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House of Commons Emblem

Standing Committee on Finance



Thursday, February 24, 2022

[Recorded by Electronic Apparatus]



    Welcome to meeting number 22 of the House of Commons Standing Committee on Finance.
    Pursuant to the motion adopted in committee on Thursday, February 17, the committee is meeting to study the invocation of the Emergencies Act and related measures.
    Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. The webcast will always show the person speaking rather than the entirety of the committee.
    Today's meeting is also taking place in a webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for active participants remain the same. Staff will be non-active participants, and can therefore view the meeting only in gallery view. I would like to take this opportunity to remind all participants at this meeting that screenshots and taking photos of your screen are not permitted.
    Given the ongoing pandemic situation, and in light of the recommendations from the health authorities as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe, all those attending the meeting in person are to maintain two-metre physical distancing, must wear a non-medical mask when circulating in the room—it's highly recommended that the mask be worn at all times, including when seated—and must maintain proper hand hygiene by using the provided hand sanitizer at the room entrance.
    As the chair, I will be enforcing these measures for the duration of the meeting. I thank members in advance for their co-operation.
    To ensure an orderly meeting, I would like to outline a few rules to follow. Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of either the floor, English or French. If interpretation is lost, please inform me immediately and we will ensure that interpretation is properly restored before resuming the proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or alert the chair.
    For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the Board of Internal Economy's guidelines for mask use and health protocols.
    Before speaking, please wait until I recognize you by name. If you are on the video conference, please click on the microphone icon to unmute yourself. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you're not speaking, your mike should be on mute. Just as a reminder, all comments by members and witnesses should be addressed through the chair.
    With regard to a speaking list, the committee clerk and I will do the very best we can to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.
    This meeting is scheduled for a longer duration today. In consideration of the fact that our witnesses may not get an opportunity to leave their virtual set-up, at around the halfway mark of the meeting I'll suspend the meeting for a five-minute health break.
    Members, before I introduce the witnesses, I understand that we have an agreement among our committee to speak about the situation in Ukraine.
    Parliamentary Secretary Beech, I see your hand up. Please go ahead.
    Mr. Chair, thank you for giving me an opportunity to speak and to address the news of Russia's unprovoked attack on Ukraine.
    Our government, the Prime Minister and the Deputy Prime Minister condemn, in the strongest possible terms, Russia's egregious attack on Ukraine. These unprovoked actions are a clear further violation of Ukraine's sovereignty and territorial integrity. They are also in violation of Russia's obligations under international law and the charter of the United Nations.
     Canada calls on Russia to immediately cease all hostile actions against Ukraine and withdraw all military and proxy forces from the country. Ukraine's sovereignty and territorial integrity must be respected. The Ukrainian people must be free to determine their own future.
    Earlier this morning the Prime Minister met with G7 partners. Our government will continue working closely and quickly with NATO and our allies to collectively respond to these reckless and dangerous acts, including by imposing significant sanctions in addition to those already announced. In the face of these attacks on Ukraine, Canada will take additional action to stop Russia's unwarranted aggression.
     We continue to stand with Ukraine, its people and the Ukrainian Canadian community here in Canada. Russia's brazen acts have profound human consequences and will not go unpunished.
    With your permission, Mr. Chair, I'd invite my other honourable colleagues to speak, if they would care to do so.
    Thank you very much, Mr. Chair.


     Thank you, Parliamentary Secretary Beech.
    I do have some hands up. I have MP Lawrence, MP Ste-Marie and then MP Blaikie after that.
    Please go ahead, MP Lawrence.
    Thank you, Chair.
    We share in the government's condemnation of this unprovoked attack on the people and the country of Ukraine. The attack is a violation, of course, of Ukraine's sovereignty. It's also a violation of international norms and of the system on which Canada and the western world's prosperity has been built—the most prosperous time in recent history.
    Putin must immediately cease his attack and withdraw all military forces. Failing to do that would undermine the international system, which Canada played a key part in establishing after World War II, that has been, as I said, the foundation of our peace and prosperity.
    As Canadians, we need to commit ourselves to the strengthening of our own security, including the Arctic, and to the renewal of commitments to NATO.
    Conservatives, parliamentarians and Canadians all stand with the Ukrainian people in this, one of their darkest hours. Our thoughts and prayers are with the people of Ukraine.
    Thank you, MP Lawrence.
    Now we'll hear from MP Ste-Marie.


    Thank you, Mr. Chair.
    Fellow members, it's now my turn to take the floor to strongly condemn Russia's attack against Ukraine. What is happening is terrible. Soldiers will die. Civilians will die. In fact, at this very moment, the people of Ukraine are being attacked, invaded and bombed. We haven't even turned the corner on the pandemic yet, and we have been plunged into a world at war. Well, war has broken out in Europe, that's a fact—a terrible one, but a fact nevertheless.
    We stand united with the Ukrainians, and we support them fully. It is a sad day for humanity, and dark days are on the horizon. I would like to tell the Russian president that it's not too late to put an end to this madness. Sadly, I don't believe that's true.
    Therefore, with a broken heart, I will instead address the people of Ukraine: our hearts go out to you, and we will do whatever we can to come to your assistance. It's our responsibility as human beings. In these hard times, know that you are not alone.


    Thank you, MP Ste-Marie.
    Now we'll hear from MP Blaikie.
    Thank you very much, Mr. Chair.
    I want to take this opportunity to condemn in the strongest possible terms the actions of Russia in violating the sovereignty and the territorial integrity of Ukraine, and call on Russia to cease all aggression against Ukraine and withdraw all of its troops.
    Our thoughts right now, as New Democrats and members of the House of Commons and Canadians, are with the Ukrainian people, who are suffering this invasion of their country, and with all of the people here in Canada and across the world who have friends and loved ones in Ukraine who are worried about their well-being.
    I think this also tells us something important about Russia under the leadership of Vladimir Putin. We have to recognize that the war isn't happening just physically. We know that Russia has also been very active in the digital space, in Ukraine and indeed here in Canada, spreading disinformation. Russia's actions in Ukraine are also related to a larger campaign to sow discord in the west. I think that's something we need to bear in mind. We need to be cautious of the influence Russia is having here at home through social media and other avenues where it can spread disinformation to try to keep people distracted while it pursues the very real agenda of territorial expansion in Ukraine.
    Thank you for the opportunity to put these thoughts on the record at a very bleak time in the world's history, Mr. Chair.


    Thank you, MP Blaikie.
    MP Lawrence, you have your hand up. Go ahead.
    First, I'd like to thank all the members for their excellent statements.
    Second, because we were unable to get the RCMP here today and have just FINTRAC, who already testified at some length at the public security committee, I'm wondering if we would move this from a three-hour meeting to a two-hour meeting.
     I'm seeing a lot of hand clapping and thumbs up from everybody. We love you, FINTRAC, but yes, two hours is the time we will have with FINTRAC today.
    Thank you, MP Lawrence, and members for those bold, strong statements showing Canada's support for Ukraine. I can tell you that, here at home, my wife is of Ukrainian descent. In my riding of Mississauga East—Cooksville, we have a large Ukrainian diaspora community. “Slava Ukraini, Slava Canada” I hope I said that right. I'll hear from MP Baker on that, I am sure.
    At this time, I would like to introduce our witnesses for today. We have FINTRAC with us, the Financial Transactions and Reports Analysis Centre of Canada. We have Donna Achimov, the deputy director and chief compliance officer of the compliance sector, and Barry MacKillop, the deputy director of intelligence.
    You now have an opportunity to make an opening statement for members and then we will go to questions. Thank you.
    I'd like to start by acknowledging the statements of the members on the situation in Ukraine.
    I want to thank you, Mr. Chair, for inviting FINTRAC to participate in your review of the Emergencies Act, which was revoked by the federal government yesterday afternoon. As you mentioned, I am joined today by Donna Achimov, who is our chief compliance officer, as well as the deputy director responsible for compliance.


    As committee members know, FINTRAC is Canada's financial intelligence unit, and anti‑money laundering and anti‑terrorist financing regulator.
    We are responsible for ensuring the compliance of more than 24,000 businesses that have requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including financial institutions, casinos and money services businesses.
    FINTRAC has a robust, risk‑based approach in place to ensure that businesses fulfill their requirements, such as identifying clients, keeping records and reporting certain types of financial transactions, including international electronic funds transfers, large cash transactions, large virtual currency transactions and suspicious transactions.


     With the reporting that we receive from businesses subject to the act, and when appropriate thresholds are met, FINTRAC provides actionable financial intelligence to Canada's police, law enforcement and national security agencies in support of their money laundering and terrorist financing investigations. Our financial intelligence disclosures are often based on hundreds, or even thousands, of financial transactions. These disclosures may show links between individuals and businesses that have not been identified in an investigation and may help investigators refine the scope of their cases or shift their sights to different targets.
    A disclosure can pertain to an individual or a wider criminal network, and can also be used by police and law enforcement to put together affidavits to obtain search warrants and production orders. In total, last year, FINTRAC provided more than 2,000 disclosures of actionable financial intelligence in support of investigations related to money laundering, terrorist activity financing, and threats to the security of Canada. Since becoming operational in 2001, the centre has provided more than 22,000 financial intelligence disclosures to Canada's police, law enforcement and national security agencies.
    In 2020-21, our financial intelligence contributed to 376 major resource-intensive investigations and many hundreds of other individual investigations at the municipal, provincial, federal and international levels. These agencies continue to seek our financial intelligence in record numbers. FINTRAC received 2,109 voluntary information records from Canada's police, law enforcement and national security agencies last year. These records contain information on alleged criminals and terrorist financiers, and are often the starting point for our analysis and the financial intelligence that we are able to generate and disclose.
    Many of the recipients of our disclosures have told us that they would not start a major project-level investigation without seeking out our financial intelligence.
    Mr. Chair, under the emergency economic measures order, certain businesses, including financial entities, money services businesses, crowdfunding platforms and payment service providers, were required to take specific actions in relation to the financial activity of individuals who were engaged in the blockades, as laid out in the emergency measures regulations. For example, crowdfunding platforms and payment service providers were required to register with FINTRAC when they were in possession or in control of property that was owned, held or controlled by an individual or entity who was engaged in an activity that was prohibited in the emergency measures regulations.
    Following the invocation of the Emergencies Act, a number of crowdfunding platforms and/or payment service providers began the registration process with FINTRAC. This has, however, now been halted with the revocation of the Emergencies Act. Crowdfunding platforms and payment service providers that were required to register with FINTRAC were also required to report suspicious transaction reports, large cash transaction reports, international electronic funds transfer reports and large virtual currency reports when thresholds set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its regulations were met. This, too, has been halted with the revocation of the Emergencies Act.
    As a financial intelligence unit, and under our legislation, we cannot speak to the reporting that we receive from businesses or the financial intelligence specifically that we provide to Canada's police, law enforcement and national security agencies.
    Mr. Chair, I want to be very clear about FINTRAC's mandate. As one of 13 federal departments and agencies that play a key role in Canada's anti-money laundering and anti-terrorist financing regime, FINTRAC was established as an administrative financial intelligence unit, not a law enforcement or investigative agency. We do not have the authority to monitor or track financial transactions in real time, freeze or seize funds, ask any entity to freeze or seize funds, or cancel or delay financial transactions. This was done very deliberately by the Parliament of Canada to ensure that we would have access to the information needed to support the money laundering and terrorist financing investigations of Canada's police, law enforcement and national security agencies, while protecting the privacy of Canadians. This did not change under the Emergencies Act or the emergency economic measures order.



    We are committed to working with Canadian businesses and our domestic and international partners to protect the safety of Canadians and the integrity of Canada's financial system.
    Thank you. We are now ready to take your questions.


    Thank you, Mr. MacKillop and Ms. Achimov.
    We are now moving to our first round of questions from members. Each party will have up to six minutes to ask questions.
    We're starting with the Conservatives and MP Lawrence. You're up for six minutes.
     Thank you very much.
    I'd like to thank Mr. MacKillop for his excellent opening statement and, I might say, his strong testimony at the public safety committee, which I've had the opportunity to review.
    I want to summarize some of the testimony you've already given so that it's clear to Canadians. Now, in the emergencies measures act, they sought to give you...I don't want to say “authority”, because it's probably the incorrect word. They sought to give you the additional ability, as registrars, to get information from cryptocurrency and from crowdsourcing platforms.
    Prior to the act—and the way it stands now, because it's been revoked—they weren't required to be registrants, and therefore you weren't getting information from them directly. Is that correct?
    It's correct for the crowdsourcing. They are not considered reporting entities. Crypto dealers, however, virtual currency dealers, are in fact registered with FINTRAC. They have been reporting to us since 2020.
    Those would constitute the intermediaries, for lack of a better term, the companies like Wealthsimple, but peer-to-peer cryptocurrencies aren't currently required to be registered. Am I correct on that?


    You are correct. Peer-to-peer is not covered. When the transactions go through a virtual currency dealer and we see large cash transactions or large purchases, for example, of crypto, or disbursements of crypto money, that is reported to us.
    I can defer to Donna if she would like to add anything else, as she is responsible for the compliance sector.
    That's correct. It's virtual currency dealers, not one-to-one virtual currency dealers.
    Okay. Thank you very much.
    That being said, though, if I understood your testimony at the public safety committee—and let's just stick with crowdsource funding here, even though they aren't direct registrants—you do sort of have eyes on those transactions through other means, such as through Stripe and Interac, and the money flows into, and I guess out of as well, a crowdsourcing platform.
    Have I understood that?
    Yes. Anytime a crowdfunding platform got used, there would be a touchpoint at a financial institution. There would be a requirement, if you were setting up a page or if you were receiving the donations in order to disburse them to others, for a touchpoint at a bank. There would be a financial institution in a position as a reporting entity to report transactions to us if they were threshold transactions or if there were reasonable grounds to suspect that the transactions were relevant to a money-laundering or terrorist-financing activity.
    Thank you very much.
    My next question builds on that. The emergency measures act invocation gave you the ability to make crowdsourcing a registrant, but I suspect you weren't able to get very far in those four or five days. I also suspect it had very little impact on the actual disbursement of the illegal protest.
    As far as you can comment on that—I realize there might be some limitations—I'd really appreciate your thoughts on it.
    Mr. Chair, the member is correct that we would have started the preregistration process, but within a week there's only so much that can be done by way of registration. At the preregistration stage, anybody who or any platform or any payment service provider who pre-registered would have been in the position to report to FINTRAC if they had reasonable grounds to suspect that the money they were seeing was relevant to a money-laundering or terrorist-financing activity.
    That being said, the goal of the emergency measures act was really to choke off the funding to what was determined to be the illegal blockades, and in fact it did serve its purpose. In—
    Sorry; but that didn't go through your body. That was directly from law enforcement to the financial institutions. FINTRAC really didn't get involved at all in the cessation of funding—unless I'm incorrect. Please do correct me if I'm wrong.
    No, that is absolutely correct. FINTRAC was not involved at all. The point was simply that once the funds were frozen in the financial institutions, there would be no transactions to report to FINTRAC. There would be no transactions through those bank accounts, because the accounts themselves were frozen.
     Mr. Chair, my time is coming to an end, I assume.
    You have one minute, MP Lawrence.
    I realize you'll have only 30 seconds for this, but perhaps you could talk about it later. As we prepare for the eventual inquiry and greater study of this, I'm wondering if you had any learnings from that week or five days about what it would take to implement crowdsourcing. Are there things you learned during that period that you could share with the committee?
    I do like to think that we learn all the time, but I'm not sure we've had enough time to really dig in deeply to see either the best way or the value of the reports that would come from crowdfunding platforms, for example. We anticipate that there would be, and we anticipate continuing discussions with them.
    I certainly don't want to talk for my colleague Donna, but I anticipate that we will continue to explore with payment service providers and crowdfunders and others on the best way to ensure or enhance the coverage in Canada to enhance the efficiency and effectiveness of our anti-money laundering regime.
    Thank you, MP Lawrence.
    We're now moving to the Liberals.
    MP Dzerowicz, you have six minutes.
    Duzhe dyakuyu. Thank you very much, Mr. Chair.
    I want to start off with my own very short statement. As a Ukrainian Canadian as well as the vice-chair of the Canadian NATO Parliamentary Association, I also strongly condemn Russia's unprovoked attack on Ukraine, which has already claimed too many lives and continues to put countless civilian lives at risk.
    I stand in complete and absolute solidarity with the people of Ukraine and its legitimate, democratically elected government and parliament. I'm glad...and unequivocally support our Prime Minister, our Deputy Prime Minister and in fact all leaders of our federal government who are condemning Russia's actions today. As well, I fully support our commitment to apply the strongest sanctions possible and to do all we can to continue to support Ukraine moving forward.
    With that, Mr. Chair, I want to say a huge thanks to our two guests today.
    Thank you so much for your work. Thank you for coming before us today.
    The Deputy Prime Minister has announced that she intends to put forward legislation that will empower FINTRAC to have oversight over crowdfunding and cryptocurrency platforms without the need for the Emergencies Act. Would you support such a change?


    Maybe I'll take that question.
    That really is dependent on the Deputy Prime Minister and Minister of Finance. If that is to come to pass, we will obviously put in place the mechanisms of support.
    Thank you.
    Continuing with Mr. Lawrence's last question and your comment right now, the Deputy Prime Minister has already made this public commitment to put forward legislation to make this permanent. Is there anything you recommend or you want to make sure this legislation contains?
    I'm wondering if there's any recommendation you would make based on, as Mr. Lawrence put it, “learnings”—for instance, you want to make sure it covers online crowdfunding platforms, or cryptocurrencies, or it specifically does something. Is there anything you would recommend at this point?
    I appreciate the question. These are certainly extensions of what we currently have in place, which are virtual currency dealers associated with money services businesses.
    We would not only continue to leverage the brief experiences my colleague indicated but would also look to do some research internationally. We have our Five Eyes colleagues, who are equally seized with the movement of virtual currencies and these technologies and these platforms. We would provide any advice. I can't go into details on the provision, but certainly they would be informed by research and experience of not only this brief event but our colleagues internationally as well.
    That was a very, very helpful answer. Thank you so much.
    When the Emergencies Act was put in place and FINTRAC was given new powers to monitor the online crowdfunding platforms and other payment providers, did FINTRAC have—this might sound odd—the capacity to be able to do the work with regard to the online platforms and the cryptocurrencies?
     Mr. Chair, that's a very good question.
    FINTRAC is a small and mighty organization, and we have many reporting entities. As my colleague Barry indicated, we have 24,000 reporting entities. What we do is allocate resources to where they're needed most. In this case, we were agile and we were able to redistribute our resources to what the priority of the day was.
    Thank you so much, Mr. Chair. I appreciate that answer and I want to make sure that my intention was well taken and understood.
    As we're moving forward, how do we ensure that there continues to be the necessary capacity and resources with any type of permanent legislation?
    So that I can be clear, what FINTRAC was able to do with the Emergencies Act was, basically, that should there have been any information that was gathered, it would have been provided by FINTRAC directly to the RCMP and/or financial institutions. Can you confirm that? Is there anyone else that the information might have gone to?


    Thank you for that and for the opportunity to provide a bit of clarification.
    We would not have reported anything. We do not give anything to financial institutions. We, in fact, receive the reports from them. We do not monitor, per se. We do not investigate.
    Once the reports are received, if they meet our threshold, which is reasonable grounds to suspect they would be relevant to a money laundering or terrorist financing activity, we would disclose that to law enforcement. It could be to the CBSA, as well, or CSIS or CSE. We have a number of authorized and legislated disclosure recipients to whom we can disclose, and we would disclose the reports to whichever law enforcement jurisdiction or whichever appropriate designated recipient would benefit most from the actionable intelligence.
    Thank you.
    I know that's a wrap, Mr. Chair.
    Yes, that is a wrap. Thank you, MP Dzerowicz.
    We are moving to MP Ste-Marie for six minutes.


    Thank you, Mr. Chair.
    Good afternoon, Ms. Achimov and Mr. MacKillop.
    I would like to commend my fellow members on their statements. The one made by Ms. Dzerowicz was particularly touching and heartfelt.
    Before discussing the Emergencies Act itself, I would like to properly understand what FINTRAC does when accounts are frozen.
    I'm going to give you a hypothetical situation to make sure that I have understood correctly. Let's say that a financial institution observes a suspicious money transfer or suspicious activity in an account. Under the ordinary legislation, the institution can freeze the account and then report it to you. On your end, after analyzing the situation, you conduct a follow‑up. Is that correct?
    Thank you for the question.
    That's not quite correct. We do not give any instructions to the financial institutions. We are not at all involved in the freezing of accounts or anything of that nature.
    In a case like the one you are describing, normally, under the law, financial institutions can submit suspicious transaction reports to us if they suspect that the transactions in question are tied to money laundering or the financing of terrorist activities. Otherwise, we do not receive reports.
    In this case, under the Emergencies Act, financial institutions were able to freeze accounts after receiving information from the RCMP to that effect. This was done without us having been made aware of the freezing of the accounts or informed of the accounts involved. We are not at all involved in this aspect of the emergency economic measures.
    Thank you very much for your response, Mr. MacKillop.
    I just want to make sure that I have understood correctly.
    In normal times, without the Emergencies Act, when a financial institution suspects that a criminal act has been committed under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the institution reports it to you. What you just explained to us is that the activities in question in this case do not fall under this act. Since the financial institutions froze accounts under the Emergencies Act, they did not submit a report to you.
    Is that correct?
    That is correct.
    Okay, thanks.
    In normal times, how many reports do you receive annually from financial institutions? I believe that you already said it, but could you remind me of the number?
    Every year, we receive some 30 million reports from all entities. Financial institutions send 80% to 90% of these reports.
    Concerning suspicious transaction reporting, I believe that we received about 460,000 reports of this nature from all entities last year.
    Okay. My takeaway from that is that FINTRAC isn't hurting for work. I congratulate and thank you for the work that you do.
    To your knowledge, have some financial institutions been able to freeze accounts under the ordinary legislation, particularly the money laundering act, and report them to you?
    I don't know whether my question was clear.


    Thank you for the question.
    I'm not an expert in the legislation governing banks, but I believe that financial institutions have the power to decide on the risk level they are willing to expose themselves to when working with their clients. Therefore, if a client exceeds that risk level, it's up to the financial institution to decide whether or not to freeze the account or no longer do business with the client.
    Can that be noted in a suspicious transaction report that would be sent to us? Yes, it's possible, because there is a section in the report that notes the actions undertaken by the financial institution or any other reporting entity. Therefore, a note could indicate that the account was frozen, or even that the institution disengaged owing to the financial risks the individual represents, which means that the institution decided to no longer do business with them.
    That's information that becomes relevant for police because, if they wish to obtain an order for production, it's important to know whether the account still exists and is still active. That is part of the information that we provide to law enforcement agencies, if we have it.
    Okay, thank you.
    As part of the implementation of the Emergencies Act, FINTRAC hasn't been asked directly about account freezing.
    Have you received any requests, guidance or direction from the government regarding the implementation of the Emergencies Act in some way?
    Thank you for the question.
    Yes, of course, but only with respect to compliance and the businesses that would be required to register with us. In the other cases, the issue concerned the enforcement of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
    I can see that my time is up.
    Thank you.
    Thank you, Mr. Ste‑Marie.


     We are moving now to the NDP.
    MP Blaikie, you have six minutes.
    Thank you very much.
    Had the registration process continued with crowdfunding platforms and other entities that aren't covered under your normal mandate, could you share with the committee what kinds of information you would have been able to receive as a result of completing that registration process, the reporting that would follow on that, and how you believe that information would have contributed to the purpose of the emergency order or how that information would work within the context of your existing mandate?
    I'll start, but I'll defer to Donna if she wants to jump in with additional information.
    Had it continued, the crowdfunding and payment service providers would have registered as reporting entities to FINTRAC. They therefore would have been subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. They would have submitted reports as per that act.
     That would have included threshold reports, as I went through earlier—into or out of Canada over $10,000, for example—and large cash transactions of $10,000 or more within 24 hours. They would have been able to submit suspicious transactions to us in the event they had reasonable grounds to suspect that the transactions they were looking at would be relevant to money laundering or terrorist activity financing.
    That is still the limitation. The mandate was not broadened to receive reports on anything. It was broadened to allow additional entities to report transactions related to money laundering or terrorist activity financing.
     Thank you.
    Please go ahead, Ms. Achimov.
    I would just add that for these new funding arms of the payment service providers as well as the crowdfunding platforms, we also had under this order a requirement for the money services businesses who were already registered with us. But if they themselves had any changes associated with their dealings, according to the act, they were required to provide us the additional information.
    In other words, those who were registered still had an obligation to signal if there were any changes in their business dealings and if they had any of those clientele who were involved or covered under the order.


    I'm tempted to say, because I think it sounds reasonable, that in the end FINTRAC was not really part of the actions under the emergency orders. That may have come into play had the registration process had enough time to take place, and you may have received information, in that case, that was pertinent to the actions being taken under the authority of the emergency orders, but in fact, given the brief amount of time that those orders were in effect, FINTRAC didn't really get involved.
    Is that fair to say? Or would you recharacterize that statement in some significant way?
    I would say that we jumped into action as quickly as we could. As my colleague indicated, we're one of 13 organizations that had a role in this. Our role was to very quickly react, to stand up our website, to make sure that we were available. We fielded numerous queries from those organizations who weren't quite sure if they were covered. The early days in terms of being able to respond to queries and to provide clarification—that was our role. That was the early start. Each organization in turn had their respective responsibilities.
    I think that's the fairest assessment in terms of the brief period of time and the fact that we did jump in rather quickly and respond to the queries.
    Indeed. Thank you for your work. I certainly didn't mean to imply that there was no work being done by FINTRAC. I was simply trying to characterize its ultimate role in the operations that took place.
    I'm curious to know whether you have an opinion on this. If the registration process had occurred and you'd received that information, or if legislative changes are made such that crowdsourcing platforms and payment processors are registered with FINTRAC on an ongoing basis, do you believe that there is a fair bit of information...or what kinds of information do you think would help you execute your normal mandate? Or do you think it's not really required and there would not be useful information? I'm curious to hear your point of view on that.
    The reality is that as we look at onboarding any new reporting entities, it is a matter of learning and understanding where the risks are and how we assess those risks and the type of reporting we receive.
    In any instance, in ordinary times we strive to do analysis as best we can based on the quality of the information we receive. In ordinary times, the role that my organization plays is extensive outreach and education. We reach out to the various associations and partners to try to determine leading practices and how we can continue to provide guidance and help them interpret the guidance so that we can get the quality of the reports that are needed in terms of having the necessary action taken.
    My colleague mentioned earlier that we are a learning organization. We strive and we work very closely with Canadian businesses and business associations to continue to educate, refine, and adjust accordingly. It is an ecosystem of us adapting to the risk, learning, and then training in sequence.
    Thank you very much.
    Thank you, MP Blaikie.
    That finishes our first round.
    We are into our second round, members, which will be led by the Conservatives.
    MP McLean, you have five minutes.
     Thank you, Mr. Chair.
    Before I start my questions, let me echo my colleagues around the committee here in condemning what's happening in Ukraine today by the Russian aggressors. This is a time when democracies around the world are sliding, and we need to make sure that we stand fast with our democratic friends in the Ukraine and ensure we stop this as much as we can.
    Moving to questions now, Mr. MacKillop and Ms. Achimov, thank you very much for the work you do and for being here at our committee today to give us more information.
    I am going to get a little granular here with you, because you did speak, Mr. MacKillop, about how, in the week that the Emergencies Act was in force, a number of crowdsourcing organizations reached out to register with FINTRAC. My understanding of all crowdsourcing sites is that they are regulated at the provincial securities level. The decision was made not to have them report to FINTRAC because it really was a duplication of the reports that go to FINTRAC: because the money flowing into them is already regulated by at least one financial provider on the in and the out. Is that correct?


    Thank you for the question. I wasn't sure if Donna was going to jump in there on the regulatory side.
    I believe you're correct. There is some regulation of crowdfunding, but I'm not sure and I'm not an expert on who regulates the crowdfunding platforms.
     However, Mr. Chair, it is correct that there is always a touchpoint with a financial institution that is regulated by FINTRAC and that does provide reports to FINTRAC on money going through their own bank account or money being disbursed from their bank account to the person or entity who set up a page—for example, a GoFundMe page. GoFundMe would have disbursed the money, and it would have been through a bank or a financial institution.
    Thank you.
    Then in the week when you actually were getting some requests from these crowdsourcing sites to get set up through a FINTRAC reporting mechanism, they were just going through the reporting mechanism and saying, “Something's emerging here and we're going to have to not only abide by the current regulations that are already enforced upon us by provincial securities regulators, but now we're going to have this extra regime”—like we say, belt and suspenders—“in order to get through the FINTRAC mechanisms.”
     Would that be an overlap and, again, what you'd call a duplication of efforts?
    Maybe I'll jump in here, Mr. Chair.
    I don't know if it would necessarily be a duplication of efforts; certainly, the security sector and the Ontario Securities Commission, we work very closely with. Our mandate is slightly different because we are responsible on the anti-money laundering and anti-terrorist financing piece of it.
    In our early days, as I mentioned, we fielded numerous queries from both crowdfunding platforms as well as payment service providers trying to understand if they are actually required and what their requirements are. We tried to make it easy to self-assess, as well as to provide guidance from that perspective.
    Okay. Thank you very much.
    I'm going to go back to some remarks Mr. MacKillop made here about the intent of what the government wanted to do in the Emergencies Act by shutting off funding to these organizations that were undertaking illegal activity at the time in Canada, and how that had its intended effect by cutting off funds to those organizations. The intended effect, of course, was already being done prior to the Emergencies Act through the GoFundMe cancellation, so was the Emergencies Act required in that respect in order to stop the GoFundMe type of disbursements?
    Mr. Chair, I don't think it's for me to determine or to say or to opine on the need for any legislation. However, GoFundMe did, on their own, stop the page and decided to reimburse the donors and to not allow the funding to continue through their platform.
     However, my understanding was that donors then moved to a different platform—GiveSendGo, which was less perhaps co-operative in terms of saying whether or not they were going to stop the funding happening on their page. Moreover, Mr. Chair, there are a number, I would say thousands, of crowdfunding platforms around the world that are accessible. I think that in terms of the Emergencies Act and ensuring that any money that was raised through a crowdfunding platform that went through a financial institution to be disbursed to support the illegal blockades was, in fact, appropriately stopped—
     Okay. I'd like to ask one final question here.
    Thank you, MP McLean. We've gone well over five minutes, but thank you. You can ask it in the next round, I guess.
    We are moving to the Liberals and MP MacDonald for five minutes.
    Thank you, Chair. I just want to say that our thoughts and prayers are with the Ukrainian people and also with our allies and the soldiers on the ground. Hopefully this gets resolved relatively quickly and we can all move on and learn from it.
    I'll get on to questions. I want to go back to cryptocurrency. I fully understand how foreign funding could destabilize both our economy and our democracy, but I want to understand better the difference between regulated funding at the present time and cryptocurrency and how you're analyzing that.


    In 2020 and 2021 we added virtual currencies to what we already report on—which include cryptocurrencies—thereby allowing us to see the flow of funding. Now we can look at the whole continuum of both regular currency and virtual currencies to see how money travels not just domestically but internationally. The addition of cryptocurrencies was very helpful.
    Crypto has been around for a couple of years now. I know you guys report on regulated funding, of course, and money movement but I'm just wondering if you have any stats or analytics relevant to crypto raising red flags to financial institutions?
    Mr. Chair, we have seen suspicious transactions from financial institutions that reference crypto and crypto-wallets or people using their fiat or normal money to purchase crypto.
     We've also received some excellent, I would say, suspicious transaction reports from the cryptocurrency dealers themselves, as they have the ability through their own compliance program to look out for AML—anti-money laundering, anti-terrorist financing—to identify particular wallets that are problematic and flows of cryptocurrency through different wallets that are problematic. Given that you can do this with relatively small amounts of crypto, we've seen it and have found it to be particularly useful in our Project Shadow, which is our public-private partnership to combat child sexual exploitation material on the Internet, those who are accessing that and who use crypto hoping that they will be anonymous by so doing. We have received some excellent STRs that have debunked the idea of anonymity in that area.
    That's good to hear.
    Since the occupation began and then the narrative on freezing bank accounts and we went through that whole process and then the Emergencies Act, at what point did you start seeing the act as having a deterrent effect on the crowdfunding “society”, if that's what you want to call it? Was there a deterrent? Was there a point in time when the crowdfunding started to decline?
    From our perspective, with regard to seeing any reports related to money laundering or terrorist financing, I don't think there was a point where there was a precipitous decline or precipitous increase in reporting. What I would say is that, as all of you have seen, I think the efforts came together at the same time and we saw the money being stopped and we saw the law enforcement activities, which were extremely well done in Ottawa, taking place almost simultaneously. I think it really was a combination of all of the actions that brought this to a peaceful end.
    How much time do I have, Chair?
    MP MacDonald, you have 40 seconds.
    In general, how far behind are we on regulations to keep up with things like cryptocurrencies and foreign monies coming into Canada to disrupt our economy and our society?
     Mr. Chair, thank you. I'll take that question.
    I mentioned earlier that we have a regular pulse with our international colleagues and our Five Eyes colleagues. Canada was amongst the first to recognize the fact that we did see this as a key element. That's why we do have virtual currencies as part of our supervision framework.
     Really, everyone has different systems across the world. There isn't a harmonized approach, but I think it's safe to say that we were one of the first countries to recognize the importance of this and the supervisory framework as part of a deterrent.


    Thank you.
    If I may, Mr.—
    That's the time, but maybe in another round or with another questioner you could add.
    Thank you, MP MacDonald.
    We have Monsieur Ste-Marie for two and a half minutes.


    Thank you, Mr. Chair.
    On February 10, before the emergency measures order came into effect, Ontario obtained a court order to freeze the two main convoy crowdfunding accounts on the GiveSendGo platform, the platform you were talking about, Mr. MacKillop. The order was granted pursuant to the regular legislation and was enforced under the normal co‑operation agreements between Canada and the United States regarding financial crime.
    Have you played any role in this process, either directly or indirectly? If so, what has it been?
    No, we haven't played any role in either the order or the actions taken by the financial institutions.
    What discussions, communications and shared work are you engaged in with securities regulators, such as the Autorité des marchés financiers, with respect to the oversight and regulation of crowdfunding platforms?
    We're working closely with our provincial counterparts. We have information‑sharing agreements not only with respect to the fight against money laundering, but also with respect to the training of our officers and best practices.
    When it comes to cryptoassets or cryptocurrencies, I imagine that you have the same type of relationship with the provincial securities regulators. Is that right?
    Yes, we have agreements with several provincial counterparts. As I said, for us, these agreements are very effective for sharing best practices, training our officers and learning about trends in virtual currency.
    Thank you.
    Thank you, Mr. Ste‑Marie.


    We are moving now to the NDP and MP Blaikie for two and a half minutes.
    Thank you very much.
    You've mentioned before, on a few occasions, that with crowdsourcing platforms and payment processors there are points of contact with financial institutions. They do have reporting obligations to FINTRAC.
    Do you believe that the exclusion of crowdsourcing platforms and payment processors from reporting obligations to FINTRAC creates blind spots that make it difficult for FINTRAC to carry out its mandate?
    I think they're early days. We are, as I mentioned, looking at various aspects of virtual currency and money services businesses and how those interact. Certainly, as a country and as a regulator, we have an obligation to look at emerging trends, and certainly there are a number of early lessons associated with a whole host of interactions with virtual currencies, and that's going to evolve.
     New platforms, new mechanisms and new exchanges are going to take place. I think it is up to us to look at some of the best practices from other organizations, as well as ours, and to evolve as the technology evolves and as the world evolves.
    In the aftermath of the emergency orders, I think one of our really important responsibilities here is to look at what happened and to try to make recommendations, so that if powers like these ever have to be used again, they can be done and used in the best possible way, in a way that respects maximally the rights of Canadians.
     I'm wondering if you have any recommendations coming out of this process, from where you sit, on how future uses of emergency measures should roll out, including whether that's via better government communication or different ways of implementing a similar order.


    Mr. Chair, I would say that we are part of a number of government organizations, a part of 13 government organizations, and I think we all will, and continue to, look at lessons learned and assess our operations, as well as those in that whole continuum. I believe we will all look at.... Not just because of this incident, but as we look at the evolving digital space and cyberspace, we're all sharing observations and looking at ways of shoring up or addressing potential loopholes and vulnerabilities. That's an ongoing part of our business, and it has to be, in this fast-paced world of crypto and digital.
    Thank you.
    Thank you, MP Blaikie.
    We're moving now to the Conservatives.
    We have MP Chambers for five minutes.
    Thank you, Mr. Chair.
    Thank you to our witnesses.
    First, I'd also like to mention that we often make headlines in this place for disagreeing with each other, but I think you've seen a multipartisan, unanimous condemnation of what is happening in Ukraine. Like my colleagues, I stand with the government and with the Prime Minister in any response that is necessary to push back on this Russian aggression, which is unparalleled and unprecedented and needs to be met with serious consequences.
    Thank you to our witnesses for appearing again. It's nice to see you back at this committee. Thank you for your testimony thus far.
    My questions will be backward-looking a bit, but also forward-looking, as I just want to confirm that I understand some of the gaps we've identified or that have been discussed.
    Setting aside the emergency order, if a transaction had met the threshold for reporting in the general sense, even if it came from a crowdfunding platform but ended up in a Canadian bank account, that would have been reported through the regular regime. Is that correct?
    That is correct. We would expect our reporting entities to report those transactions to us if they meet their threshold for so doing.
    Okay. Obviously, then, transactions that would have fallen below that threshold would not have been reported. It's similar....
    Yes, unless it was a pattern of transactions below a threshold that would lead them to meet their grounds for suspicion.
    Okay. Thank you.
    That would be the same for transactions that originate and have a destination within Canada and then outside of Canada as well.
    Yes, Mr. Chair, if their suspicions and their grounds for suspicions are met. Those are not considered threshold reports, unless they're outside of Canada or coming into Canada and they're over $10,000 within a 24-hour period, or if it's a large cash transaction of $10,000 or more.
    Okay. Thank you.
    We have heard about specific gaps. Since some of these transactions may have been identified, are there transactions that were not identified that ought to have been identified and that future legislation may address by including the crowdfunding platforms?
    I'm trying to understand exactly what that gap might be that we're looking to address.
    Thank you, Mr. Chair.
    It's hard to say right now, not knowing what transaction crowdsourcing or a PSP—payment service provider—would in fact see that is not currently seen. I think time will tell, and there is some additional work we have to do in looking at and working with them with regard to the transactions they do see and whether those transactions would allow them to meet their grounds for suspicion.
    I would assume—and I'm guessing here—that on a normal crowdfunding page we would not likely see transactions of $10,000 or more being donated to a particular cause—
    Mr. Adam Chambers: Right.
    Mr. Barry MacKillop —so we may not see significant numbers of threshold reports, but it is possible, and again, time will tell what types of transactions they see as to whether or not a pattern of transactions would lead to grounds for suspecting money laundering or terrorist financing.


    Okay. Thank you.
    Thinking ahead, if we address some of these gaps with legislation, I'm also thinking about potential other gaps that may still exist. I'm contemplating situations where an entity actually fundraises directly without the use of a fundraising platform and accepts donations, both domestic and foreign. What obligations would that entity have to report any suspicious activity to FINTRAC?
     Mr. Chair, it almost sounds like the question is referring to an existing entity that is a not-for-profit or a charity or something like that. In those cases, they are captured by virtue of having a bank account, or, if they have a cryptocurrency wallet and they want to transfer that money to a known suspicious wallet, the cryptocurrency dealers who report to us would likely catch those transactions and report them to us. For any not-for-profit or charity organization where, as we've seen in the past, our financial intelligence has been helpful in addressing charities that were being misused, the reporting we've received from our current financial institutions has been extremely useful in that sense.
    Thank you very much.
    I believe that's my time, Mr. Chair.
    Thank you, MP Chambers, and thank you for your remarks on Ukraine.
    We're now moving to the Liberals.
    MP Baker, you have five minutes.
    Thanks very much, Mr. Chair.
    I too would like to make a brief statement, if I could.
    I want to first thank my colleagues for their thoughtful and strong and supportive statements. MP Chambers took the words out of my mouth. I was going to say that we disagree on so much here at this committee and in the House and in public discourse, but this is something that we're all united on. It is so important. I think it means a lot to Canadians. They want to see us united on this issue.
    I'm of Ukrainian descent. My grandparents, like so many people of Ukrainian descent, risked their lives and lost loved ones to that desire for freedom and independence. Of course, those with Ukrainian ancestry are touched by this very personally today, but I think this is something that concerns all of us and touches all of us. That's what we've heard from the comments here today from all members.
    It touches us because we see a free and independent country being invaded unjustly and because of the humanitarian crisis. I think this is a threat to the international rules-based order that protects all of us. What we're seeing today is a threat to not only Ukraine but also to the rest of Europe and our allies and Canada. That's why I think it's so important that we take the steps necessary to make sure that Vladimir Putin doesn't win and that Ukraine is free and democratic and independent. I thank all members for their thoughtful statements.
    With that, Chair, I'd like to move to my questions, if I may.
    There has been quite a bit said and reported on with regard to the funding of the blockades coming from outside of Canada. Can you talk about FINTRAC's ability to examine or track suspicious transactions originating outside of the country?
    Mr. Chair, FINTRAC does not monitor transactions, nor do we have any ability to see transactions, going to any institution or any type of GoFundMe page or GiveSendGo page or any other crowdfunding platform. That is not within our mandate.
    We do have very good partnerships with not only our Five Eyes but also a number of international financial intelligence units. FinCEN is one of our biggest partners in the U.S. Certainly, they were alive to this issue that was going on with regard to the blockades. We had discussions with them. They were certainly knowledgeable and alive to the fact that any suspicious activity reports they might receive, they would forward to us if these were applicable and would assist us in our intelligence job.
    With regard to any activity coming from foreign donors or people living outside of Canada, these crowdfunding platforms are in fact available internationally. They are on the Internet. Anyone from around the world could have donated to what was initially a cause they felt they wanted to support. We would not see those donations, unless, of course, they were $10,000 or more and coming from outside Canada. For smaller donations made by individuals to support a cause they believe in, we would not see that unless it came into that particular cause and were deemed suspicious by the bank that was holding the bank account for that particular cause.


    That's helpful. Thank you.
    In practical terms, I'm thinking about my constituents who might be watching today or Canadians who are watching today. They've heard a lot of news about FINTRAC's role in this. We've talked a fair bit about cryptocurrency, but in practical terms, what was the impact of the requirement to have crowdfunding or cryptocurrency platforms register with FINTRAC? What steps or actions were you able to take as a result?
    I believe the initial act of registration and the conversations that were had meant that a number of crowdfunding platforms as well as payment service providers paid attention. They started to question. They came to us and wanted to understand what was required of them, what they had to do and how they were implicated. I believe it was a very early intervention in creating awareness, having those questions come in and helping those organizations self-identify fairly quickly to see if they were possibly covered and if they had activities they wanted to report.
    We made it very easy. Before they were even registered, we enabled these new organizations to register any suspicious transactions that had surfaced.
    Thank you.
    Thank you, MP Baker. Also, thank you for those heartfelt words on how Canada is supporting Ukraine and the work you're doing here on the ground.
    We are moving, members, into our third round.
    I have the Conservatives up, and I believe it's MP Lawrence?
    It's MP Lewis.
    Oh, I'm sorry. I wasn't sure. I thought I had a change.
    MP Lewis, I apologize, and welcome to the committee. It's great to have you here.
    Thank you very much, Mr. Chair.
    Thank you, colleagues.
    I'm going to echo that too, because if I didn't it would be wrong. I've been watching very closely this morning, unfortunately CNN, but you have to get your news somewhere. My heart is with all of the folks of Ukraine. Honestly, although we have work to do here, I would like to just be quiet for five minutes and just close my eyes in solidarity with each and every one of you to really think about the families being affected in Ukraine. I won't, but that's where my heart's at today, and I thank all my colleagues, especially Mr. Baker.
     I can see the pain in your face, sir, so thanks for being open and honest and humble enough to really recognize where we're at.
    First and foremost, I want to say thank you, friends. I've never been part of finance before, so perhaps I'm a little bit in left field. I do sit on the international trade committee, so if my questions are perhaps a little bit sideways, please forgive me on that front.
    I want to tie in the international trade side of things. My riding of Essex is right beside the Ambassador Bridge, so you can appreciate where I'm coming from with this.
    The first question I would ask is, if we highly regulate crowdfunding platforms in Canada, won't Canadians just switch to crowdsourcing platforms abroad? I don't know, Mr. Chair, who to address this to specifically, but whoever would like to take this first question, please do.
    Maybe I'll just step back a little bit. When we look at supervision or regulation, we really do keep Canadian business first and foremost in our minds. We look at the need for policy change, the burden on business and privacy implications. Those three areas always come into play.
    Certainly small businesses, medium businesses and corporations in Canada all have a role to play. I think it is incumbent on us to look at, as I mentioned earlier, emerging threats and risks and to try to find the right equilibrium in bringing forward reporting entities and their obligations to help fight financial crime.


    Thank you so much for that.
    Through you, Mr. Chair, I have a question for Mr. MacKillop. I think I'm directing the question to the right person.
    I'm just curious. Do other countries, specifically the United States, have agencies similar to FINTRAC? If the United States does not, does anywhere else in the world? Do you have folks outside of Canada you lean on as well?
    Yes. Just about every country that's part of the Financial Action Task Force has a financial intelligence unit.
    With respect to your question on whether or not they do what FINTRAC does, I would unabashedly say that FINTRAC is the best in the world in providing intelligence. We have international surveys indicating that.
    We are one of the few that actually do financial intelligence to support our domestic law enforcement. Many of the financial intelligence units around the world specialize in supporting the international component and sharing internationally. We do that as well, but we do tactical financial intelligence support to law enforcement and national security agencies in Canada. We are relatively unique in doing that, certainly in terms of the number of disclosures we do a year and the number of investigations we're involved in with law enforcement. Also, we are unique internationally in the number of times we are recognized as a partner in successful investigations.
    Yes, financial intelligence units do exist around the world, but I would say FINTRAC would be at the top in what we do and how we do it.
     Well, that sure puts a smile on my face. We need some good news today, so thank you, Mr. MacKillop. That's excellent.
    I have a very quick follow-up question to that then. At FINTRAC, are you able to talk to the other agencies, or is it a solid at the border, and you do your own thing and the other agencies do their own thing?
    Thank you for that.
    No, we actually talk quite a bit with them. We certainly have our Five Eyes partners, of course, with whom we have a significant number of projects that are ongoing, whether they're on, for example, the tax-evasion side or the terrorist-financing side or even on trade-based money laundering, for example. There are sometimes connections all around the world in these cases, and we have worked and are working on cases that do touch a number of different countries. We work together and share that information.
    We can query other countries, for example, if we have Canadians who are involved in using another country's banking system in order to hide their proceeds of crime. We can contact another country through the FIU. We get reports that we can then forward on to our own law enforcement in Canada, and they do the same. They do call us. We have constant contact, more so with our Five Eyes partners, of course. However, we deal with just about any country with which we have an MOU and with which we can share information and intelligence. They will do that. That's on the intelligence side.
    We also have supervisory MOUs with our Five Eyes, whereby we can share supervision information as well as best practices, training and learning. We also work through the Egmont Group, which is a group of financial intelligence units around the world, to support them in their ongoing training as well as in terms of some of the standards and some of the work we do as international financial intelligence units.
    Thank you very much, Mr. MacKillop.
    Thank you, Mr. Chair. I know I'm done.
    Thank you, MP Lewis, for bringing that trade lens to our committee. We do have the Canada-Ukraine Free Trade Agreement that we're all very proud of.
    With that we are moving to the Liberals and MP Chatel for five minutes.


    Thank you, Mr. Chair.
    First, I want to join all my colleagues in expressing my full solidarity with the Ukrainian people. Today, Ukraine is plunged into darkness and terror as a result of Russia's completely unjustified attack. President Putin's brazen disregard for international law, democracy and human life is inexcusable. Canada stands united behind the Ukrainian people. The entire international community must also join together to put an end to this terrible situation.
    I want to thank the FINTRAC officials for being here today. I appreciate their experience and their essential work. I have some questions for them.
    I was personally very concerned about foreigners and even far‑right groups funding illegal activities in Canada. Some of these activities, such as the blockades in Windsor, led to over $1 billion in economic damage. These aren't strictly terrorist activities or terrorist groups. They're people from foreign countries who fund activities that cause significant damage to our economy and put our institutions at risk.
    If the GiveSendGo data leak and the Emergencies Act hadn't come into play, would the current tools have helped us identify the donors behind the platform?


    Thank you for the question.
    You referred to the data leaks. However, we certainly don't use that data. We haven't received a list of people who donated to the cause. Unfortunately, crowdfunding platforms are available to everyone, so anyone in the world can access them.
    We've had discussions with Stripe. Certainly individuals from around the world donated money to support the cause before it was declared illegal. People all over the world are unhappy and fed up with COVID‑19. I think that some people thought at first that this was a protest against COVID‑19 and just wanted to support the cause by giving small amounts of money. It was their own money. This wasn't money laundering. I don't believe that they thought that they were funding terrorist activity.
    Normally, we wouldn't have seen any of this. Crowdfunding platforms won't release the names of all donors to us. This falls outside the scope of the legislation governing us, unless it relates to money laundering or terrorist financing.
    We know that there's a great deal of illicit money in the world and that it's often hidden in tax havens.
    When large and suspicious sums of money are donated by foreign groups on crowdfunding platforms such as GiveSendGo or GoFundMe, do your current tools enable you to obtain information about these transactions?


     It has to be a very short answer, please.


    Thank you for the question.
    No, we don't have the investigative authority. This means that we can't ask for information from the reporting entities.
    Even though these reporting entities are required to register—



    Thank you, MP Chatel. That's your time.


    Thank you.


    We are now moving to the Bloc.
    Monsieur Ste-Marie, you have two and a half minutes.


    Thank you, Mr. Chair.
    Les Affaires recently published an article from The Canadian Press in which Mr. Manchester, managing director of financial intelligence training at ManchesterCF, was interviewed. Mr. Manchester is concerned that the Emergencies Act and the resulting action have set a precedent. I'd like to hear your thoughts on his statements.
    We know that the RCMP has been sending lists of people to financial institutions, which worries Mr. Manchester. He said that the banks could continue to track individuals who have been flagged by the RCMP. In addition, the names of these individuals could end up in third‑party private sector databases used by financial institutions to combat money laundering and terrorist financing.
    What are your thoughts on this?
    Thank you for the question.
    No, I haven't seen Mr. Manchester's comments. However, with all due respect, he doesn't work within the system. That's his point of view.
    As far as I know, the emergency measures were implemented for a limited amount of time, not for an indefinite period. The banks received information pursuant to the established process, meaning the use of the Emergencies Act in a very limited way and for a very specific reason. I'm sure that the banks won't store those names and send us reports later.
    In any event, if a bank said that it was sending us a suspicious transaction report because it received a name from the RCMP, I wouldn't accept that information and I wouldn't give it to the RCMP. The police aren't allowed to direct a bank to provide information to FINTRAC. We also aren't allowed to ask the bank to give us a suspicious transaction report on someone. This information would be thrown out in court as inadmissible evidence. We can't ask a bank to do something that we can't legally do. Neither the RCMP nor any other police force is allowed to direct a bank to send suspicious transaction reports to FINTRAC for intelligence purposes, in order to gather evidence and lay charges.
    The banks have no reason to keep either the information or the names. If there were suspicious people or people with a history that suggested involvement in terrorist financing or money laundering, they would already be identified by the financial institutions.
    Thank you.
    Thank you, Mr. Ste‑Marie.


     That is the time.
    We're moving to the NDP.
    We have MP Blaikie for two and a half minutes.
    Thank you.
    I want to follow up on that.
    I was listening without translation, as I normally do. I'm usually pretty confident in my French, but what I took from your testimony was that it was just an explanation of some of the reasons Canadians should feel reassured that whatever information was transmitted in this process wouldn't leave a lasting impression on their record in the private sector.
    I'm wondering if you could take a little bit more time to explain that, so members of the committee, including, or perhaps especially, me, feel they have a strong command of your comments in response to Monsieur Ste-Marie.
    Thank you for that.
    Mr. Chair, I hope it's not because the quality of my French was not up to par that it was unclear.
    It was not at all.
    Really, the Emergencies Act was time limited, and it was for a specific event.
     For example, the information on the designated people that was given to the banks, the financial institutions and others, had to do with the funding related to the illegal blockades, to ensure that the funding that was received or disbursed was stopped.
     Once this emergency measure is revoked, as it has been, the banks cannot use that information, for example, to submit an STR to me, to say, “Hey, we got this name from the RCMP. Looking backwards, yes, the person is a criminal, so we're going to give you this.” If they gave that to me and said, “The RCMP gave me this name, so this is my threshold for reporting to you”, that would not be something that I would be comfortable disclosing back to the RCMP, because it's not something that the RCMP—and I use “RCMP” as a generic term for law enforcement here—or law enforcement can go to a bank about and direct it to send an STR to FINTRAC on any particular individual. There are legal requirements. If the RCMP or any law enforcement wants that information, they need production orders. They need warrants from the court. They cannot simply walk in and say, “Please submit an STR on Barry MacKillop to FINTRAC” so that they can then give that to me as intelligence and I can get a production order and charge someone.
    I'm not a constitutional expert or a lawyer, but that is contrary to how our court system works. There is an independence. The threshold is met. The banking system or the financial institutions would submit reports to us on people whose transactions they believe or they suspect would be relevant to money-laundering or terrorist-financing activities.
    The fact that they were either supporting or disbursing the funds related to an illegal blockade has nothing to do with money laundering or terrorist financing. We would not get a suspicious transaction report, and I do not believe that the intent or the reality would be that the banks would keep the list of these names once the process had been undertaken to unfreeze the accounts, as Madame Jacques was mentioning the other day. These accounts will be unfrozen. There's no lasting black mark on these individuals. They simply could not use that money, or whatever it was that they had, to support the illegal blockade, as per the Emergencies Act when it was in place.


    Thank you, MP Blaikie.
    I hope I get this one right: We have the Conservatives next and it's MP Lawrence's time—yes?
    You got it, Mr. Chair.
    All right. There you go.
    Thank you.
    Mr. MacKillop, I just want to confirm something arising from my last questions. Just to be clear, I imagine you were working around the clock to implement the Emergencies Act at your department, but despite your best efforts, nothing that gave you additional authorization or that gave FINTRAC additional authorization helped at all in ending the illegal protest [Technical difficulty--Editor]
    On a point of order, Mr. Chair, I couldn't hear.
    Yes. I wasn't sure if it was my system.
    MP Lawrence, I think we lost the last 10 or 15 seconds of your question.
    We lost the whole question.
    Mr. Philip Lawrence: Oh, that's a shame.
    Could you could go over it again, please?
    It was the greatest question I've ever asked.
    In all seriousness here, I just wanted to be clear, from my last round of questions, that the additional powers given to FINTRAC in the emergency measures act invocation or proclamation did not help in resolving the blockades or the illegal protests.
    I kind of hesitate to say that FINTRAC didn't have any role at all, because we were working 24 hours a day, and we are part of the security intelligence community in Canada with the federal government. But you are correct. While the authority to register crowdfunding platforms and the payment service providers may not have had a direct impact, it may have in fact reinforced the fact that it was at that point illegal to try to donate money to support this blockade or to take money out.
    It did certainly put a focus on that. It put a focus on the banks and the financial institutions that may have had any control of any goods or any accounts related to any of these crowdfunding platforms. They probably looked at other crowdfunding platforms as well that were not necessarily mentioned in the newspapers, for example. So I think there was a role, but it was certainly not a direct role in stopping this.


    [Technical difficulty—Editor] direct role.
    I'd like to pivot to a different area. My concern—I think Mr. Blaikie may have pointed this out as well—is that it does appear that we have a hole in our money-laundering dragnet. If you have a foreign entity that is giving to a foreign crowdsource or even to a not-for-profit group that, for example, wanted to stop pipelines, and maybe international actors such as Russia would want to support those types of groups or those crowdsourcing platforms, we don't really have a way to [Technical difficulty—Editor] Canadian financial institution. Correct me if I'm wrong.
    The audio was cutting out, sir, and I didn't hear everything, but I'll do my best to answer the parts that I did hear.
    If there were monies coming in from an international organization or an individual internationally, and they were in sums of $10,000 or more, we would see that, because it would use the international transfer system. Those transactions are threshold transactions that would be reported to FINTRAC. If the transactions were coming into a crowdfunding platform, the crowdfunding platforms that I have researched so far all have fairly strong anti-money laundering, anti-terrorist financing compliance programs in place. They don't want to be misused. They have terms of reference, and as we saw with GoFundMe, if you're not managing your terms of reference, they will cut that page off. They will certainly be keeping an eye on that.
    Any organization or individual who is setting up a GoFundMe page or any other type of crowdfunding page for nefarious purposes would nevertheless have a bank account if they're in Canada, so we would not only see the international transfer of threshold funds coming in; we would also have the bank keeping an eye on whether or not the bank account that was set up for this particular social cause, or whatever cause it was, was actually disbursing the money for the purposes for which it was set up. Otherwise, we would see suspicious transaction reports.
     Thank you.
    Thank you, MP Lawrence.
    Now we're moving to MP Dzerowicz for the Liberals for five minutes.
    Thank you so much, Mr. Chair.
    My first question might be slightly odd. In the short amount of time that the Emergencies Act was in place—and, FINTRAC, thank you very much for working 24 hours a day—what happens to the information that you collected? Does it just sort of stay on reserve? Does it get eliminated? What happens to that information?
    Information disclosed or received by FINTRAC with legal authority while the order was in effect will be treated in accordance with our legislation and the Privacy Act. We have rigid safeguarding of personal information. That's critical to the way FINTRAC operates. It's hard-wired in terms of the act and our mandate. We have clear principles for how we manage that information.
    As of yesterday, when the order was revoked, all activity associated with any information that we have received had to stop, and it did stop.
    Thank you.
    My next question is in the spirit of moving forward and assuming that the Deputy Prime Minister is going to continue to move forward and try to introduce legislation to make this something permanent for FINTRAC.
     One of the things that has been said about FINTRAC investigations is that they very rarely lead to charges connected to money laundering or extremist financing, and the reason that's given, such as by Transparency International Canada, is that it's largely because law enforcement agencies are hesitant to take on labour-intensive, time-consuming cases.
    Is that true? If it is true, is there something that we need to be thinking about in terms of capacity and resources and how we're actually framing any type of legislation or including it in any type of legislation moving forward?


    Mr. Chair, I think the member is correct that if we measure success based on the number of successful money-laundering or terrorist-activity financing prosecutions we have in Canada, we may not come out with significantly high numbers. However, if we look at the disruption of criminal organizations or the disruption of potential terrorist events, where our financial intelligence may or may not be recognized—because it's not recognized in every successful investigation or prosecution—I think the disruption is significant, and I think the financial intelligence is critical to assisting our law enforcement partners in their investigations.
    Certainly, money-laundering charges are difficult. They're difficult to prove and difficult to get prosecutions on, but in terms of my own level of satisfaction with my work, while getting a money-laundering prosecution is great, if I can assist law enforcement in identifying 12 victims of human trafficking and getting them out of a human-trafficking ring so they can become 12 survivors in Canadian society, I see that as success. Perhaps a human trafficker will not be charged with money laundering, but they will be charged with human trafficking, and we will save the victims.
    I think it's the measure of success where, yes, Transparency International may have looked at the FATF measure, which is money-laundering and terrorist-financing prosecutions, but for us, we believe that while that's important, saving victims, getting victims out, avoiding terrorist incidents and disrupting organized criminals are as successful as a money-laundering or terrorist-financing prosecution.
    Thank you.
    My last question again might be an odd question. If we were to add cryptocurrency and crowdfunding as part of the monitoring powers that FINTRAC would have, is there anything we would have to change if the definition of terrorism or money laundering because of these digital features? I don't think so, but I just wanted to pose the question to you.
    I don't believe that money laundering is linked to fiat or anything else, so any virtual money, any crypto money, can be used in money laundering and terrorist financing and there would be no need to change the definition of the type of currency that's being used to launder. As long as it's the proceeds of crime, it would be considered eligible for money laundering.
    Thank you so much.
    Thank you, MP Dzerowicz.
    Members, we are moving into our final round. I'm looking at the time. As we do on this committee, when there is not enough time to allow for a full round, we will divide it up equally among the parties. We are starting, for four minutes each, with the Conservatives and MP McLean.
    Thank you, Mr. Chair.
    I'm going to go back to where I left off with my last round of questioning.
    All these Canadian crowdfunding platforms are regulated through provincial securities regulators. They are covered under FINTRAC when the transactions go there. The crowdfunding platforms in Canada, specifically GoFundMe, are regulated. When activities were deemed to be illegal, they ceased to provide funds to the organization. The one gap we have is GiveSendGo—an offshore non-Canadian entity, to which some Canadian funds and some other funds were going—which we are not sure where it fits in the regulations. That's where we are at.
    This is the part that I think concerns many of the members of this committee, namely the implications of foreign funds and foreign organizations that are not regulated by Canadian institutions such as FINTRAC being able to destabilize operations or governments in Canada.
    I'm not sure how FINTRAC is going to be able to regulate these foreign platforms. Can you comment on that?
    Mr. Chair, thank you.
    With regard to looking at the gaps and at the regime and our regulatory partners, we are having conversations with them. Additional gaps and policy gaps come under the purview of our colleagues at the Department of Finance.
    I think that question would best be routed to them.


    Thank you.
    With respect to the Emergencies Act, it seems that we were clear that everything was going according to the law. The only gap in understanding we seem to have here is with respect to the regulations regarding entities' distribution of funds to a Canadian illegal operation.
    The issue we have insofar as the freezing of bank accounts in Canada is concerned is with the order in council that was issued. Freezing bank accounts for participating in an illegal activity, even when the activity wasn't illegal or deemed to be illegal, is the basic overstep at which many of our constituents really balk. Is it going to destabilize the Canadian financial system if the government has the ability to reach into the accounts of people—who are participating in an action and doing nothing illegal—and suddenly freeze those accounts? I'm not talking about accounts of $10,000 plus. I'm talking about your Mas and Pas who may have given to an organization that was not performing anything illegal at the time.
    Can you comment on that, please?
    The seizing of the bank accounts and the invocation of the act are well outside the purview of FINTRAC, so I do not have a comment on that.
    Is there anything else you'd like to comment on? It seems as though the Emergencies Act didn't have any role to play in the actions as far as the accounts and the crowdsourcing go. That seemed to occur under current Canadian legislation, and the Emergencies Act was really not required in order to freeze any of those accounts. The account freezing was the one aspect of the Emergencies Act that was really a gross overstep.
    Do you have any comment on that?
    Again, Mr. Chair, that is outside of the purview of FINTRAC and the role that we play with regard to money laundering and terrorist financing.
    Would anything be accomplished with that?
    Thank you, MP McLean.
    We are moving to the Liberals and MP MacDonald for four minutes.
     Thank you, Chair.
     I do want to say that with the last time FINTRAC was here, and this time too, of course, I learn more all the time. It's certainly reassuring that there are organizations like FINTRAC. It's appreciated. Even mentioning the human trafficking relevant to what you do is most beneficial.
     I certainly don't know how you deal with the flood of misinformation and disinformation that we've seen over the past few weeks, but I'm going to go back to what may be more of a local issue when you're dealing with financial institutions such as a credit union or something like that.
    What are the weaknesses of those institutions, I guess, that could have consequences for you as you're trying to do your job? What changes would you like to see in those institutions for betterment in your doing your job?
    Mr. Chair, I think some of that is answered by having robust compliance programs. Whether we're talking about credit unions or financial institutions, we go to great lengths in education and strongly endorsing the requirement to put a robust compliance program in place: appointing a compliance officer who's responsible for a program, developing policies and procedures and conducting risk assessments. Those are key fundamentals for a robust compliance program, as is ensuring that they have training programs and that they monitor the evolution of risk and those training programs.
    For part of our education, I must go back to what my colleague Barry indicated. Every time FINTRAC is mentioned in the context of a successful law enforcement operation, and especially when we can put a human face to the damage associated with money laundering or terrorist financing, we bring that back to our reporting entities in the institutions. They have to understand that they play a critical role not only in mitigating the damage, but in really having that robust program where they know their clients, and when something is wrong, they have reasonable grounds to suspect and they come back to us.
    For us, I think the best way to continue is educating and ensuring that we have sound appreciation for the roles these entities play in disrupting financial crime.


    Thank you.
     I'm good, Chair. Thank you.
    Thank you, MP MacDonald.
    We are moving to the Bloc and MP Ste-Marie for four minutes.


    Thank you, Mr. Chair.
    I want to come back to The Canadian Press's article in Les Affaires in which Mr. Manchester was interviewed.
    The government asked financial institutions to check whether their clients appeared to support the protests. Mr. Manchester is concerned that this will set a precedent and that, in the future, financial institutions may continue these monitoring efforts.
    What are your thoughts on this?
    Thank you for the question.
    I don't know the internal processes of financial institutions. That said, usually, when information is provided in this way, it's for a very specific reason. If the information is used for any other purpose, usually that's unacceptable and not something that financial institutions would do.
    I don't work in a financial institution, so I don't know the internal processes. However, I can tell you that the plan was to use the information for a very specific purpose and for a very limited time.
    Okay. Thank you.
    Mr. Manchester raised another concern. He wondered whether, in the few days where the Emergencies Act was in effect, the government was asking your organization to devote many resources to work related to the Emergencies Act and the siege in Ottawa. His concern is that your resources are very limited. In addition, at the start of the meeting, you reminded us that you were dealing with a heavy volume of reports, among other things. Mr. Manchester is concerned that the steps required under the Emergencies Act haven't given you the chance to carry out the rest of your work properly.
    I don't know whether my comments were clear. If so, I'd like your input on this.
    I'll start my response. I'd like to invite my colleague to comment afterwards if he wants to do so.
    As I explained earlier, since we're a small agency, we're agile. This was a national crisis and we responded with substantial resources. That's part of our daily work. When needs arose, we focused our resources on them. We did so quickly. We've been working 24 hours a day, seven days a week. We've done a great deal of work. However, it's part of our reality to respond and redistribute our resources as needed.
    Thank you and congratulations on all your work.
    The redirection of your resources in response to the Emergencies Act won't interfere with your regular activities on an annual basis.
    No, absolutely not. We certainly assigned people specifically to this initiative. However, that didn't stop us from carrying out our usual work. We worked overtime, but that's typical in a crisis. This isn't our first crisis and, unfortunately, it won't be our last. We have the necessary resources. In addition, everyone at FINTRAC is willing to get involved. It's easy to find people who want to work as long as it takes to get through a crisis.


    Thank you.


     Thank you, MP Ste-Marie.
     Our last questioner will be NDP MP Blaikie.
    You have up to four minutes.
    Thank you very much.
    I think it might help to just step back at the end of our meeting today and take a little bit of a bird's-eye view. I think part of our role here on the committee is to address concerns that Canadians may have that some of the extraordinary powers granted under the emergency orders were improperly used or abused.
    I'm wondering if you have any advice for the committee on who else we should be talking to, or what questions we should be asking, to discover, to the best of our abilities, if that's the case; and if that's not the case, to be able to reassure Canadians that things unfolded as they should have under the orders, and how to follow up if they're concerned about lasting consequences with, say, their financial institution or anything else; or, if there are to be no lasting consequences for them, how they might be able to feel reassured that this is the case, who to pursue those questions with, and what would count as kind of getting to a point where they should feel satisfied that those questions have been answered.
    I'm wondering if you have any recommendations for the committee on how we can undertake those two tasks—satisfy ourselves that there haven't been abuses, or to find them if they're there; and then, in the event that there haven't been, how to provide reassuring advice to Canadians to that effect and some advice on how they can pursue those questions further in their individual cases to satisfy themselves.
    Far be it from me to suggest whom you should invite to your committees. If there are people I know, and they don't want to come, I may make enemies, so.... Certainly, there were a number of agencies involved.
    For individuals who are constituents, who are Canadian citizens, I think they can follow up with their financial institutions. If they were caught up in this, I think immediate and direct follow-up with their financial institutions will allow them to achieve a measure of comfort with regard to their bank accounts, as Ms. Jacques said the other day, being unfrozen now that the act has been revoked. I think they can follow up with their institutions and have a discussion about what impact, if any, they would see. If their banks or financial institutions have questions for them, I'm sure they can answer those questions and get that level of comfort.
    As for the bird's-eye view, I understand that an inquiry will take place. I think many, many parties will be invited to that inquiry, which I'm sure will provide a very nice overview of everything that was done, how it was done and why it was done. From my perspective, I'm satisfied that it came to a peaceful end. Being in Ottawa every day and living through that, I was quite happy and proud of my law enforcement partners in the way they resolved this.
    I think I would leave it at that rather than suggest specific names of people you should invite.
     Thank you very much.
    I'll leave it at that as well, Mr. Chair.
    Thank you so much, MP Blaikie.
    Members, I think I speak for all of us when I say that Barry MacKillop and Donna Achimov have been excellent witnesses. We want to thank FINTRAC for being with us and for the many answers they gave to our many questions. They provided great insight into what FINTRAC does and how it does it.
    On behalf of the committee, the clerk, the analysts, the interpreters and everybody who makes this operation work, the staff and members, I want to say to all of you that I've never been prouder just to listen to you. You spoke, as I said, from the heart. You spoke strongly. We spoke united on Ukraine. I'm sure all of our colleagues, parties, party leaders, the Prime Minister and the Deputy Prime Minister would be very proud. I thank you all for what you have done.
    I believe this is the first committee since the conflict began where members have been able to make these types of comments for the public, for them to hear what we have to say.
    Thank you.
    With that, we'll—
    MP McLean has his hand up.
    MP McLean.


    Thank you very much, Mr. Chair.
    I want to echo your comments. This has been a very productive committee, including with all the comments that were received around the table today.
    I want to say goodbye to everybody; I didn't know whether I would otherwise have had the chance. This has been a very good committee to be part of. I think all of you probably know that I'm moving to a different committee next week. I will enjoy visiting whenever you invite me, but I will have different responsibilities next week.


    I'll miss all my colleagues from every party.
    Thank you and until next time, friends.


    MP McLean, we will miss you. I'm sure we'll see you around, and, yes, please join us as a substitute member any day.
    Members, with that, I will adjourn.
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