Thank you, Mr. Chair.
Good morning. I am the public guardian and trustee of British Columbia. I thank you for the opportunity to comment on Bill S-4 today. In addition to my oral comments, I have provided a written submission. My comments today are restricted to subclause 6(10) of Bill S-4, and that is with respect to the proposed provision that will enable federally regulated organizations and in particular financial institutions to report concerns of potential financial abuse of a customer, without the knowledge or consent of the customer, to a government institution with authority to investigate and to take appropriate responsive action.
The jurisdiction to respond to suspected financial abuse typically falls to provincial authorities and territorial authorities with respect to civil investigation and in particular to public guardians and trustees across the country. The Public Guardian and Trustee of British Columbia has participated in the multi-year consultation process that led to the development of the anti-financial abuse provisions in subclause 6(10). My office supports the objective of the proposed anti-financial abuse amendment and offers three recommendations for refinement of the provision to ensure that the provision is effective, and secondly, to minimize the risk of harm to an individual who is the subject of a report and a potential victim of financial abuse.
My recommendations are based on the experience my office has in responding to financial abuse and I will provide those recommendations at the conclusion of my comments.
By way of background, the Public Guardian and Trustee of British Columbia is a statutory corporation sole created under the laws of the province. My office provides fiduciary and protective services to vulnerable adults, to persons who are mentally incapable, to minor children. We administer the estates of deceased and missing persons when there is no one else able and suitable to do that. We serve approximately 29,000 clients and administer almost $900 million in private client assets.
Among the various statutory functions given to the Public Guardian and Trustee under British Columbian law is the role of investigating allegations of financial abuse, including financial neglect and financial self-neglect of mentally incapable adults. The definitions of financial abuse, financial neglect, and financial self-neglect, which guide the investigations of the Public Guardian in British Columbia, are set out in legislation, but generally speaking, abuse is an action committed by a third party. Neglect is the failure of a third party to act, and self-neglect is an individual's own failure to manage his or her own affairs due usually to mental incapacity.
When my office receives information that an adult may be mentally incapable and may be a victim of financial abuse, the Public Guardian and Trustee of British Columbia has a legislative mandate to investigate the circumstances. My office has the powers to seek disclosure of financial information from legal representatives such as an attorney acting under an enduring power of attorney, and from financial institutions where an adult may hold assets. If my office has reason to believe that the adult's assets are in need of immediate protection, the Public Guardian and Trustee of British Columbia has the authority to instruct financial institutions to, in essence, freeze bank accounts to stop any withdrawals from the accounts or transactions with respect to those accounts, to halt the sale of property, and to take any other reasonable step necessary to protect the adult's assets from dissipation or misappropriation.
Each year, my office responds to approximately 1,600 allegations of suspected financial abuse. Approximately 1,200 of those cases result in a full investigation by my office, and of approximately 400 cases, the Public Guardian and Trustee is appointed committee of estate as a result of the investigation, and that is for the purpose of acting as property guardian to manage the financial and legal affairs of the adult on an ongoing basis.
The experience of my staff in responding to allegations of financial abuse has highlighted for us the critical role played by financial institutions in identifying issues of potential financial abuse and ensuring that vulnerable adults receive the support and assistance they need when it is required in order to curtail or end the financial abuse.
Employees of banks are often in the best position to observe potential financial abuse as a result of ongoing personal contact with their customers and with their knowledge of the customers' financial affairs. While it may be best practice for a bank employee to communicate with a customer directly about concerns of potential abuse, in many cases such communication is simply not practical, nor is it prudent. In some instances, bank customers may have diminished mental capacity due to mental illness or due to diseases of aging, making direct communication with a customer challenging and often ineffective.
In other cases, a customer may be unduly influenced by or subject to the control of another person, so that advising the customer of suspected financial abuse may in fact alert the abuser to the fact that the abuse has been discovered and put the customer at greater risk. Currently, PIPEDA permits financial institutions to report financial abuse to relevant authorities, such as the police, where the financial institution has reasonable grounds to believe that a law has been contravened.
However, if no law is contravened, federally regulated organizations are restricted by the act as to what actions they are permitted to take even if financial abuse is suspected, so my office of course is responding to allegations of abuse, not certainties. No crime has been committed as yet. Enabling financial institutions to proactively report concerns of potential financial abuse to an organization such as the Public Guardian and Trustee of British Columbia, with the legislative authority to investigate and to take steps to protect the assets of the vulnerable adult if necessary, is critical in the effort to reduce the incidents or continuation of financial abuse.
The Public Guardian and Trustee of British Columbia offers three recommendations for refinement of the proposed legislative amendment in proposed paragraph 7(3)(d.3) of PIPEDA. They are as follows.
One, specify that provincial authorities, and in particular public guardians and trustees, who are authorized to respond to financial abuse, are included in the term “government institution” to which an organization may report financial abuse. The term “government institution” is currently not defined in PIPEDA, nor is a definition proposed in Bill S-4.
The difficulty here is that the act is a federal legislation governing federally regulated bodies. Public guardians and trustees fall under provincial jurisdiction. We want to ensure the legislation is clear that reports may be made to provincial bodies. The act contains regulation-making power, which would permit the creation of a regulation to define “government institution”.
Making it clear that organizations are authorized to report to provincial and territorial government institutions, and in particular public guardians and trustees across the country, will assist financial institutions in effectively reporting. Another alternative, of course, would be simply to provide the definition directly in the act. Either way, the definition would be very useful.
Two, delete the reference to “next of kin” from the list of individuals and government institutions to which organizations may report concerns of potential financial abuse. The perpetrators of financial abuse, particularly with respect to vulnerable adults, are often next of kin. Disclosure of concerns of potential financial abuse to next of kin may have the effect of alerting the abuser to the fact that the abuse has been discovered and may in fact end up putting the vulnerable adult at greater risk of harm—or at least the adult's assets at greater risk of harm.
Three, explicitly recognize financial neglect and financial self-neglect in proposed provisions, along with financial abuse. Many provincial authorities have statutory power to investigate and assist individuals who are victims not only of financial abuse but of financial neglect and financial self-neglect, the effects of which can be equally devastating. In fact, the indicators of potential financial difficulty are the same, whether it's abuse, neglect, or self-neglect. Permitting financial institutions to report concerns of financial abuse, neglect, and self-neglect of their customers, I submit, would protect the interests of vulnerable British Columbians.
Those are my comments. Thank you very much. I'd be pleased to answer questions.