Industry Committee on March 26th, 2015

[Marc-André Pigeon]

We've come down. When I started at CUCC about four years ago, we had 450 credit unions or thereabouts; now we're down to 315. It's a very consistent trend. Even a few years ago we were at close to, I think, 1,000. There may be 20-odd mergers a year, speaking roughly.

I'd just like to add something. Earlier, I think I may have misunderstood Ms. Sgro's question. I want to add a clarification, if I can. I was thinking in the going forward sense. Currently we have a credit union office of investigation whereby we can share information around criminal activities. The concern is that if, going forward, the definition is limited to fraud, we may have trouble with that kind of information sharing.

I just wanted to clarify that.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

In your opinion, does Bill S-4 reduce the red tape for businesses by giving them access to information necessary to conduct due diligence in a merger or accusation without compromising the privacy of individuals?

[Marc-André Pigeon]

I think that's a fair statement. The information sharing happens now, but it's under a cloud of uncertainty. There is no legal clarity about what is permissible.

This change would, I think, remove a concern that we have around the current situation. We welcome this change.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

Ms. Gratton, do you agree that organizations that oversee the activities of such professionals as lawyers and doctors should be able to look into allegations of wrongdoing on the part of their members and protect Canadians against harm from rising misconduct?

[Dr. Éloïse Gratton]

Maybe; I guess it depends which groups and what kind of threshold we're talking about.

One thing is for sure; the concern that I've had with this bill and that we're trying to address with the sharing of information without consent is that this privacy law should not be used to commit fraud, to hide behind. We need to make sure that we can have access to information and can conduct investigations.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

To the folks from IBC, one trend in the technology industry is data mining. I know that already you have a number of companies that are data mining for the insurance companies such as your folks'. How does this impact them in terms of producing the data you need to make reasonable decisions?

[Randy Bundus]

I would suggest that insurers will comply with the privacy law as they do their data mining.

I'm not sure, really, how to answer that question, to be honest with you.

[Richard Dubin]

I think the key point with the data analytics is that it will raise almost immediately, once the claims information is in the system, whether there is a social network and whether it's a heads-up to the insurer to say, “You have to look into this now, further, rather than automatically start paying.” That's the beauty of it, because the main problem we see right now is that payments are going on and on, and it's building up, and nothing is happening. This allows them to get some immediate information and shut it down pretty quickly.

[Joe Daniel, Conservative, Don Valley East, ON]

Thank you.

How much time do I have?

[The Chair, Conservative, David Sweet]

You have one minute.

[Joe Daniel, Conservative, Don Valley East, ON]

Okay.

Here is a general question to all of you in terms of this bill being applicable here in Canada, but clearly the Internet doesn't have any borders. What's your opinion in terms of other countries data mining or getting private information that they can distribute—of Canadians?

Does anybody want to take that on?

[Randy Bundus]

I'll give it a try.

It's very difficult for any particular government to control the Internet. There is always a risk that rules you make here just drive the wrongdoers outside the country—not that you should make the rules for here, but they will just move away. You need cooperation internationally to resolve those problems.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Bundus.

[Frank Zinatelli]

One of our themes, as I said, is harmonization within Canada, but clearly, also for our regulators who deal with other privacy commissioners internationally and do a lot of work together this is very useful, because it creates similar rules—to some degree, at least—across various countries.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Zinatelli.

Now we go on to Madame Papillon, for eight minutes.

[Annick Papillon, NDP, Québec, QC]

Thank you, Mr. Chair.

I would like to thank the witnesses for having travelled here to come and testify on this bill. My first questions are mainly for the representatives of the Credit Union Central of Canada.

How does the system you set up to prevent fraud work?

Could you describe, one by one, the steps you follow in your investigation?

[Marc-André Pigeon]

I'm going to ask my colleague Rob to answer you.

[Rob Martin]

It's a fairly broad subject. It comes down to there being a training element at the credit unions. We have our own organization, CUSOURCE, which would train individuals to identify fraud and the various features of fraud. Our lenders and our front-line staff will be put through that sort of thing.

There will be some sharing of information through our Credit Union Office of Crime Prevention and Investigation. We have agreements with the Bank Crime Prevention and Investigation Office, so we are able to share some information back and forth. Of course, that is subject to policies and procedures that are developed in alignment with the legislation, so it is fairly carefully guarded. But it does currently help us to prevent, for example, a bank robbery or an attack at an ATM: we are able to share some information with the banks and other credit unions through our office.

That's about as far as I can elaborate on it.

[Annick Papillon, NDP, Québec, QC]

Would you say that the system functions well, both overall and in its details?

[Rob Martin]

What is attractive about the bill is that it would eliminate the need for the crime prevention office. As you can imagine, in the credit union system we have fairly small institutions. There is an administrative burden that goes along with it.

We actually like the way the bill is going. We would hope that the information could be shared between credit unions, possibly without the intervention of the crime prevention office but based on the requirements of the legislation. We would just like to see it focused on being able to detect and deter not only fraud but other types of criminal activity that would seem to be excluded as it is currently drafted.

That's all I have to say.

[Marc-André Pigeon]

I would like to add a comment.

[Annick Papillon, NDP, Québec, QC]

Yes, of course.

[Marc-André Pigeon]

Thank you.

Even following the change in legislation being proposed here, we will most likely keep our office open, but in a more informal way.

Currently this imposes a regulatory burden because we have to meet certain criteria. People who work on this have to qualify. There has to be an investigation in the institution.

This will reduce our burden somewhat. We will probably keep the association, but implementing the changes proposed here will mean that the work will be less demanding in regulatory terms. It is a good thing for us.

As I said in the beginning, in situations where we have to compete with banks, we have to reduce our costs in every possible way; it is really important that we remain competitive.

[Annick Papillon, NDP, Québec, QC]

I understand.

Let's talk about the regular interaction between the credit unions and police institutions. Can you tell us, for instance, how many voluntary instances of communication there are between the credit unions and police forces in a given year?

[Marc-André Pigeon]

That is a good question. Unfortunately, I don't have that information here, but we could provide the answer later by sending it to the clerk.