The Canadian unclaimed property landscape

Unclaimed property laws vary considerably from province-to-province in Canada.

Modern Canadian unclaimed property laws are based on the Uniform Law Conference of Canada’s Uniform Unclaimed Intangible Property Act (UUIPA) that was drafted in 2003. The UUIPA was designed “to provide a harmonized legislative scheme for the consideration of those provinces and territories which may wish to enact unclaimed property legislation.” Though parts of the UUIPA have been incorporated into provincial unclaimed property programs, each province has a different structure dictating which property types holders are required to report, when dormant accounts are officially designated “unclaimed,” due diligence requirements, reporting requirements and enforcement.

To date, only three Canadian provinces (Alberta, British Columbia and Quebec) have unclaimed property legislation on the books. Banks fall under federal jurisdiction and are required to report all unclaimed funds to the Bank of Canada.

Bank of Canada

The Bank of Canada serves as the legal custodian for unclaimed balances held or issued by a federally regulated bank or trust company, which is outside provincial jurisdiction.  An “unclaimed balance” is a Canadian-dollar account, deposit or negotiable instrument that can include a savings account or chequing/current account. If it’s a deposit, it can be a credit card balance, term deposit, guaranteed investment certificate (GIC) or depository receipt. And if it’s a negotiable instrument, it can be a bank draft, certified cheque, official cheque, money order or a traveller’s cheque.

When there has been no owner activity on the account for a period of ten years, and the owner cannot be contacted by the institution holding it, the balance is turned over to the Bank of Canada, which acts as custodian on behalf of the owner. Balances are transferred to the Bank of Canada once a year on December 31.

When funds have been inactive for 10 years at a federally regulated bank, they are transferred to the Bank of Canada.  The Bank of Canada holds unclaimed balances of less than $1,000 for 30 years. Balances of $1,000 or more will be held for 100 years once they are transferred to the Bank of Canada.

If the balance remains unclaimed until the end of the prescribed custody period, the Bank of Canada will transfer the funds to the Receiver General for Canada.

At the end of December 2016, approximately 1.8 million unclaimed balances, worth some $678 million, were on the Bank’s books.

Over 93 per cent of unclaimed balances were under $1,000, representing 26 per cent of the total value outstanding. In 2016, the Bank paid out $15 million to balance holders. The oldest balance dates back to 1900.

For additional information, visit the Bank of Canada website.

Alberta

On Sept. 1, 2008, Alberta’s Unclaimed Personal Property and Vested Property Act went into effect.

Alberta Treasury Board and Finance, Tax and Revenue Administration administers the program with its main responsibilities being: to handle all incoming property from holders, managing a searchable directory for unclaimed property, and facilitating the processing of claims to reunite owners with their property. The dormancy periods for unclaimed property in Alberta range from one to 15 years based on the individual property types, but includes life insurance policies, retirement savings plans, stock certificates, security properties, uncashed cheques (including payroll), accounts receivable credits, refunds, etc. The full list of unclaimed property types and their corresponding dormancy periods can be found on the Alberta TRA website.

Reports and remittance are due 120 days after December 31. Alberta doesn’t make public the amount of money reported by holders or the amount reunited with owners.

Quebec

Québec has had unclaimed property legislation in place since 1999. Holders include financial institutions, insurance companies, trust companies, mutual fund and other investment dealers, as well as credit unions, and pension plans holding financial assets. Specifically, Quebec’s unclaimed property requirements apply to financial assets, property of successions, property of dissolved businesses, property without an owner and property located in Quebec whose owner is unknown or untraceable. The list of eligible financial assets includes safety deposit box contents, account balances in savings or credit unions, indemnities or benefits from life insurance, cheques and money orders, security accounts, and pension or retirement plan proceeds. These financial assets are designated as unclaimed after a dormancy period of three years and are then entered into the register of unclaimed property. The minimum threshold is property valued at $100 or more.

As part of the Unclaimed Property Act of June 2011, Revenue Québec must maintain an inventory of what is currently being held as unclaimed property and make the information available to citizens on their website or publish the information in major newspapers across Québec. As of February 28, 2017, there were 309,723 unclaimed accounts in Quebec worth an estimated $346,001,197. Additional information can be found on the Revenu Québec website.

 Ontario

Ontario ironically was the first province to consider unclaimed property legislation back in 1989 when the Province passed the Unclaimed Intangible Property Act. However, the statute was not proclaimed into force and the legislation was repealed at the end of 2011. 

In 2012, the Ontario budget indicated the province’s intention to once again create an unclaimed property program and the Ontario Ministry of the Attorney General (OMAG) held roundtable discussions to gather input from stakeholders in June 2013.

To date, Ontario has taken no concrete steps to implement an unclaimed property program.

British Columbia

British Columbia enacted its version of Canadian Unclaimed Property laws in July of 1999, which is contained within the BC Unclaimed Property Act. The BC program is managed by the BC Unclaimed Property Society (BC Unclaimed) which was established as a non-profit society in 2003 to administer the unclaimed property program for British Columbia.  Each year a portion of unclaimed funds are transferred to Vancouver Foundation for charitable purposes.

The BC unclaimed property program applies to specific types of property valued at various dollar thresholds. The program also specifies between mandatory or voluntary holders. Mandatory holders, which includes municipal and provincial courts, credit unions, and real estate agents, debt collection agencies, and companies being liquidated, are required by law to report and remit unclaimed property to BC Unclaimed.  Voluntary holders, which include trust funds, property insurance and closed pension plans, are not mandated by law to report and remit but strongly ‘encouraged’ to do so. The dormancy periods vary by property type and range between one and ten years. More information can be found on the BC Unclaimed website.

Voluntary holders have the option of reporting and remitting the property to BC Unclaimed or retaining unclaimed property and doing the following:

• Publishing designated information about the property and owner in a publicly-accessible database as specified under the BC Act;

• Establishing and maintaining an information line or other point of contact for claimants inquiring about unclaimed property;

• Making available to the public, information on whom to contact and how to make a claim; and

• Establishing and following procedures for reviewing and processing claims, including a process for appeal of a decision to deny a claim.

In 2015, BC Unclaimed received almost $4 million from financial institutions, companies, courts, tax offices and the Public Guardian and Trustee of British Columbia, and returned almost $1 million in unclaimed funds to the rightful owners.