Proceedings of the Standing Senate Committee on
National Finance
Issue 33 - Evidence - June 4, 2015
OTTAWA, Thursday, June 4, 2015
The Standing Senate Committee on National Finance met this day at 2:06 p.m., to continue its study on the subject matter of Bill C-59, An Act to implement certain provisions of the budget tabled in Parliament on April 21, 2015 and other measures.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this afternoon we are continuing our study on the subject matter of Bill C-59, An Act to implement certain provisions of the budget tabled in Parliament on April 21, 2015 and other measures.
[English]
Honourable senators will know that there are five other committees in addition to the National Finance Committee reviewing the subject matter of Bill C-59. Today we will hear from those committees.
The Standing Senate Committee on National Security and Defence will be the first committee we hear from. We are pleased to welcome our honourable colleagues, Senator Lang who is the chair and Senator Mitchell who is the deputy chair. They will be discussing the subject matter of those elements contained in Part 3, Division 2, which is entitled "Prevention of Terrorist Travel Act," clauses 42 and 43, which can be found at page 43. Then we'll go on to Part 3, Division 17, which is the Canadian Forces Members and Veterans Re-establishment and Compensation Act, clauses 206 to clause 229, which can be found in the English version at page 120.
Senator Lang and Senator Mitchell, we're hoping to have an understanding of the initiatives in each of these divisions generally. Specifically, we're going to have to do a clause-by-clause consideration of each of these. If there is anything in any of the clauses that you can bring to our attention that would help us in performing our function, it would be very much appreciated.
How do you wish to deal with Divisions 2 and 17? Senator Lang, will you deal with both of them?
Hon. Daniel Lang, Chair, Standing Senate Committee on National Security and Defence: Yes. I would like to discuss Division 2 of Part 3 first and then move on to Division 17 of Part 3.
The Chair: Could we do Division 2 and see if any honourable senators have questions. If not, then we will go on to Division 17.
Senator Lang: Division 2 of Part 3, colleagues, is the subject matter of the proposed prevention of terrorist travel act and amendments to the Canadian Passport Order. It authorizes the Minister of Public Safety and Emergency Preparedness Canada to revoke or cancel passports on terrorism and national security grounds. As you will see, the legislation went on to create a new right of appeal when a passport has been cancelled on such grounds. Finally, the officials said the legislation will also establish a mechanism to protect evidence and other information used during judicial proceedings concerning the act.
A number of officials from the department appeared before us for the purposes of the discussion of the bill and we also had two special advocates, Gord Cameron and Anil Kapoor, and an academic, Dr. Salim Mansur, to examine the subject matter of the provisions.
At the end of our session, there was a common consensus that the bill presented for your consideration does meet everything they said it was going to do. Overall, we felt it met the provisions that we should have put in place in order to meet the threats that Canada is facing. Therefore, we are recommending that Division 2 of Part 3 of Bill C-59 be approved without amendment.
The Chair: Thank you.
Senator Mitchell, do you have any comments?
Hon. Grant Mitchell, Deputy Chair, Standing Senate Committee on National Security and Defence: I would like to highlight one particular concern that was raised by witnesses with respect to this section. This section of the act, as Senator Lang points out, refers to judicial review and appeals processes for people who have their passport revoked.
One of the concerns raised by two of the witnesses was that there is no provision for a special advocate to represent the appellant or the individual whose passport has been revoked in the event that secret information is being considered. It is not unlike concerns raised by some in certain features of Bill C-51 where, again, these can be ex parte. That is to say, the person involved, the person accused, the person in this case who has had their passport revoked isn't there, and there is no provision for them to be represented directly by anybody. In this case, it would be appropriate. A special advocate was just used in immigration hearings.
The Chair: Thank you.
This is a separate, stand-alone piece of legislation, as I understand it.
Senator Lang: That's right.
The Chair: There is no reference or provision for "special advocate" in this legislation at all?
Senator Lang: That's correct, but there is provision for the judge, upon a hearing being called, to be able to call in what they refer to as a "special friend" of the court to help assist him or her in respect to dealing with any particular case that comes before him.
The Chair: The only other question I have is about the appeal process in relation to a passport that has been seized or taken away. What is the judicial review aspect? I didn't have a chance to study that fully. Clause 4 is appeal and clause 6 is judicial review.
Senator Lang: The individual in question can appeal in respect to any decision in respect to the courts, if that's what he or she wishes.
Senator Mitchell: You first go to the judicial review of the decision and if you still disagree, then you can appeal.
The Chair: I see. The appeal is to another level of court. The judicial review is reviewing, presumably, the action of the public servant.
Senator Mitchell: The minister can make the decision — I don't mean this pejoratively — arbitrarily, at his or her own initiative, under the Canadian Passport Order, and that can go to judicial review and then can be appealed further, as I understand it.
Senator Wallace: Senator Lang, your report refers to the establishment of a mechanism to protect evidence and other information used in judicial proceedings that could be injurious to national security or endanger the safety of any person. Do you have any comment regarding that mechanism?
Senator Lang: Well, colleagues, as you know, I'm not a lawyer. In respect to the process —
Senator Wallace: No, just as to the nature of it. Are you satisfied?
Senator Lang: I'm satisfied with it. Primarily as the Chair of the Standing Senate Committee on National Security and Defence, as you know, over the past six months we've doing a study into the question of terrorism in Canada. The threat to Canada is not diminishing; it is ever-increasing. Certain legislative measures have to be brought in similar to any place else in the free world in order to update our legislation so that we can meet the threat we are facing.
At the same time, we must have a process of due process for individuals who are brought to the attention of authorities. If immediate action has to be taken, they must have the ability to appeal. This allows that to happen from the point of view of passports.
Am I satisfied with the process? Yes. There is information that has to be kept confidential because of public security and there is a reason why in most if not all cases. Subsequently, this particular process allows for that.
I hope I've answered your question.
Senator Mitchell: I would complement that to give some more detail. It gives the judge in both of these processes and the minister certain powers to protect private information from being made public. That's probably at the heart of the process.
Senator Wallace: It's judicial discretion in making the decision?
Senator Lang: Correct.
The Chair: Seeing no other questions, I assume honourable senators are ready to go to clause by clause when we have the bill in relation to that division.
Next is Division 17, "Canadian Forces Members and Veterans Re-establishment and Compensation Act," clauses 206 to 229, found at page 120 of Bill C-59.
Senator Lang: Colleagues, for this particular section, we heard from officials of the department as well as from the Canadian Legion. We also had an individual representing an organization called VeteranVoice.info, as well as a private citizen by the name of Ms. Jenny Migneault as an individual. We received two written submissions.
I should point out that this legislation, which we considered over the course of two meetings, overall was favorably received. It does bring in a number of the requests that have been put forward by the veterans themselves. It puts a number of them into effect.
Regarding the retirement income security benefit aspect of the bill, officials from the Department of Veterans Affairs estimate that approximately 260 veterans would become eligible over the next five years, representing an approximate cost of $14 million.
Regarding the other benefit, the critical injury benefit, officials from the Department of Veterans Affairs estimated roughly $10 million over the next five years, the majority to be paid to approximately 20 individuals injured from 2006 to present day.
The third provision, the family caregiver relief benefit, whose annual benefit was established by the department based on costs for respite care for 30 days a year, is estimated to benefit approximately 350 families, representing a cost of $10.7 million over five years.
There was some debate in respect to the measures from the point of view, in one or two cases, whether or not it was enough. That was one element of some of the testimony that was given to us. Also there was debate on whether other measures needed to be put in place in the future in respect to meeting the needs of our veterans.
Nevertheless, at the end of day the committee felt that everything was positive in respect to this legislation. It is going to benefit veterans and is taking a good step forward in respect to meeting some of the needs that they are experiencing every day. We're recommending, quite frankly, that you accept this as a good benefit for the budget that you're contemplating.
Senator Mitchell: I think Senator Lang has covered it really well. I want to emphasize the point that these are steps in the right direction. Still, some services were identified in the House of Commons Standing Committee on Veterans Affairs in their report of June 2014 that we mentioned need to be addressed as future steps possibly.
[Translation]
Senator Bellemare: Is the retirement income security benefit like the Guaranteed Income Supplement or is it something that is capitalized?
In other words, is the benefit funded from the government's general revenue or is it a measure that is capitalized for veterans?
[English]
Senator Lang: My understanding is that it will be from general revenue in order to meet the requested commitments.
[Translation]
Senator Bellemare: So it will not be capitalized. Thank you.
[English]
Senator Mitchell: It's not a grant.
Senator Bellemare: There is no fund.
Senator Mitchell: Right.
[Translation]
Senator Chaput: If I have understood correctly, the charter was amended. Five main changes were made to the act and, as far as the new financial benefits, when you talk about the critical injury benefit, it concerns mainly physical injuries and not necessarily mental health issues because new criteria are needed for them.
What will happen in the case of mental health issues? If you do not make any changes, what will be done? Did your witnesses say what should be done to support mental health needs?
[English]
Senator Lang: Colleagues, I'm going back in memory to recollect some discussion about post-traumatic stress primarily and how it was having an adverse effect in quite a number of cases. Two points should be made: First, the Veterans Subcommittee is doing a study under the leadership of the Chair of the Finance Committee to look at various aspects of post-traumatic stress and how we can recommend further measures to meet some of the concerns that have been brought to our attention. I should point out that over the short period of time that we've had the opportunity to look at the question of post-traumatic stress and then go forward to a report, I'm pleased to report that one of the areas that was of great concern was that there seemed to be a silo relationship between the Department of Veterans Affairs and the Department of National Defence. I think it's safe to say, and my colleague the deputy chair can speak to this as well, that at the end of day the lack of a bridge between the two departments is disappearing rapidly, such that those who leave the forces and relate medically with Veterans Affairs will have a seamless transition. That means their records will go with them so they won't be in a situation where one department asks another in respect to what went on previously when they applied to Veterans Affairs.
Quite frankly, as a member of the committee I was surprised, and I'm sure members of the public would be surprised, to learn that that is not already the case, but these steps are being taken. Veterans recognize that significant steps are being taken with the support of the House of Commons and obviously the Senate.
Senator Mitchell: I could add in that regard that we also were able to raise the question of PTSD injured members of the RCMP. Veterans Affairs has responsibility for RCMP veterans. That link isn't as strong yet as the one with DND. I am convinced that the Deputy Minister of Veterans Affairs is aware of that explicitly, as is the minister, and that they are working on creating a stronger relationship.
With respect to your first question, the $70,000 benefit would apply to PTSD if it were to occur immediately. Generally it occurs later, although there is some other funding. I explicitly asked that. It's not that PTSD is excluded, but the way it evolves makes it different from a physical wound for which you might need immediate special care or special changes to your house. PTSD comes later and there are other programs.
Senator Lang: To clarify that, if it was immediate and there were severe effects from it, it would come under this particular section and immediately be dealt with. Later on, if those effects become evident, other programs are already in place. The question is whether they are meeting what should be done, and that's one of the questions that we're asking.
[Translation]
Senator Rivard: I understand that this report is the integrated report by your committee and the veterans subcommittee. Did either or both of you participate in the veterans subcommittee as well?
[English]
Senator Lang: Yes, the chair, the deputy chair and I participated in both committee discussions on the proposed legislation.
[Translation]
Senator Rivard: You received some witnesses, heard their testimonies and formed an opinion. Am I to understand that this report was supported unanimously by your committee or was there some dissent?
[English]
Senator Lang: Yes, it was unanimously adopted. Observations are made in the report by various witnesses. They are contained as part of the backup evidence in respect of our final conclusion, but both initiatives in our judgment are necessary and we would strongly recommend that the Finance Committee accept them.
Senator Mitchell: I will say that some of us are less enthusiastic than others about the first part in particular. Yes, there may be the need to strengthen the ability to take away passports, but the concern with representation in that process remains. The "first steps" idea is important to emphasize in the Veterans Affairs' issue as well.
[Translation]
Senator Rivard: It is normal for people to ask questions, especially since there will always be more and more of these activities. As long as Canada is involved in conflicts, there will be an increasing number of veterans who will have to be compensated for all kinds of consequences of war. However, I am pleased to learn that the committee was unanimous in adopting this part of Bill C-59. From year to year, the government will have to take into account the additional number of wounded individuals and veterans.
[English]
The Chair: Thank you, Senators Lang and Mitchell, for helping us to understand these two divisions. That gets us two divisions closer to the end of our work. We appreciate your coming down to help us with that.
The Standing Senate Committee on Social Affairs, Science and Technology is next. We have their report.
From the Standing Senate Committee on Social Affairs, Science and Technology we are very pleased to welcome the Honourable Senator Kelvin Ogilvie, chair of the committee. He will be discussing with us the subject matter of those elements of Bill C-59 that had been referred to that particular committee, namely, Division 15, entitled "Immigration and Refugee Protection Act." It deals with clauses 168 to 176 and can be found at page 102 and following in the English version.
Senator Ogilvie, we have a copy of your report in front of us. Can you help us as to what the initiative was and whether you're content that the initiative is properly without any unforeseen problems presented by the government in this bill?
Hon. Kelvin Kenneth Ogilvie, Chair, Standing Senate Committee on Social Affairs, Science and Technology: First of all, I should say that Senator Eggleton, the deputy chair, is not here, but it doesn't represent a division in the support for our report. He was unable to attend the actual meeting. Senator Campbell was there. Senator Campbell fully endorsed the language of the report, and Senator Eggleton felt he had other things that demanded his attention today and is allowing me to appear on my own here, chair.
With that, I will indicate that the section of the division that we were dealing with is relatively straightforward. The principal element is to extend biometric data as part of the identification process in regard to immigration and refugee issues. These techniques are already authorized in certain other areas. They're extended here, and the committee had no problem with the division.
The division does make changes in language to other sections to bring them into conformity and consolidate them. For the witnesses that appeared, the issue raised was the question of privacy, and they presented their concerns. The committee asked questions, and the conclusion that is written there is that the committee is confident in the measures put in place to safeguard privacy and has no issues of concern regarding Division 15 of Part 3 of Bill C-59.
That, Mr. Chair, is the extent of my report, and I would be pleased to try to handle any questions.
The Chair: I'm still looking for the sections in my act.
Senator Ogilvie: It's probably so small, sir, that it probably just —.
The Chair: The expansion of biometrics was in the paper today or yesterday, I think. There was a discussion on that.
Senator Ogilvie: I was referring to the amount of paper, sir.
The Chair: Of course.
[Translation]
Senator Bellemare: My question is very simple and short. Do you have an idea of how much it will cost? We know that the measure will be self-funded in part through the $85 fee that will be collected for the service. Do you have an idea of what it will cost?
[English]
Senator Ogilvie: There was no discussion of that cost whatsoever.
The Chair: Senator Ogilvie, you mentioned the privacy issue, which is always front and foremost in our minds these days because of the various initiatives the government is undertaking. Did you hear from the Privacy Commissioner with respect to those issues?
Senator Ogilvie: Yes, we had the officials appear before us. I think it would be worth indicating what the biometric data is. It's an electronic fingerprint. That is the extent of the biometric data being considered in this legislation.
Regarding the issues around privacy, we're attempting to ensure that the databases containing the electronic fingerprint are secure against random access in that regard. That was the issue of privacy that was raised.
We had several officials comment on that, including those from the security divisions who are in charge of maintaining those records. The process that is undertaken was described fully to us, from the taking of the original fingerprint to its translation into digital form — meaning zeros and ones — by an algorithm which ties the data directly to the original fingerprint. Zeros and ones are stored as such, and that data is meaningless unless it is then attached to a decoder, which uses an algorithm to transfer that back into the original fingerprint.
On the information given to us in terms of how these are taken and stored, sir, I'll give you my personal opinion. This is probably actually safer than the collection of paper fingerprints and the storage of them in monstrous warehouses.
The Chair: Thank you.
Senator Wallace: Senator, the amendment to the act, as you've indicated in your report, would extend the use of biometrics. I wonder if you could give us a sense of how this extended use of biometrics as proposed in this bill would compare to what's happening in other countries and their similar use of biometrics.
Senator Ogilvie: You were there, senator, so perhaps you have more knowledge of that than I do. I merely chaired the meeting. I would say that we did not get into an in-depth discussion of that to the extent that I can answer your question the way you put it.
We were assured that Canada's technology in this regard is as good as any that exists. Furthermore, the so-called extension of biometric data has already been approved for other circumstances with regard to bio-identification in Canada, and this extends it to this particular act, which is the identification of immigrants and refugees. No other issue was raised in that context.
Perhaps I'm missing the critical point of your question, senator.
Senator Wallace: No, I think you've addressed it. As you pointed out, yes, I was at those meetings. I thought for the sake of our other committee members, they may benefit from the detail that you and I may have received in those meetings.
It was simply the point that Canada moving in this direction is not an island of its own. This extended use, as I recall from what we've heard, is consistent with what's happening in other countries in the world. I think you said that, so I thank you for your succinct response.
Senator Ogilvie: The way I interpreted your question was how this compares worldwide with all the countries. We had a more focused response to that issue in the committee, as I recall. It dealt with those countries with which we deal with most frequently, and it was my understanding this was bringing us up to speed with regard to some of those countries, but I could not answer your question outright in the way I heard it.
Senator Wallace: I'll consider that the next time I ask questions.
Senator Ogilvie: It's my limited ability to understand questions, so I apologize.
[Translation]
Senator Chaput: My question will be very short. I do not remember, but was there mention of when it would come into force? Is there a scheduled date?
[English]
Senator Ogilvie: No. We did not ask specifically about the actual date at which this would come into force. The way I read this, it would imply that it would come into force following the approval of this bill and the writing of the regulations that will govern it.
Regulations have to be written in a number of areas, including defining the situations in which a biometric fingerprint would not be required. For example, there are some individuals whose fingerprints are not capable of providing an identity, and there are certain illnesses that change the fingerprint in a way that doesn't make it amenable to an accurate fingerprint process. I'm just using that as an example around which regulations have to be written.
The actual enforcement, as I understand, can only come into play following two major steps. One is the proclamation of the act and the agreement on regulations and, as you know, all regulations go through the Standing Joint Committee for the Scrutiny of Regulations. I am not in a position to predict the timing in that regard.
The Chair: Senator Ogilvie, that discussion on regulations prompts this next question.
Page 103 looked a little strange to me. Clause 169 of this act is amending section 11 of the Immigration and Refugee Protection Act, and it's at proposed subsection (1.02), about three quarters of the way down the page, line 27. It says, "Subject to the regulations, a foreign national . . . ." So it's making the law subject to the regulation. We often see the law expressed and say it will be clarified in the regulations, but the law usually has a status higher than the regulation. This appears to be reversing that in saying this is the law but subject to regulation. Are you reading it that way? Did you have any discussion on that?
Senator Ogilvie: We didn't have any discussion, but proposed subsection (1.02) follows (1.01), and it says:
Despite subsection (1), a foreign national must, before entering Canada, apply for an electronic travel authorization required by the regulations . . . . The application may be examined by an officer . . . .
My reading of that would be that this allows the act to apply to a foreign national who has temporary resident status and may apply for the visa or other documents during their stay in Canada. They're already in Canada and they are not required to go out and come back in.
The Chair: If "Subject to the regulations" wasn't there, I would agree with you, but when it's subject to the regulations, we don't know what the law is.
Senator Ogilvie: Well, again, my sense is this is simply not putting any other regulatory issue on those individuals, but I'm in your hands in that regard. It was not raised by witnesses whatsoever. It wasn't considered to be an issue. In that respect, sir, it's back to you and your committee.
The Chair: Well, we're the ones that have to do clause by clause, so thank you for tossing it back to us.
Senator Ogilvie: It wasn't a concern for us, is all I can say.
The Chair: I appreciate that. I just thought that if there was something you had gathered for us, this was the time to share it.
Senator Ogilvie: I would have been happy to, sir.
The Chair: Thank you very much for being here this afternoon, senator.
Honourable senators, from the Standing Senate Committee on Aboriginal Peoples, we're very pleased to welcome the Honourable Senator Dennis Patterson, who is the chair of that committee. He will be discussing the subject matter of those elements contained in Part 3, Division 16, "First Nations Fiscal Management Act," clauses 177 to 205, which can be found at page 107 and following.
Senator Patterson, your report is before us. Could you help us with these clauses so that we can understand what the initiative is and what your committee's view of that initiative is?
Hon. Dennis Glen Patterson, Chair, Standing Senate Committee on Aboriginal Peoples: Thank you, honourable chair and members of the Standing Senate Committee on National Finance. I appear before you today as Chair of the Standing Senate Committee on Aboriginal Peoples. Our deputy chair, Senator Lillian Dyck, is unable to be here, but she has given me her full endorsement with the views I'm going to present to you here today.
I begin by saying that there are many challenges facing the Aboriginal peoples of Canada. We were reminded of those yesterday with the release of the Truth and Reconciliation Commission report. In our committee, we are keenly aware of those challenges. Frankly, it's sometimes difficult to find good-news stories. We often encounter strong opposition to government legislation respecting Aboriginal peoples within our committee and from Aboriginal peoples themselves. This part of the budget implementation bill, Part 3, Division 16, in my view is a hardening exception. It's a good-news story, I believe. It has the unanimous support of all the members of the Standing Senate Committee on Aboriginal Peoples. Equally important, it has the strong endorsement of respected Aboriginal leaders who are involved in enhancing economic opportunities for progressive First Nations.
I will give a little background to this portion of the budget implementation bill, Mr. Chair.
The First Nations Fiscal Management Act is optional First Nation-led legislation that was enacted in 2005, I want to note, with all-party support. The act provides First Nations with fiscal powers, including real property taxation, financial management and debenture financing at their option. It's opt-in, not compulsory legislation.
Since the First Nations Fiscal Management Act came into force in 2006, I'm pleased to tell you that 138 First Nations have chosen to participate, accessing one or more of the act's core fiscal tools. These tools include financial administration laws and financial performance certification to strengthen accountability, instill greater investor confidence and to meet requirements for debenture financing.
If I may just elaborate on that a little bit, the First Nations Financial Management Board, which is led by Harold Calla, a very respected Aboriginal leader from the West Coast, actually certifies First Nation bands as to their fiscal competence and their ability to carefully manage money. That is the trigger that leads them to have access to financing and loans and the ability to raise revenues through laws like property tax. That's what they do. They can raise revenue through property tax, development cost charges and taxation of business activities to pay for the costs of local services and capital infrastructure and, most important, debenture financing, giving First Nations the ability to finance major capital projects through long-term pooled borrowing. Long-term debt provides advantages, including amortization of costs over the life of the assets, access to capital at low interest rates, lower annual financing payments and lower administration costs.
By utilizing the Financial Management Act, or the FMA, borrowing process, First Nations are able to promote economic and social development in their communities and be more like municipalities or private businesses that have established good credit. Since the FMA enactment, First Nations have raised over $220 million in local revenue, established over 50 financial management frameworks and have collectively launched a $90 million debenture. In June of 2014, that $90 million debenture was a landmark towards infrastructure and some economic development. It was backed by a syndicate of the top six banks in Canada that purchased the bond, and it sold out in 30 minutes.
So the act established three First Nation-led institutions that ensure the integrity of the regime and support First Nations in effectively exercising its jurisdiction. They are the First Nations Financial Management Board, as I mentioned, chaired by Harold Calla; the First Nations Tax Commission, chaired by Manny Jules; and the First Nations Finance Authority, chaired by Ernie Daniels.
When the statute was enacted, changes were contemplated. There was a section that provided a requirement of the Minister of Aboriginal Affairs and Northern Development to review and evaluate the legislation and the institution within seven years of Royal Assent. As a lead-up to that review, each of the First Nation institutions made recommendations to improve First Nation access to the legislation, increase efficiencies and reduce administrative burden. These recommended changes were drawn from each institution's operational experience with the legislation and from a wide variety of stakeholders.
So the improvements that are before your committee today, Mr. Chair, are largely drawn from the minister's review, which was tabled in both houses of Parliament in 2012. Additional proposed improvements stem from subsequent operational experience, participating First Nations, capital markets and other stakeholders.
I want to draw to your attention that the proposed improvements have received support from several impressive stakeholder groups, including the First Nations Tax Administrators Association, the Canadian Property Tax Association and the Canadian Energy Pipeline Association.
These are quite technical amendments, at least our committee found them to be, but their objectives are to accelerate and streamline participation in the FMA, to reduce the administrative burden on participating First Nations, and to strengthen investor and capital market confidence in the FMA.
We were very impressed in hearing independently from the chairs of the three key authorities who appeared several times before our committee. In the engagement they had with officials from Aboriginal Affairs and Northern Development and the Department of Justice, it seemed to be a truly collaborative process of developing the amendments that are before you today. We were assured by the chairs of those three authorities that they were perfectly happy with the amendments and fully satisfied that the suggestions they proposed — they proposed 43 amendments in all — were incorporated into this division.
You may ask about opposition to the bill and, of course, trying to get a balance, we did seek some criticism of the bill. The Assembly of First Nations was invited to appear before our committee, and they chose not to appear. They have agreed with the institutions from their establishment in 2005 that they will not oppose opt-in legislation of this kind, as long as it doesn't negatively affect those who choose not to opt in. So they assented to the legislation by their absence, I would say.
We did have one witness who was critical of the bill, Mr. Keith Martell, CEO of the First Nations Bank of Canada, but his issue was not really with the legislation per se, he told us, but with the institutions, specifically the First Nations Finance Authority. He felt that they had modified their mandate and their operations in a way that was potentially harmful to First Nation markets. So he was more critical of their practices rather than anything that was in the legislation.
These amendments do not really modify the institutions. They're highly technical and administrative, as I said. Perhaps I can give a couple of examples of the kind of changes.
One of them is to expedite the addition of First Nations to the schedule of certified First Nations. That schedule is attached to the bill and certifies that they are financially competent.
One of the changes before you, instead of an order-in-council process — which, as you know, can be time- consuming — this can now be accomplished by a ministerial order. The changes are designed to reduce red tape and align the regime with provincial standards.
Another example is that the changes would reduce the minimum public notice period for property taxation laws from 60 to 30 days to better align with provincial standards.
Those are my opening comments, Mr. Chair, and I would be happy to answer any questions you may have.
The Chair: Thank you for giving us that background on the First Nations Fiscal Management Act. It was helpful.
Senator Chaput: I had questions with regard to the witnesses, senator, but you answered them because you spoke at length about the witnesses that you received. You said there was one that had reservations and you also explained why.
My only question is with regard to the amendments to the schedule. You spoke of the schedule. It says:
At the request of the council of a band, the Governor in Council may, by order, amend the schedule in order to . . . .
"At the request of the council of a band . . . ." How many First Nations are there?
Senator Patterson: There are about 612 First Nation councils throughout Canada.
Senator Chaput: So any one of those 612 could ask the minister to amend the schedule?
Senator Patterson: Yes, but I should explain that in order to get to that point, they have to go through quite a rigorous process of being certified as to their financial management competence. Right now, we only have — I shouldn't say we only have, but we have 160 certified. It's not an easy process, and we've got some way to go.
Senator Chaput: Thank you.
The Chair: Senator, I'm not that familiar with this structure. The First Nations Finance Authority that you mentioned as one of three — I believe you named three different authorities — I'm making the assumption that that authority acts for all of those that have signed on to this particular initiative. I believe 138 First Nations have signed up. I'm assuming that authority is collectively helping all of those First Nations.
Is the Government of Canada or are any of the banks helping out by providing expertise in relation to that authority's work?
Senator Patterson: The work of these bodies — the First Nations Financial Management Board, the First Nations Tax Commission and the First Nations Finance Authority — are certainly supported by the Government of Canada through the Department of Aboriginal Affairs and Northern Development. They do have a close working relationship.
The financial management authority was staked with a $300 million fund upon inception, which it manages. The First Nations Finance Authority is really the body that loans money. They work very closely with banks. In fact, the source of funds from bond issuance is Canadian banks, and we're told that following the successful $90 million debenture issue in 2014, there are now plans to issue another $100 million in this current year. So they do work very closely with the banks.
The First Nations Financial Management Board is the body that does the certification. They actually go out and work with communities to ensure that they have proper financial management procedures and capacity within those First Nations.
I hope that helps.
The Chair: Yes, it does, and I'm glad that there is some support.
This sounds like a good initiative, but it certainly will need some support at the front end. These 43 administrative amendments are the result of the minister's review of the program and I think it came into force in April 2006. That such a significant number of amendments are being made shows that it was being watched closely.
We can determine whether it's an incentive or disincentive, but the First Nations normally receive quite a bit of funding from Aboriginal Affairs and Northern Development for different initiatives. If they opt for this program where they're generating a lot of their own funds, is there reduction in the amount of transfers that would come from the federal government?
Senator Patterson: The short answer, Mr. Chair, is no. Transfers from the Government of Canada to bands are for operations and maintenance in areas like health, schools and the operation of community governments.
There are capital transfers given to bands. We've been studying this subject in our committee for more than a year and we're going to be issuing a report in the life of this Parliament. The report will basically say there isn't enough money from the existing capital allocations of the Government of Canada. There is a massive infrastructure shortfall for housing, waste water and water systems, schools and health centres. Therefore it's very important, we believe, that there be other non-government sources of revenue for capital infrastructure and for economic development because the government is never going to have enough money, given the rapidly growing population and the 2 per cent annual escalator that has been in place for some 18 years.
First Nations councils that are progressive welcome this as a way of meeting needs that can't be met through existing government grants and programs.
The Chair: Thank you.
The reason I'm asking these questions is we see fairly regularly requests for appropriations, or supply, to the Aboriginal Affairs Department through the estimates process and we are always asking questions about accountability: How do we know that the money that's being transferred is being used in a manner that's sustainable? That issue keeps coming up and so we have a common interest there. Your committee is on this on a regular basis, but our committee from time to time visits that issue and we'll look forward to your report.
Senator Patterson: Thank you very much. !!!
The Chair: Colleagues, from the Standing Senate Committee on Banking, Trade and Commerce, we are very pleased to welcome one of our own, Senator Gerstein, who is the chair of that committee. He will be discussing the subject matter of those elements contained in Part 3, Division 14, entitled "Proceeds of Crime (Money Laundering) and Terrorist Financing Act," clause 167, which can be found at page 102. Then we'll go to question and answer on that if there are any, and then we can move to Division 19 under the same part, and it's entitled "Privileges for Supervisory Information," clauses 232 to 252, found at page 136. That will be interesting.
Senator Gerstein, thank you for being here and please help us out with these two divisions.
Hon. Irving Gerstein, Chair, Standing Senate Committee on Banking, Trade and Commerce: Thank you Mr. Chair. It's a pleasure to be here before my colleagues. As you have mentioned, the Banking Committee was referred two divisions of Part 3, namely Division 14 and Division 19.
Our committee held two hearings, with testimony from government officials and a number of outside witnesses. I propose to give an overview of the intended legislative changes, as well as some of the views expressed by witnesses.
Starting with Division 14, proposed amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, as you may recall the Banking Committee undertook a major review of Canada's anti-money laundering and anti-terrorist financing regime, tabling its report in March 2013.
The proposed legislative amendment in Division 14 would amend subsection 55(3) of this act. The purpose of the amendment is to allow the Financial Transactions and Reports Analysis Centre of Canada, better known as FINTRAC, to disclose designated information directly to provincial and territorial securities regulators if there is reasonable grounds to suspect that the information would be relevant to investigating or prosecuting money laundering or terrorist financing activities as well as offences set out in securities legislation.
According to the Department of Finance, FINTRAC's current inability to disclose information directly to provincial securities regulators is a shortcoming of Canada's anti-money laundering and anti-terrorist financing regime. This amendment would specifically address this shortcoming, thereby increasing the safety and security of Canadians and the financial sector.
FINTRAC told the committee that in a number of cases in which provincial securities regulators and law enforcement agencies conducted joint investigations, the information regulators received by having access to the information FINTRAC had disclosed to law enforcement agencies was very helpful when the regulators processed offences under provincial securities legislation.
The Canadian Securities Administrators, represented by the Autorité des marchés financiers, the AMF, were very much in favour of this amendment. They stated that it would allow provincial securities regulators to ask FINTRAC to provide information in relation to specific cases and would give FINTRAC the ability to disclose information to provincial securities regulators voluntarily. They also expressed that the proposed amendments would improve investigations of violations of provincial securities legislation.
In conclusion, all committee members support Division 14.
Did you wish to stop there and deal with questions before we go to the second matter?
The Chair: Thank you. I will see if there are any questions. It's a very thorough report, which we welcome. On the first one, my recollection is that it deals just with one clause, and that's clause 167.
Senator Gerstein: That's correct.
The Chair: Seeing no questions, then let's proceed to Division 19.
Senator Gerstein: Turning to Division 19 and the proposed amendments to the Trust and Loans Company Act, the Bank Act, the Insurance Companies Act and the Cooperative Credit Associations Act, the proposed amendments would provide that — and I'm going to say these three words and put them in quotations —"prescribed supervisory information" is considered privileged for the purposes of a civil proceeding.
The Department of Finance explained that prescribed supervisory information refers to the written opinions of OSFI that are provided to financial institutions regarding actions they need to take. Currently, this information is treated as confidential, not privileged, in a civil proceeding.
The proposed amendments are in response to a Quebec Court of Appeal case involving a class-action lawsuit between ManuLife and Mouvement d'éducation. As I understand it — and I am not a lawyer — the court found that this prescribed supervisory information could be subject to production in civil proceedings.
We were told by the Department of Finance that if this information were made public, confidence in financial institutions could be negatively affected, thereby creating the potential for bank runs or other actions that could jeopardize the health of an institution.
Officials also explained that the amendments would be effective retroactively and would apply in any civil proceedings in which a final decision has not yet been made before the day on which these clauses come into force.
The Department of Finance said the proposed amendments would modernize, clarify and enhance the perception of prescribed supervisory information that is prepared by OSFI and would enhance both confidence in the supervisory process and the stability of the financial system, while respecting the need for transparent and fair judicial processes.
Both the Canadian Life and Health Insurance Association and the Canadian Bankers Association appeared as witnesses before our committee and supported the proposed amendments. They indicated that the amendments would facilitate the efficient and timely exchange of information between financial institutions and OSFI, and would help to ensure the overall stability of Canada's financial system.
However, in the opinion of one senator, the proposed privilege should not extend to OSFI communications that give a directive to a financial institution to take corrective measures. I might add that this view was not shared by any other member of the committee, and after considering the witnesses' testimony, all other members of the committee supported the proposed amendments in Division 19.
Thank you.
The Chair: Thank you for a report well prepared and very well presented.
I'm a little worried about your explanation of the retroactivity, if I heard it correctly. It would apply in a civil suit that is still ongoing, that has started.
Senator Gerstein: I understand that these clauses are specifically brought in because of this action taken in the Province of Quebec and the decision given by the court of appeal. As I understand it, that situation is exempted but all others would be included.
The Chair: All others that may come in the future, we understand, but it's the retroactivity. They are underway now?
Senator Gerstein: That's my understanding.
The Chair: So we could have arguments, all the evidence presented, and the judge is just holding it, writing his judgment, and this legislation would impact on that?
Senator Gerstein: I understand that could be the situation, but I would defer to legal counsel. I would call you in as my counsel in this situation, you being much more familiar with this type of situation than am I.
The Chair: I will call in Senator Wallace here.
Senator Wallace: In view of recent discussions, I'll pass.
The Chair: Maybe the Library of Parliament can help me in finding which section the retroactivity is and under what law, what statute.
It seems to be in 239 to 245, apparently. It's in each of them.
I'll have to satisfy myself on that, but I do appreciate you had no further discussion.
Senator Gerstein: We had no further discussion than that, Mr. Chair.
The Chair: I have no other colleagues who have indicated an interest in participating in a discussion with you. They are well-informed and ready to do clause by clause. You may take your seat on the sidelines again.
Senator Gerstein: Always a pleasure.
The Chair: From the Standing Senate Committee on Internal Economy, Budgets and Administration, we're very pleased to welcome our colleague Senator Furey, who is the deputy chair. He is accompanied by Michel Patrice, Law Clerk and Parliamentary Counsel and Chief Parliamentary Precinct Services Officer; and Gilles Duguay, Director General, Parliamentary Precinct Services. They will be discussing the subject matter of those elements contained in Part 3, Division 10, Parliament of Canada Act, clauses 98 to 152, which can be found at page 73 and following.
Senator Furey, I'll call on you first. Your two colleagues may be able to help you in helping us understand this particular division.
Hon. George J. Furey, Deputy Chair, Standing Committee on Internal Economy, Budgets and Administration: Thank you for the invitation to appear today.
I want to first say that when the motions to proceed with the change in the security arrangements on the Hill were passed by both the Senate and the House of Commons back in February, the then-existing Senate Security Committee, which was interfacing with the House of Commons Security Committee, ceased to function in terms of representing the Senate.
On a go-forward basis under the guidance of then Speaker Nolin, Mr. Patrice and Mr. Duguay represented the Senate at all negotiations and briefed the committee this morning on the provisions of Division 10 of Part 3 of the bill.
I'll ask Mr. Patrice to make an opening statement to colleagues, after which we will field any questions you have.
The Chair: Thank you.
Michel Patrice, Law Clerk and Parliamentary Counsel and Chief Parliamentary Precinct Services Officer, Senate of Canada: Honourable senators, we are here to speak today about Division 10 of Part 3 of Bill C-59, the budget implementation bill, which proposes amendments to the Parliament of Canada Act in order to establish the "Parliamentary Protective Service."
The Senate has been involved in the drafting of this proposed legislation, along with legal counsel from the House of Commons, the RCMP, PCO, Public Safety Canada and Department of Justice.
It was drafted following the adoption of the motion by both houses in February, as the deputy chair said, to invite the RCMP to lead operational security throughout the Parliamentary Precinct and the grounds of Parliament Hill.
Under the leadership of the late Speaker Nolin and Speaker Housakos, we have been engaged in negotiations with the relevant parties. We have been guided by the six principles established by Speaker Nolin at the outset. Those were: This new service must respect the privilege, immunities and the powers of the respective houses and their members. Speakers must have policy oversight. The new service must ensure continuous employment of our security personnel. Funding of this new service must be centralized through a single vote, and the Speakers must be involved in the selection of the new director. The last principle is that any policing activities into allegations or complaints of criminal activity must be performed by peace officers outside this service and in accordance with existing protocol.
During the discussion between the interested parties, it became clear that legislation was required. I must say that this proposed legislation is in line with the principles that were established by Speaker Nolin.
Division 10 of Part 3 proposed to amend the Parliament of Canada Act to create a new entity, not unlike the Library of Parliament, called the "Parliamentary Protective Service," which would have legal personality and would be responsible for all matters relating to physical security throughout the Parliamentary Precinct and the grounds of Parliament Hill.
According to the draft legislation, the Speaker of the Senate and the Speaker of the House of Commons would be responsible for this new service as per their role as custodians of the powers, privilege, rights and immunities of their respective houses and their members.
The service will also be under the general policy direction of both Speakers. The "Director of Parliamentary Protective Service," however, will have the control and management of the service, meaning that he or she will be responsible for the day-to-day operations of the service. The director will be a serving RCMP member, as in the motion, and will be selected through a transparent and consultative process.
The director, however, will be accountable to the Speakers for the management and performance of that service. It's also true that the director will be accountable to the RCMP commissioner through the RCMP chain of command for ensuring that the RCMP meets its responsibilities according to the terms of service included in the arrangement between the Speakers, the Minister of Public Safety and the RCMP.
All RCMP members who will serve in the PPS, including the director, will continue to be employed by the RCMP.
Further, the proposed legislation states that the Speaker of the House of Commons and the Speaker of the Senate shall enter into an arrangement with the Minister of Public Safety and the RCMP to have the RCMP provide physical security throughout the precinct and the Hill. What that means is that this new service will have no responsibilities for matters such as information management and technology infrastructure; information technology security, meaning cybersecurity; or sharing and protection of data or other functions like the Business Continuity Plan, fire prevention and all of that. These services will continue to be provided by the Senate.
In addition, as stated earlier in terms of the principles, the RCMP members in this service would not have any responsibilities for investigating parliamentarians or parliamentary staff for criminal offence.
This new service in statute means that there will be one employer for all existing House of Commons and Senate security staff, which is to facilitate the integration and operation in this new service, one chain of command. Much of the draft legislation is devoted to ensuring that these respected staff members will be provided with employment stability, thus upholding the commitment of continued support that was made in the motion. They will continue to occupy their positions within the new PPS on the day that these provisions come into force. The terms and conditions of their employment will not change, and all existing collective agreements will remain in force.
Also, establishing the PPS will allow for the creation of a new, independent appropriation vote for it. The way it will function is that before the start of each fiscal year, the Speakers will instruct the director to prepare an estimate of the sum that will be required for the service. After consideration and approval, the Speaker will transmit these estimates to the President of the Treasury Board for inclusion in the estimates of the government for that fiscal year.
A clause in the bill has been drafted to avoid limiting the powers, privileges, rights and immunities of the Senate, the House of Commons and their members It is through their role as custodian of parliamentary privilege that the Speakers would enter into an arrangement with the RCMP for the provision of their services. This arrangement will include provisions that would protect the various privileges of each house, including control over proceedings and the right of access of members.
In conclusion, there are many steps to be taken before there's a fully integrated security operation in the Parliamentary Precinct. I realize that the partners in this new endeavour — the Senate, the House of Commons and the RCMP — are working diligently on transition planning right now.
[Translation]
The Chair: Mr. Duguay, do you have something to add?
[English]
Gilles Duguay, Director General, Parliamentary Precinct Services, Senate of Canada: We'll entertain any questions the committee may have.
[Translation]
Senator Bellemare: You raised a point that caught my interest. You said that section 79.57 indicates that an expenditures budget would be drafted and transmitted. If I understand correctly, that was not done previously.
Mr. Patrice: In the past, each institution set aside a portion of its budget for their respective security services. So the Senate would have an amount in its portion of the budget, an amount for Senate security services, and so would the House of Commons and the RCMP.
Senator Bellemare: Now there will be a common unit, and a common budget. Will there be a document with plans and priorities, as is the case for all other departments?
Mr. Patrice: Initially, all these budgets will be consolidated because the fiscal year is under way. So the amounts that have not been spent to date by the respective organizations will be consolidated within the new organization.
[English]
Senator Furey: In response as well to your question, Senator Bellemare, once the consolidation is done, on a go- forward basis it will be a separate allocation, akin to something like the Library of Parliament, for example. It will be a separate allocated budget.
[Translation]
Senator Chaput: On the last page of your committee's report, on page 4, you mention the importance of the obligation to respect parliamentary privileges. In section 79.58, you clearly indicate that none of the added provisions will be construed as limiting the powers, privileges or rights of the Senate and the House of Commons.
You add that "this statutory commitment to respect parliamentary privilege will likely be a challenge for the Parliamentary Protective Service."
I took the time to read those few lines to you because I believe that, now that the Parliamentary Protective Service is an integrated service, one of its challenges will be to respect the Official Languages Act. I am pleased to see that, in the bill, the new entity is now one of the federal institutions that comes under the Official Languages Act.
However, given the difficulty that the RCMP has in meeting is obligations regarding the offer of service in French in official language minority communities, I hope that this new entity will manage to respect the Official Languages Act, at least as well as it did previously in the Senate security system.
[English]
Senator Furey: Thank you very much for raising that, Senator Chaput. Along with the RCMP and this new integrated service, we also have assurances from the Speaker of the House of Commons and our own Speaker that the rights and privileges of parliamentarians and Parliament in general will be respected, including under the Official Languages Act.
The Chair: We've seen in the past where the RCMP has negotiated taking over the jurisdiction of policing and security. The existing officers have been taken into the RCMP and begin wearing RCMP uniforms. Is that not contemplated in this particular instance?
Mr. Duguay: Currently, recruits coming out of Regina for training will come here on a two-month basis. Now that this will be a more permanent posting, the RCMP have gone out and advertised within the RCMP. Only RCMP members can apply for 30 permanent positions that they want to post at the Parliament Hill detachment, but the members will be assigned to PPS.
The current Senate Protective Service or House of Commons protective services will become PPS members but not RCMP members.
The Chair: How about the automobiles, firearms and all the gear that they're wearing? Are we going to see a unification of all of that internally and externally on Parliament Hill?
Mr. Patrice: As you can imagine, this process of transition has many aspects. Currently there are seven working groups, ranging from finance to human resources to procurement, et cetera. They are looking at all the transition in terms of phasing into that new service, including assets, which I believe is your question. Obviously the assets that are relevant for the new "Parliamentary Precinct Service" will be transferred to that new service. All this work is going on currently to identify all of these issues.
The Chair: Will that include activity in the precinct area outside the buildings?
Mr. Patrice: That's right. Right now the jurisdiction of the new service — and I guess it's in addition to the previous responsibilities of the respective security services —- will extend to the gate of Parliament Hill with full integration. You're going to see a mix of RCMP and former Senate and House of Commons security, either on the grounds or inside, to achieve full integration.
The Chair: We're still going to see RCMP uniformed personnel around the precinct?
Mr. Patrice: Yes.
The Chair: And the precinct service and the RCMP will have compatible communications equipment and that kind of situation that we're concerned about that might not have existed in the past?
Mr. Duguay: That is the immediate focus. First of all, the RCMP will retain their identity, but they will be integrated within this function that is the PPS.
With respect to interoperability, as well as communication, our plan is that as soon as Royal Assent takes place, this will not be an issue. The planning is that if there is a crisis the next day, all these forces can communicate with each other and there is one person who has command and control of the situation.
The Chair: How will the work be divided on Parliament Hill, on the precinct, between the uniformed RCMP and the uniformed PPS?
Mr. Duguay: That is subject to this transition that Michel was alluding to. It's going to take some time. After Royal Assent, don't even expect to see a new uniform. SPS members will most likely have their current uniform, as will the House of Commons, because we realize that for as long as they will not have their own identity through policies or have their own collective agreement, issues could arise by mixing them too early. In keeping them to their respective precincts, we have to ensure that there is a seamless integration of operations and communication. That's going to give us some time to get there.
The thing that might change, and what we're also discussing, is that perhaps there would be a benefit to have current SPS and House of Commons personnel located at the vehicle screening facility, facilitating senators as well as members of Parliament to go through the vehicle screening facility.
We're also entertaining when it would be appropriate to have an RCMP member inside Parliament, but we're not there yet. A lot of discussion has to take place. The timing has to be right. We know that there is a warming up process. We're sensitive to all kinds of issues and we know that it's going to take a period of time.
The Chair: Senator Furey, you're satisfied that this legislation and the various clauses here will allow, over time, for this transition that we've been talking about?
Senator Furey: Yes, I'm satisfied that it's true to the motions that were passed back in February and that it respects the intent and purpose of those motions.
The Chair: Thank you.
Senator Furey: But, as Mr. Duguay has said, it will take some time. There will be growing pains.
[Translation]
Senator Chaput: I would like to come back to the language obligations of this new entity. If I have understood correctly, Mr. Duguay, you just mentioned that about 30 people will be recruited and that the RCMP will recruit another 30 people?
Mr. Duguay: They are not 30 new —
Senator Chaput: They are not necessarily new people.
Mr. Duguay: No, not necessarily. The RCMP wants to create stability within its current positions.
Senator Chaput: A plan will need to be created to provide services in both official languages. There are places where it is essential and others where it may not be as important. Is any planning being done to determine how services in both official languages will be provided in Parliament, so that our linguistic duality is not abandoned and is reflected as it was in the past?
Since we began integrating the services, there is no doubt that planning is always under way, but we often deal with people now who have lovely smiles and are very kind, but they do not understand French. I understand that it is a transition and that things have to fall into place. But can you give me some assurance that there will be a strategy that will ensure that linguistic duality in Canada will be reflected in the security services?
Mr. Duguay: Based on what I know of the RCMP and based on the file that was sent, one of the basic qualifications of members who want to apply — because there will be more than 30 of them — is that they be bilingual.
Senator Chaput: Will it be "mandatory" or "preferred"?
Mr. Duguay: Mandatory.
Senator Chaput: Thank you, Mr. Duguay.
[English]
The Chair: Senator Furey, I have no other names on my list.
[Translation]
The Chair: Mr. Patrice and Mr. Duguay, thank you for attending this meeting. Best of luck to you.
[English]
Colleagues, this concludes the work we have outlined for ourselves in relation to this particular bill. The next step is to receive the bill. It will come to the Senate for second reading. If you wish to speak at that time, that would be great. It will then be referred to our committee and dealt with.
I don't anticipate there will be extensive points, but one never knows. If there are any points that you would like external witnesses to clarify, that would be the time to do it. Then we'll proceed with clause- by-clause consideration. The bill will then be referred back to the Senate for third reading and you'll have a chance to speak again at third reading on aspects of it.
Thank you all very much for your understanding and patience in getting through a very difficult job. Thanks to Jodi Turner, to the Library of Parliament and to the technician. We really appreciate all of your help.
We'll let you know when next we will meet.
(The committee adjourned.)