Finance Committee on Feb. 24th, 2022

[Barry MacKillop]

Yes, Mr. Chair, if their suspicions and their grounds for suspicions are met. Those are not considered threshold reports, unless they're outside of Canada or coming into Canada and they're over $10,000 within a 24-hour period, or if it's a large cash transaction of $10,000 or more.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Okay. Thank you.

We have heard about specific gaps. Since some of these transactions may have been identified, are there transactions that were not identified that ought to have been identified and that future legislation may address by including the crowdfunding platforms?

I'm trying to understand exactly what that gap might be that we're looking to address.

[Barry MacKillop]

Thank you, Mr. Chair.

It's hard to say right now, not knowing what transaction crowdsourcing or a PSP—payment service provider—would in fact see that is not currently seen. I think time will tell, and there is some additional work we have to do in looking at and working with them with regard to the transactions they do see and whether those transactions would allow them to meet their grounds for suspicion.

I would assume—and I'm guessing here—that on a normal crowdfunding page we would not likely see transactions of $10,000 or more being donated to a particular cause—

[Adam Chambers, Conservative, Simcoe North, ON]

Right.

Mr. Barry MacKillop —so we may not see significant numbers of threshold reports, but it is possible, and again, time will tell what types of transactions they see as to whether or not a pattern of transactions would lead to grounds for suspecting money laundering or terrorist financing.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Okay. Thank you.

Thinking ahead, if we address some of these gaps with legislation, I'm also thinking about potential other gaps that may still exist. I'm contemplating situations where an entity actually fundraises directly without the use of a fundraising platform and accepts donations, both domestic and foreign. What obligations would that entity have to report any suspicious activity to FINTRAC?

[Barry MacKillop]

Mr. Chair, it almost sounds like the question is referring to an existing entity that is a not-for-profit or a charity or something like that. In those cases, they are captured by virtue of having a bank account, or, if they have a cryptocurrency wallet and they want to transfer that money to a known suspicious wallet, the cryptocurrency dealers who report to us would likely catch those transactions and report them to us. For any not-for-profit or charity organization where, as we've seen in the past, our financial intelligence has been helpful in addressing charities that were being misused, the reporting we've received from our current financial institutions has been extremely useful in that sense.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you very much.

I believe that's my time, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Chambers, and thank you for your remarks on Ukraine.

We're now moving to the Liberals.

MP Baker, you have five minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thanks very much, Mr. Chair.

I too would like to make a brief statement, if I could.

I want to first thank my colleagues for their thoughtful and strong and supportive statements. MP Chambers took the words out of my mouth. I was going to say that we disagree on so much here at this committee and in the House and in public discourse, but this is something that we're all united on. It is so important. I think it means a lot to Canadians. They want to see us united on this issue.

I'm of Ukrainian descent. My grandparents, like so many people of Ukrainian descent, risked their lives and lost loved ones to that desire for freedom and independence. Of course, those with Ukrainian ancestry are touched by this very personally today, but I think this is something that concerns all of us and touches all of us. That's what we've heard from the comments here today from all members.

It touches us because we see a free and independent country being invaded unjustly and because of the humanitarian crisis. I think this is a threat to the international rules-based order that protects all of us. What we're seeing today is a threat to not only Ukraine but also to the rest of Europe and our allies and Canada. That's why I think it's so important that we take the steps necessary to make sure that Vladimir Putin doesn't win and that Ukraine is free and democratic and independent. I thank all members for their thoughtful statements.

With that, Chair, I'd like to move to my questions, if I may.

There has been quite a bit said and reported on with regard to the funding of the blockades coming from outside of Canada. Can you talk about FINTRAC's ability to examine or track suspicious transactions originating outside of the country?

[Barry MacKillop]

Mr. Chair, FINTRAC does not monitor transactions, nor do we have any ability to see transactions, going to any institution or any type of GoFundMe page or GiveSendGo page or any other crowdfunding platform. That is not within our mandate.

We do have very good partnerships with not only our Five Eyes but also a number of international financial intelligence units. FinCEN is one of our biggest partners in the U.S. Certainly, they were alive to this issue that was going on with regard to the blockades. We had discussions with them. They were certainly knowledgeable and alive to the fact that any suspicious activity reports they might receive, they would forward to us if these were applicable and would assist us in our intelligence job.

With regard to any activity coming from foreign donors or people living outside of Canada, these crowdfunding platforms are in fact available internationally. They are on the Internet. Anyone from around the world could have donated to what was initially a cause they felt they wanted to support. We would not see those donations, unless, of course, they were $10,000 or more and coming from outside Canada. For smaller donations made by individuals to support a cause they believe in, we would not see that unless it came into that particular cause and were deemed suspicious by the bank that was holding the bank account for that particular cause.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

That's helpful. Thank you.

In practical terms, I'm thinking about my constituents who might be watching today or Canadians who are watching today. They've heard a lot of news about FINTRAC's role in this. We've talked a fair bit about cryptocurrency, but in practical terms, what was the impact of the requirement to have crowdfunding or cryptocurrency platforms register with FINTRAC? What steps or actions were you able to take as a result?

[Donna Achimov]

I believe the initial act of registration and the conversations that were had meant that a number of crowdfunding platforms as well as payment service providers paid attention. They started to question. They came to us and wanted to understand what was required of them, what they had to do and how they were implicated. I believe it was a very early intervention in creating awareness, having those questions come in and helping those organizations self-identify fairly quickly to see if they were possibly covered and if they had activities they wanted to report.

We made it very easy. Before they were even registered, we enabled these new organizations to register any suspicious transactions that had surfaced.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Baker. Also, thank you for those heartfelt words on how Canada is supporting Ukraine and the work you're doing here on the ground.

We are moving, members, into our third round.

I have the Conservatives up, and I believe it's MP Lawrence?

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

It's MP Lewis.

[The Chair, Liberal, Peter Fonseca]

Oh, I'm sorry. I wasn't sure. I thought I had a change.

MP Lewis, I apologize, and welcome to the committee. It's great to have you here.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much, Mr. Chair.

Thank you, colleagues.

I'm going to echo that too, because if I didn't it would be wrong. I've been watching very closely this morning, unfortunately CNN, but you have to get your news somewhere. My heart is with all of the folks of Ukraine. Honestly, although we have work to do here, I would like to just be quiet for five minutes and just close my eyes in solidarity with each and every one of you to really think about the families being affected in Ukraine. I won't, but that's where my heart's at today, and I thank all my colleagues, especially Mr. Baker.

I can see the pain in your face, sir, so thanks for being open and honest and humble enough to really recognize where we're at.

First and foremost, I want to say thank you, friends. I've never been part of finance before, so perhaps I'm a little bit in left field. I do sit on the international trade committee, so if my questions are perhaps a little bit sideways, please forgive me on that front.

I want to tie in the international trade side of things. My riding of Essex is right beside the Ambassador Bridge, so you can appreciate where I'm coming from with this.

The first question I would ask is, if we highly regulate crowdfunding platforms in Canada, won't Canadians just switch to crowdsourcing platforms abroad? I don't know, Mr. Chair, who to address this to specifically, but whoever would like to take this first question, please do.

[Donna Achimov]

Maybe I'll just step back a little bit. When we look at supervision or regulation, we really do keep Canadian business first and foremost in our minds. We look at the need for policy change, the burden on business and privacy implications. Those three areas always come into play.

Certainly small businesses, medium businesses and corporations in Canada all have a role to play. I think it is incumbent on us to look at, as I mentioned earlier, emerging threats and risks and to try to find the right equilibrium in bringing forward reporting entities and their obligations to help fight financial crime.

[Chris Lewis, Conservative, Essex, ON]

Thank you so much for that.

Through you, Mr. Chair, I have a question for Mr. MacKillop. I think I'm directing the question to the right person.

I'm just curious. Do other countries, specifically the United States, have agencies similar to FINTRAC? If the United States does not, does anywhere else in the world? Do you have folks outside of Canada you lean on as well?

[Barry MacKillop]

Yes. Just about every country that's part of the Financial Action Task Force has a financial intelligence unit.

With respect to your question on whether or not they do what FINTRAC does, I would unabashedly say that FINTRAC is the best in the world in providing intelligence. We have international surveys indicating that.

We are one of the few that actually do financial intelligence to support our domestic law enforcement. Many of the financial intelligence units around the world specialize in supporting the international component and sharing internationally. We do that as well, but we do tactical financial intelligence support to law enforcement and national security agencies in Canada. We are relatively unique in doing that, certainly in terms of the number of disclosures we do a year and the number of investigations we're involved in with law enforcement. Also, we are unique internationally in the number of times we are recognized as a partner in successful investigations.

Yes, financial intelligence units do exist around the world, but I would say FINTRAC would be at the top in what we do and how we do it.

[Chris Lewis, Conservative, Essex, ON]

Well, that sure puts a smile on my face. We need some good news today, so thank you, Mr. MacKillop. That's excellent.

I have a very quick follow-up question to that then. At FINTRAC, are you able to talk to the other agencies, or is it a solid at the border, and you do your own thing and the other agencies do their own thing?

[Barry MacKillop]

Thank you for that.

No, we actually talk quite a bit with them. We certainly have our Five Eyes partners, of course, with whom we have a significant number of projects that are ongoing, whether they're on, for example, the tax-evasion side or the terrorist-financing side or even on trade-based money laundering, for example. There are sometimes connections all around the world in these cases, and we have worked and are working on cases that do touch a number of different countries. We work together and share that information.

We can query other countries, for example, if we have Canadians who are involved in using another country's banking system in order to hide their proceeds of crime. We can contact another country through the FIU. We get reports that we can then forward on to our own law enforcement in Canada, and they do the same. They do call us. We have constant contact, more so with our Five Eyes partners, of course. However, we deal with just about any country with which we have an MOU and with which we can share information and intelligence. They will do that. That's on the intelligence side.

We also have supervisory MOUs with our Five Eyes, whereby we can share supervision information as well as best practices, training and learning. We also work through the Egmont Group, which is a group of financial intelligence units around the world, to support them in their ongoing training as well as in terms of some of the standards and some of the work we do as international financial intelligence units.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much, Mr. MacKillop.

Thank you, Mr. Chair. I know I'm done.

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Lewis, for bringing that trade lens to our committee. We do have the Canada-Ukraine Free Trade Agreement that we're all very proud of.

With that we are moving to the Liberals and MP Chatel for five minutes.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Thank you, Mr. Chair.

First, I want to join all my colleagues in expressing my full solidarity with the Ukrainian people. Today, Ukraine is plunged into darkness and terror as a result of Russia's completely unjustified attack. President Putin's brazen disregard for international law, democracy and human life is inexcusable. Canada stands united behind the Ukrainian people. The entire international community must also join together to put an end to this terrible situation.

I want to thank the FINTRAC officials for being here today. I appreciate their experience and their essential work. I have some questions for them.

I was personally very concerned about foreigners and even far‑right groups funding illegal activities in Canada. Some of these activities, such as the blockades in Windsor, led to over $1 billion in economic damage. These aren't strictly terrorist activities or terrorist groups. They're people from foreign countries who fund activities that cause significant damage to our economy and put our institutions at risk.

If the GiveSendGo data leak and the Emergencies Act hadn't come into play, would the current tools have helped us identify the donors behind the platform?