Finance Committee on May 17th, 2021

[The Chair, Liberal, Wayne Easter]

We will call this meeting to order.

Welcome to meeting number 43 of the House of Commons Standing Committee on Finance. Pursuant to Standing Order 108(2) and the committee's motion adopted on Tuesday, April 27, the committee is meeting to study the subject matter of Bill C-30, an act to implement certain provisions of the budget tabled in Parliament on April 19, 2021 and other measures.

Today's meeting is taking place in a hybrid format, pursuant to the House Order of January 25, 2021. Therefore, members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. The website will show the person speaking rather than the entirety of the committee. We ask folks not to take photographs of the screen, or screenshots.

With that, in this panel we are dealing with part 4, divisions 1, 2, 3, 4, 8 and 9.

We have eight officials from the Department of Finance: Jean-François Girard, senior director, financial stability and capital markets; Julie Trepanier, director, payments policy, financial systems division; Nicolas Moreau, director general, funds management division; Kathleen Wrye, acting director, pensions policy, financial systems division; Erin O'Brien, director general, financial services division; Manuel Dussault, senior director, financial institutions division; Richard Bilodeau, director general, financial institutions division; and Neil Mackinnon, senior adviser, financial crimes governance and operations.

To the witnesses, thank you very much for coming. We appreciate your efforts in this new and somewhat complicated era that we find ourselves in.

We will start with part 4—

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

On a point of order, Chair, before you begin, I wonder if you could just give the committee a bit of an outline of how you see the rest of the week unfolding. Has there been any thought given to the grouping of witnesses in the days to come? Don't take long; I just thought maybe right from the outset you could help us plan our week.

[The Chair, Liberal, Wayne Easter]

Okay. As I think everyone knows, today it's the Finance officials going through all the various divisions that we didn't get through in the budget implementation bill. Tomorrow it's two sessions, with two panels each session. The first is from 11 a.m. to 12:30 p.m.—that's 12:30 p.m. to 2 p.m. you guys' time—and then there's the session in the afternoon. I don't have that in front of me.

It's all witnesses from the public, taken from the witnesses who were proposed by the various parties. They are not according to themes. It just became too complicated to do that. They're general witnesses of interest to the parties. They're also ones who may have asked if they could appear. There will be roughly 12 witnesses in a three-hour session. It will be 24 witnesses tomorrow, 24 on Thursday and 12 on Friday. Then we have the meeting on Tuesday as well.

Jamie Fox, who I think was on Ed Fast's list, is the fisheries minister here. I spoke with him this morning. I'd like to have a separate hour for a minister, but given the number of witnesses we have, he's okay if we mix him in with another panel on Friday or Tuesday.

That's basically where we're at. I think it would be better to do it with themes, but given the time frame, it seems impossible to do that.

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Thank you, Wayne. I understand.

[The Chair, Liberal, Wayne Easter]

We will start with part 4, division 1, “Stability and Efficiency of the Financial Sector”, on changes to the Canada Deposit Insurance Corporation Act.

I'm not sure who's up from the department, but just state your name and go ahead.

For the committee's information, instead of our regular slots and questions, we will take questions as they arise, as we did for part 1 of the BIA.

Who's on? You'll have to yell, because I can't see all of you on my screen at the moment.

[Julie Trepanier, Director, Payments Policy, Financial Systems Division, Financial Sector Policy Branch, Department of Finance]

Chair, it's Julie Trepanier. I'm the director of payments policy. I'm joined by Jean-François Girard, senior director. I believe he had some difficulties connecting, so I don't know if he's on.

[The Chair, Liberal, Wayne Easter]

Julie, we'll go with you. If you want us to delay part 4, division 1 for a bit to see if he comes on, we can.

[Julie Trepanier]

Maybe that's a good idea. Thank you, Chair.

[The Chair, Liberal, Wayne Easter]

Maybe he's needed for the next one too.

We'll go to division 2 of part 4, on changes to the Bank of Canada Act.

[Nicolas Moreau, Director General, Funds Management Division, Financial Sector Policy Branch, Department of Finance]

Mr. Chair, I'm Nicolas Moreau from the Department of Finance. I'm the director general of the funds management division. I'll take care of division 2 with my colleague Kathleen Wrye from the pensions section.

I'll provide you with a brief overview of the changes that we're requiring here, and I'll be happy to take your questions after.

I will speak in French as there are interpreters.

Sections 140 to 150 of division 2 of part 4 deal with the modernization of the unclaimed amounts program and seeks to bring legislative changes to increase the efficiency of the program and also allow Canadians to recover amounts that they had lost or forgotten.

Unclaimed amounts are assets that were deposited in accounts with federally regulated financial institutions that are inactive for 10 years. After 10 years of inactivity, the assets are transferred to the Bank of Canada, which holds all unclaimed assets that were initially deposited with federally regulated banks and trust or loan companies.

The new clause proposes legislative amendments to improve and expand the unclaimed amounts program. Division 2 of part 4 of Bill C-30 contains amendments to the Bank of Canada Act giving the Bank of Canada the explicit authorization to publish information online about unclaimed assets.

The Pension Benefits Standard Act, 1985 would also be changed in order to provide a legislative framework for federally regulated pension plans. This framework would, under certain conditions, allow balances of unclaimed pensions to be transferred to a designated entity who could request that the balance be paid out.

Lastly, the Bank Act and the Trust Company Act would also be amended in order to expand the definition of unclaimed assets, which would henceforth include foreign currency deposits and assets, and would obligate financial institutions to inform the account holders via electronic means, such as by email, as well as by post, and to contact the Bank of Canada to provide more information, including the date of birth and the social insurance number of the account holder, which would make claim validation easier.

This brings me to the end of my description of division 2 of part 4 of Bill C-30.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Moreau.

Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

I'm wondering if the officials can explain to the committee how much of an effort is made to find the rightful owners of inactive accounts. What degree of effort is made? Also, what dollar amount are we typically looking at on an annual basis?

[Nicolas Moreau]

What efforts are being made? There are two parts here. There's the first part, in which the money is sitting in a financial institution. Within the first 10 years, the financial institution is required to send a reminder to the individual via mail at years 2, 5, 9 and 10. If the owner of that unclaimed fund is not responding, then the money will be transferred to the Bank of Canada.

When it's in the Bank of Canada, the bank has a list, currently published on its website, that will provide the names and the amounts that have not been claimed yet. In terms of the amount that we have, overall the bank right now has about $2.2 million sitting in unclaimed accounts. On an annual basis, a bit less than $1 million is transferred to the receiver general's account.

You need to understand that when an unclaimed account balance is less than $1,000, the bank is required to hold this account for a period of 30 years before transferring the account to the receiver general. If it's more than $1,000, the bank needs to hold this account for a period of 100 years.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

[The Chair, Liberal, Wayne Easter]

I don't think it's likely that the person who originally deposited it is going to claim it after 100 years.

Ms. Jansen.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

What is the process if someone comes after 11 or 12 years? Maybe they've been out doing missionary work in the Amazon or something like that, and you couldn't contact them. Can they get that money back?

[Nicolas Moreau]

They can. Basically, there's a process with the Bank of Canada. They need to validate that they are the owner of this account. They need to provide the information that the Bank of Canada will ask for.

That said, it takes a lot of time to make that validation, because the Bank of Canada doesn't have the social insurance number. They also don't have the date of birth of this individual. They need to rely on past transactions in the account. They need to rely also on this individual validating the last time they made a transaction in this account. It takes a lot of time to make the link between the owner and the person who is claiming this account.

The changes to the law that we're requesting in Bill C-30 would really expedite everything. They would force the financial institution to communicate the social insurance number to the Bank of Canada, as well as other information that will really help to make this transfer in the future.

[The Chair, Liberal, Wayne Easter]

Are there any other questions on division 2?

Okay, then we will go to division 3, changes to the Budget Implementation Act to exclude certain businesses from the application of a provision of the Bank Act.

Erin O'Brien, you're on.

[Erin O'Brien, Director General, Financial Services Division, Financial Sector Policy Branch, Department of Finance]

Thank you so much, Mr. Chair.

Good morning, everybody.

My name is Erin O'Brien. I'm the director general of the financial services division at the Department of Finance. I'm happy to talk to you about this small technical amendment.

The Government of Canada introduced amendments to the Bank Act back in 2018 to further advance consumers' rights and interests when dealing with their banks. The new financial consumer protection framework, which is not yet in force, is intended to protect retail consumers, including individuals in small and medium-sized businesses. Retail consumers typically lack the resources and sophistication to negotiate with banks on an equal footing. This technical amendment to the Bank Act would clarify that the statutory right to cancel a contract with the bank applies only to retail consumers, who are individuals in small and medium-sized businesses. It specifically excludes large businesses.

I'm happy to take your questions.

[The Chair, Liberal, Wayne Easter]

Are there any questions for Ms. O'Brien?

Mr. Fast and then Mr. Falk.

Go ahead, Ed.

[Ed Fast, Conservative, Abbotsford, BC]

Ms. O'Brien, can you clarify the definition of “large businesses”? Those are ones that have authorized credit of more than $1 million, more than 500 employees, and annual revenues of more than $50 million. Is that correct?

[Erin O'Brien]

That's correct. That's the definition that currently exists in the Bank Act.

[Ed Fast, Conservative, Abbotsford, BC]

Okay, and all three conditions have to be present for that to be considered a large corporation.

[Erin O'Brien]

That's right.

[Ted Falk, Conservative, Provencher, MB]

That was my question, too.

Thanks, Mr. Chair.