Is Canada doing enough to support whistleblowers?

Is Canada doing enough to support whistleblowers?

Is Canada doing enough to support whistleblowers? In recent years, the role of the whistleblower has been in the spotlight more than ever before. In the political world, WikiLeaks and Edward Snowden have brought sensitive information to the public’s attention, and in financial services some huge rewards have been paid out to whistleblowers whose tips have led to big fines being levied.

But what about Canada; is the country doing enough to combat corporate crime? Well, there has been a response. In July of this year, the Ontario Securities Commission (OSC) opened its new whistleblower department, which offers whistleblowers confidentiality, protection and compensation of up to $5 million for tips that lead to successful enforcement action.

“Whistleblowers have always played an important role, and advisors who are registrants of IIROC or the MFDA have reporting requirements,” says Caitlin Sainsbury, Partner at Borden Ladner Gervais. “But the announcement that the OSC will pay for tips means we’re in a new era in Canada. The OSC is putting the money on the table.”

Although the impact of the new department is difficult to measure, it’s expected that its scope will encourage more Canadian investment professionals to come forward if they have suspicions. South of the border, the U.S. Securities and Exchange Commission has handed out over $100 million since the inception of its whistleblower program in 2011, including single payments of US$22 million and US$30 million.

“The SEC does a good job in publicizing those payments, it increases the potential of future tips coming in,” Sainsbury says. “Their program has been around for a few years and Canada’s is very new, so it may be a while before we start to see the flashy numbers of people getting paid out. There’s going to be a bit of a lag before we get the kind of stories we’re seeing in the U.S.”

Although Canada may be a few years behind the US in terms of supporting whistleblowers, Sainsbury is receiving more calls from financial services clients about the kinds of policies and procedures they need to have in place to meet new whistleblower requirements. “Firms need to respond to the amendments to the Securitas Act, which states that no employment contract can prevent someone from coming forward,” Sainsbury says. “Previously, contracts may have had confidentiality clauses but those are now rendered obsolete by the amendments.”

A fear of not being able to remain anonymous and the possibility of reprisals remain a factor preventing people from coming forward. In response to this reluctance, the new policy prohibits companies from engaging in retaliatory action against anyone who is a whistleblower, which makes it more difficult for companies to terminate or otherwise disciple an individual who comes forward.

For a wealth professional who is considering speaking out, Sainsbury advises taking a look at the internal protocols of their organization and finding out whether or not there is an anonymous hotline. “They should look at the various mechanisms by which they can report,” she says. “Reaching out to counsel is always a good thing to do, it’ll help you weigh the potential risks and maneuver the system in the most appropriate way.”