Finance Committee on Dec. 1st, 2025

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you very much.

I'll pass the rest of the time to Mr. Leitão.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Thank you.

Good morning, gentlemen.

Thank you for being here.

Mr. Babin, at the beginning of your remarks, you talked about something that I, too, think is particularly important in our discussion: knowing who owns a company that often is hiding behind multiple shell companies.

I don’t want to put you on the spot, so I’ll understand if you can’t answer this question: Is information being exchanged with your colleagues in other countries?

[S/Sgt Chad Babin]

Yes, we do share information with our foreign counterparts, informally and formally. Being police in early stages of investigations, informal—or what we call “police-to-police”— information sharing is very valuable when it comes to finding beneficial owners, depending on the jurisdiction we're working with.

There are several networks that we're members of. I can highlight something called the ARIN, the asset recovery inter-agency network. It allows us to reach out to several—over 100—jurisdictions that we work with, and they can do police-to-police database checks on our behalf in their foreign jurisdictions and return that information to us so we can begin investigating any connections to Canada or nexus to Canada from those jurisdictions, some of which are in these so-called “tax havens”. They're quite co-operative.

[Carlos Leitão, Liberal, Marc-Aurèle-Fortin, QC]

Okay. Thank you.

One of you mentioned, and rightly so, that these days digital currencies are quite the challenge for law enforcement authorities, because they make it so easy to move money around anonymously. Obviously, a lot of that is unregulated, and different countries are beginning to look at ways to perhaps regulate that.

In Canada, we know that the Government of Canada and the Bank of Canada are looking at real-time rail and also to have a more efficient, digital type of currency, but that would be entirely regulated.

If we are to move in the direction of having governments and central banks participate actively in regulating and developing the digital currency world, what would be your recommendations? Since you've seen this world from up close, what would you say would be the main issues that you would like future regulations to address?

[C/Supt Michael Saghbini]

That's a tough one. I think we'd have to really delve into what it could look like.

Any time you have some sort of regulation, any time you have to de-anonymize yourself or you have to put your name to an account, it makes life easier.

As for how this could look, we could go back and, based on what we've seen in the past and the MOs of what people do, see how we could come up with some best practices. I think we could potentially go back at some point when we're ready for that and give some recommendations from a law enforcement perspective to say that if we did A, B and C in this context, it would help us. We would be more than happy to provide that.

[The Vice-Chair (Jasraj Hallan), Conservative, Jasraj Singh Hallan]

Thank you. That's the round.

Next is Mr. Garon for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Mr. Chair.

Gentlemen, thank you for being here.

I’d like to revisit the KPMG case, which took place in 2020‑2021. At the time, the company was suspected of having developed robust tax evasion or tax avoidance schemes. At the time, criminal charges were laid in the United States. In Canada, the Canada Revenue Agency entered into a secret agreement with KPMG, which contravened the agency’s own rules—this came to light later in court documents.

When the minister of national revenue was asked whether she was willing to use her power of inquiry, she answered, before the committee, that MPs could simply join the police if they weren’t happy.

My first question is this: Would I make a good police officer? The answer is no, so you don’t have to respond.

My second question is this: In your opinion, would it make your job easier if a minister of national revenue made greater use of their statutory power of inquiry?

Furthermore, don’t you think that, even though criminal laws differ from one country to the next, when criminal charges are laid in the United States and Canada has a secret, opaque agreement in relation to the same scheme, it sullies Canada’s international image in the fight against financial crime?

[C/Supt Michael Saghbini]

To comment on the CRA's investigative postures and how they do things, we don't know how that all played out. They will do the tax evasion side, as we mentioned in our opening. In our mandate, we go after the criminality side and not necessarily the tax evasion, but we do work closely, hand in hand, with the CRA. When they do a tax evasion investigation and they see criminality, they will refer it back to us, and we will work closely together on that.

[Jean-Denis Garon, Bloc, Mirabel, QC]

When the United States lays criminal charges, and the Canada Revenue Agency enters into a secret agreement that contravenes the agency’s own rules and the minister does not use her power of inquiry, is that not a way for politics or the agency to prevent you from conducting a criminal investigation?

[C/Supt Michael Saghbini]

In this specific case, I don't know the specifics of the comments. The CRA do their independent investigation, and if they do find that there is criminality in what they've uncovered within their investigation, they will hand it over to the RCMP, and we will work hand in hand with them on whatever investigation—

[Jean-Denis Garon, Bloc, Mirabel, QC]

My understanding is that if the Canada Revenue Agency had information that there may have been cases of criminal activity, and it decided, for whatever reason, not to forward the file to you, you wouldn’t be able to investigate.

[C/Supt Michael Saghbini]

If we see that there is criminality that is part of the tax evasion, then yes, we will investigate in parallel to what the CRA will also investigate.

[Jean-Denis Garon, Bloc, Mirabel, QC]

You would still need the information that the agency could provide. Isn’t that right?

[C/Supt Michael Saghbini]

That's possible. I can't force the CRA to give us information if it doesn't fall under their mandate, or maybe they received it from a partner that can't share with us. There are different situations that may preclude them from being able to share. I can't speak to this specific case, but it's possible that they couldn't share for whatever reason. How they obtained it, I'm not quite sure. I can't really speak to that specific topic.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I’d like to revisit the issue of stablecoins, which are virtual currencies that use blockchain technology. As you know, the government has announced its intention to have a regulated stablecoin.

People use cryptocurrency mainly because there’s friction with the SWIFT and IBAN systems, for example. Since international transfers are hard to do, people have turned to stablecoins. Personally, I get the impression that the type of regulation that the Bank of Canada will be applying is simply to ensure that these stablecoins are backed by Canadian dollars and that they won’t affect the stability of the Canadian monetary and financial systems.

Doesn't standardizing these currencies through regulation, ensuring that they remain stable, in a way amount to accepting the existence of financial tools that will both facilitate legitimate transfers and facilitate or stabilize the value of transfers that serve to camouflage tax evasion, corruption or the proceeds of crime? Doesn’t it normalize things?

[C/Supt Michael Saghbini]

The use of cryptocurrency itself is not illegal, obviously. You can go buy a vehicle using Bitcoin. It all depends on how you've obtained it. Did you sell narcotics to make your $100 million and put it into cryptocurrency to move it? That's the issue. It's not necessarily the issue of having a stable coin versus an unstable coin. It's more about our being able to trace the illegal funds that are making it through.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Having an official stablecoin will likely neither hinder nor facilitate your work. If I understand correctly, it’s something completely separate.

[C/Supt Michael Saghbini]

Again, it's very dependent on the situation. Whether it's stable or unstable is irrelevant. From a law enforcement perspective, we're looking at the crime that's being committed for that to go into cryptocurrency, whatever you want to call it. On the powers that decide on stable or unstable, really, at the end of the day, from a law enforcement perspective, we're looking at the criminality behind how they made the money and how they're moving it. It's just a tool for moving it.

[The Vice-Chair (Jasraj Hallan), Conservative, Jasraj Singh Hallan]

Thank you very much.

Next, we have Mr. Lefebvre for five minutes.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Thank you, Mr. Chair.

I’d like to thank the witnesses for being here.

As we have said in the last few minutes, the methods are increasingly sophisticated. We have talked about cryptocurrency, a relatively new reality. We have talked about tracing the provenance of cryptocurrencies and seeing how they have been transformed.

As elected officials, how could we help you and be your partners? What kind of regulations could make your job easier?

[C/Supt Michael Saghbini]

I'll pass this on to Acting Staff Sergeant Chad, who may have some ideas based on some of the groups that he is working with.

[S/Sgt Chad Babin]

Any legislative changes to improve access to banking transactions, including cryptocurrency transactions, are always being looked at by us and through our Government of Canada partners. We also work collaboratively with many of our Government of Canada partners on disruption efforts, especially around the movement of funds. Should we not be able to criminally investigate something, we look at how to leverage the different powers of different Government of Canada departments to mitigate criminality, prevent criminality, and basically make criminal activity in Canada difficult so that people will either cease or move on.

Also, increased tracing or analytic tools are always heavily leveraged by the police. Cryptocurrency is traceable, and we do trace it. We use different technologies for that, including exploring AI options to help us make networks behind that.

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

Thank you very much.

In a news release dated November 6, you stated that “only 5 to 10% of all fraud and cybercrime incidents are currently reported in Canada.” You have also set up the new national cybercrime and fraud reporting system.

Could you tell us a bit about this new system?

[C/Supt Michael Saghbini]

That's something we can get back to you on. I want to give you more of a fulsome answer to that, if we can come back with a written response, with the international organization. Can you give me more specifics as to which group you're referring to?

[Éric Lefebvre, Conservative, Richmond—Arthabaska, QC]

A news release issued on November 6 by the Royal Canadian Mounted Police announced the launch of the new national cybercrime and fraud reporting system.