Finance Committee on March 17th, 2022

[Flavio Volpe]

The automotive industry in Canada is very integrated with the American industry, as $50 million worth of auto parts cross the Ambassador Bridge every day, and about $50 million come back in the other direction. The blockade stopped carmaker plants in Michigan, Ohio, Illinois, Kentucky and further afield in Tennessee.

At this time, Canada is currently negotiating with the United States on its electrification plan and where those federal investments and the critical mineral assets are sourced from. The blockade event at the bridge highlighted to American lawmakers that they are vulnerable to an interruption. Because of that, we are now debating publicly with Michigan-based lawmakers who introduced an original EV tax-credit plan that was to be “America only”, and the blockade has given them fuel for their arguments.

The industry that I represent is 120 years old in this country and it has built a continental spine that does not operate with the border as a risk. It is now part of that discussion.

[Julie Dzerowicz, Liberal, Davenport, ON]

I'm not sure if you're able to answer this, but from your perspective, what was unusual about the blockade that you saw at the Ambassador Bridge? Was there anything unusual about it?

[Flavio Volpe]

First of all, it was publicly disavowed by the Canadian Trucking Alliance and the Ontario Trucking Association. All of the major logistics companies that our companies use, the bonded companies, have publicly expressed that they had a 100% vaccination policy for their drivers. Those drivers who did not get vaccinated were reassigned to intra-country shipments.

The people on that bridge self-identified as truckers, but that doesn't typically meet an evidentiary standard. By that measure, that protest could have been a shinny hockey protest, a restaurant worker protest or a Canadian Conservative Party protest—given that it was encouraged by those leaders—or participated in by people who come from different walks of life. None of that blockade was made using long-haul trucks or by organizations that are in long-haul trucking.

[The Chair, Liberal, Peter Fonseca]

Thank you.

Thank you, MP Dzerowicz. That's your time.

We are moving to the Bloc and MP Ste-Marie for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Volpe, all the blockades took a great toll on the economy. I found your remarks particularly compelling. You said the blockades impacted even factories in the U.S. The consequences were awful.

A while ago, one of my fellow committee members said that the government had acted very quickly. What I saw, however, was a government that waited three weeks before doing anything, letting the situation deteriorate, so I disagree with her.

Do you think the government should have acted sooner, instead of waiting three weeks?

[Flavio Volpe]

It was our publicly expressed opinion at the beginning of the Ambassador Bridge blockade that there were existing laws that law enforcement on the ground could have enforced. Both the municipal and provincial law enforcement agencies that dealt with the roads leading to that bridge appeared paralyzed. We were in direct contact with officials at all three levels of government. We implored them.... We thought the Highway Traffic Act was in place and if it were enforced, it could have addressed this crisis right when it started.

After it closed the first day, we immediately went to court as lead plaintiff, joined by the City of Windsor, and then the attorney general's office in Ontario joined us as intervenors. I think this is a case study in what a one-day, two-day or three-day delay means in law enforcement. A delay in law enforcement of that time leads to a dynamic, but fragile, economy.

There are lessons to be learned by every single agency and level of government.

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

Thank you for that very informative answer.

That means legislation was in place that would have allowed law enforcement to intervene. I gather that the political will was lacking. Let's hope it never happens again.

Thank you for your answers.

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

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Ste-Marie. That's right on time.

We'll now move to the NDP.

MP Blaikie, you have two and a half minutes.

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

Thank you.

Mr. Benitez and Ms. Wilford, it seems to me that the consequence of GoFundMe shutting down the fundraiser on its platform is that the activity shifted to another crowdsourcing platform. That's maybe lost business for GoFundMe. It's also GoFundMe successfully discharging a certain amount of risk in the business that it was doing with respect to that organization. But from a public interest point of view, it wasn't mission accomplished, because it meant that the activity that was a problem could continue.

I'm wondering if you have any reflections for the committee on the state of the crowdsource funding industry. I think we want to avoid a situation where good actors who are doing their due diligence are punished, or perceive themselves to be punished. The problem itself isn't being dealt with, but it means that somebody else is doing the work and getting paid to do work that arguably shouldn't be done.

I'm wondering if you have any comments for us on the nature of the industry and on whether some kind of additional regulation is required in order to make sure that we're rewarding good actors and not simply shifting business away from good actors and still having the same activities be supported by the crowdsourcing industry.

[Kim Wilford]

Thank you so much for that question.

You know, social fundraising is actually a relatively new phenomenon. GoFundMe was founded in 2010. Our mission is to help people help each other. Right now with the Ukraine crisis, we've raised, just since the invasion, over $50 million from over 140 countries. As you say, it's wonderful how people can come together to help one another in times of need. We want to make sure we don't do anything here that would impact that.

At the same time, to your point, there aren't any existing laws or regulations, to my knowledge, that directly regulate peer-to-peer crowdfunding that's done on platforms. What we do see in other regions around the world is the regulation falling on the fundraiser organizer, the person who's actually responsible for soliciting the donations. In some jurisdictions, those individuals are required to get permits or government approval before they start fundraising. In other jurisdictions, like Singapore, we see voluntary codes of practice that their online fundraising platforms are asked to adhere to that outline best practices for protecting users; certain prevention against data leaks; privacy rights; early fraud detection, and things like that.

I'm really only aware of one country, and that's Romania right now, that puts regulations on the donors. It has to do with the amount of the donation. If you try to raise over $200 U.S. on a [Technical difficulty—Editor] paperwork with the Romanian government and go through a different process. So [Technical difficulty—Editor] data privacy—

[The Chair, Liberal, Peter Fonseca]

Thank you for that. We are well over time.

Thank you, MP Blaikie.

We will now move to the Conservatives.

MP Lawrence, you have up to five minutes.

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

Thank you very much.

I'll start with you, Mr. Volpe. I was struck by some of your early testimony, where you stated that the vaccine mandate for truckers was causing some challenges. The reason is that I was just in Peterborough at a factory, and they stated to me that their cost of shipping had increased by five times. They ascribed that specifically to the Trudeau trucker vaccine mandate.

Has that affected your members?

[Flavio Volpe]

Certainly, the cost of trucking had gone up. We saw that it was around 10% to 15%.

I'd be curious to hear what they're actually shipping in Peterborough and who's shipping it. For volume suppliers who have the trucks picking up hundreds of thousands of dollars...a day, we're definitely seeing a linear relationship with the shortage of drivers—that's before the mandates—and the potential new shortage. We thought this number could have been about 20% in total.

We're also an integrated industry. That cost was the exact same on the other side of the border. In fact, Canada's new mandates were a reaction or a reflection of a similar American mandate.

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

Thank you for that, Mr. Volpe. We did see a sizable increase in the cost due to the trucker mandate. Thank you for that.

I want to now turn briefly to GoFundMe and give you an opportunity to clarify the following. With respect, I think one of my colleagues was a little bit irresponsible in speculating about a Russian government connection. In your search and in the way that you review transactions, did you uncover any connection between the illegal protests or blockades and the Russian government?

[Juan Benitez]

Thank you for the question.

Mr. Chair, I'm glad that Ms. Wilford also referenced [Technical difficulty—Editor] where contributions may be negative. That said, there are tremendous amounts of foreign contributions that are very positive to campaigns. I believe over 80 countries contributed to the Humboldt Broncos campaign.

For this campaign, we did review the sources of donations extensively, given the size and impact of this campaign, as we said before, and 12% of the donations came from outside of Canada. There was virtually only perhaps a handful, at most, of donations from Russia. In our opinion, and from the evidence that we see, there was no coordinated effort there to have any kind of contribution or impact.

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

Perfect.

Thank you very much for your testimony and for helping people across the world. We appreciate that.

Ms. Durdin, perhaps I will finish off with you. I think you were put in a very difficult situation, and I think many of your credit unions were.

The actual emergency measures act says that accounts could be frozen for any “designated” person. A designated person could include anyone who directly or indirectly supported.... As the Finance official said in testimony, even a $50 donation might qualify.

You were put in a position, without instructions, to freeze accounts. I know my colleagues asked some questions, but I'm wondering if I could get a little bit more clarity on exactly what instructions you were given, when you were given them, and by whom you were given the instructions with respect to the freezing of your members' bank accounts.

[Martha Durdin]

Michael, do you want to take that question? You were on the front line of that more than I was.

[Michael Hatch]

Yes. It's difficult to go back and recall the minute by minute and the day by day in the heat of the crisis. The minister's office ultimately made it clear that credit unions were to be captured by the invocation of the Emergencies Act and the financial sector measures contained therein. It was also clear to us, as we said before, that the large banks, perhaps, had a few days' head start, not on the details but at least on the fact that something of this nature was coming.

I reviewed the testimony of the Bankers Association when they appeared at this committee. They indicated that while they knew a few days ahead of time that something of this nature was coming, they didn't get the details until the regulations were published publicly, which is when we all saw them. That was Wednesday or Thursday of that week. I don't remember the precise timing.

There was a good, I would say, 36- or 48-hour period in the middle of that week during which there was a great deal of confusion with regard to (a) whether or not this would apply and (b) the nature of that application.

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

Mr. Chair, am I done?

[The Chair, Liberal, Peter Fonseca]

Yes, that's the five minutes.

Thank you, MP Lawrence.

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

Thank you, Mr. Chair.

[The Chair, Liberal, Peter Fonseca]

We're moving to the Liberals. I have MP Baker up for five minutes.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you, Chair.

I'd like to thank all of our witnesses for being here today.

I'd like to say a few things, and then I'll ask a few questions.

First of all, I would like to thank you, Ms. Durdin, for what you said at the outset about the work that your credit union community is doing, especially the Ukrainian credit unions in Canada. Like our Chair, I have a Ukrainian credit union located in my riding. I have worked closely with the Ukrainian Credit Union and with the Buduchnist Credit Union over the years on a range of community initiatives, and one of the things that have always impressed me about credit unions, whether it be those two or others, is the extent to which they give back to their communities.

I would ask you to pass along my thanks to those two in particular, but to the others as well for what they do, not just from a financial service perspective but also for communities across Canada, especially mine in Etobicoke Centre.

The second thing I want to say is that you shared your solidarity with the people of Ukraine, and I know that feeling is unanimously shared among the MPs in the House of Commons. We've seen that repeatedly.

One of the things I want to ask of you and of our friends at GoFundMe is that we do all we can. As legislators we need to do what we can, but also I ask that private sector entities and players do all they can to show our solidarity not just with the people of Ukraine but with others who are fighting for their freedom and their democracy.

This isn't a question but is maybe just a request. As you go back from today's hearing, having heard some questions about the role of dark money and foreign money and money from Russia in particular, as well as other sources of those types of funds, I would just ask both of your organizations and the organizations you represent, Ms. Durdin, to think about what more we can do to make sure that those funds that are flowing, that are influencing and undermining a democracy or feeding misinformation or undermining our security or enabling what we are seeing right now in Ukraine get stopped. I know it's not easy. I know it's challenging but I just implore you that we live up to those words with our actions to the extent possible. That applies as well to us, as MPs, of course, but I would ask all of you to do the same, if I could, whether that's through your analytic tools or whether it's through innovative and entrepreneurial thinking.

One of the reasons those credit unions are working so hard to raise money for humanitarian causes and one of the reasons that GoFundMe has raised so much money right now for humanitarian causes is that this invasion has been enabled partly through the use of illicit funds around the world. We have plenty of evidence to show that.

I'm not pointing to specific money that's flowed to specific causes. I don't have those analytics, but I'm just saying in general that we know this is a problem and I'd just ask you to do your best. That's my request of you.

My question, Ms. Durdin, is really to you, about the indications of the Emergencies Act. One thing was a question about the notice given to people whose accounts were frozen. There is obviously a range of circumstances under which someone's account may be frozen—if they refuse to pay their taxes, for example, or if a financial institution notices something suspicious in their account. My understanding is that it's also standard procedure for a credit union or a bank or whatever the case may be to not necessarily notify a client whose account has been frozen under those circumstances. Is that correct? Am I wrong in understanding that?

Is notice immediately given? If not, for what reasons do financial institutions not immediately provide that notice?

[Martha Durdin]

I would have to say that under the circumstances of the Emergencies Act there wasn't a directive given to credit unions to notify when accounts were frozen.

I'd also like to clarify that if a credit union is suspicious about transactions, they don't freeze the account for that reason. They report it to FINTRAC. FINTRAC then takes whatever action it needs to with the RCMP, which would perhaps end up in a court order, and that's when a credit union would freeze an account.

The Emergencies Act overrode that, as you know, and made that court order unnecessary in these circumstances.

I can say that credit unions in a lot of cases—and again this is anecdotal, as I'd have to go back to get the information for you—did have conversations with their members on freezing their accounts. In fact, I saw a live-feed tweet in which someone whose account was frozen actually broadcasted the phone call from the credit union to announce that his account had been frozen, so he was notified.

It is at the discretion of the organization. I would say that credit unions have perhaps closer relationships with their members than some large financial institutions would have, and credit unions would have a conversation with their members.

[Yvan Baker, Liberal, Etobicoke Centre, ON]

Thank you.