Industry and Technology Committee on June 11th, 2026

[Ted Falk, Conservative, Provencher, MB]

How do you think Plurilock would fit into the equation of reducing scamming and fraud?

[Ian Paterson]

Plurilock is primarily a B2B company. We typically don't work directly with consumers, although, given our leadership in the cybersecurity space, I am frequently the guy people call when they get into a problem. That story I shared with you about the grandfather was about somebody in my network who approached me, simply asking for help.

As it pertains to helping organizations become cyber-resilient, certainly that is something we do. I will give the caveat that my organization historically has done significantly more business in the United States. I'm here principally as a Canadian citizen looking to share my experiences to make Canada a safer and more prosperous nation.

[Ted Falk, Conservative, Provencher, MB]

Thank you.

Finally, to Ms. Corrigall-Brown, do you believe that we currently have adequate resources to prosecute people who are charged with crime and fraud offences?

[The Chair, Liberal, Ben Carr]

Answer in a tight 30 seconds, please, Ms. Corrigall-Brown.

Thank you.

[Sarah Corrigall-Brown]

Certainly, we, the federal government and Crown agencies make do with what we have. There's always—as we've all identified—the scope of the problem and the scope of the harmed Canadians.

We absolutely welcome the federal government's focus in this area and the opportunity to partner with securities regulators. I agree with what my colleagues have said. It needs to be a national, full-society response. The allocation of resources and attention to this matter is important and necessary.

[The Chair, Liberal, Ben Carr]

Thank you, Mr. Falk.

Mr. Bains, you're online today. The floor is yours for six minutes, sir.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Thank you, Mr. Chair.

Thank you to our witnesses for joining us for this very important study.

Mr. Paterson, you shared a story, but there are so many that I've heard from constituents and family members. We ourselves get these calls and SMS messages. It's a rather complex problem that we're dealing with. It's a global issue. We're ultimately seeing issues around extortion. We're trying to wrap around all of these different ways that people are being attacked.

I was wondering if you can very quickly share how the cyber-threats facing different organizations and governments differ between Canada and the U.S. Is there a specific vulnerability that you can point to? What do fraudsters most commonly exploit as targets? It could be systems that each government has or the regulations that they have in overseeing some of these platforms like Meta and WhatsApp.

Can you share something on that?

[Ian Paterson]

Thank you for the question.

I could speak to the [Technical difficulty—Editor] resilience and also vulnerabilities.

I think one of the things that will come as no surprise to anybody here is that AI has really made scams [Technical difficulty—Editor] to author perfect English, whereas previously one of the most common ways of identifying if an email was real or fraudulent [Technical difficulty—Editor].

[The Chair, Liberal, Ben Carr]

Mr. Paterson, I'm not sure if it's on our end or your end, but unfortunately we're getting a little bit of choppiness. I'm going to let it go one more time. If it disconnects, it just makes things a little bit too difficult for the interpreters to work with. I may have to circle back to you—if we get a correction in that connection.

I'm looking now, and you appear to be frozen.

Mr. Bains, I'm going to ask you to redirect that question. I'll give you some time back.

Mr. Paterson, if you can hear me, we're just going to have to try again in a few minutes.

Mr. Bains, the floor remains yours.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

I'm going to move to Ms. Corrigall-Brown.

A large focus of the work that you're doing and your advocacy around reforming bankruptcy laws is on preventing bad actors from abusing laws and hiding their gains from fraud behind bankruptcy protections. How can we improve this?

[Sarah Corrigall-Brown]

Thank you very much for the question.

This is a very specific focus of the securities regulators. We are also involved across the board in prevention, detection, disruption and enforcement. What we find, though, is that this has been an area that has persisted for years. We have taken the efforts to detect, investigate and hold hearings, and we have held people accountable by imposing sanctions. They then made no effort to pay their sanctions and turned to our bankruptcy regime to seek to be released in bankruptcy, therefore avoiding paying those sanctions and avoiding all consequences of their actions.

There are some debts that do survive bankruptcy. A person is discharged in bankruptcy, but they remain obliged to pay some debts. We are asking that debts that have been imposed by securities regulators for the most egregious kinds of misconduct—fraud, market manipulation and misrepresentation—be added to the Bankruptcy and Insolvency Act by amending the act so that those debts would survive bankruptcy. We could continue to collect on them as the person continues, and the rest of their debts could be discharged. We think that's essential.

We recognize the absolute importance and necessity of disrupting fraud before it happens. It's the best way to ensure that investors don't lose their money, to retain their confidence in participating in our economy and to protect Canadians. Early disruption is essential, but the system also needs to have strong and effective enforcement. We need to be seen to be able to manage and to regulate our economy and to protect Canadians. Having strong enforcement and amending the Bankruptcy and Insolvency Act so that people who commit this kind of misconduct can't declare bankruptcy and, therefore, avoid all the consequences of their actions is, we think, an essential part of closing a gap at the end stage. If we have actually held someone accountable, we think they should continue to be obliged to pay those sanctions.

[Parm Bains, Liberal, Richmond East—Steveston, BC]

Quite often we witness people moving. If they commit fraud, they'll move to a different jurisdiction. First, could you mention if the provinces and territories are aligned on this within Canada, and then, could you mention other outside jurisdictions that you're working closely with to tackle this problem and whether there are jurisdictions that can serve as a model for us to compare to?

[The Chair, Liberal, Ben Carr]

You have about 45 seconds for the response, Ms. Corrigall-Brown.

[Sarah Corrigall-Brown]

All Canadian securities regulators, provincial and territorial, support this request. It is a problem across the country, and we are all supportive. The provincial securities regulators work very closely together to have a harmonized security regulatory regime that protects investors and ensures that our markets are fair and have integrity.

The markets are global and fraud is global, so we also work very closely with counterparts in Europe, Asia and the United States. The United States bankruptcy regime is of note. Sanctions imposed by their securities regulators do not get extinguished on bankruptcy. That is a policy decision that has been made in the United States, and that's what we're recommending that we mirror here.

[The Chair, Liberal, Ben Carr]

Thank you very much, Mr. Bains.

Mr. Ste-Marie, you have the floor for six minutes.

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

Thank you, Mr. Chair.

Ladies and gentlemen, thank you for your presence and your testimony. Everything you've shared with us is very insightful.

Ms. Corrigall-Brown, I'd like to follow up on your request and the discussion you just had. Does the federal government seem open to making the amendment to the Bankruptcy and Insolvency Act that you're requesting?

[Sarah Corrigall-Brown]

We've had discussions with ISED officials over the last year that have been productive, and we've met with the Department of Finance as well as the Department of Industry. We've also met with representatives of this committee, and we've been invited to present to this committee. I would say that the federal government has been very open to discussions, to hearing our request and to better understanding the challenge this is raising for securities regulators.

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

All right, that's fine. We'll continue to remind them that this request is very important.

On another topic, I'd like to address the issue of cryptocurrencies. Do you consider cryptocurrency to be a form of currency or rather a security that falls under your jurisdiction?

[Sarah Corrigall-Brown]

What a great question. Cryptocurrency in itself, when it's used as a payment method, we see as a currency. We don't regulate cryptocurrency itself as a security.

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

All right.

In that case, are cryptocurrency exchange platforms considered financial intermediaries that do not fall under your jurisdiction?

[Sarah Corrigall-Brown]

We do regulate crypto trading platforms if those trading platforms are trading in what we call “crypto contracts”. Essentially, they are contracts where the value is referenced on the underlying cryptocurrency. The crypto contract is a derivative. We do regulate the trade in those crypto contracts. Those crypto trading platforms are subject to our regulation.

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

Okay. Very well. Thank you.

In the fight against fraud, when it comes to cryptocurrencies, is the federal government's role to intervene and regulate you, or—given all the security commissions working together, along with the exchange mechanisms and effective collaboration you mentioned—do you have everything you need to monitor cryptocurrency transactions?

[Sarah Corrigall-Brown]

In crypto, as in the capital markets and fraud as well, we think there's a necessity for the federal government and the provincial securities regulators to work together. When crypto itself, for example, is used as a payment, that's federal jurisdiction, and there are federal bodies that regulate in that space. The regulations and the protections they provide for Canadians are essential, yet crypto can also be used in the investment markets and for investment purposes, which we regulate. We have different protections and powers to address the risks that creates for Canadians.

It's really essential that we work together and partner; otherwise, there are gaps. Again, this is where the fact that the federal government is focusing on this and taking such a holistic view of how we can combat fraud and of the way that crypto is used for not only legitimate purposes but also fraud...we need to understand that, working together at the provincial and federal levels.

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

Thank you very much.

Mr. Pinto, from Payments Canada, my first question concerns the centralized platform you mentioned. Is the participation of the various intermediaries such as banks and other stakeholders mandatory or voluntary?

[Jude Pinto]

For any of our participants who are using RTR or a third party exchange that clears through the RTR's clearing and settlement, it is mandatory. There are the four services that I described. The network-level risk score will be consumed by them. It's available to them. It needs to go into their adjudication process on whether to proceed with a payment. There is a requirement in our rules to report fraud, account-to-account fraud with a common national taxonomy. There is an obligation under specification to contribute to the risk list. There is a requirement to use the confirmation of payee to identify a valid account.

That includes all new participants coming into the RTR directly as well as the first third-party exchange, which is Interac's e-transfer. All are mandatory.