_____ Session, Forty-fifth Parliament,

3 Charles III, 2026
SENATE OF CANADA
BILL -
 
An Act to establish the Reparation-Backed Guarantee Fund and to amend the Special Economic Measures Act
 
FIRST READING, 
 Summary

This enactment establishes the Reparation-Backed Guarantee Fund, authorizes the use of income derived from frozen assets under the Special Economic Measures Act, the Freezing Assets of Corrupt Foreign Officials Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law)to provide targeted financial assistance to eligible displaced individuals, and makes related amendments to the Special Economic Measures Act and the Financial Administration Act.

__ Session, 45th Parliament,

3 Charles III, 2026
SENATE OF CANADA
BILL -
An Act to establish the Reparation-Backed Guarantee Fund and to amend the Special Economic Measures Act
 
 Preamble

Whereas the number of forcibly displaced persons in the world is greater today than ever before;

Whereas their displacement is frequently the result of bad governance that has led to violence, armed conflict or persecution;

Whereas those responsible for that bad governance have often unlawfully enriched themselves through corrupt practices and then placed the illicit proceeds as assets in other jurisdictions, including Canada;

Whereas the Parliament of Canada recognizes the need to assist individuals admitted to Canada under the Canada–Ukraine Authorization for Emergency Travel (CUAET) and other humanitarian programs who have been displaced as a result of the armed aggression of the Russian Federation against Ukraine;

Whereas Canada, as a State Party to international humanitarian and human rights instruments, affirms its commitment to the reconstruction of Ukraine and to reparation for victims of gross violations of international law;

Whereas it is desirable to establish a lawful mechanism for the temporary and limited financial use of income derived from assets frozen under the Special Economic Measures Act, the Freezing Assets of Corrupt Foreign Officials Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law)in order to provide targeted financial support and to facilitate eventual reparations;

Whereas Parliament wishes to build on the foundation created by theSpecial Economic Measures Act, the Freezing Assets of Corrupt Foreign Officials Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) by establishing a method that is consistent with due process and transparency and by which proceeds of frozen assets can be repurposed for the benefit of the forcibly displaced and the communities that are hosting them;

And whereas Parliament’s dual objectives are to achieve a measure of accountability and to make additional resources available for the benefit of the forcibly displaced;

His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

Short title

1         This Act may be cited as the Reparation-Backed Guarantee Fund Act.

Definitions

2         The following definitions apply in this Act.

Fund means the Reparation-Backed Guarantee Fund established under section 4.

Minister means the Minister of Finance.

eligible individual means a person present in Canada under the Canada–Ukraine Authorization for Emergency Travel or any successor humanitarian immigration measure relating to the aggression of the Russian Federation against Ukraine.

foreign state has the same meaning as in section 2 of the State Immunity Act. (État étranger)

frozen asset means any property that the Governor in Council caused to be frozen or sequestrated by order under

(a) paragraph 4(1)‍(b) of the Special Economic Measures Actin relation to the Russian Federation or persons in that state;
(b) paragraph 4(1)‍(b) of the Freezing Assets of Corrupt Foreign Officials Actin relation to the Russian Federation or persons in that state; or
(c) paragraph 4(1)‍(b) of the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law)in relation to the Russian Federation or persons in that state.
Purpose

3      The purpose of this Act is to

(a) establish a dedicated federal mechanism to provide temporary, targeted financial assistance to individuals displaced by the aggression of the Russian Federation against Ukraine and admitted to Canada under humanitarian measures;

(b) ensure the lawful use of income generated from frozen assets under the Special Economic Measures Act, the Freezing Assets of Corrupt Foreign Officials Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law) to support such individuals and advance reparative objectives;

(c) create a transparent and accountable framework for the administration of a reparation-backed guarantee program under the authority of the Minister of Finance; and

(d) facilitate Canada’s contribution to future international mechanisms for reparation, compensation and post-conflict reconstruction.

Establishment of the Fund

4          (1) There is established a special account to be known as the Reparation-Backed Guarantee Fund, which forms part of the accounts of Canada and is administered by the Minister.

(2) The purposes of the Fund are:

(a) to receive and manage revenues derived from the interest, income or return on frozen assets;

(b) to provide government-guaranteed loans to eligible individuals for housing, business development, healthcare or education; and

(c) to hold such revenues pending future reparations or compensation mechanisms arising from the aggression of the Russian Federation against Ukraine.

Capital and Revenue of the Fund

5          (1) The Fund consists of

(a) all interest, dividends or other income lawfully earned from frozen assets;

(b) any sums appropriated by Parliament for the purposes of this Act; and

(c) any contributions made to the Fund.

(2) Operational and administrative expenditures of the Fund are paid from the Fund.

(3) Loans issued under this Act are charged to the Fund.

Loans and Guarantees

6          (1) Subject to regulations, the Minister may authorize loans or guarantees for the benefit of eligible individuals for the purposes set out in subsection 4(2).

(2) Loans issued under this Act are reparation-backed, and repayment obligations may be discharged, reduced or set off upon the receipt by Canada of reparations or compensation from the Russian Federation or related entities, to the extent provided by regulation.

(3) Eligible individuals are not personally liable for repayment beyond what is prescribed by regulation.

Asset Search and Tracing Powers

7          (1) Officials designated by the Minister may conduct inquiries, examinations and require the production of information or documents for the purpose of locating, identifying or tracing frozen assets within Canada.

(2) For that purpose, the Fund has investigative powers equivalent to those conferred under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, with any necessary modifications.

(3) Information obtained may be shared with the Royal Canadian Mounted Police, the Financial Transactions and Reports Analysis Centre of Canada, or Global Affairs Canada in accordance with law.

Amendments to the Special Economic Measures Act

8          The Special Economic Measures Act is amended as follows:

(a) Amendment to subsection 4(1)

Subsection 4(1) is replaced by the following:

“4 (1) The Governor in Council may make orders or regulations that
(a) restrict or prohibit any person in Canada or any Canadian outside Canada from dealing in property owned, held or controlled, directly or indirectly, by a foreign state, a person in that state or a foreign national;

(b) cause to be seized, frozen or sequestrated in Canada property owned, held or controlled, directly or indirectly, by such a state or person; and

(c) authorize, subject to conditions, the use, reinvestment or management of frozen assets for the purpose of generating income, which is to be credited to a fund established under an Act of Parliament for humanitarian or reparative purposes.”

(b) Addition to section 5.6

Add the following after subsection 5.6(1):

“(1.1) Despite any other provision of this Act, income or profit derived from the management or reinvestment of frozen assets may, with the approval of the Governor in Council and after consultation with the Minister of Finance and the Minister of Foreign Affairs, be credited to a fund established under an Act of Parliament for the purposes of providing humanitarian assistance or reparations.”

Amendments to the Financial Administration Act

9           (1) The Financial Administration Act is amended by adding the following after section 21:

“Reparation-Backed Guarantee Fund

21.1 (1) There is established a specified purpose account to be known as the Reparation-Backed Guarantee Fund, to which shall be credited

(a) amounts paid into the Fund under the Reparation-Backed Guarantee Fund Act;
(b) interest, dividends or other income derived from frozen assets under the Special Economic Measures Act, the Freezing Assets of Corrupt Foreign Officials Act and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law); and
(c) any other amounts that may be directed to the Fund under an Act of Parliament.

(2) Despite subsection 17(1), money referred to in subsection (1) is not required to be deposited to the credit of the Receiver General but shall instead be deposited into the Fund.

(3) The Minister of Finance may make payments out of the Fund for the purposes set out in the Reparation-Backed Guarantee Fund Act, and such payments are deemed to be expenditures for the purposes of that Act.

(4) The balances of the Fund do not form part of the Consolidated Revenue Fund.”

Reporting to Parliament

10        Within six months after the end of each fiscal year, the Minister shall table before each House of Parliament a report setting out:

(a) income credited to the Fund;
(b) loans or guarantees issued; and
(c) the financial position of the Fund.

Regulations

11        The Governor in Council may make regulations:

(a) respecting eligibility, loan conditions and repayment;
(b) defining procedures for asset tracing under section 6; and
(c) coordinating payments with international reparations mechanisms.

Coming into Force

12        This Act comes into force on a day to be fixed by order of the Governor in Council.