitely seems to be room for improvement. It will be interesting to see what provincial governments do to streamline Canadian unclaimed property practices, if anything, in the years to come.