Finance Committee on March 17th, 2022

[The Chair, Liberal, Peter Fonseca]

You have 30 seconds, MP Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Okay.

I have a quick question, Mr. Volpe. You referenced terms like “phony 'truckers' cause” and “inauthentic political actors”. Can you expand what you might mean by a phony truckers cause?

[Flavio Volpe]

What we saw on the Ambassador Bridge was that the drivers who had goods in long-haul vehicles were the people who were being blocked from delivering them. The people who were on the bridge were people with the closest association.... The trucks they had appeared to be pickup trucks that they drove to put in place in the middle of traffic. A different portfolio of vehicles blocked that road than what we saw on Wellington Street.

[Ed Fast, Conservative, Abbotsford, BC]

But does that make them phony truckers—

[The Chair, Liberal, Peter Fonseca]

Thank you, MP Fast. That's the time.

We are moving to the Liberals.

MP Chatel, you're up for six minutes.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you, Mr. Chair.

Thank you again to our witnesses for being here with us today.

I will start with a bit of context on where my concerns are. My questions will be directed to GoFundMe.

First, there were donations made to finance activities that were illegal and hurtful to the economy. Second, there were a number of foreign donations, and they increased as the illegal activities became more extreme and more hurtful to our economy, and to the residents of Ottawa, for example. At GoFundMe, 12% of donations were identified as foreign-sourced. That contribution increased to nearly 50% once you closed your platform to those donations, when GiveSendGo opened for donations. We also heard U.S. news channels with different standards, quite frankly, for the integrity for their information, which incited four-million-plus viewers to donate and participate in those illegal activities.

As part of the context, too, we know that Russia has been engaged in misinformation warfare for years. We only have to look at the Mueller report to understand that. They do have at their disposal, according to serious economic studies—one from Cambridge, Massachusetts—$1 trillion in Russian dark money that is circulating and dedicated to undermining our democracy.

You accumulated $10 million from donors, and the other platform the same thing, with more foreign donations. You paid out $1 million to organizers of blockades that occupied Ottawa and the bridge for the stated purpose of defying our democracy, at the time Russia was preparing for war. That's the context, and it could have been a lot worse if you hadn't acted quickly and if our government hadn't acted quickly. This can no longer happen. I'm very glad to hear that you want to be a leader in protecting the integrity of the donation platforms.

My question for you is about the source of the donations. I know you're not subject to the proceeds of crime legislation, but if you were—which we will definitely look at.... The international work right now on identifying sources of financing focuses on the ultimate beneficial owner of an account. I say this because we know that Russia and all other money launderers hold bank accounts in every country under several shell companies, or even companies that appear legitimate. Therefore, what is your due diligence to look beyond the credit card holder?

[Juan Benitez]

Mr. Chair, first, we appreciate that our collaboration with authorities and our work in responsibly handling this unprecedented, fast-moving and complex fundraiser was recognized by the committee. Thank you for that. It continues to be our endeavour to be the most responsible platform. We appreciate the recognition.

I'd also like to remind the committee that the 88% of funds that we saw donated from Canada was on the GoFundMe platform, and we cannot comment on what might have happened on other platforms that sought to run this fundraiser after we shut it down.

Our fundraising diligence does focus first on the recipient of funds. As would be common in the financial services ecosystem, that's where the so-called KYC, or “know your customer”, checks and the greatest diligence occurs, to know who will be receiving the funds and who owns the accounts that the funds will be deposited in. To do that, we run a system of checks that GoFundMe employees do. We collaborate with our payment processors, who also perform diligence in their checks. We oftentimes use their tools to perform that diligence about the funds' recipients and the owners of those accounts. Then, of course, the banks themselves would also be verifying the identity and “allowance”, let's say, of whoever owned those accounts to be on their platform and receive those funds.

On the donation side, donations can evolve quickly and rapidly. We do a risk-based review of donations based on the tools that we have—tools from third parties and our manual assessments that may happen. We progressively do those reviews based on the nature of the campaign. In this case, it was an unprecedented, fast-moving campaign with significant impacts, so we stepped up our donation reviews and proactively did that review of foreign sources. We feel comfortable with our policies and processes associated with those reviews.

[Sophie Chatel, Liberal, Pontiac, QC]

Thank you for that answer.

With regard to the 88% of donations coming from Canada, was it enough for you to identify just the credit card holder and a bank account in Canada to satisfy yourself that they were Canadian, or did you take the extra step to look at who the bank account belonged to and whether it was from another bank account, and in which case whose account, all the way down through the chain?

[Juan Benitez]

Mr. Chair, I think the amount of diligence that happens is based on our assessment of risk for a certain person. As I mentioned, on scrubbing donations themselves, we do that on a risk-based approach to identify where the parties should be.

The general standard that we're aware of in the industry is reviewing the bank and the issuing bank of the payment information that's provided to us. No donations on the GoFundMe platform were anonymous. We have information provided from every donor. However, that information is subject to what is provided by the donor, so the most correct information to trace down is in fact the issuing bank of the actual payment instrument.

To go beyond that is substantial diligence and is quite complex, and in fact requires infrastructure and reliance on the banks themselves to have done that. I spoke earlier about multiple layers in the regulatory framework. That's where we would hope that ultimately the issuing bank of the credit card would be reviewing the owner of that card.

[The Chair, Liberal, Peter Fonseca]

Thank you. That's the time.

We are moving to the Bloc.

Monsieur Ste-Marie, you have up to six minutes.

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

Thank you, Mr. Chair.

I want to start by wishing everyone a happy St. Patrick's Day. I also want to let the chair know how much I like his festive tie. He is clearly wearing it with pride today.

My sincere thanks to the witnesses for being here. Not only were their opening statements informative, but so are their answers thus far.

My first questions are for Ms. Durdin.

Thank you for acknowledging our sisters and brothers in Ukraine. What they are going through is terrible.

You said in your opening statement that the government had briefed, and provided information to, the big banks—the ones in Toronto—before the credit unions. Is that correct?

[Martha Durdin]

Yes, it's our understanding that they did.

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

Would you say the government treats credit unions differently from the big banks, putting credit unions at a disadvantage?

[Martha Durdin]

That's not always the case, but I would say generally that the government turns to whomever they regulate directly through OSFI, namely the financial institutions. As you know, most of the credit unions—except for two—are regulated provincially.

We tend to be a little bit behind in getting information. For example, with the Emergencies Act, credit unions were not given a heads-up. As I understand it from the CBA's testimony, they were given a heads-up ahead of time, while we were not. When the act was announced, we were scrambling to find out if we were part of it and if it applied to credit unions. It took us a little while to be able to get that information from the government.

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

That tells me there was a lot of uncertainty.

The job of our committee is to examine, and report on, what was done. My understanding is that, in this case, the government certainly could have done better.

[Martha Durdin]

Yes.

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

You said the government provided you with a briefing, which was attended by 600 institutions. That's unbelievable.

[Martha Durdin]

That's right.

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

Did the representatives of the institutions get a chance to ask their questions? If each of the 600 representatives was given one minute for questions and answers, the meeting would have been endless.

Do I have that right? Was that the type of briefing you were given?

[Michael Hatch, Vice-President, Government Relations, Canadian Credit Union Association]

I can take that as well.

[Martha Durdin]

Finance held a briefing. We asked them if they would hold a briefing for our credit unions. We had 600 participants. There are 220-odd credit unions in Canada outside of Quebec, not counting Desjardins.

We had a lot of interest from the compliance people at the credit unions, the risk managers. There were many more people who attended this webinar than there are actual institutions.

It was not a free-for-all. The questions were managed through the chat, and we tried to respond to most of them during the presentation.

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

Did you have something to add, Mr. Hatch?

[Michael Hatch]

Thank you.

I had the pleasure of moderating that discussion, and you're absolutely right—it's impossible to manage hundreds of questions in an hour. However, it became clear pretty quickly that most of the questions were under four or five broad categories, so we did our best to address as many of them as possible with our colleagues at Finance, who did a fantastic job on very short notice, and we're very appreciative of those efforts.

After the fact—it was on a Friday, if I remember correctly—early the following week, we were able to spend a few days looking at the questions, making sure we answered everything, and then we put together a Q-and-A document that we were able to share.

Most of the questions—though there were dozens, if not hundreds—were under a few broad categories that I think we were able to address during that session.

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

Thank you for all the work you did.

What was your contact with the RCMP like?

We know that the RCMP sent the big banks a list of individuals whose accounts were to be frozen. Did the RCMP provide that list to all the credit unions in the same time frame?

[Martha Durdin]

Because of the number of credit unions, of course, as the association representing the credit unions, we worked directly with the RCMP. We managed those lists from the RCMP, put them on a secure site that we have and gave access to our credit unions to be able to pull those lists from the site.