Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 11 - Evidence - February 16, 2012
OTTAWA, Thursday, February 16, 2012
The Standing Senate Committee on Banking, Trade and Commerce met this day at 10:30 a.m. for the review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, c. 17), pursuant to section 72 of the said Act.
Senator Irving Gerstein (Chair) in the chair
[English]
The Chair: I call this meeting of the Standing Senate Committee on Banking, Trade and Commerce to order.
Honourable senators, this morning we continue the five-year parliamentary review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This is our fifth meeting on the subject.
To date, the committee has heard from a number of so-called regime partners involved in the implementation and administration of this legislation, including the Department of Finance, Public Safety Canada, the RCMP, CSIS, CBSA, OSFI and FINTRAC.
This morning, we will begin by hearing from the Information Commissioner and then from the Public Prosecution Service of Canada.
We are very pleased to welcome Suzanne Legault, Information Commissioner of Canada, to our committee today. I understand this is the first time she is appearing before a Senate committee, so we are delighted to have that honour. The floor is yours.
[Translation]
Suzanne Legault, Commissioner, Office of the Information Commissioner of Canada: Good morning, honourable senators.
[English]
Thank you for your invitation to speak before your committee as part of your review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Since this is my first time appearing before your committee, please allow me to briefly describe the nature of my role.
The Information Commissioner position is a senior officer of Parliament appointed under the Access to Information Act. I began my seven-year mandate on June 30, 2010, after being acting commissioner for a year. A large part of my mandate involves investigating complaints submitted by individuals or organizations who feel that federal institutions have not respected their rights under the act.
[Translation]
I am supported in my duties by the Office of the Information Commissioner of Canada, an independent government agency created in 1983 under the Access to Information Act to foster the resolution of public complaints regarding access to government information.
As part of our investigations, we can use mediation and suasion to facilitate dispute resolution. We refer cases to the Federal Court of Canada and intervene in cases that involve key legal principles.
[English]
In preparing for my appearance this morning, I reviewed the comments of my predecessor during the review of the bill in 2000 and those of the assistant commissioner at the time of the statutory review in 2006. During those appearances, Mr. Reid and Mr. Leadbeater respectively expressed their concerns to the committee about what today are paragraphs 55(1)(a), (d) and (e) of the legislation you are reviewing and the mechanisms through which those provisions were passed, leading Commissioner Reid to describe them as creating a "black hole" in the machinery of government.
[Translation]
Those paragraphs exclude from the application of the Access to Information Act any mandatory or voluntary statements pertaining to financial operations connected with the commission of an offence involving money-laundering or the financing of terrorist activities. They also include exclude any information prepared by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) from information it receives regarding suspicious transactions.
[English]
The mechanism used for adopting the paragraphs I just mentioned is provided for in section 24 of the Access to Information Act. Section 24 excludes provisions in other legislation from the application of the act. The exceptions incorporated through this section have increased in number over the past few years. When the act was passed in 1983, 33 pieces of legislation were entered in Schedule II, which contains the list of exceptions. In 2000, there were 50 pieces of legislation entered into that schedule, and today it contains 60 pieces of legislation. As I mentioned previously, section 24 is essentially a back-door method of eroding access to information.
[Translation]
Like my predecessors, I have concerns about paragraphs 55(1)(a), (d) and (e) of the legislation that is the subject of your review. The paragraphs in question result in the exclusion of documents requested mandatorily, irrespective of harm, the public interest or the passage of time. Even so, it is important to remember that the Access to Information Act is based on fundamental principles, namely that federal government information should be available to the public and that any exception to that right must be specific and limited.
[English]
The Access to Information Act already contains exceptions to ensure that information is protected. There are exceptions pertaining to, among other things, national security, information obtained confidentially here and abroad, information on investigations and investigating techniques and the protection of personal information. The act even allows an agency to be excused from disclosing even the existence of a document.
Moreover, it is enlightening to note that section 24 of the legislation that includes these aforementioned paragraphs has, to my knowledge, been cited only three times by FINTRAC since this legislation and these provisions were created in 2001. In fact, of those three, one of them was removed subsequent to one of my investigations.
[Translation]
On the surface, I am of the view that the Access to Information Act contains the exceptions needed for protecting the information gathered by FINTRAC and that paragraphs 55(1)(a), (d) and (e) do not seem warranted to me. However, if the committee, after its deliberations, deems it appropriate to keep the existing exceptions to the disclosure of information pertaining to FINTRAC, I recommend that those exceptions be specified and incorporated directly into the Access to Information Act to maintain the integrity of the legislative framework and ensure that people requesting access have a clear idea of their rights.
Thank you very much for your attention. I will now be pleased to answer your questions.
[English]
The Chair: Thank you, Ms. Legault. You indicated you were not here the last time hearings were held; nor was I, so we both looked back on the same testimony. However, I was drawn to another part of the testimony given in June 2006, and I would like to quote a comment made by Mr. Alan Leadbeater who at the time was the Deputy Information Commissioner of Canada. I am quoting directly:
The Information Commissioner has a concern relating not to too much secrecy authorized by the statute but the way in which secrecy is authorized.
If I may continue:
That means that information provided to FINTRAC and information prepared by FINTRAC pursuant to those reports must be kept secret forever . . .
That is longer than the mandate of this government and longer than the mandate of any senator sitting around this table. That was not said by Mr. Leadbeater, I might add.
The Information Commissioner is of the view that, while a certain amount of secrecy is necessary for an organization such as this, secrecy forever in all circumstances, with no public interest considerations, is not consistent with the accountability of this organization. There are adequate exemptions in the Access to Information Act to protect the information, but not for all time and not without meeting certain injury tests.
Again I come back to the point that you have been appointed in the intervening time, and I was wondering how you felt about these concerns and whether or not they have been addressed in any way since the last meeting before this committee.
Ms. Legault: Nothing has changed in the legislation in relation to the disclosure provisions in section 24 of the act. That has not changed since the previous testimonies in 2000 and 2006.
My position is that normally, access to information should only be denied in very specific and limited circumstances.
The questions this committee should ask itself in reviewing this legislation are, first, whether the non-disclosure regime put in place in the legislation currently is what is absolutely necessary to protect the confidentiality of the information being provided to FINTRAC and, second, what is the mechanism by which this information must be protected? Should it be done by way of section 24 of the Access to Information Act, or should it be done directly within the Access to Information Act as a specific provision, like the provisions added as part of the Federal Accountability Act? There were specific provisions added to protect certain information of investigative bodies, such as my office, but these were added directly to the Access to Information Act.
Whether the information FINTRAC obtains needs to be protected forever is a very good question. There is very little information, in my view, that needs to be protected forever. There are some particular considerations, for instance human sources in terms of police investigations and national security or terrorism investigations. Human sources in those circumstances are probably the type of confidential information that one would want to protect for as long as possible.
Whether the information that FINTRAC gets from financial institutions deserves to be protected forever, I do not think that is necessarily the case.
The Chair: I am sure you will get more questions on this during our meeting.
Senator Oliver: I was interested in your quoting one of your previous commissioners, Mr. Reid, when he called section 55 the "black hole" in the machinery of government. You are trying to overcome that black hole by a procedure that I think you have probably talked to your lawyers about, and I wanted to go over it with you.
You are basically telling us today in our review of this legislation: "I think there is protection there, but to make it clearer, I think we should add a new section and specifically incorporate the provisions into the act."
In other words, have you gone to your lawyers and said, "I am going to appear before the committee today; do you have any language that I could suggest to the committee that would implement what we would like to do to make sure the public knows about the special protections there are for FINTRAC?" If so, is that something you could give the committee now?
Ms. Legault: No, I do not have specific language. I do not actually have a drafter on staff to do this work. As a matter of public policy, one would have to seriously look at the type of information that FINTRAC is receiving to truly identify what deserves additional protection from what is already covered in the general provisions of the Access to Information Act. The provisions that exist already protect information obtained in confidence from other governments and other institutions, both nationally and internationally, and that is a mandatory exemption; they shall not disclose this information. It is a very broad exemption.
There is also a very broad exemption for investigations that already exist in the act. There is a broad exemption dealing with anything having to do with national security or terrorist activity. There is also already in the act a provision that states that in some circumstances, an institution may not confirm or deny the existence of a record.
Therefore, the protections that already exist in the act currently, in my view, would probably cover everything that goes to FINTRAC satisfactorily because there are also provisions protecting third party information provided in a confidential manner to a specific institution. All of these already exist in the act.
Senator Oliver: You just want them specifically stated as such?
Ms. Legault: If there is anything additional that FINTRAC can justify needs additional protection. For instance, for the CBC case, there was a specific provision added to protect journalistic sources, which was not previously provided for in the act. When the FAA came into effect in 2006, there was a specific provision added to protect the information that belongs to the CBC.
Does FINTRAC need added provisions? I am not convinced of that, but after a full review, once the consultation paper by the Department of Finance has been fully responded to and all of the additional information that could be supplied to FINTRAC is analyzed, I think we would have to review the act and see if there is anything in addition to what is already in the act that needs to be given additional protection to the information holdings of FINTRAC.
Senator Oliver: In order to do that, would you say we should take every one of these broad exemptions that you have just enumerated and include those?
Ms. Legault: They are already here.
Senator Oliver: Therefore, we would not need to restate them, then.
Ms. Legault: No. They already exist.
Senator Oliver: You are recommending that those exemptions be specified and incorporated directly in the Access to Information Act to maintain the integrity of the legislative framework?
Ms. Legault: If there is anything that FINTRAC can convince us is not already covered by the Access to Information Act, which is what they are saying. They are taking the position that they need added protection. This is what has been done by section 55 in the way it has been incorporated by way of section 24.
By the way, it becomes very complicated when you do it that way. When I say it is better to add amendments to protect additional information from disclosure in the Access to Information Act itself, let me walk you through it. I was thinking about this as well before appearing.
Say I want to make an access to information request to FINTRAC — which is covered under the Access to Information Act — about information that they received from 2010 to the present from a specific bank. As far as I understand, this would be covered by section 55, under subparagraph 55(a), which is covered by section 24 of the Access to Information Act, which says that I shall not disclose this information forever.
Apparently in 2001 or 2002, subparagraph 55(1)(a.1) was added to the proceeds of crime legislation, which refers you to 7.1 of the act. You will see how convoluted it becomes. Section 7.1 protects information under section 83.1 of the Criminal Code, under section 8 of the regulations implementing the United Nations resolution on the suppression of terrorism, and they have an obligation to make a report to FINTRAC under this provision.
This is not covered by section 24 of the Access to Information Act. It was not added in 2001 or 2002 when (a.1) was added, so that information being supplied under that mechanism would be subject to the general provisions of the Access to Information Act.
Under (e), if FINTRAC takes that information and creates a report analyzing this information, that would be protected under section 24 and they should not be disclosing that information forever.
It gets even more complicated because FINTRAC has the ability to send some of this information, say, to CSIS or to the RCMP. CSIS and the RCMP are covered by the general provisions of the Access to Information Act, so they would have to treat that information under the general provisions of the Access to Information Act, even though FINTRAC itself cannot disclose this information under section 24.
For the requester, what you have to do is make a request to FINTRAC, make a request to CSIS and make a request to the RCMP, which would be covered under a different regime. That is why the way it was set up by the mechanism of section 24 makes it very difficult for the requester to actually understand what this person is allowed in terms of disclosure. This information in most circumstances would be very well protected under the general provisions of the Access to Information Act.
Senator Oliver: It basically seems that if a member of the Canadian public were interested in getting some information, the way it is worded now in the convoluted way you have just gone through it, it would be virtually impossible for them to get any of this information ever.
Ms. Legault: Most of the information they would get or that CSIS would be holding in those types of investigations is legitimately protected. I am an advocate for transparency, but I am also an advocate for the right balance, and there is some information that deserves to be protected, obviously. This kind of information generally falls under that category of information.
Under national security, for instance, after a certain passage of time, some of this information is no longer sensitive.
Senator Oliver: Even cabinet minutes.
Ms. Legault: Of course, and some of this information becomes public.
Section 55 of the proceeds of crime legislation, by virtue of section 24 of the Access to Information Act, will never be disclosed, and that is becoming problematic.
Then it gets tricky. Say your requester just wants to know how many voluntary disclosures were made in 2010, which is just a number. That becomes tricky if I get a complaint because they are not asking for confidential information but for a number of disclosures.
Senator Ringuette: The question begging to be asked is did FINTRAC or the Department of Justice consult with you before releasing their white paper with regard to your responsibility in this legislation?
Ms. Legault: My office consulted with officials from the Department of Finance previously, but I did not have that opportunity, nor have I sought it, to be honest. The paper came out on December 21, and in all honesty, this was not something that was on my radar screen until we were basically asked to appear before this committee. Therefore, I have not recently met with officials from the Department of Finance or FINTRAC, but I do have complaints. I have looked at the complaints and I have looked at FINTRAC's use of that section. To their credit, it has been used sparingly over 10 years. I could seriously find only three instances wherein they invoked section 24, and one of them was actually removed after an investigation.
Since 2008, I have had only four complaints in relation to FINTRAC's release of records under the act, and two of those are still active.
Senator Ringuette: Your office has received complaints with regard to FINTRAC and their release or non-release of information. If we look to the last review of this bill, the privacy issue was a very important one for this committee, so I am disappointed that the Department of Finance in the production of this white paper had not consulted you with regard to what changes should have been made. That is quite an issue with regard to your mandate.
In the white paper, they are suggesting removing the $10,000 benchmark with regard to financial transactions to no benchmark at all. Now we go from any type of suspicious transaction or information to all information and all financial transactions. Notwithstanding the volume of transactions to be reported, this would also increase possible complaints through your office. How do you feel about this?
Ms. Legault: With regard to the fact I was not consulted on the paper, if I recall correctly, the interim report from this committee in 2006 actually did not make any recommendations in relation to my office but rather to the Office of the Privacy Commissioner, Ms. Stoddart. They may have consulted her office in relation to privacy protection and the addition of the transactions that need to be reported.
However, really, it is not for me to comment on whether these transactions are appropriate in terms of reporting. That is not within my mandate or my expertise.
Senator Ringuette: On page 2 of your statement, you referred to a "black hole." Could you elaborate?
Ms. Legault: Mr. Reid and Mr. Leadbeater referred to a "black hole." I actually do not speak in those terms, and that is why I put them there.
To be honest with you and to this committee, when I was preparing for this appearance, there were really two issues. One was whether the protections that are in the act in terms of disclosure are appropriate in the proceeds of crime legislation, and the second one is really the mechanism by which they are protected.
The use of section 24 of the Access to Information Act to protect information from disclosure forever in this particular instance I think is completely inappropriate. I think it is ineffective and complex. I think it is now becoming a little bit of a smorgasbord. It is really a question of what information people are entitled to and how they are supposed to figure out what they are entitled to.
In terms of application of the act, it is becoming more and more complicated, particularly if some of the recommendations in the Department of Finance's paper are incorporated into the legislation, which would add the number of requirements for disclosure, so how will they be covered under this scheme?
In terms of the information that is not to be disclosed here, there is a catch-all in section 55 that says any other information other than publicly available information obtained in the enforcement of the administration of this part is actually subject to the general provisions of the act.
When I reviewed the testimony of my predecessors, they were saying that audits of the enforcement activities of FINTRAC would not be covered and that this would not provide sufficient accountability of FINTRAC. If I were to get a complaint, my reading of this is that audits would be covered under (f) of that section. Therefore, they would be subject to the general provision of the act, they would not be excluded forever, and there would be sufficient accountability provided there.
I would not necessarily say it is a "black hole" because I actually think there is information here that would not be excluded forever and that would provide some measure of accountability and review of the information, subject to the other exemptions under the act.
I am hearing myself speak, and I can see it is complicated because I am talking about two pieces of information and two regimes of disclosure and non-disclosure that are interconnected, and that is why it is a little complex to explain, but that is the reality we are dealing with.
Senator Stewart Olsen: You raise some interesting issues, interesting in the fact that this committee has struggled with both of these things, actually trying to make sure that people's privacy is protected as well as wanting more information. It is not just you; everyone is struggling.
My read of the department, and perhaps this is what you are suggesting, is that perhaps they are really trying to protect information that comes to FINTRAC because a lot of information may be nothing to worry about. It may actually have a question mark but turn out to be nothing, and for that to come out in public can be harmful to people. I think this committee recognizes that.
I am wondering if perhaps your main point is the confusion. Perhaps you are not so much damming anyone but saying mostly because of the evolving nature of the legislation and today's world, there is confusion that would perhaps be better cleared up. Is that a correct read of what you have said?
Ms. Legault: Yes, I think that is a very fair statement. Essentially, I agree, there is information that needs to be protected. For a regime like that to actually work, you need to ensure the confidentiality of the information you receive. The parties that are providing that information need to have the assurance of confidentiality.
The regime that is making this happen here, in my view, is complex, ineffective and perhaps too restrictive, and that needs to be looked at.
Legislators can do very interesting things. You could also decide, for instance, that there is some information that you wish FINTRAC to have a statutory obligation to disclose on a yearly basis. If one wants to ensure there is sufficient accountability for an institution like that, it is fairly easy to put a positive disclosure obligation in the statute that says, "FINTRAC shall disclose every year the following information about its operations." That is a very easy way to ensure there are sufficient accountability mechanisms.
That is why I do not draft legislation, because when one looks at the public policy environment, there are sometimes options that are easy, get to the point and are sometimes effective in achieving a public policy goal.
Senator Stewart Olsen: We are also tasked in this committee to perhaps provide information or amendments. Would that be what you would recommend we would look at? It is quite a simple explanation of what might sort out a lot of confusion. I thank you for that.
Senator Harb: The Department of Finance has asked Capra International to do a little report for them. Are you aware of that report?
Ms. Legault: No.
Senator Harb: This report was dated December 7, 2010. I am sure the clerk will make a copy available to you. They made a number of statements and they have a number of concerns, some of which are not far off from what you have brought to our attention today. In particular, I will read recommendation number two for your information: Finance should lead an interdepartmental working group with representatives from originating partners to determine future steps for continuing to improve the regime compliance with international commitments and to examine the following key issues. It goes on to list the issues, some of which are relevant to what you have brought to our attention. I very much encourage you to take them to task with this because this has opened the door for you to go and say, "Your own advisers have told you to discuss with me."
Speaking of the release of information, there are obviously very important things here. There is the information that is of public interest that you outlined yourself that the public needs to know, and there is the other information that are personal or entity issues. On the public disclosures, I do not think any member of the committee will disagree with you that FINTRAC should, to a large extent, release some of the information, but when it comes to other issues that affect individuals or entities, you have a very strong ally in the Privacy Commissioner. With regard to some of that information, if an individual has applied to FINTRAC because they wanted to know, it is their right to know at some point in time. Both you and the Privacy Commissioner come head-to-head or you are side-by-side. Have you spoken with the Privacy Commissioner to find out if there is some cooperation here?
Ms. Legault: We actually have a very good relationship with the Office of the Privacy Commissioner. I have not had any specific issue in relation to the disclosure obligations of FINTRAC, but normally we are fairly aligned, sometimes on the boundaries between what personal information should be protected and what personal information should be disclosed in the public interest. It has happened in the past that my office was in favour of more disclosure than the Office of the Privacy Commissioner, not surprisingly so, but in the personal information protection, in both of our legislation, there is a public interest override. It has happened in some circumstances that my office would consider that the public interest override should apply.
Generally speaking, we are very much in line. As you know, the personal information protection is actually mirrored in both of our legislation. My legislation refers back to the Privacy Act. They are very closely intertwined.
Senator Harb: This is a massive struggle, especially with national security and anti-terrorism, and lump it with section 38 of the Canada Evidence Act. It is not only the Privacy Commissioner, but everyone is in the dark and, perhaps, from what you are saying, it could be forever; right?
Ms. Legault: That is part of the argument. The argument is this: Do we need to protect this information forever or are there circumstances where we should have a disclosure after a certain amount of time? Are there circumstances where the public interest in disclosure actually outweighs the secrecy provisions? Should we have the possibility of making an assessment of whether or not the disclosure will lead to prejudice or harm? The Access to Information Act generally and the fundamental principles in terms of disclosure would generally advocate in favour of exemptions that are discretionary, that are subject to a test of injury, that are limited in time, and that are subject to a public interest override. It cannot always happen like that. As I said, in cases like human sources, we want to effect a really high level of protection to that information for obvious reasons.
That is a general scheme. With the information in FINTRAC that is obtained by the centre, in some circumstances and not others, we are giving it a blanket protection. This is the black hole that my predecessor was referring to. We are giving them a blanket protection for all of this information whatever, without any public interest override. In my view, that is not necessarily appropriate for all of this information that is being referred to here. As we move to add some of this information that is given to FINTRAC, I am not sure how it will fit into this. We are already seeing some discrepancies here in the treatment of it.
What is odd about this is that it is only FINTRAC that has this obligation. Once it goes out to the other enforcement agencies, we are having this different regime, which is the access act — even more strange.
Senator Harb: I understand that the Privacy Commissioner will appear so we may ask the Privacy Commissioner the same question. What you just mentioned here is interesting. It is not only that sometimes you are finding yourself right in front or on the shores of the black hole, but secrecy sometimes comes as a result of face value. If one of the partners makes a statement that "I want to give the information because," they do not have to give you a lot of explanation. They can enact just the Anti-terrorism Act, national security act and you are out; right?
Ms. Legault: That is where the review of this committee is very useful and the review of parliamentarians, when they look at these pieces of legislation. I said earlier, it really is incumbent on the entities, when they are claiming that these exemptions to the public's right to know are necessary, the legislators have to be convinced of the necessity of these blanket exemptions and these blanket protections.
Senator Harb: In the Canadian Charter of Rights and Freedoms, it comes into question at some point.
[Translation]
Senator Massicotte: Thank you for being here with us, Ms. Legault. In terms of information, your concern is to make the organization accountable and to make sure that information is not abused. But does the fear vis-à-vis information come from the public or from private individuals? Does this right apply to both? Is it really public information?
Ms. Legault: The information given to FINTRAC is obtained from private individuals as well as from organizations, whether private, not-for-profit, or international.
So, as I understand it, the people at FINTRAC are the experts on what goes on there. There are all kinds of information coming from different sources, from reports produced by FINTRAC and then sent to various investigative bodies. There is a flood of information that can be found and the information that one can ask FINTRAC for can come from all sorts of organizations. It can come from private individuals, such as academics who want to study the effectiveness of anti-crime and anti-terrorism mechanisms. Information that FINTRAC is asked for can come from all kinds of sources. It can also come from the general public wanting to make sure that FINTRAC is well administered and well managed and that the confidential information they have is properly kept.
For example, one of the concerns that the committee raised in 2006 was about the disclosure of information to other countries, for example, or other bodies and whether those countries or bodies have ways to protect the personal information they get. How can we know if, for example, an individual's information sent to another country is subject to the privacy constraints that we would consider appropriate in Canada?
What agreement does FINTRAC have with other countries? What specific protections have they obtained for the information they send? Could that information be disclosed? It is tough to know.
Senator Massicotte: Do you think that the disclosure criteria should be different for the parties mentioned in the report and for all the others, as such?
Ms. Legault: The act makes a distinction in that it refers to section 12 of the Privacy Act, which allows people to obtain information about themselves. You will have to ask Ms. Stoddart, as she is really the expert. If you look at the Privacy Act, section 12 provides for exceptions. So people have a right to their own information, with the exception of things like national security and on-going investigations. So the disclosure of information can be refused, even though it is personal information, if there are on-going investigations and if national security is involved. But, under section 55 of the act, the situation is different.
Senator Massicotte: It is still interesting. Our initial worry was to make sure that information remains confidential, because we are concerned about the consequences of a leak of information from a sensitive file. Your point of view relates more to the public. It is still interesting. But, when you look at the exceptions, can we conclude that information is disclosed only rarely? You are telling us that it may be a bit much and that there may be a bit too much power in the hands of the State, as there is in some.
Ms. Legault: You know, I always say that the Access to Information Act and the public's right to public sector information is all a question of balance. When bills are passed, the important thing is to get the best possible balance, if you will. How do we protect the information that must be protected at the same time as we make sure that we make available to the public the information that must be made available? I am suggesting that with section 55, by virtue of section 24 of the Access to Information Act, the protection is permanent, and neither discretionary nor concerned with the public interest. We have not got the best possible balance. The pendulum has swung too much towards the protection of information and away from the public's right to information. My suggestion to you in your review is to consider if in fact a balance has been attained. I submit that the existing provisions of the Access to Information Act are probably already sufficient for a balanced protection. If FINTRAC manages to persuade you that a bit more information must have additional protection, that extra bit of information can be specifically added to the Access to Information Act. It can be done through the new disclosures suggested in the consultation document. At the moment, there has been no discussion yet about what kind of protection that information must have.
Is that going to be in paragraph 55(2)(a) of the act? Has (1)(a) been put back, but not to section 25? Personally, I do not understand what is going on here. If we add sub-paragraphs here, how will they be covered? It is all up in the air.
Senator Hervieux-Payette: Welcome, Ms. Legault. It was not very clear what you meant when you referred to paragraphs 55(1)(a), (d) and (e). For the benefit of my colleagues, section 55 says that: subject to subsection (3), sections 52, 55, 56 and 56.2, subsection 58(1) and sections 65 and 65.1 of this Act and to subsection 12(1) of the Privacy Act, the centre shall not disclose the following: (a) information set out in a report made under section 7.
I checked what that meant and I realize that it usually refers to currency and monetary instrument seizures. All the exemptions have to do with that. In other words, it is the list of things that could be in question.
Whether permanent or not, whether action has been taken — The example I am thinking of is a jeweller who imported emeralds from Colombia and rubies from India, adding up to more than $10,000, and who provides an explanation. Is that the type of information that you would like to see disclosed or withheld for an indeterminate period of time?
Ms. Legault: You did the same thing as me when I looked at that provision. But there is also (e), which encompasses all the FINTRAC reports using the information obtained under 55(1), from (a) to (d). Paragraph (e) is much broader in terms of the reports prepared by FINTRAC from all the information they have collected. Let me tell you that the Access to Information Act already provides for exemptions for information obtained from third parties, exemptions for information on investigations, exemptions dealing with national security and terrorist activity, and exemptions for all the information provided in a confidential manner by other national and international organizations. So the system is already in place.
This is essentially making the system more complicated, and it only applies to FINTRAC. But when the information goes somewhere else, then the act applies. This is all very complex and, every time we add more information, a decision has to be made as to whether it is covered under section 24.
Senator Hervieux-Payette: Does this not all come down to the public interest? The public interest is to disclose the information, be it diamond imports or transactions over $10,000, and so on. So where is the public interest? Who from the public, other than criminals, is interested in knowing this information? I would like to know why. Basically, if you are saying that there is too much information, we are going too far. We are doing the same thing over again. You are saying that we do not need those sections. I would really like to believe you, because when we start to look into it and we have to refer to 22 pieces of legislation to understand what you want to do, it would have been simpler if you had gone into more detail so that we could understand your reservations about section 55. I have examined the act at great length, I have looked at the sections that refer to the act and now I will need to have the other act governing FINTRAC in front of me. We are not encyclopedias and we are here to represent the public interest, certainly not to serve the interests of criminals.
Mr. Chair, if you agree, it might be a good idea to expand on that a bit further in writing so that we get the real content of how it all works, not just the list of sections. Perhaps my colleagues have all understood, but when I go to the sections you mentioned, and despite my colleagues' brilliant questions, I still do not know why we have to remove section 55.
I think you might be able to tell us how removing section 55 would benefit the public interest and why another section, either in your act or another one, would serve the public interest.
I know it is not a simple exercise, because I know some legislative drafters, but sometimes I wonder whether their job is to complicate our lives or to help us.
Ms. Legault: I will be pleased to provide you with comments in writing. It basically comes down to protection. That is what FINTRAC is trying to do. They are trying to protect their sources and their investigative process. That is often the case. For example, investigations on proceeds of crime or terrorism, financial terrorism are often national and international in scope. So it is in their interest to protect the integrity of those investigations when they are in progress. People who think they are subject to some of those investigations—they are not necessarily criminals — might want details on the information collected about them.
Researchers might be interested; criminologists might be interested in doing research on the impact of proceeds of crime on society. There might be people interested in doing research on the number of suspicious financial transactions in Canada compared to other countries. Some media might be interested in finding out whether terrorist activities in the financial systems take place during a certain period of time in Canada. There might be a whole host of reasons for people to want information. People can also ask for information about the way FINTRAC is managed.
Senator Hervieux-Payette: I think that giving information to researchers is one thing. But giving information to the person who was under investigation, I am not sure about that. We very well know that, under Canadian law, to consider something a criminal offence, it has to be proven beyond a reasonable doubt. Sometimes, the reasonable doubt is still there. So it is useful for the organization to keep the evidence.
Researchers are something else. Our medical file can be available to researchers doing research on cancer. It is not the same type of information or the same type of access to information.
From what I understand about your organization, I can send you a note and you give me the information or, under your act, you can help me look for the information that I was not able to obtain through your organization. In my books, I would not say that the information is equal for those who request it. Could we restrict that? That is what we have to consider. Could that information stay in the databases of the organization managing it? That is not something that starts on January 1 and ends on December 31. It is an ongoing process.
To my knowledge, criminal organizations rarely lose their letter patents because they do not have any. It is simple. They are organizations that can change their name and nature over time.
So there are investigations, declarations and documents that have to be submitted at one point to be later compared with those of people in similar situations. I do not see the public interest in making that information available under your act.
In terms of research, I have more sympathy for criminal lawyers and such. I would not have a problem with people doing research in international politics. But I think there has to be a limit just so that things can move forward.
Ms. Legault: One of the fundamental principles of access to information is that the identity and the reason of the requester remain undisclosed to make sure there is no discrimination based on who is making the request and the reason for the request. There is a certain degree of anonymity preserved under the Access to Information Act in terms of the reasons and the identities of those making the requests.
Senator Hervieux-Payette: In general, individuals or corporations can request it from the organization. But if the organization refuses their request, they go to you. You can have all the confidentiality you want, but the organization probably already knows if those documents were refused. You have a certain degree of confidentiality but I would not call it absolute confidentiality. I am sure some people go to see you first, but, from experience, people go to the organization in question to get the documents. When people do not cooperate, we come and see you to plead our case against the organization in question. Is that the general trend?
Ms. Legault: I do not help requesters make access requests. We get involved only if there are complaints.
Senator Hervieux-Payette: Afterwards.
Ms. Legault: As you said so well, the requester makes a request to FINTRAC, and, if they are not satisfied with the answer and the exemptions requested, they will then file a complaint with us.
As I said earlier, FINTRAC had 100 access-to-information requests over the past ten years since its inception. So the organization is not often contacted. Over the past three years, I had four complaints. That gives you an idea of the numbers for when you go over the legislation.
Senator Hervieux-Payette: I do not think criminal organizations will go to see you very often. That is just a personal comment.
[English]
Senator Ringuette: When FINTRAC was in front of us, they advised us that they had a memorandum of understanding with 127 countries. Within your Access to Information Act, in regard to third party information, would the information that FINTRAC received from those 127 countries and provided to those countries be accessible?
Ms. Legault: In our legislation under section 13, there is a mandatory exemption for information that is obtained in confidence from other organizations in other countries.
Senator Ringuette: Define "in confidence."
Ms. Legault: That is a good question. I have not seen these MOUs. I do not know which countries are involved and what information they are talking about sharing, but normally the basis of the agreement is that the information will be kept confidential. At that point, there is an understanding that this information will be preserved. Our section 13 would be looked at in this context. It says that the head of the government institution shall refuse to disclose any record requested under this act that contains information that was obtained in confidence from the government of a foreign state or an institution thereof. We would have to look at whether or not this MOU was with an institution of a foreign state. We would have to look at whether or not part of the agreement is that this information is obtained in confidence. When we do our investigations in these cases, we actually look at the circumstances under which this information is provided, to see if effectively all of the information that is provided is information that is provided in confidence.
There is a severance provision in our act that allows us to look at all of the information and perhaps make some severances for disclosure where we would say that this information is actually not necessarily obtained in confidence. We would go through that exercise. We do a line-by-line review to make sure that this is something we would consider under the circumstances of that particular case to be obtained in confidence. It is a little bit complex.
What I would not know about this particular example that you mentioned is whether or not it would fit into any of section 55.
Senator Ringuette: When FINTRAC was here, they said that most of their documents were destroyed after a period of 16 years. Would that be in accordance with your act or would that not be in accordance?
Ms. Legault: The retention and disposition authority that FINTRAC would be operating under would probably be something that they would negotiate with the Library and Archives under the Library and Archives of Canada Act. However, if an access to information request is made to an institution, at that point in time the institution is supposed to preserve that information that is the subject of the access to information request until all proceedings under the access act are completed.
Say there was a case and there were court proceedings and so on and it extended beyond 16 years; they would have to preserve that.
The Chair: Madam Legault, you indicated to us that you have not been consulted by Department of Finance, nor had you seen the ten-year evaluation that Capra has prepared, which the clerk will forward to you. After you receive that, would it be possible for you to summarize all of your recommendations that you might have that you would like to bring to the attention of the committee and forward that back to the clerk, and we will see that that is circulated?
Ms. Legault: That would be my pleasure.
The Chair: That would be wonderful. On behalf of all members of our committee, we greatly appreciate your appearance this morning.
Ms. Legault: Thank you very much.
The Chair: Honourable senators, for the second portion of our hearings, we will hear from the Public Prosecution Service of Canada. The PPSC was created in December of 2006 as part of the government's first piece of legislation, the Federal Accountability Act, which came into effect after the committee's last review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. PPSC has assumed the role played within the Department of Justice Canada by the former Federal Prosecution Service, including the prosecution of offences involving terrorism, money laundering and proceeds of crime.
Representing the Public Prosecution Service of Canada, we are pleased to welcome George Dolhai, Acting Deputy Director of Public Prosecutions and Senior General Counsel; and Simon William, Senior Counsel.
Mr. Dolhai, the floor is yours.
George Dolhai, Acting Deputy Director of Public Prosecutions and Senior General Counsel, Public Prosecution Service of Canada: Thank you. As you indicated, I am the Acting Deputy Director of Public Prosecutions in relation to drugs, national security and northern prosecutions.
[Translation]
Joining me today is Mr. Simon William who is the national coordinator for proceeds of crime and money laundering issues at the Public Prosecution Service of Canada.
[English]
It is a pleasure to appear before you, and I hope that we will be able to answer all your questions to your satisfaction.
The mandate of the PPSC is set out in the Director of Public Prosecutions Act. As you indicated, Mr. Chair, it is part of the Federal Accountability Act. The mandate is to initiate and conduct federal prosecutions; to issue guidelines to federal prosecutors; and to provide advice to law enforcement agencies or investigative bodies on general matters relating to the prosecutions and particular investigations that may lead to prosecutions ultimately.
The full list of the duties and functions of the director of public prosecutions are found at section 3(3) of the act as well as its responsibilities with respect to the Canada Elections Act.
The PPSC is a prosecution service, not an investigative body. It prosecutes charges violating federal law, but only those in which the investigating agency or the police have decided that there are reasonable and probable grounds to justify the laying of a charge. In total, there are over 250 federal statutes that contain offences that fall under the PPSC's jurisdiction.
The independence of law enforcement agencies from the prosecution function is a well established, long-standing principle of Canadian criminal justice.
Prosecutors play a key role in the Canadian criminal justice system, whether federally or provincially. Courts in the public have high expectations of them. Their role is quasi judicial in nature, and it imposes the obligation of objectivity, independence and a dispassionate analysis of the available evidence.
Prosecutors must be above all suspicion of favoritism and must exercise the considerable discretion they have in good faith and without any considerations of the political implications of their decisions.
A prosecutor's role is not to win a conviction at all costs; rather, it is to put before the court all available admissible evidence. A success for us is when there is a decision on the merits on the evidence, whether that is a finding of guilt or an acquittal.
In all the provinces and territories, except Quebec and New Brunswick, the PPSC is responsible for prosecuting under the Controlled Drugs and Substances Act. In Quebec and New Brunswick, we prosecute CDSA offences if they are laid by the RCMP. If they are laid by the local police force or by the Sûreté in Quebec, then the provincial attorney general prosecutes. In the North we are responsible for prosecuting all Criminal Code offences.
As you indicated, we have responsibility even within the Criminal Code in the south for prosecuting offences such as terrorism offences and organized crime offences. In the case of the organized crime offences, those we have jurisdiction to prosecute if the underlying activity in the offence is one that falls within our jurisdiction, and that is usually drugs.
[Translation]
In the context of the system currently under review by your committee, the Public Prosecution Service is responsible for cases prosecuted under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. It is also responsible for prosecuting money laundering and possession of proceeds of crime offences when an underlying offence is federal in scope, as well as terrorist financing offences.
The PPSC also gives legal advice during investigations and obtains certain orders under the Criminal Code or under the act that this committee is currently reviewing. The PPSC also provides advice to the FATF in their work when dealing with prosecutions. As a partner, the PPSC obviously participates in most of the committees set up under this system.
We will be pleased to answer any questions you may have. Thank you for your attention.
[English]
The Chair: Thank you for your opening statement. Mr. Dolhai, I would like to start by asking you this: Does the Public Prosecution Service of Canada have access to all the information that is needed for the prosecution of money laundering and terrorist financing cases?
Mr. Dolhai: The Public Prosecution Service of Canada has access to the evidence presented to it by the police or other investigative bodies. We do not gather the evidence, nor do we determine whether or not a particular line of investigation is appropriate. Those are decisions for the police. Our function is on the delivery of a brief with the evidence in a pre-trial jurisdiction such as British Columbia, to assess whether there is sufficient evidence to lay the charge; or, in a jurisdiction like Ontario, after the charge is laid to determine whether it meets our threshold for prosecution. Our threshold for prosecution has two aspects. One is the assessment of the evidence to determine if there is a reasonable prospect of conviction, and, if there is, does the public interest require a prosecution?
In that sense, Mr. Chair, I am not able to comment upon access to all that is needed to prosecute because that is something that the police deliver to us. However, I can indicate that we do not proceed with prosecution, whether it is pre-charge or post-charge, if it does not meet that threshold that there is sufficient evidence that there is a reasonable prospect of prosecution.
Senator Ringuette: From your comments that you participate in the committees of this regime, I gather you were consulted, then, prior to the issuance of the white paper. Is that correct?
Mr. Dolhai: Yes.
Senator Ringuette: In the last five years, how many prosecutions with regard to this piece of legislation have you entered into?
Mr. Dolhai: I think the number is approximately 55 or 56. Most of those prosecutions have related to compliance issues.
Senator Ringuette: With regard to compliance by the individual that, as per law, needs to provide reports to FINTRAC. Is that correct?
Mr. Dolhai: That is correct.
Senator Ringuette: When you say most are with regard to compliance, how many of the 55 would be non- compliance related; that is, deal specifically with the issue at hand, which is money laundering and terrorist financing?
[Translation]
Simon William, Senior Counsel, Public Prosecution Service of Canada: I do not have the details about the offences that have been prosecuted. The offences might have to do with a reporting entity that has not completed a report or it could be someone who did not declare their $10,000 or more at the port of entry. What we know is that there are about 55 prosecutions under this legislation, but I do not have the details about what types of offences they are exactly.
[English]
Senator Ringuette: I think that you have to go back and provide this committee the details. Representatives from the Canada Border Services Agency were here and we are saying that with regard to threshold of $10,000 entering Canada, I think it was in the vicinity of $7,000. You are saying that your office has prosecuted 55 cases, and you say most of them deal with compliance.
How much money — and this is another issue — is your office dedicating on a yearly basis toward prosecuting people who do not declare $10,000 that they bring into Canada?
[Translation]
Mr. William: Under the money laundering and terrorist financing system, we receive approximately $2.3 million. But, as Mr. Dolhai said earlier, we are not the ones laying the charges; that is up to the entity doing the investigation. When we get the case, we make sure that the threshold is met to proceed with the prosecution, but we do not lay the charges.
I do not have the information you are referring to, Senator. You are talking about the Canada Border Services Agency. I do not know what specifically they were referring to, but in our case, if the charges are not laid, we cannot proceed with the prosecution.
[English]
Senator Ringuette: On February 8, representatives of the RCMP were before the committee and I asked these two specific questions: In the last five years, how many inspections and prosecutions with regard to money laundering and terrorist financing? Out of their 1,000 files, they had no answer, just like you have no answer now.
Mr. Dolhai: In referring to how many prosecutions under this act, it does not include the prosecutions in which there is a forfeiture of proceeds of crime in the ordinary course of prosecuting a drug case, for example. Pursuant to the CDSA and the Criminal Code, if someone is charged and convicted with respect to a drug offence, for example, like importing or possession of the proceeds of crime, which can be at the border or in the country after the money has come in or is generated here; after that prosecution is concluded, if the person is convicted of that offence and the prosecutor can demonstrate that, on a balance of probabilities, the money or the property is tied to the drug offence or to possession, then it will be forfeited.
The offences in the act are part of a larger regime that include the powers under the Criminal Code and the CDSA to restrain or seize proceeds of crime or property intended for use by a terrorist entity and then to proceed to have them forfeited if there is a conviction or even in instances where there is not a tie between the property and the offence prosecuted, but the prosecutor can prove beyond a reasonable doubt that it was the proceeds of crime, in relation to another offence, for example, it will still be forfeited.
For us, the realm that we deal with in terms of proceeds of crime and terrorist financing includes the PCMLTFA but also includes those other powers. In relation to an investigation, for example, at the end of the day, we are looking towards whether our threshold is met but also looking towards the issue of whether the property can be forfeited, either under these provisions or other provisions.
Senator Ringuette: I realize what you are saying, Mr. Dolhai. With that said, this committee is mandated to do the five- year review of the legislation. Therefore, is the legislation still adequate? Are taxpayers getting value for money? To date, I assume we are looking at, with regard to the regime, administering this legislation, probably in the vicinity of $80 million, or more, a year. That is a lot of money.
Is this legislation worthwhile? Is it providing information leading to prosecutions and charges with regard to money laundering? If the RCMP and your office cannot give us information as basic as how many prosecutions, dealing directly with money laundering, are as a result of information you received from FINTRAC or RCMP investigations and charges, we are left to believe that maybe this is not doing the job it should be.
Mr. Dolhai: I understand the question. From our perspective, as prosecutors, what we focus on is the lawful gathering of evidence by providing advice to police on how they can do it. The information they can obtain from FINTRAC, having met the threshold required, is part of that. We then ultimately determine whether there is sufficient evidence for the prosecution to proceed, based on a reasonable prospect of conviction.
Our focus is not whether the information that contributed to the ultimate gathering of evidence came from FINTRAC or not, but rather on the bottom line in terms of what is in the brief.
Senator Ringuette: Then I guess the specific information I ask that you provide to the clerk of this committee is with regard to in, the last five years, the number of prosecutions that are a direct result of this piece of legislation, how many convictions occurred from these prosecutions and how much money in financial penalties was provided through convictions.
Maybe, most importantly, are you able to provide to this committee any lessons learned from experiences in the last five years that we should be looking at and considering in this review?
Mr. Dolhai: With respect to the information you have requested, we can provide information as to how many prosecutions occurred pursuant to this legislation. We can also provide information with respect to how many prosecutions implicated forfeiture and prosecution for organized crime or other types of activity where there are proceeds of crime involved.
We are not able to tie the issue of how many prosecutions not under this act may have been assisted by information provided by, for example, FINTRAC because we do not track that information. The police may be able to do so, but it is not something we track.
We can certainly provide information about the prosecutions under this act and then also provide information about the overall prosecution of proceeds of crime and terrorist financing.
Senator Ringuette: As well as the financial penalties involved, if any.
Mr. Dolhai: Yes. To the extent we have that information, we will certainly provide it.
Senator Ringuette: There was a part of my question he did not answer with regard to lessons learned from his organization.
Mr. Dolhai: I would have to say that I do not think there were any particular lessons learned in relation to this legislation. Certainly we are constantly learning and improving, hopefully, upon what we are doing. Certainly in the area of organized crime and terrorist activity and financing, we have set up structures that help to ensure that lessoned learned from prior prosecutions, especially significant ones which often involved significant proceeds of crime, for example, as to how best prosecute them. We have, for example, a national committee, major case advisory committee, that provides advice to prosecutors in relation to those sorts of cases.
The Chair: Did you have something further, Mr. William, which you want to comment on?
Mr. William: No.
Senator Tkachuk: To clarify a few items here, you mentioned the compliance issues, that of 55 prosecutions most of them were compliance issues. When you say "compliance issues," what do you mean exactly? Is that banks or financial institutions not reporting or is it individuals caught at the border with $20,000? How does that work? What do you mean by "compliance issues"?
Mr. William: It is exactly what you just described.
Senator Tkachuk: Is it mostly someone not reporting or mostly someone at the border with more money than they are supposed to have and they have not declared the truth when asked about how much money they were transporting?
[Translation]
Mr. William: The first part of the act is on compliance; it refers to all the entities that must report suspicious transactions to FINTRAC, transactions over $10,000.
I think Part 1 of the act is all about compliance. Part 2 has to do with reporting at ports of entry. Most of the offences, the 55 offences or so I mentioned earlier, fall under those two parts of the act.
As I said earlier, the question is whether it is at the ports of entry that the reports have not been made or have been poorly made or whether it is the financial institutions or the reporting entities listed under the act that have done a poor job with the reports and that are required to keep records. I would not be able to tell you exactly which is which right now. We have to see if it is possible to get more detailed information.
[English]
Mr. Dolhai: With respect to the border non-compliance, if you will, and the seizures that can occur if someone is transporting more than $10,000, there is not a prosecution required to have that money forfeit. It is declared forfeit, and my understanding is that most of the proceedings that would arise would do so in a civil context before the federal court if a person is trying to obtain the return of the money. It does not require a prosecution, per se.
Senator Tkachuk: Of those 55 how many were compliance issues? 50? 45?
[Translation]
Mr. William: I do not have the details. Is it Part 1 or Part 2? Like I said, Part 2 is about compliance.
[English]
I am not sure if the offences were under Part 1 of the act or Part 2, which is cross-border declarations. I cannot tell you that right now, because I do not have the information. I just have the raw number, which is about 55 charges under the act.
Senator Tkachuk: How many were successful?
Mr. William: Unfortunately, I do not have that information.
Senator Tkachuk: You must know that.
Mr. William: I can look at the numbers.
Mr. Dolhai: We can certainly look that up.
Senator Tkachuk: Half?
Mr. Dolhai: If "successful" means concluded on its merits.
Senator Tkachuk: "Successful," to me, would mean there is enough evidence to prosecute someone. Were you successful in convincing a judge that you were right?
Mr. Dolhai: For us, that is not the definition of success. Our definition of success is that it is decided by a judge or judge and jury based on the evidence that we have put forward. It is a long-standing principle that the prosecutor is not supposed to seek a conviction at any cost. We are supposed to vigorously prosecute, absolutely, but ultimately a conviction is not what "success" is.
Senator Tkachuk: My view of success is you get a conviction. How many convictions did you get? It does not matter about all the other stuff.
Mr. Dolhai: We can obtain that information for you.
Senator Tkachuk: To go back to FINTRAC, I get confused by all these bodies: provincial, federal and police. What does FINTRAC feed? It alerts the police or someone to something. Let us say there is a big alert going on and they have compiled some evidence that there is something bad going on here, either people are laundering money or there is a terrorist organization involved and they alert someone. They alert the police, I would think, or the RCMP. Take me through that. What happens when it lands on the desk of, I do not know, the RCMP. Is that where it would go? Or does it go to provincial police in some cases? Where does it go?
[Translation]
Mr. William: FINTRAC makes a disclosure under the act when they have reasonable grounds to suspect money laundering or terrorist financing.
When this threshold is reached, FINTRAC will make a disclosure to entities it believes the disclosure should be made to. Entities might include the RCMP, the Sûreté du Québec and the Ontario police, and that is where they will make a disclosure.
I must point out that, when you look at the act, FINTRAC disclosures are made with a very low threshold. It is a matter of suspicion. We have to understand that suspicion is not even sufficient ground to get search warrants. Search warrants are only obtained when you have reasonable grounds to believe.
I am not criticizing FINTRAC at all; the act provides for this standard of disclosure. When the disclosure is made to the RCMP or another entity, they look at what they get from FINTRAC and take whatever action they deem appropriate. Will they then evaluate the reports? The police will decide whether to continue the investigation.
The other important thing about FINTRAC reports is that they are not evidence. FINTRAC reports are not evidence. FINTRAC reports are information.
[English]
Senator Tkachuk: I understand that. Now it goes to the police and they do an investigation. It may take six months or five years, whatever it may be, but it launches something. They decide there is enough to launch something. They proceed with that, gather the evidence, now what? They finish and say I think we have enough evidence to go to someone. Who do they go to? Are you the only person they go to? Do they go to provincial prosecutors? Where do they go?
Mr. Dolhai: They can go to a provincial prosecutor if the investigation relates to charges that would normally be prosecuted by the provincial prosecutor.
In the 10 provinces, if it is a Criminal Code offence, leaving aside organized crime and terrorism, organized crime where there are drugs involved, for example, they would go to the province. In the North, they would come to us, because in the North we do both what is done in the South by the provinces and our southern mandate. If it is in relation to something we do, then they come to us, and that would typically be drugs.
Senator Tkachuk: These 55, are those one year, two years, three years, how many years are we going back, how many of these? Is it five years?
[Translation]
Mr. William: The last five years, more or less.
[English]
I will have to confirm and get back to you on that.
Senator Tkachuk: I think I am done. I may have a follow-up question; something may stir me up.
The Chair: Mr. Dolhai, just before I entertain a supplementary, I want to clarify something that you said to Senator Tkachuk. In your capacity as the Deputy Director of Public Prosecutions, would I be correct that before you proceed with a prosecution you must convince someone that you want to move ahead on this case? Is that a fair statement? I do not know who the person is. There must be a group, a tribunal; is that right?
Mr. Dolhai: It depends on the nature of the prosecution.
The Chair: Can you decide on your own, single-handedly, without consultation, that you will move ahead with a prosecution?
Mr. Dolhai: Typically I am not the decision-maker. Typically it is the prosecutor in the field or the prosecutor consulting with the chief federal prosecutor for the region. However, I would like to add, senator, that in our desk book we have an appendix that sets out who can authorize a prosecution for what.
The Chair: I assume that is correct. Would there not have to be, in your view, sufficient merit that there are grounds for a conviction before you would proceed? Certainly you are not doing it as a show trial.
Mr. Dolhai: Absolutely, senator. We have to be convinced, and it is a process that goes on throughout the prosecution, it is not just a one-time decision. We have to be convinced that the evidence is sufficient for a reasonable prospect of conviction.
The Chair: Does it not logically follow that there must be a basis that there was a particular success rate in terms of what you decided you were going to move forward with? You are not in a position to give us that answer in the prosecutions that you have allowed to proceed?
Mr. Dolhai: Again, senator, I do not want to get tied up on the language of "success," but rather, if you are speaking about what happened to the cases, was there a conviction, was there an acquittal, or was there a stay?
The Chair: That sounds like a pretty good evaluation of whether there was success or not. You cannot give us that answer?
Mr. Dolhai: We would have to consult our records.
The Chair: We look forward to it.
[Translation]
Senator Massicotte: In terms of the purpose of the act and the language that you use, money laundering in this case, or terrorist activity, FINTRAC has issued a report this week for 2012. It has been two months. It is interesting because it is a summary of all the information and the consequences that ensue. We can see that 36 per cent of all cases with consequences, as a result of information being disclosed, involve fraud. If we analyze this information, 30 per cent is fraud and most of this 30 per cent is investment fraud.
For the latter situation, the document gives the most frequent example. It is about a father and son, very wealthy and very well-known in the community, selling real estate that does not exist, non-existent buildings. To save their skin, they eventually leave the country. Money is transferred and FINTRAC sees the transfers in foreign bank accounts.
But FINTRAC's information is definitely incidental. The people made no attempt to hide the transactions. They left the country before they got caught. FINTRAC saw the transactions after the fact. The transactions could have been done by cheque, but FINTRAC would not have found out. The information was available, maybe not as fast as if it had been done electronically, by way of a paper cheque drawn on a Canadian bank.
If that is the most frequent transaction, 36 per cent, that is 36 per cent of the fraudulent transactions, perhaps it is good for Canada, but it is far from being the main goal FINTRAC was initially set up for. We were looking at money laundering, organized crime, drugs, terrorists, but it turns out that the biggest consequence is in investment fraud.
The only significant factor is that the transfers come from a foreign country and they could equally well have been captured by cheques. That may be good for Canada. But is it really the goal? Is it as a result of FINTRAC? Is it as a result of this bill? It is not at all what we were thinking at the outset. Do you have any comments on that?
Mr. William: I have not had a chance to read the report.
Senator Massicotte: It will be available in April 2012.
Mr. William: The only thing I can say is that FINTRAC discloses money laundering and terrorist financing as well. When you talk about fraud, you are probably talking about the offence behind the money laundering. But the act provides that FINTRAC can disclose information only if the threshold for money laundering or terrorist financing is reached.
That is probably the 36 per cent that you mention, and, again, you are probably talking about the offence behind the disclosure of the money laundering that went on.
Senator Massicotte: That is not the example they give. You might well have thought that such was the case, but this was about members of a well-to-do family that was mixed up in phoney real estate. They were not laundering money; they were selling things that did not exist. They promised very high returns, and it took some time for people to finally react and demand their money back. Meanwhile, they had fled the country. The only thing FINTRAC did was see a transfer of funds from one Canadian bank to another in the Caribbean.
The motivation was not to launder money. The money was there in bank accounts. It is funny; sometimes we get unexpected consequences. If this is the biggest case, as they say it is, I wonder if we are missing the real goal.
[English]
Senator Hervieux-Payette: I have a supplementary to help get an answer.
Yesterday, we discussed which crimes and whether it was just dealing with drugs and all sorts of criminal activities. He is talking about, as far as I am concerned, a dishonest family who sold some stock that was worth nothing and cashed the money and ran away. Are we dealing with every type of crime? My colleague thinks that this crime was not supposed to be tackled with this bill. I was under the impression after yesterday's meeting that it was any kind of crime, including fraud, because in this case it is fraud. I forgive him because he is an accountant, not a lawyer. Any kind of crime, when it deals with values over $10,000, is reported. If they were obtained illegally, these people are supposed to be charged, and you or your prosecutors will go after them and that is it. As far as I am concerned, all the crimes, from what I understood yesterday, were involved. I do not know if I am explaining what you want to explain.
Senator Massicotte: You say 36 per cent of all matters reported that are suspicious relate to investment fraud, and they give that example. If this is the usefulness of FINTRAC, then I say it is not very useful, because it is one electronic transfer, and you could you have obtained the information by way of a cheque and we would not have spent all this money on this organization. The cheque would be obtained two hours later as opposed to half a second later. It was determined after the fact, when you tried to find the source of these persons, that it did not prevent the crime. I am glad FINTRAC helped a little bit, but very insignificantly relative to reducing crime in Canada relative to the cost. That is my point.
Senator Stewart Olsen: I would like to come back to the cases that you recommend to go with prosecution. Based on your definition, I am actually more interested in after the law enforcement agencies have done their due diligence and bring the evidence to you. How many cases have you actually decided not to prosecute? If you do not have that information, I would like to see that, because I am not very happy with your definition of success. I would like to see how many cases are actually brought. I do not think law enforcement agencies bring you cases that they do not consider are ready to be prosecuted. I am interested in knowing exactly how many are brought to you and how many you decide you will not move forward with. I would like to see exactly the efficacy of what we are talking about here and what FINTRAC would uncover and what you actually move forward with. If you could provide that, I would be very happy.
Mr. Dolhai: I am sorry. I do not think that we actually keep those statistics for any offence, in terms of a brief being brought and us determining there is insufficient evidence.
The Chair: You would not know how many cases are brought to your attention and you decide to proceed with this number and you do not proceed with that number?
Mr. Dolhai: We know how many we decide to proceed with, but with respect to how many are brought that we do not proceed with, I do not know that we have those statistics, frankly.
The Chair: Could you check to see?
Mr. Dolhai: Absolutely.
Senator Moore: What is the budget for your prosecution service per year? Do not tell me you do not know.
Mr. Dolhai: Yes, I do know, and it is $160 million.
Senator Moore: How many staff?
Mr. Dolhai: We have almost a thousand staff. That includes lawyers, paralegals and clerks.
Senator Moore: How many lawyers?
Mr. Dolhai: Approximately 450. I say approximately because, at various points, people are on leave, maternity leave, education leave or have decided to prosecute something else.
Senator Moore: Do you have offices in every province and territory?
Mr. Dolhai: We have offices in every province save Prince Edward Island.
Senator Moore: Where are those cases handled out of?
Mr. Dolhai: They are handled out of Halifax or by our agent on Prince Edward Island, because, senator, in addition to the number of staff prosecutors that I indicated, we also have agents, and usually the agents are employed in centres where we do not have a regional office.
Senator Moore: Do the agents handle many cases, or are most of them handled by your staff?
Mr. Dolhai: No, the agents handle a substantial number of cases.
Senator Moore: What percentage do you think they handle?
Mr. Dolhai: Roughly, I believe, 50 per cent, actually.
Senator Moore: Does that $160 million budget include the fees you pay to your agents?
Mr. Dolhai: Yes.
Senator Moore: Senator Tkachuk, Senator Stewart Olsen and others have asked you some questions that I thought were reasonable. Today, this committee's agenda is a review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Were you aware that that is what we were talking about here today before you came here?
Mr. Dolhai: Yes, senator.
Senator Moore: How did you prepare for this hearing? Would you not think that the people around this table would ask you about prosecutions, how many dollars are involved and the convictions obtained? Would you not think that would be a reasonable thing for us to ask you?
Mr. Dolhai: Senator, certainly in terms of how many dollars involved and, as I indicated, we will provide the information.
Senator Moore: Let me ask you this: In view of the fact that you are talking about prosecuting offences dealing with money laundering and terrorist financing, are you comfortable talking about this in a public forum?
Mr. Dolhai: Comfortable about talking in a public forum? There are obviously some things that are privileged that I would not be able to discuss.
Senator Moore: Would you be able to tell us more specifics if you met with us in camera, and would you be more comfortable in that?
Mr. Dolhai: No, I do not believe so, senator.
Senator Moore: I ask that because, quite frankly, I am beyond being disappointed that you do not have this information for the good people around this table and that you would not think we would be asking those kinds of questions.
I am finished, chair. Thank you.
Senator Ringuette: I went back to the report referred to by Senator Massicotte. That is a report from FINTRAC. They indicate that in the last five years, since 2007, they have contributed information in regard to money laundering, 1,741; in regard to terrorist financing, 257; in regard to a combination of both money laundering, 124; for a total of 2,122 disclosures. Out of those 2,122 disclosures that went from them to investigative bodies, RCMP or provincial or whatever, only 55 of them have been prosecuted by your office, and most of them deal with compliance, meaning reporting. Now, why do you say that the 55 that you have prosecuted are mostly in regard to compliance, and then you have FINTRAC agency saying that they have provided information in regard to money laundering and terrorist financing to a tune of 2,122? We are not even looking at 1 per cent prosecution. It is like 0.001. You told us that it dealt mostly with compliance, nothing dealing with money laundering or terrorist financing.
Mr. Dolhai: If I could respond, the prosecutions I referred to were pursuant to this act. There very well could have been prosecutions that were based at the beginning of the police investigation on disclosures from FINTRAC that resulted in charges relating to possession of proceeds of crime or money laundering or that related to the underlying offence, such as a drug trafficking offence or an importation offence, which in turn could have led, then, to the seizure and forfeiture of the property. I would suggest, senator, that it is not a direct comparison between the number of disclosures and the number of prosecutions under this act because, as I said, that information could be equally relevant to a money laundering or proceeds of crime investigation.
Senator Ringuette: Then it begs my next request, which is that you table the number of prosecutions from your office responsibility nationally — because you have been in office under the Public Prosecution Service for the last five years?
Mr. Dolhai: That is correct.
Senator Ringuette: — dealing with criminal activity to which some of the information has been provided to you by FINTRAC within the file. If FINTRAC says that they have disclosed information to the tune of 2,122 times in the last five years, then we need to know what happened to that information. Was it valid? Was it in regard to the mandate that FINTRAC has or the compliance of the financial institution, et cetera? We need to know if this is doing the job or not, and for that, your office is vital in supplying the data.
Mr. Dolhai: Senator, first, I would like to say that we do not keep data on how many cases involve FINTRAC disclosures. We focus upon the charges that result and the assessment of the overall brief to meet our threshold. There can be situations as well that we would not be aware of where the police receive a disclosure but determine that it is not of assistance in an investigation or act on the disclosure but, at the end of the day, there is insufficient evidence gathered to proceed.
Senator Ringuette: I want you to do whatever you can to provide us this information. Chair, I wish that we would recall the RCMP before us.
[Translation]
Mr. William: It is also important to remember that FINTRAC's disclosures are provided to a number of police forces. We are not necessarily the ones who get them. Of the 2,122 that you mention, Madam Senator, did 2,000 go to the provinces? I do not know. And will a province prosecute rather than the federal government? That is a hard one.
I think that it is important to remember that disclosures are made to provincial police forces and to the RCMP, but the provinces also launch money laundering prosecutions. Perhaps it was the province that launched the prosecution, not us. It is important to remember that.
Senator Ringuette: I completely understand, Mr. William, and we will ask the RCMP to come back and testify before us.
But, after all, at the end of the day, we have to consider the amounts of money that the taxpayers are putting into this whole operation. You come here and you tell us that, in five years, you have brought 55 charges to court, and that, for the most part, those charges are against people who just forgot to report a transaction. I am really disappointed. The act does not seem to be living up to expectations, certainly not mine, anyway.
[English]
Senator Moore: Briefly, I want to know, of the famous 55 cases, are those cases prosecuted by your staff, or does that also include cases prosecuted by your agents? Is that the total in the last five years, your staff in-house plus agents?
Mr. Dolhai: It is both.
The Chair: Mr. Dolhai, you have committed to send quite a bit of information back to the clerk. We are very much looking forward to receiving that. On behalf of the committee, we thank you and Mr. William for appearing before us.
(The committee adjourned.)