Evidence of meeting #18 for Declaration of Emergency in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was list.
A video is available from Parliament.
NDP
The Joint Chair NDP Matthew Green
Were you provided with instructions in terms of how to unfreeze and for whom?
General Counsel and Vice-President, Canadian Bankers Association
It was blanket that once we were allowed to unfreeze, it was a complete unfreeze.
We asked the question that if there is no forfeiture, can we just completely provide access? We were told that yes, once they're off the list or the order is revoked, you completely unfreeze.
NDP
The Joint Chair NDP Matthew Green
Just to be clear, the distinction between having it frozen versus a forfeiture is that, with forfeiture, that money would have been seized versus it being frozen and then released.
General Counsel and Vice-President, Canadian Bankers Association
That's correct.
NDP
The Joint Chair NDP Matthew Green
That was a point of distinction, one that I think this committee struggles with, so it's certainly good to have you here.
Mr. Hatch, you've heard the questions that I've put to Ms. Mason regarding the processes that were in place. Within the credit union sector, how many additional accounts did you all have to move on or act on, based on the parameters of the EA order, in addition to the list of the RCMP?
Vice-President, Government Relations, Canadian Credit Union Association
Fewer than 10. I haven't got the exact number, but it was a very small number.
I would add, also, that some of the alarm that existed in the public at the notion that the government had the legal authority to do this was mirrored across our financial institutions as well, because freezing an account is the nuclear option. It's not something you ever want to do. It's not something you do lightly, if ever.
I can say with confidence that it's not something anybody across the sector would ever do lightly, so, to the extent that accounts were frozen beyond that list from the RCMP, it was a number that you could count on one hand.
NDP
The Joint Chair NDP Matthew Green
You're very careful with the application of this particular thing.
I want you to have the opportunity to provide reflections on what you'd like to see for federal recommendations moving forward, but, based on the look that I'm getting from my co-chair, I'll probably save that for the next round.
I'll take the floor back. I think that concludes my round, if my clock was correct.
We will continue to Senator Boniface for five minutes.
Senator Boniface, the floor is yours.
The Joint Chair Hon. Gwen Boniface
Thank you.
Thank you, both, for being here.
Mr. Hatch, I'll put the question to you to perhaps give you an opportunity to further some of the comments you made. I'll refer to the House committee meeting last March. The organization said:
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.
Could you expand on that a little to help us understand where the confusion was and how you would recommend that be addressed?
Vice-President, Government Relations, Canadian Credit Union Association
There is no perfect approach to that question. You can't please everybody.
I would draw a distinction between something like the UN, which publishes an exhaustive list of individuals who are sanctioned globally. We check that on a regular basis and provide that communication to our members so they can check it against their membership, whereas the list from the RCMP was not exhaustive. It was small and targeted, but then there was further discretion granted to financial institutions, if they saw fit, to freeze accounts.
That obviously did not result in the mass freezing of accounts. I think some of the stories that surfaced about people having their accounts frozen because of $25 donations were, perhaps, a little bit of hyperbole, if I can put it that way.
It was troubling that the list was not exhaustive and that discretion was granted to our members because, frankly, nobody wants to have that power. They want to see the list and, if we have a member who is on that list, then that's black and white, and nobody wants to be in a grey area.
The Joint Chair Hon. Gwen Boniface
Presumably the confusion that's referred to in that quote is around how you make that decision, or is the confusion what the confusion creates for people who are on the receiving end of a freezing of their account?
Vice-President, Government Relations, Canadian Credit Union Association
The confusion is that we had this list, which is black and white, but then we had further discretion to freeze if we deemed activity worthy thereof. As I said, people don't want to have that discretion. They don't want to have that power and that ability to arbitrarily freeze accounts, not that it ever took place. There was nothing arbitrary about it, but perhaps it would have been better to have more concrete direction from the government in terms of exactly which accounts to freeze and exactly which criteria to apply.
A dollar threshold is never perfect. Nobody can say that a $999 donation is immaterial and a $1,000 donation is material. A dollar threshold is not something we would have expected, but more concrete guidance in terms of what criteria to check for would have been appreciated at the time.
The Joint Chair Hon. Gwen Boniface
The Canadian Bankers Association, I'm checking to see whether you have anything you would like to add to that.
General Counsel and Vice-President, Canadian Bankers Association
Absolutely.
I don't think that the financial institutions should be put in a situation where they have to take on an independent duty to determine it. It should only be relying on a list. That's what we conveyed to Finance. The appropriate way to do this to ensure consistency in how it should be applied would be to simply rely on a list that is provided, in this case, by the RCMP.
I disagree with my co-witness on the discretion. The wording in the order is “shall.” We shall make an independent determination and we shall freeze if, in fact, the facts support that the activities have taken place. There are concerns with a bank having to make that type of a decision as to whether or not those activities are taking place.
The Joint Chair Hon. Gwen Boniface
Thank you.
If you could go back again to the testimony from the CBA before the House, it stated that it is “important to remember that some accounts are still frozen to comply with court orders or proceedings.” That was at that time in March.
Can you tell us if there are any accounts still frozen to comply with court orders or proceedings? You may have covered that, but I may have missed it.
General Counsel and Vice-President, Canadian Bankers Association
My understanding is that there still are. Some have been paid into escrow, but others, I think, are still frozen.
I can come back to you on that point, but the point is that there are still orders out there that are, in effect, impacting those funds.
NDP
The Joint Chair NDP Matthew Green
Thank you.
Any additional information that you see fit—this is for both witnesses—to expand on questions that were asked or to add pertinent information will always be accepted in a further communication from you.
We will now turn to Senator Harder for five minutes.
Senator, Ontario, PSG
Thank you very much, Chair.
My first question is for both of our witnesses.
Did any of your financial institutions receive threats or warnings not to participate in the freezing of accounts?
Ms. Mason, could you start?
General Counsel and Vice-President, Canadian Bankers Association
Not that I am aware of.
Vice-President, Government Relations, Canadian Credit Union Association
Not that I am aware of.
Senator, Ontario, PSG
Thank you.
What was the largest amount in a seized account?
Ms. Mason.
November 17th, 2022 / 8:40 p.m.
General Counsel and Vice-President, Canadian Bankers Association
I would have to check that point. I can tell you that the cumulative amount from all of our banks was $8.3 million.
It's definitely not any larger than that. It would be significantly smaller, but it was not small amounts, if that helps you. They tended to be larger accounts.
Vice-President, Government Relations, Canadian Credit Union Association
Again, I don't have the precise numbers in front of me, but if memory serves, the largest single account was a mortgage or a debt account in the sum of $200,000. The others were savings or chequing accounts in the low to mid four digits, I would say.
Senator, Ontario, PSG
Thank you.
Ms. Mason, I know from testimony you made in the Senate recently with respect to sanctions policy that you have a lot of experience in the implementation of sanctions. I wonder if that experience was at all called on in implementing the order that you received with respect to this event.
In terms of lessons learned, are there lessons from the sanctions regime that could have been transferred and been helpful to you in exercising your responsibility with respect to the freezing of assets?