Budget 2023: Liberals add foreign interference office, new money-laundering rules
Deputy Prime Minister and Finance Minister Chrystia Freeland speaks during a news conference before delivering the Federal budget, Tuesday, March 28, 2023 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
By Dylan Robertson in Ottawa
Prime Minister Justin Trudeau’s Liberal government plans to launch a National Counter-Foreign Interference Office, amid ongoing scrutiny of allegations that Beijing interfered in recent federal elections.
Tuesday’s federal budget earmarked $56 million over five years for measures to combat foreign interference, threats and covert activities.
The Mounties are slated to receive most of that money before April 2026 in support of efforts to investigate threats and proactively work with diaspora communities at risk of being targeted by foreign interference.
The budget document says the new office will be created within the Department of Public Safety, but it does not include a timeline for its launch.
The measures come as former governor general David Johnston takes up his role as a special rapporteur, with a mandate to sort out whether Trudeau should call the public inquiry demanded by the three main opposition parties.
The Liberals are also proposing legislative amendments that would task a federal banking watchdog with determining whether large financial institutions “have adequate policies and procedures to protect themselves against threats to their integrity and security, including protection against foreign interference.”
The Office of the Superintendent of Financial Institutions would also be given the powers to take control of a bank “where there are national security risks.”
Ottawa also plans to beef up its money-laundering regime and policies tackling terrorism funding through a series of proposed amendments.
The changes would follow an internal assessment that found weaknesses in how departments share information, few prosecutions being pursued and gaps how the rules apply to lawyers.
The proposed legislative changes would enact whistleblower protections and crack down on people who avoid reporting requirements by using a series of small transactions.
Ottawa would also compel banks to report on assets held by people who are subject to sanctions, beefing up existing rules that generally only compel such reporting on clients suspected of terrorist financing and money laundering.
The budget says the Liberals plan to implement a Federal Beneficial Ownership Registry by the end of this year, after recently introducing legislation to that effect, with a mandate to be publicly shared by this fall.
The Liberal government also says it aims to update the public this fall on whether Fintrac should be tasked with countering sanctions evasion.
In another measure related to terrorist financing, the budget allocates $16 million over the coming two years to implement proposed legislation aimed at allowing humanitarian groups to work in Afghanistan.
Currently, aid workers cannot operate in that country without paying taxes to the government and therefore running the risk of being prosecuted for financially supporting the Taliban.
The bill proposes a regulatory program to issue exemption permits. Officials said the funding would be needed to assess applications for permits and probe the risk of the exemptions benefiting terror groups.
This report by The Canadian Press was first published March 28, 2023.
BMO completes US$160M deal to purchase Air Miles loyalty rewards program
Air Miles and BMO cards are displayed in Mississauga, Ont., on Friday, March 10, 2023. BMO Financial Group closed its acquisition of the Air Miles loyalty rewards program in Canada on Thursday, saying it plans to expand the program with new ways to earn and redeem points. THE CANADIAN PRESS/Nathan Denette
BMO Financial Group closed its acquisition of the Air Miles loyalty rewards program in Canada on Thursday, saying it plans to expand the program with new ways to earn and redeem points.
“Going forward, BMO ownership gives the program stability, but more importantly, the opportunity for us to invest in the program,” said Air Miles president Shawn Stewart.
BMO announced in March it would purchase Air Miles after the program’s U.S. parent company filed for bankruptcy. The bank’s so-called stalking horse offer for LoyaltyOne Co. was US$160 million, subject to certain adjustments, according to court documents.
With the bank’s ownership, Stewart says he’s excited for the program’s new chapter.
“We wanted to come out of the gate strong and reinvigorate what is a Canadian leading loyalty program. And what you’ll see over the summer is a continued release of of new products, and new opportunities for collectors to earn.”
Air Miles is one of the oldest and largest loyalty programs in Canada, with nearly 10 million active users, but the program has lagged in recent years as numerous companies dropped out of the program.
Last summer, Sobeys and Safeway owner Empire Co. Ltd. and office supply retailer Staples said they would be scrapping the program, a year after the Liquor Control Board of Ontario and Lowe’s Canada pulled out.
BMO said it plans to introduce enhancements to the program including an improved travel booking platform and a new way for collectors to earn Bonus Miles through receipt scanning. The latter will be available first for collectors in Atlantic Canada, followed by those in other regions.
Stewart said the main complaint coming from program partners was a lack of investment in the Air Miles program, an issue the acquisition is expected to address.
“When partners see our investment, our hope and our plan is that they’ll see the growth in the program, the opportunity for them to speak to 10 million Canadians, to understand and use the data and analytics the program provides,” he said.
The Air Miles program is re-introducing itself to Canadians in a market that’s seen more stores launching loyalty programs in recent years, but Stewart said that Air Miles stands out as a longtime brand with a broad catalogue for points redemption.
This report by The Canadian Press was first published June 1, 2023.
Total Canadian debt hit new record in first quarter: TransUnion
Canadians’ combined outstanding debt hit a new record in the first quarter, reaching $2.32 trillion, TransUnion said Wednesday.
As the cost of living rose with high inflation and interest rate hikes, many Canadians turned to credit to alleviate financial pressures, the credit reporting agency said in its latest industry insights report.
The number of Canadians with access to credit grew 2.9 per cent year over year, led by subprime consumers, which grew by 8.3 per cent, TransUnion said.
However, the agency said consumers considered prime or higher still make up almost three-quarters of total consumers with a balance, characterizing that as a “relatively healthy risk distribution.”
Credit card originations were up 20 per cent amid heavy competition in the market, while the average line of credit monthly payment increased by 43 per cent to $436.
Mortgage origination dropped 32 per cent year over year as higher interest rates slowed demand for new mortgages, especially in the refinance market.
Meanwhile, serious consumer delinquency increased, though TransUnion noted that overall delinquency levels remain below pre-pandemic levels.
“The financial position of Canadian credit consumers improved coming out of the pandemic, bolstered by higher savings accumulated through the pandemic and supported by a strong labour market,” said TransUnion director of research and industry insights Matthew Fabian in the report.
“However, the longer the current conditions of elevated inflation and higher interest rates persist, the more likely it is that a segment of more vulnerable consumers may increasingly feel the pinch,” he said.
“As available disposable incomes become more stretched, we expect a segment of consumers will be more likely to miss payments, and as a result, that delinquency rates will rise.”
Average consumer balances on most credit products rose, with the average credit card balance up 11.4 per cent to $3,909, and the average mortgage balance up 7.1 per cent to $349,178.
TransUnion expects credit trends for 2023 to be mixed due to the uneven impact of higher inflation and interest rates.
This report by The Canadian Press was first published May 31, 2023.
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