Following the introduction of captive legislation in Alberta, a greater number of prospective captive owners are expected to pick the domicile over the more traditional offshore domiciles, which have historically been popular with Canadian businesses.
The Energy Province introduced its captive legislation in July last year, and already has 13 captives domiciled in the region.
Alberta is the second province in Canada to introduce captive legislation after British Columbia.
“We might reach a saturation point, where we are going to sort of see a peak,” said Rick Da Costa, partner and national leader, corporate and regulatory insurance & reinsurance at Borden Ladner Gervais, on GCP #97.
“The cadence with which Canadians have established their own captives, and with Alberta being an option, I think we are going to start to see a higher proportion of people choosing that domicile over the usual Bermuda, Barbados or Cayman.”
Since the introduction of captive legislation in Alberta, it has been the popular option domestically rather than British Columbia, one of the main reasons being its much quicker application timeframe.
“I have known more people who have walked away from British Columbia captive applications than have actually licensed their captives there,” Da Costa added. “I’ll leave it at that.”
“But with Alberta, and this is no exaggeration, it’s like working with another law firm in terms of speed with which they operate and get things done.”
Da Costa said that by this time next year, he expects Alberta will have the same number of captives, if not more, than British Columbia.
Captive Intelligence published a long read in November highlighting that Alberta is expected to swiftly surpass British Columbia as Canada’s largest captive domicile, as Canadian businesses are presented with greater choice between onshore and offshore jurisdictions.
Alberta has a publicly stated commitment to process applications within six weeks, but Da Costa said half the captives he has worked with have received their licences in significantly less time.
“Our first one was done at Christmas time over six days, and the first email I caught from the regulator after we submitted the application was around 22 or 23 December. I thought they were sending me a list of questions and follow ups, but it was the licence.”