StatCan pokes into Canadians’ bank accounts

We learned last week that Statistics Canada wants to compel the country’s nine largest banks to hand over the financial transaction data of 500,000 Canadians. That information might include statements of account balances, deposits, ATM withdrawals, cheques written or received, and credit-card use. Social Insurance numbers will also be collected.

All of this was organized without informing the public, in particular those whose bank records are to be scrutinized. After an uproar in the House of Commons, the agency said Thursday it would put the scheme on hold until the privacy commissioner can investigate.

The chief statistician of Canada insisted that our personal information is carefully protected and never shared publicly.

That assurance was weakened by the recent revelation that an employee at Revenue Canada has been fired for illegally searching the accounts of 38 taxpayers and accessing 1,264 accounts. The employee used a sophisticated search engine that tracked surnames and postal codes.

By any standard, this is an unprecedented invasion of personal privacy by a government agency. The former chief statistician, Ivan Fellegi, has admitted as much. In an interview, he conceded: “The rollout didn’t really … explain properly to Canadians why we are into what is definitely a violation of privacy.”

We might take issue with that statement on several fronts. What “rollout” is he talking about? We weren’t consulted or even informed. What explanation is he referring to? None was offered. And how does a former chief statistician, whose job it was to protect the security of personal data, justify a clear violation of privacy?

The answer to this last question, such as it is, derives from the growing inadequacy of Statistics Canada’s databases. Historically, the agency collected personal financial information by asking Canadians to fill out various forms and keep diaries of their spending.

But increasingly, more and more of us have lost patience with inquiries of this kind. The compliance rate is down to about 40 per cent, and that’s not robust enough to build on.

Yet financial markets rely on this material for a variety of purposes, among them stock and bond pricing. If the data are no good, the pricing suffers.

It was for this reason the agency decided to go over our heads, and scrutinize personal banking records without consent.

Let’s agree that a well-regulated financial sector is in everyone’s interests. The economic crash of 2008 was due, in part, to misinformation and outright manipulation within the American banking system.

But the day is long past when governments at any level can expect their citizens to take assurances of privacy at face value. The concern is not just the routine leaking of personal information.

Detailed financial transactions are enormously revealing. They show which political party you gave money to. If you’ve been having an affair, that fact can be inferred.

Visited a private medical clinic for treatment? That, too, will be apparent.

There’s an important distinction here. We are all obliged to provide Revenue Canada with statements of our income.

But what Statistics Canada wants are details of every transaction we complete — in effect, a composite picture of our private lives.

What should be done? Let us hope the privacy commissioner’s investigation will kill the idea.

A better plan would be to renovate and simplify the various questionnaires through which personal financial data are collected voluntarily.

Canadians are by nature generous and ready to be helpful in a good cause. The collection of this information is such a cause.

The challenge for Statistics Canada is to reach out in a collaborative fashion and regenerate trust that has clearly been lost. No easy matter, perhaps.

But if the agency continues in this heavy-handed manner, public sentiment will turn permanently against it. And nobody wins that game.