Evidence of meeting #39 for Industry, Science and Technology in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was fraud.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Éloïse Gratton  Partner, Borden Ladner Gervais LLP
Frank Zinatelli  Vice-President and General Counsel, Canadian Life and Health Insurance Association Inc.
Anny Duval  Counsel, Canadian Life and Health Insurance Association Inc.
Marc-André Pigeon  Director, Financial Sector Policy, Credit Union Central of Canada
Randy Bundus  Senior Vice President, Legal and General Counsel, Insurance Bureau of Canada
Richard Dubin  Vice-President, Investigative Services, Insurance Bureau of Canada
Rob Martin  Senior Policy Advisor, Credit Union Central of Canada

12:10 p.m.

Director, Financial Sector Policy, Credit Union Central of Canada

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.

12:10 p.m.

Conservative

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?

12:10 p.m.

Director, Financial Sector Policy, Credit Union Central of Canada

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.

12:10 p.m.

Conservative

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?

12:10 p.m.

Partner, Borden Ladner Gervais LLP

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.

12:10 p.m.

Conservative

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?

12:10 p.m.

Senior Vice President, Legal and General Counsel, Insurance Bureau of Canada

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.

12:10 p.m.

Vice-President, Investigative Services, Insurance Bureau of Canada

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.

12:15 p.m.

Conservative

Joe Daniel Conservative Don Valley East, ON

Thank you.

How much time do I have?

12:15 p.m.

Conservative

The Chair Conservative David Sweet

You have one minute.

12:15 p.m.

Conservative

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?

12:15 p.m.

Senior Vice President, Legal and General Counsel, Insurance Bureau of Canada

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.

12:15 p.m.

Conservative

The Chair Conservative David Sweet

Thank you very much, Mr. Bundus.

12:15 p.m.

Vice-President and General Counsel, Canadian Life and Health Insurance Association Inc.

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.

12:15 p.m.

Conservative

The Chair Conservative David Sweet

Thank you, Mr. Zinatelli.

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

12:15 p.m.

NDP

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?

12:15 p.m.

Director, Financial Sector Policy, Credit Union Central of Canada

Marc-André Pigeon

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

12:15 p.m.

Senior Policy Advisor, Credit Union Central of Canada

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.

12:15 p.m.

NDP

Annick Papillon NDP Québec, QC

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

12:15 p.m.

Senior Policy Advisor, Credit Union Central of Canada

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.

12:15 p.m.

Director, Financial Sector Policy, Credit Union Central of Canada

Marc-André Pigeon

I would like to add a comment.

12:15 p.m.

NDP

Annick Papillon NDP Québec, QC

Yes, of course.

12:15 p.m.

Director, Financial Sector Policy, Credit Union Central of Canada

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.

12:20 p.m.

NDP

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?

March 26th, 2015 / 12:20 p.m.

Director, Financial Sector Policy, Credit Union Central of Canada

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.