Again, outside the scope of this particular investigation, cybercriminals do commit the majority of their crimes to gain access to personal or financial information for the purposes of gaining access to financial institutions and the money that's housed in those locations. The RCMP work continuously with the international community to identify and pursue the individuals who are committing a great number of these crimes.
The RCMP are working closely right now with those international partners, as well as many of the large financial institutions in Canada and the Canadian Bankers Association, to ensure that we are targeting the individuals who are causing the most significant harm. Our federal policing prevention and engagement team has hosted sessions with both the financial institutions and the cybersecurity industry. We have a new advisory group that's helping us target those individuals.
As far as knowledge goes, it's only in the hands of those cybersecurity and financial institutions. We're trying to ensure that as we are putting the resources we have into investigations, we are targeting those individuals who are causing the most harm.
We do that, as well, internationally. As incidents occur, we speak to our international law enforcement partners. We identify the behaviours we have in our cases or in our Canadian law enforcement partners' cases, so that if there are connections or individuals who are in those other jurisdictions, we're using the mutual legal assistance treaty, and we're using police-to-police collaborative efforts that we have to ensure that, internationally, all of those efforts are put towards a problem.
Now, I want to stay away again—and I apologize for doing that—from this exact incident. I cannot express what is or is not being done in this particular incident.
Thank you, Mr. Chair. As requested, I'll keep my presentation on the shorter side.
Mr. Chair and honourable members of the committee, my name is André Boucher, and I am the associate deputy minister of operations at the Canadian Centre for Cyber Security.
Thank you for the opportunity to appear before you this afternoon.
Let me begin with a brief overview of who we are.
The Canadian Centre for Cyber Security was launched on October 1, 2018 as part of the Communications Security Establishment. We are Canada's national authority on cybersecurity and we lead the government's response to cybersecurity events.
As Canada's national computer security incident response team, the cyber centre works in close collaboration with government departments, critical infrastructure, Canadian businesses and international partners to prepare for, respond to, mitigate and recover from cyber events. We do this by providing authoritative advice and support, and coordinating information sharing and incident response.
The cyber centre's partnerships with industry are key to this mission. Our goal is to promote the integration of cyber defence into the business model of industry partners to help strengthen Canada's overall resiliency to cyber threats. Despite these efforts and those of Canada's industry, cyber incidents do still happen.
This brings me to the topic we are here to discuss today. The cyber centre is not in a position to provide any details on this incident and does not comment on the cybersecurity practices of specific businesses or individuals. Any cyber breach, not just this specific instance, can be taken as an opportunity to revisit best practices and to refine systems, processes and safeguards.
In this case, media reporting and public statements indicate that the disclosure of personal information occurred as a result of the actions of an individual within the company—what is termed insider threat.
In our recent introduction to the cyber-threat environment, the cyber centre described the insider threat as individuals working within an organization who are particularly dangerous because of their access to internal networks that are protected by security parameters. For any malicious actor, access is key. The privileged access of insiders within an organization eliminates the need to employ other remote means and makes their job of collecting valuable information that much easier. More broadly, what this incident underscores is the human element of cybersecurity. The insider threat is only one example of this.
Cybercriminals have proven especially adept at exploiting human behaviour through social engineering to deceive targets into handing over valuable information. Fundamentally, the security of our systems depends on humans—users, administrators and security teams.
What can we do in a world of increasing cyber-threats? At the enterprise level, adopting a holistic approach to security is critical. This means starting with a culture of security and putting in place the right policies, procedures and cybersecurity practices. This ensures that when something goes wrong, as it almost inevitably will, there is a plan in place to address it.
Then we need to invest in knowing and empowering our people. Training and awareness for individuals and businesses are very important. Only with awareness can we continue to develop and instill good security practices, a fundamental step in securing Canada's cybe systems.
As well, we always need to identify and protect critical assets. Know where your key data lives; protect it; monitor the protection, and be ready to respond.
At the cyber centre, we'll continue to work with industry and to publish cybersecurity advice and guidance on our website. We regularly issue alerts and advisories on potential, imminent or actual cyber-threats, vulnerabilities or incidents affecting Canada's critical infrastructure.
Under, we hope, different circumstances, we'll continue to participate in conversations like this one, which help to keep the spotlight on these issues.
Ultimately, there is no silver bullet when it comes to cybersecurity. We cannot be complacent; there is too much at stake. While long-promised advances in technology may make the task easier, the need for skilled and trustworthy individuals will remain a constant.
Thank you, and I look forward to answering your questions.
Mr. Boucher, I didn't get a chance to ask you questions earlier.
My first question is about something your colleague Scott Jones said when he appeared before the committee as part of the other study we've been referring to a lot today. He said it was important that institutions and businesses report data breaches and thefts that affect them.
In its recommendation, the committee remained rather vague. Should it be mandatory to report such breaches to police in order to minimize the impact on the public and catch those responsible?
That brings me to two other questions. They're for you, Mr. Flynn.
Since the information remains online forever, should police treat these threats in the same way they do physical ones? If a murderer or someone else poses a physical threat, I imagine police investigations are conducted with a certain level of urgency. Should the same apply to cyberthreats? Desjardins contacted Quebec provincial police in December, if I'm not mistaken.
My last question is about background checks and ongoing security checks. Given how savvy individuals are these days, should these checks become the norm?
You can have the rest of my time to answer.
Thank you, Mr. Chair. I will go first, if that's all right.
My name is Annette Ryan. I am the associate assistant deputy minister of the financial sector policy branch within the Department of Finance. I am joined by Robert Sample, director general of the financial stability and capital markets division, as well as Judy Cameron, managing director of the Office of the Superintendent of Financial Institutions Canada, and her colleague. We are pleased to appear before you today.
My remarks today will address two areas that, I believe, are pertinent to the issues before you. Specifically I will clarify the roles of government departments and agencies and private sector actors within the federal financial sector framework and update the committee on efforts being undertaken by the Department of Finance, federal regulatory agencies and banks in support of cybersecurity and data protection.
Protecting the privacy and security of Canadians' personal and financial data is an objective shared by both levels of government and the private sector, and it is one that's crucial for maintaining continued trust in Canada's banking system.
I'll address the roles within the federal government and then discuss provincial government and private sector roles.
The Department of Finance along with federal financial sector oversight agencies has responsibility for the laws and regulations that govern Canada's federally regulated banking system. We collectively set expectations and oversee implementation to ensure that operational risks related to cybersecurity and privacy are properly managed by the financial institutions that we regulate.
The has overarching responsibility for the stability and integrity of Canada's financial system. Cybersecurity is a primary aspect of financial cyber-stability as it ensures the sector remains resilient in the face of cyber-threats and attacks
In turn, Public Safety has recognized the financial services industry as being a critically important sector within its wider national critical infrastructure strategy.
The Department of Finance works closely with a range of partners responsible for financial regulation and cybersecurity both domestically and internationally to ensure that the sector is adopting appropriate cyber-resiliency and data protection practices and that the specific needs of the financial sector are considered within economy-wide policies and statutes that relate to cybersecurity and data security.
I'll describe the general responsibilities among financial regulators. The Office of the Superintendent of Financial Institutions is the prudential regulator of federally regulated financial institutions, including banks. OSFI develops standards and rules for managing cyber-risks as is consistent with its wider oversight of operational risks that institutions must manage.
The Bank of Canada monitors financial market infrastructures, such as payment systems, to enhance resilience to cyber-threats, and the bank coordinates sector-wide responses to systemic-level operational incidents.
Other federal agencies have responsibilities for laws of general application in respect of privacy. The Office of the Privacy Commissioner of Canada oversees the banks' compliance with Canada's private sector privacy legislation, the Personal Information Protection and Electronic Documents Act, known as PIPEDA. PIPEDA sets out requirements that businesses must follow when collecting, using or disclosing personal data in the course of commercial activities. These include putting in place appropriate security safeguards to protect personal data against loss, theft or unauthorized disclosure.
The Department of Innovation, Science and Economic Development has overall policy responsibility for PIPEDA. In November of 2018 the Government of Canada implemented amendments to PIPEDA related to data breach reporting requirements and associated monetary penalties for failing to report.
As you've just heard, other federal departments and agencies, including Public Safety, the Canadian Centre for Cyber Security and the RCMP, share responsibilities with respect to broader Government of Canada cybersecurity initiatives.
It is important to note that supervisory responsibility for the financial sector in Canada is divided between federal and provincial governments. Provinces are responsible for the supervision of securities dealers, mutual fund and investment advisers, provincial credit unions and provincially incorporated trust, loan and insurance companies.
Accordingly, federal and provincial financial sector authorities have protocols in place for information sharing, particularly where matters of financial stability are concerned. Financial institutions, themselves, of course, are most immediately responsible for maintaining cyber and data security on a day-to-day basis, directly managing operational risks through an extensive series of protective and preventative measures, both individually and through industry-level co-operation.
These are supported by policies and standards that are continually updated to address the evolving threat landscape and remain in line with industry best practices.
Cyber-attacks are a serious and ongoing threat. I will focus on some of the steps being taken by the Government of Canada, the financial sector, regulatory agencies and the banks to ensure cybersecurity in the financial sector.
In budget 2018, the federal government invested over half a billion dollars in cybersecurity, and in October of 2018, it established the Canadian Centre for Cyber Security, which serves as a single window of technical expertise and advice to Canadians, governments and businesses. The centre defends against cyber-threat actors that target Canadian businesses, including federally or provincially regulated financial institutions, for their customer data, financial information and payment systems. Efforts to address cybercrime have been further bolstered by the newly created national cybercrime coordination unit within the RCMP, which provides a national cybercrime reporting mechanism for Canadians, including incidents related to data breaches or financial fraud.
More recently, in budget 2019, the government proposed legislation and funding to protect critical cyber systems in the Canadian financial, telecommunications, energy and transport sectors.
Our colleagues at the Treasury Board Secretariat continue their work with provincial governments, financial institutions and federal partners toward a pan-Canadian trust framework for digital identity with the goal of strengthening digital ID protection in the context of cyberthreats.
On the regulatory side, earlier this year OSFI published new expectations on technology and cybersecurity breach reporting via the technology and cybersecurity incident reporting advisory. This is intended to help OSFI identify areas where banks can take steps to proactively prevent cyber incidents, or in cases where incidents have occurred, to improve their cyber-resiliency.
While the first objective is to prevent data breaches, the reality is that these events happen and are not localized to the financial sector. Having said this, when cyber events occur at a federally regulated financial institution, control and oversight mechanisms are in place to manage them.
To summarize, cybersecurity is an area of critical importance for the Department of Finance. We are actively working with partners across government and in the private sector to ensure that Canadians are well-protected from cyber incidents and that when incidents do occur, they're managed in a way that mitigates the impact on consumers and the financial sector as a whole.
Thank you for your time. I'm happy to take questions.
Thank you very much, Mr. Chair.
My name is Elise Boisjoly, and I am the assistant deputy minister of the integrity services branch at Employment and Social Development Canada. I am joined by Anik Dupont, who is responsible for the social insurance number program.
Thank you for the opportunity to join you today. My remarks will focus on the social insurance number, or SIN, program. Specifically, I will clarify what the social insurance number is and provide information on its issuance and use; inform the committee on privacy protection related to the SIN; and provide information on our approach in the case of data breach.
What is the SIN? The SIN is a file identifier used by the Government of Canada to coordinate the administration of federal benefits and services and the revenue system. The SIN is required for every person working in insurable or pensionable employment in Canada and to file income tax returns.
It is issued prior to your first job, when you first arrive in Canada or even at birth. During the last fiscal year, over 1.6 million SINs were issued.
The SIN is used, among other things, to deliver over $120 billion in benefits and collect over $300 billion in taxes. It facilitates information sharing to enable the provision of benefits and services to Canadians throughout their life such as child care benefits, student loans, employment insurance, pensions and even death benefits. As such, the SIN is assigned to an individual for life.
The SIN is not a national identifier and cannot be used to obtain identification. In fact, it is not even used by all programs and services within the federal government; only a certain number use it. The SIN alone is never sufficient to access a government program or benefit or to obtain credit or services in the private sector. Additional information is always required.
While data breaches are becoming increasingly commonplace, the Government of Canada follows strong and established procedures to protect the personal information of individuals. My colleague mentioned the Privacy Act and the Personal Information Protection and Electronic Documents Act, which is being administered by Innovation, Science and Economic Development Canada. They provide the legal framework for the collection, retention, use, disclosure and disposition of personal information in the administration of programs by government institutions and the private sector, respectively.
As my colleague mentioned, on November 1, 2018, a new amendment to the Personal Information Protection and Electronic Documents Act came into force, which requires organizations that experience a data breach and that have reason to believe there's a real risk of significant harm to notify the Office of the Privacy Commissioner, the affected individuals and associated organizations as soon as it's feasible. Violating this provision may result in a fine of up to $100,000 per offence.
At Employment and Social Development Canada, we have internal monitoring strategies, privacy policies, directives and information tools for privacy management, as well as a departmental code of conduct and mandatory training for employees on protecting personal information. We believe that any security breach affecting social insurance numbers is very serious and, in fact, we ourselves are not immune to such a situation. For example, in 2012, the personal information of Canada student loan borrowers was potentially compromised. The breach was a catalyst for further improvements to information management practices within the department.
Preventing social insurance number fraud starts with education and awareness. This is why our website and communication materials include information that can help Canadians better understand the steps they should take to protect their social insurance numbers. Canadians can visit the department websites, call us or visit us at one of our Service Canada centres to learn how best to protect themselves. It is important to note that protecting the information of Canadians is a shared responsibility among the government, the private sector and individuals. We strongly discourage Canadians from giving out their social insurance numbers unless they are sure that doing so is legally required or necessary. Canadians should also actively monitor their financial information, including by contacting Canada's credit bureau.
A loss of a social insurance number does not necessarily mean that a fraud has occurred or will occur.
However, should Canadians notice any fraudulent activity related to their social insurance number, they must act quickly to minimize the potential impact by reporting any incidents to the police, contacting the Privacy Commissioner and the Canadian Anti-Fraud Centre, and informing Service Canada. In cases where there is evidence of the social insurance number being used for fraudulent purposes, Service Canada works closely with those affected.
Despite ever larger data breaches, the number of Canadians who have had their social insurance number replaced by Service Canada due to fraud has remained consistent at approximately 60 per year since 2014.
That being said, we understand that many Canadians have signed a petition asking Service Canada to issue new social insurance numbers for those impacted by this data breach. The main reason we do not automatically issue a new social insurance number in these circumstances is simple: getting a new social insurance number will not protect individuals from fraud. The former social insurance number continues to exist and is linked to the individual. If a fraudster uses someone else's former social insurance number and their identity is not fully verified, credit lenders may still ask the victim of fraud to pay the debts.
In addition, it would be the individual's responsibility to provide their new social insurance number to each of their financial institutions, creditors, pension providers, employers—current and past—and any other organizations. Failing to properly do so could put individuals at risk of not receiving benefits or leave the door open to subsequent fraud or identity theft.
It would also mean doubling the monitoring. Individuals would still need to monitor their accounts and credit reports for both social insurance numbers on a regular and ongoing basis. Having multiple social insurance numbers increases the risk of potential fraud.
Active monitoring through credit bureaus as well as regular reviewing of banking and credit card statements remain the best protection against fraud.
In closing, protecting the integrity of the social insurance number is critical to us, and I can assure you that we will continue to take all necessary action to do so, including reading this committee's report and considering advice from this committee and others on how to best improve.
Thank you for your time. I'd be happy to answer your questions.
Good afternoon to all committee members.
My name is Maxime Guénette. I'm assistant commissioner of the public affairs branch and chief privacy officer at the Canada Revenue Agency. With me today is my colleague Gillian Pranke, deputy assistant commissioner of the assessment, benefit and service branch at the CRA.
The CRA is an organization that touches the lives of virtually all Canadians. We're one of the largest holders of personal information at the Government of Canada. We process more than 28 million individual income tax returns annually. It's therefore critical that the CRA has an extensive privacy framework in place to manage and protect personal information for all Canadians.
Integrity in the workplace is the cornerstone of agency culture. The agency supports its people in doing the right thing by providing clear guidelines and tools to ensure privacy, security and the protection of personal information, our programs and our data.
The agency is subject to the Privacy Act and associated Treasury Board policies and directives for the management and protection of Canadians' personal information. Section 241 of the Income Tax Act also imposes confidentiality requirements on its employees and others with access to taxpayer information.
The agency also adheres to the policy on government security and direction provided by lead security agencies like the Communications Security Establishment and the Canadian Centre for Cyber Security.
In April 2013, the agency appointed its first chief privacy officer, who is also responsible for the access to information and privacy functions within the agency.
Part of my role as the chief privacy officer is to ensure that the CRA's respect for the privacy of the information it holds is reinforced and strengthened by overseeing decisions related to privacy, including assessing the privacy impacts of our programs; championing privacy rights within the agency, including managing internal privacy breaches when they occur; and reporting to CRA senior management on the state of privacy management at the agency.
Our responsibility for sound privacy management goes beyond appointing a chief privacy officer, though. It's a responsibility that all employees share.
Protecting the CRA's integrity includes ensuring that we have the proper systems in place to safeguard sensitive information from external threats. Agency networks and workstations are equipped with malware and virus detection and removal software, which are updated daily and protect the CRA environment from the increasing threat of malicious code and viruses.
At the agency employee level, computers are secured with a suite of security products ranging from anti-virus software to host intrusion software.
External services are conducted on secure platforms and protected by firewalls and intrusion prevention tools to detect and prevent unauthorized access to agency systems.
During online transactions we ensure that all sensitive information is encrypted when it is transmitted between a taxpayer's computer and our Web servers. Regardless of how Canadians choose to interact with the agency, they must complete a two-step authentication process before gaining access to their account.
These steps are crucial to making sure that access to personal information is only available to authorized individuals. The process includes validation of a number of personal and confidential data points, including a person's social insurance number, their month and year of birth, and information from the previous year's income tax return.
The CRA will shortly also be implementing a new personal identification number for taxpayers who choose to use it when calling the individual inquiries line. In addition, the CRA is currently examining additional security procedures to safeguard the information of taxpayers. As cybercrime and phishing scams become more sophisticated and commonplace, the CRA is being proactive in warning the public about fraudulent communications claiming to be from the CRA.
One very simple way in which taxpayers can safeguard against fraudulent activity is to sign up for My Account, or for businesses to sign up for My Business Account, so that they can use the CRA's secure portals to access and manage their tax affairs easily and securely. When an individual is signed up for My Account, they can also sign up for online mail in order to receive account alerts informing them of possible scams or other fraudulent activity that may affect them.
CRA is proud of its reputation as a leading-edge organization committed to excellence in administering Canada's tax system. However, inappropriate fraudulent activity can occur in the workplace. CRA has incorporated a broad array of checks and balances to ensure that those who access taxpayer information are strictly limited to employees required to do so as part of their job and to detect misconduct when it does occur.
Monitoring of employees' access to taxpayer information is centralized, ensuring an independent process that enables the agency to detect and, if necessary, address any suspect transactions in our systems. This provides assurance that authorized users are accessing only the applications and data they are allowed to access based on strict business rules.
In 2017 the CRA implemented a new enterprise fraud management solution, which complements existing security controls and further reduces the risk of unauthorized access and privacy breaches. This solution enables proactive monitoring and detection of unauthorized access by CRA employees. Any allegations or suspicions of employee misconduct are taken very seriously and are thoroughly investigated. When wrongdoing or misconduct is founded, appropriate measures are taken, up to and including termination of employment. If criminal activity is suspected, the matter is referred to the proper authorities.
Upon hire, agency employees are required to read and acknowledge the agency's code of integrity and professional conduct and the values and ethics code for the public sector.
The code clearly outlines the expected standard of conduct, including the obligation to protect taxpayer information in accordance with section 241 of the Income Tax Act. Unauthorized access to taxpayer information is considered to be serious misconduct, as reflected in the agency's directive on discipline.
The code ensures that current and former employees are aware that the obligation to protect taxpayer information continues even after they leave the CRA. All employees are asked to review and affirm their obligations under the CRA's code of integrity every year.
In the event a privacy breach does occur, it is assessed in accordance with TBS policy and procedures to document and evaluate all potential risks to the affected individual. In such a case, the CRA offers support to the affected individual through a dedicated agency representative so that the client has the opportunity to ask questions and find information as well as, on a case-by-case basis, get access to free credit protection services.
On the rare occasion when a taxpayer's information is confirmed to have been compromised, the CRA will act to resolve all outstanding issues. This includes reviewing all fraudulent activity that may have occurred in the account, including fraudulent refund payments.
We at the agency are deeply committed to safeguarding the trust Canadians place in our organization, and to meeting their expectations that we have the right checks and balances in place to secure the information entrusted to us. We have worked hard to earn the public's trust, because it is the foundation of our self-assessment tax system.
A good reputation takes years to establish. We safeguard it by remaining vigilant in our efforts to protect taxpayers from security breaches and to protect Canada's tax administration system from misconduct and criminal wrongdoing.
Thank you, Mr. Chairman. I'd be pleased to answer any questions you may have.
I briefly mentioned that in my presentation and I thank you for giving me the opportunity to talk about it at greater length.
First, an information leak does not necessarily mean that fraud or identity theft has occurred. Second, we do not automatically change social insurance numbers after a leak like this because it doesn't really solve the problem or automatically remove all risk of fraud.
Let me explain that first point a little more. If you do not change the social insurance number linked to a certain credit number and if a credit agency uses the old credit number, the person involved will not necessarily be able to get credit. In addition, if a lender does not properly check the identity of that person, and a fraudster borrows money using his name, the lender could ask him to pay the debt. So there can be other cases of fraud if lenders do not correctly check people's identity.
The second reason is that it can create serious problems of access to benefits and services. As I said in my presentation, victims of data breaches must warn everyone, financial institutions, credit agencies, past and future employers, and the managers of pension schemes to which they belonged with their old social insurance numbers, and make the necessary changes. Often, people no longer remember those to whom they have given their social insurance number, especially at the beginning of their careers. That can prevent people from receiving a pension, for example, because it is no longer possible to establish a link between an individual and the benefits to which they are entitled.
At federal level, we would certainly advise the Canadian Revenue Agency and all organizations involved. But changes could be made manually and there may be errors. This could complicate the calculation of pensions or employment insurance benefits. If someone forgets an employer and makes errors, the calculation of employment insurance benefits or the old age pension could be wrong.
My thanks to you all for being here today.
Listening to you is like being in The Twelve Tasks of Asterix. Let us put ourselves in people's shoes. Their concern is that they have no real idea of what will happen. We asked to meet with you so that we could have some information on the subject. We know that the social insurance number is one measure but is there anything else that should be done in the future to change the system? Could we do as other countries have done, such as providing more digital identification, whether it is by means of fingerprints or something else?
Ms. Boisjoly, you say that there about 60 cases per year, but look, 2.9 million people had their data stolen. Are you expecting a major increase in the number of requested changes of social insurance numbers following these identity thefts?
I also have a question for you, Mr. Guénette.
The people following what is currently happening want to know what is being done. You proposed a good solution, and solutions are what people need. You mentioned people going on the Government of Canada site and opening their financial records. If I understand correctly, by opening your records, you can receive alerts or warnings.
It has now been three weeks. We are here today as the result of an emergency request. Why was there no communication with the public, immediately or within a week following the thefts, to let people know what the Government of Canada can do to help? That's what we need to know.
I am all ears, Ms. Boisjoly.
Thank you very much, Mr. Chair.
Good afternoon to you all and thank you for joining us.
I do not normally sit on this committee, but I gladly agreed to replace one of its permanent members.
I have had discussions with a number of my constituents in Rivière-des-Mille-Îles, which is to the north of Montreal and includes Deux-Montagnes, Saint-Eustache, Boisbriand and Rosemère. They are very concerned. This is something that has come up all the time since the House adjourned on June 21. That is why I agreed to be here today without hesitation, even though I am not familiar with all the studies that this committee has done.
Ms. Ryan, earlier, you began by saying that the Department of Finance establishes the legislation and regulations that govern the Canadian banking system. You then said that oversight of the Canadian financial sector is shared between the federal and provincial governments.
Let us look specifically at Quebec. The provinces are responsible for real estate brokers, and mutual funds and investment representatives, and so on. Desjardins is a provincial cooperative institution. Just now, I mentioned my constituents, but my entire family and myself are also among the 2.9 million people affected. This concerns us a great deal and we are wondering what will be the future impact of this theft on our lives.
Have you had any requests from Desjardins? Mr. Guénette said that there are ongoing discussions between departments, but have people from Desjardins been in communication with you to get additional information?
Thank you for your question.
Of course, we have security rules at several levels. First, we screen the staff that we hire. People with more specific access have “Secret” security clearance instead of a lower level of clearance. A whole host of physical security measures are in place. People working in call centres, who have access to screens showing taxpayer information, may not have their personal phones with them. We have measures in that regard.
As for access to taxpayers' data, those data are on separate servers that are not connected to the Internet. There is a mechanism by which the employees' access to the data is reviewed annually, or each time they change jobs. Managers verify the access those employees have on a regular basis.
As for the workload, in my introductory remarks, I talked about the administrative rules. When we give employees their workload, our business fraud management system checks by using algorithms in real time. The system applies several dozen rules. For example, if employees check their own tax accounts, an alert is automatically issued and the system sees it immediately. If employees work on tasks that they have not been assigned, the system will immediately send an alert to the manager, who would then be able to ask an employee what he or she was doing in the system. Screen shots are captured per minute, which allows us to see which pages employees are consulting or which changes they have made. The system was implemented in 2017 and it is very advanced. It allows us to have controls in place.
In terms of preventing data breaches, employees are unable to copy information onto CDs, DVDs or USB keys. The system does not allow it.
Good afternoon, Mr. Chair and members of the Standing Committee on Public Safety and National Security. I'm joined this afternoon by Denis Berthiaume, Senior Executive Vice-President and Chief Operating Officer, and Bernard Brun, Vice-President, Government Relations, Desjardins Group.
First, I want to say that, at Desjardins, we were ambivalent about this exceptional committee meeting.
On the one hand, this meeting may seem premature, since we're in the process of managing this situation and the police investigations are ongoing. It's far too early to assess the situation. As such, we intend to tell you everything that we know, but in a way that won't interfere with the ongoing investigations.
On the other hand, we see this special meeting as an opportunity to inform legislators and the public about the security of personal information and the need to rethink the concept of digital identity in Canada. In my reflection process, this point prevailed.
First, I'll state the obvious. What happened at Desjardins has happened elsewhere and could happen again in any private company or public organization whose mission involves personal information management. We can think of several banks around the world, such as the American bank Chase, Sun Trust, the Korea Credit Bureau, or a number of government entities in Canada and the United States, to name a few, that have been the victims of malicious employees.
Desjardins is a leading financial institution and one of the largest cooperative financial groups in the world, with more than $300 billion in assets. In 2015, Bloomberg ranked the Desjardins Group as the strongest financial institution in North America, ahead of all Canadian banks. In other words, even the best aren't immune, and we believe that this message must be heard.
Personally, I've been working at the Desjardins Group for 27 years. I chose this organization at the start of my career because the financial institution has managed, after nearly 120 years, to successfully combine the economic and social aspects of our society.
The malicious actions of one employee led to this deplorable situation. That employee has now been dismissed. He violated all the rules of our cooperative. In this situation, we acted as quickly as possible and as transparently as possible, with the sole objective of protecting the interests of our members. That was our priority.
On June 20, a few days after learning of the extent of the situation, we went public and shared all the information available, in conjunction with the police forces. At that time, we also announced the measures implemented to address the privacy breach.
We've taken all the necessary measures to address the situation. We quickly implemented additional monitoring and protection measures to protect the personal and financial information of our members and clients. We informed all the relevant authorities, including the Office of the Privacy Commissioner of Canada, the Commission d'accès à l'information du Québec, the Autorité des marchés financiers, the Office of the Superintendent of Financial Institutions, and the Quebec and federal departments of finance.
We've implemented additional measures to confirm the identity of individuals when they contact us. We're constantly monitoring all our members' accounts. The procedures for confirming the identity of our members and clients when they call the Desjardins caisses, Desjardins Business centres and our AccèsD call centre have also been the focus of additional measures.
We contacted the affected members through the AccèsD private messaging system and by personalized letter, to inform them of the situation and of the steps that they needed to take.
We've also added extra measures to help with the activation of the Equifax monitoring package. The affected members can now register in four ways. They can register on the Equifax website, through the AccèsD telephone service, through the AccèsD web and mobile application, and directly in our Desjardins caisses by speaking with their advisor.
We're actively working with the different police forces. Lastly, we're working with external experts to continue to protect our members' personal information.
I can confirm that we acted diligently. After we received information from the Laval police service, we conducted an internal investigation and quickly traced the source of the breach to a single employee. The employee was suspended and then dismissed.
At this time, our main priority is to reassure, assist, support and protect each and every member affected by the situation.
Again this morning, we announced new protection measures for all our members. In this digital age, we at Desjardins believe that all our members must be protected.
As I was saying, Desjardins announced this morning that, from now on, all members of our cooperative will be protected from unauthorized financial transactions and identity theft. Membership is automatic and free of charge, regardless of whether they've been affected by the data breach. Since this morning, Desjardins has been protecting all its individual and corporate members. This sets a precedent in the financial services world in Canada. We're the first institution to take this step. In this situation, Desjardins is acting with rigour, a sense of duty and the willingness to honour its special relationship with its members.
We've entered an age where data is a resource on par with water, wood and the raw material needed to run entire sectors of our economy. Data is now the raw material for a whole innovative economy that will lead to tremendous productivity gains and make life easier for Canadians.
Canada is a few months away from the implementation of 5G mobile connectivity, which will increase the flow of data tenfold. According to experts, this ultra-fast connectivity will lead to futuristic applications related to artificial intelligence. Canada is already among the world leaders in this area with its three hubs, Montreal, Toronto and Edmonton. In addition, as we speak, the Department of Finance Canada is in the process of conducting a consultation on open banking, which would help open up the transactional sector. Several European countries have already made the shift.
I'll humbly ask you, the legislators, the following questions.
Is Canada currently well equipped to manage these promising technological developments, which also involve new risks? Should our identification systems be adapted to the digital age to ensure the protection of privacy and to better deal with cybercriminals? This issue is the whole notion of digital identity, which I referred to a few minutes ago.
I want to respectfully point out that these are real issues raised by the situation at Desjardins.
In closing, I want to make a proposal. I'd like to invite the committee to recommend to the Government of Canada the creation of an ad hoc multi-stakeholder working group to advise the government on how to regulate the management of personal data and digital identities. We believe that a group that listens to Canadians' concerns should at least include representatives of governments, the financial services and insurance sector, and the telecommunications sector, along with jurists and experts, or any other group that the government deems it appropriate to involve in the reflection process.
The mandate of this committee should consist of advising the government on legislation and regulations; ensuring the protection of the public; encouraging innovative technological development for the benefit of Canadians and communities; and ensuring the strategic monitoring of best practices around the world, so that Canada is always up to date.
I personally believe that Canada can't pursue excellence in digital technology and artificial intelligence without having the same ambition for data and personal information management. We must all learn from the current situation at the Desjardins Group.
Welcome, Mr. Brun, Mr. Cormier and Mr. Berthiaume. Thank you for participating in this exercise. Your presence is greatly appreciated.
Mr. Cormier, I'll start by reassuring you that, last January or even earlier, the Standing Committee on Public Safety and National Security and the Standing Committee on Access to Information, Privacy and Ethics began to address issues related to the unique identifier. We looked at models from abroad, including Estonia's model, which raises a number of other issues.
Before I ask you some more practical questions, I want to point out that the unique identifier is one of the cybersecurity issues. When someone gets their hands on the unique identifier, we'll be faced with the same issue.
I'm pleased to hear that you're offering protection to all your members. However, financial institutions tend to charge their clients to protect the clients' data from identity theft. The financial institutions themselves make the offer. Do you have the same philosophy?
To have my salary deposited into my bank account and to make transactions, automatic withdrawals and Interac payments, I must give my name, address and social insurance number to the institution that I'm dealing with. However, I must use a third party to protect this information. Why do I need to rely on someone other than the entity to which I give the information?
Regarding operations, I first want to say that no one, when they turn on their computer in the morning, has access to all the data. That is not how things work. At Desjardins, jobs are categorized according to the data required to do the work. That's the first thing.
Moreover, our organization has implemented a number of internal security and control mechanisms, but we do not want to discuss those publicly, as even our employees are unaware of those mechanisms. So I cannot describe them in any great detail.
Concerning this particular situation, a police investigation is under way, and that makes the issue highly sensitive. Quite frankly, we don't want to hinder the ongoing police investigation in any way.
As I just said, we cannot provide details on our security mechanisms, as they are important for helping us prevent this from happening again. The situation involves a single employee, but I can tell you that our security mechanisms detect external or other elements of fraud. I want to reiterate that it is extremely difficult to completely protect against a malicious employee.
I have a supplementary question, which will probably be the last one. I am addressing Mr. Cormier, the citizen.
You made a very important announcement this morning. You said that the protection applies to all members, whether or not they are affected by this unfortunate event. You said all they have to do is call you and you can take care of them. You will establish contacts, take action and take the necessary steps.
Do you think that's exactly the kind of attitude that the government, the federal state, should have right now towards the 2.9 million Canadian citizens?
Citizens are being asked to contact us, and I think it is the federal government that should contact citizens. Let's say that citizens are communicating with the federal government, shouldn't the federal government have the same approach as you and say that it takes care of everything?
The representative of Employment and Social Development Canada said that, if citizens' social insurance numbers were changed, they would have to call all their former employers. That's not what you're doing. You, incredibly, say you're going to take care of everyone at the last minute.
As a citizen, would you like the federal government to act in the same way towards the affected members?
So there were no guidelines. In other words, you are reactive. I'm not talking about you, of course. You follow political orders, and we understand that. At the moment, everything is reactive and absolutely nothing is proactive.
You said you received 1,500 requests or calls about the social insurance number. Our goal is to know how the government can help people proactively. Since you don't know which Canadians are affected, you necessarily have to wait for them to contact you. That is what is happening right now. You wait for the people affected to contact you, not the other way around. That's impossible, because you don't have the data. Mr. Cormier, from Desjardins, seemed to say that they would be ready to send this data. I know I'm asking you to give a political opinion, but you can't.
I have to express something that royally disgusts the people in my riding. I went door-to-door a lot last week and the week before that. People have consistently told me that they doubt that the government can do anything. It saddened me very much. How is that possible? I would like to break the cynicism and listen to people. People contribute 50% of their income to the Canadian government. We Conservatives want the government to work for citizens, not the other way around.
Mr. Cormier said that when someone calls Desjardins, they are proactive and take care of things for them.
We learned something very important today. In fact, we already knew that because it had been mentioned here and there. I learned from an official like you that you can change your social insurance number. I know it's complex and that even if we change it, we still have to reach a myriad of institutions, our former employers, and so on. However, it is the government that requires that citizens have a social insurance number. It is a system that should perhaps even be called into question, and we are discussing it today, in a way.
Wouldn't it be your duty to contact the 2.9 million people? The Liberal government should do this to be proactive. It knows these people. For example, at the Pizzeria D'Youville, where I worked in 2004 when I was 17, it was the boss who sent the GST to the federal government. All these things are well known. Your departments could easily link this information and change the social insurance number, perhaps not in a comprehensive way, but it should support the citizen in the very difficult task of reaching all former employers or government agencies.
I really don't like this. I know it's not your fault. You have political directives from the Liberal government, but it is not proactive at the moment. I don't like it at all. What can you say about this?