I will call the meeting to order.
I apologize to witnesses in advance. We're going to run a little further behind because we're going to have to deal with committee business at the start of the meeting rather than at the end.
I would ask the clerk if he could give the subcommittee report to the committee, and then we'll discuss it.
I'll read it:
|| Your Subcommittee met on Tuesday, March 27, 2018, to consider the business of the Committee and agreed to make the following recommendations:
|| 1. That, in relation to the statutory review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the Committee dedicate additional meetings based on the remaining lists of witnesses provided on Friday, February 16, 2018; and that, should the Committee's travel to Toronto, Ontario, London, United Kingdom, Washington, D.C. and New York City, New York, United States of America, in Spring 2018, be cancelled, efforts be made to invite these witnesses to appear by videoconference.
I think that's clear to everyone, given the travel difficulties we're having in the House at the moment. If this committee's travel gets cancelled as a result of that or doesn't get authorized tomorrow, then we would have to try to invite witnesses by video conference.
|| 2. That, notwithstanding the Committee's routine motion on the distribution of documents adopted on Wednesday, February 3, 2016, and the usual practice of committees concerning access to electronic documents, Pierre-Luc Dusseault and Pat Kelly be added to the Committee's distribution list and be granted access to the Committee's digital binder site for the remainder of the parliamentary session.
||3. That the Committee retain interpretation services in regards to....
I'll not go through all the places again related to the trip related to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
|| 4. That the Financial Consumer Agency of Canada be invited to appear to discuss their review of bank sales practices prior the commencement of the study of a budget implementation bill.
It is moved by Ms. O'Connell, seconded by Mr. Dusseault.
Is there any discussion on the subcommittee report?
(Motion agreed to)
The Chair: You have a motion, Ms. O'Connell?
It is noted that notice is given.
With that, thank you all.
Thank you, witnesses, for your patience.
As I think everyone knows, but just for the record, the finance committee is continuing its study on the statutory review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
We welcome the witnesses.
First we have the Canadian Bankers Association with Ms. Stephens, Assistant General Counsel; and Mr. Davis, Chief Anti-Money Laundering Officer. The floor is yours.
The Canadian Bankers Association would like to thank members of the committee for inviting us to participate in the review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. On behalf of our member banks, we welcome the opportunity to contribute our comments on this important piece of legislation.
From the beginning, the financial industry has taken its responsibility in this area very seriously and has worked co-operatively with the Department of Finance, law enforcement agencies, prudential regulators, and FINTRAC on the development and implementation of the regime. Banks in Canada are fully committed to supporting the fight against money laundering and terrorist financing. The banks' central role in the regime gives them hands-on experience and insight into where the regime could be improved to be more effective and efficient in its fight against money laundering and terrorist financing.
Today I will speak to our recommendations with respect to the following three topics: strengthening the regime, information sharing under PIPEDA, and client identification in a digital economy.
With regard to strengthening Canada's AML-ATF regime, we note that new provisions, regulations, and guidance are always being added to the AML-ATF regime in order to keep pace with the changing landscape for financial services. While we fully support ongoing efforts to strengthen the regime, it is becoming increasingly complex, with significant regulatory, resource, and operational costs that continue to grow.
In that regard, the banking industry is a strong supporter of using a more risk-based approach to the regime. Reporting entities should be encouraged to focus on risk typologies and customers who demonstrate significant AML-ATF risk. By focusing on high-risk transactions and patterns, banks would be able to effectively dedicate resources where they can achieve the greatest benefit.
The CBA also recommends that the regime be enhanced through greater collaboration, communication, and information sharing between governments, law enforcement, and financial institutions. This includes, one, using a more aligned and consultative approach to legislation and guidance; two, working jointly to develop typologies and identify high-risk transaction patterns; three, sharing information on individuals or entities under investigation; and four, allowing FINTRAC to request additional information once it has reasonable grounds to suspect money-laundering or terrorist financing activities.
We believe that overall, these changes would help strengthen the regime. Also, in order to ensure the regime is functioning effectively, we support the collection and publication of data with respect to investigations, prosecutions, and convictions.
The next topic I'd like to go over is information sharing under PIPEDA. We believe the ability of banks to help protect against financial crime would be enhanced if PIPEDA were amended to allow financial institutions to share information among themselves to detect and prevent other types of serious criminal activity beyond fraud. Currently, the relevant provision in PIPEDA is limited to where it is reasonable for the purposes of detecting or suppressing fraud, or of preventing fraud.
This makes it challenging for the financial system to effectively restrict a customer who is considered to present higher risk for money laundering or terrorist financing from having access to services. If one financial institution, for instance, believes that one of its customers is involved in one of these activities and accordingly terminates the relationship, there's virtually nothing to stop them from just moving down the street and going to another institution.
We strongly support the recent ethics committee's recommendation that PIPEDA be amended to allow for a broader range of instances where financial institutions can share information. It should go beyond financial fraud to include money laundering and terrorist financing, to strengthen the regime as a whole. At the same time, we recognize that any measures taken to enhance information sharing must be balanced with privacy considerations.
My last topic is related to client identification in a digital economy. It is imperative that the AML-ATF regulations continue to be flexible and adaptive in an environment of rapid development and adoption of emerging technologies. Banks need to harness the ever-changing world of digital technology solutions, including innovative and secure means of performing identification, to meet the consumer demands of banking in a non-face-to-face environment. There is still a reliance on physical viewing of identification documents. We believe the legislation needs to be expanded to allow for the use of advanced technology that has the ability to perform remote identification.
This can be done through mechanisms such as online scanning, data extraction, and document authentication; live video connections; blockchain; biometrics; and other methods as they become available in the near future. Many of these methods have the potential to provide greater security and accuracy for client identification than reliance on the viewing of physical documentation at a branch.
In closing, we would like to reiterate the strong support of the banking industry for the AML-ATF regime. We are pleased to have an opportunity to work co-operatively with the government and parliamentarians to ensure that Canada's system is effective and efficient.
Thank you once again for providing the CBA with this opportunity to offer our views.
Thank you for the opportunity to talk about the 2018 statutory review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
I'm going to approach this issue from the perspective of our 260-plus members that we often characterize as the small businesses of the Canadian financial sector. Our concerns, as you'll see in my comments, are really oriented from that perspective.
I would note first of all that the credit union system is pleased to see that the government is seeking a balance between regulatory compliance and the associated costs. Credit unions know they have a role to play in fighting these criminal activities. They are apprehensive, however, about the expansion of this framework to include sectors in which small entities, such as credit unions, do not always have the required resources or knowledge.
We also recognize that financial institutions have a responsibility to know who they are dealing with. That is the foundation of our business model. That said, our members maintain that due diligence as regards money laundering, collecting information, and documentation requirements is costly and prevents them from focusing on their core mandate, which is serving their members.
All this matters because our research, and research internationally, have found repeatedly that regulatory compliance, especially with money laundering and terrorist financing obligations, impose a disproportionately large and heavy burden on credit unions, smaller institutions, and smaller credit unions in particular. In fact, I think this creates a barrier to entry or good competition in the banking sector. It's a serious issue for us.
With the proposed expansion of the framework to cover new sectors, it would seem this load will spread to more entities. I know it's difficult to argue against the logic behind moving towards functional regulation, but it's also hard to imagine how collecting more information will necessarily lead to a more successful policy outcome. So far, the evidence we've seen does not bear that out.
It's true that some of the proposed changes try to make the overall framework more efficient and responsive. We are concerned, however, that some of these are just tweaks to what is frankly often a burdensome and not always efficient or effective system.
We'd like to suggest a different approach. We'd like to suggest the adoption of a model built around a simplified due diligence process for use in situations where there is little risk of services or customers becoming involved in money laundering or terrorist financing. Other jurisdictions have already adopted this approach. We believe that following their example would lead to the same results, namely reducing or at least limiting the increase in administrative burden imposed by the framework. Further, we think it would do so without affecting the value or quality of the gathered information.
This alternative model could also leverage new technologies to achieve the goal of capturing useful information while minimizing the cost of doing so. For example—I think this has been discussed publicly—the public sector might consider creating industry-wide information clearing houses. These clearing houses could collect beneficial ownership information, from annual tax reports, that could be keyed to unique identifiers assigned to each tax filer. By limiting a reporting entity's obligations to obtaining this unique number from their clients, the resulting compliance burden could be meaningfully reduced. Reporting entities would no longer need to go through the inefficient and duplicative effort of gathering this information from each account holder.
From the client's perspective, it would be less time-consuming and repetitive, especially for clients who hold accounts at several reporting entities. For the public sector, this approach could increase confidence that the information is secure, consistent, verified, and accurate. Since the detection of money laundering often hinges on observing the flow of funds among parties, policy-makers may also want to consider tying this approach into some of the changes that are being proposed as part of the payments modernization effort.
In short, we think the approach we are proposing would give credit unions and other reporting entities more time to focus on what is truly important, namely, explaining the context of transactions, rather than recording the usual, factual information.
The measures we are proposing are not simple to implement. We admit that. Yet if we are to strike a balance between costs and results, we encourage policymakers to carefully consider our proposals.
As I wrap up, I'd like to briefly shift to thanking this committee for the support it gave to credit unions as we worked to secure the right to use generic banking terms. Yesterday, as you know, the federal government introduced proposed changes as part of its budget implementation act that for us represent important progress on this file. This committee deserves credit for its support.
I'd be happy to take your questions on today's topic and also to appear on your Bill review.
Thank you very much.
As you mentioned, my name is Ethan Kohn. I'm Counsel at the CLHIA. My colleague Jane Birnie from Manulife Financial is here. She is the Assistant Vice-President, compliance.
We'll begin with an opening statement, and then we'd be pleased to address any questions the committee might have.
The Canadian Life and Health Insurance Association is a voluntary association with member companies that account for 99% of Canada's life and health insurance business. The life and health insurance industry is a significant economic and social contributor in Canada. It protects over 28 million Canadians and makes $88 billion a year in benefit payments to residents in Canada. In addition, the industry has over $810 billion invested in Canada's economy. In total, 99 life and health insurance providers are licensed to operate in Canada, and three Canadian life companies rank among the 15 largest life insurers in the world.
Our industry is proud to do its share in fighting money laundering and terrorist financing. When proceeds of crime are introduced, layered, and integrated into the financial system, public confidence is eroded. Companies with weak controls risk having significant administrative penalties imposed, and they also risk considerable damage to their reputation.
This committee has heard from a number of witnesses, including FINTRAC, that a risk-based approach to compliance and to enforcement is an objective of Canada's AML regime. Because neither reporting entities nor government agencies enjoy unlimited resources, it is important that they focus on the areas of greatest potential exposure. In this regard, I would note that the insurance industry is relatively low risk. We offer long-term protection products for which a significant majority have a clear source of funds, which makes it unlikely that bad actors will exploit the insurance sector. To illustrate this point, in 2016 over three-quarters of premiums received were in regard to products that carry a low risk for money laundering and terrorist financing. These products include term life, group life, registered annuities, disability insurance, and uninsured health contracts.
I would also note that the personal insurance industry is unique among all reporting entity sectors—not only are insurers subject to the act, but so too are their primary distribution network, life insurance advisors.
Each individual advisor must have controls in place similar to those required of insurers.
For our industry, there really are belts and suspenders in place.
I will turn now to the question at hand, this committee's examination of the PCMLTFA as part of the five-year review. You've heard from previous witnesses that the FATF assessed Canada's regime as being largely effective in containing ML-TF threats, and that Canadian financial institutions have a good understanding of their risks and obligations, and generally apply adequate mitigation measures. We agree with that, though there is always room for improvement.
With that, I'll turn the floor over to Ms. Birnie.
Policy-makers have made good strides in examining and improving aspects of the system that present real challenges for insurers. One example is the requirement that institutions identify the beneficial owners of corporations. As you know, the government is working with the provinces in devising a system that would have corporations report their controlling shareholders. We understand there could be sensitive information in such a repository, and unfettered access may not be appropriate. Limited access by authorized financial institutions, however, would avoid the need for each institution to replicate the work of determining beneficial ownership. It would make a better customer experience when applying for our products, as there would be fewer questions to ask and less documentary evidence to produce. This would have a dual benefit of enhancing privacy rights and reducing regulatory burden on every legal entity in Canada.
We also appreciate recent enhancements to identification requirements. Last year, the government responded to industry and introduced greater flexibility in the documents that constitute acceptable forms of identification. Going forward, we support further efforts to expand ID methodologies, such as digital identification.
Over the past couple of years, amendments have also been made to enable FINTRAC to exchange information with more of its federal and provincial partners, such as securities regulators and national intelligence agencies. If this were extended to allow FINTRAC to share information with reporting entities, there would be benefit to industry and to Canadians alike.
In each of these areas, we see real signs of progress, and we encourage Finance, FINTRAC, and OSFI to continue their efforts in identifying and addressing other aspects of the regime that would benefit from streamlining, bearing in mind the primary objective of the act: minimizing the abuse of Canada's financial system by money launderers and terrorists.
Thank you for inviting us today, and we're pleased to answer any questions.
Hello. Thank you kindly for inviting me.
As you said, I am an Associate Professor in the Law Faculty of Université Laval, a tactful title for a retired professor who still makes a contribution to the university community.
I am not an expert on the application of the Proceeds of Crime and Terrorist Financing Act. I specialize in taxation only, so my comments today will be limited to taxation in international transactions. I do not claim to have the solutions, but I would still like to put forward some hypotheses that may or may not be borne out.
Laurent Laplante, a journalist and essayist who I greatly admired, told me about twenty years ago that we cannot control what we cannot see. That is true for the criminal activities we are discussing today. Applying that statement to taxation, we can see that crime draws its strength from secrecy. When essential information that is needed to understand a commercial transaction remains secret and is not disclosed to the authorities—who nonetheless should have access to it in order to do the necessary audits and calculations—that means that our detection tools are inadequate.
In short, these weaknesses of our tax system that I have identified—some fiscal, others more commercial—can be exploited by tax evaders. I will explain them in greater detail later on or in answering your questions.
First, our tax legislation is very attractive, especially to international players, as it provides a screen and camouflages illegal transactions through the exempt surplus. I will talk about this later on.
Second, the fines for tax evaders, tax criminals, are too lenient. Most of these people do of course have advisors, guides, who are experts in taxation and who do not act alone. Recently, a businessman in Quebec City told me that he had been approached several times by accounting firms to carry out large international transactions, using tax havens in particular. He was also told several times that it was risky, but that it should work. He turned down those offers.
There is a third element, something that could be discussed. I am referring to bearer shares, which are used in tax evasion and are often denounced. Unfortunately, the Canadian Bar Association made an exception to this rule and did not speak out against them. Stating that this would interfere with tax planning, it argued for the status quo.
The voluntary disclosures program is the fourth element. In spite of the most recent changes to the program, it needs to be completely reviewed and to a large extent scrapped. The United States has in fact just announced that it is scrapping its offshore voluntary disclosure program; the program will be eliminated in a few months.
The Jordan decision is the fifth element, and it is increasingly being raised in taxation matters. In a very recent decision regarding tax evasion of $31 million related to contraband tobacco, a Quebec Court judge dismissed the charges on February 26, 2018, in accordance with the Jordan decision.
The sixth element pertains to changes that should be made to paragraph 55(3)b) of the Proceeds of Crime and Terrorist Financing Act, in order to expand the powers of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to require it to disclose information to the Canada Revenue Agency. Paragraph 55(3)b) is poorly written, in both English and French, but I would say the French version is even worse.
Another element that I will discuss very briefly is the ability of foreign companies to pay tax-free dividends to Canadian parent companies through the exempt surplus.
My explanation is as follows: there is nothing stopping a foreign company that is located in a tax haven, where there are few controls, and that is affiliated with a Canadian company from smuggling firearms or selling illicit drugs and recording those revenues under the company's exempt surplus, since there are no controls in the foreign country. As a result, in many cases no one is the wiser when those amounts are repatriated as dividends payable to the Canadian parent company, because form T1134 requires very little information from the dividend recipient.
As a colleague from the Canada Revenue Agency told me recently, it is obviously worse when the parent company is not subject to an audit. It is smooth sailing because the Canadian parent company deposits the amount it receives in its bank account and not in a non-resident entity. The resident entity may deposit amounts from abroad. That is a major problem. As someone noted, a new generation of tax evaders could take advantage of this situation.
Why then should we not require the foreign entity that pays dividends to a Canadian parent company to obtain certification from an expert in the field to certify that the revenues earned are indeed from legitimate operations? And at the same time, of course, impose prison terms for experts who sign off on something that constitutes fraud?
Canada has concluded 23 information sharing agreements and more than 90 tax conventions, in some cases with countries that merrily engage in fraud.
On March 26, just two days ago, an article by Jeremy Cape was published in the Tax Notes International.
He is a tax and public policy partner with Squire Patton Boggs in London.
Mr. Cape said the following about Nigeria:
|If I were a Nigerian living in Nigeria, I'm not sure I'd be wholly compliant with my tax affairs. In fact, there's a good chance I'd be a tax evader.
There is in fact a lot of tax fraud in Nigeria, and Canada has a tax convention with that country.
There are other aspects as well. I could mention Panama, with which Canada concluded an information sharing agreement. Article 6 of that agreement should include a foreign control mechanism to allow us to investigate what is happening abroad, but it does not. There is an article 6 in 22 other information sharing agreements, allowing Canada to investigate what is happening in those countries, but there is no such article 6 in the agreement with Panama.
As recently as yesterday, the Canada Revenue Agency told me not to worry about it, since Canada has signed the Convention on Mutual Administrative Assistance in Tax Matters. Article 9 of that convention does in fact provide that countries may conduct investigations in other countries, but Panama has set aside article 9. Since it does not subscribe to that article of the convention, Panama could refuse to let foreign countries conduct investigations within its borders.
Okay. Thank you for clarifying.
I'm going to move to the credit unions, please.
We certainly heard this before when we had testimony from different officials in terms of credit unions. You mentioned in your testimony as well the model of knowing your customer and things like that. I can see that certainly in a lot of communities, but there are still credit unions in big cities and a lot of customers, and it would pose a challenge to know your clients all that well.
I understand that's the model, but in today's day and age that's certainly not possible everywhere. How would the credit unions see their role in ensuring that you do try to know your customers, but if you can't physically know them, that you have other conditions in place?
I'll ask you a two-part question all at once. Also, we know from the larger banks and the testimony we heard earlier that there are systematic flags built within the system. The average teller isn't going to know that even though it might be an amount under the $10,000 that is being transferred, there are flags built into the system. I can't imagine that every credit union—the smaller ones—could have that technological infrastructure. What role do you see in terms of knowing your customer and technology and those costs, then?
We haven't done an analysis for AML-ATF in particular. We've done analyses around total regulatory burden, but AML-ATF is always cited as the number one most burdensome regulatory policy out there.
I can give you some numbers from a study one of our member centrals did of Ontario and B.C. credit unions. They found that the compliance cost per member—and, again, this is for the entire suite of regulatory policy and positions—was $75 at the smaller credit unions, those with $250 million or less in assets. At the larger credit unions it was $22 per member, for those with $2 billion.
Just within the credit union system, you can see that the impact of regulatory burden is quite disproportionate, depending on your size, per member. We can imagine that, if we extended that to the large banks, the gap would be that much bigger.
These are real numbers we have gotten from surveys, from analysis, and again, this kind of research has been replicated in the U.S., in Italy, and elsewhere in Europe. We even did a study earlier, in 2011, with almost identical results where, within the credit union system, the big guys have five times less cost, from an FTE perspective, than smaller guys do.
It's actually possible to look at a comparison with the United States. Since 2009, the Internal Revenue Service, or IRS, has initiated proceedings against 1,545 taxpayers in relation to activities abroad and 671 taxpayers in connection with tax violations.
In Canada, from 2011 to 2016, proceedings were initiated against 42 taxpayers in relation to tax evasion. A CBC/Toronto Star investigation recently revealed that, since 1977, the Royal Bank of Canada had registered 429 offshore companies engaging in tax evasion in Panama. The bank was asked to turn over information, and it complied. It shows, however, how prevalent the use of offshore companies is.
As for bearer shares, everyone agrees that there is a problem. Even academics are saying that Canada is lagging behind on the issue. We have a serious problem, and we can't continue to allow bearer shares to be issued on the market. We absolutely have to get rid of them, since that is what led to the whole Panama Papers debacle. The British Virgin Islands still have bearer shares. My personal prediction is that the Virgin Islands will be the site of the next Panama Papers-style scandal, precisely because they still allow bearer shares.
Blockchain presents a unique opportunity for client identification in a secure and encrypted way, using the concepts of digital keys and digital key management. That's an area that we need to contemplate as we look forward to revamping regulations. How will banks use digital key and digital key management in the new regime, and the rights of protecting that information under PCMLTFA and things of that sort?
I'll tie this in quickly with bearer shares, if I may. In the blockchain world, this is a bearer share. If I give you this, it has a private key and a public key, and you own what is in that crypto-wallet or in the blockchain. That is not a mechanism by which the conventional means that we use to track and report on money laundering will work in the future, so there's an opportunity for exploration and new ways of innovation in how we think about AML in a future state in this space.
I welcome ongoing discussions with the Department of Finance, the CBA, and the government on this very topic, with FINTRAC included. The advancements we're seeing in technology create opportunities, but they also create new risks, and we need to be in a position to address that.
Thank you, Mr. Chair, as well as to all our witnesses for all the work you do and for coming to share your expertise with us today so we can help with this review.
I'd like to talk about FINTRAC in general. I have spoken with a number of credit unions that say that they are spending more and more money to comply with the federal side. There are many touchpoints, and FINTRAC is one of them.
This can be open to the group. FINTRAC collects a lot of data, and it does so on a lot of transactions. Right now, legislatively, it can only utilize that data on a one-to-one basis if it's regarding money laundering or terrorism financing. Then it works with the proper authority to tackle that from there. They cannot share information, by law, because they don't want to compromise privacy. Nevertheless, we know that in places under provincial jurisdiction, such as private mortgages, etc., there are a lot of cash sales that are not picked up by CMHC or by OSFI.
My proposal, as part of some sort of renewal of FINTRAC through this review, would be to see if we can take what is already very costly to credit unions and other reporting agents under this and allow FINTRAC to aggregate so that no personal, private information is compromised, allowing policy-makers to have a better understanding of the markets. For example, real estate professionals do tell me that FINTRAC takes quite a bit of their time. Again, I haven't seen the paperwork, so I can't judge that, but I bet you that if they had a return showing a little bit more information on cash sales in their area or which provinces are the flashpoints for troubles with real estate, they would probably value that. Is this something that you think would be a welcome addition as far as making that information publicly available?
In regard to administrative burden...and again, I don't want to say that the $75 per member is all FINTRAC, because that's not fair, and that's not true. It's an accumulation of the common reporting standard and know your client protocols, etc. There's a lot that goes into that, to be clear, but when I asked FINTRAC, when they came to this committee on this review, if they track—and Mr. Kmiec went on this vein, as well—they said that they are very effective at what they do, but they do not track the administrative compliance cost. You can't manage what you can't measure.
Do you think that it would be helpful to know, when they are doing their jobs, that there there was a number that they had to be accountable for, and if it went up over a period of time then public officials like us could better evaluate whether the system is working as is intended?
Mr. Albas, I couldn't agree more. I mean, even small changes in some of the definitions.... I'll give an example. I know you're using the Department of Finance February paper as a foundational document. One of the proposals is to broaden or increase the scope in terms of the definition of what would constitute a head of an international organization, these sorts of changes.
Obviously, the system needs to adapt to perceived threats and money launderers. They change and they amend their ways in response to these things, but in terms of changing the definition of a head of an international organization, these are small changes, but they can result in multi-million dollar costs, certainly to members of our association.
Forms need to be changed, and these changes are made electronically. Training has to be provided. There are outside vendors who need to be engaged, and many insurers often use the same vendors, so when these changes need to be made, and there's a deadline by which that has to happen, there's often competition for those scarce resources, and as you can imagine, what happens is the cost of those resources go up.
Let me just say there are a lot of excellent proposals and suggestions in that paper. We've mentioned a few, but this is one we're quite concerned about.
I think OSFI has a regulatory sandbox project that maybe could be expanded to have small projects where you could try some of these new technologies. Maybe that might not be appropriate for some of the larger banks, but I do know they do it for smaller organizations looking to try new things, and perhaps that might be an avenue for some of those things.
There's been a little bit of talk about clearing houses for information where perhaps you could have beneficial ownership as well as other information being fed in. To tell you the truth, as great as that sounds, I'm extremely reluctant when you see that you have credit bureaus being hacked. You see Facebook structuring itself in such a way that, again, there are breaches or potential breaches. Anytime you have something that's large and big, and inevitably if it's run by government, oftentimes when the budget comes round and people look to save, they don't necessarily update it or continue to keep things strong and that could leave it open to all sorts of things.
Then we also have existing registries, like in B.C. we have the land title registry, which works very well and has always been paid for by those who use it. Again, there would be transition costs and amalgamation costs. There are challenges when you amalgamate certain centres to a central authority; and there are those vulnerabilities. While I like the idea and perhaps we could use things like blockchain, how would you address some of those concerns?
I'd like to start with the bankers.