Declaration of Emergency Committee on May 3rd, 2022

[Claude Carignan]

I see.

Have you ever seen any offences where the banks were used to deter people from committing criminal acts?

It's as though someone robbed a bank and, to deter him from committing another similar act, we seized all his financial activities rather than prosecute and punish him.

[Isabelle Jacques]

Listen, it was under the Emergencies Act. It was a rather extraordinary situation. It was the first time the Emergencies Act had been used. It was clearly not a normal situation.

[Claude Carignan]

Thank you.

[The Joint Chair, NDP, Matthew Green]

Thank you very much.

We will now move on to Senator Harder.

Senator Harder, you have five minutes. The floor is yours.

[Peter Harder]

Thank you, Chair.

Madame Jacques and Mr. MacKillop, I'd like to pursue the issue of non-Canadian source funding and the way in which you became both aware of that and what actions you took, if any, to try to bring in line that source of funding to the effort to stop the funding of illegal occupation in Canada.

For example, did you have discussions with your American counterparts? Do you see this as a gap in the existing framework that you put in place? How would you, going forward, ensure that Canadian actions that are foreign-sourced would not be a loophole in funding of illegal activity?

Madame Jacques first, please.

[Isabelle Jacques]

Thank you.

If you do not mind, I will turn the question over to Julien Brazeau.

[Julien Brazeau]

Sure.

In terms of sort of the international reach, we became aware through media reports of the fact that potential U.S. funds were being used.

In regard to the measures that were put in place for crowdfunding platforms and PSPs, they apply equally to firms that are domiciled outside the country. That being said, obviously from an enforcement perspective our ability to enforce against them is limited. I can say there were no conversations at the time with our U.S. counterparts, at least to my knowledge, in terms of a potential gap.

I'll maybe leave it to my colleagues at FINTRAC to speak more specifically to enforcement challenges they may see across the border, but essentially, the measures were meant to capture both domestic and international firms.

[Peter Harder]

Before we go to FINTRAC, I wonder if I could follow up. I don't know how much nuance to read in your comment “at the time”. Have you had conversations with American authorities since?

[Julien Brazeau]

No.

I'm sorry. I shouldn't have given any sense of nuance to that—

[Peter Harder]

I know how to use words, absolutely—

[Julien Brazeau]

No, I haven't had any discussions with U.S. counterparts since.

[Peter Harder]

Mr. MacKillop, could you brief us in respect of the FINTRAC relationship?

[Barry MacKillop]

I'm sorry, relationships with whom...?

[Peter Harder]

With U.S. counterparts, if any.

[Barry MacKillop]

We have a very good relationship and an ongoing relationship with FinCEN, which is FINTRAC's counterpart in the U.S. They were well aware of what was going on in Canada. They also received suspicious activity reports from their entities, but I don't believe the crowdfunding platforms report to FinCEN, so it was more along discussions and what might happen going forward on covering crowdfunding platforms and the challenges that we would have.

I know that on our compliance side we do have an international supervisory forum, where information among the Five Eyes is shared in terms of challenges and successes with respect to compliance across the Five Eyes, which are the five countries, for those who don't know. I'm sure you're all well familiar with the Five Eyes. Those discussions are ongoing, and they take place on a regular basis.

[Peter Harder]

If I could pursue this a little further, you say you're having those discussions now. Do you expect that will lead to some institutional relationships to fill this gap or to otherwise be assured to each other that you will not become victims of offshore funding of illegal activities?

[Barry MacKillop]

I'm not sure. I would turn to Ms. Achimov with respect to the compliance side.

The opportunity to provide money from outside Canada into Canada will always exist, and these platforms are international, but I believe having the crowdfunding platforms now as reporting entities to FINTRAC and the due diligence required will enhance their ability to ensure their platforms are not used for nefarious purposes. But they are used by many people to raise funds for very good causes, and that money they raise could in fact come from outside Canada and would not be in any way looked upon badly.

[Peter Harder]

Thank you.

I appreciate the assurances you're providing.

[The Joint Chair, NDP, Matthew Green]

Thank you very much.

We will conclude this round with Senator White, after which time we will take a five-to-eight-minute break to allow people to take a breather and then we will come back and resume.

Senator White, the floor is yours for five minutes.

[Vernon White]

Thank you very much, Mr. Chair.

Thanks again to the witnesses.

If I may, Assistant Deputy Minister Jacques, just so we're clear, the list of people and organizations was provided to financial institutions. Financial institutions then sent information back in meta format.

On those specifics, do you know if the RCMP received information beyond metadata specific to the account holders, such as the amount in each account, where the money was derived, etc.?

[Isabelle Jacques]

I do not know if they did.

[Vernon White]

Have they ever discussed with you the fact that they had that information about specific account holders?

[Isabelle Jacques]

No.

[Vernon White]

Can you give me specifics on how long the accounts were inaccessible for the account holders?

[Isabelle Jacques]

Well, certainly, they were inaccessible for as long as they were involved in illegal activities. I know that they started unfreezing some of those accounts on the 21st and they were completely unfrozen by the 24th.