Finance Committee on March 7th, 2022

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

Thank you very much.

Thank you to our witness for being here today.

You said earlier that financial institutions had a duty to freeze the accounts of people who were either participating in illegal activities connected to the demonstration or funding illegal activities connected to the demonstration, and you said that the RCMP furnished banks with evidence to the effect of whether or not certain individuals were, in fact, doing those things. Were there other sources of information that banks accepted or sought out themselves on the basis of which they froze or would freeze any account, or was it understood that only names submitted by the RCMP for this purpose would result in actionable account freezing?

[Angelina Mason]

To clarify, we relied primarily on the names provided by the RCMP, but there were obligations under the order separate from that, which required banks to make their own determinations. We did not rely on external information. I know there have been suggestions of leaked donor lists, etc., but we did not rely on that information at all. What banks were obligated to do was to apply their normal risk-based approach in monitoring their accounts, as they would do for money laundering or what have you, and if, looking through the lens of the activities in Ottawa, something was then flagged, then there would be an obligation to freeze.

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

Were any accounts frozen for individuals whose names did not appear on the list of names submitted to banks by the RCMP?

[Angelina Mason]

Yes.

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

Do you have a sense of the number of those names?

[Angelina Mason]

There would be a small number. Again, we're in the customer business, so we wanted to make sure that our obligations here were limited and not in any way incorrectly going to the vast majority of our customers. Based on the numbers from the RCMP, there were 180 accounts out of our largest six domestic banks with over 60 million customers.

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

I think we heard in other testimony that the total number of accounts frozen was something like 206.

[Angelina Mason]

Right. That would include other financial institutions, not just banks.

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

Okay.

What would be the other kinds of information, or where would banks access that other information that feeds into their normal risk assessment?

[Angelina Mason]

Again, it would be unusual activity. It could be anything from a large deposit, which could happen if someone appeared to be using their personal deposit account as a fundraising mechanism. As I said, there would have to be a threshold applied; it wouldn't involve looking into minutiae.

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

You also mentioned earlier that accounts had been frozen under other authorities, like certain court orders. When accounts are frozen, are people notified under what authority the account has been frozen?

[Angelina Mason]

In this case, the order did not address notification, so as with other court orders, it was up to banks how they would deal with it through their usual processes. In some cases, some clients were notified after the fact; in other cases, they weren't.

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

So at the very least, it was administratively possible for banks to disclose to their clients that their accounts had been frozen under the authority of the Emergencies Act.

[Angelina Mason]

It was, insofar as doing that wasn't prohibited.

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

If the government had added that as a criterion or a requirement of the legislation, would that be something your members would have been able to comply with?

[Angelina Mason]

Yes, if it were a legal obligation, we would have to comply.

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

This is perhaps asking for a little bit of speculation from you, but do you think it would have been useful to banks' clients to know that their account was frozen under the authority of the Emergencies Act, or that if they wanted to pursue remedies against the government, for instance, if they felt that the freezing of their account had been inappropriate, that it would be useful documentation for them to have?

[Angelina Mason]

To clarify, I want to distinguish the difference between “notice” and “information”.

Even if a bank didn't notify their client, if a client contacted their bank and asked, “Why was my account frozen?”, the bank would tell them.

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

Okay, and that's true today. If someone has had their account frozen and they're not sure why, they'd call their bank and ask the question, and the bank would give them the answer of what authority that account was frozen under.

[Angelina Mason]

That's correct. Yes.

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

I think it was mentioned earlier...and this was the first time this particular act has ever been used, namely that we've had an emergency declared under this act.

Do you think, if it happens again and similar financial measures are put in place, that it would make sense for the government to require banks to notify clients that their accounts had been frozen as a result of the Emergencies Act?

[The Chair, Liberal, Peter Fonseca]

Give a short answer, please.

[Angelina Mason]

That's a policy point for the Department of Finance, which we would need to consult on.

[The Chair, Liberal, Peter Fonseca]

Thank you.

That's the time for our first round.

Thank you, MP Blaikie.

We are moving into our second round. In this round, we're starting with the Conservatives.

We have MP Lawrence up for five minutes.

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

Thank you very much.

I want to go through the process. The Emergencies Act is invoked, Ms. Mason, and then your members are contacted, presumably by the finance department, and told how the process works. Is that correct? Is that how it went down?