Evidence of meeting #42 for Industry and Technology in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was telecommunications.
A recording is available from Parliament.
Liberal
The Chair Liberal Ben Carr
In order for me to do that, I'll need to have it in both official languages.
Liberal
The Chair Liberal Ben Carr
I would like to suggest, considering that there was a significant degree of collaboration to bring this fraud study forward, at your request and with collaboration on the part of members around the table, that it seems somewhat useful to me that we continue to have this conversation before we deal with this matter.
Therefore, as we have done previously when we had motions put before us unexpectedly, I would recommend that we navigate the rules a bit here, with your permission, colleagues, to conclude the final few minutes of witness testimony that we have, and then I can come back to take a look, Madam Dancho, at this question. I don't see any use in our making witnesses wait for us to get through this.
Conservative
Liberal
The Chair Liberal Ben Carr
Colleagues, is there any further commentary on this matter before we conclude that and I take a look at it?
Monsieur Ntumba, go ahead.
Liberal
Bienvenu-Olivier Ntumba Liberal Mont-Saint-Bruno—L’Acadie, QC
I think you've said it all. We have witnesses. In addition, the notice of motion was not tabled beforehand. So I agree with what you said.
Liberal
The Chair Liberal Ben Carr
We'll finish the testimony first, and then we can continue this discussion.
Madam Dancho, I'll ask your team to work quickly, please, to get that distributed to members in both official languages. I'll take a look at it once we're done our testimony here.
Mr. Bains, the floor will be yours, sir, if you would still like it for some questions that you have. Then I am going to take a few minutes to ask a few questions, and then we'll get back to the matter that was raised a moment ago by Madam Dancho.
Mr. Bains, the floor is yours, sir.
Liberal
Parm Bains Liberal Richmond East—Steveston, BC
Thank you, Mr. Chair.
Thank you to our witnesses for joining us today on this very important study.
Quite a significant amount of information has come forward, and I thank you for sharing much of that and for focusing on the risk side of things and more recommendations. Ultimately, the committee's purpose is to establish strong recommendations that we can take forward.
I'd like to focus on your thoughts about Bill C-22, which is before us in the House right now and being debated, and about lawful access. In my conversations with many of the police agencies locally here in British Columbia, and even with CSIS, they want more access, the ability to be involved in the lawful access piece and also the financial crime agency. They want to know how they can be engaged in those processes to ensure that they can tackle some of these things.
The Australian reference is extremely interesting to me. For most of it, it seems like it's a very doable change in regard to codes of conduct for banks and platforms, verification pieces. Could you share some of your thoughts on lawful access, and any recommendations you have?
President and Chief Executive Officer, Canadian Bankers Association
Is that directed to the CBA first?
President and Chief Executive Officer, Canadian Bankers Association
Thank you very much, MP Bains. It's good to see you.
At the higher level, one of the critical things is that it's not so much the information that would be needed in Bill C-22 to help us fight scams and fraud; it's more the support and oversight of information exchange and the coordination with law enforcement, particularly if we determine that it's international bad actors that are contributing to the scams or fraud. It's a broader element.
I would defer to my telecoms peers to know if there's anything specific about Bill C-22 and frauds and scams that would be helpful from their perspective.
Liberal
Chief Security Officer, Telus
With respect to Project Lighthouse, which I spoke about earlier, we did receive court orders from police so that we could provide the data they needed to conduct that investigation. I think that worked very well, with the exception of perhaps a timeliness component. The one observation I would make is that we need to find ways in our lawful access system to get data rapidly into the hands of the investigators who need it to carry out their work.
Liberal
Parm Bains Liberal Richmond East—Steveston, BC
Going on to the cyber-weapon, have you uncovered...?
The perpetrators with the SMS blaster have been caught, but you talked a lot about how fraudsters will find a way to move on and move into different areas. Have you noticed different approaches or other technologies that fraudsters are using? What potential investments or initiatives can the government take to combat them on the cybersecurity side?
Chief Security Officer, Telus
There are many more forms of pre-positioned destructive capability that we have detected within Canada. The arrest of this group in Toronto did not eliminate the use of SMS blasters completely. We know that there are more, and they are operating in other jurisdictions in the country.
Going back to my testimony from this morning, I would reiterate that law enforcement needs a direct mandate and more resources to support the dismantling and apprehension of the rings that are operating inside Canada and deploying this technology to conduct fraud on an industrial scale.
Liberal
Parm Bains Liberal Richmond East—Steveston, BC
I'll stay with you on this.
You talked about reforming the AML regime. Can you expand on that? Have we, as a government, spoken enough about that in any way, or is this something that you're bringing forward now?
Assistant General Counsel and Vice-President, Canadian Bankers Association
I think there is a significant amount of reform required for the AML regime.
It's been about 26 years since the PCMLTFA was meaningfully modernized. We haven't seen a parliamentary review for some time. I think we are slightly overdue on that.
We would like to see reform in various areas, but let's start with modernizing the legislation. We want to look at the governance of the PCMLTFA regime, and we want to look at the legislative tools that the regime has. Then we also want to look at information sharing. What's been discussed today is critical, but it's the amount of information flowing to FINTRAC that isn't necessarily leading to results.
There's a significant degree of reporting. As my colleague mentioned, there are 400 fields in Canada for an STR, versus 35 in Australia. There are a lot of ways we could pare down those fields. There are a lot of ways we could reduce the number of transactions that are reported and still yield tangible results—in fact, better results. You would create less noise in the system, and you'd be better able to use the information at hand to empower law enforcement. We want to see that sort of sector-specific supervision to ensure that areas of risk are receiving the appropriate oversight and then sharing information.
I note you mentioned Bill C-22. There are some changes in Bill C-2, which is still out there, that we would like to see from an AML perspective. Those are the public-private safe harbours. Those are the safe harbours that allow federally regulated organizations to use the information, without threat of liability, that law enforcement is providing to them, the pre-production information that allows organizations subject to the PCMLTFA to properly focus their efforts on risk.
First and foremost, I think a meaningful review of the legislation is required, but we have a lot of ideas, as I've just covered, as to the direction we could go in to really help boost results.
Liberal
Parm Bains Liberal Richmond East—Steveston, BC
Thank you so much.
I'll cede the rest of my time to the chair.
Liberal
The Chair Liberal Ben Carr
Okay, Mr. Bains.
Witnesses, I have a couple of very quick questions here.
Perhaps, Mr. Ostler, you're best positioned to answer them. Madam Dancho did bring this up in relation to the Australians.
You were talking about quick takedowns. In the Canadian context, are social media platforms being co-operative when you reach out, having identified that there is a problem of some sort, and you ask for co-operation to take down a deepfake, a false advertisement or whatever it may be? Are they meeting you? Are they willing to work with you? If not, what's the reason?
President and Chief Executive Officer, Canadian Bankers Association
That's a great question, Chair.
When we started the Canadian anti-scam coalition, in the first year, we actually had a work stream on this specific item, because the digital platforms are part of the coalition. We worked through how we could better provide them with information so that they could take things down. That has improved co-operation, but their verification process for taking things down is lengthy. Things are not taken down as quickly as they would be in Australia.
It's hard to know what's driving that. It could be resources. It could be prioritization. The reality is that, although we've had great discussions and such, there's room for improvement.
Liberal
President and Chief Executive Officer, Canadian Bankers Association
Interestingly, at the UN's Global Fraud Summit, all the large digital platforms were signatories to the framework that I talked about. That framework talks about the shared responsibility of all players in the fraud life cycle, so they have recognized it.
Going into the forum, Meta said that they want to improve their verification process. Going into that, they had verification at 70%. If a bank verified only 70% of their customers, I think they would be shut down. Meta's objective is to move it to 90%.
I think those are good things, but there's opportunity for improvement.
Liberal
The Chair Liberal Ben Carr
What I'm asking you, specifically, is this. When you speak to social media platforms about the depth of the issue, in your view, are they accepting responsibility for the role that they play as a vehicle for this fraud to occur?
President and Chief Executive Officer, Canadian Bankers Association
Yes.
The IBFed met with the global head of fraud and security for Meta at the UN Global Fraud Summit. They acknowledged that this is an issue, and they wanted to work with us internationally. We're having great discussions around ways to pilot and improve what we can.
I would say that 2026 has marked the most substantive progress we've had, and there's a lot more to do.
Liberal
The Chair Liberal Ben Carr
Thank you.
I have a second question.
There was reference earlier to credit score—that a victim of a fraud or scam would have a credit score implication. I know it's not necessarily your area of expertise, but can you provide some reflection to the committee in relation to how a Canadian who has been victimized by fraud and then sees a negative repercussion on their credit score can remedy that credit score diminishment that's occurred by virtue of the fraud?
