Finance Committee on April 11th, 2024

[Konstadin Kantzavelos]

Our costs are the same. Our costs are the same for utilities, believe it or not, because of things like that. We've had to be—

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

You've made the changes, then, to how your business is operated.

[Konstadin Kantzavelos]

Believe it or not, these changes were already part of our day-to-day existence. Where we've seen higher costs, obviously, is with materials such as hangers and the stuff that we wrap our garments with when they're picked up.

When it comes to utilities, our biggest expense right now, for the facilities that have pickup and delivery services, is obviously gasoline. However, operating the plant has been extremely steady, and that's why we've been able to keep our prices down.

[Dave Epp, Conservative, Chatham-Kent—Leamington, ON]

Thank you. The carbon tax would affect it.

However, I do want to save my last few seconds for Mr. Perkins.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you.

[The Chair, Liberal, Peter Fonseca]

You have 30 seconds.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I have a quick question for Dr. German. We have a big money-laundering issue going on with organized crime in the lobster and eel fishery in southern Nova Scotia, where organized crime is paying fishermen cash, bad money, and then the product is being bought from organized crime by outside money.

How would FINTRAC manage to help that issue at all, when everything's being done through cash and product?

[The Chair, Liberal, Peter Fonseca]

Please give a very short answer, Dr. German.

[Dr. Peter German]

Cash eventually makes it into the mainstream financial situation one way or another, and that's where banks become involved, and so forth. I'll stop there.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Now we have to go to MP Weiler, please.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you, Chair.

I want to thank all our witnesses for being here today. I just wish we had more time to ask questions of everybody.

I would like to direct my questions to Dr. German, and perhaps we'll have a longer discussion once we get into the parliamentary review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

I appreciate your feedback on the third party money-laundering changes, the undertaking requirement and the white-label ATMs now being included in the proceeds of crime act.

You said, “We are tweaking our legislation; we are not grabbing it, shaking it and making sure it is effective.” I'll take the bait here. When you mention that, what would it look like to you if we were “grabbing it, shaking it and making sure it is effective”?

[Dr. Peter German]

Thank you very much, Mr. Weiler. I believe it's on your invitation that I'm here, so I appreciate that. I also know the work that a certain Professor Weiler has been doing in this area, so thank you for all that you do.

I really think, and have advocated for quite some time, that Canada needs a national strategy. It has to be both federal and provincial. You can't have some provinces doing civil forfeiture and others not. We have two provinces at this point that have no civil forfeiture legislation. Then, in the criminal realm, you see prosecutions for money laundering in Ontario, but you don't see them in British Columbia. You need a holistic approach, for one thing.

Then, what are the problems? Let's, as I say, fundamentally shake the legislation. The United States is able to deal with money-laundering asset forfeiture quite efficiently, and these are complex cases that it deals with. However, there are a lot of constraints in our criminal justice system that make it very difficult for police to investigate and for prosecutors to prosecute. A lot of it is symptomatic of the larger systems, such as disclosure, time frames, and the difficulty of obtaining production orders and search warrants. So, there are a whole plethora of things that we really should be looking at to properly deal with this.

Certainly, there have been complaints about aspects of the proceeds of crime legislation for a long time. Something as simple as this.... If you look at the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, you will see that there are certain businesses that have to report cash over $10,000, but not all have to. For example, the car industry is exempted. Out here, we have seen cars purchased with cash for $250,000, and it's dirty money. By the time it reaches the bank, it's clean money; it has gone through the car dealership. So, we have this haphazard system. We have to just shake it and really get serious.

I do work in other parts of the world. You will see in developing countries that they have all the legislation, but then when you dig down, nothing is being enforced. Nothing is happening. However, to the outside eye, it looks good. In some ways, that's where we're at right now. It looks good, but when you dig down, nothing is happening, in a manner of speaking.

[The Chair, Liberal, Peter Fonseca]

That's your time, MP Weiler.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you for that, Dr. German.

We're now off to MP Ste-Marie, please.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you, Mr. Chair.

I'm going to continue with Mr. German.

I was quite blown away by your presentation and all your answers to my fellow members' excellent questions.

Coming back to Bill C-59, I have a two-part question for you.

First, what would you recommend to improve the bill in terms of amendments? If you don't have them all now, it would be appreciated if you could get back to the committee in writing.

Second, what measures should Canada and the other levels of government implement to better combat money laundering, based on the experience of the European Union, the United States and other jurisdictions?

[Dr. Peter German]

Thank you, Mr. Ste‑Marie.

I appreciate that.

I'm happy to provide some more information in writing.

I think, at this point, it's just important to pass what you have, but I don't think it's perfect. Similar to what Mr. Davies suggested.... You look at just the wording and you get into the technical aspects of it, and I just wonder whether it's really going to have the impact that we want it to or whether it's going to get mired down like a lot of this stuff gets mired down.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Thank you.

Broadly speaking, what could we learn from jurisdictions like the European Union in implementing measures here?

[Dr. Peter German]

Again, I'll go back to the need for a national strategy. I would include corruption in that—money laundering, corruption, financial crime, if you wish, but certainly the money-laundering aspect. We've been advocating for that, and getting the provinces and the feds together. This is not any one party's problem or any one government's problem. It's a holistic problem. It's something that we all have to look at.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

That's very clear. Thank you very much, and I wish you much success in the important work you're doing.

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie.

Now we'll go to MP Davies, who will be our final questioner.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thanks, Mr. Chair.

Dr. German, I'm just going to pinch off this piece on this “markedly unusual” test, because I'm starting to get increasingly concerned. This area of legislation is so important, but I'm just wondering whether we are setting the stage for interminable litigation over imprecise language. The test is whether behaviour is “markedly unusual or...inconsistent with lawful activities”. I think the “inconsistent with lawful activities” part is fairly clear, but I'm starting to get a little nervous about “markedly unusual”.

We do have an opportunity in the next couple of weeks to make amendments to this legislation. Would you recommend that we maybe search for some more precise language or, as you said, should we pass it as is and, I guess, see what the courts decide?

[Dr. Peter German]

If there's an opportunity for amendment, definitely, I do think that something could be done. I think it's cautious legislation right now. The word “markedly” does concern me. Last night, I was looking at some U.S. legislation dealing with third party money laundering, and the courts have not been quite so harsh or restrictive as “markedly”.

I do think we could look at some amendments. I'm happy to send some correspondence to the committee with some suggestions.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'd appreciate it if you have any suggestions in that regard. I've been in Parliament 16 years and I'm not sure we're the best arbiters of what “markedly unusual” is.

Do I have any time left, Mr. Chair?

[The Chair, Liberal, Peter Fonseca]

Yes.