Bill C-27

Digital Charter Implementation Act, 2022

An Act to enact the Consumer Privacy Protection Act, the Personal Information and Data Protection Tribunal Act and the Artificial Intelligence and Data Act and to make consequential and related amendments to other Acts

Part 1 enacts the Consumer Privacy Protection Act to govern the protection of personal information of individuals while taking into account the need of organizations to collect, use or disclose personal information in the course of commercial activities. In consequence, it repeals Part 1 of the Personal Information Protection and Electronic Documents Act and changes the short title of that Act to the Electronic Documents Act . It also makes consequential and related amendments to other Acts.
Part 2 enacts the Personal Information and Data Protection Tribunal Act , which establishes an administrative tribunal to hear appeals of certain decisions made by the Privacy Commissioner under the Consumer Privacy Protection Act and to impose penalties for the contravention of certain provisions of that Act. It also makes a related amendment to the Administrative Tribunals Support Service of Canada Act .
Part 3 enacts the Artificial Intelligence and Data Act to regulate international and interprovincial trade and commerce in artificial intelligence systems by requiring that certain persons adopt measures to mitigate risks of harm and biased output related to high-impact artificial intelligence systems. That Act provides for public reporting and authorizes the Minister to order the production of records related to artificial intelligence systems. That Act also establishes prohibitions related to the possession or use of illegally obtained personal information for the purpose of designing, developing, using or making available for use an artificial intelligence system and to the making available for use of an artificial intelligence system if its use causes serious harm to individuals.

Canada Business Corporations Act

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I am thankful for the opportunity to engage in this debate.

The reason I find this so important is that I am from the beautiful province of British Columbia and from the city of Abbotsford, which is nestled between majestic Mount Baker, at 10,500 feet high, and, on the other side, the mighty Fraser River. We live in a wonderful community in a wonderful region of the country. However, one of the challenges we have had over the years is that Canada, and more specifically British Columbia, has become the locus, the very heart, of money laundering in our country.

Just so Canadians understand what money laundering is, I will note that it is not benign activity engaged in by Canadians who want to avoid taxes or something like that. Money laundering is about taking the proceeds of crime, channelling them into what appears to be a legitimate business or a legitimate asset and trying to make those proceeds seem legitimate. It is a great way for criminals to hide the proceeds of crime. The last thing I believe Canadians want to do is aid and abet criminals to commit their crimes in our country, yet that is what has been happening for many years.

This legislation is not the be-all and end-all. Bill C-42 is simply a part of the solution. What it would do is establish a beneficial registry, an ownership registry, that would allow Canadians to see who actually owns the companies into which money might be directed from the proceeds of crime. This is not going to solve the whole problem of money laundering. Our police have their hands full in trying to track these criminals down, trying to identify the proceeds of crime and trying to get convictions.

Here is another problem. Money laundering has contributed significantly to the inflationary impacts on prices of land, real estate and homes that Canadians want to buy. These criminals know that if they can get money channelled into a house, it will be less likely for the police to identify that asset as being a proceed of crime. They also channel these proceeds of crime into legitimate businesses, like small and medium-sized enterprises. They channel this money into hard assets. They may be boats or expensive cars. At the end of the day, this costs Canadians big time.

There is another reason this is important to British Columbians. It was in British Columbia that the Cullen commission was established to investigate this very challenging problem to our criminal justice laws and to the broader issue of how much money laundering costs the average Canadian.

The Cullen commission made a long list of recommendations, most of which implicated the provincial government. It called upon the provincial government to act. However, there was one recommendation that stood out, which was that the federal government establish a pan-Canadian beneficial ownership registry for corporations. I believe Justice Cullen really intended for this to cover all companies in Canada. The problem is that the criminal justice law is federal law, so we as a Parliament have jurisdiction over it. Here is the problem: The large majority of Canadian companies are incorporated not at the federal level but at the provincial level, implicating every one of our 10 provinces and our territories.

How do we cobble together a pan-Canadian foreign ownership registry program with all of these different players at the table? The bill would, at least in the immediate term, establish a corporate beneficial ownership registry for federally incorporated companies, which is a good start. However, I believe the Cullen commission's intent was for the Liberal government to engage the provinces and territories to expand this to include the provincial regimes in federal legislation so that we can go after the money launderers in every corner of our country.

There is a reason this has come to our attention as lawmakers. Back in 2016, the Panama papers exposed how vulnerable Canada was to money laundering. Those papers made it clear that Canada was a laggard on the international stage when it came to addressing money laundering and interdicting the criminals who were taking proceeds of crime, filtering that money through legitimate enterprises and assets and then getting away with their crimes.

In 2017, it was the Liberal government's finance minister, Bill Morneau, who said we needed a beneficial registry to help combat money laundering in our market to determine the true source of funds and ownership in the acquisition of firms. He was right at that time, and that was 2017.

What happened in the intervening years? Nothing. From 2016 to 2023, we had eight years of inaction on the part of the Liberal government. This is pretty shocking, since the government, through its finance minister, at the very least had become aware that this was a very important issue for Canadians and nothing was done.

I will say that I am pleased that at least this has now come before us as Bill C-42, and it looks like we will see a beneficial ownership registry passed and implemented in our country. However, as the bill goes through committee review and comes back to the House, we are going to be asking a lot of questions. For example, how will this registry protect Canadians' privacy rights? We want to interdict criminals as they try to undertake their criminal enterprises, but we also want to make sure that the privacy of Canadians is protected.

I do not have great confidence that the government will actually protect our privacy, and here is why. We recently debated Bill C-27 in the House, which is all about privacy rights. We have been asking the government to actually include privacy as a fundamental right in Canada that Canadians can depend on. Sadly, Bill C-27 did not include that, so we have a right to be concerned.

We also want to ask who will have access to the information in the beneficial registry. Is it the police? Is it the ordinary citizen? It is business people? None of that is clarified in this legislation. We need to know that. Will the bill give law enforcement the necessary tools to combat money laundering and terrorist financing?

To conclude, I believe there is all-party agreement, so I am asking for unanimous consent to request a recorded vote on Bill C-42.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you.

Mr. Fay, you talk about data a lot. It's very important. We've been dealing with Bill C-27 as well and some other bills. It's good timing that they're all being talked about at the same time.

Let's include intangible assets and IP with data. What recommendations can you make for Bill C-34 that would review and protect those assets in Canada?

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm going to turn to Ms. Greenwood to follow up on Ms. Rempel Garner's line of questioning on big data companies, AI, etc.

First, I would make the comment that some of those hard questions being asked of the big digital companies were around getting them to pay for content and to pay their taxes, just like we ask Canadian companies to do, so it was more on that fairness aspect.

That aside, on this idea that we have to move faster than the speed of government here, we have Bill C-27, which probably won't get to committee before the fall, so that's going to be moving slowly. We have a subject like AI, which is developing very quickly and a lot faster than people imagine, probably, yet it will transform our world.

How do we do that faster than the speed of government and do it with the care that it deserves?

[Philippe Dufresne]

Our current funding is $30 million, so it would be half of that. We have specific requests for potential Bill C-27 responsibilities in terms of additional guidance and additional investigation responsibilities.

[Philippe Dufresne]

I think we're very focused on protecting children and how we use their personal information. Children are exposed more and more, obviously, to the digital world in everything they do, whether it's in school or socializing with their friends. We need to look at it. Our laws need to be updated to reflect this reality.

One of my recommendations on Bill C-27 in the report has to do with the protection of children and ensuring we're treating children's personal information in the best interest of the child, looking at what they are exposed to and the information they share and making sure they're aware and have a good understanding of what's going on and the long-term implications of it.

In many respects, sometimes they're exposed to things and face implications that they're not equipped to understand. We're treating them like adults, to some extent. We have to make sure they have the appropriate protection in terms of their information and their participation in the digital world.

[The Chair, Conservative, John Brassard]

Yes, I checked with the clerk, and we didn't receive it. There may be portions of Bill C-27 this committee will have to deal with, so could I suggest that you share that letter with this committee as well? Is that possible?

[The Chair, Conservative, John Brassard]

Thank you, Mr. Villemure.

Mr. Dufresne, I have to clarify something. When Mr. Villemure was asking questions about Bill C-27, you said that you sent the letter to the ethics committee. Is it possible you sent it to the industry committee?

[Philippe Dufresne]

We received additional financial support in the last budget in connection with Bill C-27 so that we can do the work to prepare for the coming into force of this bill, if Parliament decides to pass it. That is a good thing, as I mentioned.

If this bill is passed as it now stands, we expect my office to have additional responsibilities, for example, the authority to make orders and to recommend financial penalties. What is more, there will be more stringent requirements for the complaints process and we will be responsible for reviewing the organizations' codes of practice. Those are all positive things that will expand our role. That being said, we have determined that we will need additional resources to do our work properly.

[René Villemure, Bloc, Trois-Rivières, QC]

Okay. Thank you. That was just a joke.

This morning, the committee is studying the estimates. Bill C-27, which we are going to study a bit later, raises a lot of issues in terms of artificial intelligence, obviously, but also in terms of privacy. Does your office have the means to protect privacy in light of the new requirements set out in Bill C-27?

[Philippe Dufresne]

I am focusing on my jurisdiction as Privacy Commissioner. We concluded that we need to determine whether we are adequately protecting the personal information of Canadians and young people. When the investigation is over, we will make it public and, if necessary, make recommendations. Some of these recommendations might call on parliamentarians if we determine that there are gaps in the legislation.

We make all sorts of recommendations. We can make some for businesses and also in the context of bills, such as Bill C‑27. If it is a matter of privacy, it is part of our mandate and we will continue to focus on that.

[Philippe Dufresne, Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada]

Good morning, Mr. Chair and committee members.

I am pleased to be here today with my colleague Caroline Maynard, Information Commissioner of Canada, to discuss the main estimates for the Office of the Privacy Commissioner of Canada for the fiscal year 2023-24.

As Privacy Commissioner of Canada, I am responsible for protecting and promoting the privacy rights of Canadians in the public and private sectors. In my last annual report, tabled in Parliament in September 2022, I point out that this is a pivotal time for privacy in Canada, and I highlight the important work of my office in this regard.

My office investigates complaints and breaches that have meaningful impacts for Canadians and privacy in Canada. For example, earlier this year, we released the results of our investigation into Home Depot's sharing of personal information with Facebook when their customers opted for an electronic receipt at checkout.

We found this practice to be a breach of privacy law, in part because we concluded that it was unlikely that Home Depot customers would have expected that their personal information would be shared with a third party like Facebook simply because they opted for an email receipt instead of a printed one.

Since issuing our findings, my office has learned of several other retailers allegedly engaging in similar practices. We have reached out to those organizations and are in the process of confirming how they are complying with the expectations flowing from our investigation.

Looking ahead, my office recently announced investigations into TikTok that focus on its privacy practices as they relate to younger users, as well as the company behind the artificial intelligence-powered ChatGPT. Children are less able to understand and appreciate the long-term implications of consenting to their data collection and need even greater privacy safeguards. We can and must do more to protect their privacy. This will be one of my key priorities in the years ahead.

My office also needs to stay ahead of fast-moving technological advances. We need to monitor and research technology so that we can anticipate how it may impact privacy and so that we can promote the technologies that most enhance privacy. This is another of my key focus areas.

My office provides advice to government departments and private sector organizations, publishes reports on compliance with privacy laws, and raises public awareness about privacy issues. In this digital age, the world is at our fingertips, and the price of that convenience is often the disclosure of personal information. That is why it is so important for Canadians to be aware of their right to privacy, to be able to control when and how their personal information is collected, used and disclosed, and to know where to turn for help when they need it.

We also provide advice and recommendations to Parliament on legislative reform and on privacy issues of considerable interest and importance to the public. On that note, I would like to thank the committee for the reports it published following studies on the device investigation tools used by the Royal Canadian Mounted Police and on the use of facial recognition technology.

As I noted in my statements following the release of those reports last year, I welcome the committee's recommendations to improve privacy protections, to ensure that the law recognizes privacy rights as a fundamental right and requires federal institutions to consider and address the impact on privacy from the outset when designing and using new technologies, and to adequately regulate technologies that have an impact on privacy.

My office has an initial operating budget of $29.5 million for 2023-24. We manage these resources optimally to protect and promote the privacy rights of Canadians as effectively as possible.

We are also looking ahead and preparing for law reform. The government took an important step toward modernizing the private sector privacy law with the tabling of Bill C-27, which has been referred to the Standing Committee on Industry and Technology for further study. My written submissions and recommendations to the INDU committee were made public by the committee earlier this week. I'm looking forward to appearing before the committee to discuss this important bill.

I was pleased to learn that in the recent budget, the government proposed temporary funding of $6 million over two years for my office to undertake more in-depth investigations of privacy breaches and to improve response rates to privacy complaints, as well as $15 million over five years to operationalize new processes required to implement the proposed consumer privacy protection act. Should Parliament adopt Bill C-27, it will be essential that my office be properly resourced to fully and effectively take on important new responsibilities, especially those focusing on prevention.

Canadians are more concerned than ever about protecting their privacy. That is why the work of my office is so important.

I look forward to your questions.

Reference to Standing Committee on Procedure and House Affairs

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, I would like to begin by saying that I will be sharing my time with the hon. member for Lac-Saint-Jean.

Like my colleagues, I rise today to speak about China's interference in political and public affairs and the breach of privilege of a member of this House. Obviously, it is one member, but all of us are under attack in this situation.

I will try to make this quick because I understand that people are waiting to hear from my colleague from Lac-Saint-Jean, whose expertise is in great demand. I think that there are some things that need to be said.

As we know, for several years now, a number of expert reports have highlighted China's actions, going so far as to accuse it of interfering in the political affairs of several countries, including our own. There have been reports of cyber-attacks on Canadian government institutions, businesses and universities, as well as other suspicious activities, such as manipulating social media and disseminating disinformation.

There are Chinese police stations that are operating while the Prime Minister looks on. There have been debates in the House on the active participation of Chinese government agents in the federal election and the controversial $200,000 donation to the Trudeau Foundation, which raises many questions about how much the Prime Minister knew about these matters.

These activities are extremely disturbing and raise questions about the integrity of our democracy and our electoral processes. We cannot allow foreign powers, no matter how big or how influential, to interfere in our political affairs and disrupt our democratic process. The Liberal government has gone from being disconcertingly naive about the Chinese Communist regime to inexplicably inactive in the face of China's repeated attacks on our democracy.

The straw that broke the camel's back was The Globe and Mail article about a CSIS report from 2021 stating that the member for Wellington—Halton Hills and his family in Hong Kong were being threatened by a Chinese diplomat who was still in Canada. The member for Wellington—Halton Hills had just voted in favour of a motion condemning the genocide of the Uyghurs by the Communist Party of China.

These are all very serious allegations involving troubling information that could have a potential impact on our parliamentary duties. The Speaker's ruling on this matter is exemplary, and I agree with the conclusion that an entity like China intervening with retaliatory measures against an MP and his or her family represents an attack on our collective ability to carry out our parliamentary duties unimpeded.

That is simply unacceptable and must be condemned in the strongest possible terms. It is our duty to protect our democracy and defend our colleagues' privileges. We must work together to strengthen our national security and protect our democratic institutions from outside threats. We must also support our colleagues and give them the means to fulfill their democratic mandate without fear or intimidation.

The Bloc Québécois will vote in favour of this motion because it has already debated these issues favourably in the public arena. First, when it comes to the foreign agent registry, I will not list all of the opportunities that the government has had for serious reflection since the member for Wellington—Halton Hills moved a motion in 2020 concerning Huawei's involvement in Canada's 5G network. Obviously, time has proven him right.

The Bloc Québécois has expressed its support for an independent public commission of inquiry into foreign election interference. That position is shared by other opposition parties that think that the recent leaks about China's attempts to interfere in our elections require an independent public inquiry.

Former chief electoral officer Jean-Pierre Kingsley has expressed his support for such an inquiry. According to him, Canadians have the right to know everything about what happened, and the lack of a public inquiry will only prolong the consequences for those who were affected. Kingsley also rejected the argument that a public inquiry could compromise public safety. He stated that public safety is there to protect democracy, not the other way around.

The government has sought to put off a public inquiry for a long time citing public security concerns. However, that has not prevented many people, including the former director of CSIS, Richard Fadden, from joining in the call for a public inquiry.

Overall, it is clear that the calls for a public inquiry into foreign interference in elections are growing stronger. Canadians have the right to know if their democratic process is under threat from foreign actors and what steps their government is taking to protect democracy and the interests of their country.

Can we get the truth on the closure of the covert police stations in Canada and on the threats against people who return to China or who have family in China?

This is not the first report we have heard about persecution and repression of certain people who criticized the Chinese government or who were considered dissidents.

The Chinese government also brought in a social credit system that can affect people's ability to travel, find work and access certain services based on their behaviour and their political leanings. It is important to note that these operations are often carried out covertly and the information is often difficult to verify. However, there is enough evidence to suggest that these threats exist and that governments and citizens should be aware of these risks.

The government's attempts to lower the temperature and stonewall are eroding our confidence in it. Its handling of the expulsion of Chinese diplomat Zhao Wei has been embarrassing.

We must be proactive. We must take steps to strengthen our national security, and we must shield ourselves from foreign attacks. We must also continue to strengthen our ability to identify, report, monitor and counter cyber-attacks. They can be extremely difficult to detect and thwart, but we must be ready to face these threats and to protect our institutions against malicious attacks.

The case of the member for Wellington—Halton Hills raises a bigger problem in a world that is becoming more complex. With the growth of social networks, it is getting easier and easier for malicious people to target and harass elected officials, journalists and other public figures. The threats and attacks can be deeply disturbing and have real consequences for the safety of the individuals concerned. This is our cue to rethink our society and even our use of social media.

Increasingly, we tolerate threats because they are just threats. If we do not tolerate threats towards our colleague, we should not tolerate the threats we are subjected to on social media, either.

Our world is entering a new era. China may be using an old way of doing things right now, but new ways of influencing our elected officials will be found. They will become increasingly insidious. Our lives are showcased on social media. Hackers are finding new ways to go even further in getting data.

Just imagine. A fraudster can practically create a new identity for themselves using data leaked from a bank or government. If a member of Parliament is targeted, what impact will that fake identity have? How will a new power be able to influence elected officials?

I serve on the Standing Committee on Industry and Technology, and these are issues that must be discussed during our study of Bill C-27. We need to ask ourselves whether the government has really made all of the connections that need to be made between all of the laws in order to strengthen the protection of Quebeckers and Canadians.

When it comes to protecting ourselves from China, there is also the Investment Canada Act, which may not go far enough in protecting our vital areas, our supply chains. These are things that I have a lot of questions about.

With the arrival of even more powerful technologies, such as quantum computing, we know that a lot of our data is stored on servers and that China will not hesitate to check that data and use it against us, of course.

Consequently, and in conclusion, we have to equip ourselves with all the tools available to fight foreign interference. That starts with solidarity with the member for Wellington—Halton Hills.

An Act Respecting Regulatory Modernization

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Madam Speaker, one thing that stood out from my colleague's speech was the part specifically related to Bill C-27 and the importance of regulating artificial intelligence.

He mentioned the great work done by the member for Windsor West. Perhaps that member's most concrete contribution to this issue so far was to divide the debate, until the NDP eventually asked for two votes on the same issue, which meant that we arrived 15 minutes late in committee. I will spare my colleagues all the details.

Nevertheless, considering that this bill should have been passed in 2018-19, we get the sense that some members have tried to delay and stall. Could the NDP not be part of the solution to speed things up with the government, especially when it comes to paperwork done by our administrators and agricultural producers?

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Gaheer.

If there are no other questions, that concludes our two hours of committee work for today.

Before we adjourn, I want to thank our witnesses. It's been very interesting. I speak on behalf of all members when I say that was an enlightening conversation. We appreciate your taking the time, and for some of you, it was at the very last minute. We appreciate your presence here this afternoon.

Before we adjourn, though, members, we have budgets to adopt.

You have received the relevant material from the clerk.

I therefore move the adoption of the budgets for the consideration of Bills C‑34 and C‑27. Is there unanimous consent to adopt these budgets?

[Dr. Patrick Leblond]

Yes. In a way, if the idea is that we can ask for commitments to reduce the risks to national security, then the question is how we make sure the foreign investor is actually going to respect those commitments.

To me, a half-million dollar fine—one shot—doesn't do it. Compare that with Bill C-27, where, if you don't protect personal data, you could actually be fined at a minimum of $25 million. Is our personal data so much more important than national security? I would argue not. They should at least be equal, so I'm surprised that this same formula doesn't apply here.

Now, that's one thing. Here's another. Let's say that a company makes billions of dollars from these assets, these important assets or technical information. Even $25 million is nothing. Does the minister then have the ability to impose further sanctions or to say, “No. You actually have to divest now. I'm sorry. We gave you x number of warnings. You can't do it.”

I think the law should be much stronger in terms of holding foreign investors to the commitments that we require of them in the first place.