Finance Committee on Dec. 8th, 2021

[The Chair, Liberal, Peter Fonseca]

We'll do what we did the last time and continue until about six or seven minutes before we have to get up to vote. Thank you.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

My last question, potentially, to FINTRAC, for now, is this: Has anyone in the Canadian government, the CRA or the finance department assured FINTRAC that organized criminals or the criminally minded will not be filling their pockets with taxpayers' dollars once again?

[Barry MacKillop]

I do not believe they would be in a position to give us that assurance. Criminals have historically done, and in the future will continue to do, their best to get around anything if there's an opportunity to make money. They are motivated by greed. This, unfortunately, is not limited to the federal government benefits. We've seen criminals take advantage and try to take advantage of benefits across all the provinces as well as internationally. Unfortunately, while the vast majority of the money that's going out is going out to Canadians who need it—Canadians who are benefiting from it and who require that support—the criminal element, whether Canadian or international, will always try to take advantage. Our role and the role of our reporting entities and the role of law enforcement is to try to identify those individuals, try to intervene with them, and try to lead to enforcement actions, eventually, against them.

I don't think that anyone, including me, could give you assurances, nor could I design a program that would be criminal-proof. We have a regime that is working well. We're working together. We have great co-operation. We have great reporting. We are working well to try to identify those who are trying to take advantage of the system, whether it's here in Canada or in instances in which we can assist our international partners.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. MacKillop.

Now we're moving to the Liberals for five minutes.

Go ahead, Mr. MacDonald.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you, Chair.

I'm going to follow up with a couple of questions for FINTRAC relevant to the relationship they have.

Can you explain the relationship between FINTRAC and CRA?

[Barry MacKillop]

We have a very good relationship with CRA, actually. They are a disclosure recipient. Any time we meet our threshold for money laundering and we see that the transactions may be related either to tax evasion or to criminal use of the tax system or charities, we can disclose proactively to CRA. We can also disclose proactively to Revenu Québec. Both Revenu Québec and CRA have the authority and the opportunity to submit what we call voluntary information records to FINTRAC, whereby they can explain to us and outline to us investigations that they are currently undertaking and seek our assistance in their investigations.

We've had some very good mentions in the media, in fact, of support that we've been able to provide to CRA in several of their investigations over the years. Therefore, from an intelligence perspective, we do work well with CRA. They are good partners. We work with them right across the country.

[Heath MacDonald, Liberal, Malpeque, PE]

Based on your numbers, do you have any numbers or statistics on things pre-COVID relevant to financial intelligence on—I'm not going to use the words “organized crime” because I don't think they're appropriate anymore, after your clarification—these types of files you're dealing with in which the banks make observations? I think you used the word “threshold” at one point in your opening remarks.

[Barry MacKillop]

We get 30 million transactions a year from our reporting entities: large banks, small banks, medium banks, money service businesses, casinos, accountants. We have nine different reporting sectors that all report to us. The suspicious transaction reports have in fact been increasing over the years. A lot of that may have to do with the fact that we developed some very successful public-private partnerships that have led to the identification of very specific indicators that can then be used by our reporting entities in their monitoring systems to generate the financial transactions that get certain red flags related to things like human trafficking, child sexual exploitation on the Internet, fentanyl trafficking, romance scams that tend to take advantage of the elderly, underground banking and the use of casinos for laundering money.

The transactions and the reporting that we get in terms of suspicious transactions have been increasing. The quality has been increasing. Over the years historically we've done, I would say.... Just over the last three or four years, for example, we've averaged over 2,000 disclosures of actionable financial intelligence to our law enforcement national security agencies and our law enforcement partners across Canada and internationally. Fraud, generally speaking, whether it's a romance scam type of fraud, a 419 fraud or any type of fraud you can think of, tends to be included in somewhere around 30% to 33% of our disclosures. Fraud is always one of the top three predicate offences to money laundering, and there are, as you know, several different types of fraud. It could be anything from email account takeovers to the CERB fraud we are seeing and have seen. Fraud is always, unfortunately, a significant percentage of our disclosures year over year.

[Heath MacDonald, Liberal, Malpeque, PE]

I have one final question.

I have constituents in my riding who had their accounts frozen. They were collecting CERB, and their accounts were frozen by CRA. Is that a link back to your organization as well? Did a flag go up that said, “You know what? Something is not right here, so let's freeze this account until we figure it out or understand what the issues are”?

[Barry MacKillop]

We have no authority to freeze accounts, nor to request that CRA or anyone else freeze accounts on behalf of anyone. If in fact we had done a disclosure to CRA and as part of their investigation they determined that something was amiss and asked the banks to freeze the account, that would be completely and solely with respect to the CRA and their authorities, or the bank and its authorities. It would not be a link back to us because we are not involved in the investigative component once we provide the intelligence.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. MacDonald. That's your time.

[Heath MacDonald, Liberal, Malpeque, PE]

Thank you very much.

[The Chair, Liberal, Peter Fonseca]

Now we're moving to the Bloc.

Go ahead, Mr. Champoux.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Chair.

I'll come back to Mr. Laperrière, because we had a very interesting conversation earlier.

Mr. Laperrière, I have a persistent concern. Since we realized that the assistance programs for freelancers or self‑employed workers in the cultural sector were coming to an end, the concern is that we risk losing expertise. As we know, self‑employed cultural workers often have expertise and passion. It is very easy to fear that, if they don't receive financial support, many of these workers will migrate to other sectors of activity.

What damage do you think could be done to the cultural industry if help is not offered quickly?

[Michel Laperrière]

You've described the danger very well.

I'm thinking particularly of the younger generation. For the graduates of specialized schools, such as music or theatre conservatories, the last two years have been catastrophic. These young people have no opportunity to showcase or express their talents or to become known and recognized. I think this is a real problem.

I would like to clarify one other thing. The foundation exists to provide one‑off assistance to artists who are established in the profession. It's not a question of ongoing support, but of one‑off support. In this field, it is normal for artists to experience a slump. This one‑off support enables them to continue their career. If they have nothing to hang on to, they will become Uber drivers or who knows what. After all, they have to be able to earn a living and support their families.

[Martin Champoux, Bloc, Drummond, QC]

With no access to the Canadian economic recovery benefit, or CERB, and no real eligibility for EI, these people will be dependent on assistance that must be provided quickly.

Aren't you concerned that this may come a little too late in many cases?

[Michel Laperrière]

As far as I know, the CRB ended in October.

[Martin Champoux, Bloc, Drummond, QC]

That's right.

[Michel Laperrière]

So yes, we must think about helping these people as quickly as possible. However, I repeat that we must not rush, but take the time to do things properly. For our part, we have established a model with the Quebec government. That said, I'm not thinking only of the people of Quebec, but also of my colleagues across Canada. We must have an organization that is accountable.

[The Chair, Liberal, Peter Fonseca]

Thank you, Mr. Laperrière.

Now we're moving to the NDP and Mr. Blaikie for two and a half minutes.

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

Mr. Laperrière, you spoke earlier about a model whereby you helped the Government of Quebec provide financial support to self‑employed workers in the cultural industry.

However, wouldn't a program like the CRB be a good thing for the self‑employed, since it would come directly from the government and would be a fixed amount paid at regular intervals?

[Michel Laperrière]

There's no question that this program has helped tremendously not only the cultural workers, but also the hospitality workers, as was mentioned by a witness earlier. I'm familiar with this model. Moreover, we know that when plan A for people in the cultural industry doesn't work out, their plan B is to go work in a restaurant. In the current context, that means that both plans are rotten.

In short, these programs were indeed of service to people in the cultural sector, but also in other sectors. It was a good way to help them. Now, can we extend these support measures? It's not up to me to answer that question.

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

Bill C‑2 would put in place the Canada worker lockdown benefit.

Would it be a good thing if self‑employed cultural workers had access to this benefit, even if lockdown wasn't imposed in their region?

[Michel Laperrière]

The answer to that question is yes, Mr. Blaikie. That's certainly the best solution.

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

Thank you very much, Mr. Laperrière.

For Ms. Potter from the Tourism Industry Association, we know that there are a lot of people who are self-employed in the tourism industry who won't be covered by the measures in Bill C‑2. Do you think it would be helpful for self-employed people in the tourism and hospitality industry to have access to the Canada worker lockdown benefit, notwithstanding whether there's a lockdown order in their particular region?