Mortgage services providers in BC will soon be able to utilize personal mortgage corporations (PMCs) for tax efficiency instead of resorting to a common workaround involving registering a mortgage brokerage and co-brokering deals with a primary brokerage.

The introduction of PMCs under the new Mortgage Services Act (MSA)  modernizes how individual mortgage brokers can operate their businesses and brings BC in line with professional standards available to realtors and other regulated service providers.

What Are Personal Mortgage Corporations?

A Personal Mortgage Corporation allows an individual mortgage broker or principal broker to incorporate and provide their services through a wholly owned company. This creates opportunities for tax planning and business structuring, while ensuring all regulatory requirements remain fully in place.

Key Features:

• Single Owner and Control:
  Each PMC must be entirely owned and controlled by one licensed broker. Only the broker (and in some cases their immediate family) can own shares, and the broker must serve as the sole director and president. The company name must include the broker’s name and “Personal Mortgage Corporation.”

• Dual Licensing:
  Both the individual and their PMC must be separately licensed under the MSA. The PMC’s licence is linked to the individual’s licence, and both reference each other for transparency.

• Continued Brokerage Relationship:
  The PMC can only operate in association with the same licensed brokerage as its owner. A PMC cannot operate independently; like before, all business is conducted under the umbrella of a licensed brokerage.

• Limited Activities and Staffing:
  The PMC can only provide mortgage services through its owner. No other licensed brokers can act on behalf of the PMC, and it can only employ unlicensed support staff. No other business activities are permitted.

• Receiving Commissions:
  The new rules allow the brokerage to pay commission directly to the PMC, instead of the individual broker. The broker then draws their income from their corporation. This enables the benefits of incorporation without bypassing the core regulatory safeguards.

• Compliance and Accountability:
  Using a PMC does not reduce the individual broker’s regulatory responsibility. All compliance, conduct, and enforcement rules apply equally to both the broker and the PMC. The Superintendent may discipline both if there are breaches.

• Licence Linkage:
  If the individual’s licence is suspended or ends, the PMC’s licence is automatically suspended or cancelled as well. If the corporation stops meeting the strict structure requirements, its licence becomes inoperative until fixed. The PMC can never outlive or separate from its owner’s licence.

What This Means for Brokers and Brokerages:

This new framework replaces the previous practice of co-brokering agreements used to achieve similar business goals. Brokers now have a compliant, transparent way to incorporate, while all regulatory controls and industry protections are preserved.

Next Steps:

• Review the official guidance from BCFSA on Personal Mortgage Corporations (when available).

• Consider how these changes may impact your business planning, compliance procedures, and internal agreements.

• Ensure all licensing and structural requirements are fully met if you intend to use a PMC.

• Existing brokers and lenders must be properly licensed or within a recognized exemption by October 2026.

We encourage all members to consult BCFSA’s resources and, where appropriate, seek professional legal and tax advice to ensure full compliance as the transition deadline approaches.

If you have any questions or need further clarification, CAPL members are welcome to contact Samantha Gale at s.gale@privatelenderassociation.ca.