Industry Committee on June 12th, 2023

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Van Bynen.

It is now Mr. Généreux's turn.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

Mr. Beaudoin, the registry is the main tool provided in the bill. The names of individuals with at least 25% of the corporation's shares will be disclosed.

Are there tools, other than the registry, that should have been included in the bill? What tools not included in the bill would have been helpful to you?

[Supt Denis Beaudoin]

I don't think anything glaring is missing from Bill C-42. To repeat what others have mentioned, I think it's important to ensure that the regime is pan-Canadian. That's the most important thing, especially when you consider the fact that the share percentage varies from province to province. In some places, it's 25%, and in others, it's 10%. Criminals will go to areas or countries that don't have these kinds of rules. Corporations that are under criminal investigation by the RCMP or that are being used to launder money will be incorporated in those jurisdictions.

That's why the most important thing is to ensure that the legislation applies to the entire country. The provinces and territories have to be brought in, whether through this regime or an independent one.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I see. Thank you.

Mr. Brown, you just said that a number of provinces had a 25% threshold. Do you know whether all 10 provinces and three territories have that threshold in place, or do some still need to make adjustments?

[Justin Brown]

I'm not certain all the provinces and territories have that threshold. It may be nine out of the 10 provinces.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Which province hasn't established that threshold yet?

[Justin Brown]

I can't give you any details. I know that the government signed an agreement with the provinces and territories in 2017, and it was further to those discussions that the 25% threshold was established. That's where the threshold in Bill C-42 came from.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

If an amendment was adopted and the threshold chosen, whether 15% or 20%, for example, was different from the one chosen by the provinces that had already made a decision, would that be a problem? Wouldn’t it be better for everyone to have the same threshold?

[Justin Brown]

I don’t know. We’re in a state of uncertainty. We’ve been talking about a certain threshold with the provinces and territories for about six years, and we have a plan of engagement to find a pan-Canadian solution to this. We believe that all provinces and territories can adopt the approach proposed in this bill. If we lower the threshold to 10%, I don’t know how the provinces and territories would react. Personally, I don’t know whether this would complicate the exchange of information between the federal government and the provinces and territories. I’m not saying it’s impossible, but it’s not certain.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

When this bill is passed, what will the federal government expect from provinces and territories in terms of working together to ensure that the federal registry matches the provincial ones, and that it’s as efficient as possible?

[Justin Brown]

The primary goal of the federal approach is to ensure interoperability with the provinces and territories. It is designed with that goal in mind. There are, however, many technical details that will need to be discussed with the provinces and territories. The portal, for example, comes to mind.

The federal government is committed to discussing and working in partnership with the provinces and territories. As I said, the ministers sent a letter last week to their provincial and territorial counterparts to renew these discussions with a view to adopting a pan-Canadian approach. This bill is an important sign that the federal approach has been established. It provides a model for all of Canada.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Minister Champagne told us that the $200,000 fine was unheard of anywhere in the world. He said it was higher than fines set in the 130 or 150 countries with which we have international agreements.

Can you corroborate these statements?

[Justin Brown]

I can’t really comment on the size of fines in other countries.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Beaudoin, do you believe that such a fine will truly deter potential fraudsters or those involved in money laundering?

[Supt Denis Beaudoin]

That’s certainly a good question.

I believe another witness said that a criminal organization that makes hundreds of millions of dollars in profits would certainly be able to pay such a fine. As I understand it, these fines would only apply when there is intent to defraud or intent to circumvent the registry. The bill provides for two fines, one of $5,000 and the other of $200,000. It will be a matter of seeing how the government can apply both provisions.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I don’t know who will be able to answer this question, but I’d like to know who will be responsible for determining whether this was a mistake made in good faith or whether there was genuine intent to defraud. I’m a contractor myself, and I do paperwork all day long. Sometimes people make mistakes.

Is it up to the RCMP to determine whether there has been fraud or attempted fraud? It may happen that someone on the register as a director or business owner makes a mistake. Who will determine if it was a mistake made in good faith?

[Supt Denis Beaudoin]

It will be a matter of determining the person’s intent, not unlike any investigation. This isn’t always easy to do. You have to identify why such a mistake might have been made, what lies behind it. Often, there’s an alert—I’m searching for the right expression.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

A whistleblower.

[Supt Denis Beaudoin]

Exactly. It’s important to put legislative provisions in place to protect whistleblowers and ensure that the investigating entity has all the facts. The investigating entity will have to prove intent to defraud the system.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I find it interesting to hear in your comments that under this process, the Department of Finance or the Department of Revenue determines that there is possible fraud or that there is reason to investigate. The file is then transferred to you.

Is that how it works?

[Supt Denis Beaudoin]

As I understand it, after consulting my colleagues at Innovation, Science and Economic Development Canada, or ISDE, the responsibility for implementing this lies with them. However, as this is federal legislation, the RCMP could consider the evidence during investigations of money laundering, drug trafficking or other crimes.

[The Chair, Liberal, Joël Lightbound]

Excuse me for interrupting you, Mr. Beaudoin, but there is no interpretation at the moment.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Chair, I can hear interpretation into English on the French channel.

[The Chair, Liberal, Joël Lightbound]

My colleagues who are listening on the English channel…