Finance Committee on March 17th, 2022

[The Chair, Liberal, Peter Fonseca]

I call this meeting to order.

Welcome to meeting number 31 of the House of Commons Standing Committee on Finance. Pursuant to the motion adopted in committee on Thursday, February 17, the committee is meeting to study the invocation of the Emergencies Act and related measures.

Today's meeting is taking place in a hybrid format pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely, using the Zoom application. The proceedings will be available via the House of Commons website. Just so that you're aware, the webcast will always show the person speaking, rather than the entirety of the committee.

Today's meeting is also taking place in a webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for active participants remain the same. Staff will be non-active participants and can therefore only view the meeting in gallery view. I'd like to take this opportunity to remind all participants in this meeting that screenshots or taking photos of your screen are not permitted.

Given the ongoing pandemic situation and in light of the recommendations from the health authorities, as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe, all those attending the meeting in person are to maintain two-metre physical distancing and must wear a non-medical mask when circulating in the room. It's highly recommended that the mask be worn at all times, including when seated. Participants must maintain proper hand hygiene by using the provided hand sanitizer at the room entrance. As the chair, I'll be enforcing these measures for the duration of the meeting, and I thank members in advance for their co-operation.

To ensure an orderly meeting, I'd like to outline a few rules to follow.

Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of the floor, English or French. If interpretation is lost, please inform me immediately and we will ensure that interpretation is properly restored before resuming proceedings. The “raise hand” feature at the bottom of the screen can be used at any time if you wish to speak or alert the chair.

For members participating in person, proceed as you usually would when the whole committee is meeting in person in the committee room. Keep in mind the Board of Internal Economy's guidelines on mask use and health protocols.

Before speaking, please wait until I recognize you by name. If you're on the video conference, please click on the microphone icon to unmute yourself. To those in the room, your microphone will be controlled as normal by the proceedings and verification officer. When speaking, please speak slowly and clearly. When you're not speaking, you mike should be on mute. I would remind you that all comments by members and witnesses should be addressed through the chair. With regard to a speaking list, the committee clerk and I will do the best we can to maintain a consolidated order of speaking for all members, whether they're participating virtually or in person.

I'd now like to welcome our witnesses. From the Automotive Parts Manufacturers' Association, President Flavio Volpe is with us. From the Canadian Credit Union Association, we have the president and chief executive officer Martha Durdin, and vice-president of government relations Michael Hatch. From GoFundMe, we have president Juan Benitez, and general counsel Kim Wilford.

Welcome.

At this time, the witnesses will have an opportunity to provide remarks for up to five minutes. We will start with the Automotive Parts Manufacturers' Association and Mr. Flavio Volpe.

[Flavio Volpe, President, Automotive Parts Manufacturers' Association]

Thank you, Chair, and members, for inviting me. I always appreciate the opportunity to have this forum and this platform.

In November 2021, Canada reciprocated an October announcement by the U.S. that unvaccinated cross-border truck drivers would no longer be allowed to cross the border without requiring quarantine, by January. Our industry expressed concern for the effect that might have, in an already tough time, on the mode of transport we rely on most for the critical export corridors that underpin our livelihoods.

At the time, I said this to the Toronto Star:

Trucking is the lifeblood of our industry. Cars get shipped via rail, parts get shipped by truck. This is hitting the industry at a time when supply chains are having the most difficulty they've had in a hundred years.

In fact, about half the production we make a year is exported that way, $18-billion worth or so in a normal year.

As the deadlines approached and affected drivers began to make themselves heard in public, I was circumspect in an interview with Automotive News:

What will happen here is, if we're down 20 per cent of truckers, industries like ours will have to up-bid our access to available drivers.

In a Sun Media interview, I expanded on my point and my concerns:

...the trucking shortages, now exacerbated by the mandates, will cost parts makers in both Canada and the United States. [Our] members will now be competing with those wanting to move all kinds of goods as they seek truck space and drivers.

I was, and still am, a strong supporter of vaccinations, but we caution that governments have to be sensitive and flexible to what is happening. It was always going to be a choppy transition, but the public health leadership in this country had, by most quantitative measures, placed Canada favourably in comparison with the United States and other major countries around the world. We took this latest hurdle as something we could absorb for the greater good.

In March 2020, when the COVID pandemic caught everyone unprepared, it was auto parts companies that initiated the largest peacetime mobilization of Canada's industrial capacity in response. Our call to action was echoed immediately by government. Within two weeks, parts companies began to make masks, shields, ventilators, vaccine coolers, swabs and gowns. Dozens did so without purchase orders. Our industry has served as the prime example of extraordinary civic duty, and we've done so proudly for the last two years.

This is the context in which we experienced the lawless blockade of the Ambassador Bridge by anti-government actors who cloaked themselves in a phony “truckers” cause that shut down Canada's most important cross-border asset for the first time since 9/11. That singular event in February, which seemingly paralyzed governments and law enforcement as well, cost the highly integrated automotive sector approximately $1 billion in unrecoverable production, and then cost approximately 100,000 Canadian automotive workers similar shift and pay losses.

On a regular day, about 10,000 actual truck drivers pick up and deliver $50 million in goods from Canadian parts companies and deliver them to their U.S. customers. They return with a similar load from U.S. factories to Canadian automakers. Those drivers were forced to stay home, unpaid, while people who pretended to be them forced them to lose actual work.

[Technical difficulty—Editor] inauthentic political actors in Ottawa who shamelessly egged on their social media followers, and then was carried out by a couple of dozen macroeconomically illiterate followers. Its cost to Canadian industry in shipments is dwarfed by its cost in goodwill.

It was unfortunate that a court order secured on February 14, 2022, by the APMA as lead plaintiff was required to kick-start the enforcement of the law in Windsor. We need to have a better overall mitigation plan in place amongst all levels of government to avoid future “freedom barbecues” from blockading critical public infrastructure.

Next week I will meet with the White House for the first time since this blockade ended to talk about how we continue to build an electrified Canada-U.S. auto sector together. I thought it best to let the dust settle and the embarrassment subside before I returned to Washington to lecture Americans about their trade obligations to Canada.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Volpe.

I also want to say congratulations. It's your birthday today, I understand. For taking this time on this special day of yours and joining our committee as one of our witnesses today, happy birthday on behalf of everyone.

[Flavio Volpe]

Thank you. We can't stop time, so I appreciate your marking it.

[The Chair, Liberal, Peter Fonseca]

That's right; we can't stop time.

We will now move to the Canadian Credit Union Association for their remarks.

You have up to five minutes, please.

[Martha Durdin, President and Chief Executive Officer, Canadian Credit Union Association]

Thanks very much, Mr. Chair.

Thank you, members of the committee, for the invitation to speak with you today. My name is Martha Durdin.

I am the president and chief executive officer of the Canadian Credit Union Association.

Joining me today is Michael Hatch, vice-president of government relations.

The CCUA represents 219 credit unions and caisses populaires outside of Quebec. Credit unions contribute nearly $7 billion to Canada's economy by providing deposit, loan and wealth management services to over 5.9 million Canadians. Collectively, credit unions and regional centrals employ nearly 30,000 people and manage over $280 billion in sector assets.

Credit unions are co-operatives. In other words, the people who bank with credit unions are the same people who own them. Being accountable to our member owners, as opposed to shareholders, results in customer service that is second to none. We consistently rank at the very top of surveys of customer satisfaction for financial services.

For rural members of this committee, it's important to note that in almost 400 communities across Canada, credit unions are the only on-the-ground providers of financial services to households and small businesses.

We worked closely with financial officials and the RCMP last month as the Emergencies Act measures were rolled out. We'd like to thank the minister and her team for keeping in regular contact with us in the heat of the crisis. We're particularly grateful to senior Finance Canada officials who provided, on short notice, an in-depth briefing to our members on the financial components of the measures. It was attended by over 600 representatives from across Canada.

We also have constructive feedback to provide on other elements of the process. In the early days of the crisis, there was the impression, not uncommon in our dealings with the federal government, that the large six banks were consulted or informed days before credit unions and other financial institutions were. Credit unions represent almost half the financial sector in some provinces, and millions of Canadian consumers. We need to be at the table in discussions with Ottawa at the same level as the federally regulated banks in all matters that directly impact our operations and our members, particularly in a time of crisis such as this.

When the measures were first announced, it was very unclear to whom the financial sanctions applied. Eventually it became clear that they were aimed at a very small list of individuals and entities. However, in the early days, there was some degree of panic among some Canadians that their accounts may be frozen due to such things as small donations to the convoy. In those important days, the government was less than clear about the intended targets of financial measures under the Emergencies Act.

Many of our members expressed this concern, and many Canadians made significant withdrawals from credit unions as a result, sometimes in the hundreds of thousands of dollars, and on a few occasions millions. While these withdrawals did not cause liquidity issues at all for credit unions, staff had to manage many very unhappy members. Better and much clearer communications from the government could have mitigated this.

One credit union leader wrote to us: “We had a tremendous amount of members very seriously concerned regarding the government's ability to seize accounts; it brought forward a large sense of mistrust with the government that they could just seize individuals accounts.”

The government also granted a significant level of discretion to financial institutions regarding whose accounts to freeze. This further contributed to confusion and to possibly an uneven application of the financial components of the measures. Many would have appreciated further guidance from the government on precisely which accounts would be frozen.

In the end, a relatively small number of credit union accounts were frozen. For a short period of time, our members froze a total of 10 accounts with a total value of less than half a million dollars.

We hope this feedback is helpful to the government and to the committee.

We're happy to take your questions, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

Thank you.

[Martha Durdin]

I know it's not the purpose of this committee's current work, but I just want to say that credit unions do stand with our Ukrainian Canadians. We have Ukrainian credit unions in Canada. We condemn, in the strongest terms, the war against the people of Ukraine.

Thank you.

[The Chair, Liberal, Peter Fonseca]

Ms. Durdin, thanks for those remarks. We do have one of those Ukrainian credit unions right here in my riding of Mississauga East—Cooksville, which we are very proud of. Thank you for your opening remarks and for being with us today.

We will now move to GoFundMe.

You have up to five minutes for your opening remarks.

[Juan Benitez, President, GoFundMe]

Good morning, Mr. Chair and members of the committee. It is our pleasure to join you all today to discuss important matters related to the “freedom convoy” fundraiser and social fundraising in Canada.

My name is Juan Benitez. I'm the president of GoFundMe. I am joined by Kim Wilford, GoFundMe's general counsel. On behalf of everyone at GoFundMe, we want to acknowledge the impact of the so-called freedom convoy on the citizens of Canada, in particular the residents of Ottawa and each of you.

GoFundMe is the world's most recognized and most trusted fundraising platform. Our mission is to help people help each other with a goal of being the most helpful place in the world. We are humbled that GoFundMe has become a noun, synonymous with receiving help and assisting communities. That impact is far-reaching, as we have delivered over $17 billion in assistance to communities in 19 countries since the company began over a decade ago.

In Canada we are now delivering well over $200 million in community assistance each year, including for such significant events as the Humboldt Broncos fundraiser in 2018 that raised over $15 million, as well as the hundreds of other campaigns that help friends and family members with their needs and dreams every day.

Before we provide a timeline of events for the "freedom convoy" fundraiser, I would like to thank Ottawa authorities, notably interim police chief Bell, Mayor Watson and their teams for their collaboration and transparency. I also want to say that all our decisions and policies are guided by our terms of service, which are posted publicly and outline what is permissible and what is prohibited on our platform. Fundraisers relating to misinformation, hate speech, violence and more are prohibited by our terms of service.

The "freedom convoy" fundraiser was created on January 14. We began actively monitoring it the next day, based on significant fundraiser activity. Our initial analysis concluded that the fundraiser was within our terms of service and could remain active. On January 27 we initiated distribution of $1 million through our payment processing partner. It was disbursed to the financial institution designated by the "freedom convoy" fundraiser organizer. It is our understanding that TD Bank has applied to an Ontario court to surrender the money that was in the organizer's account.

Following this disbursement, public statements from the fundraiser organizer began to shift in tone, and on February 2 we suspended the fundraiser. This effectively meant that all future donations and withdrawals were paused. From February 2 through February 4, we heard from local authorities that what had begun as a peaceful movement had shifted into something else. They shared reports of violence, harassment, misinformation and threatening behaviour by individuals associated with this movement.

During this time, we also commenced a review of where donations were coming from. Our records show that 88% of donated funds originated in Canada, and 86% of donors were from Canada.

On February 4, following concerning dialogue with the fundraiser organizer and her team, as well as continued updates from law enforcement and local authorities, it became clear that the fundraiser no longer complied with our terms of service. We removed the fundraiser from our platform, and on the following day initiated refunds to all donors via our payment processing partner, including all transaction processing fees, tips and the $1 million already paid out. When the Emergencies Act was invoked on February 14, we immediately pre-registered with FINTRAC, as was required at that time.

GoFundMe aspires to be the benchmark for responsible operations in the social fundraising industry. Over 80 of our 400 employees are dedicated to policy creation and enforcement, data privacy, information security, regulatory compliance and prevention of payment fraud, financial crimes and money laundering. We employ industry experts, and consider ourselves experts and innovators in these areas.

Beyond the investments we make at GoFundMe for trust, safety and compliance, there are multiple layers in the regulatory framework surrounding social fundraising. All donations are processed, held and paid out by our payment processing partners. This means that GoFundMe does not directly interact with or hold any funds collected from donors, and nor are we ever able to redirect those funds. While GoFundMe is not currently required to report to FINTRAC, it is our understanding that in Canada, the authorized payment method used for donating and the financial institution that receives the donated funds are both regulated by FINTRAC.

In summary, GoFundMe controls, payment processor controls and banking system controls are the three layers involved in social fundraising operations focused on ensuring regulatory compliance. We believe responsible action is core to social fundraising, and we run our business accordingly. We proactively invest in the relevant processes, teams and tools to be the industry leader in this area.

There will always be opportunities to learn and improve, and we hope the committee acknowledges the responsible actions we took in close consultation with local authorities. While this committee and the Canadian government make decisions about how to move forward, we are happy to contribute our expertise. We look forward to continuing our assistance to Canadian communities.

We look forward to the committee's questions.

[The Chair, Liberal, Peter Fonseca]

Thank you, president Benitez and all of the witnesses, for your opening remarks.

We are moving now to our first round of questions from members. Each party will have up to six minutes to ask the witnesses questions.

We are starting with the Conservatives and MP Fast for up to six minutes.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, Mr. Chair.

Welcome to all of our witnesses. I appreciate your willingness to appear.

My first question is for Mr. Benitez. Thank you for your testimony.

You mentioned that 88% of funds originated in Canada, and over 80% of the donors were from Canada. Is that correct?

[Juan Benitez]

Yes. Thank you for that confirmation.

Yes, 88% of donated funds originated in Canada, and 86% of the donors to the campaign were from Canada.

[Ed Fast, Conservative, Abbotsford, BC]

There was some suggestion in the media and elsewhere that [Technical difficulty—Editor] in funding the convoy. Is there any evidence that this is the case as it relates to the fundraising that was done through GoFundMe?

[Juan Benitez]

When we did our analysis of the source of funds that were donated to this campaign, we worked closely with payment processing partners and related financial institutions to assess the sources of donations based on the financial instruments that were used. For example, a credit card number will have a BIN associated with it, which reflects the banking institution that issued that credit card. We believe the analysis we did in consultation with our payment processing partners is accurate.

I would also add that we proactively did an analysis on the other potential foreign sources of funds for this campaign, given the unprecedented nature of the campaign, the speed at which it evolved and the impact that it ultimately had on Canada and, specifically, the community in Ottawa. We found, as reflected in the numbers shared with the committee in my opening statement, that there was not a significant foreign contribution.

[Ed Fast, Conservative, Abbotsford, BC]

When you looked at the foreign contributions and the less than 20% of foreign donors—or whatever number, maybe 22%—were there any large donors that would have stuck out and would have raised red flags in trying to influence the outcome of this protest?

[Juan Benitez]

No, we did not discover that. Once we reviewed the donations, we did not identify significant donations or patterns that were there.

I believe Ms. Wilford might know the largest donation that we took on the campaign from a non-Canadian source.

[Kim Wilford, General Counsel, GoFundMe]

Thank you, Juan.

Thank you for the question.

The largest donation in this campaign was from a Canadian, and it was in the amount of $30,000. I don't have the—

[Ed Fast, Conservative, Abbotsford, BC]

That was the largest donation.

[Kim Wilford]

That was the largest donation. Yes.

[Ed Fast, Conservative, Abbotsford, BC]

We're not talking about million-dollar donations that flowed in, trying to influence the events in Canada.

[Kim Wilford]

No. That's correct.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you for that.

You also mentioned that you effectively froze the fundraiser once you discovered that there was what you referred to as “violence” and “harassment”, and that there were a number of other concerns that you had. Where did that information come from? Was it from police authorities or other government authorities? Did it come from the media?

How did you establish the fact that there was a credible evidentiary problem with this convoy?

[Kim Wilford]

When this fundraiser was created on January 14, it was within our acceptable terms of use. There was nothing in our original diligence around the fundraiser organizer or anything in the campaign content that suggested that it violated our terms. The donation velocity is what caused it to get the attention of our internal teams. The next day, we started communicating with the fundraiser organizer and her team. It was on January 27, as Mr. Benitez said, that we initiated the $1-million distribution from the campaign.

On January 31, our teams became aware of a statement by Ottawa police that caused us to want to reach out and talk to them to receive credible information about what was actually occurring. There was a lot of misinformation around this campaign and GoFundMe's role in it, so we were trying to get credible, consistent information from the authorities on the ground.

On February 2, our team spoke to local law enforcement and interim police chief Bell. On February 3, I spoke to Mayor Watson. On February 4, we again spoke to the local police in Ottawa.

However, as Mr. Benitez said, that first conversation with the local police is when we suspended the campaign on February 2. That stopped it from accepting any future donations and stopped any future disbursements from going out. We continued to do our diligence until we realized it had violated our terms and removed it from the platform on February 4.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you.

Mr. Chair, how much time do I have?