Public Safety Committee on Nov. 18th, 2025

[The Chair, Liberal, Jean-Yves Duclos]

I call this meeting to order.

Good morning, everyone. Thank you for being here on this Tuesday, November 18. Welcome to meeting number 13 of the House of Commons Standing Committee on Public Safety and National Security.

Pursuant to Standing Order 108(2) and the House order of reference of October 23, the committee is meeting to consider Bill C‑12, an act respecting certain measures relating to the security of Canada's borders and the integrity of the Canadian immigration system and respecting other related security measures.

I would now like to welcome the two witnesses for the first hour of this meeting. From the Canadian Bankers Association, we have Michael Donavan, chair of the Anti-Money Laundering Specialist Group; and Hartland Elcock, assistant general counsel and vice-president.

Welcome, Mr. Elcock and Mr. Donovan.

Mr. Elcock, you have five minutes for your opening remarks.

[Hartland Elcock, Assistant General Counsel and Vice-President, Canadian Bankers Association]

Good morning.

I would like to thank the committee for the opportunity to speak to Bill C-12, an act respecting certain measures relating to the security of Canada's borders and the integrity of the Canadian immigration system and respecting other related security measures.

My name is Harland Elcock, and I am the assistant general counsel and vice-president of the Canadian Bankers Association. With me is Michael Donovan, a member and chair of the CBA's anti-money laundering specialist group, and senior vice-president and chief AML officer, Canadian Imperial Bank of Commerce.

We are both pleased to be here today to speak to Bill C-12. The CBA is the voice of more than 60 banks in Canada, employing more than 300,000 Canadians and helping to drive Canada's economic growth and prosperity. Our members take the fight against money laundering, terrorist financing and sanctions evasion seriously. Among the most active reporting entities in Canada's AML regime, they devote significant resources to their AML programs, including their internal controls and employee training. Much of this investment focuses on continual improvements to address the shifting landscape of compliance requirements and the evolving nature of risk. Their goal is to effectively detect, deter and report suspicious activity to mitigate money laundering, terrorist financing and sanctions evasion.

As major stakeholders within the AML regime, our members' participation moves beyond compliance. Banks play a leadership role in public-private partnerships with FINTRAC. One of these triple-P partnerships is Project Guardian, which is focused on identifying transactions or attempted transactions where there are reasonable grounds to suspect money laundering related to fentanyl trafficking. This project led to FINTRAC operation alerts, and highlights indicators of suspicious transactions for all reporting entities.

The CBA and its members also actively participate in ongoing enhancements to Canada's AML regime. For example, the CBA and members have long sat on the federal Advisory Committee on Money Laundering and Terrorist Financing. We have also been advocates supporting comprehensive beneficial ownership transparency in Canada and increased private-to-private information sharing for AML and ATF purposes. These changes are a step forward for Canada's AML regime.

In alignment with our members' position and investment in Canada's AML regime, we suggest targeted changes to Bill C-12, none of which change the substance of the bill, and new regulations to help the bill achieve its policy goals while mitigating adverse outcomes.

More specifically, the CBA suggests the following targeted changes to provide clarity to Bill C-12's proposed changes to the regime that will reinforce a risk-based approach, preserve the efficacy of recent enhancements to the AML regime—like private-to-private information sharing—and promote transparency and predictability. These changes are as follows.

Defer the coming into force of increased administrative monetary penalties until regulatory criteria are established to ensure their transparent and predictable application, reserving the highest AMPs for egregious and systemic issues.

Add a regulation-making power to establish and provide certainty on the criteria for assessing if a compliance program is reasonably designed, risk-based and effective.

Remove the one-year limit to extending a compliance remediation agreement to prevent the arbitrary application of significant additional fines, particularly where a delay is outside the control of a reporting entity.

In determining if a client's name is obviously fictitious, rely solely on the judgment of the reporting entity, as this is a highly subjective standard.

Exempt banks from the mandatory FINTRAC enrolment due to existing oversight.

Amend the proposed false information offence to reflect intent to deceive. This is consistent with other similar provisions in the Criminal Code, and will avoid triggering the offence when providing information, or not, in good faith.

Clarify that, like a violation, an offence alleged to have been committed before the coming into force of the proposed new provisions and Bill C-12 will not be subject to them.

Thank you, again.

I will now turn to Michael Donovan for final remarks.

[Michael Donovan, Chair of the Anti-Money Laundering Specialist Group, Canadian Bankers Association]

Thank you, Hartland.

As Hartland mentioned, my name is Michael Donovan. I'm very happy to be here in my capacity as the chair of the CBA's anti-money laundering specialist group. I appreciate the opportunity to speak on Bill C-12 today.

I want to highlight the commitment of CBA members to an efficient and effective AML regime. CBA members recognize the leadership role they play within Canada's AML regime. They make significant investments in their AML programs and work closely with FINTRAC, the Department of Finance Canada, law enforcement agencies and prudential regulators to deter and detect money laundering, terrorist financing and sanctions evasion activities. They also participate actively in discussions and consultations with government to help inform the ongoing evolution of Canada's AML regime.

We feel that adopting the technical changes to Bill C-12, as Hartland has outlined today and in our brief that we provided to the committee, will help ensure a fit-for-purpose, risk-based AML regime that can more effectively target and keep pace with evolving risks. This will strengthen our collective ability to protect the interests of all Canadians.

Thank you very much.

[The Chair, Liberal, Jean-Yves Duclos]

Thank you very much.

We'll now go to questions from members.

Mr. Lloyd, you have the floor for six minutes.

[Dane Lloyd, Conservative, Parkland, AB]

Thank you, Mr. Chair.

Thank you to the witnesses.

Mr. Elcock, could you repeat the intent-to-deceive recommendation that you put forward?

[Hartland Elcock]

Yes, sir. Again, this has been provided to the committee in a brief, so you should be able to review it there as well.

Currently, there's a proposal in the legislation to have a criminal offence for failing to provide FINTRAC with information or for providing incorrect information to FINTRAC. We don't have a problem per se with the offence, but as with many fraudulent statement offences under the Criminal Code, there's an intent to deceive.

What we wouldn't want here is an unintended consequence where someone in good faith has, through an examination process, let's say, with FINTRAC, decided to provide certain information in response to FINTRAC. Perhaps the information, in their view, was correct or perhaps they failed to provide information because it simply wasn't needed, based on their good-faith judgment. We wouldn't want a criminal censure to be placed against a good-faith action by a compliance officer in an organization. The unintended consequence is that you can impact both the hiring and retention of high-quality staff in this important area in the bank.

[Dane Lloyd, Conservative, Parkland, AB]

Thank you for clarifying that.

Mr. Donovan, Canada has seen a huge rise in online gambling in recent years due to legislative changes that have really opened up this market. Have you been seeing any rise in money laundering in relation to online gambling activities?

[Michael Donovan]

The scope of what we're here to speak about on Bill C-12 is really the provisions that we've talked about in our opening address and in the brief.

In terms of seeing an increase in money laundering in the gaming sector, that might be a question better directed towards FINTRAC, which receives the information from the gaming sector and other sectors related to suspicion of money laundering coming from those areas. It would probably be in a better position to answer that question.

[Dane Lloyd, Conservative, Parkland, AB]

Are you saying that you can't answer the question or that you just won't answer the question?

[Michael Donovan]

I don't have the information to be able to accurately tell you whether or not I've seen an increase or not. Again, I think it's better to go to FINTRAC for that information.

[Dane Lloyd, Conservative, Parkland, AB]

There were people who were significantly concerned about provisions that I see have now been included in budget 2025 with regard to banning cash transactions over $10,000.

I'm wondering if you could provide some context for people about these provisions and why these provisions have been brought forward. Can you provide some more information about those?

[Hartland Elcock]

I can't speak to Bill C-2 at the moment. We're here to speak to Bill C-12.

I can certainly follow up with your office if that would be helpful and connect you with the CBA, but it would be inappropriate for me to comment on the decision of the government around certain amendments.

[Dane Lloyd, Conservative, Parkland, AB]

How do you think the legislative changes in Bill C-12 will affect law enforcement's ability to investigate complex financial crimes that are related to organized crime?

[Hartland Elcock]

The majority of changes in Bill C-12 are related to supervision and compliance. That's really the focus of these changes.

I can't necessarily comment on external factors, but I think I can comfortably indicate that the changes—the minor amendments—we're suggesting to Bill C-12 would help create more predictability and transparency around those supervision and compliance powers to ensure a more efficient and effective regime, which ultimately would help to empower the AML regime.

[Dane Lloyd, Conservative, Parkland, AB]

I only have a minute left.

Are you familiar specifically with parts 9 and 10 of Bill C-12? Do you think that these are sufficient to address the current vulnerabilities that criminal organizations are exploiting within the financial sector, or do you think stronger and clearer legislation is needed?

[Hartland Elcock]

We're supportive of a strong AML regime that's efficient and effective. Particularly, we believe that if minor amendments are made to Bill C-12 along the lines that we've outlined in the brief to the committee, they'll likely strengthen the regime and lead to better protection for Canadians.

[The Chair, Liberal, Jean-Yves Duclos]

Thank you, MP Lloyd, for that segment.

Let me turn to MP Acan for six minutes.

[Sima Acan, Liberal, Oakville West, ON]

Thank you, Mr. Chair.

Mr. Elcock and Mr. Donovan, thank you for coming to be our witnesses today.

My questions can be answered by both of you, if necessary.

It is evident that criminals often evolve their methods and techniques for committing illicit financing in Canada. This includes the use of emerging technologies such as AI-driven bots, platforms like Telegram, or privacy coins to mask some transactions.

Can you speak to the effectiveness of the amendments in Bill C-12 to equip Canada's AML regime to catch up with and meet the emerging threats?

[Hartland Elcock]

Again, Bill C-12 is largely focused on supervision and compliance changes within FINTRAC. We believe that should those changes be properly and technically made—as I said at the outset, all of the amendments we're suggesting are minor and wouldn't change the substance of the bill—they will drive efficiencies and effectiveness in the regime, which will flow through to reporting, improved financial intelligence, better prosecutions and investigations and, ultimately, protecting Canadians.

[Sima Acan, Liberal, Oakville West, ON]

You mentioned in your opening remarks an amendment to Bill C-12, but in addition to that, do you see any technological or collaborative measures we should consider that could support and strengthen the AML regime?

[Hartland Elcock]

I'm here today to speak to Bill C-12, so again, I'm focused on those technical amendments to the bill that we believe will drive efficiencies, effectiveness, predictability and transparency.

[Sima Acan, Liberal, Oakville West, ON]

How does Bill C-12 strengthen the tool box of the Canadian government and banking sector to counter money laundering? Can you provide some examples of what illicit financing, money laundering or related activities Bill C-12 would specifically address?

[Hartland Elcock]

Bill C-12 predominantly focuses on supervision and compliance.

Supervision is certainly important. FINTRAC has 35,000 reporting entities, so it's important that they're properly equipped to deal with that supervision. It's important, again, that the supervision is predictable and transparent. This will ultimately drive an effectively functioning supervision regime and improved reporting and lead to better protection for Canadians.

[Sima Acan, Liberal, Oakville West, ON]

To what extent can enhanced public-private information sharing as outlined in part 10 of Bill C-12 help close the gap between increasingly sophisticated money-laundering techniques and Canada's enforcement regime?

[Hartland Elcock]

I believe public-private information sharing may not be part of Bill C-12, but I would indicate that we are certainly supportive of responsibly developed information sharing in the AML space. It would create a balance between public safety and, certainly, the interests of Canadians and their privacy.