Declaration of Emergency Committee on May 3rd, 2022

[The Joint Chair, Hon. Gwen Boniface]

Mr. MacKillop, I'm sorry; I'm going to have to cut you there.

Thank you.

[The Joint Chair, NDP, Matthew Green]

Thank you, Madam Chair.

At this point, I'll take back the chair.

We will continue with you, Senator.

You have five minutes. The floor yours, Senator Boniface.

[Gwen Boniface]

Thank you very much to all the witnesses for being here.

I want to perhaps give an opportunity for FINTRAC to help the committee understand your relationship with respect to the emergency order.

We've heard where you don't impact and how you're not affected. I'd like to understand better what the role of FINTRAC was during the emergency order.

[Barry MacKillop]

FINTRAC's role under the order did not change with respect to our mandate and the role we normally do prior to the order and subsequent to it from an intelligence perspective.

From the compliance side, it added crowdfunding platforms and payment service providers and required that they register with FINTRAC as reporting entities, and that preregistration did, in fact, take place.

As I mentioned in my opening remarks, the registration process was not completed during the time the emergency orders were in effect, but, from an intelligence perspective, all reporting received would have to be received based only on money laundering or terrorist financing suspicions by our reporting entities. We did not have any extended powers or enhanced authorities from a financial intelligence perspective at FINTRAC because of the orders.

[Gwen Boniface]

Thank you very much.

Perhaps I could ask both finance and FINTRAC, as you work through this process, which is unprecedented, have you conducted any internal reviews that would help give you insight into how it worked, didn't work, and what you may have learned from the process?

I'll go to finance first.

[Isabelle Jacques]

We did not do a formal review, but certainly, we've thought about it, and some comments were provided from some institutions that they would have liked to have been contacted earlier.

We moved as quickly as we could under the circumstances; the situation was unprecedented. We tried to go to the larger financial institutions, including Desjardins, and we also extensively contacted the Canadian Credit Union Association. We did our best, but I think some of the institutions would have liked to have been contacted earlier, so that's something we would seek to improve in the future.

[Gwen Boniface]

Can I hear from FINTRAC's perspective?

[Barry MacKillop]

From the financial intelligence component of FINTRAC, there was no review of anything that was done in the sense that our mandate has continued, and we just continued. I think, concerning some of the lessons learned, the outreach and some of the new entities and new sectors we had an opportunity to talk about, perhaps Ms. Achimov could explain to you what that outreach was and how it might position us for the future.

[Donna Achimov, Deputy Director, Chief Compliance Officer, Compliance Sector, Financial Transactions and Reports Analysis Centre of Canada]

Thank you, Mr. Chair.

I'd like to say that we took every opportunity. In having preliminary discussions, we had a number of calls and queries from those who weren't quite sure if they fell under the auspices of what was required. We answered questions. What we tried to do was target outreach and be consistent with what we knew at the time. Keep in mind that it was a very short period of time. We had, as my colleague Mr. MacKillop had indicated, 21 potential payment service providers and crowdfunding platform service providers that reached out to us.

[Gwen Boniface]

Okay.

Perhaps I'll go back to finance to ask the question. How long were you given to actually put the system in place? Obviously, you were given forewarning that the invocation was coming. How much time did you have?

[Isabelle Jacques]

We're talking about days. It was very quick. As such, once the order came into force, we had very little time to try to help all the institutions that had to take action. We moved as quickly as we could.

[Gwen Boniface]

I appreciate that.

[The Joint Chair, NDP, Matthew Green]

We will now move on to Senator Carignan for five minutes.

[Claude Carignan]

Thank you, Mr. Chair.

My question is for Ms. Jacques.

I have the Economic Emergency Measures Order before me. Unless I'm mistaken, Ms. Jacques, you're saying there were no seizures because the government seized the designated persons' accounts, but the banks decided on their own to freeze the accounts of those persons.

Is that seriously what you're telling us?

[Isabelle Jacques]

No, that's not what I said. I actually said that the financial service providers had to "cease…making available any property, including funds or virtual currency, to…a designated person."

So what that means is to cease and not provide services or…

[Claude Carignan]

It's saying to cease providing services.

[Isabelle Jacques]

That's correct. It doesn't say to seize property. Nothing in the act states that anyone should seize property. A supplier must cease making property available. So it's really a preservation measure.

[Claude Carignan]

That's correct. It's also called a seizure.

[Isabelle Jacques]

No. There are actually two kinds of seizures.

[Claude Carignan]

Earlier I heard you talk about the law. I'm not sure your law training… I'll let it drop.

[Isabelle Jacques]

Well, look…

[Claude Carignan]

A seizure doesn't involve a creditor. I encourage you to read the Supreme Court's judgments on this point. I'll send you some quotations from the Supreme Court.

[Isabelle Jacques]

I understand. I'm not here to teach a course on the law. I was just trying to answer the questions.

[Claude Carignan]

I'm aware of that.

[Isabelle Jacques]

The reason it isn't a seizure is that the act provides that an institution must cease…