Five billion dollars is a lot of things. It’s enough to buy more than 90 tons of gold or nearly equivalent to BMO Financial Group’s revenue in the latest quarter. But here’s something you may not have known: $5 billion is also the estimated total of unclaimed assets in Canada.
Due to a lack of databases and unclaimed property legislation, it makes it hard to find these assets (deposits, credit union accounts, and trust funds), according to a CBC News article.
Sometimes the money is in the form of a bond that was never cashed. The same can be true of share certificates for stocks. You could also have a situation where an insurance company is unable to locate the beneficiary of a life insurance policy.
And then there’s arguably the most straightforward case of unclaimed property: Dormant savings accounts. In Canada, a bank deposit is considered dormant if there hasn’t been any activity for 10 years.
As the Bank of Canada explains:
“An ‘unclaimed balance’ is a Canadian-dollar account, deposit or negotiable instrument held or issued by a federally regulated bank or trust company. If it’s an account, it can be in the form of a savings account or chequing/current account. If it’s a deposit, it can be a credit card balance, term deposit, guaranteed investment certificate (GIC) or depository receipt. And if it’s a negotiable instrument, it can be a bank draft, certified cheque, official cheque, money order or a traveller’s cheque.
When there has been no owner activity in relation to the balance for a period of ten years, and the owner cannot be contacted by the institution holding it, the balance is turned over to the Bank of Canada, which acts as custodian on behalf of the owner. Balances are transferred to the Bank of Canada once a year, on 31 December.”
Balances of up to $1,000 are held by the Bank of Canada for up to 30 years. Any balance exceeding $1,000 is held for up to 100 years. Once the 30 or 100 years is up, an unclaimed balance is then transferred to the Receiver-General of Canada (that’s who Canadians make their taxes payable to). So in other words, if you snooze for 30 or 100 years, you lose. It then becomes the government’s money.
There are actually a staggering number of balances that remain unclaimed. According to the Bank of Canada’s website, it held 1.7 million unclaimed balances worth $626 million as of Dec. 2015. Most of these (93%) are under $1,000. In 2014, the Toronto Star reported that one man had unclaimed balances totalling almost $677,000.
Not all unclaimed assets are held by the Bank of Canada, however. The Star notes that these include “non-Canadian currency accounts, RRSPs, credit union balances, gold or silver certificates, safety deposit boxes, insurance payments, court payments, stocks and dividends, wages and real estate deposits, most of which are covered by provincial legislation.”
Even if you don’t think you have an unclaimed balance, it doesn’t hurt to do a quick search on the Bank of Canada’s website. All you have to do is enter your name plus your province or territory.
If you think you might have some unclaimed property that wouldn’t be held at the Bank of Canada, it may still be possible to retrieve it. A couple provinces, Alberta and Quebec, have legislation that deals with assets that haven’t be reunited with their rightful owners. Otherwise, it’s really up to an individual to do the legwork in locating their money or property, or for the holder to track down the person or people in question. Maclean’s recounted the story of one fund company that managed to find a woman who had an unclaimed balance of five figures, but the story makes the point that this kind of persistence is not the norm.
As far as unclaimed bank account balances are concerned, not only is the money just sitting there waiting for its owner to appear, it’s also sitting there not earning any interest. So if you’re one of the many Canadians with a dormant bank account, you might as well locate it and put it to use. Whether you want to spend the windfall, invest it, or save the money in a high-interest savings account, you’ll be glad to get the money back.
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Flickr: Alex Vakulenko