Tag Archives: Ontario

Dear Doug: Unclaimed Property Legislation is “For the people” and will help you pay for promises

There’s approximately $2 billion+ in Unclaimed property sitting with various financial organizations across Ontario that needs to be returned to hard-working Ontarians but no one knows how to find those assets. That’s not right nor fair but also sad because a large portion of that would ultimately also serve the Ontario budget in a big way now and in years to come. All we need to make it happen is long-awaited Unclaimed Property Legislation.  Such legislation in Ontario would truly fit the definition of “For the People” but also for the Province.

Unclaimed property legislation is an important part of consumer protection – but missing in Ontario

Ontario is the single largest jurisdiction in North America without unclaimed property law to protect consumers. Such legislation is an important aspect of consumer protection which is why all jurisdictions across the US have had such legislation in force for 50 years or more. Unclaimed property legislation also exists across the UK, Australia, New Zealand and most recently, Kenya.   In the last 10 years legislation has been enacted in Alberta and Quebec. Both provinces like the US, offering a centralized database for searches but differing slightly in the assets that are included. BC has had legislation in place since 2000, but there is a voluntary element which is unlike any other jurisdiction.

There is no reporting of unclaimed assets which makes finding those lost assets difficult to say the least

But it is Ontario that remains the most disappointing outlier as Canada’s largest province where much of the financial sector is located. If you live in Ontario and you or a loved one have misplaced or lost a financial asset, the lack of legislation makes it hard to find those assets. If your Grandfather Jack made you a beneficiary on an insurance policy and forgot to tell you about it before he passed away you’re out of luck. There is no obligation for an insurer to look for beneficiaries even if the insured has likely passed, based on age. If your Mom invested in an Ontario Savings bond 20 years ago and she died without telling you, the bond is part of the $70 million or more in unclaimed/matured Ontario Savings bonds sitting idle because the Province has indicated, it’s “not their job” to look for bond holders even if they had the address to send a  T5 for tax purposes. If your Dad had an account with an Ontario Credit Union 30 years ago that he forgot about, it’s still there waiting for him there because Ontario Credit Unions have been waiting for the Ministry of Finance to tell them where to send inactive and unclaimed credit union accounts for more than 20 years. Section 182 of the Ontario Credit Union Act (1994) indicated that unclaimed accounts should be set aside but didn’t specify where to forward them.  Whereas, in the case of federally regulated banks, Canadian dollar accounts without activity for 10 years or more are forwarded to the Bank of Canada by December of each year and added to the unclaimed account registry available online.

Unclaimed Property Legislation would be a Win/Win for the people of Ontario and the Provincial treasury

Ironically, Ontario was the first Canadian province to pass unclaimed property legislation in 1989, in order to “safeguard the rights of owners of intangible property by providing a method for owners to recover, in perpetuity, their intangible property held by others. “  The program as envisioned was to rely on the services of the Public Trustee to administer the program on behalf of the province, “to hold and to return lost and forgotten property”. The Act also specified that unclaimed intangible property was to be used for the benefit of the people of Ontario until the property was claimed by its owner.  That’s the way it works in the US. In the US, despite central databases and proactive promotion to residents to look online for any missing money, a good portion of over $70 billion total in unclaimed financial assets helps support state treasuries, in particular education, infrastructure and health care. Indeed, in most US states, while claims can be made in perpetuity by legal owners or by their heirs, it’s been long considered good public policy to put unclaimed property to work which is why unclaimed financial property is a big and growing revenue generator ranking 3rd after corporate and personal tax. That makes unclaimed financial property legislation a win/win for owners and for government.

Ontario has had 2 false starts with Unclaimed Financial Property legislation and is about 50 years behind putting that legislation in place but the former Attorney General declared it “Not a Priority”

Despite the best interest of those who could benefit from Unclaimed property legislation, the statute for unclaimed property legislation in Ontario was not proclaimed into force after being passed in 1989 and was repealed 22 years later in 2011. The 2012 budget announced Ontario’s intention to try again and create an unclaimed property scheme that would mirror that of the US. But despite myself and other stakeholders attending and providing input to those consultations with the Ontario Ministry of Attorney General in 2013, there has been virtually no follow-up.  After making several inquiries, the only  response I could gather from the now former, Attorney General’s office was that it was “not a priority” This despite the fact that the proposed program for unclaimed intangible property could be fairly easily initiated utilizing the Uniform Unclaimed Intangible Property Act, which was developed by the Uniform Law Conference of Canada many years ago. The rules are written we just need it to move forward.

Ontario is a disappointing outlier when it comes to unclaimed property legislation despite an approximate $2 Billion in unclaimed financial assets

And so here we are in 2018 with Ontario remaining as the single largest outlier in North America when it comes to unclaimed property legislation.  That’s due to the fact that Ontario has an estimated $2 Billion + in unclaimed or lost financial assets in the form of unclaimed provincially regulated bank/trust/credit union accounts, insurance policies, share certificates, dividends, unclaimed wages, bonds, pensions and other property types including prepaid funeral deposits, utility deposits and tax refunds etc.  Without any legislation there is no duty for organizations holding unclaimed property to report on or to relinquish those assets or to look for those who have lost track of their financial assets (or the heirs of legal owners).

If you think that’s a lot of money here’s a comparable. The State of Illinois has had unclaimed property program in place since 1962 and has a population of about a million less than Ontario. The Illinois Treasurer’s unclaimed property program – now known as I-Cash  is currently safeguarding 15 million properties valued at roughly $2.9 Billion and working to reunite each with its rightful owner. 1 in four residents of Illinois who search the I-Cash database finds property to claim with an average claim of $1,000. 1 in 8 of residents living in Illinois has unclaimed property and in the last 2 years more than $300 million has been paid out to legal owners by a proactive Illinois Treasury.

No one loses track of their hard-earned and generally tax paid financial assets. It seems “UnCanadian” to do nothing to help

To be clear, no one loses their hard-earned and generally tax paid financial assets on purposeAssets generally become lost as a result of a tragic event, forgetfulness, missing or damaged records or human error. In Ontario because there is no law that requires the holders of unclaimed financial assets to look for the asset owners, generally they don’t.  Much of the unclaimed or lost financial assets owing may not be life-changing windfalls, but I believe that hard-working Ontario residents deserve to have one place to search & find those unclaimed financial assets. Given that it’s 2018, it should not be this difficult to move forward to do what’s right when it would benefit consumers, taxpayers, and our cash strapped government treasury.

It seems at least to me so very “UnCanadian” to not move forward with unclaimed property legislation and do what’s right for the people of Ontario when ultimately it might serve to also be an economic action plan in waiting for Ontario and help the new Premier pay for some of his promises.

Unclaimed Financial Assets in Canada

Ontario needs unclaimed property legislation

 

Unclaimed Credit Union accounts

Unclaimed Credit Union Accounts in Ontario

Inaction is a disadvantage for Credit Unions in Ontario

There’s so much to love about Credit Unions but when it comes to providing Credit Unions an equal playing field in Ontario, I can’t help but feel that the Ministry of Finance is putting them at a disadvantage by their inaction. The inaction I’m referring to relates to their apparent disregard for Unclaimed or Dormant credit union accounts.  This inaction & disregard is not helpful to Credit Unions and it’s certainly not helpful to the client/members those Credit Unions serve.

Unclaimed Credit Union accounts can be hard to find

Unlike Unclaimed accounts held by federally regulated banks, Unclaimed Credit Union accounts in Ontario are hard to find unless you know the exact Credit Union you or a loved one dealt with.  Federally regulated banks are required to remit unclaimed accounts that have not been active for 10+ years to the Bank of Canada where a searchable online database is available; that database currently includes $532 Million of such accounts. What would be the total value of Unclaimed Credit Union accounts in Ontario ? I’m pretty sure that no one inside the Ministry of Finance or outside has any clue. And that’s the problem.

The Credit Unions and Caisses Populaires Act, 1994 (20 years later)

One might assume that a similar system would be in place for unclaimed credit union accounts held in Ontario as there is for accounts held by federally regulated banks in Ontario. It’s 2014 after all and the Credit Unions and Caisses Populaires Act, 1994 set out the guidelines for Unclaimed or dormant accounts in that legislation. But…

Alas…that’s not the case. While the Ministry of Finance expects that Credit Unions are following the rules around notifications to dormant or unclaimed account holders, they have not yet gone as far as having those Credit Unions remit those accounts to the Ministry as intended.

Why?

Why has it taken 20 years to direct Ontario Credit Unions to where they need to send all of those unclaimed credit union accounts that have been forgotten?

I’ve asked the Ministry of Finance again recently this question. After much delay the Ministry responded but failed to answer that very question.

Here’s their reply

  • The government recognizes the importance of ensuring that individuals who hold dormant deposit accounts at credit unions are aware of the status of their accounts and have access to the funds held in those accounts.
  • The Credit Unions and Caisses Populaires Act, 1994 requires that credit unions provide notices to depositors whose accounts are dormant at regular intervals. For example, depositors must be notified 2 years and 5 years after a transaction has last taken place in the account or since the depositor last requested or acknowledged an account statement.
  • We understand that credit unions have systems in place to ensure unclaimed deposits are properly monitored and that depositors are informed.  If an account is dormant for more than 10 years, credit unions are required to remit the amount to the Minister of Finance when directed to do so.
  • The Minister of Finance has not yet specified a date when the funds should be remitted to the government

We hope you will find the information provided useful.

Sadly, No. The information provided by the Ministry of Finance recently is not very helpful; not very helpful at all. And, most certainly, the inaction on the part of the Ministry of Finance with regards to Unclaimed Credit Union accounts is generally not helpful to Ontario Credit Unions or their members.

Let’s be clear: No one loses their hard earned/tax paid financial assets on purpose.

Ontario credit union members deserve to have one place to search & find their Unclaimed Credit Union accounts. Let’s get it done Ontario.