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I call this meeting to order. This is meeting number 76 of the Standing Committee on Finance. Pursuant to Standing Order 108(2), we are continuing our study of terrorist financing in Canada and abroad.
We are very pleased to have with us four witnesses in Ottawa. We are still expecting one. I think he's delayed in his travel. We also have a guest from the United Kingdom.
First of all, from the British Columbia Civil Liberties Association, we have the policy director, Micheal Vonn. From the Clement Advisory Group, we have the president and CEO, Mr. Garry Clement. From Fasken Martineau DuMoulin, we have Koker Christensen, who is a partner. We are expecting Matthew McGuire from MNP LLP to be here shortly.
By video conference from London, we have as an individual, Mr. Haras Rafiq from the Quilliam Foundation.
Welcome, all. Thank you so much for being here with us this morning.
You will each have five minutes for your opening statement and then we'll have questions from members. We'll begin with the British Columbia Civil Liberties Association.
:
Thank you, Mr. Chair, and good morning.
The B.C. Civil Liberties Association urges the committee to undertake a study of how Canada is addressing the issue of terrorist financing. In our submission, Canada's approach to this issue has long lacked critically needed oversight and review, and the urgent need for these will intensify with the passing of Bill .
FINTRAC is of course a key component of Canada's strategy with respect to deterring and detecting terrorist financing. The Arar inquiry's policy phase is the most comprehensive analysis of national security accountability that Canada has ever undertaken. As I'm sure you know, the inquiry's recommendations included consolidated review processes for national security agencies, including FINTRAC. However, no review mechanism has been created. Meanwhile, audits of FINTRAC by the Office of the Privacy Commissioner of Canada, the OPC, have consistently demonstrated troubling over-collection and retention of personal information. While FINTRAC itself maintains that one of its primary safeguards for privacy is its independence from law enforcement, Bill , if passed, would make such independence all but fictional.
As the Privacy Commissioner has just stated in his submission to the Senate committee on national security and defence, Bill would make available to 17 federal departments and agencies, including FINTRAC, the RCMP, CSIS, CSEC, and the CRA, potentially all personal information these departments hold on Canadians. All 17 of these departments would be in a position to receive information about any or all Canadians in interactions with government in an unprecedented blurring of the mandate of these 17 different institutions.
We anticipate a steady stream of legal challenges if these proposed powers are enacted, and these developments make very pressing indeed an assessment of FINTRAC's proper mandate and role in relation to other national security agencies. This of course necessitates a review of its efficacy.
The OPC audit reports echo the assessment on efficacy cited in the 2013 report of the Standing Senate Committee on Banking, Trade and Commerce entitled “Follow the Money: Is Canada Making Progress in Combating Money Laundering and Terrorist Financing? Not Really”.
There would appear to be a dearth of information to accurately assess whether the Canadian regime is meeting its objectives. No empirical evidence is being generated to suggest that the regime is successfully accomplishing its goals. To the contrary, what little evidence is available can only suggest either that there is considerably less terrorist financing than feared or that the regime is not very effective at addressing it. However, much of the response to the situation of genuinely failing to understand the need and efficacy of the regime is simply repeated urges for more invasive powers; broader disclosures of sensitive, highly prejudicial personal information; a more onerous administrative burden on the private sector; and more resources for FINTRAC and its partners.
FINTRAC, as part of our national security apparatus, works with some degree of necessary secrecy. But currently, that secrecy is inadvertently allowing for a failure of accountability. There is no dedicated review body that can tell us whether FINTRAC is operating properly, successfully, and lawfully.
At the B.C. Civil Liberties Association, we say that this is a critical juncture for a long overdue study and sober assessment of the genuine need and the most efficacious, accountable, and rights-protective means of addressing that need.
Thank you very much.
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Chairman Rajotte and distinguished members, thank you very much for this kind invitation.
I want to also thank you for allowing me to submit a fairly lengthy document. I obviously won't go through it, as we'd be here all morning, but I do want to cover some highlights, if you will permit me. I want to talk from an operational perspective on what I'm seeing. Having been in law enforcement for 34 years now, as well as more than seven years in compliance, I think I come with a unique perspective, seeing both sides of the world.
I think we have to accept that terrorists consider themselves at war, one with no rules or uniforms. Terrorists camouflage themselves in our civilian population in order to unleash their fury upon unsuspecting targets and symbolic structures. The reality is that they're out there, and I think we have to accept that. With Canada's recent expansion into Syria, I would suggest it also means that we have to be more alert than we were in previous times.
The reality is that for financial institutions, identifying suspicious activity, especially for terrorist financing, is extremely challenging. I would argue that there has to be a more concerted effort in a public and private partnership, where there's collaboration between law enforcement and the financial institutions. I know that some of this is sensitive information, but I firmly believe we can appoint somebody with security clearance to be a chief anti-money-laundering officer in a bank. We can have them appointed as a point of contact in, for instance, emerging situations.
I can give you an example. I just came back from the financial crime conference in New York. One of the bank chief anti-money-laundering officers spoke of being contacted by the FBI at three o'clock in the morning on a very serious matter. Because of the relationship that had been established, she went to the bank that had been previously arranged and was able to pull off the data about the financial flows, which were extremely valuable in the investigation. When we're dealing with terrorist situations, we're dealing with real time, and I believe that's something that's essential.
I think one thing we need to do is to be more efficient and effective in assisting financial institutions. The other thing I think we need to do a better job of is providing financial institutions with the typologies that FINTRAC is seeing so that the financial institutions can better serve the overall goal of what we're all trying to stop—terrorist financing and the financing of organized crime.
The other aspect I'd like to talk about is that when we put up sanctions against Syria, they were very laudable sanctions. I think we'd all agree with them. But what happened as a result is that all of the money services businesses that had Syrian clients were shut down by the banking community. The problem for us, and it is a problem, is that all of that money continued to flow in an underground economy. Neither law enforcement nor the intelligence agencies.... I can tell you that I have submitted a number of intelligence briefs on this, because I have a number of contacts in the Iranian community, and none of those have yet to be followed up on. I still get examples of where in the newspaper they're still advertising for their services.
This concerns me greatly, because this has been going on for a period of about four years. How much of that is related to terrorist financing? I suggest that if we're going to allow foreign students to come from Syria, we also have to accept that they have to have some vehicle to flow their money. I would suggest to this committee that the fact that we allow the MSBs and that they are monitored with independent reviews—the one that I was doing I was monitoring quarterly—is of value, because we know exactly what's going on and who the people are. I suggest that's far better than an underground economy.
The other area I'd like to speak to is the fact that this whole area requires expertise. I can tell you that I was very fortunate; I guess I was an anomaly in the RCMP, because I started in the proceeds of crime and money laundering area in 1983, at the embryonic stage, under the auspices of Rod Stamler. I helped developed the program. I can tell you that over the years, frustration crept in. I ended up leading the program at the end, and I watched expertise constantly going out the door because of our antiquated belief that we have to have a rank-based system. That is an 18th century philosophy when we're fighting 21st century crime. We have to get to the point where skill is an absolute requirement. We need to build up that expertise. I can tell you that when I left the RCMP, my average experience was 1.7 years.
The other thing I would suggest, which is of value, is that we need to look at biometric software. One requirement under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act is identification and often that is not face to face.
I've made a submission that we need to look at using even such things as Skype, with which you can look at the individual. There are biometrics out there now that can compare a passport with the individual in front; they compare the two photos. That also is something we need to look at on our borders. Biometrics and facial recognition software would serve us all well.
The last point I would make is about white-label ATMs. I have raised it a number of times; there seems to be a belief that they're properly captured and they're not a risk. I strongly suggest to this committee that white-label ATMs need to be brought under the regime.
Thank you very much.
I am a partner with the law firm of Fasken Martineau. My perspective on terrorist financing legislation is primarily as an adviser to financial institutions and others that are subject to this legislation. My comments today are not on behalf of any particular clients but simply reflect my own experience in this area.
The types of clients I would advise in relation to this would be banks, trust companies, life insurance companies, credit unions, and various types of businesses that would fall within the category of money services businesses.
A general concern of the financial institutions' clients I deal with is regulatory burden. A lot of that has nothing to do with terrorist financing; it's about other types of regulation and risk management requirements, but it does extend to anti-money laundering and anti-terrorist financing requirements.
Every few years, since the current form of the legislation was introduced, there have been significant changes to the legislation and an expansion of the requirements to include filling gaps and articulating the requirements. These have led to what is currently a fairly onerous regime.
I think there is a general recognition that terrorist financing is a problem. I think that taking that problem seriously entails requiring financial institutions to obtain a lot of information about customers and to do a lot of monitoring of transactions, but it needs to be kept in mind when examining these requirements that there is a real cost to the institutions.
In particular, there's a cost to smaller institutions. Larger financial institutions have large teams of personnel dedicated to this area. Smaller institutions don't have the resources to do that and can find themselves in a very challenging situation whereby they are subject to essentially the same requirements as big banks but without the resources.
The reason for that is that to a large degree the legislation is one size fits all. Elements of it are risk-based and the expectations of regulators such as OSFI will vary, depending on the nature of the institution, but a lot of the legislative requirements are minimum requirements. They have to be met regardless of the size of the institution, and doing that can present a significant challenge to an institution's ability to compete. I suggest that fact be kept in mind in any review of these requirements.
A related point would be that in examining the requirements and considering changing or introducing new requirements, we should give careful consideration to the business practices of the types of firms that will be affected. We need to make sure the requirements introduced are practicable, that they're workable in light of what the firms subject to these requirements are actually doing, so the firms won't need to greatly distort business models simply because the legislation was written in a particular way.
Finally, another area I encounter on a fairly regular basis involves businesses with some kind of fund transfer aspect as part of their models. They are being caught within the scope of money services businesses.
There are a lot of businesses doing various things in the payment space—a rapidly developing and growing area—that are caught or potentially caught by the definition of money services business, even though they're certainly not the traditional type of MSB.
Consideration needs to be given to these types of businesses to make sure that firms that are not intended to be caught by these requirements are not being picked up and caught by them, and to make sure there's an appropriate balance so that innovation in this area is not unduly stifled.
My name is Matthew McGuire. I'm the national anti-money laundering practice leader of MNP. We're the fifth-largest accounting firm in the country. My professional life involves developing risk-based approach, anti-money laundering, and counterterrorist frameworks for financial institutions and other reporting entities across the country. Thanks to this government, I've also helped the governments of Panama and Trinidad to develop their capabilities.
I really appreciate this opportunity to provide input into terrorist financing threats, harms, and countermeasures. I'd like to talk about two main themes. One is the existing framework and how it might be improved in terms of reporting entities and their responsibilities. Second is the accounting profession as it relates to terrorist financing.
The fight against money laundering and terrorist financing is really a battle against crime, and lawmakers across the world have decided that the best way to go about this is to encourage criminals to abandon their craft by taking away the financial incentive and by making it too hazardous to conduct their activities.
To maintain a hostile environment, countries have adopted measures such as establishing financial intelligence units and dedicated law enforcement. They've also deputized reporting entities. They've asked reporting entities, such as banks, to maintain their own hostile environments. Because money launderers and terrorist financiers take refuge in anonymity and opaque and complex transactions, the environments in which they're required to surrender their identities and in which their transactions create trails and are subject to scrutiny are hostile to them.
International standards were leveraged, of course, after world events that highlighted the significance of the threats of terrorism. In the case of terrorist financing measures, they're principally designed to increase public safety by depriving terrorists of the means to support their wrongful aims and acts. Rather than diminishing financial incentives, these measures are designed to deprive terrorists of the means to pursue their objectives. More importantly, they provide intelligence into the networks, ways, and means of terrorists.
Deputized reporting entities, those that have responsibilities and have to create the hostile environment, have three main responsibilities. They have to screen names. They have to assess and manage terrorist financing risk. They have to report and freeze terrorist assets and transactions.
Continuous name screening is required of certain reporting entities because of the United Nations Act and the Criminal Code. It's arguably the most significant counterterrorist financing tool in a reporting entity's arsenal, but it's not well forged and it hasn't been all that effective. The lists that must be referenced lack sufficient details, have few details on associates, or are out of date, and the guidance is seriously wanting.
It's wanting because the legislation is ambiguous, and there's no comprehensive authoritative guidance on the frequency of screening. There is no identification of fields against which we should screen, of the algorithms that might be used, or of appropriate means for resolving false positives. Reporting entities therefore have inconsistent and uneven responses and, as Garry mentioned, there's no requirement for certain reporting entities, such as money services businesses, as financial intermediaries to conduct continuous monitoring of their transactions for terrorist financing.
I was glad to see that economic sanctions were one focus of the recent budget. I would suggest that those funds could be allocated to improving the quality of available data.
In terms of assessing and managing risk, reporting entities are universally required to assess and manage their risk of terrorist financing. To do that, they have to understand the threats they face and the significance of the realization of those threats. In our experience with reporting entities, they do not meaningfully assess and manage their risk of terrorist financing. At best, the topic is dealt with superficially. Neither do regulatory examinations draw attention to these weaknesses.
An understanding of these threats comes from experience and knowledge transfer. Reporting entities understandably have very little experience and, therefore, they depend on knowledge transfer. The financial action task force calls on us as a country to provide a threat assessment in order to be able to inform our assessment of risks and the tools we design. Without that information, it is nearly impossible to design the tools we need for this fight.
As I say, terrorism and terrorist financing are not new. Knowledge transfer must begin and must continue unabated.
I'd also like to comment on the remarks of Professor Bill Tupman to the committee on March 31. For reference, he suggested that accountants were instrumental in terrorist financing operations. I agree that any large organization could benefit from accounting skills, but let's go after the bad apples, not the tree.
To conclude, terrorism is not new: think Belfast, Oklahoma City, Air India. The maturity of our regime of countermeasures cannot be blamed on the novelty of terrorist financing and should not continue to be arrested. For the contributions of reporting entities to be meaningful over the long term, they must benefit from rigorous education and intelligence regarding the threats that face us; comprehensive guidance to identify risk, detect nefarious actors, transactions, and assets; and intelligence sharing.
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Mr. Chair, good morning. Good morning to you as well, my fellow panellists and everybody else there.
My name is Haras Rafiq, and I'm the managing director of the Quilliam Foundation, one of the world's major think tanks looking at combatting extremism and terrorism. I want to bring to this gathering today anecdotal, academic-based research, and evidence-based research, as well as observational research and analysis as to why this study into the impact of terrorist financing is not just important but vital and crucial.
Within the organization, we have tens of years of experience on the part of people who have been on the other side, people who have been jihadists and terrorists in the past, have done their time in prisons, and have now come out disavowing the whole ideology and theology that drove them there in the first place. From that, we know what these terrorists are doing from an Islamist-terrorist perspective and how they're doing it. I want to touch a little on that today.
The other part of the experience that I bring today is that after the terrorist attacks of 7/7, I was on the U.K. government task force that came up with preventing violent extremism, which is now our old strategy of combatting radicalization and extremism and terrorism, which in North America has been adopted by the U.S.A. and Canada. Whether that will be effective or not is a different issue.
I want to talk about two main things. First is individual pathways and why finance is important to them, and second is strategic radicalization and why finance is important to that as well. If we just focus purely on terrorist financing and ignore the financing of recruiting and facilitating people to become terrorists, as well as those who may have sympathy and empathy for terrorists, we're only doing a partial job, so I urge the committee to widen the scope of this study it's undertaking.
In terms of the personal pathways, there are pathways that involve grievances that may be partial, genuine, or perceived. These individuals need to be looked at through a lens of extremist recruiters to Islamist ideologies that are operating. Those include groups such as the Muslim Brotherhood, which have now declared combative jihad in places like Egypt, and others that are operating to a large extent within Canada and North America and around the world with support from many people who may not consider them to be terrorist organizations. They ultimately provide people with solutions to become terrorists through this belief in the utopian Islamist caliphate and the theological justification that underpins that. Only by looking at this whole process and at how finance is used to take individuals through this grievance-based process and this ideological change can we really combat terrorist financing and understand the impact it has on Canada and around the world.
The other thing I want to touch on is strategic radicalization. In order to move a society as a whole, and in this case it will be Muslims in the west, people who have an Islamist agenda must teach individuals that their parents practised a particular version of Islam that is no longer legitimate and that the society doesn't want them there, and that therefore they must fit into a different society and change their practices. The way they do this is no different from the way fascism or communism has been spread. They build a number of entities within different spaces in our society, whether they provide education or pastoral care, and so on. Then by building their own individual capacity and education, they persuade them to come and join their gang or their club. They then, obviously, move them along through the grievance-based process.
Open-source documents available from certain intelligence agencies around the world say that certain countries have spent hundreds of billions of dollars so far helping this strategic radicalization, which ultimately leads to terrorism. All this now requires funding, so we have NGOs and charities and a whole number of other organizations that will fund these activities through other shell companies. One way we identify these organizations is by looking at the directors and the trustees and their ideological values. What do they aspire to? I think that has to be part of the study if you're going to be effective.
The last thing I'd like to say is that this is something that needs to be done more, not just in Canada, but around the world as well. There is very little work and research being undertaken in terms of the Islamist extremist organizations that will ultimately fund terrorism. We know there are cases from Canada. We know there are cases from North America, in Britain, yet we still, as governments, are dragging our [Technical Difficulty—Editor] and I urge the committee to undertake this study, this research, as a matter of urgency. If the Quilliam Foundation or I as an individual can provide any assistance or play any role or part, we'd be more than happy to do so.
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First of all, thank you for agreeing with me on the fact that this may well be a partial inquiry—we don't look at everything—and I really value your support in looking at this from a holistic perspective.
There are a number of studies and factors we can take into consideration. We have done some reports looking at front organizations and looking at the way groups such as the Muslim Brotherhood set up shell companies, shell organizations, in order to actually undertake some very nefarious activities. We know that in Canada there have been activities. There is great report by somebody I respect and hold in the highest regard, Tom Quiggin, who has looked into organizations in Canada that deal in corruption, drug trafficking, kidnapping, manipulation of individuals, fraud and tax evasion, organizations that will, once successful, move into other organizations.
But in order to look at who these organizations are, I agree with you that the processes of radicalization really need to be taken into consideration rather than necessarily de-radicalization. I would rather the committee consider getting to individuals before they are radicalized, before they become sympathizers, before they become supporters of terrorism. If we are really going to combat and prevent “violent extremism”, we have to combat the ideas first.
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I would suggest a couple of things. First, I would echo my co-panellists in terms of guidance to entities. There is vast over-reporting of suspicious transactions, in part because, as the financial institutions have said to other committees, there is so little guidance and such an onerous burden on reporting entities should they miss anything.
Over-reporting is absolutely to be predicted given that you have criminal jeopardy should you not report effectively. There is no guidance as to what constitutes effective reporting, and so we have massive over-reporting of suspicious transactions, thereby not advancing security because we are getting things we don't require. Yet we're not taking them out of the system once they are in the system. FINTRAC retains them, and in fact it's more cost-effective if they don't have a person extract them.
These are some of the things that the OPC does simply because it's more cost-effective to just warehouse the data than it is to cleanse it of the things you don't need. These are the kinds of problems that guidance would fix.
Concerning oversight, we have heard about a number of models.
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If we look at the way terrorist entities operate, the way they generate money, in the past a lot of their money used to come from certain countries in the Middle East, from wealthy individuals, donors, etc. Many of these countries have stopped financing, not because they've had some sort of spiritual epiphany but because the very same people they were financing in the past are now threatening their own standing within their own countries.
Over the last five or six years plus, many of these terrorist entities have had to generate their own funds. Let's look at an organization such as ISIL, for example. While it is not in Canada, these are tactics that are used, and they have influence in Canada and around the world. Their main source of income right now is from sales of oil on the black market, but also from the sale of antiquities, from drug trafficking, from racketeering, from kidnapping, and from all of the other things that we know they are involved in. In order to undertake these activities, they have to work in partnership with a number of people who are involved in organized crime.
There are many connections, especially in the drug trade. We know that for sure there is a significant involvement in the drug trade by terrorist entities, and they're using the old smuggling routes from places such as South America. These kinds of activities are now being emulated by other groups in the West—in the U.K., in Europe, etc.—and there have been some cases in which groups and organizations have been found to be supporting terrorist activity through working with organized crime.
And thank you to the witnesses for being with us today.
Mr. Clement, I'm going to start with you.
You aren't the first to point out the problems undermining the RCMP's work. In fact, just a few days ago, Deputy Commissioner Mike Cabana told the Standing Senate Committee on National Security and Defence that the reallocation of 600 organized crime resources to anti-terrorism efforts was a serious problem. That really exposed the major issues within the RCMP.
Would you care to comment on what Mr. Cabana, a member of the RCMP's senior leadership, had to say?
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I totally agree with what the deputy commissioner said. Mike and I used to work together, so I know him very well. I know we bandied this about in my previous life with him.
I think part of the problem is that we should have seen some of this terrorist fallout coming. I think with a little bit of foresight and strategic planning, we may not have become caught as we did.
I was the senior officer on the Arar inquiry, and I am greatly concerned about this moving of resources as we're right back into the same situation Justice O'Connor commented on. Where is the level of expertise when you're dealing with this? It doesn't happen overnight. Those things are troubling.
As far as throwing more resources at it goes, again, I suggest that's great in theory. Where are we going to get those resources? Maybe this is where there has to be a more concerted effort to look at public-private partnerships and bringing in resources. Bringing a police officer up to a standard doesn't happen overnight.
I'll make one last comment. I lived through the regime of fenced funds in the integrated proceeds of crime. I think the value of that for you and for the public was that we were required to report back annually to Parliament. We had to show the efficiencies and the effectiveness. That is gone, and we're back to wondering about the development of expertise.
Just so you have a clear understanding of why I think rank is such an impediment, you have to understand that in order to get a raise in salary you need to be promoted. What ends up happening is that you invest a substantial amount of money in building up expertise. When a position opens up in another section for which the person is more than amply qualified, they're going to take it, and you can't fault them, because that's the only way we have. I did a study under Phil Murray. I believe skill-based pay is something that has to come in for white-collar crime.
:
If you look at the way the U.K. government has tackled this problem, it has made some mistakes. Post-2005 and the terrorist attacks in London, we developed a strategy that was called preventing violent extremism.
The governments at the time decided they would initially centralize and provide in the region of £80 million to £90 million and then focus that money locally through local councils and local governments to try to get people to work locally, and to empower a number of organizations to do the research locally and on a national level as well.
In 2010 when the last coalition government was formed, there was a review of that strategy, and it had changed from “preventing violent extremism” to “prevent”. That was to undertake a global, holistic approach to the way we tackle this problem, de-radicalize not just the violent side, when it becomes much more difficult to try to de-radicalize somebody, but to try to prevent somebody from becoming radicalized.
Unfortunately in 2010 and 2011, following a global economic crisis, the British coalition government decided to considerably cut the amount of funds they were going to provide in this area, all the way down from £80 million or £90 million a year to £1.7 million last year. That was a significant decrease, and many organizations had their funding cut.
Many organizations were in desperate need and looked for alterative ways of surviving. Some of the organizations went to countries in the Middle East and then eventually ended up buying into their philosophy and so actually became part of the problem and not necessarily part of the solution.
One thing we've had recently, since the development of ISIL and the foreign fighters who are going down to join ISIL and al Qaeda in Iraq and Syria, is the re-emergence of the belief that governments need to do more. Just before Parliament was dissolved, we had an instruction by our Home Secretary to increase the amount of funding and to increase the size of the “prevent” bureaucracy.
Herein still lies the mistake. They're still trying to increase the bureaucracy and keep everything in-house rather than going out to the community, and that is a serious mistake.
:
Thank you all for being here.
I missed the week prior to our break, but I would say that on a personal basis, I find this the most fascinating discussion we've had yet, because we're really getting into the meat of the matter. I don't know where to begin.
Mr. Rafiq, I think you were honest in your evaluation toward the end. The danger of throwing money at a problem is, of course, that we build bureaucracies. Then, rather than treating the problem, we've created this whole structure that now demands to be fed, and that certainly doesn't help.
I don't have enough time, and I think we'd need hours to talk about this, but it would be interesting to hear your thoughts about how we should proceed. I don't want to be cutting, but I suppose you would probably argue that you haven't had enough time to prove that that would be the solution, but how has that worked for you?
The problem is we live in a free society where, as you so eloquently stated and I think it was stated as well by some of the other members, these people are able to just move amongst us. It's so difficult. We don't live in a society like China's in which people get caught, have a quick trial, and join the firing squad in the stadium on Saturday. This is a free society and we value those things.
Ms. Vonn, I think you put that out as well.
I'm going to get to my question, but I just need to get this out, because I know, having worked in this committee and in the ethics committee, that so often we heard from law enforcement that they need tools.
Mr. Clement, I have sons in the law enforcement profession, and we repeatedly hear that they need tools, and the tools they're specifically asking for are the tools we will provide in Bill .
On the other hand, we have the civil liberty groups saying that we're going to impede on people's rights. This is a real problem. I think we recognize it's a real problem.
I'm just going to share something with you very quickly about police officers, and you know this as well. The rank and file, the majority of police officers, are not able to do this work because first of all, they're not trained, and, second, there are so many regulations and so many oversights that impede their work. So this is a real problem. This is something that is not easily remedied.
I have one last point and then I'll get to my question. We know that these groups go to certain areas. I've heard that from police enforcement as well. They will target areas around jails. They'll live in those areas. Even if we were to apply some approach to engaging our population, our young people, these groups know who to target.
I think this has been asked before and I'm going to ask anybody to jump in. Where do we find the balance between what civil liberty groups are asking for and the tools that police enforcement agencies have insisted on for years and years and years?
I'll start with you, Mr. Clement.
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I come at this having lived through two inquiries. It was great, because at that point everybody was playing armchair quarterback, and we had that luxury at the time. But I've had, obviously, years to think about this.
When I've looked through it, and I think this is what police officers today need, the reality is that if I'm given a choice of possibly making a mistake, and maybe not being 100% accurate here about this individual and having to answer a day later as to why I didn't take action and a number of people were killed, I'm going to opt for.... And I'm sorry if that offends this individual, but we're dealing in a human business.
You are never going to have 100% accurate information and the sad part of it is I can suggest to you that when the new inquiry comes out, this committee is going to be pleasantly surprised, because we are now going to be able to use the information we were prevented from using by our American authorities in the Arar inquiry.
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For me it's very clear. if somebody is about to break the law, if somebody is preparing to break the law and commit a crime, that comes under “protect” and not under “prevent”. That should be the police's responsibility. The police should get involved in protecting our communities and, if somebody has committed a crime, pursuing the criminals and ensuring that they face the due diligence.
When it comes to prevention, when it comes to people who are sympathizers and empathizers, we need effective programs of de-radicalization. We have them in the U.K. If somebody doesn't meet the thresholds for de-radicalization, we need processes of rehabilitation. These could be just young kids who are nine years old who are looking at videos and thinking they are very cool. They just need some critical thinking and some effective interventions.
Then we come to the wider part, which is societal. This must not come from the police at all. What we need to do as a society is to make Islamism.... President Obama made a speech which I thought was [Technical Difficulty—Editor], but he missed the point. He said that an extremist ideology is at play, but then he didn't name the ideology. What happened then? Other people—the far right, the far left, and everybody else—started naming the ideology, and people started thinking it was Islam per se.
We must be very clear on what it is we don't stand for as a society. We don't stand for totalitarian or fascist ideologies, and we know what to do against them. Islamism needs to be just as unpopular as Fascism and Communism have been. We need to educate and empower our civic society in schools and everywhere else to take that struggle forward.
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Ms. Vonn, I apologize for missing your official presentation.
One of the concerns and questions we have is that as we see Bill being presented as an option, too broad a net is being cast. Essentially adding more hay onto the pile doesn't make the needle easier to find. I'd like Mr. Clement's comment on this as well
Mr. Christensen, we've heard from some of the financial institutions that collecting metadata doesn't necessarily always lead to what we want, which is more security, especially if you're storing it all and not cleaning it. You start to capture more and more people without increasing the security and safety of Canadians.
One key concern we've had is around the definition of terrorism. If that then broadens out, and if our ultimate goal is a safer and more secure society, how does the definition weigh into concerns about what comes next under the auspices of protecting us from terrorism, if we're now defining terrorist activity so broadly as to include anything that might oppose government policy or the collection of opposition to Canadian sentiment?
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Given some comments about returning to the acts of terrorism, preventing terrorism, and terrorism financing, my concern is that one consideration in Bill is economic interests of the state. We've had government questions on this, and that's why I'm feeling this is okay territory, but I'll allow the chair to rule if I'm stepping beyond.
We've seen through Air India, and we've seen through Arar that we were incapable of being precise enough about who we were going after, and people were able to finance these activities. Sometimes, as Mr. McGuire said, it takes a very small amount of money, so precision is incredibly important.
Is it fair to say, Mr. Clement, as we go forward, that we need that oversight, that reporting back to Parliament, which you said is no longer done, and that we should be very precise about what we're trying to understand?
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You have a right to freedom of speech and conscience—
Mr. Mark Adler: Yes or no, please.
Ms. Micheal Vonn: —as has been defined by the Supreme Court.
Mr. Mark Adler: Yes or no, please.
Ms. Micheal Vonn: No, I'm not going to answer that question—
Mr. Mark Adler: I didn't think you would.
Ms. Micheal Vonn: —because I don't understand it.
I'm trying to explain how I understand your question.
The Chair: Yes, respectfully.
Mr. Mark Adler: Totally respectfully.
Mr. Clement, a number of organizations here in Canada have had their funding or charitable organization status taken away from them, like IRFAN and the Muslim Association of Canada. The key really, and this is what we're talking about here, is to find the money. That's really the key to all of this.
I mean, this isn't something new; we have seen this through history. Certainly Herbert Hoover, when he was president in 1929 during the whole problem in Chicago with Al Capone and all of that, didn't call in the director of the FBI; he called in the director of the Treasury to defeat organized crime in Chicago. They did so through the creation of this group ultimately called “the untouchables”.
Do we need a group like that today to focus on finding the money trail?
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First of all, the threat is real. We have a team that monitors and follows these individuals in Iraq and Syria, and we work with a number of agencies around the world to provide support. I can go on the record now and say that there are stories of 9-year-olds, 12-year-olds, 14-year-olds, and 16-year-olds who have been either beheading people or shooting people between their eyes and killing them. These stories are real. There is radicalization going on.
Gilles, the head of the counterterrorism division for the EU, is now saying that there are between 3,000 and 4,000 Europeans who have gone. In the U.K., we're saying that there are 600 plus. Some people are saying, though I am not, that there are 1,000 people. The reality is that all of the figures that are being used are baseline figures and they're the minimum figures. The reality is we don't actually know how many individuals have gone out there, but there are more than the numbers being talked about. That's number one.
Number two is that there seems to be a particular alignment between the political ideology that is Islamism and Islam, which are different, just as socialism is different from being social. Being social has to do with the way people interact, while socialism is an ideology that is left of centre. Islam is a religion that I and nearly two billion people around the world choose to practise in different ways. Islamism is a political ideology that wishes to enforce a particular version, their version, of sharia law on the rest of the world.
One of the main idealogues of this particular ideology was somebody called Sayyid Qutb. He basically took far right ideologies from Europe and then overpinned them. So instead of doing these things for the states or for individuals, do them for God. He brought in the God factor to ideologies that we have fought world wars against and the Cold War against.
The problem is that there are many organizations and individuals that can feel empathy toward some of these values. We need to ensure that this particular ideology is exposed. Perhaps you will forgive and pardon my candidness, but if there were somebody outside in the street right now dressed in a particular Nazi uniform doing a salute, we would all know how to react. The problem is that the majority of mainstream society still doesn't know how to react to the Fascist ideology that is Islamism, mistaking it for a faith that is Islam. We and everybody else have to take partial blame for that because we have been afraid to call it out for what it is.
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I have just a couple of questions.
Mr. Rafiq, I'm reminded of the Oklahoma City bombings that were mentioned earlier and the radicalized Christian ideology that was used to justify some of the attacks on innocent people. There's a commonality and a line between some of the things we're talking about here: the extremism of groups and the use of religion broadly to justify terrorist activities. I'm also thinking back. I worked in Sierra Leone for a while on the recruitment of very young people into incredibly violent acts—eight-, nine-, and ten-year-olds. There was no Islamization over that. It was a grab for power, and the sale of diamonds into the North American market enabled it. It was no different from the sale of oil now by ISIS.
So there are these commonalities and trends. We've seen some of this movie before, perhaps not on YouTube and not with the extremism that ISIS propagates and uses to drag various groups into their conflict, but there's a pattern. Organized crime recruits young gang members from suburban Toronto where I grew up—eight-, nine-, and ten-year-olds—and radicalizes them. We didn't call it radicalization, though, did we?
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So it's taking a model that's been used in west Africa, sub-Saharan Africa, and the Far East. It's been used in gangs and urban centres in North America and drug trades. There are a couple of consistent factors. One is the causal identity and the second one is money. There's a great deal of money, in small amounts, through drug trades and prostitution, and all those types of things.
Are there any lessons to be learned, since this is maybe at a scale or at a level of pervasiveness and violence that we haven't seen. I worked in Sierra Leone. It's very difficult for me at a personal level to say this is something unbelievably new, because the violence I witnessed was incomprehensible. Yet we bought diamonds for many years from these places. It was very difficult to get western countries to realize that through our banking, our sales, and our purchases, we were contributing somehow.
Mr. Rafiq, is anything I said outside the limits of trying to understand this issue? How do we stop it?
I'll stop there and pass it to my colleague, Mr. Labelle.
[English]
As chair, I'm going to take the next round.
I have a number of questions. I'll try to focus on a couple of areas, first of all on FINTRAC and then on the RCMP.
I have to say that after the first two meetings we had with departments, with FINTRAC, and with the RCMP, I wondered why we were doing this study since everything was operating well. Since then every single witness, regardless of their perspective, has clearly said to the committee that things are not fine and that we need to do a lot of work in an awful lot of areas.
First of all, with respect to FINTRAC, Ms. Vonn, you said, “There is no dedicated review body that can tell us whether FINTRAC is operating properly, successfully, and lawfully.” You've clearly stated your position in terms of what review is necessary.
Perhaps I'll put the question then to Mr. Clement and to Mr. McGuire.
What's your perspective in terms of whether Parliament can tell whether FINTRAC is operating properly, successfully, and legally?
Mr. McGuire.
We are dealing with a complex world today, with cybercrime and terrorism. It can't be captured in the way we've done it. I really have to agree with Jeffrey Robinson, who said we are using an 18th century philosophy to fight 21st century crimes.
I don't say this lightly. I'm very proud to have been a member of the force. I'd do my career over in a heartbeat. But the reality today, and I have looked at this from the outside now for seven years, is that, as an organization, the RCMP can't continue being all things to all people, because something is going to fall off the table.
Mr. McGuire, my question is for you.
In recent years, the Canada Revenue Agency has undertaken somewhat of a witch hunt against charitable organizations. According to Library of Parliament notes, the CRA revoked the registration of 1,612 charities in 2013-14.
You mentioned the CRA team responsible for audits. Were those registrations revoked because of terrorism, or simply because the charities in question engaged in political activities that conflicted with government views and practices?
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I was looking for an opportunity to maybe wrap up some of my thoughts.
Mr. Rafiq, I appreciate what you were saying. The discourse started that this is not an unusual phenomenon, that this is something that transcends society in different areas. I beg to differ. I say that because if we begin to institute measures to de-radicalize.... I think we'd all agree that what's taking place in Islam today in that radicalization is something that we must guard against. I would suggest we put in measures do that, and I would hope you'd do the same thing in Britain.
We don't provide jobs. That's a mistake. We lay the groundwork in which economies can flourish, so that people can find meaningful employment. We offer good education.
I'm a bit of a libertarian myself. Ms. Vonn might like to hear this. I would argue that the government is doing those things and does those things very well. However—and this is the danger I see in what you're suggesting—if we begin to institutionalize some format to have people thinking in a certain way, I'm afraid Ms. Vonn might say, and I would certainly stand up and say, “I don't know about this”.
I'm a bit of a farmer. I like doing things the natural way, and maybe the government will at some point challenge those beliefs. I think we really need to focus in on a certain area.
Can you comment quickly? I'm going to ask Mr. Clement about some more terrorist funding after that.