Proceedings of the Standing Senate Committee on
National Security and Defence
Issue No. 14 - Evidence - Meeting of May 15, 2017
OTTAWA, Monday, May 15, 2017
The Standing Senate Committee on National Security and Defence met this day at 1:15 p.m. to study the subject matter of those elements contained in Divisions 12 and 19 of Part 4 of Bill C-44, An Act to implement certain provisions of the budget tabled in Parliament on March 22, 2017, and other measures.
Senator Daniel Lang (Chair) in the chair.
[English]
The Chair: Colleagues, welcome to the Standing Senate Committee on National Security and Defence for Monday, May 15, 2017.
Before we begin, I would like to introduce the people around the table. My name is Dan Lang, senator for Yukon. On my left is the clerk of the committee, Adam Thompson.
I would like to invite each senator to introduce themselves and state the region they represent, starting with the deputy chair.
Senator Jaffer: My name is Mobina Jaffer and I'm from British Columbia.
[Translation]
Senator Saint-Germain: Good morning. Senator Raymonde Saint-Germain from Quebec.
[English]
Senator Lankin: Frances Lankin from Ontario.
Senator Woo: Good afternoon. Yuen Pau Woo, British Columbia.
Senator McIntyre: Paul McIntyre, New Brunswick.
[Translation]
Senator Moncion: Lucie Moncion, Ontario.
Senator Boisvenu: Pierre-Hugues Boisvenu from Quebec. Welcome.
[English]
Senator Beyak: Lynn Beyak, Ontario. Welcome.
The Chair: Thank you, colleagues. Welcome to our witnesses.
We will only have two panels today because of the lateness of the direction to deal with Bill C-44. In trying to contact people to come forward to the committee, it was a very short period of time, so there will have to be some decisions as to whether or not we will have further hearings on May 29. It wasn't from the lack of trying, from the clerk's office and others, to ensure we have a full day, but that's the way it's come down. So we will have to deal with it accordingly.
Once again before we begin, I want to thank the clerk and the clerk's staff for all the hard work that was done with respect to the Defence Policy Review and the release of that particular document to the general public. They did go the country mile to make it happen. Once again, thank you very much.
Colleagues, today we will be meeting for two hours to review Division 12 and Division 19 of Bill C-44, the Budget Implementation Bill.
Joining us in panel one today are Ms. Lisa Pezzack, Director, Financial Systems Division; Mr. Maxime Beaupré, Chief, Financial Systems Division from the Department of Finance. Also joining the panel is Mr. Dan Lambert, Assistant Director, Financial Transactions and Reports Analysis Centre of Canada.
Welcome to the committee. I understand that you have an opening statement. Please begin. We have one hour for this panel.
Lisa Pezzack, Director, Financial Systems Division, Financial Sector Policy Branch, Department of Finance Canada: Thank you very much, Mr. Chair, members of the committee.
The government is proposing legislative amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or the PCMLTFA, to bolster Canada's efforts to combat money laundering and the financing of terrorist activities. The proposed amendments would expand the list of disclosure recipients that can receive financial intelligence related to threats to the security of Canada to include the Department of National Defence and the Canadian Armed Forces.
Secondly, support a more effective intelligence on beneficial owners of legal entities.
Finally, make various technical and other changes to strengthen the framework, support compliance and approve the ability of reporting entities to operationalize the act and ensure that the legislation functions as intended.
A secure and stable financial sector is critical to the Canadian economy. For this reason, the government is committed to ensuring that the financial sector cannot be exploited by individuals and entities associated with criminal or terrorist organizations for illicit gain. It's important to regularly improve our anti-money laundering and anti- terrorist financing regime to address emerging risks and to maintain Canada's international leadership in the fight against money laundering and terrorist financing.
The government will strengthen efforts to combat money laundering, terrorist financing and tax evasion. This will include taking steps to improve corporate transparency to ensure law enforcement and other authorities have timely access to beneficial ownership information.
I will provide more detail about the three types of proposed amendments.
In terms of expanding the disclosure recipients related to threats to the security of Canada to include the Department of National Defence and the Canadian Armed Forces, I want to be clear that we'll be using the definitions of threats to the security of Canada as outlined in the CSIS Act. We're not expanding the definition; we'll have a very clear and concise definition.
In terms of supporting more effective intelligence on beneficial owners of legal entities, we will allow FINTRAC to disclose information on beneficial ownership to appropriate competent authorities. They sometimes have this information on record but it's not currently allowed that they could then share that information with competent authorities such as law enforcement, and the changes here today would allow them to do that.
Finally, let me outline some of the technical changes that we're looking to do. For one thing, we will be looking at clarifying some definitions. For example, the definition of "client'' has been misunderstood by various reporting entities, so we're providing greater legal clarity in terms of what we mean when we use "client'' throughout the legislation.
We will be clarifying and streamlining the regulation-making authority, which now has quite a number of options on the kind of regulations we can make. We will clarify that all trust companies that are incorporated in Canada but not currently regulated are subject to the reporting requirements.
We'll clarify that money services businesses, which are subject to the UN or the Special Economic Measures Act, SEMA, if subject to sanctions under either of those pieces of legislation, would not be allowed to be registered as an MSB in Canada with FINTRAC.
Finally, there are a number of changes that will correct English and French translation and clarify the concordance and other things.
That, Mr. Chair, is my opening statement and we welcome questions.
The Chair: Colleagues, I'd like to set the tone here in respect to at least the concerns I have and perhaps most members have, and that's the question of the privacy rights of Canadians versus the right of authorities to have access to information, number one, and number two, to provide information to other countries.
First, I have to say that I'm kind of troubled that this legislation is involved in a budget bill because, quite frankly, I think it's a separate, stand-alone issue or should be.
Can you tell us if the information that you're asking for the authority to have access to and to be able to transfer to other agencies that then will be able to transfer to other countries, the way I understand it, will this be subject to a warrant to justify this type of intrusion into private matters?
Ms. Pezzack: The information that is collected by FINTRAC from reporting entities is not subject to a warrant, but let me take a step back first, if I may.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act legislation was very carefully crafted to try and balance the rights of private individuals to maintain privacy and Charter rights, as well as to address national security concerns. So everything that we do with this piece of legislation is meant to make sure that that balance stays equal.
Furthermore, as part of the legislation, FINTRAC, which is the recipient of this reporting information, is subject to regular audits by the Privacy Commissioner to make sure that their maintenance of the privacy of individuals is maintained throughout. So before FINTRAC can release any information to anybody, it has to meet two tests. First, it has to meet the test that the information would be relevant to a threat to the security of Canada or that it is clearly related to money laundering.
Then the second part is that they have to have reasonable grounds that there is reason to pursue this information further. FINTRAC collects the information, they do analysis, but they can't just send it off to anybody for any reason. There are specific tests in the legislation about how they can treat that information, whom they can share it with and how it can be shared.
Senator Jaffer: Thank you to all three of you for being here. I appreciate your presence and your remarks.
Can I first get a clarification from you as to competent authorities? Whom do you mean?
Ms. Pezzack: Under the legislation, it would depend on what kind of information it was. There is a variety of competent authorities laid out in legislation depending on the type of information it has.
In the amendment that we're dealing with here, the competent authority would then be the Department of National Defence. In other cases it would be a law enforcement agency, so police agency, the RCMP or provincial police authorities. The Canada Revenue Agency is a competent authority in this regard, as are the Communications Security Establishment or CSE, CSIS, and in some cases, the Canada Border Services Agency or CBSA because there are infractions related to the illegal importation of money.
Senator Jaffer: In your remarks you spoke about threats to Canada, obviously, and we all want to protect Canada, but what if it's not a threat to Canada?
Ms. Pezzack: Well then there would be no reason for FINTRAC to disclose information to the Department of National Defence.
Senator Jaffer: They won't be disclosing and you're sure of that?
Ms. Pezzack: Yes. As I said, they undergo regular privacy audits to make sure that they're only sharing information with whom they should be sharing it under the tests laid out in the law.
Senator Jaffer: And only for threats to Canada?
Ms. Pezzack: In this case of the amendment that we're discussing today.
Senator Jaffer: I have a question that's bothering me. In your main section 56.1(1) in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, in particular the changes in phrases of 56.1(1) to remove the requirement stating that FINTRAC may only share information with international organizations if the organization in question is established by governments of foreign states. But then when I read the definition of "international organizations,'' they would not need to refer to organizations established by governments of foreign states. What do you mean by that?
Ms. Pezzack: Under the legislation, FINTRAC can sign a memorandum of understanding with a financial intelligence unit in another country, so the equivalent of FINTRAC in another country, some of which have exactly the same type of administrative role and some of which are more operational agencies, I would say, with a law enforcement mandate.
Senator Jaffer: With other countries, I get that. For me an international organization would be the UN, for example. I don't know why you would want to share anything with the UN on these things, but it may be. Here I read that the international organization does not need to refer to organizations established by governments or foreign states.
Maxime Beaupré, Chief, Financial Systems Division, Financial Sector Policy Branch, Department of Finance Canada: That's part of the technical amendments to the bill so this is not a policy change. Throughout the legislation there are references to laws of a country, and it has been brought to our attention, through internal reviews and discussions, that in some cases there might be obligations in foreign countries, obligations which are not necessarily at a national stage but at a sub-national stage. As a result, we've looked at everywhere in the act that refers to laws of a country and we've made sure we were able to capture those circumstances as well.
Senator Jaffer: I'm still not clear, so clarify for me. With the example you gave me, it would be something that was established by a government to a sub-agency. That's how I understood your example. But here the definition says it need not refer to organizations established by either governments or foreign states.
Ms. Pezzack: One such organization would be Interpol, for example. It's not necessarily created by any sort of one government; it's an intergovernmental organization. Interpol would be one of the types of organizations that they would deal with.
Senator Jaffer: I don't want to belabour this, but Interpol is established by foreign states. It doesn't exactly fit in, but maybe you can reflect on it and I'll come back in the second round of questioning.
The Chair: Colleagues, we have a long list of questioners. If we keep the preambles down a bit, we can get all the responses.
[Translation]
Senator Boisvenu: Thank you very much for being here. I am a little surprised by this measure. On the one hand, the government is announcing an easing of terrorism control policies; on the other hand, it wants to strengthen the ties. I am a little confused as to the government's approach. Have the Privacy Commissioner or the Canadian Bar Association been consulted on enforcing this policy? If so, was it an open or closed consultation?
Mr. Beaupré: There was no formal consultation on developing these specific measures. The parliamentary process provides that possibility. However, the inspiration for many of these measures comes from our frequent interactions with our partners in the Canada's anti-money laundering and anti-terrorist financing regime and with entities that provide information to FINTRAC. We have ongoing discussions with the industry. A number of the technical changes discussed here may cause confusion, as the industry has found. Those discussions have led to the adjustments put in place here.
So we did not hold formal preliminary consultations before the bill was introduced, but we regularly discuss issues to improve the regime. In that sense, we could say that there was some consultation.
Senator Boisvenu: I understand that the Privacy Commissioner has not been consulted. I may have misunderstood your presentation, but could the information be provided to another nation, such as the United States?
Mr. Beaupré: The act allows FINTRAC to exchange information with its foreign counterparts when there is a duly signed memorandum of understanding between those two organizations.
Senator Boisvenu: I am trying to understand the logic. Many illegal immigrants are entering Canada right now. Canada seems to want to refuse to give information to Americans on human smuggling networks from the United States. At the same time, we are prepared to provide criminal information. What is the rationale for the management of terrorism and the entry of illegal immigrants, some of whom could be terrorists? I'm trying to understand the logic of it all. On the one hand, it's no; on the other hand, yes.
Ms. Pezzack: In this case, the exchange of information is strictly related to money laundering and terrorist financing. That's what the legislation is —
Senator Boisvenu: I understand, but we are still —
[English]
The Chair: I'm sorry, but we have a long list here.
[Translation]
Senator Saint-Germain: I fully understand the context, the security environment and the terrorist threats from a financial perspective.
As for Division 19 of Part 4, the amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, I would like to know more about the reasons for and the scope of the amendment that would improve the information about the beneficial owners of legal entities. Could you explain the need for going all the way to the beneficial owners of legal entities, and the scope of this amendment, please?
Mr. Beaupré: In Budget 2017, the government announced a fairly ambitious program to work with the provinces and territories to improve the availability of information on the beneficial owners of legal entities. This is a major objective to improve the way our anti-money laundering and anti-terrorist financing regime works. It is targeting a well-known technique that individuals who want to either launder money or finance terrorist activities use to try to obscure the origin or destination of their funds through legal entities.
Senator Saint-Germain: Charitable organizations, for example?
Mr. Beaupré: Yes. The idea is to provide law enforcement with better information when conducting investigations. That is the objective of this measure. As part of the budget implementation bill, it is a much narrower measure than we are suggesting. As Lisa pointed out in her opening remarks, it is to ensure that, when FINTRAC has all that information, it can make it available to law enforcement so that, with search warrants, they can obtain adequate information from the entities concerned.
Senator Saint-Germain: What limits your ability to transfer information to law enforcement? Just now, the explanation was that permissions had to be obtained. In the case of charities or NGOs in general, what are your criteria?
Mr. Beaupré: The legislation provides for very strict measures to control information that can be made available to FINTRAC. It can only disclose information specifically designated in the legislation. Today, we are proposing to add the information on beneficial owners to that list. This information may only be disclosed to specific disclosure recipients listed in the legislation. There is a measure now that would allow FINTRAC, once the conditions are met, to disclose information to the Department of National Defence and the Canadian Armed Forces. Those are two criteria clearly defined by the legislation: the type of information that can be disclosed and to whom it is disclosed.
[English]
Senator Beyak: Thank you for your presentation. It was very informative. Would you be able to tell me whether, in the issues of trusts or the Department of National Defence, a privacy impact assessment was completed in either case?
Ms. Pezzack: No, we haven't completed a privacy impact assessment in either case because we haven't yet tabled the legislation. However, the legislation as a whole has been subject to privacy impact assessment in the past.
Senator Beyak: For those watching at home, you've mentioned some of the groups you'll be sharing with — CSIS, CBSA, the Communications Security Establishment Canada. Is there a place that ordinary citizens can go to check the other places you'll be sharing information with to ensure privacy? I know that if they're not money laundering or financing terrorism they have nothing to worry about, but just for information.
Dan Lambert, Assistant Director, Intelligence, Operations, Financial Transactions and Reports Analysis Centre of Canada: Good afternoon. The FINTRAC website and our legislation maintains all the agencies to whom we may disclose. In Canada we mentioned CBSA, CSE, law enforcement agencies, and so forth. We're not adding to that list beyond the Canadian forces. We're not creating new powers in relation to it. We disclose on threats to the RCMP and to CSIS as it pertains right now.
In relation to DND, there is a need, given the Canadian Forces and their national criminal intelligence units, to receive and benefit from that information on threats There's no expansion in terms of information that we're gathering. It's information the same as beneficial ownership that's held by the reporting entities.
What can be disclosed — because I sign off on all the disclosures — is a very high threshold in relation to reasonable grounds to suspect it would be relevant to a money-laundering or terrorist-financing investigation. When we put a report together, in order for it to be disclosed to law enforcement or a national security agency such as CSIS, we have to be convinced that the privacy of Canadians is respected and there are reasonable grounds to suspect it would be relevant. So there is a judicious review within FINTRAC whenever we disclose to them, whether it be within Canada or abroad. It's also important to understand that if we were disclosing abroad, to a country with which we have an MOU, it's not a must disclose. We don't have to disclose. We shall. We have to meet that threshold, and we do that in a very judicious manner in terms of the fact of what information we are divulging.
Senator Beyak: Very helpful.
The Chair: Colleagues, so we don't lose this line of questioning, the privacy of Canadians versus the question of what can be disclosed, why, in the preparation of this legislation, did you not consult the Privacy Commissioner prior to bringing the legislation forward to say that we met that test?
Ms. Pezzack: The disclosure process has already been brought forward with the Privacy Commissioner. The Privacy Commissioner goes in and does an audit every —
The Chair: Yes, but not on this particular section that you are bringing forward to us and the expansion of the authority that you are asking to go into the question of trust and other areas of concern. The question was: Why wasn't that done before it came here so that we knew and understood where the Privacy Commissioner was positioned?
Mr. Beaupré: The framework as a whole has been set up to carefully balance those considerations. Here we're not fundamentally altering the balance within the legislation. We really are making tweaks at the margin, so we have conducted an assessment because we are constantly looking for that balance, so we did take that into consideration in crafting this change. When we make technical changes to the act, we don't necessarily reinvent the whole apparatus.
Senator Woo: I want to follow that line of questioning to ask you about the extent to which these amendments change or do not change the scope and framework of the existing legislation. I understand that the FINTRAC regime currently allows for sharing of information with foreign entities where there's an MOU. You are now adding DND and the Canadian Armed Forces in cases of national security threats. In some cases this information may be shared with foreign bodies as well, where there's an MOU.
So the question is this: Do these amendments change materially the scope and size of disclosure, sharing of information to foreign bodies, or is it simply the same types of procedures for sharing with foreign bodies with the addition of DND and Canadian Armed Forces?
Ms. Pezzack: Just to be clear, most of the information sharing that we do now is with domestic competent authorities as opposed to foreign.
Senator Woo: Yes.
Ms. Pezzack: With the addition of the MOUs, it would allow FINTRAC to share with foreign governments.
However, in terms of how we would share information on national security, is it fundamentally different than how we would share with DND than how we would share with CSIS or another competent authority? No, we don't believe it is.
Senator Woo: No, let me try again. Currently information that is provided to CSIS and CSE and RCMP and so on, from time to time that information may be shared with foreign entities where there's an MOU; is that correct?
Ms. Pezzack: So FINTRAC can share the MOU. It doesn't have to go directly.
Senator Woo: I see.
Ms. Pezzack: That's where the confusion is and I wasn't perhaps clear. FINTRAC has MOUs that would allow them to share information with their counterparts, foreign intelligence units in other countries who do the same thing there as FINTRAC does here. As Dan pointed out, that's permissive sharing, they are not required to share.
Senator Woo: Yes.
Ms. Pezzack: In the domestic context, when they share with competent authorities here, as we said, there are two strict tests that they need to meet. In that case, the same type of tests are going to be applied here as are already applied with other information sharing on a domestic level.
This is not dealing with how any of those other organizations would share information internationally. This is strictly about what FINTRAC does and the requirements that are put around their ability to share.
Senator Woo: With the addition of DND and Canadian Armed Forces, the sharing of information with foreign bodies will still go through FINTRAC?
Ms. Pezzack: FINTRAC would share information.
Senator Woo: Where there are MOUs?
Ms. Pezzack: Yes, where there are MOUs.
Senator Woo: The system is essentially intact with the addition of two domestic bodies receiving information?
Ms. Pezzack: Yes.
Senator Woo: Thank you very much.
Senator Lankin: I have a couple of questions. Let me know if my time runs out and I will have to go on the second round. I'm just giving you fair warning, chair.
The first is with respect to adding to the list of competent authorities. I understand how FINTRAC works and its relationship to CSIS and others. You have mentioned on a number of occasions enhancing what it can do with law enforcement, so I'm trying to separate out the addition of competent authorities.
I understand you're adding DND and Canadian Armed Forces, and that's the only additions.
Ms. Pezzack: Yes.
Senator Lankin: There are specific requirements in the legislation now, not just about the threshold and definitions that you have to meet, but in terms of under what circumstances and what kind of information can be shared. This simply says national security threats and uses general language on what we are adding in — information relevant to a threat to the security of Canada as it relates to DND and Canadian Armed Forces. That's not much of a definition or scope. The threshold I get, and the threshold remains strong. What is the nature of the information that would be relevant to or relate to DND and Canadian Armed Forces?
Mr. Lambert: The definition of threat to security of Canada defined in the CSIS Act, foreign influence activities, espionage, politically motivated violence, to give you some examples, and so forth.
So the context of that is what is framed there, but that's in relation to the Department of National Defence and the Canadian Armed Forces. So it's specifically in relation to them in terms of an entity — when they have forces abroad, when they have individuals here in Canada that are posted, if individuals are being subjected to some aspect of foreign influence activities, espionage is another example, and so forth. We are able to disclose information, financial intelligence, if we meet our threshold, in relation to DND and areas under their control when it's specifically in relation to them.
Senator Lankin: I'm thinking of noted cases where someone within DND or the Armed Forces has released information to foreign entities. Would you not have been able to inform DND or Canadian Armed Forces before about the financial information to track that? That would have been prohibited?
Mr. Lambert: It would have. Our disclosure restrictments we spoke to earlier are laid out in the legislation in terms of who we can. To be honest with you, if we met our grounds in that situation we would disclose to the Canadian Security Intelligence Service.
Senator Lankin: All right.
The Chair: Senator Lankin?
Senator Lankin: I'll make this the last one on this round and then you can put me down again, please.
One of the issues I'm always interested in when something is reported to CSIS, and you also have law enforcement that you can report things too, is the whole world of intelligence to evidence. Do we fear anything in this expansion of the competent authorities that you can report to that starts to blur some of those lines? Because in the past, as you said, you had intelligence and you reported it to intelligence services. Now these are more active branches of government, DND and Canadian Forces.
Mr. Lambert: No, I don't think it fundamentally changes. I'll give you an example. One of the largest recipients of financial intelligence from FINTRAC is the RCMP. So the RCMP gets this intelligence. It would be up to them, in relation to their investigation, to obtain a warrant in order to get the documentation and so forth as their evidence. We don't produce evidence; we produce intelligence. The information we produce to the Canadian Security Intelligence Service would be analogous to what we will be providing to DND.
Senator Lankin: That's very helpful. Thank you.
Senator McIntyre: I have two short questions. One has to do with the role or involvement of stakeholders, and the other has to do with unregulated trusts.
Did any stakeholders have concerns with these proposals that have been shared with you or the minister's office? If so, can you outline those concerns? Who are the stakeholders?
Ms. Pezzack: Primarily our stakeholders for this are the 31,000 reporting entities across Canada. This includes financial institutions such as banks and credit unions. It also includes anybody who deals in financial transactions, so real estate agents, accountants and money services businesses. We have not heard any concerns from stakeholders as a result of these legislative proposals. In fact, what we're trying to do in terms of clarifying the definitions and language is to address some of their concerns. The definition of "client,'' for example, is one thing they came to us and said, "We're a little bit confused about how this applies. Is it the person who comes in to do the transaction?'' If somebody comes in to make a deposit on behalf of their company, is the client the person who's making the deposit or is it the company that sent them to make the deposit? That's one of the things we're trying to do to make it easier for reporting entities to do their business.
Senator McIntyre: I note that there is a proposal to add unregulated trusts as reporting entities under the PCMLTFA. My question is this: What is the policy rationale for proposing such an addition, that of unregulated trusts that are incorporated or formed under a provincial statute as reporting entities?
Ms. Pezzack: Some of them are incorporated under provincial statute but not regulated, and the wording of the act right now is that all regulated trust companies have to report to FINTRAC. So this would capture those who have been incorporated in a province but who are not regulated by a province.
Senator McIntyre: If Bill C-44 were enacted, how would FINTRAC determine when an unregulated trust has been incorporated or formed in a province?
Mr. Beaupré: The reason for this clarification is that there is a sliver of trust companies that has a different operating model than your bread-and-butter trust company that is regulated by a province. As a result, the bill proposes new obligations for such trusts, including having a place of business in Canada where instructions from FINTRAC could be served. That's one example where FINTRAC would have a better ability to interact with those trust companies.
[Translation]
Senator Moncion: On a number of occasions, you mentioned that the change did not necessarily affect the money laundering legislation. So the change is not about access to personal information and the disclosure of the amounts. Rather, the change is about the people who will be able to use the information. If I understand correctly, you are adding National Defence and the Canadian Armed Forces, and basically everything that is currently being done in the fight against money laundering stays the same.
Ms. Pezzack: More or less, yes.
Senator Moncion: Right now, when there are investigations, the Privacy Commissioner is not involved, because the activities that are the subject of an investigation contain an element of doubt about the legitimacy of the transactions. Those activities are not covered by the Privacy Act and are subject to investigations and information transfers between nations.
Mr. Beaupré: I would like to clarify a few things. FINTRAC does not investigate those activities.
Senator Moncion: It receives information.
Mr. Beaupré: FINTRAC receives information, develops financial intelligence, but does not conduct investigations. It analyzes information.
It must be understood that this information is complex and that FINTRAC has expert staff who, in very complex cases of money laundering, analyze the information and forward it to the appropriate authorities so that they can launch an investigation.
You talked about bypassing the legislation. I would like to point out that FINTRAC complies with all the existing laws and that it does not circumvent them. Everything is done in compliance with the legislative provisions.
Senator Moncion: Okay. Going back to the issue of personal information, what I was saying is that everything that FINTRAC and the Privacy Commissioner do is consistent. The purpose of the change you've made is to determine who has access to that information, namely National Defence and the Canadian Armed Forces.
Mr. Beaupré: That is the main change. The report is still about 20 pages long, and other changes are being made, but yes, that's the main change.
[English]
The Chair: Colleagues, we'll go to the second round, but I want to follow up, if I could. As we know, Bill C-51 was passed a number of years ago and is under active review. It will come up for amendments or a whole new bill in the very near future. This particular principle applies in Bill C-51, just to put that into perspective.
When the Senate committee reviewed Bill C-51, we did an in-depth study of the bill. Throughout, the concern was the privacy of Canadians versus the question of the transfer of information on Canadians to other entities, specifically foreign entities, and exactly what the ramifications were.
In our report, we recommended that the government develop statutory authorities among the national security bodies in order to provide for the exchange of operational information, referral of investigation, conduct of joint investigations, coordination and preparation of reports.
I understand FINTRAC. FINTRAC strictly brings all the information in and then, under certain terms and conditions, will transfer it to the authorities. I understand that.
My question is this: Have those statutory regulatory authorities been established to ensure that among the 17 departments, or other foreign entities, you have those agreements and the information is transferred under a certain understanding in those agreements? Is that in place?
Ms. Pezzack: I'm sorry; we were just consulting because I was thinking about the SCISA legislation, Security of Canada Information Sharing Act.
Within the FINTRAC legislation, they are so constrained in terms of what they can and can't share, and with whom and how, that we didn't see that anything here changed that balance. The broader sharing of secure information I think has been addressed, but if you will —
The Chair: If I could; I don't mean to be argumentative, but the requirement for statutory authorities to be put in place so it's clearly understood how the transfer of information is done, who has done it and under what conditions you can transfer, I would assume that would apply to FINTRAC or any other department, the same type of regulatory guidelines, so that there's no misunderstanding.
Am I incorrect on this? Perhaps you could clarify for the committee?
Mr. Lambert: To give you an example, if we received voluntary information from the RCMP in relation to a money laundering investigation they are doing, an individual that they are investigating, we take that information and analyze it to see if we have financial information that we would have received under the PCMLTFA from some of the 31,000 reporting entities we have. If we reach our grounds, we can disclose that information to the RCMP. That information is the property of the Royal Canadian Mounted Police force when we disclose it. We've reached our grounds. We've reached our threshold. We're not transferring information. We are lawfully disclosing, under the legislation and all the statutes that are there, the information to the RCMP. The information is theirs to do with, under their own legislation, what they want to do in terms of an investigation or how they want to handle the information.
The Chair: You still haven't answered my question as to whether the statutory authorities have been established. That's a separate question in itself and you don't know the answer to that.
Senator Jaffer: Thank you for all your answers. Whenever I speak to financial institutions, they're always talking about the cost of all the different requests that are made by government. Have you done any analysis on what this extra obligation will cost financial institutions?
Ms. Pezzack: Well, because they already have the responsibility to report, this would just be how FINTRAC would treat the information that they're already receiving, so we don't in fact think that it would create an additional burden. It is something that we're very conscious of. We hear from financial institutions that they have those concerns as well.
[Translation]
Senator Boisvenu: In the case of an internal criminal money laundering investigation, the legislation quite clearly allows police forces to contact financial institutions for information. However, if the same police forces request the same information to transfer it to a third party, then the legislation is not necessarily so clear.
Have you consulted with the Canadian Bankers Association on whether it would voluntarily provide that information, knowing that it is not intended for the RCMP, for example, but rather for the FBI? Would the Canadian Bankers Association agree and be fully comfortable with that?
[English]
Ms. Pezzack: I think you would probably have to ask them that.
In the first instance, though, the financial institutions would be sharing the information with FINTRAC, and FINTRAC would keep that information private, unless, as we explained, it met the two tests to share that information with a third country, with a domestic competent authority or with someone with whom they had a memorandum of understanding internationally.
[Translation]
Senator Boisvenu: Has the Canadian Bankers Association been consulted? If so, does it agree with this procedure?
[English]
Ms. Pezzack: But there is nothing in here that changes the process.
[Translation]
Senator Boisvenu: Has the Canadian Bankers Association been consulted?
Ms. Pezzack: Yes, but that does not change the process of sharing information with FINTRAC.
[English]
Senator Beyak: Further to my first question, would you be able to table a list of the memos of understanding with the foreign entities as it relates to Canadians for the trusts?
Ms. Pezzack: Certainly.
Senator Beyak: Thank you.
Ms. Pezzack: Sorry, for the trusts? The trusts are not related.
Senator Beyak: As it relates to Canadians, any of the memos of understanding with the foreign entities that will be given the information.
Ms. Pezzack: The MOUs that FINTRAC has with foreign intelligence units in other countries, yes.
Senator Beyak: Perfect. Thanks.
Senator Lankin: Thank you very much. Just a comment or suggestion for the future — I actually found the briefing note not very helpful in terms of telling the narrative of what's being accomplished here. I think some of the questions come from that.
We spoke earlier about expanding the list of disclosure recipients, who FINTRAC can give the information to, two new groups there, where it's related to threat to security and the high threshold and all of the same procedures that the Privacy Commissioner has already audited and signed off on.
I'm not going to talk about the technical amendments because I actually haven't had time to understand them all.
The second piece is to support more effective intelligence on beneficial owners of legal entities. As I look through and read the proposed changes, it doesn't really say much other than to authorize the centre to disclose information related to beneficial ownership. Was that information prohibited from sharing before? Is this clarity to say for sure you can? Was it a question before? What's the problem it's trying to fix?
Mr. Lambert: Money laundering is a very complex issue when it comes to the actual act of money laundering. Not to quote the CBC report recently, but that's probably a pretty good indication of how money moves around the world. It moves through corporations, entities, trusts, different aspects and so forth.
FINTRAC collects information that's provided to it by the 31,000 reporting entities. It's clearly stated in the act what is designated information and what we can provide. There are only certain types of information that we can provide.
What this does, in terms of beneficial ownership — and the view is that beneficial ownership can be used as an aspect for money laundering — where there is expanded information that is already collected by the 31,000 reporting entities, not all of them, but let's say by the major banks and so forth, that they collect and they provide to us so that when we reach our grounds, we can disclose to law enforcement in relation to money laundering investigations. It allows them to do their job better in relation to their investigation on money laundering, by providing them with more expanded information.
We can't currently share it, no.
Senator Lankin: Thank you. So you can't currently share that, but you currently receive that from reporting entities?
Mr. Lambert: At times we do. Not all the time, but at times we do.
Senator Lankin: Will this compel reporting entities to provide that in the future?
Mr. Lambert: My understanding is that when they have that information, yes, they should be providing it to FINTRAC.
Mr. Beaupré: The obligation for reporting entities to collect this information, for those who are subject to that obligation, that obligation already exists. The responsibility for disclosing by FINTRAC to disclosure recipients is a legislative one.
Once the reporting entities have information, it's a regulatory obligation with the type of information that they then provide. It's really about forms, like the format of the various forms.
Senator Lankin: Here's what I'm trying to get at: You answered a question earlier and said that this doesn't put any onus on reporting entities. I just want to know, along with the now clear right or obligation or whatever for FINTRAC to disclose to competent authorities and, under MOUs, foreign entities, does this place any additional burden to either collect or collect and remit that information to FINTRAC on any reporting entity that isn't currently required to report that?
Mr. Beaupré: The obligation to collect information already exists. The obligation to report is a regulatory one. Currently, there's no obligation in the regulations to provide this information to FINTRAC, but that's something that could be done through regulatory amendments. In this legislation, for the times that FINTRAC has the information, we are making it possible for the centre to disclose that information to law enforcement or other reporting entities.
Senator Lankin: May I follow this just a couple steps more?
The Chair: I think you should, Senator Lankin.
Senator Lankin: Just so I understand, then, the regulatory ability to require reporting entities to report information about beneficial ownership exists for some and not for others, and it could be expanded in the future?
Mr. Beaupré: Just to clarify, the reason why the centre sometimes has beneficial ownership information, it's going to get technical, but in some types of reports that the reporting entities can file with the centre, there's a field of information that is a free field. That's what makes the Canadian regime very rich in details, and it helps FINTRAC do its work with relevance. Sometimes in that free field, the reporting entities may include information about beneficial ownership. They're not required to do that, but if they feel it helps to establish why a transaction is suspicious, they provide this information.
Senator Lankin: Perfect. We're getting someplace now. I'm going to push on a little bit more.
Mr. Beaupré: They're required to collect it already. Sometimes if they feel it contributes to the story of why they believe a particular transaction is suspicious, they will provide that to FINTRAC.
Senator Lankin: So it's not happenstance, but with reason on the part of the reporting entity. When FINTRAC sometimes gets that information, they will now be able to disclose it, on the thresholds, to two more competent authorities, if relevant or as relates to their activity.
In the future, you could by regulation direct more recipients to report that, but you could do that now and you haven't. That's not part of the intent here. If that were to happen, that would come before the parliamentary Regulations Committee to review in the future, and there would be parliamentary oversight of the implementation or use of that regulation-making power?
Ms. Pezzack: It would go through the regular regulatory process, which would mean that it would be gazetted and open for public comment and then it would go through approval.
Senator Lankin: Okay. And it could do it now. Why is this in a budget bill?
Ms. Pezzack: This falls within the purview and authority of the Minister of Finance. He is responsible for the money laundering and terrorist financing regime.
Senator Lankin: Are there finance bills that you have, from a policy point of view, that don't get wrapped up inside a budget bill from time to time?
Ms. Pezzack: From time to time, yes.
The Chair: Colleagues, we are coming close to time here. I'd like to follow up on a couple of other things, if I could, and if other members have a further follow-up, I think we have a little bit of time left.
Ms. Pezzack, you referenced that there had been a privacy impact assessment done at a point in time. I would assume it had to do with FINTRAC. Perhaps you can tell us what that was, and are the results of that available to the committee?
Ms. Pezzack: I would have to go back. My understanding is that a privacy impact assessment would have been done when the legislation was created, but I would have to go back and find that.
The Chair: Could you provide us with a copy of that?
Ms. Pezzack: Yes.
The Chair: I think that's very important.
The other area I want to talk about here, and this is a major concern of Canadians, is that their information inadvertently becomes involved in, perhaps, a review by FINTRAC because they're a third or second party with respect to some transactions which they know nothing about, yet their name, their information, could become part of this overall overview. If you look in historical terms at the WikiLeaks and the various information that government has had with respect to the privacy of their citizens, this really came into question. Why did they have the information? What are they doing with the information?
Just as important, when do you make the decision that you're going to redact that information? In other words, at the end of the day, the information is eliminated.
Can you give me assurances that the information that you're asking for here — it's not necessarily within the Canadian context; I'm talking about the international context — that Canadians' information isn't going to be used in a way that is not acceptable to us as Canadians? What assurances can you give us?
Mr. Lambert: In relation to disclosing information, first of all, to other Canadian authorities and so forth, we're very judicious in terms of our disclosure in relation to the individuals or entities upon which we're disclosing. We don't provide more information that we can't justify giving. That happens on a daily basis. Any disclosure that goes out is limited and focused in relation to what would be relevant to that money laundering investigation that we feel is intelligence. It's not expanded; it's not left open-ended. Like I say, it's signed off on by an authority such as myself, and I am subject to all the legislation in relation to signing off a legal disclosure.
In relation to dealing with foreign entities with which we have MOUs and FIUs around the world, if we're dealing with a financial intelligence unit in another country, it's because there is a direct relationship in relation to that money laundering investigation involving individuals in that country and, perhaps, individuals in Canada. So, again, the scope is very limited in terms of what is specifically in relation to that investigation and what is provided. It's only in relation to that. It's not opened up further in terms of second, third, fourth or fifth individuals who may not be a party.
It's judicious in terms of the reasonable grounds to suspect will be relevant to that investigation, especially in terms of, again, we shall disclose. It's not where we must disclose to other foreign entities. Again, it's within our purview to provide that information only when it's justified.
The Chair: Colleagues, does anyone else have any follow-up questions?
We appreciate you taking the time to appear before us. Once again, thank you.
Joining us on our second panel of the day to speak to Division 12 of Bill C-44 is Ms. Faith McIntyre, Director General, Policy and Research Division, Strategic Policy and Commemoration at Veterans Affairs Canada.
Ms. McIntyre, welcome to the committee. I understand you have an opening statement.
Faith McIntyre, Director General, Policy and Research Division, Strategic Policy and Commemoration, Veterans Affairs Canada: Thank you very much. Mr. Chair, honourable members, it's certainly a privilege to address you today.
If there's one thing all Canadians can agree on, it's our debt of gratitude to our veterans for their service. After their selfless contributions, the government and the people of Canada owe them the support they need to transition to civilian life. To that end, it is a pleasure for me to address this committee in respect of Division 12 of the Budget Implementation Bill.
The Government of Canada has committed to ensuring financial security for veterans. Budget 2016 invested $5.6 billion in additional financial benefits for our veterans and their families. A couple of examples of initiatives are increasing the disability award to the maximum of $360,000 and reopening nine offices as well as opening a new one.
Budget 2016 initiatives for veterans could be characterized as an investment in financial security and improved service, whereas Budget 2017 focuses more on helping veterans transition to civilian life, improving supports for families and investing in mental health.
We are here to discuss the Budget Implementation Bill, which includes three of the eight initiatives contained in the budget for Veterans Affairs Canada. They are the Veterans' Education and Training Benefit, a redesigned career transition services program, and the new Caregiver Recognition Benefit, as well as a change in the name of the act and enhancements to simplify administration, all of which will be in place as of April 1, 2018, and a total of $624 million over five years.
To begin, we are proposing to change the name of the act from the Canadian Forces Members and Veterans Re- establishment and Compensation Act to the Veterans Well-being Act. This change highlights the important link to our ultimate goal, being the well-being of veterans. To be more precise, well-being is more than just financial compensation. The ultimate outcome that VAC strives to achieve is the well-being of veterans and their families.
We know that well-being is multifaceted and we have developed the following to help describe it: A satisfied and fulfilled veteran with purpose, who is financially secure, safely housed, in good health physically and mentally, highly resilient in the face of change, well integrated in the community, proud and cognizant of his or her legacy and being valued and celebrated.
As noted earlier, there are three Budget 2017 initiatives that are included in the Budget Implementation Bill. The current Family Caregiver Relief Benefit provides an annual grant of just over $7,000 to veterans who can use it for the relief of their informal caregiver. We heard loud and clear from caregivers that they would prefer to be recognized with a payment issued directly to them.
Therefore, the Family Caregiver Relief Benefit will be replaced with a Caregiver Recognition Benefit, a monthly amount of $1,000 tax-free and indexed annually that will go directly to the caregiver. It will be provided in recognition of the valuable role that caregivers play in supporting seriously disabled veterans.
In addition to the supports for families and caregivers, we are doing more for veterans transitioning to their post- military life. We are introducing the Veterans' Education and Training Benefit. This will cover up to $40,000 in tuition and other costs for veterans who served at least six years, and up to $80,000 for veterans who served at least 12 years. Five thousand dollars can be used toward professional and personal development courses such as pursuing a real estate licence. This benefit is for all honourably released veterans who were released on or after April 1, 2006.
For the past seven years, Veterans Affairs Canada has conducted the Life After Service Studies program of research to help us learn about the needs of veterans as they transition to civilian life. The study tells us that 27 per cent of veterans experience a difficult adjustment to civilian life, and of those, the majority, 60 per cent, were not medically released from the military.
Supporting education and professional development will ensure more released military members can find a new sense of purpose and put their skills to use in support of a transition to civilian life.
[Translation]
We are also redesigning the Career Transition Services we offer so that more people can make use of them, including serving members of the Canadian Armed Forces, survivors, spouses and common-law partners of veterans. Services will include the provision of labour market information, career counselling and job search assistance and will be provided on the basis of need. They will have access to job search assistance and counselling to work with veterans and employers to ensure success. Veterans will receive support from coaches who understand military culture.
The redesigned program is intended to work hand in glove with the education and training benefit. For example, an individual leaving the service will be able to access career counselling advice through the program, improve their skills or education through the education and training benefit, and then return to the Career Transition Services program for job search assistance. The intent is to facilitate a better transition out of the military and into civilian life.
[English]
We are also adding ways to help streamline program delivery. The act also includes a more simplified application waiver that will enable the department to waive applications for benefits and to make decisions if the department already has the necessary information on file. This change is being added as a general provision in the act, so it will apply to all programs.
I would also like to briefly highlight some of the other budget investments that are not included in the Budget Implementation Bill. It's certainly seen as a full package, again, in support of well-being of veterans and their families.
We know that the transition from military to civilian life can be challenging for some veterans and for their families, which is why we are expanding access, further to the pilot project launched in 2015, to the military family services program at all 32 Military Family Resource Centres for medically released veterans and their families, which will also include the telephone-based family information line and the family force website.
As a further support to families, the one-year time limit for eligible spouses and survivors to apply to the Rehabilitation and Vocational Assistance program will be eliminated. They will be able to apply whenever they are prepared to return to work.
[Translation]
In an effort to become more flexible, responsive and innovative, we will launch three new initiatives in the coming year.
First, we will create a new centre of excellence that will focus on post-traumatic stress disorder and related mental health conditions. Modelled after the American and Australian Centres of Excellence, the centre will create and disseminate knowledge, clinical practice guidelines, and treatment outcomes. This information will help with the treatment of veterans with mental health conditions and also benefit first responders and other Canadians impacted by trauma.
Second, to promote and support community action, a veteran and family well-being fund will be established to fund projects aimed at building knowledge around the issues affecting veterans and developing services that will target these needs. The annual budget will be $3 million.
Finally, while the range of benefits and services offered to veterans is broad, there are always unique situations that arise for which the government cannot plan. As such, we will establish an emergency fund that would provide the flexibility to respond in urgent situations when the well-being of veterans and their families is at risk.
[English]
In closing, the measures included in Budget 2017 will go a long way to support veterans and their families as they transition out of the military and settle into civilian life. However, the job is not yet complete. There will be additional measures that will be announced in the fall, including response to the minister's mandate regarding provision of a lifelong pension. The department is committed to continuing our research and our work to understand the needs of veterans and their families, and we want to respond as required. This is certainly the least we can do for the brave men and women who serve our country.
I thank you very much again for the opportunity to speak to you today. I'm certainly more than happy to take your questions.
The Chair: Thank you very much, and we will begin with Senator Jaffer.
Senator Jaffer: Thank you, Ms. McIntyre. You are always obliging on very short notice in coming to brief us, and we appreciate the work you and your colleagues do for veterans and for Canada.
First, I have a clarification question. There has always been this question of lump-sum payment or being given monthly payments. Is that in place now or not yet? Do you know what I'm saying?
Ms. McIntyre: I do understand the question, yes, thank you very much.
We currently have a disability award, which is a recognition for pain and suffering. It was increased under Budget 2016 to a maximum amount for 100 per cent disability of $360,000. There is an option to take an annual amount. However, it is a lump-sum payment.
My reference at the end — and it is included in the narrative of Budget 2017 — that there certainly are pieces that still have yet to come as certainly part of the package for financial security for veterans. I believe what you are referring to is one of those pieces, which is a provision of the monthly lifelong pension for veterans where we are working actively in consultation with stakeholders in order to be able to make proposals through the government for the fall.
Senator Jaffer: Thank you very much. We look forward to hearing from you about that. Your presentation was very comprehensive. My first question is about medically released veterans. Will they get the education and training benefit that you have set out here?
Ms. McIntyre: Again, thank you very much. I have to say it's a very topical question. Currently we have the Vocational Rehabilitation and Assistance program, which for the most part is for individuals who are medically released from the military. Certainly as part of that there is an educational component.
Upon completion of that program, individuals can be eligible as well to receive the Veterans' Education and Training Benefit. There is eligibility for those individuals if they are no longer participating, no longer eligible for the vocational rehabilitation and focused assistance program for them to also be able to benefit from the education and training.
The example that we like to use is an individual might come in, might want to do a bachelor's program under the vocational rehabilitation. They are medically released so they are eligible for that program, and then they may want to access, again, depending upon how many years they have served, either $40,000 or $80,000, to possibly go for their MBA, their masters.
Senator Jaffer: They can't do it at the same time?
Ms. McIntyre: They cannot access both programs at the same time, correct.
Senator Jaffer: I have a difficult question, but there are all kinds of reasons why people are dishonourably discharged, and I read your comments and see that it is only for people who are honourably discharged. What was the rationale behind that?
Ms. McIntyre: Certainly it's a question we worked through actively, as you can imagine, from a policy perspective as we developed the pieces. I do have to say that the actual definition of that will be prescribed in the regulations, which we are currently drafting to move forward to Treasury Board Secretariat.
Certainly the thinking behind it is that individuals need to have been able to have been honourably released, and we're following, if you will, the principle behind that exists in the Canadian Armed Forces. We are still looking at how best that would be defined. Most likely we will be following what currently exists.
However, having said that, we are also looking at possible exceptions for when the minister can intervene, if indeed there is a case for such to be done.
[Translation]
Senator Saint-Germain: As a member of the Subcommittee on Veterans Affairs, I take note of your willingness to respond to the need to adapt, improve and strengthen services. I really want to stress that.
The monthly caregiver benefit will be non-taxable; will the education benefit be taxable?
Ms. McIntyre: Yes, the education benefit will be taxable.
Senator Saint-Germain: What criteria did you use to determine the amount of $40,000 that will be awarded to people who are honourably released after six years, and $80,000 after 12 years?
Ms. McIntyre: Thank you for the question. Two components were evaluated to determine the amounts and the years of service. First, we worked closely with the Canadian Armed Forces to determine those criteria. We wanted to ensure that they would not be negatively impacted. That was quite an important principle. We wanted to help them with recruitment. After more or less six years of service, members tend to make major decisions. That is what the Armed Forces told us. So it's a good time to use an incentive to keep them longer. That is how we determined our criteria.
As for the amounts, a bachelor's degree costs about $20,000 a year. This includes tuition, school supplies and even accommodation. We have taken into account the great disparity in tuition fees across our vast country, as well as the number of years of service.
Senator Saint-Germain: You talked about additional measures that are not in the budget. However, I see at least two that have budgetary implications: the $3 million veteran well-being fund, which supports community action, and the emergency fund.
Does the $3 million come from the department? Where does the money come from? Why is the emergency fund not included in the budget? Is it from the consolidated revenue fund?
Ms. McIntyre: Yes.
Senator Saint-Germain: How come it is not in the budget bill given that it has a financial impact?
Ms. McIntyre: Thank you for the question. The government announced both funds in Budget 2017. Since no changes are being made to the act or regulations, the measures do not appear in the bill before you. However, the financial authority stems from the budget announcement the government made in March.
Senator Saint-Germain: You are therefore confirming that these measures are in line with the budget rules.
Ms. McIntyre: Exactly.
Senator Boisvenu: Ms. McIntyre, from your accent, I am guessing that you are from New Brunswick, Nova Scotia or Prince Edward Island — that you are Acadian, in any case. Welcome and thank you.
The smallest of measures will help our veterans, to whom Canada has a duty.
I have a slew of short questions. Do the current funding requests reflect the things that veterans have been asking for for years?
Ms. McIntyre: First off, I should say that the creation of the education and training benefit was set out in the mandate letter given to the Minister of Veterans Affairs, so it is part of his mandate. The answer to your question is yes. The United States has long provided an education benefit, under its GI bill, which has many iterations. Canadian veterans were extremely interested in a similar benefit.
Furthermore, we did not have a program for members of the Canadian Forces who left the military while still in good health. This is the first program of its kind in Canada. It's a very important program in all respects, the transition to civilian life included. The figures I provided are statistical evidence of that.
The caregiver benefit was introduced in Budget 2015 and provided $7,000 in annual financial support directly to veterans. We received a lot of feedback to the effect that that was not the best approach because it did not focus on the caregivers, who wanted to be recognized. That is the reason for the change. Going forward, a monthly payment will go directly to the caregiver.
Next, the Career Transition Services program was redesigned. It was an existing program that reimbursed veterans for the provision of career transition services up to a lifetime maximum of $1,000. Veterans who received assistance with resume preparation, for example, would submit their invoice and we would reimburse them. However, the measure did not meet the requirement, and very few veterans were eligible. Numerous challenges with the transition to civilian life were still noted, so we wanted to overhaul the program to deliver transition services across the country, through a subcontractor. The answer to your question, then, is yes.
Senator Boisvenu: I assume the $40,000 and $80,000 are the maximum benefits. The benefit paid has to reflect the actual costs incurred. For instance, if the costs are $20,000 in Quebec, the veteran will receive a reimbursement of $20,000, not $40,000. If the costs are $40,000 in British Columbia, where tuition is more expensive, the veteran will receive a reimbursement of $40,000. We are not talking about a set amount of $40,000. The benefit paid reflects the actual cost up to a maximum amount.
Ms. McIntyre: Not exactly. That's an excellent question. A number of models exist. As far as the rules go, we are in the midst of figuring out how the program will be laid out. We won't be requiring any invoices or amounts. We will, of course, be working with the veteran to determine whether they will be participating in a program. The applicant will have to be accepted by the university, college or trade school in question. In addition to tuition and the cost of books, the amount has to take into account living expenses. Veterans going to school full time may not be able to work. The set amount is $40,000 for veterans with at least six years of service. Veterans will not have to submit invoices in order to be reimbursed.
Senator Boisvenu: Does that mean veterans would be able to access the education benefit as well as a scholarship? Some provinces have very generous scholarship programs. Could veterans receive both at the same time? If veterans are eligible for a scholarship, is the $40,000 education benefit reduced?
Ms. McIntyre: That's another great question. That's what we are currently exploring. As things stand, I would say that there are no plans to reduce the benefit. We are working closely with other departments that make payments to veterans. However, the answer is no, that is not at all the purpose of the benefit.
Senator Boisvenu: Is this measure retroactive, not to mention all of the measures you are telling us about today? Can veterans who left the armed forces a few years ago take advantage of these measures?
Ms. McIntyre: Yes. The bill before you stipulates that the education benefit is applicable as of April 1, 2006, when the new charter came into force. Veterans have 10 years after the coming-into-force date of April 1, 2018 to apply for the program.
The new caregiver benefit is slated to come into effect on April 1, 2018 on a going-forward basis, because the program already existed. The Career Transition Services program will be retroactive to 2006.
[English]
Senator McIntyre: Thank you, Ms. McIntyre, for your presentation. "McIntyre,'' a good Scottish name, obviously.
That said, as I understand your presentation, Division 12 of Bill C-44 makes significant changes calling for career transition services, the creation of an education and training benefit, and a Caregiver Recognition Benefit.
My question concerns the career transition services and the relationship of those services with the regulations. In other words, would the regulations continue to stipulate that veterans can receive a maximum of $1,000 for career transition services even though most of the other aspects of the program that once appeared in the regulations are now incorporated under this act?
Ms. McIntyre: Thank you very much for the question.
Indeed, that is one of the reasons why we're redesigning the program, so the regulations will, indeed, be adjusted. We found that, first of all, the $1,000 was not sufficient. It was a reimbursement program only. There was not a whole lot of up take. It really didn't provide what we wanted in terms of objectives and outcomes in terms of transition. We will be working with a national provider — or providers, plural, depending on exactly what the contract brings — so that we can ensure consistent, coast-to-coast bilingual services, and there will be no cap of money. In this case it includes survivors, common law spouses, and they would not have to provide receipts. They will be working directly with the contractor.
Senator McIntyre: Do you think that we could see an overlap of programs between Veterans Affairs and the Department of National Defence? If so, what measures could be implemented to prevent such an overlap?
Ms. McIntyre: Thank you very much for the question. I think most of you are aware of all the work we're doing from seamless transition, really trying to ensure that there is no duplication overlap and making the transition of the individual once they leave the forces as smooth and clean as it can be.
We have worked very closely with the Canadian Armed Forces.
The way this redesign program will work is there will be different access points. So for individuals who are currently serving, they certainly have their own personnel service officers that they can work with. That's very much, though, about staying in the military and being promoted within, not necessarily looking outside of the military for when they are ready to transition.
So whenever they want, those individuals would be able to access some online services, for example labour market information. It will help them decide possibly where to move once they do release. And then once they are ready to release, then they can access a bit more of the services, and then eventually be able to participate in coaching, counselling, job search assistance. So the intent is certainly not to have overlap. We have worked very closely with the Canadian Armed Forces in designing and redesigning this program, Senator McIntyre, and we are confident there will be no overlaps. Part of that too, as I said, is the ongoing work from a transition perspective with the Canadian Armed Forces.
Senator McIntyre: Thank you.
Senator Lankin: I have a general comment and then a specific question to the Family Caregiver Relief Benefit. In general, I'm very supportive of this. I think it's a tremendous step forward. It's an important investment, and I'm pleased to see this in the budget.
I would note that there are some provisions that have been in regulations that have been brought into the legislation, and there are some more provisions that will be in the regulations. I would just offer a thought that maybe the Subcommittee on Veterans Affairs might benefit at some point, as you develop your regulations, from an opportunity to look at them. There is much in here that allows the minister to assess need for a career transition, or to cease payments under certain provisions, and it's not clear how all of that will work. I'm very confident that you will be putting that together with the best intent of assisting the well-being of veterans. I think it would warrant a look at that in order to understand how they worked together.
My specific question is with respect to the Caregiver Recognition Benefit. I understand you did a lot of consultation. I understand family caregivers have told you very clearly that they wanted this paid directly to them. It seems to me to run contrary to what has happened over the last number of years in other elements of health benefits and the autonomous control of one's life and supports by the individual themselves.
So to give you an example, someone with a disability who perhaps requires attendant care for many years, there was a contract signed and the money went straight to the care provider. In that case, not necessarily a family member, but it could be an agency or whatever. And there's a huge push from individuals themselves to want that money paid to them so they could purchase from whom they want, with standards, and where they're comfortable and not have that directed for them.
I'm concerned here, because, in the majority, there are many wonderful family caregivers, but there are circumstances where people are at risk and vulnerable to those who are providing the care, even within their own family. The fact that it's an obligation on the part of the caregiver and the veteran to report if this is no longer in place, it could bring about some situations of abuse. I'm quite concerned about that. I'm quite concerned about the view of veterans themselves and their autonomy and ability to determine the relief. This is for respite relief, and they will need to have those funds to bring somebody else in to take care of them when the family caregiver is on respite relief. Can you just address that concern for me?
Ms. McIntyre: Yes, certainly, and thank you very much. To your first point, certainly more than willing to engage as required with the regulations and leave that to you and your colleagues to determine how best to do that.
And to confirm, our intent is definitely veteran-centric, the well-being of the veterans, and to ensure that what we do prescribe in the regulations provides us that flexibility, hence why we wanted it in the regulations and not in the legislation, and possibly even in the policy, which would give us greater flexibility as needed. That's currently the process we're looking at.
In terms of the Family Caregiver Relief Benefit, your points are certainly noted and very appropriate. I think that we wanted to be able to recognize the caregiver, and we have not within Veterans Affairs provided any of that recognition in terms of either a monetary amount or otherwise, and this is certainly one of the areas we have been criticized for and wanted to be able to adjust the benefit.
The minister in this case can, if he has any concerns, obviously whoever is delegated on his behalf, can certainly investigate further if there are situations of abuse and cease payment and question that. We want to ensure that there is protection in there, and that would be done appropriately.
As to the respite piece, there are certainly other treatment benefits and programs that a veteran can access to assist still with respite, and this is really seen as being able to transfer that. A lot of times, as you know, spouses cannot work their full-time hours or they may not even be able to remain employed, depending on the situation, to care for their injured or ill member veteran.
As such, this is really trying to engage them and provide them with that recognition, but your points are very appropriate and I will certainly have noted them and will look at them as we work through the regulations and the policy and for future policy development as well. Thank you.
Senator Lankin: It sounds to me that this is more a recognition slash very small "c'' compensation, paid recognition, than a Family Caregiver Relief Benefit. There's nothing in here thus far from what I've read, at least, that relates to relief. This replaces a certain amount of benefit that the veteran themselves had control over to help them bring in who they wanted at a time where there was relief required for a family caregiver.
Ms. McIntyre: Yes.
Senator Lankin: I wonder whether, in fact, it is appropriate to be replacing as opposed to being added, but I've made those concerns known.
I have one short comment. Yes, regulations will give you more flexibility to respond to what you find, and policy even more so, and each one of those gives fewer rights to the veteran to know what they're entitled to and to be able to insist on. There's a balance there, and I think that's one of the things that the community should be able to look at.
Ms. McIntyre: Understood.
Senator Beyak: Thank you very much for your heartfelt presentation. I have sat on the Veterans Subcommittee for many years, and I like to see the way you have worked together, suggestions from the previous government, the current government, all the parties, all the stakeholders. Our Senate committee has advocated for some time a non-partisan approach to the military, whether it's procurement, equipment, or the veterans, and this is very gratifying, so thank you.
My question is have you heard specifics from stakeholders that were not addressed in here? And if you could outline them, I would appreciate it.
Ms. McIntyre: Yes. Thanks very much for your comments. As I said, this is all still a work-in-progress. The job is not done. I'm not saying anything that is not obvious, but the mandate commitment as was referenced in the very first question I was asked regarding the lifelong pension is still very much at the top of the list of concerns, comments and feedback from stakeholders. I can confidently say that what we are presenting through the Budget Implementation Bill is certainly very well received. However, that piece is missing which was clearly outlined in our minister's mandate commitment.
I think, too, as we move forward and really look at this focus on well-being and that whole multifaceted approach of well-being, we need to, from a policy perspective, start engaging our stakeholders more in that type of conversation.
The Chair: I want to follow up, if I could, Ms. McIntyre, and that's in respect to the Veterans' Education and Training Benefit, up to $40,000 in tuition, and for those who have served up to six years up to $80,000 for veterans of 12 years.
Perhaps you could maybe just tell us for the record what's in place right now for a veteran for the purposes of education and training benefits as opposed to what we're recommending here?
Ms. McIntyre: Sure, certainly, Mr. Chair.
The Chair: And the amounts, please.
Ms. McIntyre: Certainly. Currently we have the Rehabilitation and Vocational Assistance Program which is up to I believe a maximum of $75,800. That's solely for actual expenses incurred as part of a rehabilitation training program. That is for medically released veterans, most notably service-related.
There is eligibility as well for non-service-related within a 120-day time frame. There is a window for individuals to receive that. Again, the eligibility is primarily for those who are medically released service-related. At the same time, they would also be eligible for financial compensation through our Earnings Loss Benefit program as well.
A very different population is being addressed in the education and training benefit. As I said earlier, all honourably released, regardless of the type of honourable release, can access that $40,000 or $80,000, depending on years of service.
The Chair: So those who were under the previous policy and were medically released, would be directly informed in terms of exactly what was available for them and how they could access those particular funds?
Ms. McIntyre: Yes. One does not replace the other.
The Chair: No, I understand that.
Ms. McIntyre: The vocational rehabilitation Earnings Loss Benefit, which, as you're aware, we increased in October of 2016, is remaining and in place. As I said earlier, if individuals have used those funds and are no longer eligible, they can then access the education and training amounts as well. They will be working together with the case managers who are engaged with those individuals in the Rehabilitation Services and Vocational Assistance program.
Career transition is part of it. They get their education and go back to the Career Transition Services program for job counselling. It should all be seamless, and all the VAC components will be working together to ensure that, regardless of type of release, the proper programs are accessed by the veterans.
The Chair: Before I go to Senator Jaffer, I want to make an observation. Senator Lankin raised this with respect to caregivers. I personally think she has brought forward a reasonable position that should be looked at. At the end of the day, the responsibility lies with the veteran and no one else. I think we have to be very careful, as we administer these taxpayer dollars, to ensure they go where they should be going.
Now I'd like to go to Senator Jaffer.
Senator Jaffer: Thank you, chair. I'm sure this is not retroactive; it's ongoing for the people who get these benefits? Somebody honourably retired or resigned last year won't access these benefits, right?
Ms. McIntyre: Actually, they will. For the Education and Training Benefit, as well as the career transition benefit, it goes back to April 1, 2006. However, not the Caregiver Recognition Benefit. That is on a go-forward basis.
Senator Jaffer: There are a lot of changes happening, which is laudable — I'm happy with them — but it is also becoming more of a maze. For example, will the $1,000 for Career Transition Services continue? Is this separate from the education fund? Will this continue?
Ms. McIntyre: Again, I can certainly relate to all of pieces in the mix here. Two points on that: One, the redesigned Career Transition Services will replace the current model. So the $1,000 will no longer exist. They will have access to much more than that under the redesigned program.
I will also state that Budget 2017 provided $24 million over six years for outreach and communications. This is all part of an ongoing narrative. As I said, it is certainly not at all easy to follow and needs to be properly communicated and explained to our members, our clients, our veterans and their families.
Senator Jaffer: What about the Service Income Security Insurance Plan, where DND and Veterans Affairs Canada are involved? How will that continue?
Ms. McIntyre: Again, that is a good question and very top of mind. In terms of the income security piece — and that, too, was referenced in the narrative of Budget 2017 — we are still actively looking at the consolidation of financial benefits: what the Canadian Armed Forces offered under their income security and insurance model, and what we offer under the Earnings Loss Benefit. We are hoping that, in the next year, something will be coming forward from the government to look at that in terms of the big picture and to propose a way forward.
Senator Jaffer: This is not directly to do with the changes happening here, but it is about looking after the issues of veterans, one of which is the one-stop shopping. One of the things we hear a lot about is that when someone leaves the Canadian Armed Forces, sometimes 15 departments are involved.
We've also heard that when you're with the Canadian Armed Forces, you go to one place and all your needs are met. It's a real culture shock when you leave and you have to deal with all these different groups. It was almost like you were looked after from the time you woke up to the time you went to sleep, and now you have to fend for yourself. For someone who has been in the Armed Forces for a long time, it's a real culture shock. What are we doing to help with that?
Ms. McIntyre: I would agree that the three items in the Budget Implementation Bill are very particular and certainly have an important intent and outcome when we look at well-being.
Having said that, though, how we implement them, working with the Canadian Armed Forces — there was an earlier question to that point — will be very important. How we move forward, from a government perspective, in terms of looking at veterans and their families from cradle to grave and how best to ensure those supports and that culture is at the top of our list, if you will, in terms of work that's being undertaken, it is the hope coming forward in the short term through the government to have a proposal on how best to do that.
Day to day, however, we are working actively with the Canadian Armed Forces to minimize those interventions. In terms of the example I gave you today of a waiver, if we already have information on file to be able to make an assessment for eligibility, we don't need to go back and get service records or whatever that might be. We can now take the hand of that individual even prior to their releasing, which before we didn't have the authority to do that. It came a couple of years ago. So they can actually apply for benefits while they're still serving, which again is a very important concept.
We're not quite there yet, but we're cognizant of that and we're working actively with our counterparts in the Canadian Armed Forces and Department of National Defence.
Senator Jaffer: Thank you very much.
The Chair: Colleagues, we've come to a conclusion. I want to echo Senator Lankin's comments with respect to the measures that are being presented here. I know they're going to be welcomed by the veterans and should go a long way in correcting some of the inequities that they've experienced in the past.
I want to make one final point that I think is relevant. Once these provisions are implemented, they constitute another reason for a young man or woman to join the Armed Forces. At the end of the day, they are benefits, especially for the purposes of retraining and education, which a lot of Canadians otherwise don't have in terms of recognition for the commitment they make.
I would stress that, with regard to the Department of National Defence and the military, this should be clearly advertised as a benefit in order to try to encourage more young Canadians to enlist.
Colleagues, I will excuse our witness. Thank you very much.
I'd like to go in camera for a few minutes once the witness has been excused, and anyone else who needs to leave. We'll recess for two minutes and then we'll go in camera.
(The committee continued in camera.)