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 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 that happen is long awaited Unclaimed Property Legislation to be initiated in Ontario. Such legislation fits the definition of “For the People” and for the Province.
Unclaimed property legislation is an important part of consumer protection – 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 finally been enacted in Alberta and Quebec both 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 looking for 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 for you 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 and you don’t find any details about the policy in his belongings, 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 know the address when issuing a T5 for tax purposes to the bond holder. 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 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 Province
Ironically, Ontario was the first Canadian province to pass unclaimed property legislation in 1989, in an effort 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 collected across each State will remain unclaimed and so those funds are used to 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
Despite the 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 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 State of 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
To be clear, no one loses their hard earned and generally tax paid financial assets on purpose. Assets 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.
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