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Senators who have examined the suspended plan by Statistics Canada to obtain personal records and the banking details of a half-million Canadian households say banks could be expected to launch lawsuits to protect the information of their customers if the project is restarted.

The members of the Senate committee on banking, trade and commerce said in a brief report released on Tuesday that if the statistics agency resumes its plan to collect the banking and credit information, the federal government should tell the banks to remove any personal identifiers before the data are handed over.

“The committee has serious concerns with respect to Statistics Canada’s proposed pilot project, not only because of the magnitude and the personal nature of the data being demanded, but also with respect to the lack of transparency throughout the process,” the report said.

The plan by Statistics Canada to obtain the banking records, and the fact that the agency has been collecting personal financial data from a credit bureau for more than a year, came to light through media reports in October. The ensuing public outcry prompted the agency to suspend the project, at least until federal Privacy Commissioner Daniel Therrien has completed a review.

“The project is only on hold and we feel it must remain so at least until the Privacy Commissioner reports on the issue. We will carefully review the Privacy Commissioner’s report,” Carolyn Stewart Olsen, a Conservative Senator who is the deputy chair of the banking committee, said in an e-mail.

In a release that accompanied the report, the senators said witnesses told the committee that the collection of the personal banking data could be considered unethical “and may lead to lawsuits from banks who are trying to protect their customers' data.”

The Senate committee also recommended that federal laws protecting the privacy of Canadians be aligned with other international privacy standards and that the Statistics Act be reviewed to address privacy concerns.

Chief Statistician Anil Arora has said the pilot project is necessary to calculate important economic indicators including gross domestic product and the consumer price index. He assured the Senate committee that the information would be anonymized and securely maintained.

Mr. Arora initially balked at the idea of receiving the data without identifiers, saying that would make cross-referencing with other data sets impossible and reduce their value. But, after testifying before the senators last month, he suggested that he is open to discussing alternatives, such as receiving financial records with the names removed by the banks instead of by Statistics Canada.

“If there is a way that we can still provide good quality data that still matches up to the needs of Canadians, of course we will do that,” he told reporters when asked if the agency would consider receiving anonymized data from the banks.

With a report from Bill Curry

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