Finance Committee on May 24th, 2018

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

Members have been together pretty near every day and evening this week, so we're seeing lots of each other.

The hearing this morning is pursuant to Standing Orders 110 and 111, order in council appointment of Nada Semaan to the position of Director of the Financial Transactions and Reports Analysis Centre of Canada, referred to the committee on Thursday, March 22 of this year.

We have Ms. Semaan with us this morning. Welcome, Ms. Semaan.

Before we start, we did send out a note to members, because we haven't, I don't believe, as a committee in this Parliament, gone through order in council appointments. I just want to remind people what was in that note.

There are certain rules pertaining to the examination of order in council appointments. Committees are limited to examining the individual's qualifications and performance, with a view to their performing the duties the office seeks. This means that I as chair could interrupt the questioning of members if they deal with matters irrelevant to the committee's inquiry, for instance, political affiliation, contributions to political parties, and the nature of the nomination process. Any question, however, may be permitted if it can be shown that it relates directly to the appointee's ability to perform the duties of the office.

That's what we're here to go through, the ability to perform the duties of the office. I believe you have an opening statement.

Ms. Semaan, I believe you have an opening statement. The floor is yours.

[Nada Semaan, Director and Chief Executive Officer, Financial Transactions and Reports Analysis Centre of Canada]

Yes, I do, and thank you so much, Mr. Chair.

I'm very pleased to be here today to answer questions in relation to my appointment as Director and Chief Executive Officer of the Financial Transactions and Reports Analysis Centre of Canada.

I'd like to begin by saying how truly honoured I am to have been appointed to lead FINTRAC, an organization that plays such a vital role in protecting Canadians and the integrity of the financial system.

When I served as the Executive Vice-President of the Canada Border Services Agency, I saw first-hand the value of FINTRAC's financial intelligence and the results the centre achieves for Canadians.

The clearest example of these results can be found with project PROTECT, where the FINTRAC's financial intelligence has been critical to helping police rescue dozens of young Canadian women from the most horrifying conditions imaginable.

These types of results would not be possible without the dedicated efforts of thousands of businesses across the country that work with us to protect Canada's financial system, and that provide us with the information we need to produce financial intelligence for Canada's police, law enforcement and national security agencies.

I am committed to working with these businesses to ensure that they understand and are able to comply with their obligations under the act. I sincerely believe that they want to comply and that they want to help protect Canada and Canada's financial system. It is our job to ensure that they have the knowledge and the tools to establish effective compliance programs. With this type of support, I'm convinced that compliance rates will continue to improve and that we will find ways to make the regime even stronger and more effective.

As I follow your review of the act, there seems to be a solid understanding of the importance of Canada’s anti-money laundering and anti-terrorist financing regime and the results it achieves for Canadians. Going forward, we are committed to looking more closely at the what and the how, and to engage businesses transparently and with an open mind to find even better ways of running our programs. This includes reviewing the burden facing businesses, and it is a priority for us that we work with them.

In my time as associate deputy minister at Agriculture and Agri-Food Canada and at Canadian Heritage, I worked collaboratively with a variety of stakeholders to address the issues and enhance programs and program delivery. I know the real benefit of working and listening to all perspectives and being open to change.

FINTRAC is at a critical moment in its evolution with this committee's review of the act, the implementation of our new analytics system, and the tremendous innovation that is taking place all around, including in the financial sector. Collectively, we are setting the course for FINTRAC for many years to come. I believe that my 27 years of experience in Canada's professional public service has prepared me very well to help navigate FINTRAC through the changes that lie ahead.

As the assistant secretary of the economic sector at the Treasury Board of Canada Secretariat, I worked very closely with Treasury Board ministers to find more efficient and effective ways of running government programs. I learned, in this role, that there is always a way to make programs better. FINTRAC is a strong organization with a very strong, knowledgeable, and dedicated staff, and I know we can make it even better.

Early in my career as an analyst at Cognos, I gained valuable experience in the field of information technology and business intelligence tools. I've put this to good use throughout my career and specifically as the Chief Information Officer and Assistant Deputy Minister of Systems at Service Canada, where I was delighted to play a key role in setting the vision, design and implementation of the Service Canada Initiative. It has certainly had a significant impact on the quality of service that Canadians receive from their federal government. This experience will be helpful as we work with businesses to enhance our program.

One of my proudest moments as a public servant came when I was responsible for running the old age security programs and the Canada pension plan as the senior director general at Social Development Canada. Specifically, when we looked at the process for seniors to access the guaranteed income supplement basically we saw that it involved several different application forms, very complex application forms, that resulted in a number of seniors not even knowing that they were eligible for the benefit, and when they did know they were eligible they did not know how to complete the application form to actually access the benefits.

With the help of our public service experts, we built a new process that not only was tailored to meet the needs of citizens but also made it much simpler. With that work, one letter was sent to seniors based on their income statement from the tax assessment to proactively inform them that they were eligible for the supplement. With this we were able to provide benefits and reach an additional 200,000 low-income seniors who did require the benefit in a very simple and efficient manner. This process is still in use today.

I am pleased to provide more detail on my experience but I would like to conclude by saying that, as a Canadian who immigrated to Canada at the very young age of five, I am humbled, truly humbled, to be here and to have the opportunity to serve Canadians in what is recognized internationally as the best public service in the world. In fact, I chose to make the public service my career in order that I may serve my country, the country that welcomed me and my family and has provided so much to us.

As you can see, I am a very proud public servant, but I am also a very proud Canadian. In every department and agency in which I have worked I have seen my colleagues demonstrate the same commitment to excellence. They listen. They learn. They always look to improve, and they rise to the challenge to both protect and ensure the economic prosperity and the prosperity in general of Canada and Canadians. This is exactly what I've seen at FINTRAC over the past two months that I've been there. I am blessed to join this team, but I have felt blessed, I'll be honest with you, to serve Canada and Canadians in every single public service job that I've ever had.

With that, Mr. Chair, I'd be happy to answer questions.

Thank you very much.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Semaan.

I don't believe we're going with the regular round. We will go to those who have questions. I might say, and I expect it's the same for all MPs on the point you made on seniors not knowing they're eligible for benefits, it always amazes me when people come into the office and they don't know they are entitled to certain benefits. That happens in a lot of our offices. That was one of the better moves that a government has made, in my view, in giving them notice, but then there are others who don't file their taxes so they don't know either. We run into that too.

We'll start with Mr. Dusseault and then Mr. Albas.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Ms. Semaan, thank you for being here and congratulations on your appointment.

My main question is about your experience in organized crime and crime in general. Of course, you do not have experience on the inside. I'm talking about law enforcement and the knowledge you have acquired on the ways organized crime works. Criminal organizations are certainly those who launder money, we know that. So I want to get a perspective on that issue in order to understand the way organizations involved in organized crime operate, so that we could arrest their members.

[Nada Semaan]

Thank you very much for the question.

When I was the Executive Vice-President at the Canada Border Services Agency, that organization was the second most important federal government agency in terms of law enforcement. I had the pleasure to work a lot with intelligence services. I learned a great deal from working in the criminal realm. We had many cases at our borders, and we were Canada's first line of defence against crime. I was also part of, and still am, a committee of deputy ministers responsible for national security.

When I was the executive vice-president, I worked with FINTRAC. I really saw the work being done there and the importance of information given to us and the information we gave to FINTRAC. At that time, I was very interested in that work and I knew that, owing to my work in security and regulation and regulatory administration, as well as my experience with computer systems and intelligence, the position would be a very good fit for me.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Dusseault.

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Mr. Chair.

Thank you, Ms. Semaan. I certainly appreciate your presentation today in regard to your background. I certainly welcome you to this committee and wish you the best as you try to work on behalf of all Canadians.

In regard to our study right now, our statutory review on anti-money laundering, proceeds of crime, and anti-terrorist funding, we've come across a number of different sentiments. We had the minister of the crown from British Columbia, David Eby, come here, and he portrayed FINTRAC in.... While you certainly have said that you've had the honour and pleasure of working with many people, some of the best being at FINTRAC, he had a much different view. Are you aware of the comments he made about FINTRAC at this committee?

[Nada Semaan]

I am. Actually, we met with Mr. Eby as well when he came to Ottawa. We had a very constructive and very productive meeting.

As you know, the role of FINTRAC is twofold. One is to help businesses comply with the act so that we get the information and can then provide intelligence to law enforcement organizations. They can then do their work in terms of enforcement.

At that meeting, we spoke about how we can work better together, about how our information can be accessed, and about the work we've been doing. We also explained to Mr. Eby that we have increased some of our assessment activity in both the real estate and casino sectors. In fact, we've increased our assessments of real estate agents significantly over the past few years, to the point where 30% of all our assessments are in the real estate sector. A number of those are in Vancouver, Toronto, and other areas of the country.

Moreover, we have developed a casino forum where we provide information. We're doing a lot of outreach as well to explain to people the importance of that information, so that we can get it. With the casino forum, we've had provincial administrators or regulators of casinos, as well as casino owners and people who actually worked at the casinos. We were able to provide enough information where we did actually see an improvement in the number of suspicious transaction reports...and the number, so both quality and quantity of suspicious transaction reports in the real estate sector and in casinos. Once we get those, we create actionable intelligence for law enforcement to then take it to the next round.

We have been working collaboratively, and we've agreed to continue to work collaboratively.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay. So—

[The Chair, Liberal, Wayne Easter]

I don't in any way want to cut off discussion, but really, this line of questioning is getting into the second part of our session, when I would invite up here the rest of the FINTRAC officials.

Are there any more questions that people want to ask about Ms. Semaan's background and her ability to do the job?

Is there anything specifically related to the appointment process that we want to ask Ms. Semaan before we get into the rest?

Ms. Semaan, I believe you are here as a witness as well.

[Nada Semaan]

Yes.

[The Chair, Liberal, Wayne Easter]

Really, it would be better to have this information as evidence in our proceeds of crime, money laundering, study than on the order in council appointment process.

Do you have a question here?

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

No. I would just say, Mr. Chair, that this is a good suggestion and perhaps we might get unanimous consent from the committee to include the last bit of the testimony so that we can include that in our money laundering review.

[The Chair, Liberal, Wayne Easter]

I think that's fine, if people agree.

[Some hon. members]

Agreed.

[The Chair, Liberal, Wayne Easter]

Are there any more questions on the qualifications?

Mr. Sorbara.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Mr. Chair.

Welcome, Ms. Semaan.

I was wondering if you could briefly touch on your past experience in terms of the size of the bureaucracy and the processes versus what you've now come to at FINTRAC, and how the two are relatable, or not.

[Nada Semaan]

Actually, this is one of the smallest groups that I've led in a long time. Before, as assistant deputy minister even at Social Development Canada, or ESDC—it's changed names so many times—as the chief information officer there, I led an organization of over 3,000 employees, with a budget of about $30 billion at the time. At Canada pension plan or old age security, we administered over $70 billion a year in benefits to Canadians.

I was the associate deputy minister at Canadian Heritage, which was my first associate deputy minister appointment. It was an organization of over 1,600 people. It was actually 1,800, but with the DRAP, it became 1,600. I managed a number of programs and a budget also in the billions, as well as a large portfolio organization in terms of arm's-length agencies.

At Agriculture and Agri-Food, I was an associate deputy minister as well. We led an organization of over 6,000 employees and billions of dollars of benefits as well.

At Agriculture and at Canadian Heritage, the job was actually leading arm's-length organizations, so we provided the policy advice. We provided some of the regulatory guidance and the policy guidance to them, but at arm's length.

Canada Border Services Agency is an organization of 12,000 employees, and about $1.8 billion in terms of mostly operational services at the border. There, I was at an agency that was arm's length from the government.

I've had both the opportunity to be the policy lead as well as an agent that is arm's length from government. I think it has actually served me quite well.

Based on my experience in intelligence and public safety at CBSA, but also on the regulatory frameworks that I've been able to put in place, whether it be at Agriculture, Canadian Heritage, or at ESDC, and with my IT background, I believe my training for this position has been very well established.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

That is wonderful to hear. I'm just going to use the words “change management”. I take it you are obviously quite familiar with that in respect of what you would encounter at FINTRAC if there needs to be additional changes or anything like that. We're confident that we have someone in place, and from what it sounds like, most certainly so, to handle that.

[Nada Semaan]

In every single one of my jobs, there was a very large amount of change management.

As I mentioned, at Canadian Heritage, we had to manage a workforce reduction of 30% and a major cut in our budget. That obviously included a lot of change management. About a year and a half after that, we had the public service employee survey. We had one of the best results in the entire employee public service survey, even with all of those cuts.

The guaranteed income supplement, for example, was a very major change. It basically was taking a look and saying that we can do better. Instead of Canadians having to come to government and apply on what was literally eight different application forms, and about 10 pages in number eight font—very hard to read—we said we can actually change it using the way the regulations and the legislation are set out. We can find a way where we can reach them. By working with our CRA colleagues and with the Office of the Privacy Commissioner, we found a way to do that. It required quite a bit of change because it totally changed how we actually delivered.

I must say even in the two months that I've been at FINTRAC...it is an organization that's used to change, that embodies and enjoys change. With the advancements in technology, we must change. We must first of all harness those advancements so that we can find better ways to work with our colleagues and our reporting entities, but we also need to take a look at those changes in technology because they now allow bad actors to have new methods in order to abuse our system. So, we will have to be constantly on top of all of that change.

Thank you so much.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I have a follow-up question about your experience in managing the regulatory framework of fines and penalties imposed on offenders.

Could that experience help you in this entire process of reviewing the fine scheme, which was deemed to be too subjective by the courts? Based on your experience at Employment and Social Development and at the Canada Border Services Agency, could those organizations be good examples of perhaps more adequate and objective regulatory frameworks on fines in order to satisfy the courts?

[Nada Semaan]

Thank you very much for the question.

My experience at the Border Services Agency was indeed very useful. The agency set many administrative penalties, and I have a lot of experience in that area, as well as with the appeal process.

In addition, when I was the assistant deputy minister at Agriculture and Agri-Food Canada, I gained a lot of experience, especially when it came to the implementation of policy and of the regulatory framework. I also worked at the Canada Food Inspection Agency, which has a very good process in terms of administrative penalties.

I also gained experience with FINTRAC. We have, and we will have, a very good administrative penalties program in the near future. I hope that it will be the best in the world.