Evidence of meeting #13 for Public Safety and National Security in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was c-12.

A recording is available from Parliament.

On the agenda

Members speaking

Before the committee

Elcock  Assistant General Counsel and Vice-President, Canadian Bankers Association
Donovan  Chair of the Anti-Money Laundering Specialist Group, Canadian Bankers Association
Superintendent Pat Morris  Commander, Provincial Operations Intelligence Bureau, Ontario Provincial Police
Commissioner Derek Santosuosso  Assistant Commissioner, Technical Operations, Royal Canadian Mounted Police

11:50 a.m.

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

Really, today I'm here to speak to Bill C-12, and it would be inappropriate for me to comment more broadly on risks that I don't have a line of sight on. However, I can indicate that the changes we're proposing for Bill C-12, again, are minor, and they will ensure that what's outlined in Bill C-12 will help to build a stronger regime and to better target risk.

11:50 a.m.

Chair of the Anti-Money Laundering Specialist Group, Canadian Bankers Association

Michael Donovan

I would add, though, that the government's recent national risk assessment on money laundering, which the CBA participated in by providing input and feedback, is probably a good guide as to where the vulnerabilities are within Canada's AML regime, from a money-laundering perspective. That, for us, is something we incorporate within our own institution's risk assessments that we undertake across the enterprise, as well as when we're looking at our various clients, to help determine the right mitigation controls that we need to put in place to comply with the law as well as to prevent money laundering and terrorist financing here in Canada. I think that is the appropriate document to look at, to see where there may be further opportunities to strengthen Canada's AML regime against the vulnerabilities that have been highlighted in the national risk assessment.

11:50 a.m.

Conservative

Chak Au Conservative Richmond Centre—Marpole, BC

I'm really disappointed that you failed to comment on the bigger picture. You narrowly confined yourself to a very small area.

Anyway, I'm going to ask you another question regarding the banks that you represent.

We know there are some changes in new money-laundering methods linked to the drug trade, such as crypto layering, funnel accounts and trade manipulation. Again, how is the bank sector adapting to those kinds of new methods of money laundering? What have you been doing, and what kinds of measures have you adopted?

11:50 a.m.

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

Well, as Mike outlined, the national risk assessment has been updated to provide pinpointed information on different types of risks. Banks then invest heavily in their programs, policies, procedures and controls to help target, detect, disrupt and deter these sorts of activities.

11:50 a.m.

Chair of the Anti-Money Laundering Specialist Group, Canadian Bankers Association

Michael Donovan

I would just say it's a continuum. We are always looking to evolve our detection and deterrence methodologies within the various banks to identify these emerging risks, manage those appropriately and, in the end, ensure that we're reporting any suspicion of money laundering related to these emerging technologies or new sectors to FINTRAC so that they can appropriately do their analysis and disclose to law enforcement, as required.

11:55 a.m.

Conservative

Chak Au Conservative Richmond Centre—Marpole, BC

How fast are the banks being able to catch up—

The Chair Liberal Jean-Yves Duclos

Thank you. I'm sorry, MP Au, but that's all the time we have for that segment.

We have MP Ramsay for the next segment, and then we'll move to Madam DeBellefeuille.

Mr. Ramsay, you have the floor for five minutes.

Jacques Ramsay Liberal La Prairie—Atateken, QC

To begin, I would simply like to say, as Mrs. DeBellefeuille said, that it would have been very useful for committee members if the Canadian Bankers Association had produced its brief in both official languages.

Mr. Elcock, I had the benefit of meeting you before the meeting, so I already had some material. One of your recommendations is as follows: “Add a regulation making power to establish and provide certainty on the criteria…”

In your presentation, you seem to refer a lot to FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada. Tell me why FINTRAC can't determine those criteria. I would have thought it could already adopt those kinds of regulations to meet the conditions you talked about.

11:55 a.m.

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

What we'd like to see is the criteria in regulation rather than in guidance: This creates more transparency and predictability. It also ensures consultation with reporting entity sectors to ensure that all of the different factors that should be considered and potential unintended consequences are worked through with government. It leads to a robust set of criteria. It's not uncommon in regulatory or supervision frameworks for specific criteria to be included in regulation.

Jacques Ramsay Liberal La Prairie—Atateken, QC

Is FINTRAC capable of holding consultations like that?

11:55 a.m.

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

We would like to see the Department of Finance consult on future regulations, as is common practice under any regulation of the PCMLTFA.

Jacques Ramsay Liberal La Prairie—Atateken, QC

You talked about millions of suspicious transaction reports. In your opinion, how many of those reports are analyzed by FINTRAC and lead to further action?

11:55 a.m.

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

A suspicious transaction report is an STR. These are reports on transactions where there are reasonable grounds to suspect that there is money laundering, terrorist financing, sanctions evasion or an attempted transaction that could be linked to those three offences.

Once that information is passed to FINTRAC, it's confidential as to how it's handled and whether it's disclosed to law enforcement and how that's done. I would encourage engagement with FINTRAC and FINTRAC's annual report to better understand the potential outputs of STRs and how they use that information.

Jacques Ramsay Liberal La Prairie—Atateken, QC

That doesn't stop you from talking about a large number of low-value transactions. So you still have your opinion on that. I understand that FINTRAC has the final say on this, but, in your opinion, how could the process be improved to generate more suspicious transaction reports that lead to an outcome?

11:55 a.m.

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

There have been a number of advancements to address this particular point in the last several years, one being private-to-private information sharing. This helps organizations, reporting entities under the PCMLTFA, if properly empowered and approved by the Office of the Privacy Commissioner of Canada, to share information that will allow them to identify complex criminal networks and improve their ability to determine if there are reasonable grounds to suspect money laundering and terrorist financing, which then allows for an STR to FINTRAC.

I think more improvements in this area are positive. We've seen public-to-private information sharing also being discussed. I think appropriate AML information sharing that properly balances the privacy of Canadians with their security and safety is an effective way to ensure that financial intelligence STRs are targeted on bad actors and that FINTRAC has actionable information that it can use to empower law enforcement.

Also, I'd draw attention to the efforts of our members in this area: the public-to-private partnerships. I mentioned Project Guardian, for example, that helps to develop or has developed indicators around money laundering linked to fentanyl trafficking. This isn't important only for our members; this is important for the regime overall. It educates all the foreign entities—

Noon

Liberal

The Chair Liberal Jean-Yves Duclos

I'm sorry for interrupting, Mr. Elcock, but the time is up. Thank you.

Mrs. DeBellefeuille, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Elcock, I'd like to continue the discussion we started in the last round.

You told me that it was important to know the regulations in order to know the rules of the game, and that duplication was to be avoided. What impact could duplication have on our ability to intervene in money laundering? What should be avoided?

Noon

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

The only area of duplication that we're dealing with, in our view, at least in Bill C-12, is mandatory enrolment. Again, mandatory enrolment is important. It's important that FINTRAC know its reporting entity base, but our members already have a strong relationship with FINTRAC and are already well known to FINTRAC. All of the relevant information is already collected and maintained by OSFI.

It is a duplication to have our members register both with FINTRAC and with OSFI. This is the only area where we see a need for a minor technical amendment to avoid duplication, but again, we do not want our comments to be confused with not supporting mandatory enrolment.

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

I'm sorry to interrupt you, but I just want a better understanding.

You agree that if we pass Bill C‑12, there will be some duplication, especially for your members, since you seem to be telling us that you're quite advanced on the whole compliance issue.

However, I insist: What does Bill C‑12 change for you? You're telling me that there could be some duplication. You have to know the rules of the game, but you were consulted by the government. You shared your concerns and worries with the government. Does it seem like you were heard or completely ignored?

Noon

Assistant General Counsel and Vice-President, Canadian Bankers Association

Hartland Elcock

The Department of Finance operates a robust consultative framework. What we're suggesting here are technical changes to supervision and enforcement in proposed amendments in Bill C-12. None of our changes seek to undermine the core purpose of the bill or its policy intent. Again, our minor changes, which are technical changes to wording, are only to drive forward efficiency and effectiveness.

What we see in Bill C-12 is a bill that will enhance supervision and enforcement powers under the regime, or proposes to. We believe those enforcement and supervision enhancements should be predictably, transparently and fairly applied. The minor changes will achieve that.

Noon

Liberal

The Chair Liberal Jean-Yves Duclos

Thank you, Mr. Elcock. I'm sorry to cut you off so abruptly, but we're at the end of the hour we were able to spend together.

Mr. Elcock and Mr. Donovan, thank you very much for being here and participating, and for your preparation. We wish you a good day.

We will suspend for a few minutes while we bring in the other witnesses.

The Chair Liberal Jean-Yves Duclos

We're back, and we will now begin our second hour of testimony and questions.

I'd like to begin by welcoming our guests for this second hour.

From the Ontario Provincial Police, we have Superintendent Pat Morris, commander of the Provincial Operations Intelligence Bureau, by video conference. From the Royal Canadian Mounted Police, we have Derek Santosuosso, assistant commissioner, technical operations, and Superintendent Kimberly Hopkins, director general, sensitive and specialized investigative services.

Welcome to all three of you.

Superintendent Morris, I understand that you also represent the Canadian Association of Chiefs of Police, so you're going to give us a bit of an overview from both organizations. You have the floor for 10 minutes.

Chief Superintendent Pat Morris Commander, Provincial Operations Intelligence Bureau, Ontario Provincial Police

Honourable members of the committee, thank you for the opportunity to appear before you today. I come to speak on behalf of the Ontario Provincial Police and, more broadly, the members of the Canadian Association of Chiefs of Police.

My role is not to comment specifically on matters of federal jurisdiction, although they are intrinsically tied to this legislation and our overall mission in public safety. I will focus on the critical areas in which the current and associated legislation, both Bill C-12 and Bill C-2, and the mandates and roles of our federal law enforcement and intelligence partners merge with those of the Canadian law enforcement community more broadly.

With that in mind, I am specifically focusing on the public safety threats of transnational organized crime, terrorist and extremist entities. I will discuss the convergence of these actors, malevolent foreign actors, transnational repression and the devastating impact of illicit commodities including drugs and weapons as well as human trafficking and transnational fraud, including cryptocurrency and trade-based and traditional money laundering, which impact public safety and the integrity of our criminal justice system on a daily basis.

Border security, national security, the integrity of our immigration system and the other related security measures referred to in the title of this legislation are key to public safety. This includes the safety and security of our citizens in their daily lives as they are impacted by crime and also the more elusive threats of transnational crime, terrorist conspiracies or foreign actor interference. It is the detection, prevention and mitigation of these nefarious impacts on Canadians and the disruption of the actors that perpetrate them that are our joint responsibility—what we refer to as our mission.

I wish to communicate clearly about the role of the OPP and Canada's police services in this operational environment, the complexity of our task, the challenges our investigators face daily, and how legislation such as Bill C-12 and other factors included in Bill C-2 are an absolute requirement for us to fulfill this mission and enhance the safety of Canadians. In my opinion, some are just a matter of common sense, such as lawful access.

By way of introduction, the OPP is comprised of approximately 10,000 members. It is the second largest police service in Canada and one of the largest deployed services in North America. While it provides frontline services for over 300 communities, it is responsible for vast territories that include marine and land border points, critical infrastructure and transportation in proximity to key ports of entry. The OPP also provides a host of specialized investigative services, such as intelligence and investigative capacity specific to transnational organized crime and terrorism and sophisticated investigative supports in relation to cybercrime, physical and electronic surveillance and other services.

Recently, we have watched significant developments in international relations that merit our attention. The United States conducted military operations in the Caribbean that resulted in civilian casualties. In response, trusted intelligence partners have signalled concerns about operational practices and have adjusted their intelligence co-operation. We have seen escalations in global conflict, demographic shifts, polarization, a lack of societal cohesion and increased impact domestically by foreign actors that impact the trust in our public institutions, including the police.

These are significant to us, not because the Ontario Provincial Police have a role in foreign policy but because they illustrate a broader reality. The geopolitical environment is altered. Events in the Middle East, Ukraine and Venezuela impact public safety in our small towns. Further, partnership frameworks that have governed international security for decades are shifting. For Canadian law enforcement, this means we must be thoughtful about how we develop our own operational capacity, how we leverage our intelligence resources, how our legislative norms ensure interoperability domestically and with allies—ultimately, how we build and maintain national and border security within this environment, enhancing the safety of our communities at home.

This is not a cause for alarm. It's simply a recognition that our society and the threats that are presented as well as the remedies, require more complex partnerships and more careful management. Canadian law enforcement must be increasingly nimble in our operational effectiveness. In this, we need your help.

Against this background of geopolitical change, I want to describe the very concrete operational challenges Canadian law enforcement agencies face every day. These are not theoretical but operational, as recently as today.

By way of example, just this month, the OPP seized 46 kilograms of fentanyl in a single operation. That is equivalent to 460,000 street doses. This represents only one single enforcement action against trafficking networks that, by federal health estimates, have resulted in approximately 18 deaths per day or 1,377 apparent opioid toxicity deaths in the first quarter of 2025.

The OPP and numerous services have been very engaged in targeting these trafficking networks, especially in relation to fentanyl and cocaine. Our success in countering these threats is of paramount importance, hence our discussion today.

The first reality is that sophisticated criminal organizations—Mexican cartels, South American trafficking networks, Chinese production operations and transnational criminal organizations in general—are using our country as a critical node in global supply chains. These are not traditional drug trafficking and money-laundering organizations. They operate with unprecedented sophistication. This resulted in the listing of seven criminal organizations as terrorist entities in 2025.

Intelligence indicates that at least seven major transnational criminal organizations maintain operations in our country. They have systematically embedded operatives within Canadian shipping logistics chains and export facilities. They have cultivated relationships with corrupted public and private sector employees, including port workers, warehouse supervisors, and transportation and licensing officials. They understand Canadian supply chain vulnerabilities and they exploit them methodically.

The challenge is not that organized crime exists. The challenge is the scale, the sophistication and the integration of these networks into legitimate commercial entities. A single corrupted supervisor or long-haul trucker can enable multiple trafficking operations, each generating hundreds of thousands of dollars in criminal proceeds. The changes proposed in Bill C-12 will assist in this regard undoubtedly, and we welcome them, but they fall short.

The most sophisticated investigative technique in organized crime today is effective and reasonable lawful access, including interception of criminal communications as warranted under part VI of the Criminal Code, but Canadian law enforcement faces monumental obstacles in this regard. Criminals communicate on encrypted social media applications. That is how they execute money-laundering schemes, engage in terrorist conspiracies and involve themselves in acts of murder, and yet our legislation does not recognize and act on the evolution of technology and the tools and procedures required to disrupt these conspiracies.

As the officer responsible for this capacity in the Ontario Provincial Police and the joint-force joint technical assistance centre, I can assure you that this is an absolute daily impediment with real-life consequences to our citizenry. Bill C-2 contained the lawful access updates that are necessary to be successful in combatting modern, technologically enabled crime to protect victims and prosecute offenders.

The second threat and reality is that first nations communities and territories adjacent to our border are being systematically utilized and exploited as smuggling corridors and contraband staging zones. In May 2025, the OPP's Project Panda disrupted a criminal network operating within Six Nations and uncovered transnational criminal organizations manufacturing counterfeit products, including up to 500 million counterfeit cigarettes annually on first nations territory. These operations employ community members and create a cycle where economic incentive overwhelms longer-term community welfare.

Akwesasne, Tyendinaga and communities along the St. Lawrence Seaway have similarly become primary smuggling routes for firearms and have been host to production of illicit commodities. In October of 2025, the OPP's Project Chase executed multiple search warrants, seizing over 110,000 marijuana plants with a street value of over $120 million.

This is not only a first nations law enforcement problem. This is an effective exploitation of opportunity. This is a threat that will also be faced in areas of burgeoning development in our country, such as Ontario's Ring of Fire and its access to rarefied minerals. Addressing this challenge requires both effective enforcement and collaboration. Bill C-12 provides tools for border security and the enforcement dimension, and they will assist us. Here too, legislative authority for sophisticated lawful intercept, as outlined in Bill C-2, will assist in intelligence acquisition, criminal investigation and prosecution.

The third threat is one that law enforcement has only recently begun to fully operationalize. Foreign governments are conducting security operations within Canada through proxy networks and organized crime groups. This activity is having a devastating impact on Canadians, especially those within certain diasporas. This was expertly addressed by the CSIS director in his address last week.

In September of this year, by way of example, the Bishnoi gang was designated as a terrorist entity. This organization operates globally, with approximately 700 members, including a substantial presence in Ontario.

It is simultaneously a criminal organization engaging in extortion, assault and murder and a proxy for transnational repression, targeting individuals based on their political affiliations or government stance.

The Chair Liberal Jean-Yves Duclos

Superintendent Morris, you have a couple more seconds, please.

C/Supt Pat Morris

Bill C-12 will enable our operational effectiveness, first, by the improvements in relation to the border security authority, which give us enhanced interoperability with our federal partners; second, by significant improvements in intelligence sharing and information access with key federal partners; third, by the financial intelligence integration, especially in relation to anti-money laundering and mandatory compliance; and fourth, by the enhancements to the Controlled Drugs and Substances Act in relation to precursor chemical control, and protections for our undercover operators.

In conclusion, I welcome these changes, but via viable technological utility. There is a need to modernize Canadian legislation and policy mechanisms to match the pace of technological innovation related to public safety. Our legislative environment is slow to adapt, and this presents daily risks, evidentiary losses and public safety impacts. Criminals communicate and conspire as the rest of society does, via social media applications, not archaic copper lines. Law enforcement encounters encryption, anonymization—