Finance Committee on March 29th, 2007

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

If the committee is going to approve $10 million on a main estimate and then there is an increase, we'd like to know what the money is going to be spent on. I had asked for it last year. I think I made it clear I didn't need detail, but I had to ask for it and I don't think I should have to ask for it. We're looking at the estimates. We need to know what this money is being spent on.

We'd like to know the number of cases you've studied. If you want, I'll ask for all kinds of details. I'll ask for how many hours you spent on cases and what the billing time was. I can get into details if you'd like, but at minimum I'd like to have at least a one-page summary of what this money is being spent on and I'd like to have it in writing.

It's not acceptable. I asked for it last time and it took two weeks to get it, and now I have to ask for it again. I think it should just be automatic. It's not the end of the world; it's money. This is public money. All we're asking for is a bit of detail.

But correct me if I'm wrong. I'm not trying to go...but if you have something to hide, maybe you can just tell us and maybe we can make the story of it shorter. But I don't think I'm asking for something that's unreasonable.

[The Chair, Conservative, Brian Pallister]

If I could assist in advance of Mr. Pacetti's request, I'm sure you're willing to put something in writing to us, but perhaps in advance of doing that you'd like to outline a synopsis of some of the work you've undertaken over the previous fiscal year, or anticipated work. I know it's difficult to anticipate--

Mr. Pacetti, yes.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I'm not asking for an outline; I'm asking for some detail in writing. I asked for it last time. I thought that perhaps you would have learned from the last time. I was maybe a bit too nice, but all I'm asking for is detail, and I'm still being nice. If you don't want me to be nice, just tell me; I'm not going to be nice.

This is not my money; this is the public's money.

[The Chair, Conservative, Brian Pallister]

Yes, you don't want to see him when he's not nice.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Mr. Chairman.

[The Chair, Conservative, Brian Pallister]

Yes, you're welcome.

We'll continue now.

Is that a reasonable request? Can you assure the committee members that you'll be able to provide somewhat more detail in terms--

[Pierre Gosselin]

Mr. Chairman.

[The Chair, Conservative, Brian Pallister]

Yes, Mr. Gosselin.

[Pierre Gosselin]

We are in the process of preparing our report on plans and priorities, which goes into great detail on what the tribunal plans to do in the coming fiscal year. The time for that has not yet arrived because the fiscal year is not finished yet, so we can't roll up all the data, but in the early part of the next fiscal year we will produce it. We produced it last year; we produce it every year.

We produce an annual report that's an inch thick.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

That's not what I'm asking. If you took last year's number of $10.005 million and increased it by an estimate of 10%, I have no problem with that; I just want it in writing. On the $10.682 million, you came to a number, and somebody must have done something. If you did it on the back of a paper napkin, I have no problem with it; that's another issue.

We got some of the numbers last year after I asked for them. There was some detail, but what the committee got was fine. I'm just asking how you got to $10.682 million.

[Pierre Gosselin]

In the opening statement, sir, I explained.... Pardon?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I'd like it in writing. That's all I'm asking.

Thank you.

[Pierre Gosselin]

I will give you a copy of the estimates we provided to Treasury Board.

[The Chair, Conservative, Brian Pallister]

Thank you, sir.

We will continue with Mr. St-Cyr.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Thank you, Mr. Chairman.

I have a few questions for FINTRAC. During consideration of Bill C-25, we met with you to talk about changes to be made to new roles and responsibilities. I asked many questions, and was particularly interested in the mechanism used to protect private information. You gave a very good explanation of how the mechanism works. You analyze statements provided on a voluntary basis, which are then reviewed by a committee. If the committee decides that it is warranted, it sends complementary information to police services who provide intelligence.

I had also asked if there was a verification mechanism. This would be a good protection mechanism. I was told that there was no follow-up as to whether or not it was necessary to review cases and check if the decision to disclose information was a good one or not.

Since then, have you taken any measures to come up with a follow-up mechanism to make sure that past disclosures were carried out properly?

[Mark Potter]

Thank you for your question.

I'll give you a somewhat lengthy answer, and then I would appreciate it if you could give me further direction if you would like to me to focus on more specific areas.

At FINTRAC we take the protection of privacy and information extremely seriously. It's a part of everything we do. Before you can work at FINTRAC you have to be cleared to the secret level and eligible for the top-secret level. Within our facilities we have extremely robust physical and IT security.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

I will interrupt you there, because I have very little time. You made this presentation the last time, and I trust you completely. I simply want to know if there are any follow-up mechanisms to determine whether the disclosures made by the committee were effective, if they actually led to investigations, if they were relevant, and if the system contains any deficiencies. Have past activities been reviewed and verified?

[Mark Potter]

I think your question covers two potential areas. One is performance measurement and what happens to our disclosures. Related to that is the protection of privacy and information during that process.

We're an analytic agency. We produce case disclosures that we then forward to law enforcement and CSIS. If they deem it appropriate, they conduct further investigation and examination related to these cases.

As a regime led by the Department of Finance, we are developing and refining increasingly robust and comprehensive performance measurements for the whole regime, starting with intelligence, investigation, charges, convictions, and so on. That is under development and is still evolving. As a fairly young agency and a fairly new regime, we are making improvements in that area, but that's still to come and we're still working on it.

In terms of specific cases, we at FINTRAC do not track those.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Therefore, you are unable to tell us exactly how many of the 168 disclosures mentioned in your speech actually led to lawsuits or convictions, nor can you talk about the role that you may have played in future convictions.

[Mark Potter]

The short answer is no. The slightly longer answer is that these investigations take a considerable period of time, often a number of years. The ones we disclosed very recently are probably in progress.

We occasionally learn anecdotally through media reports that our disclosures have been used in investigations, prosecutions, and convictions, but at this time we do not receive information on specific cases and what has happened to them.

What we have put in place with law enforcement is a disclosure feedback process. So we learn about the quality of our disclosures, the timeliness of them, whether they lead to new leads, whether they contribute significantly to an investigation, and so on. We are getting this sort of feedback information, which is extremely useful to us.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

In order to understand what is happening with your data, do you think it would be a good idea to systematically receive feedback on the final result?

From what I understand, people either say that they like or dislike the information you have, or that it could be improved. Yet, ultimately, were there any lawsuits or convictions? For now, nothing systematic is in place, correct? Do you believe that this situation should be rectified?

[Mark Potter]

I absolutely agree with you. In order to ensure that taxpayers are getting value for FINTRAC's work and for the work of the entire regime, which involves significant expenditures, there should be robust measurements in place, and that is certainly the direction in which we're moving as a regime.

The Department of Finance is leading that process and working with the Department of Justice, with law enforcement, and with us to put in place the right sort of performance measures.

[The Chair, Conservative, Brian Pallister]

Mr. Del Mastro has the floor.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

I have a couple of questions. I'll start with Mr. Potter.

Mr. Potter, there seems to be kind of a prevailing thought out there, and certainly we hear it in the media all the time, that the government is awash in cash, the provincial government is awash in cash, there's cash everywhere. I'm very sensitive to that because, as pointed out by my colleague, it's the taxpayers' money, it's Canadians' money. When I see an estimate that's 22 times inflation...if I were a taxpayer sitting at home, I'd have concerns about that.

Essentially your funding was about $1 per Canadian. Every Canadian is giving FINTRAC about $1. What you've asked for is $1.50. What's in it for them? What are they going to get for their 50¢? How much more are they going to get out of it? What is the benefit to Canadians by extending this additional funding?

[Mark Potter]

Thank you very much.

I think that's an extremely fair and pertinent question, that we should be assessed on our results, and I'll highlight two key areas. We have a dual mandate, for detection and for deterrence.

On the detection side, it's really about our core product, which is a case disclosure, an intelligence product. So you look there at the volume, the value of the transactions. You also look at the feedback we get from our partners, from law enforcement and from CSIS. Do they consider it a high-quality product, a timely product that contributes to their investigation and ultimately leads to results for Canadians—being charges, convictions, and reduced money laundering and terrorist financing in Canada and the associated criminality? So that's a key front for us.

The second is deterrence. Do we have a system in Canada of financial intermediaries that are aware of their obligations, respect their obligations, and provide high-quality reports to us? We receive over 15 million reports a year from reporting entities. These are a key part of our analytical work, and these create a deterrence regime that makes it difficult to use Canada for these purposes, for money laundering and terrorist financing.

So those are two key areas where we're very cognizant of generating concrete results, having them measured and having them contribute directly to the well-being of Canadians.