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I call this meeting to order.
Welcome to meeting number 31 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 available via the House of Commons website. Just so that you're aware, 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 only view the meeting in gallery view. I'd like to take this opportunity to remind all participants in this meeting that screenshots or 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 and 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. Participants must maintain proper hand hygiene by using the provided hand sanitizer at the room entrance. As the chair, I'll be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.
To ensure an orderly meeting, I'd 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 the floor, English or French. If interpretation is lost, please inform me immediately and we will ensure that interpretation is properly restored before resuming 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 the committee room. Keep in mind the Board of Internal Economy's guidelines on mask use and health protocols.
Before speaking, please wait until I recognize you by name. If you're on the video conference, please click on the microphone icon to unmute yourself. To 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, you mike should be on mute. I would remind you that 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 best we can to maintain a consolidated order of speaking for all members, whether they're participating virtually or in person.
I'd now like to welcome our witnesses. From the Automotive Parts Manufacturers' Association, President Flavio Volpe is with us. From the Canadian Credit Union Association, we have the president and chief executive officer Martha Durdin, and vice-president of government relations Michael Hatch. From GoFundMe, we have president Juan Benitez, and general counsel Kim Wilford.
Welcome.
At this time, the witnesses will have an opportunity to provide remarks for up to five minutes. We will start with the Automotive Parts Manufacturers' Association and Mr. Flavio Volpe.
:
Thank you, Chair, and members, for inviting me. I always appreciate the opportunity to have this forum and this platform.
In November 2021, Canada reciprocated an October announcement by the U.S. that unvaccinated cross-border truck drivers would no longer be allowed to cross the border without requiring quarantine, by January. Our industry expressed concern for the effect that might have, in an already tough time, on the mode of transport we rely on most for the critical export corridors that underpin our livelihoods.
At the time, I said this to the Toronto Star:
Trucking is the lifeblood of our industry. Cars get shipped via rail, parts get shipped by truck. This is hitting the industry at a time when supply chains are having the most difficulty they've had in a hundred years.
In fact, about half the production we make a year is exported that way, $18-billion worth or so in a normal year.
As the deadlines approached and affected drivers began to make themselves heard in public, I was circumspect in an interview with Automotive News:
What will happen here is, if we're down 20 per cent of truckers, industries like ours will have to up-bid our access to available drivers.
In a Sun Media interview, I expanded on my point and my concerns:
...the trucking shortages, now exacerbated by the mandates, will cost parts makers in both Canada and the United States. [Our] members will now be competing with those wanting to move all kinds of goods as they seek truck space and drivers.
I was, and still am, a strong supporter of vaccinations, but we caution that governments have to be sensitive and flexible to what is happening. It was always going to be a choppy transition, but the public health leadership in this country had, by most quantitative measures, placed Canada favourably in comparison with the United States and other major countries around the world. We took this latest hurdle as something we could absorb for the greater good.
In March 2020, when the COVID pandemic caught everyone unprepared, it was auto parts companies that initiated the largest peacetime mobilization of Canada's industrial capacity in response. Our call to action was echoed immediately by government. Within two weeks, parts companies began to make masks, shields, ventilators, vaccine coolers, swabs and gowns. Dozens did so without purchase orders. Our industry has served as the prime example of extraordinary civic duty, and we've done so proudly for the last two years.
This is the context in which we experienced the lawless blockade of the Ambassador Bridge by anti-government actors who cloaked themselves in a phony “truckers” cause that shut down Canada's most important cross-border asset for the first time since 9/11. That singular event in February, which seemingly paralyzed governments and law enforcement as well, cost the highly integrated automotive sector approximately $1 billion in unrecoverable production, and then cost approximately 100,000 Canadian automotive workers similar shift and pay losses.
On a regular day, about 10,000 actual truck drivers pick up and deliver $50 million in goods from Canadian parts companies and deliver them to their U.S. customers. They return with a similar load from U.S. factories to Canadian automakers. Those drivers were forced to stay home, unpaid, while people who pretended to be them forced them to lose actual work.
[Technical difficulty—Editor] inauthentic political actors in Ottawa who shamelessly egged on their social media followers, and then was carried out by a couple of dozen macroeconomically illiterate followers. Its cost to Canadian industry in shipments is dwarfed by its cost in goodwill.
It was unfortunate that a court order secured on February 14, 2022, by the APMA as lead plaintiff was required to kick-start the enforcement of the law in Windsor. We need to have a better overall mitigation plan in place amongst all levels of government to avoid future “freedom barbecues” from blockading critical public infrastructure.
Next week I will meet with the White House for the first time since this blockade ended to talk about how we continue to build an electrified Canada-U.S. auto sector together. I thought it best to let the dust settle and the embarrassment subside before I returned to Washington to lecture Americans about their trade obligations to Canada.
Thank you.
:
Thanks very much, Mr. Chair.
Thank you, members of the committee, for the invitation to speak with you today. My name is Martha Durdin.
[Translation]
I am the president and chief executive officer of the Canadian Credit Union Association.
Joining me today is Michael Hatch, vice-president of government relations.
[English]
The CCUA represents 219 credit unions and caisses populaires outside of Quebec. Credit unions contribute nearly $7 billion to Canada's economy by providing deposit, loan and wealth management services to over 5.9 million Canadians. Collectively, credit unions and regional centrals employ nearly 30,000 people and manage over $280 billion in sector assets.
Credit unions are co-operatives. In other words, the people who bank with credit unions are the same people who own them. Being accountable to our member owners, as opposed to shareholders, results in customer service that is second to none. We consistently rank at the very top of surveys of customer satisfaction for financial services.
For rural members of this committee, it's important to note that in almost 400 communities across Canada, credit unions are the only on-the-ground providers of financial services to households and small businesses.
We worked closely with financial officials and the RCMP last month as the Emergencies Act measures were rolled out. We'd like to thank the minister and her team for keeping in regular contact with us in the heat of the crisis. We're particularly grateful to senior Finance Canada officials who provided, on short notice, an in-depth briefing to our members on the financial components of the measures. It was attended by over 600 representatives from across Canada.
We also have constructive feedback to provide on other elements of the process. In the early days of the crisis, there was the impression, not uncommon in our dealings with the federal government, that the large six banks were consulted or informed days before credit unions and other financial institutions were. Credit unions represent almost half the financial sector in some provinces, and millions of Canadian consumers. We need to be at the table in discussions with Ottawa at the same level as the federally regulated banks in all matters that directly impact our operations and our members, particularly in a time of crisis such as this.
When the measures were first announced, it was very unclear to whom the financial sanctions applied. Eventually it became clear that they were aimed at a very small list of individuals and entities. However, in the early days, there was some degree of panic among some Canadians that their accounts may be frozen due to such things as small donations to the convoy. In those important days, the government was less than clear about the intended targets of financial measures under the Emergencies Act.
Many of our members expressed this concern, and many Canadians made significant withdrawals from credit unions as a result, sometimes in the hundreds of thousands of dollars, and on a few occasions millions. While these withdrawals did not cause liquidity issues at all for credit unions, staff had to manage many very unhappy members. Better and much clearer communications from the government could have mitigated this.
One credit union leader wrote to us: “We had a tremendous amount of members very seriously concerned regarding the government's ability to seize accounts; it brought forward a large sense of mistrust with the government that they could just seize individuals accounts.”
The government also granted a significant level of discretion to financial institutions regarding whose accounts to freeze. This further contributed to confusion and to possibly an uneven application of the financial components of the measures. Many would have appreciated further guidance from the government on precisely which accounts would be frozen.
In the end, a relatively small number of credit union accounts were frozen. For a short period of time, our members froze a total of 10 accounts with a total value of less than half a million dollars.
We hope this feedback is helpful to the government and to the committee.
We're happy to take your questions, Mr. Chair.
:
Good morning, Mr. Chair and members of the committee. It is our pleasure to join you all today to discuss important matters related to the “freedom convoy” fundraiser and social fundraising in Canada.
My name is Juan Benitez. I'm the president of GoFundMe. I am joined by Kim Wilford, GoFundMe's general counsel. On behalf of everyone at GoFundMe, we want to acknowledge the impact of the so-called freedom convoy on the citizens of Canada, in particular the residents of Ottawa and each of you.
GoFundMe is the world's most recognized and most trusted fundraising platform. Our mission is to help people help each other with a goal of being the most helpful place in the world. We are humbled that GoFundMe has become a noun, synonymous with receiving help and assisting communities. That impact is far-reaching, as we have delivered over $17 billion in assistance to communities in 19 countries since the company began over a decade ago.
In Canada we are now delivering well over $200 million in community assistance each year, including for such significant events as the Humboldt Broncos fundraiser in 2018 that raised over $15 million, as well as the hundreds of other campaigns that help friends and family members with their needs and dreams every day.
Before we provide a timeline of events for the "freedom convoy" fundraiser, I would like to thank Ottawa authorities, notably interim police chief Bell, Mayor Watson and their teams for their collaboration and transparency. I also want to say that all our decisions and policies are guided by our terms of service, which are posted publicly and outline what is permissible and what is prohibited on our platform. Fundraisers relating to misinformation, hate speech, violence and more are prohibited by our terms of service.
The "freedom convoy" fundraiser was created on January 14. We began actively monitoring it the next day, based on significant fundraiser activity. Our initial analysis concluded that the fundraiser was within our terms of service and could remain active. On January 27 we initiated distribution of $1 million through our payment processing partner. It was disbursed to the financial institution designated by the "freedom convoy" fundraiser organizer. It is our understanding that TD Bank has applied to an Ontario court to surrender the money that was in the organizer's account.
Following this disbursement, public statements from the fundraiser organizer began to shift in tone, and on February 2 we suspended the fundraiser. This effectively meant that all future donations and withdrawals were paused. From February 2 through February 4, we heard from local authorities that what had begun as a peaceful movement had shifted into something else. They shared reports of violence, harassment, misinformation and threatening behaviour by individuals associated with this movement.
During this time, we also commenced a review of where donations were coming from. Our records show that 88% of donated funds originated in Canada, and 86% of donors were from Canada.
On February 4, following concerning dialogue with the fundraiser organizer and her team, as well as continued updates from law enforcement and local authorities, it became clear that the fundraiser no longer complied with our terms of service. We removed the fundraiser from our platform, and on the following day initiated refunds to all donors via our payment processing partner, including all transaction processing fees, tips and the $1 million already paid out. When the Emergencies Act was invoked on February 14, we immediately pre-registered with FINTRAC, as was required at that time.
GoFundMe aspires to be the benchmark for responsible operations in the social fundraising industry. Over 80 of our 400 employees are dedicated to policy creation and enforcement, data privacy, information security, regulatory compliance and prevention of payment fraud, financial crimes and money laundering. We employ industry experts, and consider ourselves experts and innovators in these areas.
Beyond the investments we make at GoFundMe for trust, safety and compliance, there are multiple layers in the regulatory framework surrounding social fundraising. All donations are processed, held and paid out by our payment processing partners. This means that GoFundMe does not directly interact with or hold any funds collected from donors, and nor are we ever able to redirect those funds. While GoFundMe is not currently required to report to FINTRAC, it is our understanding that in Canada, the authorized payment method used for donating and the financial institution that receives the donated funds are both regulated by FINTRAC.
In summary, GoFundMe controls, payment processor controls and banking system controls are the three layers involved in social fundraising operations focused on ensuring regulatory compliance. We believe responsible action is core to social fundraising, and we run our business accordingly. We proactively invest in the relevant processes, teams and tools to be the industry leader in this area.
There will always be opportunities to learn and improve, and we hope the committee acknowledges the responsible actions we took in close consultation with local authorities. While this committee and the Canadian government make decisions about how to move forward, we are happy to contribute our expertise. We look forward to continuing our assistance to Canadian communities.
We look forward to the committee's questions.
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When this fundraiser was created on January 14, it was within our acceptable terms of use. There was nothing in our original diligence around the fundraiser organizer or anything in the campaign content that suggested that it violated our terms. The donation velocity is what caused it to get the attention of our internal teams. The next day, we started communicating with the fundraiser organizer and her team. It was on January 27, as Mr. Benitez said, that we initiated the $1-million distribution from the campaign.
On January 31, our teams became aware of a statement by Ottawa police that caused us to want to reach out and talk to them to receive credible information about what was actually occurring. There was a lot of misinformation around this campaign and GoFundMe's role in it, so we were trying to get credible, consistent information from the authorities on the ground.
On February 2, our team spoke to local law enforcement and interim police chief Bell. On February 3, I spoke to Mayor Watson. On February 4, we again spoke to the local police in Ottawa.
However, as Mr. Benitez said, that first conversation with the local police is when we suspended the campaign on February 2. That stopped it from accepting any future donations and stopped any future disbursements from going out. We continued to do our diligence until we realized it had violated our terms and removed it from the platform on February 4.
Thank you again to our witnesses for being here with us today.
I will start with a bit of context on where my concerns are. My questions will be directed to GoFundMe.
First, there were donations made to finance activities that were illegal and hurtful to the economy. Second, there were a number of foreign donations, and they increased as the illegal activities became more extreme and more hurtful to our economy, and to the residents of Ottawa, for example. At GoFundMe, 12% of donations were identified as foreign-sourced. That contribution increased to nearly 50% once you closed your platform to those donations, when GiveSendGo opened for donations. We also heard U.S. news channels with different standards, quite frankly, for the integrity for their information, which incited four-million-plus viewers to donate and participate in those illegal activities.
As part of the context, too, we know that Russia has been engaged in misinformation warfare for years. We only have to look at the Mueller report to understand that. They do have at their disposal, according to serious economic studies—one from Cambridge, Massachusetts—$1 trillion in Russian dark money that is circulating and dedicated to undermining our democracy.
You accumulated $10 million from donors, and the other platform the same thing, with more foreign donations. You paid out $1 million to organizers of blockades that occupied Ottawa and the bridge for the stated purpose of defying our democracy, at the time Russia was preparing for war. That's the context, and it could have been a lot worse if you hadn't acted quickly and if our government hadn't acted quickly. This can no longer happen. I'm very glad to hear that you want to be a leader in protecting the integrity of the donation platforms.
My question for you is about the source of the donations. I know you're not subject to the proceeds of crime legislation, but if you were—which we will definitely look at.... The international work right now on identifying sources of financing focuses on the ultimate beneficial owner of an account. I say this because we know that Russia and all other money launderers hold bank accounts in every country under several shell companies, or even companies that appear legitimate. Therefore, what is your due diligence to look beyond the credit card holder?
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Mr. Chair, first, we appreciate that our collaboration with authorities and our work in responsibly handling this unprecedented, fast-moving and complex fundraiser was recognized by the committee. Thank you for that. It continues to be our endeavour to be the most responsible platform. We appreciate the recognition.
I'd also like to remind the committee that the 88% of funds that we saw donated from Canada was on the GoFundMe platform, and we cannot comment on what might have happened on other platforms that sought to run this fundraiser after we shut it down.
Our fundraising diligence does focus first on the recipient of funds. As would be common in the financial services ecosystem, that's where the so-called KYC, or “know your customer”, checks and the greatest diligence occurs, to know who will be receiving the funds and who owns the accounts that the funds will be deposited in. To do that, we run a system of checks that GoFundMe employees do. We collaborate with our payment processors, who also perform diligence in their checks. We oftentimes use their tools to perform that diligence about the funds' recipients and the owners of those accounts. Then, of course, the banks themselves would also be verifying the identity and “allowance”, let's say, of whoever owned those accounts to be on their platform and receive those funds.
On the donation side, donations can evolve quickly and rapidly. We do a risk-based review of donations based on the tools that we have—tools from third parties and our manual assessments that may happen. We progressively do those reviews based on the nature of the campaign. In this case, it was an unprecedented, fast-moving campaign with significant impacts, so we stepped up our donation reviews and proactively did that review of foreign sources. We feel comfortable with our policies and processes associated with those reviews.
I want to start by wishing everyone a happy St. Patrick's Day. I also want to let the chair know how much I like his festive tie. He is clearly wearing it with pride today.
My sincere thanks to the witnesses for being here. Not only were their opening statements informative, but so are their answers thus far.
My first questions are for Ms. Durdin.
Thank you for acknowledging our sisters and brothers in Ukraine. What they are going through is terrible.
You said in your opening statement that the government had briefed, and provided information to, the big banks—the ones in Toronto—before the credit unions. Is that correct?
I had the pleasure of moderating that discussion, and you're absolutely right—it's impossible to manage hundreds of questions in an hour. However, it became clear pretty quickly that most of the questions were under four or five broad categories, so we did our best to address as many of them as possible with our colleagues at Finance, who did a fantastic job on very short notice, and we're very appreciative of those efforts.
After the fact—it was on a Friday, if I remember correctly—early the following week, we were able to spend a few days looking at the questions, making sure we answered everything, and then we put together a Q-and-A document that we were able to share.
Most of the questions—though there were dozens, if not hundreds—were under a few broad categories that I think we were able to address during that session.
Two things that have been part of the discussion so far deal with what requirements, if any, financial institutions had to notify clients whose accounts had been frozen, whether they under the authority of the emergency measures order or under some other authority, and what financial institutions were expected to do with that information or any potential flags on people's accounts that should have been frozen under the order.
Can you give us your thoughts on each of those things—whether there was any clear direction provided in either of those cases, either verbally or in writing, and, if not, whether you think clear direction on those matters would be useful?
:
Thanks so much, Mr. Chair.
I want to thank all of the witnesses before us today. Thank you so much for your time. This is a very important meeting on the implications of the Emergencies Act, particularly the economic order measure. Thank you for being here with us today.
I just want to start off very quickly. I know that GoFundMe indicated that a high percentage of the donations that came in to them for the “trucker convoy”, which I'll put in quotes, came from Canadians. I do want to put on the record though, Mr. Chair—and I think it is important to do so—that according to a February 14 Toronto Star article, “Nearly 41 per cent of the more than $10.7 million donated to the 'Freedom convoy' through an online fundraising site has come from the United States, leaked data suggests.” I think it is very important to put that on the record. We have found that sources have validated that, indeed, foreign investments have gone into the “freedom convoy”.
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No, and I'm sorry, Mr. Benitez, just in case you misheard me, I said it was GiveSendGo's leaked data. It wasn't GoFundMe. If that did not come across clearly, I want to clarify that for the record. Thank you for that.
It was not you, and I was not disputing what you said, and I wasn't disputing your numbers at all. It was more another platform. I just wanted to leave with the public who might be listening that there is evidence that there was a foreign contribution into the “freedom convoy”.
I'll turn now to you, Mr. Volpe. You were very clear and articulate about the impact of the blockade of the Ambassador Bridge on the economy as well as workers. What damage did the blockades do to Canada's international reputation, and had they not been stopped through some measures like the Emergencies Act, what would the additional blockades or renewed blockades have done?
Mr. Volpe, all the blockades took a great toll on the economy. I found your remarks particularly compelling. You said the blockades impacted even factories in the U.S. The consequences were awful.
A while ago, one of my fellow committee members said that the government had acted very quickly. What I saw, however, was a government that waited three weeks before doing anything, letting the situation deteriorate, so I disagree with her.
Do you think the government should have acted sooner, instead of waiting three weeks?
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It was our publicly expressed opinion at the beginning of the Ambassador Bridge blockade that there were existing laws that law enforcement on the ground could have enforced. Both the municipal and provincial law enforcement agencies that dealt with the roads leading to that bridge appeared paralyzed. We were in direct contact with officials at all three levels of government. We implored them.... We thought the Highway Traffic Act was in place and if it were enforced, it could have addressed this crisis right when it started.
After it closed the first day, we immediately went to court as lead plaintiff, joined by the City of Windsor, and then the attorney general's office in Ontario joined us as intervenors. I think this is a case study in what a one-day, two-day or three-day delay means in law enforcement. A delay in law enforcement of that time leads to a dynamic, but fragile, economy.
There are lessons to be learned by every single agency and level of government.
Mr. Benitez and Ms. Wilford, it seems to me that the consequence of GoFundMe shutting down the fundraiser on its platform is that the activity shifted to another crowdsourcing platform. That's maybe lost business for GoFundMe. It's also GoFundMe successfully discharging a certain amount of risk in the business that it was doing with respect to that organization. But from a public interest point of view, it wasn't mission accomplished, because it meant that the activity that was a problem could continue.
I'm wondering if you have any reflections for the committee on the state of the crowdsource funding industry. I think we want to avoid a situation where good actors who are doing their due diligence are punished, or perceive themselves to be punished. The problem itself isn't being dealt with, but it means that somebody else is doing the work and getting paid to do work that arguably shouldn't be done.
I'm wondering if you have any comments for us on the nature of the industry and on whether some kind of additional regulation is required in order to make sure that we're rewarding good actors and not simply shifting business away from good actors and still having the same activities be supported by the crowdsourcing industry.
:
Thank you so much for that question.
You know, social fundraising is actually a relatively new phenomenon. GoFundMe was founded in 2010. Our mission is to help people help each other. Right now with the Ukraine crisis, we've raised, just since the invasion, over $50 million from over 140 countries. As you say, it's wonderful how people can come together to help one another in times of need. We want to make sure we don't do anything here that would impact that.
At the same time, to your point, there aren't any existing laws or regulations, to my knowledge, that directly regulate peer-to-peer crowdfunding that's done on platforms. What we do see in other regions around the world is the regulation falling on the fundraiser organizer, the person who's actually responsible for soliciting the donations. In some jurisdictions, those individuals are required to get permits or government approval before they start fundraising. In other jurisdictions, like Singapore, we see voluntary codes of practice that their online fundraising platforms are asked to adhere to that outline best practices for protecting users; certain prevention against data leaks; privacy rights; early fraud detection, and things like that.
I'm really only aware of one country, and that's Romania right now, that puts regulations on the donors. It has to do with the amount of the donation. If you try to raise over $200 U.S. on a [Technical difficulty—Editor] paperwork with the Romanian government and go through a different process. So [Technical difficulty—Editor] data privacy—
:
Thank you for the question.
Mr. Chair, I'm glad that Ms. Wilford also referenced [Technical difficulty—Editor] where contributions may be negative. That said, there are tremendous amounts of foreign contributions that are very positive to campaigns. I believe over 80 countries contributed to the Humboldt Broncos campaign.
For this campaign, we did review the sources of donations extensively, given the size and impact of this campaign, as we said before, and 12% of the donations came from outside of Canada. There was virtually only perhaps a handful, at most, of donations from Russia. In our opinion, and from the evidence that we see, there was no coordinated effort there to have any kind of contribution or impact.
Thank you very much for your testimony and for helping people across the world. We appreciate that.
Ms. Durdin, perhaps I will finish off with you. I think you were put in a very difficult situation, and I think many of your credit unions were.
The actual emergency measures act says that accounts could be frozen for any “designated” person. A designated person could include anyone who directly or indirectly supported.... As the Finance official said in testimony, even a $50 donation might qualify.
You were put in a position, without instructions, to freeze accounts. I know my colleagues asked some questions, but I'm wondering if I could get a little bit more clarity on exactly what instructions you were given, when you were given them, and by whom you were given the instructions with respect to the freezing of your members' bank accounts.
I'd like to thank all of our witnesses for being here today.
I'd like to say a few things, and then I'll ask a few questions.
First of all, I would like to thank you, Ms. Durdin, for what you said at the outset about the work that your credit union community is doing, especially the Ukrainian credit unions in Canada. Like our Chair, I have a Ukrainian credit union located in my riding. I have worked closely with the Ukrainian Credit Union and with the Buduchnist Credit Union over the years on a range of community initiatives, and one of the things that have always impressed me about credit unions, whether it be those two or others, is the extent to which they give back to their communities.
I would ask you to pass along my thanks to those two in particular, but to the others as well for what they do, not just from a financial service perspective but also for communities across Canada, especially mine in Etobicoke Centre.
The second thing I want to say is that you shared your solidarity with the people of Ukraine, and I know that feeling is unanimously shared among the MPs in the House of Commons. We've seen that repeatedly.
One of the things I want to ask of you and of our friends at GoFundMe is that we do all we can. As legislators we need to do what we can, but also I ask that private sector entities and players do all they can to show our solidarity not just with the people of Ukraine but with others who are fighting for their freedom and their democracy.
This isn't a question but is maybe just a request. As you go back from today's hearing, having heard some questions about the role of dark money and foreign money and money from Russia in particular, as well as other sources of those types of funds, I would just ask both of your organizations and the organizations you represent, Ms. Durdin, to think about what more we can do to make sure that those funds that are flowing, that are influencing and undermining a democracy or feeding misinformation or undermining our security or enabling what we are seeing right now in Ukraine get stopped. I know it's not easy. I know it's challenging but I just implore you that we live up to those words with our actions to the extent possible. That applies as well to us, as MPs, of course, but I would ask all of you to do the same, if I could, whether that's through your analytic tools or whether it's through innovative and entrepreneurial thinking.
One of the reasons those credit unions are working so hard to raise money for humanitarian causes and one of the reasons that GoFundMe has raised so much money right now for humanitarian causes is that this invasion has been enabled partly through the use of illicit funds around the world. We have plenty of evidence to show that.
I'm not pointing to specific money that's flowed to specific causes. I don't have those analytics, but I'm just saying in general that we know this is a problem and I'd just ask you to do your best. That's my request of you.
My question, Ms. Durdin, is really to you, about the indications of the Emergencies Act. One thing was a question about the notice given to people whose accounts were frozen. There is obviously a range of circumstances under which someone's account may be frozen—if they refuse to pay their taxes, for example, or if a financial institution notices something suspicious in their account. My understanding is that it's also standard procedure for a credit union or a bank or whatever the case may be to not necessarily notify a client whose account has been frozen under those circumstances. Is that correct? Am I wrong in understanding that?
Is notice immediately given? If not, for what reasons do financial institutions not immediately provide that notice?
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I would have to say that under the circumstances of the Emergencies Act there wasn't a directive given to credit unions to notify when accounts were frozen.
I'd also like to clarify that if a credit union is suspicious about transactions, they don't freeze the account for that reason. They report it to FINTRAC. FINTRAC then takes whatever action it needs to with the RCMP, which would perhaps end up in a court order, and that's when a credit union would freeze an account.
The Emergencies Act overrode that, as you know, and made that court order unnecessary in these circumstances.
I can say that credit unions in a lot of cases—and again this is anecdotal, as I'd have to go back to get the information for you—did have conversations with their members on freezing their accounts. In fact, I saw a live-feed tweet in which someone whose account was frozen actually broadcasted the phone call from the credit union to announce that his account had been frozen, so he was notified.
It is at the discretion of the organization. I would say that credit unions have perhaps closer relationships with their members than some large financial institutions would have, and credit unions would have a conversation with their members.
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Thank you very much for that.
I'll move over just briefly to the credit union.
Ms. Durdin, thank you for the work that you and Michael do. I have a quick question regarding the treatment of credit unions. I want to reiterate what some of my colleagues have said, that it seemed that during this pandemic, and even to today, the credit unions seemed to be left out. You were left out of the Canada emergency business account. It took several weeks for your members to get in on that. Again, it seems to be the same process here.
Is it a structural thing in Ottawa that credit unions are not given the same access to departmental officials? What's your view on this?
:
Thank you very much, Mr. Chair.
Look, disinformation warfare is absolutely real. There's no doubt in our minds. It entices people to donate to causes that are harmful to our democracy. My Conservative colleague is at best very naive to think that misinformation to undermine democracy does not exist, especially from people now noticeably repeating Russian propaganda.
Ms. Wilford, you started to give a very good answer to the question my colleague Mr. Blaikie asked you earlier. We are all aware of the issues and the dangers and risks caused by the illicit financing and use of money. We want to make sure that those platforms are indeed used for good causes.
What especially are your recommendations for us to ensure the integrity of those platforms and the use of the money being raised? You were starting to quote certain foreign legislation that perhaps are ahead of us in ensuring such integrity. Would you please continue to enlighten us on those practices?
:
I wish I were the sort of expert that you may think I am. I am pretty well versed in the regulations in the jurisdictions were we operate and other markets where we decide to go, and where our donors are coming from.
What I was trying to say last time is that there are a number of laws right now protecting users and the platforms. You have everything from privacy and data security to consumer protection regulations. Our payment processors and the banks are all bound by their own financial regulations. They report to FINTRAC, as we know. They report to FinCEN in the U.S. There are a number of regulations that exist.
At the same time, we're always trying to provide the safest and most secure experience for our users. We believe that being a responsible platform helps them understand some of the laws that are in the existing jurisdictions where they are donating from.
As I was saying, in some jurisdictions, we see that fundraising for charity is quite regulated. We see that you need to go to the government to get a permit to do that in places like Australia, Denmark and Finland. We see in Singapore that they have this voluntary code of best practices where they look for the online platforms to sign up to, and then the platform puts that on their website as a badge of honour. We comply and they get audited by the government, so that the users and citizens can feel like the checks and balances are in place.
As I was saying, Romania is really the only one I'm aware of—but that doesn't mean that others don't exist—where they limit the donation amounts. They're looking to regulate the donor. The issue is that—
When I read the orders that were made to enforce the Emergencies Act, my sense is that they were drafted in a very vague and broad manner, particularly when it comes to the guidance for financial institutions.
Finance officials told the committee that the department did not provide you with rules or details in writing; the information was provided only verbally.
After reading the orders, I wondered how institutions were supposed to handle joint accounts. I wondered what would happen to child support and rent payments coming out of the accounts in question. Those are just two examples to illustrate a much broader issue.
Was the department's failure to provide clear written guidance a problem for you?
I'd like to go back to Ms. Wilford.
I'm curious. Coming out of this experience we have lived here in Canada and the use of the Emergencies Act, have you identified any shortcomings in the Canadian regulatory framework, at least from your perspective? Are there any recommendations that you would have for us to consider as a committee, or recommendations that you think we should consider making to the government concerning your industry?
This is particularly when issues like the kind we saw—national security issues and others—come to light and the government develops concerns. Are there any regulations or directions that you think we should consider recommending to the government?
:
I would just say that as the most recognized platform, we're the most responsible one. We operate within the law and, in many cases, above the law. We hope that's one reason among many that we stand out and that people around the world use us to come together and help each other.
As my colleague said, as you look to figure out ways to address what occurred, we would welcome the opportunity to collaborate with you and discuss different sorts of regulations or controls that can be put in place to ensure that we continue to provide the safest and most secure environment for our users and everyone who wants to come together to help each other in the world.
We want to make sure that we don't thwart the good that happens. I think that's been recognized just in the outpouring of support we see for Ukraine. We saw it for Afghanistan. We see it for climate disasters that occur all over the world. Online fundraising is actually a really beautiful thing, and there is a ton of a regulations already in place to protect the users. Certainly if the government and this committee wished to have further collaboration, we would welcome that opportunity.
Thank you, MP Blaikie.
On behalf of all the members of the committee, the clerk, the interpreters and the staff, we want to thank our excellent witnesses. Thank you for your remarks, your testimony and your answers to our many questions to help inform our Emergencies Act study.
Thank you, everyone, also for joining us here on St. Patrick's Day and Flavio Volpe's birthday.