Canada’s banks are considering legal action to prevent Statistics Canada from obtaining their clients’ banking records without consent as the federal agency faced criticism from several fronts Thursday during a special Senate hearing.

Statscan’s chief statistician, Anil Arora, pledged during the meeting that the plan will not go ahead until the federal privacy commissioner completes an investigation.

The Senate banking committee also heard Thursday from Privacy Commissioner of Canada Daniel Therrien and privacy and consumer advocates.

In his first public comments on the Statscan controversy, Canadian Bankers Association president Neil Parmenter told senators “all options are on the table,” when asked whether Canada’s banks are considering legal action.

Until Thursday, Canada’s banks and their lobby group – the CBA – had released only cautiously worded statements in response to Statscan’s plan, which emerged publicly over the past two weeks.

“The central concern is this is a very new and unprecedented request,” Mr. Parmenter told reporters following the meeting. “Banks have never been asked to provide personal client information to Statistics Canada before and so that’s why there’s such concern from the industry.”

Also during the hearings, the federal privacy commissioner provided his strongest expression of concern to date regarding Statscan’s plans. He stressed that he decided to launch an investigation because of complaints from the public – 52 so far – and not because of an invitation from Statscan.

Mr. Therrien also said that while his office met six times over the past year with Statscan for discussions that included the agency’s general plans to obtain “administrative data” from private companies, the specific plan to compel banks to hand over the records of 500,000 Canadian households was not raised with him.

“I think we were all struck, in the recent news, by the amount of data [being requested] from a large number of dwellings in a very detailed way,” said Mr. Therrien. “What is raising a lot of concern currently is what I call the scale, the breadth, the scope of information that is being sought.”

The project was tentatively scheduled to begin in January. Mr. Arora, the chief statistician, told senators that obtaining banking records would help inform figures such as inflation, which is a crucial statistic for both business and government.

“We can get higher-quality data from those transactions that people are undertaking in an electronic world and the banks have those transactions,” he said. “We’re not interested in what exactly that transaction was. What we’re interested in is the intelligence of it so that we can then benchmark those indicators [such as inflation].”

The Senate meeting was attended by several senators who sit with the Conservative caucus, which has been highly critical of the Liberal government in the House of Commons for supporting Statscan’s plan.

“It’s almost totalitarian in its scope,” said Conservative Senator Carolyn Stewart Olsen. “I think many Canadians will begin to think we are living in an Orwellian nightmare.”

Former Ontario privacy commissioner Ann Cavoukian told senators that she is strongly opposed to Statscan’s plan. She said the technology exists for banks to remove the names of individuals before transferring the data and that option should be looked at more closely.

The hearings highlighted a key point of tension faced by the banks. As private-sector companies, they are governed by the Personal Information Protection and Electronic Documents Act, a federal law approved in 2000 that requires private companies to obtain an individual’s consent when they collect, use or disclose that individual’s personal information.

However, Statistics Canada appears to be of the view that its powers in the Statistics Act – which dates to 1985 – trump the privacy laws governing the private sector.

Section 13 of the Statistics Act gives Statscan sweeping powers to compel the release of “any documents or records that are maintained in any department or in any municipal office, corporation, business or organization” requested by the chief statistician for statistical purposes.

“The banks are caught between a rock and a hard place,” said independent Senator Howard Wetston.

Ms. Cavoukian said Parliament should look at updating the Statistics Act.

“The concerns that I’ve been hearing is that Section 13 of the Statistics Act is unconstitutional. It authorizes warrantless seizures in violation of a reasonable expectation of privacy,” she said. “The perception is it’s happening behind our backs.”

The Globe and Mail, November 8, 2018