Proceedings of the Standing Senate Committee on
National Finance
Issue 11 - Evidence - May 7, 2014
OTTAWA, Wednesday, May 7, 2014
The Standing Senate Committee on National Finance met this day at 1:55 p.m. to study the subject-matter of Bill C- 31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this afternoon, we are going to continue our study of the subject-matter of Bill C- 31, An Act to implement certain provisions of the budget tabled in Parliament on February 11, 2014 and other measures.
[English]
We have two witnesses today on two different parts of Bill C-31. By video conference, we welcome Mr. Paul Beesley, Detective Inspector, Anti-Rackets Branch, with the Ontario Provincial Police.
Detective Inspector Beesley will be speaking on Part 1, clause 28, which deals with disclosure of taxpayer information to a police organization. Clause 28 can be found on page 13 of the bill.
We also welcome back, on a different subject this time, Mr. Darren Hannah, who is the Acting Vice President, Policy and Operations, with the Canadian Bankers Association. Mr. Hannah will be speaking to us today on Part 5, clauses 99 to 101, Canada-U.S. Enhanced Tax Information Exchange Agreement Implementation Act, on page 72 of the bill. Should we begin, then, with Detective Inspector Beesley? Do you have any opening remarks?
Paul Beesley, Detective Inspector, Anti-Rackets Branch, Ontario Provincial Police: I do, sir. Thank you. Can you hear me okay there?
The Chair: Yes, we are fine.
Mr. Beesley: Mr. Chair and committee members, it's my pleasure to appear before you today. I am thankful for the opportunity to represent the Ontario Provincial Police and our new Commissioner, Vince Hawkes, on this particular section of Bill C-31, on behalf of the men and women who investigate financial crimes and criminal enterprises in particular. We value the investigative information and leads provided to us through our relationships with investigative partnerships in law enforcement, including the RCMP, municipal and First Nations police services and our federal government agency partners, which include the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC, and the Canada Revenue Agency.
FINTRAC assists law enforcement with information involving the transfer of funds and the tracking of proceeds of crime used by criminal and terrorist organizations. This information supports full, thorough and professional investigations. Tracking the proceeds of crime is important to the work we do to keep communities safe. Profit- motivated criminals consistently extract billions of dollars annually from the legitimate economy. Criminals use this money to strengthen their businesses and finance other criminal enterprises.
Criminal activities such as drug trafficking, gunrunning, fraud, human trafficking and the black market sales of illicit goods and services are driven by the profits that they generate.
Criminal organizations have a destructive impact on our lives and our communities. They can also lead to a wide spectrum of violent acts, including intimidation and extortion.
In our efforts to combat enterprise crime, we focus on three pillars: prevention, intervention and suppression.
With the growth of commonly used technology, like electronic banking, all manner of financial records have become integral to the evidentiary requirements of successful investigations.
Currently, there are two ways in which law enforcement can obtain taxpayer information from the Canada Revenue Agency. First, section 241(3)(a) of the Income Tax Act allows taxpayer information to be disclosed to law enforcement when an information in a criminal proceeding has been laid.
Second, section 241(4)(e)(v) of the Income Tax Act allows taxpayer information to be disclosed pursuant to an order made under section 462.48(3) of the Criminal Code. That section of the Criminal Code allows disclosure of income tax information for listed offences upon application from the Attorney General. The listed offences are various offences under the Controlled Drugs and Substances Act and the Criminal Code dealing with organized crime, proceeds of crime and money laundering. About 70 per cent of all proceeds of crime are money laundering investigations utilizing one of those authorities.
The current regime, however, is burdensome. It prohibits pre-charge disclosure of taxpayer information in most cases. This added burden imposes restrictions that compound delays that exist in obtaining financial records as part of an already complex and lengthy investigation.
The amendments proposed to section 241 of the Income Tax Act, as I read them today, would allow police organizations access to information through a process based on reasonable grounds to believe a listed offence has been committed. This is the same test used to obtain Criminal Code search warrants and production orders. It is our opinion that, if passed, Bill C-31 would ensure police continue to have the updated legislative tools to attack profit-motivated crime while maintaining public safety.
The OPP enforces laws; we do not make them. We do, however, support legislative change that provides law enforcement with the tools and resources to maintain public safety. Prompt access to financial and tax records is very valuable in the fight against organized criminal activity. Again, the OPP is pleased to make a contribution as you consider Bill C-31. I would be happy to answer any questions that you might have.
The Chair: We'll continue with Mr. Hannah, and then go to questions. Each senator who has a question will pose it to one or the other of our witnesses. Mr. Hannah, you have the floor, sir.
Darren Hannah, Acting Vice President, Policy and Operations, Canadian Bankers Association: Good afternoon. My name is Darren Hannah, Acting Vice President of Policy and Operations with the Canadian Bankers Association. I'm very pleased to be here today at the committee's invitation. The CBA strongly supports the government's decision to enter into an intergovernmental tax information sharing arrangement with the U.S. because it relieves Canadians of the burden they would otherwise face due to the U.S. Foreign Account Tax Compliance Act.
As you know, FATCA was passed in the United States in 2010 and is intended to detect U.S. persons who are evading U.S. tax using financial accounts held outside the United States. Under FATCA, non-U.S. financial institutions would be required to report relevant information to the U.S. tax authorities about financial accounts held by identified U.S. persons. CBA has been very clear on FATCA from the beginning. While we understand that the U.S. government is attempting to address tax evasion, we have opposed how they are going about it with FATCA. Canada is not a tax haven and Americans do not move here to evade taxation. We actively opposed FATCA publicly with appearances before and submissions to U.S. government authorities.
Unfortunately, despite worldwide efforts by the CBA and others, U.S. officials have no intention of repealing FATCA; and simply ignoring FATCA is not an option. Non-compliance would mean that both the financial institution and every customer of that financial institution, in Canada and around the world, would face a 30 per cent withholding tax on any U.S.-source income and on the sale of any U.S.-source investments and potentially withholding tax on Canadian source income due to the so-called foreign pass-through payment provisions. This means that any bank customer or retiree that had U.S. mutual funds, stocks or bonds would have faced billions of dollars of lost income due to withholding tax even if they had no other ties to the U.S. For financial institutions, non-compliance would effectively mean that we would longer be able to do business in the U.S. capital markets or with any institutions that do business in the U.S. capital markets, which is effectively every major financial institution in the world.
To ensure that Canadians did not face substantial negative consequences that could have come with FATCA, on February 5, 2014, the Canadian government announced that it had entered into an intergovernmental agreement, IGA, with the U.S. government under the existing Canada-U.S. Tax Convention Act. The requirements of the intergovernmental agreement are reflected in the proposed changes to the Income Tax Act in Canada under Bill C- 31. And financial institutions will be required to comply with the changes under Canadian law.
We have agreed with the federal government that entering into an intergovernmental agreement is the best approach under the circumstances. We recognize and support the efforts that the Canadian government has made. Under the intergovernmental agreement, financial institutions will report relevant information on accounts of U.S. persons to the Canada Revenue Agency, rather than directly to the U.S. Internal Revenue Service. The Canada Revenue Agency will then exchange the information with the Internal Revenue Service through the provisions of the existing Canada-U.S. Tax Convention. The 30 per cent withholding tax will no longer apply to retail clients of Canadian financial institutions.
What does this mean for bank customers in Canada? The vast majority of Canadian bank customers are not U.S. persons and for them, the intergovernmental agreement will have no impact. Under the intergovernmental agreement, banks will review their customer information. If there is no information indicating that an individual may be a U.S. person, then they will not have to do anything.
If a customer has an existing account and there is an indication that they may be a U.S. person, or if they are opening an account, their financial institution may ask them to provide additional information or documentation to demonstrate that they are not a U.S. person. However, if they choose not to provide additional documentation upon request, the financial institution may be required by Canadian law to report the account information to the Canada Revenue Agency.
Under both the intergovernmental agreement and Canadian banking law, proof of citizenship is not required to open a bank account. The vast majority of Canadians can open an account with financial institutions as they always have. However, if there is some indication in a new or existing account that they might be a U.S. person, then their financial institution may have to ask them to self-certify that they are not a U.S. person for tax purposes.
In conclusion, as I've said, FATCA is here to stay and ignoring it isn't an option. We fully support the government's work in putting in place an intergovernmental agreement. I look forward to your questions.
The Chair: We will start from that proposition. FATCA is here to stay so how do we live with it? The elephant living next door has passed a law and because we are so interrelated with the U.S. in terms of business activity and financial transactions, we have to adjust; and this is the government's attempt to adjust. Each of you is content with the initiatives being taken. Mr. Hannah?
Mr. Hannah: Yes, absolutely, we strongly support the measures.
The Chair: We'll go to questions starting with the Deputy Chair of the Committee, Senator Smith from Montreal.
Senator L. Smith: Mr. Beesley, could you give us the background of your relationship? How does it work between the OPP and FINTRAC? When do you get involved? How do you use the information that FINTRAC gives you? Where do you get together in the process of an investigation?
Mr. Beesley: FINTRAC's reports come to the police. They can come to us unsolicited. Sometimes various police agencies will get notices of suspicious transactions. We can use that to start an investigation and then we can seek additional information from FINTRAC. Sometimes we can't get the information automatically. Of course, there are privacy concerns. Suspicious large cash transactions are often reported to police. Many of them are legitimate transactions that have been caught in the legislation. Every now and then we get a nugget that we can add to other information about the source of that money or we may conduct an investigation into the activities of a certain person or company. We will get a FINTRAC report and marry those two to sort of add to the general evidence that we use primarily in money laundering investigations.
Senator L. Smith: That's sort of how it could work. From a strategic perspective, when you know of criminal activity or groups that have been associated or affiliated with criminal activity in the area of money laundering, if you already have relationships, whether in Canada or the U.S., do you take a strategic approach to dealing with FINTRAC as opposed to them reporting just transactions to you? They give information to you, but on a strategic side, if you have known criminal elements that you are trying to have surveillance on, I would assume the relationship is slightly different. It's more planned; is that correct?
Mr. Beesley: That is correct, sir. We will ask FINTRAC to look for certain activities of targets of investigations, primarily involved in organized crime, money laundering, drug trafficking, those kinds of things, where there are large cash receipts, if you like, if that's a term I can use.
Drug trafficking is a cash business. The criminals aren't going to declare this as their money from drug trafficking. They'll try to hide that through some sort of legitimate activity. That is hopefully where FINTRAC can identify those areas where there are large amounts of cash being, for want of a better term, washed through legitimate businesses.
We would ask FINTRAC to watch for particular targets. Sometimes they can, sometimes they can't, depending on where we are in an investigative process, and also because of the legislation they are bound by.
Senator L. Smith: Could you give our committee a two-second overview of how you deal with other police forces across the country? I understand you're each independent bodies operating within your own jurisdictions, but how would you work with other people in lieu of money laundering and with FINTRAC as a group?
Mr. Beesley: I can speak specifically to the situation in Ontario. I don't want to speak for the RCMP, but I'm aware of their Integrated Proceeds of Crime program.
Let me first deal with the situation in Ontario. In Ontario, the OPP operates a partnership with 19 other municipal agencies. We operate a unit known as the provincial Asset Forfeiture Unit. It's a joint forces operation of 19 police services, led by the OPP, funded with provincial funds. Their primary purpose is to seize assets of ill-gotten gains and money laundering investigations.
Again, I do not want to speak for the RCMP, but the Integrated Proceeds of Crime Unit is an RCMP-led program, funded federally. The OPP is a participant in that program. There are units across the country. They deal with primarily large international money laundering investigations, where the substantive crime, if you like, is money laundering.
The provincial Asset Forfeiture Unit deals with proceeds of crime investigations that flow from perhaps drug investigations or human trafficking investigations, whereas the IPOC tends to conduct stand-alone proceeds of crime where that's the substantive offence.
It's an issue of scale. The RCMP IPOC program deals with massive international money laundering schemes, and we would deal with that on a provincial or local level. I don't know what happens in other provinces.
Senator L. Smith: Just a last point, chair, if I could.
Section 28 of the budget, in terms of the article that's put in, is helpful to you in pursuing the types of information that you need in case studies; is that correct?
Mr. Beesley: It is, sir. Yes, sir.
Senator L. Smith: Were you going to add something? You looked like you were going to say something else.
Mr. Beesley: I think I said in my opening remarks that the current system is very — we could call it burdensome, and it's very limited in terms of what tax information can be obtained. Currently, a Criminal Code charge is required to be laid before we can get tax information on most taxpayers.
It's sort of putting the cart before the horse under the current regime. We have to prove that there is a proceeds of crime or money laundering case, and then we can get the tax information; whereas if it were the other way around, the taxpayer's information of what they were claiming as legitimate income is very important to us when we're conducting what we call a net worth analysis. For instance, someone who is declaring $50,000 in income but living in a million- dollar house doesn't make any sense to anyone.
That's where pre-charge tax information would be very useful. Currently, it is only available in very limited circumstances, through a provision in the Criminal Code.
Senator Callbeck: Detective Beesley, prior to the changes, if the CRA came across something illegal, my understanding is there's nothing they could do about it.
Mr. Beesley: The CRA has a criminal investigation division of its own. Again, I don't speak for the CRA. If the CRA came across something illegal, my understanding is that you're correct; if a taxpayer who is, for instance, involved in drug trafficking declared to the CRA, ``My source of income is drug trafficking,'' that would not necessarily be shared with the police.
Senator Callbeck: Not necessarily, but they could?
Mr. Beesley: I think, as the act is currently written, section 241 prohibits the disclosure of taxpayer information, except in the two circumstances that I've talked about. One is post-charge, where there's a nexus to the crime; and the other is under an order of the Criminal Code, under section 462.48 of the Criminal Code. Currently, as understand it — and I don't profess to be a tax expert — those are the only two circumstances in which taxpayer information can be shared with anyone — the police especially.
Senator Callbeck: The people who work for Canada Revenue Agency, do we need anything to ensure their safety and security? Is there any way that a criminal organization can find out if they gave the information, or who gave it?
Mr. Beesley: If a member of a criminal organization is charged, the law requires full, frank and fair disclosure of the evidence. As I'm just thinking forward, I would suspect that someone from CRA would have to testify to the veracity of those tax returns. Ultimately, somebody from CRA would have to be a witness in any criminal proceeding against a member of a criminal organization. In terms of protection, I think that's out of the scope of my area of knowledge.
Senator Callbeck: Mr. Hannah, this is a very complex issue that you're dealing with, and I am wondering about it being in an omnibus bill. Wouldn't this have been better dealt with in stand-alone legislation?
Mr. Hannah: Senator, I can't speak to the modality by which you go about passing legislation. That's clearly for policy-makers. From a banking industry perspective, though, we have a great interest in having it passed because of the importance of the issue at hand. Canadian foreign direct investment in the U.S. totalled $318 billion as of last year. U.S.-source income flowing to Canadians was $42 billion. Clearly there's a lot at stake, so from our perspective it's very important that the intergovernmental agreement be brought into effect in order to avoid the consequences that would otherwise befall us.
Senator Callbeck: You say that your organization supports it very strongly. I'm wondering: Was that all the legislation or was there great debate in certain sections of it?
Mr. Hannah: We support the legislation in order to bring into effect the intergovernmental agreement.
The legislation, as we understand it, is designed to give effect to the intergovernmental agreement that will allow us to not have to be subject to the U.S. FATCA legislation and will not have to require that financial institutions enter into FFI agreements and everything that goes along with that. From our point of view, it's really important that the enabling legislation be passed to bring the agreement into effect.
Senator Callbeck: All right, so there are actually no areas where there was a lot of dispute about it?
Mr. Hannah: In the current legislation? No, we support the current legislation as it's written, yes.
Senator Callbeck: Pardon?
Mr. Hannah: We support the current legislation to enact the intergovernmental agreement as it's written. We haven't offered comment on it.
Senator Callbeck: On the issue of privacy, there have been a lot of emails from people concerned about that. Would you care to comment on that area?
Mr. Hannah: From our point of view, it is a far better alternative to have Canadian financial institutions reporting to the Canada Revenue Agency than would have been the alternative under FATCA, which would have been either again face the enormous financial consequences that the economy would have faced or face the prospect of reporting directly to the U.S. Internal Revenue Service. I appreciate the concerns, but it is a much better alternative given the stakes.
Senator Callbeck: But you do understand there are concerns about privacy?
Mr. Hannah: From our point of view, we are reporting to the Canada Revenue Agency. We have a reporting obligation associated with that. A lot of material gets reported to the Canada Revenue Agency associated with tax. This would be another element of that. There is an established relationship and a legal framework there in order to make sure that everything is done in a way that's protected and proper.
Senator Callbeck: From the financial officials, I think we got the impression that the deal with the government was not necessarily the one that they wanted. Did the government consult at all with you or stakeholders on this agreement?
Mr. Hannah: We talked at length with the Government of Canada about FATCA generally. Clearly, they are the architects of intergovernmental agreements of any type. That is their role. But do we support the agreement that has come out of the process? Absolutely, we do, because it offers a lot of benefits over FATCA itself. It offers the fact that there's no longer any withholding tax, which is very important, and the fact that, as we mentioned earlier, reporting would be to the Canadian tax authority, not to the U.S. tax authority. It reduces the scope of application, carving out a lot of things like retirement savings products, and it doesn't require any kind of account closure under any circumstances.
Senator Callbeck: In other words, you're satisfied with the amount of consultation that took place with the government?
Mr. Hannah: Yes.
Senator Callbeck: Thank you.
Senator Buth: Mr. Hannah, thank you very much for your comments. I want to go back to something that you said in your comments. If a customer has an existing account and there is an indication that they may be a U.S. person, what criteria will you use to determine that they may be a U.S. person?
Mr. Hannah: The criteria are actually spelled out in the intergovernmental agreement. I don't have them all here, but it's the usual sorts of things one would expect: U.S. place of birth, U.S. address, U.S. phone number, standing instructions to forward funds to a U.S. account. There are a few others, but it's the sort of thing you would expect, and it's laid out in the actual agreement itself.
Senator Buth: As Senator Callbeck has mentioned, we have gotten a lot of emails from people who expressed their concerns saying that they're Canadian citizens but the way the U.S. determines whether or not they're a U.S. person will capture Canadian citizens, essentially, in this information going to the U.S. Do you have any comments on that?
Mr. Hannah: What I can say is, first, in the normal course, if you're not a U.S. person, and most Canadians aren't, none of this applies. It has nothing to do with you. If you are a U.S. person, then you have a U.S. obligation because of the fact that they tax on the basis of citizenship rather than on the basis of residency. The challenge it creates for people, therefore, is that they have this tax obligation.
Ultimately, the intergovernmental agreement is about the exchange of information. It's actually not a tax agreement at all. The tax liability was always there and rests with the U.S. Internal Revenue Code. What is happening here is there's an international trend towards tax information sharing. The G20 identified it as a key mechanism to fight tax evasion. This is an example of that trend at work. We can expect to see more of this sort of thing generally because there is a generalized view that this is the way to address tax evasion.
Senator Buth: Is the U.S. the only country that taxes citizens regardless of where they live?
Mr. Hannah: As far as I know.
The Chair: Based on worldwide income?
Mr. Hannah: Yes.
The Chair: There were a couple of points that came out when we had the officials here, Mr. Hannah. One of them was U.S. person and the definition of that. Some are concerned that that definition may be broad enough to cover Canadian residents, Canadian citizens, who are accustomed to going to the U.S. during the winter months. Are you satisfied that that's a false concern, or is that a concern?
Mr. Hannah: I think everybody has recognized and is aware of the snowbird issue. I think everyone is trying to take that into account. I'm quite satisfied that the government is seized of the issue and that it's going to end up that it has largely been addressed. I'm not particularly concerned that you will get a large number of false positives, which is I think what you are concerned about, from the fact that you have people who will serially go to U.S. for four months to evade the bad weather. It might have been six months this year. I'm confident that we're not going to have significant issues in that area.
The Chair: You're confident that can be worked out?
Mr. Hannah: Correct.
The Chair: I wish all Canadians had the same confidence. That is always part of our problem, trying to ensure that they have no reason to be concerned.
The other issue that came up was a due diligence issue that the financial institutions in Canada are required to go through. We were told that a program of due diligence was being worked out so that the financial institutions would know what would be required of them, something more than just asking their customers to self-certify that they're not a U.S. person. There has to be something more than that. Are you involved in that? Is that happening, and are you confident that's moving in a reasonable direction?
Mr. Hannah: I think you're referring to whether there will be any interpretive guidance or the like that might come out of the tax authorities, as was done in the U.K. Our expectation is there will be substantial guidance to help give administrative direction to implementing the intergovernmental agreement. They did it in the U.K., and we expect we'll get something similar to that here.
The Chair: Have you made any estimate of how much this is going to cost the financial institutions and therefore be passed on to the depositors and the customers of the banks?
Mr. Hannah: There are three questions in there. I will parse them off. First off, CBA does not get involved in pricing questions, so I'll set that aside.
We do not have a specific estimate of implementation costs writ large, but what I can say is, given that we're talking about, again, $318 billion worth of foreign direct investment by Canadians in the U.S. and $42 billion worth of U.S. source income flowing back to Canadians from those investments, the economic consequences of non-compliance would dwarf any economic cost associated with compliance.
The Chair: I suppose that's a question that we don't have the convenience of debating in any event because it's something we have to do. This has already been worked out as an acceptable alternative to the Americans, and it's their legislation that we're looking for the acceptable alternative to. Thank you.
I have a couple of questions for our other witness, but I will go first to Senator Buth, who had a follow-up question.
Senator Buth: Just a supplementary question: Do you know how many people this may affect in Canada?
Mr. Hannah: I'm not certain.
Senator Buth: I think the heard the number 1 million. That was either in the emails or was in previous testimony.
Mr. Hannah: I've seen a lot of numbers tossed around, but I haven't seen any source associated with them. So I have no way of verifying the accuracy.
Senator Buth: I was hoping you would be the source.
Mr. Hannah: Oh, no, it wasn't me.
The Chair: Detective Inspector, it's not entirely clear to me, and maybe you could help me and maybe some of my colleagues. There is a group of three — FINTRAC, Canada Revenue Agency and the police force, the OPP in this instance. This legislation, you've pointed out, allows, under the Income Tax Act, for information, presumably from the Canada Revenue Agency, to be sent to a police agency before a charge is actually laid.
Mr. Beesley: That's correct, sir.
The Chair: That's one of the ways that the information will flow. I know that information goes from FINTRAC to the Canada Revenue Agency. FINTRAC gathers information on a regular basis. Do they send it automatically to you now, or do you send information about deposits of money to them?
Mr. Beesley: No. We don't send information about deposits of money to FINTRAC. The financial institutions complete submissions to FINTRAC based on activities that occur at financial institutions, and FINTRAC does an analysis. Then, they will send that information to police, often unsolicited, when it meets their threshold. They will have several transactions that will meet their threshold. I'm not exactly sure what their threshold is, but we will typically get FINTRAC reports about suspicious transactions unsolicited. We don't send FINTRAC information about deposits of suspicious money.
The Chair: In section 241 of the Income Tax Act, you have talked about the level of test as to when you could get access to the information through a process based on reasonable grounds to believe a listed offence has been committed. I believe you indicated that that's similar to a warrant; is that correct?
Mr. Beesley: Yes, sir. There are several judicial order authorities in the Criminal Code. The most common one is a basic section 487 search warrant. The test before a judicial officer in the Criminal Code is reasonable grounds to believe, so it's beyond suspicion. It's something less than the threshold used to convict a person, but it certainly allows the judicial officer, in the case of the Criminal Code, to make an informed decision about what information the police have so that the judicial officer can issue an order that conforms with section 8 of the Charter of Rights and Freedoms so that persons are not subject to unreasonable search and seizure. I believe that the legislation, as proposed, doesn't talk about ``judicial officer.'' It talks about an ``official.'' I'm not sure what the definition of an official is under the proposed amendment, but it does talk about reasonable grounds to believe an offence has been committed.
The Chair: There is some third party that would look at this request for information, like a search warrant, before you, the police force, had the opportunity to access personal tax information under the Income Tax Act, section 241?
Mr. Beesley: That's my understanding, senator, of the proposed amendment. It's interesting wording: ``An official may provide to a law enforcement officer of an appropriate police organization. . . .'' The Criminal Code uses the word ``a justice'' may issue a search warrant to a police officer or peace officer. This wording is a little bit different. I don't know what Parliament had in mind when they were using the word ``official'' or choosing the term ``appropriate police organization,'' but I'm sure that will be interpreted for us before the legislation is enacted.
The Chair: Our difficulty is that we are asked to enact this legislation based on incomplete information, which we were hoping to get from you.
Mr. Beesley: Okay; fair enough, I'm just reading the legislation, and those words are not what we see in the Criminal Code. They're a little bit different. The word ``official'' implies, to me, some sort of senior public servant, not a member of the judiciary. As for ``appropriate police organization,'' I'm not sure what that means.
The Chair: There is a test that we read in our reading of the proposed legislation, that FINTRAC has an obligation to evaluate the usefulness of the information it passes on to Canada Revenue Agency. You indicated that FINTRAC often sends information to you as well. You probably don't know what test they are applying in the information they send to Canada Revenue Agency, but is there any type of test you are aware of that they are applying before they send personal, private information about taxpayers to you at the OPP?
Mr. Beesley: I think it should be clear that FINTRAC doesn't send us taxpayer information. It sends information about transactions that occur at various financial institutions or other places where large amounts of cash may be transacted, such as a casino. For instance, your T1 return wouldn't come to us from FINTRAC. The report would usually indicate dates, times, the amount of money and the frequency that those deposits or transactions occur. FINTRAC doesn't report tax information to the police.
The Chair: Thank you. That's an important clarification. You don't see names, initially, on the information from FINTRAC?
Mr. Beesley: Not initially, but eventually we could after we had conducted a follow-up investigation.
The Chair: You get transactions without names, and you say, ``That looks interesting,'' and turn around and go back to FINTRAC and ask, ``Who was that?'' Is that how it happens?
Mr. Beesley: When you boil it down, that is essentially what happens. There are a few other processes in there where we have to confirm information and do a few other things. At the end of day, that's exactly what happens.
The Chair: Anything flow from any of those questions? My list is exhausted, and we are all probably exhausted as well. I would like to thank Mr. Hannah from the Canadian Bankers Association and Detective Inspector Beesley from the Ontario Provincial Police. Thank you to each of you for being here and helping us to understand these particular areas in the new bill that we are dealing with.
Colleagues, that's all we have for you this afternoon. We will see you this evening at the usual place and time, and we'll carry on with Bill C-31. If we could be prompt, we have the minister this evening, and then we'll proceed and hopefully finish Bill C-31 this evening from the government officials' point of view. We are in room 2 of Victoria Building, so it's not precisely the same room. Thank you. This meeting is now concluded.
(The committee adjourned.)