Finance Committee on Feb. 24th, 2022

[Heath MacDonald, Liberal, Malpeque, PE]

How much time do I have, Chair?

[The Chair, Liberal, Peter Fonseca]

MP MacDonald, you have 40 seconds.

[Heath MacDonald, Liberal, Malpeque, PE]

In general, how far behind are we on regulations to keep up with things like cryptocurrencies and foreign monies coming into Canada to disrupt our economy and our society?

[Donna Achimov]

Mr. Chair, thank you. I'll take that question.

I mentioned earlier that we have a regular pulse with our international colleagues and our Five Eyes colleagues. Canada was amongst the first to recognize the fact that we did see this as a key element. That's why we do have virtual currencies as part of our supervision framework.

Really, everyone has different systems across the world. There isn't a harmonized approach, but I think it's safe to say that we were one of the first countries to recognize the importance of this and the supervisory framework as part of a deterrent.

[The Chair, Liberal, Peter Fonseca]

Thank you.

[Barry MacKillop]

If I may, Mr.—

[The Chair, Liberal, Peter Fonseca]

That's the time, but maybe in another round or with another questioner you could add.

Thank you, MP MacDonald.

We have Monsieur Ste-Marie for two and a half minutes.

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

Thank you, Mr. Chair.

On February 10, before the emergency measures order came into effect, Ontario obtained a court order to freeze the two main convoy crowdfunding accounts on the GiveSendGo platform, the platform you were talking about, Mr. MacKillop. The order was granted pursuant to the regular legislation and was enforced under the normal co‑operation agreements between Canada and the United States regarding financial crime.

Have you played any role in this process, either directly or indirectly? If so, what has it been?

[Barry MacKillop]

No, we haven't played any role in either the order or the actions taken by the financial institutions.

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

What discussions, communications and shared work are you engaged in with securities regulators, such as the Autorité des marchés financiers, with respect to the oversight and regulation of crowdfunding platforms?

[Donna Achimov]

We're working closely with our provincial counterparts. We have information‑sharing agreements not only with respect to the fight against money laundering, but also with respect to the training of our officers and best practices.

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

When it comes to cryptoassets or cryptocurrencies, I imagine that you have the same type of relationship with the provincial securities regulators. Is that right?

[Donna Achimov]

Yes, we have agreements with several provincial counterparts. As I said, for us, these agreements are very effective for sharing best practices, training our officers and learning about trends in virtual currency.

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

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Ste‑Marie.

We are moving now to the NDP and MP Blaikie for two and a half minutes.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Thank you very much.

You've mentioned before, on a few occasions, that with crowdsourcing platforms and payment processors there are points of contact with financial institutions. They do have reporting obligations to FINTRAC.

Do you believe that the exclusion of crowdsourcing platforms and payment processors from reporting obligations to FINTRAC creates blind spots that make it difficult for FINTRAC to carry out its mandate?

[Donna Achimov]

I think they're early days. We are, as I mentioned, looking at various aspects of virtual currency and money services businesses and how those interact. Certainly, as a country and as a regulator, we have an obligation to look at emerging trends, and certainly there are a number of early lessons associated with a whole host of interactions with virtual currencies, and that's going to evolve.

New platforms, new mechanisms and new exchanges are going to take place. I think it is up to us to look at some of the best practices from other organizations, as well as ours, and to evolve as the technology evolves and as the world evolves.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In the aftermath of the emergency orders, I think one of our really important responsibilities here is to look at what happened and to try to make recommendations, so that if powers like these ever have to be used again, they can be done and used in the best possible way, in a way that respects maximally the rights of Canadians.

I'm wondering if you have any recommendations coming out of this process, from where you sit, on how future uses of emergency measures should roll out, including whether that's via better government communication or different ways of implementing a similar order.

[Donna Achimov]

Mr. Chair, I would say that we are part of a number of government organizations, a part of 13 government organizations, and I think we all will, and continue to, look at lessons learned and assess our operations, as well as those in that whole continuum. I believe we will all look at.... Not just because of this incident, but as we look at the evolving digital space and cyberspace, we're all sharing observations and looking at ways of shoring up or addressing potential loopholes and vulnerabilities. That's an ongoing part of our business, and it has to be, in this fast-paced world of crypto and digital.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Blaikie.

We're moving now to the Conservatives.

We have MP Chambers for five minutes.

[Adam Chambers, Conservative, Simcoe North, ON]

Thank you, Mr. Chair.

Thank you to our witnesses.

First, I'd also like to mention that we often make headlines in this place for disagreeing with each other, but I think you've seen a multipartisan, unanimous condemnation of what is happening in Ukraine. Like my colleagues, I stand with the government and with the Prime Minister in any response that is necessary to push back on this Russian aggression, which is unparalleled and unprecedented and needs to be met with serious consequences.

Thank you to our witnesses for appearing again. It's nice to see you back at this committee. Thank you for your testimony thus far.

My questions will be backward-looking a bit, but also forward-looking, as I just want to confirm that I understand some of the gaps we've identified or that have been discussed.

Setting aside the emergency order, if a transaction had met the threshold for reporting in the general sense, even if it came from a crowdfunding platform but ended up in a Canadian bank account, that would have been reported through the regular regime. Is that correct?

[Barry MacKillop]

That is correct. We would expect our reporting entities to report those transactions to us if they meet their threshold for so doing.

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

Okay. Obviously, then, transactions that would have fallen below that threshold would not have been reported. It's similar....

[Barry MacKillop]

Yes, unless it was a pattern of transactions below a threshold that would lead them to meet their grounds for suspicion.

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

Okay. Thank you.

That would be the same for transactions that originate and have a destination within Canada and then outside of Canada as well.