Aon is working on its second Alberta captive which is expected to be licensed shortly, after launching its first in September.
Of the two companies that Aon has set captives up for in Alberta this year, one is for an Ontario based company, and one is for British Columbia-based organisation.
In 2023, Aon will have launched five new captives in total for Canadian businesses.
“Two are in Vermont, two are in Alberta, and one is in Bermuda,” Toronto-based Mike Weiss, national leader for alternative risk financing solutions at Aon Global Risk Consulting, told Captive Intelligence.
The often-named Energy Province introduced its captive legislation in July last year, and now has 11 captives domiciled in the region.
Weiss said that those Canadian companies that are currently domiciling their captives outside of Canada generally have significant amounts of non-Canadian risk.
“Alberta is currently not an option for them necessarily from a corporate structure, strategic and service perspective,” he added.
Captive Intelligence published a long-read highlighting that Alberta is expected to quickly surpass British Columbia as Canada’s largest captive domicile, as Canadian businesses are presented with greater choice between onshore and offshore jurisdictions.
British Columbia’s captive legislation is more established than Alberta’s and for the past 25 years had been the only onshore captive regime in Canada. It has just over 20 active captives today.
Weiss said Alberta is turning out to be a more viable alternative to British Columbia as the legislation is “more friendly” with regards the type of captives that can be formed, while companies are not required to have most of their operations in the province.
“Alberta has written into legislation that it will review and reply to an application within 45 days, whereas British Columbia can take a minimum of four months,” Weiss said.
“Alberta is more open for business, but their ability to grow their team to process and regulate the growing captive market will need to be seen.”
Weiss noted that there are several large to midsize Canadian companies including energy companies that have predominately, if not 100%, Canadian risk, that could benefit from a captive.
“Several have never thought about it or expressed interest over the past few years but have not yet gone through the process,” he said.
“As we go into 2024 and beyond, these companies will potentially begin to recognise the benefits.”