POLITICS
03/01/2012 12:20 EST | Updated 05/01/2012 05:12 EDT

Government hasn't made case for boosting dirty-cash powers, says privacy czar

OTTAWA - The government is trying to expand Canada's anti-money laundering system without proof the new powers are actually needed, the federal privacy watchdog says.

Privacy Commissioner Jennifer Stoddart told a Senate committee Thursday that Canada already has an expensive, secretive and intrusive regime for detecting dubious transactions.

But there is no conclusive evidence of its effectiveness, she added.

"We shouldn't strengthen this regime — because of its impact on Canadians — until we have done some more research on its effects."

Fintrac, the federal anti-money laundering agency, currently reviews electronic cash transfers of $10,000 or more. The government proposes broadening the law to scrutinize all electronic fund transfers entering or leaving Canada.

Stoddart says this would mean examining large numbers of harmless transactions, such as money transferred by parents to children studying abroad, or remittances sent by naturalized Canadians to family members overseas.

She also took issue with proposals to:

— collect more information about people who purchase retail gift cards — seen by police as money-laundering instruments;

— allow Fintrac to share more information with law enforcement and intelligence agencies.

Stoddart also suggested creating a dedicated watchdog to keep an eye on Fintrac should its powers be expanded.

"If the government decides to go ahead with broadening the regime, I would suggest that more oversight be added."