Declaration of Emergency Committee on May 3rd, 2022

[Gwen Boniface]

Okay. Thank you.

My understanding—this is for both finance and FINTRAC—is that work on amendments is under way in the Department of Finance to close the crowdfunding gap.

Is there an anticipated timeline, and what are the particulars that you're hoping to get to?

[Isabelle Jacques]

Yes, that is accurate. Actually the gap has been.... The measures are now permanent. Regulations were in place as of April 27.

[Gwen Boniface]

Can you tell me what the advantages are? What are you attempting to close?

[Isabelle Jacques]

What was closed—I can turn to Julien to give more details—is that we added to the list crowdfunding platforms as well as payment service providers, which were not covered previously.

I'll turn to Julien to better explain it.

[Julien Brazeau]

Briefly, essentially the new regulations made permanent what was contained in the emergency measures, in terms of the obligations on crowdfunding platforms and payment service providers to register and to disclose suspicious transaction, and also put on them heightened responsibilities in terms of due diligence and verification of clients.

[Gwen Boniface]

Very quickly, can you tell me whether or not you or anyone within your department has had any discussion on an international basis to look at other countries and how they may have dealt with this issue similarly?

[Julien Brazeau]

We have looked at benchmarking what other countries are doing. Canada is one of the first in terms of the coverage of crowdfunding platforms; however, in regard to payment service providers, the European Union as well as Australia already cover those entities for purposes of anti-money laundering and anti-terrorist financing.

[Gwen Boniface]

Thank you very much.

[The Joint Chair, NDP, Matthew Green]

Thank you.

We will now move on to Senator Carignan.

Mr. Carignan, the floor is yours.

[Claude Carignan]

Thank you.

Ms. Jacques, if I understood correctly, earlier you said there were no consequences for the financial institutions if they decided not to freeze transactions involving designated persons.

Is that correct?

[Isabelle Jacques]

Yes, that's correct.

[Claude Carignan]

In that case, I'd like you to explain the meaning of section 7 concerning immunity:

7 No proceedings under the Emergencies Act and no civil proceedings lie against an entity for complying with this Order.

So there's immunity for those who comply with it, but those who don't won't be prosecuted either.

[Isabelle Jacques]

Yes, section 7 grants immunity to entities that have complied in good faith with the order.

[Claude Carignan]

Can I be prosecuted if I don't have that immunity and haven't complied with the order?

I refer you to subsection 10(2) of the Emergency Measures Regulations, which provides as follows:

(a) on summary conviction, to a fine not exceeding five hundred dollars… (b) on indictment, to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding five years or to both.

[Isabelle Jacques]

I didn't think that section applied to the order, but perhaps you can put that question to the Department of Justice.

[Claude Carignan]

Yes, of course.

I just want to go back to seizures. You said earlier that it wasn't a search. I just want to remind you that we're talking about a restraint order, even though it comes from the order, not from a judge. I would encourage you to read the judgment that the Supreme Court rendered in 2002 in Quebec (Attorney General) v. Laroche, in which it held that a restraint order is a seizure within the meaning of section 8 of the Charter.

[Isabelle Jacques]

The court didn't issue a restraint order in this case.

[Claude Carignan]

Really?

Isn't it an order when it comes from the Governor in Council?

[Isabelle Jacques]

It's an order, but this one says to cease doing business with designated persons and providing them with services. I don't think we agree on the definition.

[Claude Carignan]

No, I don't think we agree.

[Isabelle Jacques]

I view that as a conservation measure and a freeze.

For example, if a bank sees a transaction that it suspects is fraudulent and decides to freeze the account to ensure it's inaccessible, do you think that's a seizure?

[Claude Carignan]

I'm reading section 2, which refers to ceasing any transaction concerning property. The definition of "property" may be very broad. Property can be a vehicle, a house, real property or a business.

What's the benefit of making an order that requires a bank to cease all financial transactions and to stop making financial instruments available to a person who takes part in an illegal protest on Wellington Street?

[Isabelle Jacques]

First, it helped ensure that people stopped financing illegal activities. Second, it urged people to leave Parliament Hill by telling them that their accounts would be unfrozen if they did so, because…

[Claude Carignan]

So that was the objective.

[Isabelle Jacques]

…illegal protests have significant financial consequences.