Tuesday, June 6, 2017

The Standing Senate Committee on National Security and Defence has the honour to table its

TWELFTH REPORT

Your committee, which was authorized to examine 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, has, in obedience to the order of reference of Monday, May 8, 2017, examined the said subject-matter and now reports as follows:

On May 15, 2017, your committee heard witnesses on the subject matter of 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.

Consequently, the committee heard from:

• Ms. Faith McIntyre, Director General, Policy and Research Division, Strategic Policy and Commemoration, Veterans Affairs Canada (VAC) regarding Division 12’s proposed changes designed to support Canada’s veterans; and

• Ms. Lisa Pezzack, Director and Mr. Maxime Beaupré, Chief from the Financial Systems Division, Financial Sector Policy Branch, Finance Canada and Mr. Dan Lambert, Assistant Director, Intelligence, Operations, Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) regarding Division 19’s proposed amendments to Canada’s anti-money laundering and anti-terrorist financing regime.

This report summarizes the witnesses’ comments.

DIVISION 12: PROPOSED AMENDMENTS TO THE CANADIAN FORCES MEMBERS AND VETERANS RE-ESTABLISHMENT AND COMPENSATION ACT

Ms. McIntyre highlighted that the 2017 federal budget’s priorities are primarily designed to facilitate veterans’ transitions to civilian life, assist veterans’ families and support mental health.  She mentioned a $624 million federal investment over the 2016–2017 to 2021–2022 period, and identified three areas of potential change contained in Bill C-44:

• a caregiver recognition benefit;

• a veterans’ education and training benefit; and

• a redesigned career transition services program.

She also indicated that Bill C-44 would change the name of the Canadian Forces Members and Veterans Re-establishment and Compensation Act to the Veterans Well-Being Act to reflect Veterans Affairs Canada’s (VAC’s) view that veterans’ well-being goes beyond financial compensation.

Caregivers

Ms. McIntyre commented that Bill C-44 would replace the Family Caregiver Relief Benefit with a monthly, tax-free caregiver recognition benefit paid directly to caregivers;  the $1,000 benefit would be indexed annually. According to her, this proposed change would respond to caregivers’ desire to be recognized by VAC for their role in caring for veterans. She stressed that VAC would ensure the existence of measures to protect veterans from potential abuse, and said that the Minister of Veterans Affairs could investigate situations of such abuse and — if required — cease payments.  

Education and Training

As well, Ms. McIntyre spoke about the proposed veterans’ education and training benefit, which would be available in the amount of $40,000 and $80,000 for service of at least six and 12 years, respectively, to veterans honourably released on or after 1 April 2006. She mentioned that the definition of “honourably released” would be included in regulations, and would likely reflect that used by the Canadian Armed Forces (CAF). According to her, VAC is considering exceptions to the “honourably discharged” requirement; in such cases, the Minister of Veterans Affairs could intervene.

Ms. McIntyre said that, in developing the proposed veterans’ education and training benefit’s years-of-service criteria, VAC worked closely with the CAF, and considered variations in education and training fees across Canada. She stated that, currently, VAC does not intend to reduce the proposed benefit’s amounts if a veteran also receives provincial grants or scholarships.

According to Ms. McIntyre, veterans who have left the CAF for medical reasons, have completed the Rehabilitation Services and Vocational Assistance program, and are deemed able to return to work could access the proposed veterans’ education and training benefit. She provided an example of the manner in which medically released veterans could access the program and the proposed benefit: a veteran could pursue a bachelor’s degree under the former and a master’s degree under the latter.

Career Transition

Regarding the proposed redesign of the career transition services program, Ms. McIntyre indicated that the goal is to create a seamless transition from the proposed veterans’ education and training benefit to the career transition services program. She said that the redesigned program would expand access to a larger number of people, and would offer career transition services, job market information, professional orientation and support in seeking employment on a bilingual basis through a subcontractor; no monetary limit would exist.

DIVISION 19: PROPOSED AMENDMENTS TO THE PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING ACT

Ms. Pezzack indicated that the proposed amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Actwould affect:

• the list of disclosure recipients eligible to receive financial intelligence connected to threats to Canada’s security; and

• the sharing of information about beneficial ownership.

According to her, the proposed amendments would also make technical changes to and clarify the Act.  

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Disclosure Recipients

Ms. Pezzack stated that Bill C-44’s proposed changes would expand the list of disclosure recipients eligible to receive financial intelligence connected to threats to Canada’s security to include DND and the CAF, and noted that the definition of “threats to security” would be that outlined in the Canadian Security Intelligence Service Act. Mr. Lambert explained that this definition would guide the types of information that might be relevant to be shared with DND or the CAF, and provided foreign influence activities and espionage as examples.

In relation to the privacy of Canadians, Ms. Pezzack mentioned that the Proceeds of Crime (Money Laundering) and Terrorist Financing Act requires FINTRAC to undergo regular audits by the Privacy Commissioner, and that the Act attempts to balance individuals’ privacy and Charter rights with the need to address national security concerns effectively. She noted that a two-step test must occur before FINTRAC can release information to eligible disclosure recipients: the information must be relevant to a threat to the security of Canada or clearly related to money laundering; and there must be reasonable grounds to believe that the information should be pursued further by the recipient. Mr. Lambert provided assurances that Canadians’ privacy will continue to be protected because FINTRAC does not share information that cannot justifiably be shared; as well, the information that is shared must be relevant to a specific investigation.

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Beneficial Ownership

Regarding the beneficial ownership of legal entities, Ms. Pezzack said that Bill C-44’s proposed amendments would allow FINTRAC to disclose information about such ownership to appropriate competent authorities.  According to Mr. Beaupré, the proposed changes would not impose an additional burden on reporting entities; however, while regulations to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act do not currently require reporting entities to report specifically on beneficial ownership, future regulatory changes could require such reporting.

Technical Changes

In Ms. Pezzack’s view, Bill C-44’s proposed technical changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act would involve primarily clarifications:

• to certain legal definitions to ensure consistent use;

• to the regulation-making authority;

• to ensure that all trust companies that are incorporated in Canada but currently not regulated would be subject to reporting requirements;

• to ensure that any money services businesses that are subject to sanctions under the United Nationsor the Special Economics Measures Act would not be permitted to register with FINTRAC as a money services business in Canada; and

• to translations and language concordance.

Regarding formal consultations with the Privacy Commissioner or the Canadian Bar Association about Bill C-44’s proposed technical changes to the Act, Mr. Beaupré specified that the proposed amendments were a result of frequent conversations with relevant federal partners and entities that report to FINTRAC.

Your committee recommends the adoption of Divisions 12 and 19 of Part 4, of Bill C-44.

Respectfully submitted,