Public Safety Committee on April 8th, 2019

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Are you in any capacity at all working with analysts or staff of the Department of National Defence in protecting yourselves? Is there a collaboration on such issues as AI, quantum, things that would affect other parts of our critical infrastructure as well if they came at us?

[Martin Kyle]

Absolutely.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Are you able to elaborate in a bit more detail?

[Martin Kyle]

No.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Okay.

Are sufficient funding levels in place, in your assessment, to do that kind of work? Are there trajectories where we need to invest more, be it talent, structural work or thinking about it differently, as we go into AI and those kinds of questions?

[Justin Ferrabee]

We're very confident with what we have now. There is always opportunity and a need to continue to invest and improve. We are very confident and feel as though we have been responding well, as have our partners in government and elsewhere. There are also needs that emerge as we go, as you've heard. The bar is always rising, so the need to continue to invest, and potentially grow investment, is there.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Is the degree of centralization of the clearance system that we see in Canada typical of other developed democracies—the G7 and the Five Eyes—or is there an argument to decentralize the clearing system so that any given attack will be able to do less damage if successful?

[Justin Ferrabee]

Our central clearing system is very similar to those of other G7 countries and other advanced financial infrastructures. We are always looking at opportunities to continue to strengthen the security. We are confident in the position we have right now, and we will always be looking. We've done a lot of research, which has been public, on distributed ledgers and their application. The low surface area and the high trust among parties are factors that diminish the need for a distributed ledger of some kind or some other new technology in that way, but we're always looking at it and investing in innovation.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

That's very helpful. Thanks very much.

The final question I have is strictly a personal interest question.

What percentage of consumer transactions in Canada, in your estimation, are done on a non-electronic, i.e., cash basis? What kinds of trend lines do we see? Is that data that you have?

[Justin Ferrabee]

We publish a report every year called “Canadian Payment Methods and Trends”, which refers to that. You will see cash diminishing. We believe it will continue to decline, but it will never go away. It's below 50% now, and declining at a rate of somewhere between 5% and 7% a year.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Thank you very much, Mr. Chair.

[The Chair, Liberal, John McKay]

Well, I must be in the declining minority, then.

We have Mr. Picard and Mr. Graham.

[Michel Picard, Liberal, Montarville, QC]

Can I withdraw money from an ATM machine in London or Paris?

[Terri O'Brien]

I think in Europe there are some restrictions, but, yes, there are certainly ATMs that you could withdraw money from in Paris.

[Michel Picard, Liberal, Montarville, QC]

Can I withdraw money from St. Petersburg or Moscow?

[Terri O'Brien]

No, that would violate sanctions rules.

[Michel Picard, Liberal, Montarville, QC]

There's nothing available on the Russian side, using my Interac card.

[Terri O'Brien]

No. We would absolutely adhere to all sanctions rules in Canada.

[Michel Picard, Liberal, Montarville, QC]

Okay. I'm done.

[The Chair, Liberal, John McKay]

That was quick.

Mr. Graham.

[David Graham, Liberal, Laurentides—Labelle, QC]

I'm going to build on an earlier question from Ms. Dabrusin on cheques, and perhaps the obsolescence of the cheque as we know it.

Is it time to dump account numbers, addresses and signatures on our cheques and switch to...? I don't know if we can have a paper version of a token, but is there is any way of doing that?

[Terri O'Brien]

Yes. Absolutely.

We're innovating new payment transmission technologies every day. The cheque continues, I would say, mostly in the small business space and a little bit in the retail consumer space, but not as much. There's really no need for a paper cheque anymore.

[Justin Ferrabee]

We would say that we're seeing a rapid decline at the consumer level. There are still some people who rely on it, and there are some circumstances where that's the only method of payment that is going to work, for a host of reasons. Where we see the biggest need is in the small business area, and usually it's for managing information, because currently information doesn't flow cleanly across the system in terms of to, from and all the notations, and they get a copy of the cheque so they can see it.

Until we can rectify or remedy that, we see a strong hold on cheques. We're making a number of moves to improve the information that travels with payments by publishing standards. One of the most current global standards for information is the ISO 20022 standard, which includes vast amounts of information to travel with your payment, which would allow a small business person to see more, including invoice and all kinds of other information that goes with that.

Our expectation is that the decline of the cheque will come with the introduction of more robust information to travel with the payment.

[David Graham, Liberal, Laurentides—Labelle, QC]

The cheques will continue to exist. Are you going to de-information that piece of paper?

[Justin Ferrabee]

No. We're going to replace it.