- Member of Parliament
- Member of Parliament
- Bloc Québécois
- Joliette
- Quebec
- Voting Attendance: 68%
- Expenses Last Quarter: $132,165.46
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Madam Speaker, I would like to thank the member for Bay of Quinte for introducing Bill C-365. As surprising as it may be, this is the first time we have had the opportunity to debate open finance in the House. Even the Standing Committee on Finance has never addressed this issue. So far, the discussion has been largely left to the experts and industry representatives. All the fine people at the Department of Finance, the Office of the Superintendent of Financial Institutions and the Financial Transactions and Reports Analysis Centre of Canada are currently examining the issue. The Autorité des marchés financiers, or AMF, and Quebec's ministry of finance are also looking into it. It is important to remember that the technology companies that would interface with customers in an open financial system are not banks. They do not necessarily fall under federal jurisdiction, just as not all financial institutions fall under federal jurisdiction.
I have been closely following the work of the Advisory Committee on Open Banking, which is referenced extensively in the preamble of the bill. This work is very enlightening. The committee heard from a wide range of stakeholders, including banks, credit unions, insurance companies, trusts, brokers and technology companies. However, no consumer advocacy groups, privacy advocates or provincial regulators were consulted. It is past time to broaden the conversation. For that reason alone, the member is making a huge contribution and I sincerely thank him for it.
Implementing an open financial system would be a huge change with many implications. In the long term, we can envisage a system in which financial institutions would essentially manufacture financial products. Customer relations would be handled by technology companies that would not offer the financial products themselves but would act as intermediaries and data aggregators. That is quite a change. The bill's preamble lists the benefits of such an open financial system. I will not repeat them here, as the sponsor did a fine job outlining them. I support them. They are real. I would even say that moving toward an open system is probably inevitable.
Since this is the first time we are discussing this subject, I will use my time today to broaden the debate a bit. It is our job as legislators to talk about the benefits, but also the challenges and risks, since we are working toward the common good.
Our financial system's greatest asset is its stability and the confidence that comes with that stability. It is stable because it is subject to strict legal obligations. Ultimately, if something goes wrong, for example if there is fraud, data theft, failure to report a suspicious transaction that would assist in tracking money laundering or terrorist financing, then the financial institution is the one that is legally and financially responsible. Financial institutions are subject to strict prudential obligations so as to ensure they have the means of dealing with the risks in question. Since the financial institutions are ultimately responsible, they guard their members' and customers' personal and financial information very jealously. However, this is where the system's greatest asset, its stability, also becomes a weakness, because it can lead to compartmentalization and a lack of flexibility.
The world has changed. The development of information technologies has given rise to the data economy, which can only grow if data circulates freely. It is unclear whether our financial architecture is adapted to this new environment. A financial institution cannot be expected to take responsibility for the use of data it no longer has custody of. Prudential standards and regulations will have to be adapted. It is far from certain that a technology company has the wherewithal to take on those financial risks. A financial start-up can be born and die in no time at all. If that happens, there will be no one left to shoulder the consequences of fraud, data leakage, incorrect information or poor financial choices. We need to be cautious.
Does that mean we should do nothing? Far from it. People want the flexibility of an open financial system. They want aggregators that put all their information in one place, facilitate transactions and give individuals an accurate picture of their financial situation. That is invaluable when money is tight at the end of the month. People also have a hard time understanding why they are not being allowed to do this. After all, our personal information belongs to us.
That is why fintech companies have already started coming on line despite the legal limbo. They are responding to an obvious demand. At this point, however, because they are not officially part of a cohesive financial system, they exist in a grey area and find alternative ways to evolve. Users currently provide their personal information themselves, and when the app gets into an account, it extracts data from the screen and stores it.
Financial institutions' secure networks get regular visits from actors outside the financial sector, and that makes them vulnerable. The more advanced these strategies get, the greater the risk. As I was saying, the status quo is not sustainable. It would be pointless for legislators to bury their heads in the sand. There is no going back to 1990.
In some cases, the risks are minimal. An aggregator that scans public data to show us mortgage rates at all financial institutions in one click is convenient and low-risk. When it collects our personal data to give us a detailed picture of our financial situation, that is also convenient, but carries more risk. Financial information is very sensitive, so it is vital to protect it. If the app can be used to perform transactions, which implies that it places orders, that opens up a whole new level of risk, the risk of fraud.
What about the principle of needing to know the customer? That principle is the foundation of our anti-money laundering and anti-terrorist financing laws. How can a financial institution apply this principle when it is communicating via an app? Lastly, an important part of risk is the financial capacity to take on risk. Without that, the consumer could lose everything. Fintechs currently operate in a grey area, which is a problem. What we need is a clear framework with clear obligations and responsibilities, as well as oversight mechanisms and institutions to enforce compliance.
The Advisory Committee on Open Banking recognized all of these difficulties, but it felt that it was important to move quickly so that Canada would not be lagging behind and so as not to hamper the sector's development. Companies continue to operate in a grey area, which is not serving anyone well. That is why the advisory committee recommended giving clear direction but introduce minimal regulations so that things can move faster. Then, industry stakeholders can determine for themselves how to operationalize that and resolve technical issues. In short, the committee is recommending a sort of self-regulation.
The committee recognized that the financial soundness of technology companies is an issue, but it did not propose any institutional mechanism for dealing with it. There would not be any equivalent for deposit insurance, at least not in the beginning. At best, the committee mentions getting their own insurance. The committee also recognized the constitutional issue, but it proposed circumventing it. It proposes integrating the federal financial institutions. As for the others, they can join if they want to, but as second‑class institutions.
I am a Quebecker whose main financial institution is a co‑operative, not a bank. Understandably, a two‑tier financial system leaves much to be desired. Barring a constitutional amendment, the federal government cannot regulate them. Also, in order for the financial system to be truly open, governments will have to coordinate. I really like the first clause of Bill C‑365. It requires the government to present directions and an action plan in a timely manner so that the public can take ownership of it and we can debate it. That is good. I am not so sure about the second clause. Setting a deadline for introducing legislation without ensuring that we are ready and that any potential problems have been resolved seems a bit rash to me.
As we consider the implementation of open banking, let us heed the Emperor Augustus and make haste slowly. That is essentially the message I am getting from the Speaker, who wants me to wrap up. Let us get to work right away because the status quo is no longer tenable, but let us take the time to do things right, because the stakes are high.
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- Nov/21/23 5:35:59 p.m.
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Mr. Speaker, I thank my House leader for making this point again. This is basic economics. Are there any economists in the Liberal Party? Do they understand these notions? The government often gives the impression of nickel-and-diming, but by trying to save the grant part of the loan, it could cause so many bankruptcies and have such a wide-ranging impact that it could end up being more detrimental to society and the government's finances.
When we discuss this informally with ministers, most of them agree with us. The problem is with the Minister of Finance. In that regard, I want to highlight the great work by my colleague from Terrebonne, who wrote the finance minister to make her aware of this. She also reminded her that the Quebec National Assembly unanimously demanded a one-year extension of the loan repayment deadline on September 26, well before this November economic statement that the minister just presented.
Why are elected officials of all stripes in Quebec City asking for this? It is because they are just that little bit more connected to their community. They talk to their SMEs, they meet with them and they are worried about them. Like us, they are able to do the math and come to the conclusion that, even if the aim is to save a little money, there is a risk of losing a lot more in the end. Moreover, it will destabilize the economy. Really, the economic statement was the place for this kind of announcement. This is another missed opportunity, another disappointment. It is more proof that this government has grown out of touch, very out of touch, with the people and with SMEs.
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Mr. Speaker, I thank my colleague from the Standing Committee on Finance. We just spent the last week touring western Canada. We visited every region to hear from people. All the organizations, the chambers of commerce, the organizations representing SMEs are asking for the deadline to be extended by one year. It is the same in Quebec. We hear it everywhere.
When we speak with the ministers individually, most of them agree with this call. Most of them do not understand the Minister of Finance's reaction. That is what is throwing a wrench in the works. The Minister of Finance and senior civil servants are saying that it is going to be expensive.
We have been leading the charge for quite some time. We just want to be the voice of the SMEs we represent. We were ready to negotiate with the government. For example, if the government wants Bill C‑56 to pass, in exchange, we would like the government to extend the deadline by a year. With all due respect, we wish the NDP had followed our lead. I hope they keep this example in mind so that, in future negotiations, they can ask for this in exchange. It would be a big win for SMEs. It would mean 20% fewer bankruptcies, according to figures from the Canadian Federation of Independent Business. It would make a big difference.
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- Nov/3/23 11:15:27 a.m.
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Madam Speaker, the Parti Québécois just published the theoretical finances of an independent Quebec, “Un Québec libre de ses choix: finances d'un Québec indépendant”, a study that is thorough and fair.
Its publication pushed the National Assembly to unanimously adopt a motion that recognizes “the financial viability of an independent Quebec”. In other words, every elected member from every political party represented in Quebec City, including the West Island Liberals, agrees that Quebec as a country is financially viable.
The study shows that Quebec compares favourably to the G7 and OECD countries on every financial aspect. The study notes that, beyond financial viability, the economic advantage of being a country is the power to choose where to invest one's money and, as the leader of the Parti Québécois said, “putting an end to federal favouritism to the detriment of Quebec when it comes to direct investments in the economy”.
Quebeckers have more than enough money for their country. The only question is: When?
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Madam Speaker, we have been using Zoom for two or three years now. It is a shame that some people still have problems choosing the right interpretation channel.
I have a question for my colleague.
Bill C‑46 includes a $2-billion investment in health care. This measure appears again in Bill C‑47.
Today at the Standing Committee on Finance, senior officials confirmed that, if the bill is not amended, a total of $4 billion will be invested in health care.
The hon. member is saying that there is not enough money for health and mental health. This is our chance to ask his government to not remove that part of Bill C‑47, so that $4 billion will be invested in health care instead of $2 billion.
Will he commit to working to keep the $4 billion?
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Mr. Speaker, it is deeply concerning. Is the government doing a good job of managing public finances? The answer is no. The government is not paying attention to the cost of the services that it is providing.
I will give some examples. Issuing a passport costs four times more than issuing a driver's licence when Quebec does it. Processing an EI claim costs two and a half times more than processing an application for social assistance in Quebec City. Resources are badly managed. Nonetheless, the Parliamentary Budget Officer identified what is indirectly a fiscal imbalance by pointing out that the flexibility is here in Ottawa. Instead of funding, say, health care in the provinces, the government is increasing the number of programs and interfering in jurisdictions. That is unacceptable.
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Mr. Speaker, my regards to my hon. colleague for Louis‑Saint‑Laurent. I thank him for his speech. We might not always share the same values, but he always has something interesting to say during our debates in the House.
I want to ask him about something that is unclear to me, to see if he feels the same way. In her budget, the Minister of Finance announced funding of $80 billion for the economic transition, as it is called. A lot of upcoming tax credits are absent from the bill. No money for investments, subsidies or support is directly announced, but the infrastructure development is there. From the way things are presented, it appears as though the money earmarked for this will not be part of the budget framework and will be managed separately, outside government accounts. That means there will no longer be accountability to the House.
What does my hon. colleague think of that?
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Madam Speaker, first of all, I want to say that I cannot believe the Liberal government's stance on this bill and how weak the arguments are. I find it unacceptable. What a joke.
I am pleased to speak this afternoon to Bill C‑289, introduced by my friend and colleague on the Standing Committee on Finance, the member for Simcoe North. As my colleague from Rivière‑du‑Nord said last October, the Bloc Québécois is in favour of this important bill.
This bill will amend the Criminal Code to make it an offence to give false or misleading information to a financial institution requesting that information in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. As we know, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act currently asks financial institutions to verify their clients' true identity and the source of funds under certain circumstances. Financial institutions must also report transactions they deem suspicious to the government, so the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, can carry out the necessary verifications, prevent laundering of the proceeds of illegal activities and prevent such funds from being used to finance illegal activities, such as terrorism.
The problem with the current situation, which the Liberals do not seem to understand, is simply a lack of vigilance. I see this bill as a step in the right direction to increase everyone's vigilance. The government's lax attitude and lack of vigilance are a problem right now, even though the tracking of dirty money is one of the most important areas of action.
The problem with the current situation is that if a client makes a false statement to their bank, they may get away with it because there is minimal verification. It is important to do more to combat money laundering.
The problem with the current situation is that if a client makes an intentionally misleading or incomplete statement, the consequences are not serious enough. There are virtually no consequences for these criminals, so there is every chance that they will fall through the cracks. As a result, the information that FINTRAC obtains is incomplete and its work becomes less effective. This explains the poor results in this area in Canada, contrary to what has been argued on the other side of the House.
This is how this chain of negligence results in dirty money being laundered in the real economy. Bill C-289 addresses this flaw. The bill does not fix everything, but it is one more step in the right direction to better uncover money laundering activities.
I want to provide an example connected to the sanctions against Russia. It is not a direct example of tracking dirty money, but it does illustrate the lack of vigilance at present. Early this week, two Montreal companies were sanctioned by the United States for circumventing economic sanctions against Russia. These companies are distributors of electronic components. In tracking the money, the Americans discovered that these two Montreal companies were circumventing the sanctions.
Why were Canadian authorities not able to uncover this scheme? Why were our southern neighbours doing our own institutions' job for them?
The reason may be the lack of vigilance and the lax attitude. That has to change. We must change the existing culture. We have been speaking a great deal about the Chinese government's interference. We have to figure out a better way to track illicit money in order to guarantee our independence. We must change attitudes. That is what this bill helps accomplish.
Members will recall that last May, the Italian consulate in Montreal organized an event to mark the 30th anniverary of “operation clean hands”, a vast anti-mafia and anti-money laundering operation during which two Italian judges were murdered. Retired Italian judge Roberto Scarpinato came to Montreal to give us a warning. He told us that Canada had become a haven for mafia activity and money laundering. Society needs to do something. He encouraged us to develop “antibodies” to money laundering. He said we needed to stop being naive, to be more vigilant and to not be afraid to enforce our laws to the fullest extent, because money laundering is a scourge in Canada and in Quebec.
According to Transparency International, the amount of money laundered annually in Canada could be between $43 billion and $113 billion.
This means that up to $113 billion a year in proceeds of crime, from both here and abroad, is being reintroduced into our economy, allowing criminals to reap the benefits of their crime with impunity and causing economic distortions, such as skyrocketing real estate prices. It is an appalling situation and the complacency we are seeing is pitiful. Something needs to change.
British Columbia launched a commission of inquiry into money laundering, the Cullen commission. The Cullen commission may be the most comprehensive effort ever made to understand the phenomenon of money laundering in Canada, its effects, its causes and the best ways to prevent it in future. It submitted its report in June after more than two years of work and hundreds of witness testimonies. The report points the finger at the RCMP and FINTRAC for not taking money laundering seriously enough. It excoriates the banks for looking the other way. In fact, it accuses pretty much everyone of negligence. It also provides examples of what money laundering looks like.
There is the case of Runkai Chen, a Chinese immigrant who came to Vancouver in 2006. Despite reporting about $40,000 in annual income, he built a real estate empire worth tens of millions of dollars. Mr. Chen was a straw man who laundered dirty money from China. He regularly received large transfers from foreign numbered accounts and reinvested the money in real estate. He made false statements to financial institutions here, and they did not ask questions. None of the big Canadian banks raised any red flags. Not RBC, not CIBC, not BMO.
It was actually a foreign financial institution that alerted FINTRAC, and that is how the scheme was uncovered. Foreigners are more vigilant than our institutions when it comes to finding dirty money laundered here. It is this kind of negligence every step of the way that Justice Scarpinato was talking about when he said we need to develop antibodies.
We actually already have a lot of the legal arsenal needed to deal with this problem. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act is a powerful tool. Banks are required to verify the identity of their clients and where the money is coming from. They have the power to freeze funds they deem to be suspicious. They are required to report suspicious transactions, large amounts of cash, and international transfers if they have difficulty determining where the money actually came from.
These requirements exist, but most of them rely heavily on the client acting in good faith and the financial institution being vigilant. By forcing clients to make true and complete statements to the banks or face criminal penalties, Bill C‑289 addresses the first step, which is to verify the identity of the client and the source of the funds. This could start off a virtuous cycle where the financial institutions themselves would be more diligent about checking and government organizations would be better informed and more likely to co-operate with their counterparts abroad. In short, we could begin to develop the antibodies needed to seriously address the scourge of money laundering. That is why we will support this important bill.
Once again, I denounce what I believe to be the spurious arguments of the Liberal Party in opposing this bill. At present, there is a lack of vigilance and rigour in the tracking of dirty money. We must take action. Bill C‑289 sets the bar. As I was saying, that is why we will support it.
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Mr. Speaker, I thank my colleague who also sits on the Standing Committee on Finance.
I would first like to comment on the point of order. I want to quote a line from a French movie, a Christmas classic: “I am not blaming you, Pierre”.
This bill is a step in the right direction, but it does not go far enough. That is how I see it.
I would like to ask my colleague to explain once more what the government should do to improve the bill and enhance what is being proposed.
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Mr. Speaker, I want to thank my hon. colleague with whom I have the pleasure of working on the Standing Committee on Finance. It is truly a pleasure to work with him. I thank him for his speech. He raised a number of very troubling issues.
I want to refer to the annual report from the department's investment division, which was tabled in Parliament last October. In the preceding year, there were 1,255 foreign investment projects, totalling $87 billion. However, only 2%, or 24 of them, were determined to have national security implications and would be covered by the new rules set out in this bill. The other 1,221 investments remain subject to the old rules. Of those, only eight, or less than 1%, were subject to a review to determine if they will truly provide a net economic benefit.
According to my hon. colleague, is the government doing enough to ensure both national and economic security?
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Madam Speaker, I thank and congratulate my colleague for his speech.
In the fall economic statement, the Minister of Finance reneges on a commitment she made in last spring's budget, which was to limit credit card fees for merchants. In the spring budget, she told us that she would introduce legislation and the issue would be dealt with this fall. However, now it has turned into a commitment to talk to the credit card companies, and if they do not self-regulate, she will introduce legislation later to force them to act.
In my hon. colleague's opinion, is that enough?
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- Jun/17/22 11:43:24 a.m.
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Madam Speaker, it was the same old talking points.
There is no one in this government to listen to Quebeckers. Ever since the Minister of Finance started covering for both the Prime Minister and the Minister of Foreign Affairs, there is no one we can talk to about making progress on the issues that matter to businesses and citizens. The minister's three jobs, coupled with her refusal to delegate to colleagues, has made this government blind to what is happening on the ground.
Is there anyone left in this government who realizes that inflation is a real problem with real consequences that requires a response now, not in six months?
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Madam Speaker, I want to salute my colleague from Mégantic—L'Érable and thank him for his speech.
Bill C‑19 is the first budget implementation bill introduced by the Minister of Finance, which would implement certain measures of the budget.
This bill is more than 420 pages long and it extends far beyond the content of the budget. This bill talks about laws being enforced in space, in a galaxy not so far away. The next division talks about strip-searches in prison.
Does my colleague think there is a legitimate reason to include all kinds of other bills in an already massive bill? Why does he think the government is choosing this approach?
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