Evidence of meeting #134 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cases.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Trevor Bhupsingh  Director General, Law Enforcement and Border Strategies Directorate, Department of Public Safety and Emergency Preparedness
Cherie Henderson  Director General, Policy and Foreign Relations, Canadian Security Intelligence Service
Commissioner Joanne Crampton  Assistant Commissioner, Federal Policing Criminal Operations, Royal Canadian Mounted Police
Sébastien Aubertin-Giguère  Director General, Traveller Program Directorate, Canada Border Services Agency
John Davies  Director General, National Security Policy, Department of Public Safety and Emergency Preparedness
Paul Saint-Denis  Senior Counsel, Criminal Law Policy Section, Department of Justice
George Dolhai  Deputy Director of Public Prosecutions, Office of the Director of Public Prosecutions

4:50 p.m.

Director General, Law Enforcement and Border Strategies Directorate, Department of Public Safety and Emergency Preparedness

Trevor Bhupsingh

Beneficial ownership is really the number one issue. There's lots of other good stuff going on globally. My colleague mentioned some of the other jurisdictions you're going to be visiting, Chair, as I understand it. There are lots of global efforts and international norms there for Canada to take a look at. They appear to be doing quite well with it. It's probably something where we need to look at it in terms of stopping actors from hiding behind corporate structures in order to move their money, and we need to ensure there no gaps in the regime.

In terms of the exclusion of lawyers, it's a point of exploration. It is being explored. They set up corporations, and they also notarize important transactions with lots of money, and that's worth some exploration.

4:55 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you.

Mr. Dusseault.

4:55 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

I'd like to ask a related question, quickly, if I may.

Ms. Crampton, I want to pick up on your recommendation about the exclusion of lawyers and Quebec public notaries from the act. I'm from Quebec, so it's of interest to me. I wonder how lawyers and notaries would react to new obligations under the act, if such amendments were made. I'd like you to tell me what they would be required to do under the act. Would they have to report any transactions over $10,000, or would they have to demonstrate vigilance and flag any suspicious transactions?

As you know, notaries and lawyers, notaries in particular, handle numerous real estate and corporate transactions. Further to your recommendation, what would be required of them?

4:55 p.m.

A/Commr Joanne Crampton

Thank you, Mr. Chair.

I'd say simply what Mr. Bhupsingh has mentioned. Because they have such involvement in those types of transactions, I think it's really important they be included within the act as other agencies and organizations are.

We did an audit from July 2013 to June 2017 looking at 51 financial crime cases that were of that higher level I mentioned before that federal policing was looking at, and over 75% involved lawyers as either a direct suspect or someone identified during the investigation, but they were not pursued in terms of a subject of interest.

Lawyers are certainly a significant part of those investigations, whether at a suspect level or certainly engaged in activities that are surrounding it, and wittingly or unwittingly engaged within these types of investigations and files.

4:55 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Are you suggesting they be required to submit reports to FINTRAC, in the same way that real estate agents do? Are you recommending they have reporting requirements?

4:55 p.m.

A/Commr Joanne Crampton

I wouldn't be able to recommend an exact type of reporting, but I certainly believe they should be within the act with a certain level of reporting. Yes.

4:55 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

My other question is an important one, but I'm not sure which of you is best-suited to answer.

We hear a lot about real estate transactions in Canada. However, many of the documented money laundering cases involve the purchase of property abroad, sometimes—if not often—in jurisdictions with more lax laws. Fraudsters buy hotels, casinos, and big-ticket properties.

Do you run into problems when it comes to accessing information related to foreign real estate transactions?

As a follow-up, I'd like to know what kind of co-operation you get from foreign countries in your efforts to collect information on money laundering committed using this strategy?

February 26th, 2018 / 4:55 p.m.

A/Commr Joanne Crampton

With regard to international investigations, I mentioned previously about the MLAP process, the mutual legal assistance process. It can be very cumbersome. It's an area that the RCMP feels needs further exploration and further streamlining. I think there are some changes that can be made to that process where information could be more timely.

Our partners internationally are very willing to share information, but we need to go through the proper legal means in order to obtain that. We have liaison officers right around the world who work with our international partners, so we do have a great working relationship right cross the world, but the legal processes can certainly slow down that share of information and the availability of it.

5 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Fergus, you have the last couple of questions, and we will let it go to the next panel.

5 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

We know this is a problem. Previous Senate reports have estimated the size of money laundering and ATF issues might represent somewhere between $5 billion and $15 billion of activity in Canada alone. FATF has saluted the efforts we've been making and also pointed out some places where we could improve.

It seems that beneficial ownership is a big issue as well as the legal profession, privacy concerns, and others. Is Canada a haven for this? Are we the bad boy internationally compared to our international partners?

5 p.m.

Liberal

The Chair Liberal Wayne Easter

Does anyone want to answer that question? I don't know if the witnesses are in a position where they can answer that type of question.

5 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Okay, I will make it a little bit less leading. Five to 15 billion dollars is a pretty significant amount, and that was in the previous parliamentary reports on this. Has the problem gotten worse since 2013?

5 p.m.

Liberal

The Chair Liberal Wayne Easter

There are a lot of puzzled people. If it's not worse, it is a problem, though, and that's why we're trying to deal with it with this review.

5 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Okay.

Has it gotten better?

5 p.m.

Liberal

The Chair Liberal Wayne Easter

I think that's unknown, probably.

5 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

It seems that we have some obstacles that our partners don't seem to have, which are causing some serious concerns and which I'm really grateful have been identified.

Thank you especially, Assistant Commissioner, for identifying these issues so clearly.

We can't let the status quo continue. We have to address it. Are there discussions going on currently with the legal profession to try to figure out ways that we can assure solicitor-client privilege, yet be able to make sure, as I think you pointed out, that there's no recklessness involved in their transactions?

5 p.m.

Liberal

The Chair Liberal Wayne Easter

I think, Greg, it's fair to say that maybe that question may be better put to the Department of Justice.

5 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Well, I think someone—

5 p.m.

Liberal

The Chair Liberal Wayne Easter

They're next on the list, unless somebody here wants to answer.

5 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

—was about to answer.

5 p.m.

Liberal

The Chair Liberal Wayne Easter

Does anybody want to answer? The floor is open.

I think they talk in their discussion paper about the discussions that are already going on with the legal community.

With that, we'll have to go to the next panel, which is the Department of Justice and the Office of the Director of Public Prosecutions.

Thank you all. I would say that if any of you have further information that you think may be valuable to the committee, send it to the clerk or give one of us a call. I think, as you can note, we're trying at the moment to find a way through the fog of this issue as well.

With that, we'll adjourn for three minutes and bring up the next panel.

Thank you very much.

5:20 p.m.

Liberal

The Chair Liberal Wayne Easter

We'll reconvene.

Welcome to our guests.

We will continue dealing with the statutory review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

With us are witnesses from the Department of Justice and the Office of the Director of Public Prosecutions.

Before we start, I'll point out we will have a vote in the House. Bells are at 6:15. We have two motions that we need to deal with in camera before we go to that vote so that we have the financing in place to deal with this issue. I'm suggesting we do a hard stop at about 10 after six, or thereabouts.

With that, I'll turn it over to our witness from the Department of Justice, Mr. Saint-Denis, senior counsel, criminal law policy section. I understand you don't have an opening statement.

5:20 p.m.

Paul Saint-Denis Senior Counsel, Criminal Law Policy Section, Department of Justice

No, Mr. Chairman, I don't.

5:20 p.m.

Liberal

The Chair Liberal Wayne Easter

You can answer questions.

Next is Mr. George Dolhai, director of public prosecutions with the Office of the Director of Public Prosecutions.

You have a short statement, George. Go ahead.

Thank you both.

5:20 p.m.

George Dolhai Deputy Director of Public Prosecutions, Office of the Director of Public Prosecutions

Thank you, Mr. Chair.

I'll be very brief, owing to the time. I know the committee wants to get to questions.

I am pleased to appear before the committee today.

The Public Prosecution Service of Canada has two roles: to provide law enforcement agencies with legal advice to ensure that evidence is gathered in accordance with the rule of law and, as such, is admissible for the purposes of subsequent prosecution;

and to prosecute fairly and impartially so the cases can be decided based on the admissible evidence. We apply the common law and the statutes when we're advising the police at the investigative stage.

Our test for prosecutions has two parts.

The first part is a reasonable prospect of conviction. Every prosecution service in the country has basically the same test. There's a slight variation in British Columbia.

The second part of the test is common among all prosecution services as well, and that's the public interest: is there a public interest in undertaking the prosecution?

We're evidence driven. The police use intelligence to help guide their investigation. By the time we are involved our focus concerns evidence and evidence gathering.

Our considerations are not political nor are they contingent on whether a law is appropriate. We apply the public interest to the second part of the test, and if there's sufficient evidence, the ordinary rule is that you go ahead with the prosecution. When you get to a point of public interest, the public interest criteria are spelled out in our deskbook: what you can and can't consider.

We are not investigators. Law enforcement agencies independently select the individuals they investigate and determine the scope of that investigation. At the investigation stage, our role is to provide advice, so our communications with law enforcement are subject to solicitor-client privilege.

We also assist them in obtaining judicial authorizations, including search warrants, restraint orders, special search warrants, production orders, and wiretap applications.

What does that mean in relation to the proceeds of crime and money laundering? We have no control over the types or number of cases under investigation or referred to us for prosecution.

We're independent of the police throughout the whole process, just as they are of us. They're both important constitutional principles. At the prosecution stage we'll consult them, but at the end of the day, the decision is ours to make independently.

The DPP and the prosecution service have no reporting relationship with the Minister of Justice. Our role, as I said, is on the prosecution side. We're often consulted about policy matters and will offer our operational view on the implications. But the wisdom of a law, whether it should or shouldn't be made, is not our domain. Our domain is to assist with the operational impacts and to provide that advice.

Finally, we're one of 11 prosecuting services in the country. Parliament has given that responsibility to the provinces and to us. There is some limited overlap in areas like organized crime—we deal with organized crime touching on drugs—and market fraud. We also have joint jurisdiction on terrorism, although to date all terrorism prosecutions have been undertaken by the PPSC. There's considerable co-operation on an operational level among all the jurisdictions—but we are distinct. We prosecute all the federal statutes, including the Criminal Code as it relates to organized crime and terrorism. The provinces will prosecute the Criminal Code on such offences as fraud, as I said already. In the northern territories, the PPSC prosecutes all criminal offences, both the drug offences and the Criminal Code offences that you would normally think of.

The Public Prosecution Service of Canada is responsible for prosecuting money laundering and possession of proceeds of crime when the offence is under federal jurisdiction, as well as terrorist financing offences. The service is also responsible for prosecutions under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

I would now be happy to answer your questions.

Thank you.