Finance Committee on May 31st, 2024

[Ryan Williams, Conservative, Bay of Quinte, ON]

Are you aware that some of these AMPs are larger than the AMPs for FINTRAC, so that, for some companies that actually perform fraud, these are higher penalties?

[Werner Liedtke]

I wasn't aware of that, but certainly the Department of Finance would have done their studies to determine the appropriateness of the AMPs.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Given that in your opening round you said that FCAC is playing such an important part—and we agree that we need regulation and we need to get open banking going—is the $1 million allocated to your organization really testament to playing such an important part in this regulation in this first phase of study?

Just to compare, the U.K.'s open banking implementation entity, which is OBIE, was established, and they were funded with 60 billion pounds to start the same phase. Do you think that being provided only $1 million is enough?

[Werner Liedtke]

The million dollars we're receiving is just for the remaining of this fiscal year in order to do the preparatory work that we're going to do between now and the end of March. We will go back to the government in the fall to put in a full funding request for what we will need for our structure and our consumer awareness campaign and what the cost will be to sustain this operation. The million dollars is just for the next nine or 10 months or so.

[Ryan Williams, Conservative, Bay of Quinte, ON]

There have been reports.... This government keeps promising industry that it will have legislation implemented as soon as it can. It keeps kicking it down the line. Do you see this legislation coming in fall 2024?

[Werner Liedtke]

I don't have insight into the full legislative calendar. That would be under the responsibility of the Department of Finance.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Thank you.

Mr. Chair, do I have any time left?

[The Chair, Liberal, Peter Fonseca]

That's the time, but thank you.

Now we'll go to MP Thompson for the next six minutes.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

Welcome to the witnesses.

I need to start with you, Ms. Yetman.

Thank you for your comments; it's really nice to hear the positive. I quite agree with you that the attention on teachers is incredibly important. I thank you again for the link to food insecurity and the importance of the school lunch program.

In my province, in conversations that I'm having within the community, there is tremendous support for this and for the need to ensure that we have a cultural lens on how we present the program so that rural communities are very much part of this program and it doesn't just end up in urban areas—which is clearly where we've had more strength in programs in the past—but is about every child. I look forward to working through that going forward.

Even though my children are outside of the school system now, the shortages of teachers have been coming for quite a period of time. There's no doubt that rural communities see this more intensely than urban areas. There was the pandemic with the challenges of switching to remote learning, although I do think that what happened was phenomenal. Educators stepped up and really did so much to try to ensure that the children moved forward in their educations.

We saw a significant number of senior educators leave, which has just exacerbated the problem. Again, to your point, loan forgiveness is a really helpful way to encourage young educators to move to rural areas and begin to address the challenge. Would you comment on that and what you're hearing from teachers across the country?

Certainly, please give any additional comments you have on this and what we need to do moving forward to ensure that we really mitigate the shortage as much as we possibly can in the short term and build strengths going forward, so we don't end up in this place again.

[Heidi Yetman]

As you know, education is a provincial jurisdiction, and one of the things that has been happening over the last 10 to 20 years is systemic underfunding of education, unfortunately. That systemic underfunding has created, like I said in my opening statement, fewer resources for students and much more difficult working conditions.

If we look to the north, I was really lucky. I got to visit Nunavut this year to talk to the teachers up there. Teachers in the south, if you would like to call that the south, when there were no jobs in the south, would move up to the north. Some of them stayed because the north is quite an interesting place to work and an interesting place to live, like the Yukon and Northwest Territories. Now not as many people are going up north, and the reason is.... You just have to look across the country. In the fall of 2023, Quebec announced 8,500 teachers missing from the system.

In Ontario, for example, there are about 37,000 teachers who are part of the College of Teachers, but they're not in classrooms. Where have they gone? During the pandemic, as you said, teachers realized that they could do other things. They started exploring other job opportunities that were perhaps less stressful, and they didn't have to bring as much work home on the weekends and in the evenings, etc.

We are seeing a retention and recruitment crisis across Canada, and it's going to get worse because retirements are going to start going up. That's why the loan forgiveness program for the north is really important. If we want to attract teachers to the north, it's no longer what it was before where there were no jobs, and let's go to the north and see. I met teachers up there from Newfoundland and New Brunswick who have stayed their entire career up there. They went there as young teachers because there were no jobs in the south, and they stayed up there.

It's a really important little piece. I know that loan forgiveness is already there for nurses and doctors for that same reason, to gravitate people to remote communities and rural communities. Yes, unfortunately, education in this country is going through a bit of a crisis right now. These three things that I talked about—mental health, loan forgiveness and the universal school food program—are all going to be very helpful.

Even just speaking about the universal school food program, we know that classrooms are becoming more and more violent, unfortunately. Believe it or not, they are the little ones in kindergarten and grade one who lost two years of socialization. There was research in Toronto that showed that a food program brought down violence in schools. I think this is going to be good for classroom complexity as well.

I could go on. I like to talk.

[Joanne Thompson, Liberal, St. John's East, NL]

No, that's wonderful.

I have friends who went to the north for a year when they graduated and they're still there, to your point.

I want to touch on the students. They were absolutely impacted by shortages and I agree with you on the pandemic. I can't begin to imagine how difficult it is for students to have lost those couple of years, especially the little ones, but I think it's all the way through.

I agree that nutrition makes a difference. It makes a difference in someone's ability to just have attention, but also on behaviour.

I also want to link in the supports that we're talking about, certainly in government, around mental health, drug use and the role that teachers play in being able to detect when a child.... I understand it's often in elementary when a child begins to disengage and there's that separation from focus and attention. Then they become incredibly vulnerable to outside influences and to becoming part of drug usage. It's very early when that happens.

How can we support educators so that we work across departments and, together, have eyes on young people to really assist in all ways to keep them focused and in the school system?

[The Chair, Liberal, Peter Fonseca]

Thank you, Ms. Thompson.

You'll have to hold on to that because we're well over time. Maybe you can get to that answer in the second round.

We are going now to MP Ste-Marie, please.

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

Thank you, Mr. Chair.

I'd like to welcome all the witnesses and thank them for their testimony.

Professor Elgie, I really appreciated some of the points you raised. Amendments to that effect will certainly come up in the course of the debates that will be held during the clause‑by‑clause study of the bill.

My speaking time is limited and I'd like to ask the FCAC representatives some questions.

Mr. Liedtke, thank you for being here with some members of your team.

First of all, can you tell me how the decision to entrust your organization with responsibility for the framework on consumer-driven banking services came about?

[Werner Liedtke]

Thank you for the question.

The decision came from government. The Minister of Finance and the Department of Finance chose us to be the regulator.

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

Okay, thank you very much.

We all know that the sharing of financial data involves serious cybersecurity risks. What expertise does FCAC have in this area?

[Werner Liedtke]

Thank you for the question.

Currently, we don't have a lot of experience in cybersecurity ourselves, but certainly we will be developing that as part of our regulatory function and through the accreditation process.

Right now, if there are any cybersecurity issues within the financial system, OSFI plays a role in that and we participate as a financial partner.

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

Given that financial technology companies are not banks, they are not subject to federal authority. To your knowledge, did the government obtain agreement from the provinces, and particularly from Quebec, which has its own statutes under the Civil Code, before tabling this bill?

[Werner Liedtke]

Thank you for the question.

Currently, under the framework, the provincially regulated entities can opt in. They're not subject to our own market conduct activities.

That's why we're creating a completely new entity under the senior deputy commissioner for consumer-driven banking. It's to have that separation from our normal market conduct. They will still be under the jurisdiction of the provinces, but the very specific details with the provinces and the agreements are still being negotiated by the Department of Finance.

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

I was, of course, talking about financial technology companies and not financial institutions subject to provincial regulation, but I'll move on to that now.

Some officials briefed us on the notice of ways and means with respect to this bill. My understanding is that if a financial institution subject to provincial regulation wishes to adopt the open banking system, it would have to adhere to the federal framework. To do so, the province would have to give its consent and waive its own framework for the activity linked to the open banking system.

Is that your understanding of the situation?

[Werner Liedtke]

Thank you for the question.

What I meant to say was that the collaboration that is now taking place for the next stage of accreditation is taking place with the provinces and the Department of Finance to identify the specific rules for all enterprises that are going to be engaging in the framework. That collaboration and consultation is commencing now.

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

Thank you for your clear reply.

So the government is providing a strictly federal framework, which would lead the provinces to waive some parts of their areas of jurisdiction. Moreover, the consultations have only just begun. So the work hasn't been done upstream and that's causing serious problems.

Can you tell us, on the basis of the framework presented here, which provincial statutes would have to give way to the federal legislation?

[Werner Liedtke]

Thank you for the question.

The issue of the provincial-federal relations is under the purview of the Department of Finance, so I would defer that question to them.

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

Okay. Thank you.

Can you tell me who would handle the certification of technology companies? Would it be you, the federal government, or provincial regulatory organizations like the Autorité des marchés financiers?

[Werner Liedtke]

Thank you for the question.

The specific issues of accreditation are still being finalized, and the consultations are taking place with the provinces. Our expectation, based on the current framework that was published, was that we would be the accreditation authority, including those entities that opt in.

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

Will Quebec's Consumer Protection Act be applicable to open banking system activities?