Public Safety Committee on Nov. 18th, 2025

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

I'm going to interrupt you for a minute.

You speak about compliance. That's a voluntary act. Criminals will not voluntarily follow the rules.

I think there are some extra things we can do. From your position, from your vantage point as the banking industry in Canada, there have to be more things that could be considered in Bill C-12 to prevent more exploitation occurring.

That's really what I'm asking, if I didn't make it clear the first time. What other things can we really focus on that aren't addressed in your opening remarks or in Bill C-12 currently?

[Hartland Elcock]

It would be inappropriate for me to comment, I think, on the government's choices to put forward certain legislation.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

You're here as a witness, and the purpose of bringing witnesses to committee is not about government choice. It's about hearing from the experts in the industry that can help us, as the whole of government, find solutions, because we're all here on the same team and saying that we need solutions to this problem.

You guys have a unique vantage point to give us those solutions. It's not about whether it's appropriate or not. You have ideas. You may not have brought them forward today, but pie in the sky, what is it that we need to see, hear and do in Bill C-12 that we could still possibly do?

[Hartland Elcock]

I think, as I said, that responsible AML information sharing is a key way to balance the privacy of Canadians with strengthening the AML regime to focus on bad actors.

Investment is also important, which we've seen. We have long advocated, as the CBA, for investment in prosecutorial and investigative powers. This is important. It's key that organizations within the government...and I think there have been a lot of attempts to do this over decades. This is an issue that the government has long been dealing with. Crime is constantly evolving. Investment is key.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

You're saying in law enforcement and prosecutorial—

[The Chair, Liberal, Jean-Yves Duclos]

I'm sorry, MP Motz, but time is up. That was a very useful segment.

We now turn to MP Dandurand for five minutes, please.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you very much, Mr. Chair.

Mr. Elcock, let's go back to the international scene. To maintain our reputation there, we know that it's important to be a peer, to be on the same level as other countries. To what extent do these regulations bring us in line with other countries? In your experience, where do these regulations put us in relation to other countries when it comes to financial crime?

[Hartland Elcock]

I think that this bill in particular, given its focus on supervision and enforcement, doesn't contain those elements that have been discussed in other forums recently.

Again, it's critical for a transparent, effective AML regime to drive forward the transfer of critical financial intelligence to FINTRAC, which can then properly analyze it and then provide it to law enforcement.

Building a regime, as you've done here, or continuing to add to a regime, is important, and we think that minor amendments that don't change the substance of the bill are important to ensure that this bill achieves its policy goal of strengthening the AML regime in Canada.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Bill C‑12 requires that the compliance program adopted under the act be “reasonably designed, risk-based and effective”. How will this standard help you focus your efforts on financial crime risks, such as highly sophisticated money laundering and cyber-fraud schemes, rather than serving as window dressing compliance?

[Hartland Elcock]

Our members invest heavily in their AML programs. This investment cuts from everything from training of employees to the design of their controls. What's in this bill will, if properly amended, create efficiencies and effectiveness that ensure the regime functions effectively and provides the information that FINTRAC requires to meet its mandate.

[Michael Donovan]

I would just add that I think provision in particular codifies what the banks are already doing, but helps bring a level playing field to other reporting entity sectors across the regime that may not have adopted the same compliance approach. The technical amendments that we're looking for are just to provide some assurity and transparency to the criteria which we'll be measured against in terms of bringing that compliance program that is risk-based and effective to bear.

Right now, the way it's written is still very subjective. We would just like a little bit more clarity and criteria around what is going to be that test of what's effective. As it's drafted right now, that's a little bit ambiguous to us.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Do you have any recommendations as to the clarifications that should be made in this regard?

[Hartland Elcock]

We would encourage consultation on that point, particularly as it's a regulatory point.

As Michael mentioned, our members certainly already have robust, well-funded programs. I think consultation will help to breathe life into the regulations and help to set a standard that benefits the AML regime as a whole. As Michael mentioned, there may be other sectors that would greatly benefit from a clear pathway here. The banking sector is a leader in this space and through consultation would certainly be able to provide its views to the government on how best to design these future regulations.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Do I have any time left, Mr. Chair?

[The Chair, Liberal, Jean-Yves Duclos]

You have 30 seconds.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

I'm going to give my time to Mrs. DeBellefeuille.

[The Chair, Liberal, Jean-Yves Duclos]

You can feel the love around this table.

Mrs. DeBellefeuille, you have the floor for three minutes.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Thank you very much for your generosity, Ms. Dandurand. Our guests have to listen to the interpretation to understand me, which leaves me less time to ask my questions.

Mr. Elcock, you often refer to your brief. You may not be in the habit of testifying before parliamentary committees, but since you didn't submit your brief in both official languages, no one around the table was able to read it before your appearance. However, I believe you have the means to prepare a brief in both official languages. That would have allowed us to delve deeper into your testimony and further explore the amendments you are proposing. That was just a little piece of advice.

Could you tell us the big difference between the current regime and the one proposed in Bill C‑12? What would the bill change day to day for banks? If it gets passed, would the Quebeckers and Canadians who frequent your establishments be better protected?

[Hartland Elcock]

Thank you for the feedback.

The major difference with Bill C-12 for our members to some extent isn't significant. Our members are highly compliant. They have a strong compliance culture and invest heavily in their operations, both from a compliance perspective and, as I said in my opening remarks, from the perspective of engaging directly with FINTRAC to drive forward education in this space to provide all reporting entities with key indicators on reporting on specific types of money laundering and terrorist financing. Therefore, banks are leaders in the AML regime.

However, what we do think are important are minor amendments to this bill that will help the bill achieve its policy goal of building a stronger compliance and supervision framework for all 35,000 reporting entities.

An example is mandatory enrolment. We support mandatory enrolment in principle. It's important that FINTRAC be able to understand who all of its reporting entities are. It needs to know its reporting entity base. In our view, banks shouldn't be included in that program simply because it's duplicative for banks. Banks are already overseen by OSFI. There's already a registration program in place there.

Similarly, banks actually provide assessments to FINTRAC to support its compliance operations, as is common in the financial services sector. FINTRAC has a strong relationship and knowledge of all banks operating in Canada, and we don't feel there's a need for banks to provide this registration information. It would simply be duplicative and potentially conflicting between different registration regimes.

That does not mean, though, that we do not support mandatory enrolment. Mandatory enrolment, as I said, is very important, in principle, for the regime and it's critical. This is a critical step forward in Bill C-12 for FINTRAC to have that information on a broader set of reporting entities, which are 35,000 in number.

[The Chair, Liberal, Jean-Yves Duclos]

Thank you, Mr. Elcock, for that brief intervention.

MP Au, you have the floor for five minutes.

[Chak Au, Conservative, Richmond Centre—Marpole, BC]

Thank you for the presentation.

I come from Vancouver. I represent the riding of Richmond Centre—Marpole, so I'm quite familiar with the so-called Vancouver model of money laundering. One thing we've identified in the past was that many of those criminal activities of money laundering actually went through the currency exchange operations. We see that quite often if one operator is being red-flagged or sanctioned, they can easily change the name and open up another new operation to carry on with the activities.

From your perspective, is this still going on? Also, is Bill C-12 going to do anything about interrupting that kind of chain of operations?

[Hartland Elcock]

It would be inappropriate for me to comment on specific risks within the money-laundering sector. That's maybe a better question for FINTRAC. The CBA, as a trade association, doesn't have line of sight on that level of specificity.

What I would say, though, is that what's being proposed in Bill C-12 will outline improvements to supervision enforcement, which, as I think Michael mentioned, are important for reporting sectors as a whole.

With the appropriate amendments to Bill C-12 to target it and create transparency and predictability in its application, I think we will help to encourage compliance with the PCMLTFA for certain reporting sectors and drive forward a stronger and more efficient money-laundering regime that keeps pace with risk.

Risks in the AML space are always evolving. That's why our members invest so heavily in their operations, their programs, their policies, their procedures and their training to ensure they can detect and deter risk as it changes.

[Chak Au, Conservative, Richmond Centre—Marpole, BC]

Are you saying that the underlying loopholes that enable the Vancouver model will remain open even if Bill C-12 passes? Is that correct?

[Hartland Elcock]

I don't think that's correct. It simply would be inappropriate for me to comment on that level of specificity. I don't have line of sight on that level of operational information. Again, it is a better question for the government.

[Michael Donovan]

I would just add that as we look at Bill C-12, I think there are provisions in there that look to help identify individuals involved in the Canadian AML regime from a financial perspective. Those provisions will help identify them so that FINTRAC can properly supervise them.

There are amendments in here asking for greater supervision and assurance that FINTRAC is getting the information it needs to be able to ensure compliance with the AML laws and regulations. Then there are suggested technical amendments for the requisite penalties to be in place for those who are going to be egregious about not complying with those requirements. From that perspective, that's why we're very supportive of what's contained here within Bill C-12, with the right technical amendments so we don't have the unintended impact.

All of that should help to strengthen the risks you're identifying through the typology of the Vancouver model or other money-laundering typologies.

The stronger identification and supervision of the players within the market and assurance that the information they're providing is accurate and meaningful can only help strengthen the regime.