New Brunswick will soon join Alberta, British Columbia, and Quebec as Canadian provinces with active unclaimed property laws on their books. New Brunswick recently published proposed rules in connection with their Unclaimed Property Act, which received Royal Assent on March 17, 2020 (Bill 22). Per the Financial and Consumer Services Commission (FCNB), the Act will be proclaimed and become effective with the adoption of the rules.
The proposed rules were approved for publication on September 22, 2020. Businesses and other stakeholders are invited to provide feedback by November 23, 2020. The Act, proposed rules, and the invitation to comment are available at: https://fcnb.ca/en/unclaimed-property.
The following is a summary of the Act and proposed rules.
Exemptions from the Definition of “Property”
- Gift cards;
- Property acquired from participating in a loyalty program;
- Property in a safe deposit box held by a provincially regulated credit union ,trust company, or federal financial institution;
- Property owed under an accident or sickness in-force insurance policy; and
- Property with a fair market value of less than $1.00.
Applicability of the Act
The Act applies to a business with a head office or registered office in New Brunswick (the “Province”); is registered at an address at where process may be served, or has an agent for whom process may be served in the Province; has a place of business in the Province; or whose central management is exercised in the Province.
Indication of Owner Interest Includes:
- The non-return of statements related to the property;
- Electronic access to a password-protected account;
- Regular automatic withdrawals of premiums by the holder from an owner’s account, if the property is acquired by means of such withdrawals; and
- Regular automatic withdrawals from an account held by a holder pursuant to a rental agreement that requires such regular automatic withdrawals.
Due Diligence and Reports
- Most property types have a 3-year dormancy period and are listed in the proposed rules.
- Due diligence notices must be sent to the owner 90-180 days prior to the reporting due date for property valued at $100 or more. Notice must be sent by regular mail through Canada Post. If the holder has an email address for the owner, notice must be sent electronically.
- Reports are due within 90 days after the end of the year, with a December 31st cutoff date, provided that the last known address of the owner is in the Province and the holder is either based in the Province or carries on business there; or the address or identity of the owner is unknown and the holder is based in the Province.
- Holders are not required to report or deliver property if required to do so by another Act. Holders are also not obligated to report property if the total fair market value of the property in the report is less than $500 and each individual property in the report has a fair market value of less than $50.
- If the property is a security, the holder must also submit the most recent account statement of the owner along with the report. If the owner has securities with a total estimated fair market value in the account of less than $1000, the holder must liquidate the account and delivery the liquidated property to the Director. If the total is $1000 or more, the holder must submit the report, but hold the property until the Director gives permission to deliver it.
When Unclaimed Property Vests in the Commission
- Unclaimed property held by the Director with a net value of less than $50 vests in the Commission immediately upon receipt. Unclaimed property valued at less than $500 vests in the Commission 10 years after receipt.
Record Retention and Statute of Limitations
- There is a 10-year record retention period and a 6-year statute of limitations.
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