Declaration of Emergency Committee on Nov. 17th, 2022

[Angelina Mason]

Yes. In the case of sanctions, we had the systems in place so that when we had a designated name, we had the ability to search against that name. We leveraged our sanctions compliance in that regard.

What was missing and different from our usual approach with sanctions law was that there's usually clarity on exceptions. Usually, when a sanction is issued, if humanitarian relief is available, it's stated. If there are certain types of exemptions, it's stated. It's also clear that it's a list, and that the government is responsible for determining who's on the list and who comes off the list.

[Peter Harder]

Thank you.

Mr. Hatch.

[Michael Hatch]

It's a very similar process. I wouldn't have anything to add to what my colleague at CBA said on that question.

[Peter Harder]

Great.

I look forward to Mr. Green's further questioning on lessons learned.

Ms. Mason, on lessons learned, again, you have the sanctions experience and now this experience. What advice do you have for us to consider in our report on how the implementation of the freezing of assets related to an emergency order could benefit from this experience and the broader context of sanctions policy?

[Angelina Mason]

One would be, of course, the guidance, so you're not left with all these questions and people know that it's limited and that it's targeted.

[Peter Harder]

Anything else?

[Angelina Mason]

Also, I would add that financial institutions shouldn't have to be put in the position of determining whether a conduct is illegal.

[Peter Harder]

I noted that from earlier questioning. That's a good point to asterisk for our consideration.

Mr. Hatch, other than being at the table earlier, what are the lessons learned?

[Michael Hatch]

I would echo what my colleague said: clear communication not on day one but on minute one. This was a minute-by-minute, hour-by-hour crisis and in the world of banking, you never want to use the R-word, the run. There was nothing like that, but there were whispers that people were starting to show up making large withdrawals in those key early days—the Monday and the Tuesday of that week—before it became clear later that week, because it was not yet clear. Eventually, it became clear that it was very targeted, but it was not yet clear in the early days how targeted it was meant to be and people in that situation in some cases assumed the worst.

[Peter Harder]

Thank you.

[The Joint Chair, NDP, Matthew Green]

Senator Patterson, you have five minutes, sir.

The floor is yours.

[Dennis Glen Patterson]

Thank you, Mr. Chair.

I'd like to ask each witness, beginning with Ms. Mason, could you tell us when did your organization or the financial institutions you represent become aware of the special temporary measures?

[Angelina Mason]

Our larger members, the six D-SIB banks, were given a heads-up it was coming. We learned when it was announced by the Prime Minister. But we all got the actual order at the same time. No one saw the details of that order until they were made public. So while they may have had a heads-up, the specific details of the order were all received at the same time.

[Dennis Glen Patterson]

Mr. Hatch, please.

[Michael Hatch]

That's correct. We heard of it when it was made public by the most senior levels of the government, and in the early, early days or the first day or two, my recollection is that we were scrambling on behalf of credit unions to clarify whether or not the orders applied to us. The assumption was that, of course, they did, but it wasn't yet 100% crystal clear on day one that they were going to apply to provincially regulated financial institutions.

[Dennis Glen Patterson]

If I may ask each witness as well, please, how quickly did your financial institutions then act to carry out their requested role?

[Angelina Mason]

What I would say is there was a gap between when it was announced and when the actual order came up. It was almost 30 hours, so what we did quickly was, based on what descriptions had been given both by the Prime Minister and Minister Freeland, start to generate a number of questions, because we were already wanting to understand what we would have to do from a compliance perspective. Then once the order was dropped and we saw the details, we updated those questions. We were ready to act once we received that first list from the RCMP.

[Dennis Glen Patterson]

Mr. Hatch, please.

[Michael Hatch]

I would outline a broadly similar process, but again, behind by a day or two, which at the time felt like a much longer period of time than that indeed.

[Dennis Glen Patterson]

Again, I have a question for both witnesses.

We have information from you about the freezing of accounts based on that discretion you were required to exercise, the duty to determine illegal acts, and I think it was four or five from the Bankers Association, and 10 accounts from the credit unions. Could you each tell us how many accounts were frozen by your institutions based on the RCMP lists?

[Angelina Mason]

Ours would be about 175. Our accounts in total were 180, so I'm ballparking here, but the vast majority.

[Dennis Glen Patterson]

Mr. Hatch.

[Michael Hatch]

Yes, I don't have the precise numbers, but again, there were only 10 in total. Some if not most of those would have come from the list, but not all of them.

[Dennis Glen Patterson]

Okay.

Thank you, Mr. Chair.

[The Joint Chair, NDP, Matthew Green]

We have the ability to go into the second round. I want to put to the committee whether we want to follow our standard practice of four and three, or whether we want to expand to five. It would appear we have until 9:30, if I'm correct. We have time to stay with five, if we like. Of course, if you've exhausted your line...you can always defer.

Does that work for everybody?

Okay, we will continue, then, with a five-minute intervention for Mr. Motz, followed by Ms. Bendayan for five minutes.

Mr. Motz, the floor is yours.