Evidence of meeting #135 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was fintrac.
A video is available from Parliament.
Conservative
Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC
But whatever their agreement says, obviously, if Parliament has said, this is the law, then statute law would then overwhelm a privately construed contract.
Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada
To go back to your question is this something we're seized of, this is exactly the kind of issue for which we have recommended changes to PIPEDA and it deals with the issue of meaningful consent, consent that you may have given to that organization to handle and manage that information.
This is our bread and butter and we have made recommendations to Parliament to amend PIPEDA to give us more enforcement authority to deal with these issues.
Conservative
Liberal
The Chair Liberal Wayne Easter
We've never seen your heart rate go up around here, Dan, because you're always so calm.
Ms. O'Connell.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you all for being here.
I want to start with the Privacy Commissioner as well, except it's a little bit of a different angle. The other day when we had more of the security agencies and officials before us—specifically, people from CSIS, RCMP, and whatnot—one of the questions I had was similar to what Mr. McLeod was talking about, on information sharing. For example, CSIS receives some information that it would then send to the RCMP that deals with money laundering, because CSIS doesn't really deal with the further investigation. It sends the tip, or it might send it to FINTRAC, or the RCMP might send something to FINTRAC.
What oversight is there if a piece of intelligence or information has been sent to the appropriate agency, and how do we know it's investigated? Are there any statistics on whether it was looked at, whether a decision was made not to pursue or to pursue, and where that information then goes? The answer I got was kind of twofold: one, that's what the Office of the Privacy Commissioner could do every two years; and the other was the potential for the new committee with parliamentary oversight.
However, after hearing the presentation and understanding your office's role, it sounds as if that has nothing to do with what your oversight is, or I could be wrong, but your oversight is really mainly on ensuring that privacy is protected and that this information is not overused. My original question about ensuring that information or tips are being sent to the right place and not just falling into a black hole somewhere, that's not what your office looks at, or is it?
February 28th, 2018 / 5:15 p.m.
Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada
It is not what our office is doing. You're perfectly right. Our role is to look at the sharing or disclosure of information and whether it was done lawfully. I think the new review agencies created under Bill C-59 will help, because they will look not only at questions of legality but at effectiveness of the programs. Your question as to whether tips are acted upon or information is acted upon has more to do with the effectiveness of the way in which the various agencies perform their mandates, so that may be.... I would need to look at the mandate of NSIRA. That may be part of its job, but the committee of parliamentarians, certainly, would have a mandate to look at questions of effectiveness of the agencies.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you. I'm glad you cleared that up. Perhaps my question wasn't clear originally in terms of the other agencies, but your office was specifically cited as having that potential oversight ability, and it doesn't sound as if that's within your mandate.
Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada
It's oversight but with a view to looking at privacy.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Right. It's not within your mandate even if you felt there was—
Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada
No, it is not.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you.
With regard to PWGSC, and specifically on the seizure side, the chair asked a question early in our study about local law enforcement agencies—whether municipal, regional, provincial—and the issue of seizures. Some of the fines are coming to the federal government, and yet the local agencies are putting in a lot of the work in investigations in a lot of cases...and partnership. There is this idea—and I'm curious if you think it's real or overstated—that the local law enforcement agencies would go after or investigate.... Because usually money laundering or criminal activity is not one thing, and they may pursue a drug charge or some other charge that, one, may be easier to prove, and two, the proceeds or any fines would then go to those agencies, whether provincial, municipal, etc.
Have you heard of this? Obviously they wouldn't necessarily tell the federal government they're not going to pursue it this way because they get to keep the funds that keep it going. Are there rumblings that this is an issue on the enforcement side and where the proceeds of crime end up going in terms of bottom lines and budgets for police forces across the country?
Director General, Specialized Services Sector, Integrated Services Branch, Department of Public Works and Government Services
There is a sharing regime in the regulations of the Seized Property Management Act that allows for sharing with provinces. If a local police force does the majority of the work, they get the lion's share of the proceeds. Many provinces, particularly in the west from Ontario to the Pacific, have introduced civil remedies for criminal actions, so other avenues can be used.
We have seen a trend in our business volumes from 1993, when the group was formed with a single case, through to peak volumes around 2009 under the Controlled Drugs and Substances Act, one of the acts we serve. Then we had decreasing volumes through 2015, and then more stabilization lately. There's an ebb and flow, and there's a lot of variation within a given jurisdiction in a given year. This is a normal part of the business.
Most of the discussions we've had with law enforcement about predicting business volumes—predicting makes them easier to serve—have related to the competing priorities that law enforcement has to deal with. These are things like national security, which has emerged as a big priority lately, and a shifting view, through the FATF evaluation of Canada, that money laundering is a threat to national security and therefore should be given increased weight. Those kinds of thinking have seen ebbs and flows in our business volumes.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
I am going to try to not take up too much time.
I'd like to go back to the process you described, which begins with audits, is followed by investigations and eventually leads to the Public Prosecution Service of Canada. In your opinion, is the system effective enough? At this time, the files are passed from one person to another. Do you see any way of improving that process?
Director, Criminal Investigations Division, Criminal Investigations Directorate, International, Large Business and Investigations Branch, Canada Revenue Agency
I think the process works very well.
As for the civil cases processed by the Canada Revenue Agency, internal auditors will sometimes send on dossiers to those who are responsible for investigations. When there are a sufficient number of offence indicators in a case, the auditors submit the case to the Criminal Investigation Program personnel, who accept it and conduct an in-depth investigation before sending it to the Public Prosecution Service of Canada.
The process is the same for the other law enforcement organizations; after having conducted their investigation, they send the file to the Public Prosecution Service of Canada, or to the province concerned if they are provincial or municipal organizations.
I have no recommendation to make to change the system. The Criminal Investigation Program receives the majority of tax evasion reports from internal investigators. We can also decide to launch an investigation ourselves after having received information from FINTRAC, or following research conducted in our databases.
NDP
Pierre-Luc Dusseault NDP Sherbrooke, QC
You seem quite proud of the 93 tax treaties and 23 tax information sharing agreements which were mentioned. Not everyone shares that pride in the public sector.
My questions are about the tax information sharing agreements. Do they really work? Are your investigators satisfied with the co-operation of the signatory countries? Are the Criminal Investigation Program people satisfied with the quality of the information they receive from these countries, given the difference in standards and the fact that those countries do not necessarily collect the same information? As you know, in some of the countries with which we have concluded agreements, taxpayers are not even required to produce income tax returns.
Does that situation sometimes cause problems, in your opinion? Is it an obstacle to your investigations?
Director, Criminal Investigations Division, Criminal Investigations Directorate, International, Large Business and Investigations Branch, Canada Revenue Agency
I do not think that the tax information sharing agreements hinder our work. On the contrary, I think that there is a lot to be gained in signing new agreements with as many countries as possible.
In 2018-19, a new Common Reporting Standard for the automatic exchange of financial account information will come into effect. I think that this will really increase tax information sharing and that the CRA will benefit from this a great deal in its audits and investigations.
Liberal
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Mr. Therrien, I would like to better understand Canada's ranking in the list of countries that protect the confidentiality of their citizens' private information. Can we be compared to other countries, such as the United States or the United Kingdom?
Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada
In your specific area or in a more general way?
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
In a more general way. Could you compare the system in those countries and the level of personal information protection there with what is done in Canada?
Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada
The systems are certainly comparable in part, since the Canadian system is derived from the recommendations of the Financial Action Task Force, an international organization that sets international standards or quasi-standards. In this specific area, the Canadian system thus resembles the others.
More generally, I would add that the Privacy Act, which applies to the federal public sector, has not seen any changes since the 1980s, and Canada is a bit behind in that regard.
Liberal
The Chair Liberal Wayne Easter
No, we're pretty well right down to the time.
Thank you all.
We have the discussion paper from the Department of Finance, which I think most of the agencies or departments have been involved in, and that is leading in certain directions. If any of you have information you think would be helpful to the committee beyond that discussion paper, we're open to it, so don't be afraid to either drop the clerk a note or give one of us a call if you have a suggestion for something that we maybe should be considering but we're not.
With that, thank you again for your testimony and your work.
We shall adjourn until tomorrow morning.
The meeting is adjourned.