Bill C-45 (Historical)

An Act to amend the Criminal Code (criminal liability of organizations)

[Linda Silas]

Yes. I'm sure Ms. Hall could explain to you every province's laws, but in most provincial laws for long-term care, there has to be an RN, a registered nurse, assigned on a 24-hour basis. However, sometimes that registered nurse is the director of nursing, and he or she is at home in the middle of the night. Then it's the registered nurse who's on the unit, a licensed practical nurse, or sometimes just personal care workers with somebody on call.

Again, when we're talking about the Criminal Code—and Ms. Hall mentioned the Westray act—it's really to see who makes the final decision, and we guarantee you, the committee, that it is not the nurse or the personal care worker on the ward or in the long-term care facility. Often, it's not even the director of nursing in that facility or the director. It is either the shareholders or the board of directors, depending. The bill as proposed now is really flawed because it's talking about managers who direct the day-to-day activities, but they don't really direct the day-to-day activities, so we have to find out who directs them.

Offshore Health and Safety Act

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Mr. Speaker, I am pleased to have the opportunity to weigh in on this important issue again. I had the opportunity to speak on this at second reading, at which time I indicated my support for this legislation and for the measures. I was pleased that the two levels of government, the two provincial governments and the federal government, were finally able to reach agreement. The Province of Newfoundland and Labrador and the Province of Nova Scotia passed mirror legislation, and the federal government is now following suit.

I want to focus my presentation today on where we go next. It is extremely important that we get the best piece of legislation that we can to serve the purposes laid out in the legislation. However, if we do not have the enforcement and the political will to make it happen then, frankly, we will go back to the decades when the offshore on the east cost was covered by draft regulations. We will go back to something we see far too often as it relates to private industry, in particular in the fields that are so dangerous. I speak of the whole practice of voluntary compliance. In that, governments expect the companies and individuals involved in any particular industry to be safe and careful and to not put workers at risk.

We know that public sector and private sector entities conduct risk analysis at every opportunity, before they put in any constraints on their practices whatsoever. Before a private sector company introduces any, in this case, safety measures or the use of safety equipment, it will do a very careful analysis on what the chances are that anything is going to happen, that there are going to be problems, that there is a risk there will be a loss of limb and life and, even at that point, what the exposure of that company is to liability.

That is why it is so important for governments to take their responsibility seriously in protecting people who are not protected, whether they are citizens, customers, clients, or workers. In the case of the Ocean Ranger, the 84 people who lost their lives, and in the case of the Cougar helicopter, the 17 people who lost their lives, nobody represented them. Nobody went to the effort to ensure there were constraints on the private sector companies that controlled what was going to happen to them when those workers at their jobs were carrying out their responsibilities. That is why it is incumbent upon us, not only to pass legislation to prevent these kinds of things, but also to ensure that the legislation is enforced, to ensure there is the political will in place, and that there are provisions in the legislation to ensure that people or companies that contravene provisions of the legislation are held accountable.

We had a terrible tragedy in Nova Scotia, in 1992, where 26 miners lost their lives. There was a royal commission held that made a number of recommendations. It led to Bill C-45, which was passed in this House, I believe in 2004.

It was called the Westray bill, and it was done to assign corporate responsibility. That legislation makes all decision-makers in a company responsible for the results of bad decisions or decisions that lead to the loss of life. Yet, since 2004, 22 years after that disaster happened, there have been a couple of charges but absolutely no convictions.

That underlines my point. We need to make sure that the responsibilities are laid out in the legislation. We need enforcement. We also need to make sure that people are held accountable. Ultimately, it all comes down to political will.

This legislation would only take us part of the way. We are only beginning to move in the right direction toward ensuring that the industry has a proper health and safety regime, as well as regulations.

However, our responsibility does not end here. We need to ensure that as development continues we work harder to make sure the people working in this environment are protected, and that the environment itself is protected.

I want to refer to Lana Payne, the Atlantic director of Unifor, who testified at the natural resources committee. She said that “Canada is still far behind other industrialized oil economies such as Norway, the United Kingdom, Australia...[and] the United States” in having “powerful stand-alone authority in charge of safety and the environment...”.

The member who spoke before me seemed to suggest that we do not have a stand-alone regulator here. We do not need it. It is a small jurisdiction. It is smaller than the Arctic or the west coast or some of these other countries. The member should say that to the 82 families who lost loved ones when the Ocean Ranger went down. He should say that to the 17 families of the workers who lost their lives when the Cougar helicopter went down.

If development is going to be conducted off the coast of our country, then we need to ensure that proper protections are in place, as in other countries. We have not done enough. We need to do better. We in the New Democratic Party will do everything in our power to ensure that this country does a better job in this area.

It is important for the federal government to continue working with the provinces and offshore boards in this area. There is no doubt about that.

I wish the government had considered the amendment that was introduced by our members on the natural resources committee. That amendment would have seen a review by the minister after five years. We would have known whether the legislation was actually accomplishing, not only what it set out to accomplish, but whether the government was showing the political will to enforce it and to hold people accountable. That happens with other legislation. It is not new. Things change, and try as we might, we might miss provisions that we should have perhaps picked up on. A five-year review would indicate whether we had run into any difficulties. A five-year review would ensure that 10 years or 13 years out we have done our due diligence with respect to making this happen.

I will refer to the intervention by my friend Dr. Susan Dodd, who wrote the book The Ocean Ranger: Remaking the Promise of Oil . Susan lost her brother when the Ocean Ranger went down. I spoke at some length about Susan's work in this area at second reading, but let me say again how much I value her opinion and the exhaustive research that she engaged in to prepare her book.

Before committee, Susan rightly identified that the “failure to regulate leads not only to the loss of life and the destruction of the environment, but also to the public's losing confidence in the legitimacy of government”. Disasters, such as the Ocean Ranger, Westray—and I referred to the explosion of the coal mine in Pictou County, in 1992—and the Deepwater Horizon, are also political disasters. People appropriately asked why it was that regulations did not exist or were not strong enough. Why were there weaknesses in the system and why were they not addressed years before?

Too often, changes to health and safety come about as a reaction to an event rather than as a preventative measure. I would suggest that this needs to be changed.

When I was preparing for these remarks, I looked at the Westray example. I was a member of the legislature in 1992 when that disaster happened. Within the next day or so, I sat with families in Stellarton who were trying to understand the magnitude of the disaster and whether their loved ones might still be alive. In the initial days of that disaster, it was a rescue effort.

We had a commission of inquiry, which did not table its reports until 1998. There were 74 recommendations, and section 73 led to Bill C-45.

I talked abut the need to hold decision-makers accountable. In the Westray situation, they found that there were decisions made or not made that directly led to the explosion and the loss of life. Everyone recognized that the people who had the responsibility for making decisions did not make those decisions, or they made decisions understanding that a result there could be a disaster, an explosion, which happened. Those people need to be held accountable, and that is what led to Bill C-45.

Here we are 22 years later, and we still have not been able to hold people accountable for these kinds of workplace disasters. That is why I worry very much about our sense of satisfaction when we pass a piece of legislation like this.

We have been at this for 13 years. We worked with the other jurisdictions and we got it through. When it passes through this House and finally receives royal assent, we have done our job. However, that is just the beginning. That is the point I am trying to make; it is simply just the beginning. We need to do so much more to make sure that we fulfill our responsibilities in representing the people of this country.

Let me make it clear. I certainly do not have all the answers on how we protect workers in the offshore industry or how we protect our environment. That is why I feel compelled, as an individual MP and a member of this House, to say we need to be ever vigilant and be always listening and always paying attention, so we can ensure that the right thing is done, that we correct our mistakes, and that we move quickly, because we are responsible to represent not only people who work in that industry but also the environment, in the event of oil spills. As my colleague from St. John's East said, there will be a third rig in operation in 2017, even farther off the coast of Newfoundland. They are exploring, again, off the coast of Nova Scotia and in the gulf. It may be inevitable that there will be further development of these resources, but we cannot proceed without ensuring that we are protecting the people who work in the industry and protecting the environment, because once those disasters happen, those lives are lost and that environment is damaged, in many cases, forever.

Let me make a couple of suggestions.

First, I call upon the current government, and any government, to support the recommendation that has gone before Transport Canada to ensure that all airplanes and helicopters that are used for search and rescue and to transport workers to and from the oil rigs must have the capability to operate for an hour after they have no oil or have run dry. That has been a recommendation--in fact, it was 30 minutes, I believe—and that recommendation has still not been put in place. Even after it was determined to be one of the problems that led to the disaster with the Cougar helicopter, that still has not been implemented. I think it is extremely important that we ensure regulation is put into place. We know this is a fairly standard requirement for helicopters that operate off the coast, to give them time to land safely.

Second, the government needs to reverse its cuts to search and rescue and ensure that our SAR teams have the equipment necessary, and in working order, to carry out their missions as quickly as possible. These are life and death situations that these people are responding to in Atlantic Canada and around our coasts. It is too often the case that search and rescue missions are hampered because our dated equipment is not functioning or the teams are unable to arrive in a timely manner.

I think it is important that I also make a plug for the environment, in this respect. As I have already said, Canada is lagging behind once again. While the government has recently introduced legislation to increase oil and gas spill liability to $1 billion, this amount pales in comparison with the actual costs of the spill cleanup and the impact on our environment and local economies.

To wrap up, there is still a lot of work to be done to strengthen the safety of the offshore industry for our workers and for our environment. While Bill C-5 is a step in the right direction, I think it is incumbent upon the government to continue to work with the provinces, the stakeholders, and industry to prevent future disasters.

Patent Act

[The Speaker]

I have the honour to inform the House that when the House went up to the Senate chamber, Her Excellency the Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill C-45, an act to amend the Criminal Code (criminal liability of organizations)--Chapter No. 21.

Bill C-25, an act to modernize employment and labour relations in the public service and to amend the Financial Administration Act and the Canadian Centre for Management Development Act and to make consequential amendments to other acts--Chapter 22.

Bill C-6, an act to establish the Canadian Centre for the Independent Resolution of First Nations Specific Claims to provide for the filing, negotiation and resolution of specific claims and to make related amendments to other acts--Chapter 23.

Bill C-459, an act to establish Holocaust Memorial Day--Chapter 24.

Bill C-55, an act for granting to Her Majesty certain sums of money for the public service of Canada for the financial year ending March 31, 2004--Chapter 25.

Bill C-37, an act to amend the Canadian Forces Superannuation Act and to make consequential amendments to other acts--Chapter 26.

Bill C-50, an act to amend the statute law in respect of benefits for veterans and the children of deceased veterans--Chapter 27.

Bill C-48, an act to amend the Income Tax Act (natural resources)--Chapter 28

Bill S-21, an act to amalgamate the Canadian Association of Insurance and Financial Advisors and The Canadian Association of Financial Planners under the name The Financial Advisors Association of Canada.

Westray Mine

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, today Bill C-45 will gain royal assent.

The Westray bill is a victory for working people across Canada and culminates 11 years of work by New Democrats in solidarity with families of mine disaster victims, Westray survivors, steelworkers and other trade union partners.

This brings us one step closer to ensuring that corporations are held liable for irresponsible working conditions that end up costing workers their lives.

Justice Peter Richard, who presided over the Westray public inquiry, described Westray, as, “a story of incompetence, mismanagement, bureaucratic bungling, deceit, ruthlessness, cover-up, apathy, expedience and cynical indifference”.

Bill C-45 will ensure in future that corporate managers and employers are held criminally responsible for endangering the lives of workers. Let there not be another Westray.

Criminal Code

[Bev Desjarlais, NDP, Churchill, MB]

Mr. Speaker, I am pleased to have the opportunity to speak on the bill for a couple of reasons. First it will give me the opportunity to speak for a bit on the companion legislation that was tabled on the same day as this legislation, and that is Bill C-45, the corporate manslaughter bill, and also on this piece of legislation, which certainly is timely.

To indicate some of the reasons we have the bill before us, I will read out of few of them just in case somewhere along the way someone has forgotten what prompted governments in the U.S. and Canada to finally put in place legislation to address some of the problems we are having in the corporate world and which are having an extremely detrimental effect on the markets. I say extremely because although things have been happening for a number of years it was not too severe and not quite as much money was being lost. Not quite as many people were affected, nor were so many of the pension funds of people we knew. Nothing was being done for a lot of years.

Over the course of the years from the early 1990s and on, we were hit with a number of problems. I will read through them just to remind Canadians of why we are here with the legislation and why it is personally important that the legislation gets support. I would agree with my colleagues on why we should strengthen it. We should be strengthening it in a number of areas.

There was the Enron Corporation. At one time the seventh largest company in the U.S., Enron announced in November 2001 that it had overstated its earnings back to 1997 by about $600 million U.S. Is that not great? It was by about $600 million U.S., give or take $1 million or maybe $100 million. The company camouflaged the huge debt in a web of off the balance sheet partnerships. The company collapsed in the biggest bankruptcy filing in U.S. corporate history. The shares now trade for pennies in the over the counter markets. The bottom line is that people's pension funds, employees' benefit plans and numerous areas are affected as a result of companies doing this type of underhanded businesses.

Tyco, the conglomerate company, abandoned plans to split into four parts when concerns arose over its accounting practices in the wake of the Enron fiasco. In early June, the company announced the resignation of its CEO, Dennis Kozlowski, who was later charged for allegedly avoiding payment of over $1 million U.S. in sales tax on $13.2 million U.S. in artwork. Tyco shares are down 80% since the start of the year.

There was Adelphia Communications. In March, the Pennsylvania based cable company said it had loaned billions of dollars to the founding Riga family. The family relinquished control of Adelphia, which defaulted on a $7 billion U.S. debt and filed for chapter 11 bankruptcy protection on June 25.

Livent, the Toronto entertainment company, collapsed in 1998 amid allegations of financial impropriety that led to its financial results being restated. Soon after the collapse, the new management of Livent filed a $225 million lawsuit against Garth Drabinsky and Myron Gottlieb, the two Canadians who founded the theatre company. Livent then fired Drabinsky and Gottlieb, saying they fraudulently manipulated financial records to hide losses of $100 million. They have countersued for $200 million. Livent also filed for bankruptcy protection, citing debts of $334 million.

When we see companies like this filing for bankruptcy protection, we have to wonder about those involved and whether or not there should be some very strong criminal legislation in place to ensure that they cannot do those types of things that have such a great effect, not just on their employees but on the markets overall and, again, on pension funds and pensioners.

Going on to ImClone and the Martha Stewart affair, the drug company's co-founder and former CEO, Sam Waksal, and his daughter were charged on June 12 with insider trading relating to sales of ImClone stock. In the days leading up to the release of the federal ruling that rejected the company's new cancer drug, Martha Stewart came under investigation after she sold nearly 4,000 shares of ImClone on December 27, a day before the regulator's announcement. She is a friend of Waksal's and shared the same stockbroker. ImClone shares are off more than 90% from the high. As for Martha Stewart, of course her shares are down a little bit these days too.

Then, of course, there is Canada's own Michael Cowpland. The founder and former CEO of the software company Corel Corporation is still involved in the OSC's case over insider trading allegations after a company he controlled sold $20 million worth of Corel shares five years ago, just before it posted poor earnings. The OSC has rejected a proposed settlement that would have seen Cowpland pay a $575,000 fine and his company pay $1 million.

I mentioned those examples for a couple of reasons. The next time someone in the House talks about corporations being good citizens and that we should always trust them and allow them voluntary recognition of certain practices, I want everybody to remember each and every one of those corporations and why we need legislation in place to hold them as well as individuals accountable for their crimes. Just because a corporation has millions of dollars does not mean it is a good corporate citizen unless there is legislation in place that ensures it remains a good corporate citizen.

I indicated the reasons for including capital markets fraud in the bill, but Bill C-46 is an act to amend the Criminal Code as it relates to capital markets fraud and evidence gathering. Evidence gathering relates to whistleblower protection to which a number of colleagues have already spoken today. There have been criticisms that the sanctions in place are not strong enough and will not provide protection for whistleblowers. I have to agree that stronger legislation needs to be in place.

If employees or others know that these kinds of actions are taking place and they do not feel secure and feel that their livelihood will be jeopardized as a result of their evidence, it will be tougher to get these types of actions halted in the early stages. People must be assured that if they disclose this information they will not have to worry about getting another job in their field.

This is not just about being with one employer. We all know what blacklisting can do within business sectors in the world. There is a tendency to blacklist anyone who is seen as a squealer or a whistleblower. It has become a negative thing to squeal or whistleblow even if someone who has been committing a criminal act is caught, especially if that individual is in the corporate world. We have to ensure that we provide strong sanctions so people can feel safe if they whistleblow.

A number of my colleagues in the House have tried to bring in whistleblower protection for our own public service employees. Some individuals in the Office of the Privacy Commissioner wanted to mention things that had been going on but because they could not be assured of protection, actions went on for a period of time that ended up costing taxpayers huge amounts of dollars. As a result, huge amounts of taxpayer dollars were spent in that office without proper scrutiny. Had there been whistleblower protection within the public service, I submit that would not have happened.

In spite of the government bringing forward this piece of legislation, we still do not have whistleblower legislation in place that will protect public servants. The minister has stated that she does not think it is necessary because public servants would not do that kind of thing.

I need to remind people again of various situations that have happened in a number of government departments where deputy ministers or assistant deputy ministers have absconded with funds. There have been criticisms about the Indian health branch and a number of other departments. It is crucially important that there be whistleblower protection for the public service as well.

There is one area in Bill C-46 which has not been discussed a lot today and I want to make a point of emphasizing it. In spite of always being concerned about taxpayers' dollars being spent, I know what a tough job it is to ensure that legislation is enforced. Legislation can become just words on paper unless some enforcement mechanisms are in place.

I was pleased to see that the federal government would create a number of integrated market enforcement teams composed of RCMP officers, federal lawyers and other investigators such as forensic accountants to deal with capital market fraud cases. They will be located in cities throughout Canada and are scheduled to become operational over the next two years. They will work with securities regulators as well as provincial and local police forces.

It is crucially important to ensure that these types of mechanisms are in place, otherwise the legislation is not worth the paper it is written on. If there is going to be meaningful action against corporate fraud, there have to be people who are trained in those areas to get to the crux of the problem and do the job that is needed.

I want to take the time to comment on the Office of the Superintendent of Financial Institutions, OSFI, which deals with pensions and keeps track of pension funds in Canada. There has been criticism that there are not enough dollars in pension funds and OSFI is supposed to be keeping tabs on them. The bottom line is that in a good number of instances, OSFI does not have the resources to keep tabs on those pension funds.

As a result, we have ended up with situations like the Air Canada pension fund fiasco where the company did not put enough dollars into the pension fund. By the time OSFI got around to telling the company it had to put in enough money, Air Canada was going bankrupt. We now have a situation where a number of employees are not getting their pension funds. Certainly their families, their communities and Canadians throughout the country are being affected by the failure to properly support a program that is in place to keep tabs on pension funds.

My colleague from Regina—Qu'Appelle had introduced amendments at committee stage to strengthen Bill C-46. One of those was in regard to whistleblower protection. I emphasize again that there was a need to do that. Ideally it would have increased the penalties for employers who intimidated employees who were taking part in whistleblowing. In the other area, it was to have stronger penalties for insider trading.

Quite frankly I want to commend the government for bringing forward this legislation a whole lot quicker than it brought forward the legislation on corporate manslaughter, the corporate liability bill, commonly referred to as the Westray bill, which was introduced at the same time as this legislation. Bill C-45 also addressed corporate responsibility, but it did not address something that seems to hit home so much more with people, which is really too bad.

Bill C-46 deals with the money aspect and it certainly hits home with people, but Bill C-45 dealt with the lives of workers who were injured or killed on the job as a result of gross negligence and disregard by corporations. It took the government almost 11 years to finally come through with the legislation. I am extremely pleased that the House and the other place have seen fit to finally pass that legislation.

I will commend the government on Bill C-46 and indicate that it should be strengthened, but I will also make the point of emphasizing that it took far too long for Bill C-45 to come into place. I personally believe that a number of accidents have happened since that time that may have resulted in corporations being held criminally responsible for the deaths of workers. I am not going to mention specific instances, but I think those corporations out there that have had accidents like that know who they are.

Corporations will know that from the day the Westray bill, the corporate liability legislation, Bill C-45 takes effect, they will not have that freedom any more. At least there is going to be a challenge out there. If that is enough to smarten up corporations to put in place better work processes by not ignoring safety mechanisms, then it has done the job. It is far better to have that legislation in place to ensure that there is a bit of fear.

To this point there has been nothing. Somehow being fined a couple of thousand dollars, whether it be $10,000 or $50,000, because they did not want to fix an unsafe action in the workplace that might cost them $100,000 was no big deal. Somehow the workers' lives were an okay kind of bargain for certain employers to say, “To heck with it. It is more cost effective this way, so if we lose a couple of lives, no big deal”.

That is not going to happen any more, or at least I hope it will not happen any more. I hope corporations recognize that if they take a life, they will be giving up something at least close to a life on their part. Certainly if the legislation does not do the trick, we will be back here ensuring that the legislation is strengthened.

In January 2002 the Canadian Democracy and Corporate Accountability Commission issued a call for the Canadian government and corporations to follow the wishes of the majority of Canadians and to adopt measures to expand corporate accountability.

The commission did not just talk about corporate accountability with respect to the dollars that corporations were making or with regard to lives. It expected that corporations would look at things differently and would take a lot of factors into consideration when they dealt with whether or not they were good corporate citizens. It would consider whether or not they were following good human rights practices, whether they dealt with companies that followed good human rights practices, good labour standards, good environmental standards.

In the same way that people say there is honour among thieves, there was a time when there was honour among business people, that things were done in a certain way because it was beneficial for society. Somewhere in the course of our history not only in Canada but in the U.S. and throughout the world that has been lost. Somehow the bottom line is about making the most money with total disregard for the environment, for lives and for everyone else. Times have changed. People have said they will not accept that any more and if corporations are not good corporate citizens, they will make their lives miserable. That is the way it should be.

Things are changing in the world. There have been too many Enrons, too many Tycos, too many issues with ships spilling oil into the oceans. The fines have been so limited that they did not worry about cleaning it up because it really did not affect their bottom line. In some cases corporations can deduct the cost of their fines from their income tax. That is unacceptable. Those are the kinds of things we cannot allow to continue.

I mentioned the Canadian Democracy and Corporate Accountability Commission. A good friend and a former leader of the NDP, Ed Broadbent, was very much a part of that commission. He has been involved with others as well.

Members of the commission travelled throughout Canada. They not only talked to a few people here in Ottawa and a few in one province and here and there, they talked to people throughout the country. The message the commission heard was that Canadians want to see good corporate citizens in every aspect, in dealing with the environment, workers' lives, human rights. That is the route we have to take.

The NDP will certainly be supporting the legislation. We want to make it perfectly clear that we would like to see it strengthened in a number of areas, certainly the whistleblower protection and as well the amounts of the fines and penalties that corporations should have to pay in a number of areas.

I cannot think of the countries offhand, but there are countries in the world that actually put in place fines that are commensurate with a person's income or wealth. For a person who is a millionaire and is operating a business that is making millions of dollars, there is a $2,000 fine for some environmental damage or corporate fraud, the fine is a percentage of the person's income or wealth. For someone who makes $200, a fine of $20 has an impact, but a fine of $20 for someone who makes $2 million has no impact.

Maybe it is time we put in place those penalties that are a percentage of the amount of yearly income or profit that someone makes. We would truly see some strong action taken for corporations to improve their actions in this world and penalties that really did fit the crime.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I rise once again regarding this bill, of which I have already spoken at other stages. It is as industry critic for the Bloc Quebecois that I am taking part in this debate. I used to be human resources development critic and, as such, I may have had more opportunity to deal with issues that have to do with workers, employment insurance and things like that.

In this case, I think that this is a bill that deserves our support. Indeed, it is the result of several years of work as well as the result of the tenacity of certain members of this House. The involvement of members of the Standing Committee on Justice and Human Rights was mentioned. The work that led to this bill was initiated by NDP members. They were the ones who were closest to those who went through this terrible experience.

As was mentioned earlier, this bill follows several bills that were brought forward by individual members. Basically we realized, following the explosion at the Westray mine in Nova Scotia, that we did not have the necessary tools to conduct a thorough inquiry.

This could also have a preventive effect so that, in future, people would not engage in more or less acceptable behaviours for which they could not punished previously. Now, with this legislation, before engaging in such behaviours, people will know that there are consequences, and chances are that they will choose not to go in that direction. Indeed, they will have been warned in advance that it is very dangerous to engage in these types of behaviours.

First, let us go back to Bill C-468, which was introduced in February 1999. The purpose of this bill was to establish in certain circumstances the criminal liability of corporations for criminal acts or omissions carried out by their officers or staff and to create a new offence in the Criminal Code for corporations that do not provide a safe workplace.

This bill was also aimed at making it easier to establish the criminal liability of directors and officers, something that was missing from the legislation and the Criminal Code. It was impossible to clearly put the blame on those who were actually responsible for these situations.

After Bill C-468 died on the Order Paper in June 1999, a motion was presented to amend the Criminal Code and other federal legislation to hold corporate managers and administrators responsible for workplace security. At that time, the Bloc was in favour of such an amendment. The members of the Bloc Quebecois took part in the work needed to ensure that the end result would be as good a bill as possible and one that would solve the problem at hand.

The bill was introduced again in October 1999, as Bill C-259. Once again, it died on the Order Paper. In February 2001, the bill was introduced again. At that time, the hon. member for Laurentides spoke in favour of the bill while explaining that Quebec already had such an agency—the Commission de la santé et de la sécurité du travail—that oversees the safety of employees. Thus, in Quebec, we already had a framework for dealing with such situations. Nevertheless, that did not correct the weaknesses of the Canadian Criminal Code. Thus, the Bloc Quebecois thought it relevant to push for the adoption of a satisfactory bill.

For example, in the House on November 11, 2001, the member for Hochelaga—Maisonneuve expressed his support for such a bill. For him, it was important to pass this bill as a kind of legislative corrective measure, and especially important to strengthen the Criminal Code in order to prevent loss of life among workers.

Finally, it was the Standing Committee on Justice and Human Rights that began to deal with the issue. It held hearings on the issue in the spring of 2002 and tabled its report in June 2002. It recommended that the government introduce legislation in the House on criminal responsibility of corporations, managers and administrators.

That has been the legislative process so far. Beginning with a private member's bill, facing many challenges, we have finally, through sheer tenacity, ended up with a government bill. In the end, the government had almost no choice but to introduce something. We started with a vague private member's bill, and ended up with a recommendation from the Standing Committee on Justice and Human Rights, telling the government that it must act. And that is how Bill C-45 came to be introduced in the House.

The main changes pertain, first, to the use of the term “organization”, rather than “corporation”. This will take in more institutions, including institutions that otherwise would not have been covered and could have continued to engage in inappropriate behaviour.

The bill also says that a company can be held criminally liable for the acts of employees who are not necessarily senior officers in the company. We know that with the multitude of hierarchical levels, under the current Criminal Code there would be no way to ensure that someone who committed a reprehensible act could be prosecuted accordingly and forced to assume the consequences of what he had done. Part of this is corrected in the current bill.

The material aspect—the act of committing a crime—and the moral aspect—the intent to commit a crime—of criminal offences attributed to companies and other organizations no longer need be the work of the same person. It is possible that in an organization where a criminal act has been committed, that someone utters the intent to commit the crime and directs someone else to do it. Now this distinction can be made in charges and in the how the behaviour of people involved in this type of situation is judged.

When it comes to criminal negligence, the moral aspect of the offence could be attributed to the organization insofar as it can be attributed to one of the organization's senior officers. For these aspects, it is essential that fault be attributable to one of the senior officers of the organization.

With regard to mens rea, the organization could be held responsible for the actions of its senior officers if a senior officer is party to the offence or directs other employees to commit an offence or if a senior officer, knowing that an employee is about to be party to an offence, does nothing to stop them.

I would say that this is the crux of the bill. It was truly this side of it that had major flaws and blame could go back and forth without anyone ever having to take responsibility.

The bill also explicitly imposes an obligation on those with the authority to direct the work of other employees to take the necessary steps to prevent bodily harm to those individuals.

The bill also establishes sentencing principles and conditions of probation for organizations. It was important to have clear and specific penalties, so that people would know exactly what the consequences of their actions would be. This did not exist previously in the Criminal Code, which led to the Westray mine situation, where it was impossible to establish liability and to ensure that it was assumed correctly. This gave a very bad example for the future and created legal precedents. This is why it was necessary to legislate.

We know that, in Canada, the conditions under which a corporation can be held criminally liable are essentially based on jurisprudence. Therefore, it was important to have adequate legislation as a basis for jurisprudence.

The bill also amends current legislation so that organizations other than corporations can be held criminally liable. Indeed, under this bill, the term organization includes a public body, body corporate, society,company, firm, partnership, tradeunion or municipality. Let us hope that we did not forget other types of organizations that could be placed in such situations. The definition appears to be broad enough to cover all those who should be covered.

The bill also says that the term organization includes any association of persons thatis created for a common purpose,has an operational structure, andholds itself out to the public as anassociation of persons. We see that the legislator really wanted the definition to be as broad as possible. It is not only the employer that is included but any other type of organization, so as to prevent the same kind of situation from happening again. The government is ensuring that the legislation was not corrected only to cover a certain type of organization or employer, but all the different types of associations.

The bill also deals with the issue of safety in the workplace when it says, with respect to section 217.1, that every one who undertakes, or has theauthority, to direct how another person doeswork or performs a task is under a legal dutyto take reasonable steps to prevent bodilyharm to that person, or any other person,arising from that work or task. This new provision will make it possible to charge people in positions of responsibily who have failed to meet this obligation with criminal negligence.

Again, this measure comes from the impact analysis of the tragedy at the Westray mine. Of course, it will not bring back those who died in that terrible accident and are still mourned by their families.

However, this bill at least gives those families the assurance that legislators have learned their lessons and are trying to ensure that such a tragedy never occurs again.

Sentencing these organizations is another issue on which we put a lot of emphasis. The bill would add new sections and expand existing sections to take into account, during sentencing, factors that are characteristic of organizations. A specific section is also added to regulate the probation conditions applicable to organizations.

Overall, this bill seems to solve one of the problems linked to the tragedy at the Westray mine. For all these reasons, the Bloc Quebecois supports the principle of Bill C-45.

Given the current state of the law, we believe it is important to establish a regime of criminal responsibility for businesses that is effective and takes into account the differences between an individual and an organization.

However, I would like to voice a concern regarding offences. Indeed, mens rea is required, in other words, to prove that intent is above and beyond that required for criminal negligence. A first look at clause 22(3) leaves questions as to how effective this clause will be when it is applied to a specific situation.

We have reached a level of proof that, in practice, might be difficult to achieve. We made these comments in committee and at other stages. This has not been corrected, but let us hope that with respect to jurisprudence, we will not end up in a situation where we have to amend the legislation because it was not accurate enough in the first place.

I want to reiterate that Bill C-284, which had been presented by the NDP, proposed a solution to this difficulty by including the possibility of reversing the burden of proof for corporations. Reversing the burden of proof would work as follows: once it has been established that the employees of an organization have committed an act or made an omission leading to the commission of a crime, that organization would have to prove that it neither authorized nor tolerated such behaviour.

Thus, it would be a kind of preventive measure to avoid that kind of situation. We also should note that the bill does not in any way make it possible to impute criminal responsibility to administrators of corporations, unless the corporation itself has committed a criminal act.

Perhaps this amendment was not included in Bill C-45 for constitutional reasons. Still, it remains open to interpretation, which I hope will not leave an opportunity for people with bad intentions to commit a criminal act without being subject to the appropriate sanctions.

Certainly, the entire bill must be examined very carefully to ensure that it is effective; still, its objective remains valid and necessary in order to make organizations answer for their acts.

I believe that this is the kind of law on which we will look back in 10, 15 or 20 years and say that it brought in real improvements to prevent unacceptable behaviour. It will have corrected something that had caused a great deal of pain in the past, particularly to the families of the victims of this accident.

Nevertheless, it will be clear that the measures that legislators in this field have taken will have helped correct the situation. We can hope that this kind of situation will never happen again and that there will be no need to intervene before the courts to obtain convictions. The way the bill has been written and the information that will be provided to various organizations are intended to make people in all kinds of organizations aware of the fact that they will be held responsible for the consequences of their actions. Thus, we hope to avoid a repetition of the terrible accident at the Westray mine.

In conclusion, I want to express my wishes, and those of many members of this House, that we will be able to pass this bill and that it will come into effect as soon as possible.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I am happy on this occasion to have the opportunity to speak briefly in the final reading stage of the so-called Westray bill, Bill C-45, that is now before the House.

I want to take the opportunity to pay tribute, where I think tribute is owing, to those Canadians who have worked long and hard to bring the bill to the point where we in fact will have a vehicle to hold criminally accountable corporations, their officers and executive members who knowingly put at risk the lives of their employees.

I think credit must first and foremost go to the families, the survivors of the Westray miners, 26 of whom lost their lives in my province of Nova Scotia over a decade ago, and to the surviving miners who had been employed at Westray but, fortunately, were not working in the mine on the occasion when this tragic disaster occurred.

Second, credit is owing to the trade union movement and, in particular, to the United Steel Workers of America which made a commitment that was not required in law and not a commitment it had entered into in any contractual way but in fact a commitment to help the Westray miners organize. A vote had been cast by the Westray miners but because the ballots were counted after the 26 deaths occurred, it turned out that the Westray miners had sought to be represented by the United Steel Workers of America.

The mine closed but the steel workers never faltered, never hesitated. They poured their heart and soul, blood and guts into pressing for the kind of changes in law, the changes in health and safety practices in Nova Scotia and across the country, that would ensure never again would there be an occurrence permitted in this country such as what happened at Westray.

Credit must also be shared with those who have lost their lives and others who have advocated on behalf of workers who lost their lives or lost their health or lost limbs in workplace accidents, who have also understood the need for changes in the Criminal Code to make it possible to establish corporate responsibility and accountability and, where appropriate, corporate criminality when employers act in grotesquely irresponsible ways that endanger the lives of their workers.

I want to underscore the tragedy of the government having taken so long to reach this point of bringing the legislation forward by mentioning 21 year old Lewis Wheelan. He was employed by Ontario hydro to clear brush. In Nova Scotia we call it Power Corporation. Through what was a horrendously irresponsible set of circumstances, for which the employer was responsible, this young man initially suffered a serious workplace injury and became a triple amputee. He struggled valiantly to rehabilitate himself but in a double tragedy and a double irony he lost his life during the recent Ontario hydro power outage.

His father wrote to me a few days ago expressing concern about the possibility that the bill would die on the Order Paper as a result of premature prorogation or the recessing of this session of Parliament. I do not think we should leave it to chance. We should ensure that the legislation is effective.

Had the legislation now before the House been in place in May 2001, when Mr. Wheelan's son suffered his severe workplace accident, the employer, Great Lakes Power Corporation, a subsidiary of Brascan Corporation, would have found itself in the criminal courts facing the kind of sanctions and ultimate justice that are in the bill.

It is too late for Lewis Wheelan and the other Lewis Wheelans of the world who have lost their lives over the last 10 years in what might have been preventable workplace accidents or injuries and ultimately workplace fatalities but let us not delay further the full implementation of the legislation.

I have been concerned, and I know others have been concerned from the beginning, about whether the legislation is as far-reaching as it needs to be. We do not know whether the bill captures all of those intended by the recommendations of the judge who presided over the Westray inquiry. Departmental officials have insisted that those concerns are unfounded and they have been adamant that executives, officers or CEOs of corporations who might engage in criminally irresponsible activity as it relates to the lives of their employees will be fully covered under the legislation. I hope those assurances are based on solid ground.

There also has been a concern about whether the definition of organizations is one that is entirely appropriate and whether there is any possibility that inadvertently those who would be least expected to be held responsible for workplace injuries or fatalities might find themselves being blamed and others in fact finding themselves getting off scot-free. We have been given assurances that these concerns are, if not ill-founded, that there is a remote possibility that those concerns are on solid ground.

For that reason, I and the New Democratic Party caucus are prepared to indicate our support for the legislation. It may not give us the most stringent possible measures but in this instance it is certainly an improvement over the disgraceful situation as it relates to holding employers fully responsible for criminally irresponsible actions in the workplace.

I again pay tribute to those who have worked to bring this about. I think some credit also needs to go to the justice committee. Sometimes it is not evident to the general public that parliamentary committees working under the umbrella of Parliament, in this case the parliamentary committee on justice, get the job done. It is true that sometimes committees are hopelessly bogged down, paralyzed or engaged in dismaying partisan manoeuvring in the eyes of the public but in this case some credit has to go to the chairman of the justice committee, the member from the Fredericton area and two other members of the committee for ensuring that this necessary legislation has now reached this stage in the completion of the parliamentary process.

The bill was first introduced by me in a private member's bill and died on the Order Paper. It was then introduced by my colleague, the member for Churchill, and died on the Order Paper.

It is much appreciated that enough members of the House saw the necessity of moving forward. The justice committee had a genuine and sincere debate on whether it was necessary, once the government sponsored its own legislation, to have a full array of witnesses come before the committee yet again. Given the urgency of getting on with the legislation, we appreciate the cooperation at the justice committee to recognize the possibility that bringing forward a whole series of witnesses all over again was perhaps unnecessary and, in any case, could jeopardize the importance of the legislation being enacted before the House faces the possibility of prorogation.

To all those who have contributed, I send a heartfelt expression of appreciation. In the final analysis, to those who have paid with their lives in preventable workplace deaths, accidents and injuries, it is hoped that this, in the future, will allow family members to say that lives and limbs were not lost, that people did not sacrifice their health without there finally being an appropriate response from the federal government to do what it could to prevent such fatalities and tragedies in the future.

[Inky Mark, Canadian Alliance, Dauphin—Swan River, MB]

Mr. Speaker, it is a pleasure on behalf of the Progressive Conservative Party to take part in the debate on this very important bill, known as the Westray bill. Certainly, the Progressive Conservative Party wishes to see its quick passage.

The purpose of the bill is to amend the Criminal Code to establish rules for attributing organizations with criminal liability for the acts of their representatives. It would establish the legal duty of persons directing work to ensure the safety of workers. It sets out factors for courts to consider when sentencing organizations and provides conditions for court imposed probations.

Bill C-45 is billed as the government's long awaited response to the findings of a public inquiry into the Westray mining disaster.

On May 9, 1992, an explosion at the Westray site in Plymouth, Nova Scotia, killed 26 coal miners. As a result, the mine's parent company, Curragh Inc., and two on-site managers were charged with manslaughter and criminal negligence causing death. Despite evidence of lax safety standards and hazardous conditions in the mine, the case failed at trial sparking allegations of abuse of the court process and appeals to the Supreme Court.

The founder of Curragh Inc. refused to testify at the subsequent public inquiry calling it a farce, which prompted a public outcry over the lack of corporate accountability.

In 1997, inquiry commissioner Justice Peter Richard, issued the final report that accused mine managers and government inspectors of dereliction of their duties. A key recommendation from the report called upon the federal government to ensure that corporate executives and directors were held properly accountable for workplace safety.

Let me go over some of the highlights of the bill.

The criminal liability of corporations and other organizations will no longer depend on a senior member of the organization with policy making authority; that is, a directing mind of the organization having committed the offence.

Another highlight is the physical and mental elements of criminal offences attributable to corporations and other organizations will no longer need to be derived from the same individual. The class of personnel whose act or omissions can supply the physical elements of a crime attributable to a corporation or other organizations will be expanded to include all employees, agents and contractors.

Another highlight is that for negligence based crimes, the middle element of the offence, mens rea , will be attributable to corporations and other organizations through the aggregate fault of the organization's senior officials, which will include those members of management with operational as well as policy making authority.

For crimes of intent or recklessness, criminal intent will be attributable to a corporation or other organizations where a senior officer is a party to the offence or where a senior officer has knowledge of the commission of the offence by other members of the organization and fails to take all reasonable steps to prevent or stop the commission of the offence. Sentencing principles specifically designed for corporate organizational offenders will be adopted.

Another highlight is that special rules of criminal liability for corporate executives will be rejected.

The last highlight that I will provide is that an explicit legal duty will be established on the part of those with responsibility for directing the work of others, requiring such individuals to take reasonable steps to prevent bodily harm arising from such work.

It should be noted that none of the provisions in the bill are retroactive. The government claims that the bill should make it easier to convict companies and other officials of crime that injure workers or the public.

Although specifying that an organization may be held responsible for occupational safety matters is a step forward, the bill does not address what happens if a negligent organization ceases to exist.

For example, Curragh Inc. was bankrupt by the time the Westray prosecutions could have started, meaning that imposing a fine and preventative safety measures in that case would have been meaningless punishment.

The Canadian Federation of Independent Business said that the bill has the potential to end up as mere feel good legislation, meaning that it would have little practical impact. It says that it would rather see the federal government assist businesses to meet their existing health and safety obligations.

However, many groups have come out in favour of this legislation. Physicians for a Smoke-Free Canada, for example, have stated that it believes Bill C-45 will effectively ban smoking in all workplaces, as second-hand smoke is considered a health hazard, and the bill requires employers to take reasonable measures to protect employee safety.

Also nothing in the bill suggests that it will be easier for workers or members of the public to receive direct compensation from corporations for their wrongdoings. One possible way to address this would be to distribute fines collected from organizations found guilty of workplace safety violations to the individuals directly harmed by the offence.

The bill also does not deal completely with the responsibility and accountability of corporate directors for unsafe work environments. The definition of a “senior officer” specifically includes the director, chief executive officer and chief financial officer, but does not mention lower level corporate executives and officers.

In closing, despite the failings of the bill, the PC Party believes that it is better than no bill at all and we certainly encourage its quick passage through this House as well as the Senate.

[Richard Marceau, Bloc, Charlesbourg—Jacques-Cartier, QC]

Mr. Speaker, it is with great pleasure that I rise today to speak to Bill C-45. As you know, the purpose of the bill is to carry out an indepth review of the principles of law governing the liability of corporations and other associations of persons for all criminal offences.

I want to commend committee members for their cooperation. All parties put their shoulders to the wheel so that the bill could be passed quickly, and in as non-partisan a fashion as possible.

It is also interesting and crucial to remind the House that this bill is the outcome of the efforts of ordinary members of this House and not an initiative of the government. Members worked hard to ensure that tragedies such as the one we saw at the Westray mine would never occur again or, if they did, that very harsh penalties could be incurred.

To understand the issues, it is important and even essential to put them into context. We remember that at the Westray mine, in Nova Scotia, 26 men, 26 mine workers died, leaving wives and children behind, creating sadness for women and children who did not deserve to lose their loved ones. We also remember that the public inquiry revealed that the tragedy was caused in large part by the negligence of the bosses, who had turned a blind eye to some serious safety problems.

For more than five years, the government did not do a thing in response to this inquiry. MPs had to bring pressure to bear to get substantial legislative changes passed to ensure that such a situation will happen again. These members worked hard, with the fierce and constant support of the families of the victims of Westray.

In June 1999, a motion was put forward to amend the Criminal Code and other federal legislation so that the directors and officers of a company would be held responsible for workplace safety. At the time, the Bloc Quebecois supported the motion, but when Parliament was dissolved, the motion died on the order paper. Since then, similar motions were brought in on several occasions. But we must recognize that the government dragged its feet until it introduced Bill C-45.

Bill C-45 is based on eight key points I will review here:

First, to the use of the term organization, rather than corporation. This will broaden the definition, thereby affecting more institutions.

Second, companies can now be held criminally liable for the acts of their employees who are not necessarily in positions of authority or, as they are commonly referred to, the higher ups.

Third, the material aspect—the act of committing a crime—and the moral aspect—the intent to commit a crime, the mens rea —of criminal offences attributed to companies and other organizations no longer need be the work of the same person.

Fourth, the category of persons whose acts or omissions can constitute the material aspect—meaning the criminal act that can be attributed to a corporation or any other organization—is broadened to include all employees, representatives or contractors.

Fifth, with regard to crimes resulting from negligence, generally referred to as criminal negligence, the fault can now be attributed to the organization to the extent that one of the senior officers of the organization can be charged with the offence.

Sixth, in the case of deliberate crimes, an organization can now be held responsible for the actions of its senior officers to the extent that a senior officer is party to the offence, directs other employees to commit an offence or, knowing that an offence will be committed by other employees, does nothing to prevent it. It is important to clarify, nonetheless, that the acts or actions of senior officers must be committed with the specific purpose of procuring an advantage for the organization.

Seventh, the bill is designed to place the onus explicitly on anyone who undertakes to direct the work of other employees to take all reasonable steps to prevent bodily harm to these employees

Finally, the bill also contains provisions for establishing general sentencing principles and probation conditions in respect of the organizations.

We are therefore extremely pleased with this bill. We support it, although we would have liked to have seen it sooner.

Although enactment of Bill C-45 cannot of course compensate the families, the women and children who have lost husbands, fathers, brothers, we do hope that Bill C-45 will at least lessen their suffering somewhat and will give those who have lost loved ones in such tragic circumstances some feeling that justice has been done.

[Darrel Stinson, Canadian Alliance, Okanagan—Shuswap, BC]

Mr. Speaker, it is a pleasure to comment on Bill C-45. I would really like to think of it as the Westray bill.

When I was first elected in 1993, representatives of the small communities of Plymouth and Stellarton, Nova Scotia were among the first to come to see me as I was serving as the mining critic for the official opposition. They still come to see me today .

Back in 1993 they sought justice regarding 26 working miners, their neighbours, friends and customers, sons and fathers, husbands and brothers, who died underground in the Westray mine disaster on May 9, 1992. Since then, at least one folk song has been written about it, the title of which is “Everybody Knew”. I have travelled to the area several times and have found that is a fact; everybody knew there were problems with that coal mine. Everybody knew conditions were not safe, yet management sent those men into unsafe conditions day after day until what seemed to be almost inevitable happened.

According to the Westray mine public inquiry, sparks struck by cutting bits from the continuous miner, a machine working the southwest 2 section of the mine, ignited coal dust and she blew, taking not only those families' dear ones, and hopes and dreams, but also the traditional Cape Breton coal mining economy with it. That inquiry also found:

Had there been adequate ventilation, had there been adequate treatment of coal dust, and had there been adequate training and an appreciation by management for a safety ethic, those sparks would have faded harmlessly.

Today, over 11 years later, to the best of my knowledge not one representative of the resource company, not one mining inspector, not one provincial or federal bureaucrat from the Department of Natural Resources, Environment Canada or the Department of Labour has served one day in jail for what seems to me, admittedly not a lawyer, their criminal negligence in those 26 preventable deaths.

The federal government helped finance this mine so it cannot simply wash its hands and point the finger of blame solely at the province. As the report states:

Westray took over development from Canadian Mining Development in early April 1991, at a much earlier stage of development than originally planned, and began using continuous mining machines to drive the mains.

Still quoting from the report:

In the rush to reach saleable coal, workers without adequate coal mining experience were promoted to newly created supervisory positions. Workers were not trained by Westray in safe work methods or in recognizing dangerous roof conditions--despite a major roof collapse in August. Basic safety measures were ignored or performed inadequately. Stone dusting, for example, a critical and standard practice that renders coal dust non-explosive, was carried out sporadically by volunteers on overtime following their 12-hour shifts.

Here are some further quotes:

Management trivialized the concerns of workers, some of whom quit their jobs at the mine. Although the mine inspectors asked the company for roof support plans, as well as stone dusting plans, it repeatedly deferred supplying them. Westray is a stark example of an operation where production demands resulted in the violation of the basic and fundamental tenets of safe mining practice.

As Mr. Don Mitchell, mining consultant for the Nova Scotia department of labour concluded from his post-explosion investigation of mining safety training, Westray mine “had no program that was appropriate to the needs of that mine”.

I have to ask, why was there no such investigation in time to prevent those 26 deaths? Such blatant disregard for the safety of employees must not be allowed to be repeated. Nevertheless, every day in Canada, workers are still being killed or injured on the job while some corporations simply continue what they do best, make a profit.

Of course most corporations do have a heart and also recognize that good, safe working conditions also are good business practice. It is also true that provincial workers' compensation rates will go up after accidents, and sometimes they go up a lot. However, that financial aspect has not proven to be enough to motivate all corporations into creating safe workplaces.

Therefore, Canada needs both big carrots and big sticks, including federal legislation for criminal liability, to protect vulnerable workers, like the new kid in his job, those young workers most likely suffer workplace injuries.

In conclusion, as mining critic for the official opposition and as one who has personally visited the communities and the United Mine Workers local most affected by the Westray disaster, regardless of whatever other concerns may affect our scheduled business this fall in Parliament, this bill is shamefully overdue. I believe we should pass this legislation post-haste.

[Paul MacKlin, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, the passage of Bill C-45 represents the final step in the House in making significant reforms to the criminal law as it applies to all organizations. The bill has its origins in the terrible tragedy of the Westray mine explosion. All parties in the House cooperated in ensuring that the bill received high priority.

As members know, the bill when passed will significantly modernize Canadian law by expanding the circumstances in which an organization can be held criminally responsible for the actions taken in its name by its representatives.

To accomplish this it will introduce definitions of “organization”, “senior officer” and “representative” that in combination expand the current directing mind test of liability to include persons who manage important aspects of the organization's business. It will codify rules for attributing criminal liability to organizations that reflect the modern, complex decision making structures of organizations. It will set out factors for a court to consider when sentencing an organization. It will provide optional conditions of probation that a court can impose on an organization.

Well run organizations that take seriously their responsibilities as corporate citizens have little to fear from these changes. They would of course be well advised to review their practices and procedures and how much discretion they give to managers. However, the organization will only be held liable when there has been fault on the part of a senior officer. In offences based on negligence, the senior officer will have to have shown a marked departure from the standard of care that could reasonably be expected.

Where the offence is based on fault other than negligence, for example, knowledge or intent, the organization will only be liable if a senior officer who intends to benefit the organization either is a party to the offence personally, or directs the commission of the offence or turns a blind eye to the criminal activity of others.

These new rules are balanced and fair.

With respect to safety, the bill proposes not to separate out corporations and other organizations, but rather to emphasize the importance of ensuring the safety of workers and the public by introducing into the Criminal Code new section 217.1 making it a legal duty for everyone who directs the work or other persons, or who has the authority to do so, to take reasonable steps to prevent bodily harm to that person or any other person.

Officials of the Department of Justice told the standing committee that in an organization with a complex structure, this new duty would apply not only to the organization itself, but also to individuals who may be personally liable in their own capacity, such as senior officers, low level managers, shop foremen, indeed anyone in the corporation who has the authority to direct how work is to be done.

Ultimately, the chief executive officer and the board of directors are responsible for how work is carried out. Clearly, they are not involved in the day to day decisions on the shop floor, but if they act with total disregard of their obligations with respect to work or worker safety and put pressure on the lower level managers to sacrifice safety to production, they could be personally liable.

I believe that Bill C-45 is already having an effect. Worksite News in August ran an editorial under the title “Bill C-45: What You Need To Know To Protect Your Assets Against The New Criminal Liability For Workplace Safety”. In that editorial the author wrote:

Corporate Canada would be well advised to assess their current OHS programs, training budgets and real commitment to workplace health and safety. An effective program with demonstrated clear communication throughout the organization is not only the way to ensure compliance with your legal obligations, but more importantly it helps to ensure the health and safety of your employees.

I understand that officials of the Department of Justice have met with the Canadian Chamber of Commerce and with the occupational health and safety committee of the Canadian Manufacturers and Exporters to explain the potential impact of Bill C-45. They have also participated in a panel on Bill C-45 and the implications of proposed amendments to the Criminal Code as part of the Health and Safety Law Conference 2003 held in Toronto. All members should be encouraged by these signs that corporations and other organizations are considering their policies in the light of this new duty.

I believe that all parties in the House have approached this bill, the previous debate on Bill C-284 and the hearings of the standing committee last year in a non-partisan way, seeking to improve the operation of the law in this important area. I believe that all parties can take pride in their contribution to developing this bill and that the House can unanimously pass this bill and send it to the other place where we hope it will receive the same expeditious, non-partisan consideration.

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, insofar as the last part of the question, in fact such a motion would not change a law in any case. Let me first of all start by saying that this afternoon we will continue with debate on the opposition day non-confidence motion.

Tomorrow we shall consider Bill C-50, respecting veterans benefits, followed by the Senate amendments to Bill C-6, concerning first nations. Then, if we have time, we will consider Bill S-13, an act to amend the Statistics Act.

On Monday, we will consider bills left over from this week, as well as Bill C-32, the Criminal Code amendments, Bill C-13, the Assisted Human Reproduction Act, and Bill C-45, the corporate governance bill.

Tuesday shall be the last allotted day in this budget cycle.

On Wednesday and on subsequent days, we shall return to any unfinished business, adding to the list any bills that may be reported from committee. We will also start debate on Bill C-19, the First Nations Fiscal and Statistical Management Act, and Bill C-43, an act to amend the Fisheries Act.

This is the part of the session when it would be normal for bills that have been in committee for some time to be reported back to the House. I am hopeful that committees, such as the Standing Committee on Justice and Human Rights, the Standing Committee on Citizenship and Immigration and the Standing Committee on Transport, will soon complete their legislative work, so that the House may dispose of them in an orderly fashion.

Committees of the House

[Paul MacKlin, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, I have the honour to present, in both official languages, the fifth report of the Standing Committee on Justice and Human Rights.

Pursuant to its order of reference of Friday, September 19, 2003, your committee has considered Bill C-45, an act to amend the Criminal Code (criminal liability of organizations), and has agreed to report it with amendments.

Criminal Code

[Peter Stoffer, NDP, Sackville—Musquodoboit Valley—Eastern Shore, NS]

Madam Speaker, it gives me great pleasure to speak on behalf of my party and the hon. member for Regina—Qu'Appelle to Bill C-46.

Bill C-46 is the sister bill to Bill C-45, the Westray bill. I want to say at the outset that my party supports the bill in principle, although we would have liked a few amendments and further discussion in committee.

I consider the bill to be important legislation and something that is long overdue. Our research department has indicated to me that David Lewis, Ed Broadbent, Tommy Douglas and others of our party asked for corporate accountability for a long time. Now we are starting to slowly see a bit of that. We have to give credit where it is due, which is to the media for the way it covered the Enron story and the Bre-X story.

Canadians are saying that enough is enough. Canadians are concerned about where their investment dollars go. Workers and their families are concerned about where their pension dollar goes. Nothing can make people more sick to their stomach in terms of our own money than when we see the head of Enron living in a lavish mansion in Florida, with I do not know how many rooms, while the workers at Enron have lost all their pensionable savings. How that can happen in a free and open democratic society like the United States is beyond me.

The question is, can it happen here? Without legislation it probably could.

We are hoping this particular bill has teeth. In order to have teeth, as my hon. colleague said earlier, we must ensure that the authorities who oversee and regulate this type of legislation, whether it be a commission, the RCMP, domestic police services or whoever, have the final authority to investigate, bring charges and make them stick. They will also need the resources because we know these corporations have deep pockets. They could tie up cases of this type in the courts for a long time. It is just the way the legal system is sometimes.

We must ensure that the people who will be prosecuting these companies or corporations in the future have the resources and the technical ability to carry it through. Otherwise, this will fall like a deck of cards.

Another concern is the protection of employees. Although the bill does discuss whistleblower protection, we do not think it goes far enough. Clause 6 of Bill C-46 makes threats and retaliation against employees an offence punishable either as an indictable offence, which carries the maximum sentence of five years, or as a summary offence.

It is quite curious that the government is introducing a law that exposes an employer who makes threats to a punishment that is less than that of extortion. This is especially worrisome when the purpose of clause 6 is to deter employers from committing economic extortion. What we mean by that is that the threat will always be there for employees. What will happen to an employee who decides that someone in the legal or political world needs to know that what is happening in the company is simply not right? Many people will hold back because they do not want to lose their jobs.

As well, if people are in a particular trade or in the financial services world and they become blacklisted, who will hire them? No one should be punished for telling the truth but a lot of people in the corporate world have that fear hanging over them. We also have it in the public service world.

I will just go off track for a moment. It is interesting that the commissioner of the Coast Guard, Mr. Adams, would write a letter to all his employees and say that if any of them have contact with a member of Parliament the Coast Guard wants to know the details of any conversations.

Why would the commissioner of the Coast Guard want to know about my conversation with an employee of the Coast Guard? It is none of the commissioner's business. In a free and open, democratic society, people, in my opinion, have the right to speak to their member of Parliament on any subject.

To turn back to the corporate world, we want to ensure that when people within the corporate world see, hear or feel that something is drastically wrong they will be allowed to speak openly. If they are wrong, the court of public opinion will weigh heavily upon them, but if they are right, they will be doing our country a great service.

As I said before, many of these corporations hire lot of people in this country, and thankfully they do, which is part of the good thing about businesses in this country working hand in hand with government to create a mixed economy, something I have always supported. However the reality is that we must protect people's pensions. We must ensure they have proper working environments and reliable salaries and wages to base their living on.

I come from the airline world. When Canadian Airlines merged with Air Canada I could not help but notice that Air Canada wanted to delay or hold back some of its employees' pension liability funds. We simply will never accept that. The 11th commandment in the world is “Thou shalt not fool around with thy pension”. A pension is what a lot of people work for, be they in the auto industry, the forestry industry, the airline industry or even members of Parliament for that matter.

The fact is that when we leave our places of employment after many years of service we rely on that pension plan to ease ourselves into retirement. For anybody, be it government or business, to attempt to fool around with that pension plan is despicable and criminal.

I am hoping the bill will deal with issues of that nature down the road. I think the essence of the bill is accountability, transparency, openness and fairness. It would ensure that when corporations show us their books and tell us that they were audited fairly by an independent agency that they will not be buffaloing, masking the figures or whatever, that those are the facts.

Who will ever forget Bre-X? I remember people telling me many years ago that I had to get into this Bre-X because it was so hot. They told me that I would be able to retire early if I invested in Bre-X. It was around $95 a share at that time. I possibly should have invested and left when it reached about $130 or $140 but I do not think I would have. I probably would have been like most investors, been a little greedy, held on and then lost everything. Why? Because Bre-X and the people behind it lied to the investors and to the Canadian people. It was out and out fraud.

How many people lost their shirts on that? How many investors were shaken in the stock market because the stock market commissions were not able to or could not, for whatever reason, find out until it was too late? This bill should send a clear warning to companies telling them that if they are thinking about attempting to defraud investors, to screw their employees and everything else, we will keep a very close eye on them. Again, we can only keep that close eye on them if we have the resources and the manpower to get that job done.

It may be my perception but, like anywhere else in a capitalist society, people can make large amounts of money if they are smart, know the right people and have a lot of luck at the same time. The thing is that a lot of those companies in the United States, and the list goes on and on, are corrupt. They use smoke and mirrors. They have influence and conduct insider trading. It goes on and on, and a lot of them get away with it.

However it appears that the United States is not afraid to go after the big guys. We saw the impeachment of Richard Nixon. We saw them go after Bill Clinton. We saw them go after the seventh largest corporation in the United States, Enron. The Americans do not appear to be afraid of these individuals, the amount of money they have or their influence. If they have done something wrong or it is perceived that they have done something wrong in the United States the government will go after them.

The problem in the United States, as it is here, is that far too many companies get away with those kinds of things and that is completely unacceptable.

I will give a quick analysis that was done by our research department. The integrity of our public markets and strong investor confidence has been an important issue for security regulators for a long time because these principles are the necessary foundation for any successful market.

We in the NDP always question the market system of our economy. Many of us in the NDP like a mixed market economy, one with the private sector along with government. We think government could be an appropriate tool and an appropriate avenue to work with private business to develop the economy so that we can equally share our resources across the country. As our famous leader of the CCF, J. S. Woodsworth, once said “What we desire for ourselves, we wish for all”.

If the market is perceived to be corrupt or influenced in any way, shape or form by some shady characters or some outside sources that makes investors very nervous and they will put their money somewhere else.

The main contribution that Bill C-46 makes to this effort is to act as a greater deterrent to would-be insider traders and provide courts with the authority to compel the production of documents to determine the nature and extent of insider trading.

Insider trading is a tempting way to take care of one's friends. If we had a lot of stock, let us say in Air Canada, which I believe is trading now at anywhere between $1.10 and $1.30, and we knew tomorrow that a big deal would be coming up for Air Canada that could raise the price of shares, would we not love to know that information beforehand so we could either buy more or sell out, depending on the circumstances? There are not too many Canadians who would not love to have that type of information but that information, called insider trading, is extremely dangerous to the confidence of all other investors.

What happens is that only a select few, those in the inner circle of whatever that kind of information will assist, will get it, while the vast majority of investors will be left out in the cold. That is simply wrong. I am glad to see that the bill actually tries to do something about that.

The codification of aggravating sentencing factors and the elimination of mitigating factors, such as status and reputation, if those attributes were relevant to the commission of the offence, will develop a more consistent and certain punishment regime. That is something we support. If corporate criminals want to commit those kinds of act and break the trust of investors and ordinary Canadians, we believe they should be punished to the fullest extent of the law. We like the idea of punishment for fraud going from 10 years to 14 years, fraud affecting capital markets going from 10 years to 14 years and market manipulation going from 5 years to 10 years.

I want to make sure that it just does not say “Here is your 14 year sentence but, by the way, if you serve one-third of it, with good behaviour off you go”. No. We have to make a strong deterrent and make sure that 14 years means 14 years.

I know of other concerns. Let us look at someone who commits a criminal act and gets eight years. I had an individual in my riding who had eight previous impaired charges and on the ninth one he actually killed someone, an 18 year old girl. He was sentenced to eight years but only served two of them. Many citizens in my riding, including myself, were extremely upset when that sentence was reduced.

It is just like Bill C-46 on corporate crime. When the head of a major company, which employees thousands of people, defrauds their pension plans, he or she only gets a few years while the employees lose all their savings and lose everything, which means that if they had no private savings of their own and have no other means of supporting themselves they will then turn to the government for assistance. The government should try to prevent that by making sure that if the bill says 14 years, then that is what the person gets, not 3 years and not if they are really good in jail they can go early. That is nonsense.

The NDP will ensure that further amendments come to this bill. We have always said that corporate accountability, business accountability, is extremely important. To the best of our ability we will make the government aware that any agencies or regulatory authorities must have the manpower and the resources to carry out identification and charging, to ensure that they have the wherewithal to carry through with those cases.

As I said earlier, companies can be charged but when the companies have all kinds of money to fight these cases, they can tie them up in the courts for a long, long time with appeal after appeal. Our judicial system must have the authority, the manpower and the staying power to ensure that cases result in convictions. In the end we must protect the investors, protect our workers and protect fellow businesses not only in this country but around the world. If we prove to investors around the world who are looking to invest in Canada that we have a fair, transparent and open system, that would go a long way in building our economy in the future.

There is still an unanswered question to which I have not received a satisfactory answer. It has to do with trade deals such as the WTO, NAFTA, or whatever they may be. Now that many of these companies are becoming very international in their nature, will this domestic law stand up to those trade deals in terms of people who own companies but do not actually reside in Canada? Will we be able to bring them to court satisfactorily with these trade deals hanging over us? Will those trade deals impede us from bringing this type of domestic legislation to the forefront? I do not know, but I would like those questions answered.

I am proud to say that our party will be supporting this bill in principle.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to speak in the House today to Bill C-46, an act to amend the Criminal Code (capital markets fraud and evidence-gathering).

It is tempting to go down the road, as several speakers have, about the government and its practices versus what it is trying to accomplish in the bill, but I will not do that. I want to talk about this specific bill and feature some of the things that I think are positive but also some of the major weaknesses that need to be discussed.

I know that with the coming election boundary changes we are fast-tracking that bill for the member for LaSalle—Émard to make sure the provincial requirements for new seats will happen. That is something that has been going over the summer and it is happening right now.

I would expect the same thing to happen to Bill C-46. Because it is important for Canadian families and for businesses we need to ensure the business of the House is not ground out. I do not want to see that hypocrisy. The bill is certainly owed to the general public.

The mere fact that we are talking about this shows us that the entire free market system has been shattered by unprecedented corporate fraud. Formerly reputable accounting firms, business leaders and banks have been shaken to their foundations, and it is not just in Canada. WorldCom, Xerox and Enron are good examples in the United States of what has driven us to recognize that there are problems.

These problems highlight a systemic or financial system. It is systemic because it is not just isolated to one or two groups or organizations. They have far-reaching effects and they involve multiple companies and organizations that we do not even know about.

We have focused exclusively on the top, not just the medium and the small, which we still do not know about. Plenty of excellent corporations, which are working very well within the system, are being punished as well because others are abusing it. We need to make sure that stops. There is no doubt about that.

The current spin by the financial market backers and government backers is that this is individual ethics rather than a systemic problem. However the reality is that right now we require the toughest policing between lawyers, police officers and investigators and l to ensure that people can come forth with information and we can gather information. That is a significant change over the last several years. That is an identification that we have systemic problems with our system that is hurting, not only people who invest money but the development of our free market economy, and that has to change.

One of the issues that is not addressed in the bill is another question that needs to be raised. I believe it is fraud. We have a system right now where a CEO can come into a company, cut thousands of workers, sell equipment and assets, raise the price of the stock for the short term, get a big cash handout, a series of bonuses and then leave the company in ruin. That also has to be addressed. The bill does not address that but we should start talking about that as a change to the system.

We have literally thousands of workers who have lost their jobs and people who have lost their investments for a short term, and that has to stop.

This has been driven by a number of issues that have happened in the United States and worldwide, as we said, where millions of dollars have been lost.

The U.S. congress responded by passing the Sarbanes-Oxley act and enhancing enforcement and funding to support investigations and prosecutions. It was very swift and clear on this and here we are still fumbling with it through our system. That is not acceptable.

After listening to thee discussions today from the government side and the opposition parties, it sounds like there is support. My hope is that we will continue to press that and ensure that we at least have some improvements. Where those improvements should go in terms of the length and distance, everything from the actual types of tools that the prosecutors have to the actual fines and jail time, might be different but we have to make sure that something gets through.

I hope we go for some very strong laws and improvements that the bill requires.

On June 12, 2003, Bill C-46, a companion to Bill C-45, the Westray bill, was tabled and presented as a Canadian response to the Enron fiasco and the Sarbanes-Oxley act. It is important to note that we are talking as well about some environmental and human safety issues at the workplace. It would make people responsible for their actions and they no longer would be able to hide behind a corporate identity or symbol. It would actually bring to the forefront people who make decisions and who are derelict in their duties.

This is something that is actually important and exciting, because it gives those people providing good, stable jobs with the best practices the ability to compete with those who cheat the system.

This package intended to maintain investors' confidence in Canada's publicly traded companies includes spending of $120 million over the next five years, together with proposed amendments to the Criminal Code. The money would go towards the creation of six integrated market teams, IMETs, made up of RCMP investigators, federal lawyers and other experts.

That in itself is acknowledgment once again of systemic problems. We have a government that has a record of dismantling public service and privatizing. That is the record over the last 10 years. The government is now admitting it needs to create another body to deal with this problem. If it is $120 million, I do not believe that is going to be sufficient, because the document itself outlines the fact that government is going to go after the major perpetrators, that they will not be able to get to the other ones. The government is scratching the surface with this.

Despite that, the $120 million may not even be enough money for policing the greatest of crimes. Hopefully when we get to the committee stage we will hear from delegations and from witnesses and experts who will bring numbers forward. I would expect that suggestions will be made to raise that amount of $120 million to provide for appropriate legal repercussions and prosecution so that people do not get away.

Bill C-46 makes insider trading a criminal offence with a 10 year sentence. The bill targets employees of corporations and others who use privileged information not available to other investors to benefit themselves. That is a significant achievement in itself. It shows that there actually will be some repercussions. I do not believe that is enough. I will get into that later with a comparison of what is happening in the United States. I believe we need to go farther than that.

It also creates a new offence punishable by up to five years in jail to prohibit intimidating or retaliating against employees who report fraud and other unlawful practices or conduct in the financial markets. This will protect employees from employment related harassment and punishment; that is whistle-blowing. Members of the New Democratic Party have been calling and advocating for whistle-blowing protection for many years. It is a good feature to have, but five years is not enough to protect an employee.

We know that some of these people may not necessarily even get prison time. They could be out and they could also hold other jobs with competitors. They could have inroads with groups, organizations or other investors and that could have a repercussion on employees. I want to see greater detail on how we can protect those employees to make sure that when they step forward they have the confidence that not only will their business will support them, but also that outside of that the Government of Canada and the institutions of justice will protect them and their family.

Without that, we are going to lose many files. We will see many cases requiring more investigation and cost. We have to simply say that we will not let people hang out to dry by themselves, that we are going to protect them and their families when they have the courage to step forward. That has not happened enough in the past.

Right now the bill also codifies non-mitigating factors. For example, if a corporation has been a good corporate citizen and used that leverage, then it will be used against a corporation not to lessen a fine. That is an improvement. That is a first step and there is no doubt about that.

I think we should be looking at other things over a company's history to see what taxable deductions it has been using. Has it been lunches? How much booze has been written off? What about the environment? Has it actually caused environmental problems and written them back as a tax deduction? That can currently be done in the government's program. A company can spill or create a toxic waste and actually get a fine and then at the same time claim it back on income tax. Has the company done these things?

There are political donations, golf games, and all the different things that a company has used through their system. They should be examined. The corporation should be made to pay it back if it has actually had someone on the take or was basically using information or those experiences to better their position or to share that arrangement amongst people. The reality is that taxpayers end up paying for that as they write off those deductions. Taxpayers are subsidizing those deductions. All of that should be added to the actual bill.

Right now Bill C-46 creates a new procedural mechanism by which persons will be required to produce documents, data or information in specific circumstances. One of the good things about the bill is that these production orders may be issued without another party's knowledge, which will allow investigators to gather evidence from third parties such as banks and auditors without tipping off the subject of their investigation.

That goes back to my position on whistle-blowers. We would be able to save millions of dollars, strengthen cases and ensure that justice would be done if we can get that information and cooperation, but that takes the confidence of those people stepping forward. As it is right now, I do not believe the bill provides that confidence. It does not provide that ironclad commitment required. We know that this type of system will actually create better opportunities for us to prosecute and to be successful, but once again, that has to be enshrined in such a way that people feel protected.

As things stand right now, there is a deterrent effect. Punishment for fraud would increase from 10 to 14 years, for fraud affecting capital markets from 10 to 14 years, and for market manipulation from 5 to 10 years. I believe that is not enough. That has to change. We should be looking for stiffer penalties. As well, if damages are over $1 million fines could be increased. Perhaps we have to look at lowering that $1 million. I am not sure whether I am comfortable with that and I am looking forward to hearing witnesses come forward to discuss that.

The bill also allows the Crown to prosecute for insider trading. That is very important. We think that should move forward right away.

One of the concerns we do have with the bill it is that there are still some vague definitions involved. There is an issue of vague information in regard to insider trading, that is, how significant is significant? The definition is not there. We know that there can be increased penalties because significant information comes forward or there is significant alteration on the market, but who is going to define that? I do not think that leaving this entirely to the courts is good. Whether it is a 15% drop in the stock or a financial issue affecting later performance, those are things we have concerns about. We would like to see these further defined.

There is another aspect of Bill C-46. Once again I will go back to whistle-blowing; I can do this quite a bit because we have been talking about whistle-blowing for years. Instead of amending the Criminal Code we should keep the broader definition of extortion so that it still exposes offenders to an indictable offence punishable by life in prison. What we can do is make sure that it is one of the harshest penalties out there.

There is no mention in the bill of accessories to fraud or wilful blindness. I am going to go through a brief scenario on Enron to give an example of some of the weaknesses of the bill that we need to discuss. Obviously the offence of fraud requires an element of intent to deceive, but what happens when there is no intent to defraud yet the failure to act allowed the deception to take place in itself?

For instance, let us take the example of the Enron fiasco, which in part prompted this legislation. There, the accounting firm of Arthur Andersen admitted to making “errors in judgment”. It shredded thousands of documents relating to its audit of Enron and suspected or knew that Enron was breaking security regulations.

Most cases prosecuted under this legislation will not involve outside firms such as accounting firms so closely involved in the actual offence, but the example illustrates how an outside firm's omissions can contribute to commission of the offence itself. That is why under Bill C-46 we need to explore the possibility of imposing a legal duty on outside firms dealing with financial statements or companies to take reasonable steps to verify or scrutinize the accounting practices of their clients to expose them to criminal liability.

It is not good enough to just pass the buck. We would have those groups and organizations that are actually paid as businesses having to show their confidence in what the corporation has put forth to the market to prove and back up what they have done; they could not hide. That is one of the weaknesses of the bill. It does not go after them the way it should and it would allow situations like that of Enron to continue to happen.

It has become obvious that it is not practical to rely only on the deterrent effects of criminal legislation to prevent such disasters. What is needed are better watchdogs to oversee the affairs of corporations and to ensure that businesses' accounting practices comply with the law that all material information is being disclosed.

Once again it goes back to the whole concept of whistle-blowing to gather that information and ensure that it can be used, and it cannot be just the corporation. We must have those accounting firms responsible. They as well would be responsible. If we look at some of the accounting cases, and I am going to read out a couple of them, we know that they are very important to the actual criminal liability issue. One is Enron, as I mentioned. I will not go through that again except to say that basically in 1997 it overstated its earnings by about $600 million U.S. It should have been responsible and so should all the partners who signed off on that.

Tyco allegedly avoided payment of $1 million U.S. in sales tax on $13.2 million in artwork. They did not show that. They should have been responsible. Adelphia Communications lent billions of dollars to the founders, the Rigas family. The family relinquished control of Adelphia which had defaulted on $7 billion U.S. in debt and filed for chapter 11 bankruptcy protection on June 25. Once again its loan documents and information were not accounted for. Livent is another one where financial records were manipulated to hide losses of $100 million.

Once again, those who sign off on this business need to be responsible and should be considered as part of the offence in itself.

I am going to compare some of the differences between the United States and Canada as we discuss Bill C-46.

Right now for insider trading, Canada gives 10 years in prison. In the United States, the maximum sentence for insider trading is going to increase from 10 years to 20 years, with a fine of up to $5 million U.S. That is the minimum.

For threatening whistle-blowers in Canada, there is up to five years in prison. In the United States it is going to be up to 10 years in prison.

On increased enforcement, they are actually going to be hiring 200 new investigators, lawyers, and auditors and establishing an accounting oversight committee to monitor and regulate accounting industries. That once again goes back to my argument on the accounting, that they are actually identifying that and providing a resource for that.

The sentence for fraud in Canada is raised from 10 years to 14 years. In the U.S. it is actually going up to 20 years in jail.

I agree with the debate about whether or not there should be minimum sentences provided. My concern quite frankly is that a judge could give a minimum sentence which would not act as a deterrent. A person would get a couple of years perhaps and there would be no real repercussions on his or her life beyond that. Maybe there would be some professional repercussions but it would not be the same compared to the businesses and the families that had lost their savings and their ability to plan financially for their futures. I have some real concerns that we may not get the type of deterrents we are seeking.

The government needs to look at this. We need to focus if we are really going to attack this problem. It is systemic. It is not something that happens to one or two companies. We know that fraud occurs and market practices are very vulnerable to a number of people who are taking advantage of the system. We need to be in front making sure that justice is going to happen.

We have a different perspective on corporate crime here in Canada. We see street crime and we act on those things a little differently, but regarding white collar crime we have done very little or nothing at all. That has to change. This bill should move quickly through Parliament to ensure that Canadians are protected and that their investments are there for the future.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Richard Marceau, Bloc, Charlesbourg—Jacques-Cartier, QC]

Mr. Speaker, on behalf of my colleagues in the Bloc Quebecois, I am pleased to take part in this debate at the second reading stage of Bill C-46, sponsored by the Minister of Justice, which deals with capital markets fraud and evidence-gathering.

Members will remember that this bill was introduced just before summer recess last spring, after months of waiting and pressure from all sides. The gigantic financial scandals that we have seen over the last 24 months, such as Enron, Arthur Anderson and WorldCom just to name a few, have shown how urgent it is for the government to legislate in that area in order to protect not only investors but also the whole economic system.

But the government was dismally slow to react, being too busy, no doubt, managing the leadership crisis within the Liberal Party of Canada. The bill was finally introduced, very late unfortunately, but we can nevertheless be pleased that we do have it before us now. I will take this opportunity to say that the Bloc Quebecois will support speedy passage of this bill so that we finally have legislation that will effectively regulate financial transactions and ensure the accountability of business auditors. To this end, the Bloc Quebecois will propose certain amendments to specify both the scope and the spirit of the bill. I will be more specific about these amendments later in my speech.

I would remind members that, in the fall of 2002, the Bloc Quebecois urged the federal government to tighten the provisions of the Criminal Code so that the authorities would have better tools at their disposal to fight corporate fraud. In fact, several elements of the bill stem from our party's contribution to the debate, but we find it unfortunate that some of our suggestions were not accepted.

We still have major concerns about one particular aspect of the bill. We find it difficult to understand that this bill could provide that a federal attorney also has jurisdiction to prosecute Criminal Code offences concerning capital market fraud. This is especially worrisome to us since the federal government publicly announced, or at least suggested, its intention of establishing a Canadian securities regulator.

As you know, and this is an aspect that is particularly important to the Bloc Quebecois, securities regulation clearly falls under the jurisdiction of the governments of Quebec and the provinces. We must therefore ensure that the various jurisdictions are respected, thereby countering the federal government's designs in this respect.

This will be discussed further at committee stage, and I believe we ought to focus on the principle of the bill for the time being. So, the bill amends the Criminal Code and creates two new offences, namely insider trading and threats and retaliation against employees who may have revealed corporate misdeeds. At the same time, the maximum sentence for some offences, including fraud, is increased, and certain rules relating to aggravating and mitigating factors will be codified to facilitate interpretation at the time of sentencing. In addition, the bill gives the Attorney General of Canada jurisdiction to prosecute these offences.

The enactment also provides for new mechanisms whereby certain persons will be compelled to produce documents, data or information that will often be specific. As I said in my introduction, there is a very specific context requiring legislation in the financial sector today.

Corporate scandals in the United States have made us aware of how fragile our financial system is and how much were collectively rely it. Some might think that only major investors can be affected by a financial debacle and that the small savers who make up the most part of the population are therefore relatively safe. The fact is that this is totally untrue.

In fact, the biggest and most powerful financial players are represented by the whole familiar panoply of pension funds, and this inevitably means that part of these funds consists of our fellow citizens' savings. Thus, if a pension fund were to suffer substantial losses, it would be the small investors who would pay the heaviest price, even to the point of losing their life savings and seeing their retirement plans go up in smoke.

In this regard, and without getting too entangled in numbers, in order to understand the factors at stake here, it is important to note that in Canada in 1998, Canadian trusteed pension funds held assets of more than $500 billion. Statistics Canada, in a 1998 report entitled “Trusteed pension funds, financial statistics,” estimated that of the $500 billion held in pension fund assets, about $115 billion was invested in Canadian stocks and some $57 billion in foreign stocks.

These sums, which appear astronomical to ordinary mortals but are commonplace in the financial world, represent the contributions of four million Quebec and Canadian workers to these funds. As an illustration, only the financial assets of the chartered banks exceed the capital held by the pension funds.

There is another important fact that illustrates the need to regulate the integrity of administrators. It has to do with the propensity of trusteed pension funds to favour investment in stocks rather than in fixed interest securities. As such, and in light of the previously mentioned figures, it is clear that a financial crisis as serious as the one suffered by our neighbours to south, would be devastating to Canada. The consequences to the retirement incomes of millions of households would be immeasurable and it is precisely those households that we have to protect.

Fortunately, to date, Canadian markets have been relatively spared from large-scale professional misconduct, except for the scandals involving the former directors of Cinar and Nortel. However, we feel that despite the fact that our securities regulation systems are, in the opinion of many experts, much more comprehensive than that which existed in the United States before the financial crisis, it is nonetheless important to send a clear message to corporate directors that financial misconduct constitutes a serious crime and that the punishment will fit the crime.

This is what prompted the Bloc Quebecois, in the fall of 2002, to call for significant changes to the Criminal Code in order to provide the appropriate authorities with better tools to fight crimes of a financial nature.

A year ago, my colleague from Joliette and I proposed adding a section to the Criminal Code that would make insider trading a criminal offence in order to send a clear message to company directors that the use of confidential information obtained within the scope of their duties for the purpose of making profits or avoiding losses would not be tolerated. This is essentially a question of fair play since making profits or avoiding losses in this manner impacts negatively on other investors who do not have access to the same privileged information.

We had suggested amending the Criminal Code by adding, after section 382, a specific reference to insider trading as a criminal offence punishable by a maximum prison sentence of ten years. We are quite pleased at the interest the government has shown in our proposal by including it in its bill.

Additionally, the Bloc Quebecois proposed that a new offence could be created for securities fraud. This offence, which would be patterned on the measures adopted in the United States, could carry a ten-year jail term. It would prohibit fraud when selling or buying securities. The Bloc had also proposed two amendments to section 397 of the Criminal Code. This section clearly stipulates that fraud is committed by someone who:

—destroys, mutilates, alters, falsifies, makes a false entry in or omits a material particular from, or alters a material particular in a book, paper, writing, valuable security or document.

In our opinion, this provision could have applied to falsified financial statements. Furthermore, subsection 2 of this section makes it a specific offence if documents are falsified with the intent to defraud the creditors.

Currently, both offences carry a five-year prison term. We believe that this sentence is so light that it might not deter unscrupulous individuals from committing fraud for millions of dollars. Consequently, we had proposed increasing the maximum term of imprisonment to ten years.

Finally, we proposed adding a third subsection to section 397 of the Criminal Code to specifically target the falsification of financial documents with the intent to defraud shareholders. We believe that shareholders are a more vulnerable category since, unlike the majority of creditors, their investments are not guaranteed. Furthermore, although the information they are provided with is accessible, it is not easy to understand.

I would remind hon. members that these small investors are included in the major pension funds, and few such investors know exactly what is in their portfolio. We therefore have trouble seeing the reason why there would be a specific offence relating to fraud of which creditors are victims, and yet where shareholders are concerned a similar provision would not be included in the Criminal Code. This is precisely the flaw the Bloc Quebecois wants to correct, and we are hopeful that the government will realize the singular nature of this situation.

As I have said, the government plans to add to the Criminal Code a provision defining insider trading and its criminal nature, subject to up to ten years in prison. Although insider trading is banned at this time under provincial legislation on the sale of securities, and the Canada Business Corporations Act, this new Criminal Code offence is intended for the most egregious offences that merit stiff criminal penalties.

This new proposal for an offence being directly modelled on the Bloc's proposal, we cannot be anything but pleased that it is included in the bill. It seems, for once, that the government has heeded the opposition and bowed to our arguments.

The same thing goes for threats of reprisal against employees. It is necessary, indeed vital, for there to be special protection for employees who blow the whistle on fraud, or contribute information that leads to its discovery by assisting law enforcement officers in the investigation of such situations. The purpose of this is both to reveal such financial frauds and to protect employees from the intimidation which might occur in such circumstances.

Often these people play key roles in the disclosure of corporate scandals, but as a result are at risk of intimidation or threats, including action affecting their employment or means of livelihood. Creation of a new offence of threat or reprisal relating to employment would encourage people with inside information to cooperate with law enforcement officials and would punish those threatening or making use of reprisals. Let us note in passing that this offence would be punishable with up to five years' imprisonment if Bill C-45 is passed with this provision.

Overall, prison sentences would be increased to reflect the gravity of the crime and its repercussions. The proposed reforms would establish aggravating circumstances, which the courts should take into consideration in setting sentences. Thus the bill calls for maximum sentences to rise from 10 to 14 years for the present fraud offences under the Criminal Code, and for those affecting the public market. Maximum prison sentence for market manipulation offences increase from 5 to 10 years.

Factors such as the extent of the economic impact or any negative impact on investor confidence or market stability, defined as aggravating circumstances, could lead to stiffer sentences.

It is also of particular interest that, under these provisions, the accused or convicted person cannot invoke a reputation in the community or work as an attenuating factor for sentencing, This is precisely because these qualities are, more often than not, used to defraud and commit crime. We do acknowledge that these proposals are highly interesting, but regret that the government has not chosen to make use of our suggestions on stiffer sentencing for offences under section 397 of the Criminal Code.

I wish to call the attention of the House to the fact that Bill C-46 will force professionals to breach their duty of confidentiality.

Under certain circumstances, the government's legislative proposal would force a professional to produce information or documents, which could result in the disclosure of confidential information infringing on an individual's privacy.

While the clauses in question provide that the production order may contain terms and conditions to protect a privilegedcommunication, particularly between a lawyer and theirclient, the fact remains that confidential information might be disclosed in certain circumstances. We must therefore ask ourselves if forcing a professional to provide confidential information could undermine the professional-client relationship of trust.

However, a person named in an ordermade under these provisions may apply to a judge for an exemption from therequirement to produce any document, data orinformation referred to in the order. It remains to be seen what bases judges will use to prohibit the disclosure of confidential information.

Before I conclude, I would like to come back to an issue I raised at the beginning of my speech about the involvement of federal prosecutors. In fact, this includes some irritants that would need to be alleviated for the bill to be passed quickly.

As you know, financial market regulation comes under the jurisdiction of Quebec and the other provinces, as does the administration of justice.

Under this bill, the attorney general of Canada would have concurrent jurisdiction with the provinces and the territories to prosecute certain criminal fraud cases, including the proposed new offence of illegal insider trading. Federal involvement in this area would supposedly be limited to cases that threaten the national interest in the integrity of capital markets.

According to information released by the federal government, the Government of Canada will work with the provinces to ensure proper and efficient concurrent jurisdiction by establishing prosecution protocols.

We cannot support such a deliberate encroachment by the federal government in provincial areas of constitutional jurisdiction. What is even worse is that all of this goes to prove the federal government's intent to infringe upon yet another area of Quebec and provincial jurisdiction, the securities market.

Lastly, we are now debating the principle of the bill and we look forward to having the opportunity in committee to examine some of these issues in greater detail. Therefore, at this time, the Bloc Quebecois will support Bill C-46 in principle.

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, I am happy to again have an opportunity to address Bill C-45, which deals with corporate criminal liability.

When debate on second reading began on Monday, I had an opportunity to raise various concerns that had been identified about the legislation in terms of the shortfall, the inadequacy of the provisions in the bill to actually get the job done, to actually act upon the horrifying tragic lessons of the Westray disaster that occurred in my province in 1992 resulting in the deaths of 26 miners.

What the Westray inquiry clearly established was that those deaths were preventable. I will quote directly from the report of Justice Peter Richard when he said that it documented “a complex mosaic of actions, omissions, mistakes, incompetence, apathy, cynicism, stupidity and neglect”.

The details of that horrendously irresponsible behaviour that could be described as nothing less than criminal have been fully spelled out. I will quote briefly from a couple of the specifics that documented the glaring safety abuses, among them: inadequate ventilation design and maintenance that failed to keep methane and coal dust at safe levels; unauthorized mine layout, forcing miners to work risky tunnels to get the coal out faster; methane detectors were disconnected because frequent alarms, signalling dangerous concentrations of methane, interrupted coal production; procedures to stonedust coal to render it non-explosive were done only sporadically, usually before inspections; and an appalling lack of safety training for miners.

There may be some people following the debate on this so-called Westray bill, Bill C-45, who are wondering if this only has to do with coal mining. That is an important question to be addressing. Many people know that coal mining, by its very nature and its very essence, is a very hazardous industry, and that is true, but what has clearly been established is that the most basic, the most elementary, the most fundamental safety precautions that could have prevented this tragedy were not observed, were not enforced by the company that employed those workers and operated that mine.

However it is about more than coal mining and this particular tragedy. It is about the 1,000 men and women in this country who lose their lives in workplace accidents. It is about the close to one million--and it is hard to get one's head around that figure--workplace accidents that occur on an annual basis in this country.

At the end of the day it is not a statistic or an array of statistics that we are talking about. What we are talking about are human lives shattered or terminated, in all too many cases, as a result of practices that could have been improved and accidents prevented.

In the few minutes that remain to me I do not want to talk about more details respecting the Westray disaster because that has been well-documented again and again. It was documented in the private member's bill that I had the privilege of bringing forward in 1999, which died on the Order Paper, and in the private member's bill brought forward by my colleague from Churchill which also was sidelined. However, we are finally at the point where we are dealing with a piece of legislation. It is inadequate to the task but at least it is now before us and we need to get it right.

In the few minutes remaining to me I will talk about a courageous young man by the name of Lewis Wheelan. One month ago today, on August 19, 2003, I received the following message from the parents of Lewis Wheelan, Melanie and Bob Wheelan, from Echo Bay, Ontario. The message reads, “Sadly I share with you the loss of our beloved Lewis. He left us strong and optimistic with nothing but love in his heart even for those who failed him so terribly”.

I want to tell the House the tragic horror story that unfolded on May 30, 2001 for 19 year old Lewis Wheelan, a young man who was energetic, optimistic and who faced a brilliant career.

He reported for his summer job on May 30, 2001 after his first year at university. The second day on the job he was electrocuted by 7,200 volts from a live hydro wire dropped on him as he worked gathering and piling brush for his employer.

As a result of that electrocution he lost his right arm, his right shoulder front and back, both legs, the middle finger of his left hand, partial use of his left hand due to nerve damage in the forearm and was burned over half of his body.

I visited Lewis Wheelan in his home as he was struggling to pull his body and soul together to get out across the country to tell his story and fight for workplace health and safety and, yes, fight for the kind of legislation that we are here considering today, which is legislation to change the Criminal Code to hold corporations accountable for criminal behaviour in putting the lives of employees knowingly at risk in the workplace.

It is a double tragedy that Lewis Wheelan passed away in August, because he was clearing brush under contract to a company that was engaged by Great Lakes Power. In the hearings held to gain convictions for the completely unsafe practices of that company under contract, what was absolutely documented was that this was a private company owned by Brascan that was constantly guilty of cutting corners, of not maintaining the power lines to any kind of safety standard, not clearing the trees and brush in a timely manner and not willing to invest the money to keep the lines safe so that the line that broke, which resulted in Lewis' electrocution and ultimately his death, had 15 splices in it. The company was too cheap to protect the lives of its workers.

However, even though, under the provincial health and safety requirements for training, this company was found to be woefully inadequate, the occupational health and safety division of the Ontario government was not able to hold the four directors charged in this case in any way accountable for their actions.

This is a company that made $240 million last year. It received a fine of $250,000 and, I might say, a tax deductible fine, which my colleague for Winnipeg North has repeatedly talked about as being obscene and something we have to do something about.

It is a double tragedy that this young man's life was ended as a result, again, of inadequate public policy. His life ended as a result of the power blackout; surely a double irony if we consider the workplace accident that occurred in the first place.

As a result of the power blackout, Lewis Wheelan was abandoned for his most basic survival needs. I think two things are underscored by the story of Lewis Wheelan's life. First, the need for us to not just consider the legislation that is before us and uncritically pass it, but for us to send it on to committee where it is absolutely essential that it be tightened up and made more effective in order to achieve the recommendation made by Justice Peter Richard, which was to establish criminal liability for the directors and the senior managers who escape responsibility in such a horrendously irresponsible and reckless situations.

Second, it seems appropriate on this occasion to acknowledge that we need to keep the provision of power, as my provincial colleague, Howard Hampton, has argued again and again, in the public domain where there will be public accountability and where we do not end up with situations of private corporations further contracting out work, such as the maintaining of power lines, completely thumbing their noses at health and safety and not concerning themselves with the impact a power failure has on people' s lives.

I want to say again, as many have, that we welcome the fact that the bill has reached this stage. One steelworker e-mailed me this morning, as many others have, and said “Thank goodness the Westray bill is finally making its way into law”. However let us take the opportunity to do the job right in the name of the 26 Westray miners who lost their lives and in the name of the families of those Westray miners who pleaded to me and my NDP provincial colleagues 11 years ago to see that their loved ones did not lose their lives in vain, to at least leave that legacy for their children. Let us do it in the name of the Lewis Wheelans of this country who have lost their lives by the thousands, 1,000 every year on average, because of workplace health and safety accidents, the overwhelming majority of which could have been prevented.

As the NDP caucus has already indicated, we will be supporting the bill going to committee. Sometimes when we say that we will support a bill to go to committee and we hope there will be improvements when it gets there, we have a kind of sinking feeling that it is a faint hope. The government knew the legislation, as it brought it forward, was inadequate. It did not make the restrictions as tight as they needed to be, the provisions to capture those senior managers and directors. The government knew that.

However I have to say in this case that I am optimistic that the justice committee will do the work that is necessary to make sure this legislation comes back to the House appropriately amended. Why am I optimistic? I am optimistic because it was the justice committee that was willing to act on the private members' bills brought forward by myself and by my colleague from Churchill in the first place and put the government on the spot. Unanimously, members of all parties in the House recommended to the government that it take the essence of Justice Peter Richard's recommendations on the Westray inquiry, the essence of the private members' bills that we brought forward on behalf of the Westray workers and families, and the thousands and thousands of others whose lives have been unnecessary lost, and bring forth legislation to once and for all address this issue.

I appeal to the justice committee to act in that spirit and, having done the homework, having understood the need for this legislation, that it not bring forward nominal amendments that are just tokens, but amendments that will be effective, enforceable and will ensure the job is done.

I look forward to that spirit being carried out by all my colleagues in the House who represent the people of Canada who look for leadership on this issue.

[Bernard Bigras, Bloc, Rosemont—Petite-Patrie, QC]

Madam Speaker, it is with great pleasure that I take part in this debate today on Bill C-45, which deals, among other things and most importantly, with the criminal liability of organizations.

It is with great pleasure that I do so, because I had the opportunity, over a year ago, to attend the convention of the Canadian Labour Congress, the CLC, in Montreal. The CLC had made a number of parliamentarians aware of the problem. I remember this convention in Montreal quite well. Some parliamentarians were present. I was there, but there were also representatives from the NDP. Unfortunately, the Liberal Party had refused to attend, as had the Conservative Party and the Canadian Alliance.

The delegates made us aware of the importance of making legislative changes to better protect workers. They gave as an example, of course, the explosion at the Westray mine, in Nova Scotia. The explosion inside the mine had caused the death of more than 26 men. After a rather extensive public inquiry, it was concluded that, most likely, if some prevention or safety measures had been taken to protect workers, the tragedy would not have occurred. The public inquiry into the Westray mine showed that there had been negligence on the part of company directors, with respect to safety.

The delegates had made us aware of the importance of enacting legislation. Essentially, Bill C-45 is merely the expression of a willingness to react to this problem and to make the necessary legislative changes.

I must remind the House that we had studied this issue many times before, through private members' bills such as Bill C-468, Bill C-259 and, more recently, Bill C-284, containing similar provisions. Of course, some aspects have been omitted from Bill C-45. We know that some provisions of Bill C-284, particularly with regard to penalties, have not been included in Bill C-45. Consequently, we would like to amend it.

First of all, the bill uses the word “organization” instead of “corporation”. As a result, it applies to a larger number of institutions. We must raise the awareness of firms regarding the need for prevention and protection of workers in the workplace. However, we must realize that some workplaces are more dangerous than others.

As the Westray mine disaster taught us, it is essential to make the organization, in other words the institution or the firm, responsible for the protection of workers.

Another aspect of the bill is that from now on a firm will be criminally liable for the actions of employees who are not necessarily very high in the hierarchy. What does this mean? It means that in the case of bosses who are not necessarily executives but foremen or third or second level bosses, the firm would have organizational liability insofar as these bosses are responsible for the enforcement of stringent security standards.

Negligence is no longer acceptable, it is now a criminal offence. This is not a trivial issue when we know that some workplaces are more dangerous than others, especially for human health. Moreover, in some workplaces, negligence relating to safety can result in the loss of human life. The Westray mine is a case in point.

Offences of negligence are another important aspect. Let us take criminal negligence as an example. The moral element of the offence will be attributable to the organization insofar as the moral element of the offence can be attributed to one of the senior officers of the organization.

So, as I mentioned earlier, there is now criminal liability for offences of negligence. In reality, the whole issue of prevention in the workplace is at the heart of these provisions.

Another aspect of the bill is that it explicitly makes it a duty for those who have the authority to direct how employees do work, to take the necessary steps to prevent bodily harm to the employees. In other words, this is about the responsibility of foremen and managers and the need to have stringent prevention standards in dangerous workplaces. That is another important aspect.

Clause 3 of Bill C-45 is even more interesting and it is the key element of the bill. It reads as follows, and I quote:

Every one who undertakes...to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person or any other person, arising from that work or task.

This will make it possible to charge those who fail to comply with this requirement with criminal negligence.

With clause 3 of the bill, occupational safety is improved. This is fundamental.

We agree with certain aspects relating to the principle of the bill. But we can only condemn the fact that between the time when we studied Bill C-284, during the first session of this Parliament, and Bill C-45 now before us, some substance was lost, with respect to the criminal liability of directors and officers, for example.

With respect to the penalties that could be imposed on organizations, I should point out that they would have no effect in cases of bankruptcy. Given the very principle that underlies it, Bill C-45 should therefore not be allowed to provide loopholes to businesses which are in a difficult fiscal situation or have declared bankruptcy.

In our opinion, there should be full liability, not only for businesses which are operating but also for those that have declared bankruptcy. It seems clear to us that this bill bears some resemblance to Bill C-284, but there are significant omissions as well. The danger is that this could lead to loopholes with respect to criminal liability.

Another significant omission is that, contrary to Bill C-284, Bill C-45 contains no provisions for making directors and officers of corporations criminally liable if they are not the ones who, materially, committed a criminal act.

Once again, there are significant omissions in this bill and, in some respects, Bill C-284 was more comprehensive than the one before us today.

I will point out in closing that, with a vote in favour of this bill today, we are telling those working in conditions hazardous to their health and safety that the message from the Westray mine workers has come through loud and clear: negligence must be punished.

We have also understood that prevention is the most fundamental action, the cornerstone of worker protection. We believe nothing like this must ever be allowed to happen again. We believe that imposing penalties and taking stringent measures, up to and including punishment of negligence under the Criminal Code, cannot help but improve workers' lives, as well as their working conditions.

The message we are sending out today is that we have understood the Westray mine workers, and intend to make the necessary legislative changes to protect them better. Workers have the right to protection, particularly when they work in a dangerous environment.

[Alexa McDonough, NDP, Halifax, NS]

Madam Speaker, I was very happy to hear the spokesperson for the Conservative Party indicating support for the direction of the Westray bill, Bill C-45. However, I am deeply disturbed that he has made no indication that his party shares the concerns that have been widely raised about the shortfall and inadequacies in the legislation that is now before the House.

Let us be clear, we are talking about a piece of legislation that has been 11 years in incubation and is only finally now finding its way into the light of day. It leaves me wondering whether the Conservative Party has already dropped the term “progressive”.

I want to ask the member if he would clarify something. I have heard from many people that if this legislation had actually been in place at the time the Westray disaster occurred in Nova Scotia 11 years ago in 1992 costing 26 lives, that it would not have made any difference whatsoever in establishing the criminal liability, the criminal culpability, of the directors and senior managers of that company. They clearly were responsible for horrendous deeds that were documented in the Westray inquiry. Is the member prepared to fight alongside the New Democratic Party and all others concerned? We must ensure that the bill actually is what it needs to be to get the job done in the future both by way of prevention, and punitive measures where they are deserved.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Madam Speaker, it is a pleasure today to speak to Bill C-45. As a Nova Scotian it is particularly poignant. The legislation emanates from a disaster in my province, in fact the Westray disaster in the riding of the hon. member for Pictou—Antigonish—Guysborough, the leader of my party.

Almost 12 years ago, on May 9, 1992, the Westray mine disaster in Plymouth, Nova Scotia occurred, killing 26 men. At the time I was actually living in New York. I was listening to national public radio on that morning. It was the first time I had ever heard Nova Scotia mentioned on national public radio in New York during the period of time that I lived there. I remember how it impacted me, the thought of 26 Nova Scotians dying, and we were to learn unnecessarily, in a disaster that could have been prevented. It is unfortunate that 12 years later we are still debating the merits of a piece of legislation that could have been in place a lot earlier to protect Canadians against that sort of corporate malfeasance.

It is interesting to consider the legislation today in an environment where increasingly issues of corporate governance and accountability are being debated and discussed. Most of the time when we are talking about corporate governance and accountability, we are talking about financial issues, dollars and cents issues and accounting issues. We are talking in this case not about dollars and cents but about human lives.

If we consider the principles of corporate governance and the principles of financial accountability and financial corporate governance, the similarities are striking of what we want to achieve. We simply want to see that management and ownership is held accountable and responsible to protect the safety, of workers in this case, from avoidable disasters.

Our party has spoken supportively. My leader, in his capacity as justice critic for our party, has been supportive. Clearly there are some legitimate criticisms of the legislation that it does not necessarily go far enough. I suppose an unfortunate irony of this is that the legislation quite possibly would not have helped address the accountability of the management and ownership of the Westray mine.

In the case of Westray, prosecution of the corporation would have been pointless. The parent company, Curragh Resources, was bankrupt by the time a prosecution could have been started and there was nothing left for a court to fine. No company survived to implement new safety policies.

The power to charge a corporation would have been an empty power in that sense in the Westray disaster. There is a fine line clearly between ensuring reasonable accountability and governance on health and safety issues but also recognizing that there is always the risk of somebody down the management chain acting irresponsibly. There is a fear in Canada today at the board of directors level of various companies that there is going to be an almost unlimited accountability. These issues have to be considered.

There is a fine line effectively in creating an environment within which no Canadian would take the risk of being on the board of a company for fear of being implicated in a proceeding like this, even though they would not have a direct responsibility. Despite those fears, there is no doubt we need greater levels of accountability of management and ownership in health and safety issues.

I would hope that this legislation will help prevent the kind of disaster, such as the Westray disaster which destroyed lives. It took away lives and tore apart families in Nova Scotia in 1992. We would like to see Canadians protected immediately by the passage of this legislation. Hopefully this legislation can play a role in preventing another Westray type disaster in the future.

We should not have had to wait 12 years after the original Westray disaster for this legislation. It is imperative that we as legislators move quickly now, when we have the opportunity, to pass this legislation and do the right thing.

Sometimes in this place when we are talking about legislation it seems a little esoteric, it seems less connected to the lives of ordinary Canadians, but this is not one of those times. This is a time when I am proud to speak to an important piece of legislation. As a Nova Scotian, I feel particularly honoured to have the opportunity to stand in the House and support this legislation.

I want to commend my leader for having played such an important role at justice committee as justice critic for our party over the last number of years in terms of working toward the passage of this legislation. I want to commend him and offer my full support and that of our party for the direction that this legislation is trying to achieve.

Business of the House

[Don Boudria, Liberal, Minister of State and Leader of the Government in the House of Commons]

Mr. Speaker, I will be pleased over the following weeks to continue to elaborate on the program from now until December 12 for the benefit of the hon. member and for anyone else. More specifically, about the following week, I wish to express the following by way of the business statement.

This afternoon, we will continue with the debate on the opposition motion.

Tomorrow, the House will return to the motion to refer Bill C-49, the electoral boundaries bill, to committee before second reading. This will be followed by Bill C-45, the corporate liability bill, or Westray bill if you like, and Bill C-34, the ethics commissioner bill.

On Monday, we will begin with bills not completed this week, Friday in particular. We will then proceed to Bill C-46, respecting market fraud, Bill C-50 respecting veterans, Bill C-17, the public safety bill, and finally Bill C-36, the Library and Archives of Canada bill.

Tuesday will be an allotted day.

On Wednesday and Thursday, the House will begin consideration of Bill C-48, respecting resource taxation, and will then return to any of the business just listed that has not been completed.

Criminal Code

[The Acting Speaker (Mr. Bélair)]

I am sorry to inform you that there was only one minute left on the clock during your speech. I inform you that you still have nine minutes to go when debate resumes on Bill C-45.

It being 6:30 p.m., the House stands adjourned until tomorrow at 10 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 6.30 p.m.)

[Joe Peschisolido, Liberal, Parliamentary Secretary to the President of the Queen's Privy Council for Canada and Minister of Intergovernmental Affairs]

Mr. Speaker, let me begin by saying that Bill C-45 should be supported as it will make a great contribution to promoting safety in the workplace. As was stated earlier on, the hearings of the standing committee had their origins ultimately in the Westray tragedy, and I believe all members wish to do what they can as legislators at the federal level to eliminate as much as we possibly can, deaths and injuries on the job.

The Criminal Code is not the primary way of promoting safety. Strong laws governing the workplace, like those which this government introduced into the Canada Labour Code, vigorous inspection of farm factories, mines and other high risk work sites and training workers and supervisors in the best safety practices are the first line of defence. However the Criminal Code does represent the judgment of Parliament as to what conduct is so harmful that it must be treated with the utmost severity.

Within the code there are distinctions in the severity of the sentence possible, ranging from the most minor offences punishable only on summary conviction to the most serious punishable by life imprisonment. Causing death by criminal negligence is among those offences that are punishable by life and causing bodily harm is punishable by 10 years of imprisonment. Despite the fact that these provisions have been in the code for many years, prosecutions of corporations for death and injury in the workplace have been rare. These changes in Bill C-45 should lead to more accountability for the most serious cases of endangering workers.

Members of the House may be interested to know that outside experts in the field have come to the same conclusion. Cheryl A. Edwards, a lawyer in private practice in Toronto, wrote an article in the August 22 edition of the Lawyers Weekly . The opening paragraph of the article states:

On June 12, 2003, the prospect of both regulatory and Criminal Code prosecutions emanating from a serious workplace accident became much more real. The federal government introduced anticipated amendments to the Criminal Code in Bill C-45, which, if passed, will create positive occupational health and safety-related duties for corporations, individuals, and other parties defined as “organizations”. Bill C-45 will make it easier to convict those parties of criminal negligence for workplace safety violations.

Let us then deal with Bill C-45 as others have, but I would like to also elaborate on this point. What are the elements of Bill C-45 that will enhance the effectiveness of the Criminal Code in holding corporations accountable for safety?

First, there will be the positive duty imposed on those who undertake or have the authority to direct how another person does work to take reasonable steps to prevent bodily harm to any person arising from that work. Application of existing criminal negligence provisions would mean that those parties that fail in this duty and show wanton and reckless disregard for safety in doing so could be found criminally negligent.

Similar duties already exist in statutes and regulations governing the conduct of various businesses and even in the common law. Placing the duty, however, in the Criminal Code is an important signal that Parliament intends that everyone take their responsibility for worker safety very seriously.

The criminal negligence sections of the code already impose a legal duty on parents and spouses to provide the necessities of life and on anyone who undertakes to administer surgical or medical treatment to another to use reasonable knowledge, skill and care. It is right that the duty to protect workers and the public from foreseeable harm be placed in the Criminal Code and so treated in the same way as these other duties.

The mere fact that the legal duty is in the code may also serve to simplify some prosecutions. It can also serve as a wake-up call to those who direct work. Reckless disregard of the duty of care can lead to imprisonment for a very long time.

With respect to corporations that are charged with criminal negligence, the rules for attribution of liability set out in the proposed new section 22.2 of the Criminal Code will make it somewhat easier to establish liability of the corporation than is the case under existing common law rules.

Those rules establish a two step procedure. First, the crown would have to show that the actions of a single corporate representative or group of representatives demonstrated a lack of care that constituted a breach of the new legal duty to take reasonable steps to prevent bodily harm. Then the crown would have to show that a senior officer either acted or failed to act in a way which was in a marked departure from that which could be expected of a senior officer in the circumstances.

Both representative and senior officer are defined. Corporations will be liable for the physical acts and the omissions of the director, partner, employee, member, agent or contractor of the corporation. An important innovation of the proposed reform is that the courts will not have to seek a single person who both committed the negligent act or omission and was a directing mind of the corporation. Bill C-45 provides that conduct by two or more representatives can be added together to constitute the negligent conduct.

For instance, if we consider a death or injury in a mine, there may have been a series of errors by employees and supervisors that all contributed to the accident. If a single employee turned off three separate safety systems and miners were killed as a result of an accident that the safety systems would have prevented, the employee would probably be prosecuted for causing death by criminal negligence but the mine operator might not depending on the particular facts. Did the employee act in defiance of direct orders or did the employee act in accordance with company policy and practices?

On the other hand, if three employees each turned off one of the safety systems, none of the employees would likely be subject to criminal prosecution because each one thought there would still be two systems in place to protect the workers. Under existing rules for attributing liability, the mine operator could very well also escape prosecution because no single person was negligent. However under the proposed rules, the fact that the individual employees might escape prosecution would not be a bar to the prosecution of the corporation. After all, the corporation through its three employees turned off the three systems.

Not only is proving the act of negligence going to be easier under the reforms but finding the wanton and reckless disregard for safety that is necessary for a conviction of the corporation is also going to be easier. The fault of the corporation is found through the actions and omissions of a senior officer, which is defined to include persons who play an important role in establishing the organization's policies, and persons responsible for important aspects of an organization's activities, and in the case of a corporation includes directors, the CEO and CFO.

The existing test developed by the courts is, as people have alluded to, quite restrictive. In the leading case, the Supreme Court referred to the person having so much authority in the corporation that the person could be considered the directing mind, alter ego or soul of the corporation. While the Supreme Court recognized that a corporation could delegate enough authority to managers that the corporation would have more than one directing mind, it is clear that the court is looking for persons on the very highest rungs of the corporate ladder.

Again, in the words of Ms. Edwards in the Lawyers Weekly :

The proposals do not eliminate the “directing mind” doctrine, as it would still be necessary to prove culpability of a senior official. However, the doctrine would be altered to eliminate the requirement to show [their] direct involvement, and it would be altered to allow the actions of lesser corporate representatives to make the organization party to the offence of criminal negligence.

This clearly signals an expectation that senior management take a proactive role in health and safety matters. The conduct of senior management could very well come under unprecedented scrutiny from investigators.

It is not only Ms. Edwards who expects Bill C-45 to have a major impact. In an article in Worksite News, Norman Keith, another lawyer from Toronto specializing in occupational health and safety issues wrote:

Bill C-45 extends legal duties to a new level that will likely include foremen, lead hands, and even co-workers. The requirement “to prevent bodily harm to that person, or any other person, arising from that work or task” goes farther than any current OHS legislation in Canada. Nova Scotia requires employers to be responsible for members of the public at or near the workplace, however, Bill C-45 casts the net farther to include all persons that may be affected by the work or task.

It is certainly my hope and expectation that Ms. Edwards' prediction of “unprecedented scrutiny” and Mr. Keith's prediction of “a higher level of accountability” will come true.

In passing Bill C-35, Parliament will be responding positively to the Westray tragedy. The new rules and the positive duty combined should ensure that the Criminal Code serves to attribute liability in a way that is fair to workers and their employers when there has been death or injury at work.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, I rise today to speak on Bill C-45 concerning the criminal liability of corporations. Before getting into the pith and substance of the legislation, I would like to say that I examined this bill as my party's industry critic to see what impact it would have on the industry sector, while recognizing the fundamental merit of plugging a loophole in the Criminal Code that absolutely had to be plugged.

Unfortunately, a terrible situation existed where it was later realized that liability could not be correctly assigned and that measures had to be taken accordingly.

I am also speaking as a former director of personnel. In a previous life, before I was elected to this place, I was the director of personnel and secretary general of the CEGEP in La Pocatière. I have lived though various labour relations situations. Organizations obviously have a major moral responsibility to take. The absence of any clear indication of how to deal with these things in the future created a loophole that absolutely had to be plugged.

The last aspect I wanted to raise was the process for improving the legislation. People often wonder whether the efforts made by lawmakers, that is the hon. members, ever pay off. In this case, the result has been a government bill, which was introduced on June 12 by the Minister of Justice and Attorney General of Canada.

The purpose of the bill is to review the principles of law concerning the criminal liability of corporations and other organizations. But to get there required sustained efforts. I want to acknowledge in particular the efforts of the members of the NDP.

If we look briefly at the history of this bill, it was based on Bill C-468 and Bill C-259, put forward by the NDP in the thirty-sixth Parliament, and on Bill C-284, put forward by the same party in the first session of the thirty-seventh Parliament.

This goes to show that the NDP kept up the pressure following the public inquiry into the causes of the explosion at the Westray mine in Nova Scotia. We all remember this tragic accident. Without going into the evidence of the case, it was realized that, basically, this accident was caused by neglect. Efforts were made to clearly identify who was responsible. Under the current code, it was impossible to really hold responsible those who ought to have been held responsible.

From that point, steps were taken to establish, under certain circumstances, the criminal liability of companies for omissions or criminal acts by their directors or employees and to add a new offence to the Criminal Code for companies that fail to ensure a safe workplace.

In the mining industry, this was more evident than ever. It is an industry where all problems absolutely have to be eliminated from the outset. Negligence has very significant direct consequences. This aspect needed to be corrected and broadened to incorporate all employers and organizations that, until then, could slip through the cracks. This aspect of liability needed to be defined.

This has to do with the criminal liability of companies for omissions or criminal acts perpetrated by their managers or employees. We are trying to have a new offence added to the Criminal Code for companies that fail to ensure a safe workplace.

In addition, there is everything that is not criminal in nature, but results in accidents. However, in this case, we are truly talking about situations where an act can be recognized as being criminal.

Initially, the bill that was introduced by the NDP was designed to facilitate establishing the criminal liability of company administrators and directors. The bill died on the Order Paper at the end of the first session of the 36th Parliament, in September 1999.

The NDP raised the issue once again. In June 1999, a motion was moved to review the Criminal Code and other federal legislation so that company executives and administrators could be held responsible for workplace safety.

At that time, the Bloc Quebecois, which was in favour of such a review, supported the motion. This motion was moved in 2000 and the Bloc Quebecois voted in favour of it. There were also motions brought forward in 2001 and 2002 on the same subject.

In October 1999, the NDP reintroduced its bill, which also died on the Order Paper.

There has therefore been continuity in the desire to regularize this situation, not only because of the difficulties identified in the Criminal Code in connection with past situations, but also and particularly for future situations, in order to ensure that a dissuasive effect is created and that employers and organizations are well aware of the potential consequences if they do not fulfill their responsibilities properly.

In the same vein, the fact that these past actions are today culminating in Bill C-45 is very good news indeed.

Obviously, the bill needs to be examined carefully. Perhaps some corrections will have to be made in committee, as my colleague suggested earlier. Basically, however, this is a positive bill.

On November 11, 2001, the member for Hochelaga—Maisonneuve indicated his support for a similar bill. He felt that it was important to pass such a bill in order to improve the legislation and particularly in order to tighten up the Criminal Code to prevent any workers from losing their lives. As I was saying, through prevention and increasing employers' awareness of their responsibilities, there is more likelihood that the approaches adopted will be what they need to be.

Most employers, like most members of the public, are honest. Unfortunately, the Criminal Code is there for those who are not. That is the purpose pf this bill.

The member for Laurentides also spoke out in favour of this bill. In expressing her support, she indicated that Quebec already has in place a body, the CSST, or Commission de la santé et de la sécurité au travail, to ensure worker safety.

We wanted to ensure that the bill did not interfere with the responsibilities of the CSST. In this case, this being an amendment to the Criminal Code, it can be considered that this is really a federal responsibility. As a result, we feel it is appropriate to move ahead with this bill.

What is also significant is that Bill C-284, the previous version tabled, was withdrawn before Bill C-45 was arrived at. There had been an agreement to examine the matter in the Standing Committee on Justice and Human RIghts in February 2002.

The committee held hearings and presented a report. It asked, and I quote:

that the Government table in the House legislation to deal with the criminal liability of corporations, directors, and officers.

Bill C-45 is the result of all these actions. I think there is still room to make improvements as we study the bill, so that we end up with legislation that is exactly what is requested to eliminate the shortcomings in the Criminal Code.

Quickly looking at the main issues addressed by Bill C-45, we first notice the use of the term “organization” instead of “corporate body.” This is a way to truly include all possibilities. For example, the definition of “organization” is:

(a) a public body, body corporate, society, company, firm, partnership, trade union or municipality, or (b) an association of persons that (i) is created for a common purpose, (ii) has an operational structure, and (iii) holds itself out to the public as an association of persons;

This very broad definition, will cover all situations that might arise. Of course, when the bill is passed, all associations and organizations must be informed about the implications of the law, in order to ensure they are aware of it.

A company can also, according to the bill, be criminally liable for acts carried out by employees who are not necessarily highly placed in the company. Previously, it was absolutely necessary to have a manager who was in an untenable situation. That concept is now being extended to ensure that no one can slip through the safety net. The organization could consider that these people were not really under its control. The safety net will be tightened up, so that organizations will feel more responsible for all of their employees and so that employees will act with propriety.

The bill also mentions the categories of persons whose actions may actually constitute a criminal act for which a corporate body or any other organization is liable. This has been broadened to include all employees, representatives or contractors.

When it comes to criminal negligence, the moral aspect of the offence could be attributed to the organization insofar as it can be attributed to one of the organization's senior officers.

Therefore, this section ensures that, in the case of criminal negligence, someone is responsible and that liability is tied to one of the organization's senior officers.

With regard to mens rea , the organization could be held responsible for the actions of its senior officers if a senior officer is party to the offence or directs other employees to commit an offence or if a senior officer, knowing that an employee is about to be party to an offence, does nothing to stop them.

Obviously, it must be noted that the actions of this senior officer must seek to benefit the organization.

The bill explicitly imposes a duty on those with the authority to direct the work of other employees to take steps to prevent bodily harm to those individuals.

The bill also adopts sentencing principles and probation conditions for organizations, because, in fact, persons cannot be sentenced, when an organization is sentenced, in the same way as if it were a person.

Currently in Canada, it is essentially jurisprudence that determines the conditions under which a company can be held responsible for a criminal offence.

In the case of criminal offences that require mens rea or the intent to commit a crime, companies are only responsible for acts or omissions by persons who may be said to constitute the directing mind of the company. In fact, according to the identification theory, persons who constitute the directing mind of a company personify its intentions.

The bill also amends, in different sections, the types of institutions, and establishes an organization's criminal liability. It integrates the notion of who can be a “representative”. Earlier, it was mentioned that liability was being extended not only to senior officers, but in many cases to other employees. For example, a “representative” essentially includes any person working for or affiliated with the company. This could be a director, an employee or a member, agent or contractor. A “senior officer” is any representative who plays an important role in the establishmentof the organization’s policies or is responsiblefor managing an important aspect of theorganization’s activities.

This bill, specifically clauses 22.1 to 22.3, contributes to changing the current state of the law by introducing new elements to the identification theory. In terms of what are essentially acts of criminal negligence, we could, under clause 22.2, hold an organization criminally liable in cases where the physical offence—the act of committing a crime—is perpetrated by a representative in the scope of tht person's authority, and fault lies in the hands of a senior executive.

To prove that a senior executive acted at least partially to benefit an organization, it would have to be confirmed that they participated in an offence in the scope of their authority by having someone else knowingly commit an offence or by knowing that someone else was committing or was about to participate in an offence and the executive failed to take the necessary actions to prevent it.

There is nonetheless a framework that would prevent peculiar situations from being subject to the prosecution under the Criminal Code based on new sections resulting from Bill C-45.

In terms of sentencing an organization, the bill suggests adding new sections and completing existing sections to take into account, during sentencing, factors that are characteristic of organizations. Therefore, a specific section was added for organizations to regulate the probation conditions applicable to organizations, which are not of the same nature as those for individuals.

The bill increases the maximum fine for an organization when a guilty plea is entered by summary conviction or for a less serious offence, increasing it from $25,000 to $100,000. This provides a very clear incentive not to repeat a situation whereby the organization's liability could be determined and the organization could be convicted.

Currently there are no limits for fines for criminal acts or more serious offences, and this is not being changed by the proposed legislation. If there is a very serious situation, the sum could be determined based on the seriousness. This will continue to be the practice.

This bill is the result of a series of steps taken by several parliamentarians in this House. The Bloc Quebecois is in favour of the principle of this bill.

Given the current state of the law, it is important that a criminal liability regime be established for businesses that is effective and takes into account the differences between an individual and an organization.

We will see in committee if the bill could not be improved where it deals with offences, and it is said that an intent must exist which goes beyond criminal negligence. The suggestion was made to reverse the burden of proof, that is to say that when it has been established that an act or omission was committed by the personnel of an organization, resulting in a criminal act taking place, the onus will be on the organization to prove that it did not authorize or condone such behaviour. When we hear witnesses in committee, we will be able to see if this would not be a better approach than the one put forward in the bill as it now stands.

Note also that this bill does not allow directors, executives or a corporation to be held liable if they did not physically and personally commit a criminal act. This may tie in with the constitutional issue, but it deserves nonetheless to be examined further to ensure there are no loopholes which, we will find out in a few months or years, ought to have been plugged when Bill C-45 was passed.

I should point out also that the penalties that may be imposed would have no effect on a business that has declared bankruptcy. This touches on the whole issue of a big organization taking some action which results in its going bankrupt because it has lost its business name and can no longer sell its product. In this case, when penalties are paid, it will be too late, and the fact of the matter will be such that the business will not be able to assume the costs.

While particular attention must be paid to a number of things in Bill C-45, as this was explained, for the system to be effective, the fact remains that the purpose of this bill is valid and necessary to ensure that organizations are held accountable for what they do.

I believe we are making an addition here that does not fix what happened at the Westray mine, but at least for the families of those who died in the mine, for the entire community that was affected and for the future also, I think that we are taking an appropriate, responsible step, as parliamentarians, in proposing that this bill introduced by the government be passed.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, today is the first day of the fall session and Bill C-45 is on the Order Paper. That speaks to the very fact of how important this legislation is and how important it is to move forward on this matter.

Today is our first day back. We have had debate all afternoon. We will continue to have debate and as soon as we finish that debate we will send it to committee. Again, I urge the hon. member to speak to his House leader, and other opposition members to speak to their House leaders so we can indeed have this legislation brought forward as quickly, effectively and efficiently as possible. Perhaps it could be done before our recess week in October.

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, Bill C-45 is the culmination of many years of attempts to reform the general law of attributing criminal liability to corporations. In fact, Bill C-45 would give Canada rules that are appropriate for the complex, modern corporate world where often a company has many places of business, various subsidiaries, parts of the business contracted out to specialists, decentralized control over some parts of the business and a great deal of discretion vested in its managers.

Now, in these circumstances, it is difficult to decide whether a corporation has committed a crime both by doing something the law prohibits and by intending to break a law or having mens rea, as the criminal lawyers say.

It is not surprising that rules that were originally developed beginning in the horse-and-buggy age are often in need of updating as conditions change. It is part of the genius of the common law system that adjustments can be made by the courts as new cases come before them. The common law may not always have the logical consistency that academics want but it does get the job done.

Historically, at first the courts held that a corporation could not break the law but gradually the courts made exceptions.

The first criminal offence for which a British company was found liable was for nuisance. Something simply had to be done about locomotives setting fire to crops by their sparks. The real problem was not with a strict liability offence but with those offences where the crown had to show some form of intent.

It was not until 1915 that the House of Lords developed a so-called directing mind test for offences of intent but the test was quite narrow, concentrating on a corporation's board of directors.

Of course Canada also followed British judgments until 1949 when appeals to the judicial committee of the Privy Council were finally abolished and our Supreme Court of Canada was created.

The Alberta Court of Appeal struggled with this issue as late as 1941 in a case called Rex v. Fane Robinson Ltd. The two directing officers of a garage company, pursuant to an agreement with an insurance adjuster, added a certain sum to a repair bill on an insured automobile. On the receipt of the moneys from the insurer, part of the additional sum was given to the adjuster and the balance was retained by the garage company. There was no problem finding the individuals involved guilty but the garage company was also charged with conspiracy to defraud and obtaining money by false pretences.

The trial judge, following the narrow test developed by the Privy Council, acquitted the company. In the judgment he wrote as follows:

The accused is a corporate body incorporated under the laws of the Province of Alberta. A corporation acts through its directors. There is no evidence whatever disclosed in the minutes of the meetings of the directors or the shareholders which are in evidence, that any authority by resolution was ever given to the directors acting in their official capacity to enter into the conspiracy alleged in the first count, or to procure by false pretences the money alleged in the second count...

The Court of Appeal in a two to one decision convicted the company. Justice Ford wrote:

--I have, not without considerable hesitation, formed the opinion that the gradual process of placing those artificial entities known as corporations in the same position as a natural person as regards amenability to the criminal law has...reached that stage where it can be said that, if the act complained of can be treated as that of the company, the corporation is criminally responsible for all such acts as it is capable of committing and for which the prescribed punishment is one which it can be made to endure.

Interestingly enough the dissenting judge wrote “I am of the opinion that mens rea must be established in a case of this nature. A number of changes in regard to liability of corporations have been made from time to time by Parliament and, as has been suggested, the changes and extension of liability of corporations will probably be extended, but in my opinion the extension, if there is such to be, must come from Parliament”.

It is important to note that what was said in the dissenting opinion was that it must come from Parliament.

It has been more than 60 years since that was written and I would respectfully submit it is high time that Parliament did set the rules. The legal background, the many attempts to reform the law and the situation in other countries were thoroughly canvassed in the discussion paper the Department of Justice provided the standing committee and in the government's response to the standing committee's one page report. Clearly we are not starting from scratch and no one should be taken by surprise by the provisions of Bill C-45.

The fundamental question that we as parliamentarians must answer is whether the proposals in Bill C-45 with respect to offences requiring proof of knowledge or intent by the corporations are appropriate in today's conditions.

As members know, in the absence of action by Parliament, the Supreme Court expanded the so-called directing minds test in the Canadian Dredge and Dock case in 1985. The government in its response found the Canadian Dredge and Dock case rules too restrictive. Also the committee rejected the American vicarious liability model as contrary to fundamental principles that underlie Canadian criminal law. It also rejected the Australian corporate cultural model as being vague and also untested.

Instead, Bill C-45 proposes to broaden the persons who can be considered directing minds through the definition of “senior officer”. It sets out three ways that a senior officer can make the corporation criminally liable, but in all cases the senior officer must have the intent at least in part to benefit the corporation.

The first question we must ask ourselves is whether the definition of “senior officer” is broad enough to catch the right officers without being so broad that it unfairly stigmatizes the corporations. Members should not underestimate the consequences of the criminal conviction on the reputation of the corporation but also on the individuals employed by that corporation.

The proposed definition of “senior officer” includes everyone who has an important role in setting policy or managing an important aspect of the corporation's activities. It is significant that that person does not have to have the final say in setting policy but must have an important role. Moreover, a person who has no role in making policy can be a senior officer if he or she is entrusted with important management duties.

In the Rhône case referred to in the government's response, the Supreme Court stated the following: “The key factor which distinguishes directing minds from normal employees is a capacity to exercise decision making authority on matters of corporate policy, rather than merely to give effect to such policy on an operational basis”. Clearly, the proposal in the bill is broader.

The new definition makes it clear that the directors, the chief executive officer and the chief financial officer of a corporation are, by the virtue of the position that they hold, automatically senior officers. A corporation charged with an offence cannot argue that the individuals occupying these positions actually had no real role in setting policy or managing the corporation and so were not senior officers.

However, there is an endless list of titles: senior vice-president finance; general manager western division; corporate counsel. The same title can mean quite different things in different corporate structures. For example, the executive assistant to the president could have a great deal of authority and effectively speak for the president in one corporation and so be a senior officer, but in another corporation would have only minor administrative functions, perhaps such as scheduling the president's meetings.

Necessarily, the Criminal Code has to use general language so that the courts will have to decide in each case whether a person who is not the CEO, CFO or a director is indeed a senior officer. By requiring that person play an important role in developing policy or managing an important aspect of the business, we are indeed providing the courts with indications of the position the person must actually play in that organization.

The first two ways that a senior officer could make the organization liable set out in section 22.3 are fairly straightforward. The most obvious way for the organization to be liable is the first way set out in 22.3, which is that the senior officer actually committed the crime for the direct benefit of the corporation. For example, if the CEO cooks the books and thereby induces others to provide funds to the corporation, both the corporation and the CEO may be guilty of fraud. However, senior officers usually direct others to do such work.

The second way set out in section 22.3 makes it clear that the corporation is guilty if the senior officer has the necessary guilty intent and indeed wants to benefit the corporation, but subordinates carry out the actual physical act. An example would be where a senior officer could be benefiting the corporation by having it deal in stolen goods. The senior officer could instruct employees to buy from the supplier offering the lowest price, knowing that the person who offers to sell the goods at the lowest price can only make such an offer because the goods are stolen. Here the employees themselves have no criminal intent, but the senior officer and the corporation could be found guilty.

The bill proposes a third way of holding the corporation liable and this is something new. A corporation could be guilty of a crime if a senior officer knows employees are going to commit an offence but that senior officer does not stop them. Using the stolen goods example, a senior officer might become aware that an employee will get a kickback from the thieves for getting the corporation to buy the stolen goods. The senior officer may have done nothing to set up the transaction, but if he or she does nothing to stop it with the intent that the corporation again will obtain a benefit from the lower price, the corporation would be responsible.

Members should note that indeed in this third case, unlike the first two, the senior officer does not have to be active within the scope of her authority. In other words, if a manager of security knows that there is criminal activity going on in the sales division, for example bribing municipal officials to get a contract, she cannot decide to let it slide so that the company will benefit, even if that area of the corporation's business is not her responsibility. She must take all reasonable steps to stop the commission of the crime.

The supreme court has held in the Sansregret case, which involved a sexual assault that “Where the accused is deliberately ignorant as a result of blinding himself to reality, the law presumes knowledge”.No doubt the court will apply the same test to an organization, which will be liable if a senior officer is wilfully blind to information in order to avoid confirming what he or she suspects.

The government in its response to the standing committee report concluded that Canadian criminal law as it applies to corporations is in need of modernization. The directing mind model does not reflect the reality of corporate decision making in the delegation of operational responsibility in complex organizations.

Cumulatively, the changes to the law which are set out in Bill C-45, particularly as they affect those crimes that require knowledge or intent, represent a significant broadening of the rules for holding a corporation liable. The proposed changes should be supported by the House and I urge members to vote in favour of the bill.

[Jim Abbott, Canadian Alliance, Kootenay—Columbia, BC]

Mr. Speaker, I appreciate the opportunity to speak to Bill C-45, but I am sad that we have to have this kind of legislation under consideration by the House. I take a great deal of comfort for the Canadian Alliance and for that matter for the bill and for the House as a whole from the fact that our justice critic, the member for Provencher, as a former attorney general of Manitoba, will be able to bring a lot of light to the process.

The process is a complex one simply because one cannot hold a corporation accountable at the end of the day. The people who have to be held accountable are people as opposed to just a numbered corporation. Getting the balance between those two things and ensuring that the bill is operative and is workable is going to be exceptionally important.

One of the things that I have been particularly encouraged by has been the tone of the debate in the House on this issue. There has been a very low level of partisanship and there has been a strong desire expressed on the part of everyone that the bill be a proper working document, an agreement on the part of parliamentarians here that we bring forward legislation that can be useful.

We have to remember that the most probable cause, the foundation of Bill C-45 is the Westray disaster. There was tremendous political interference in the process around Westray, both at the federal and provincial levels. In the spirit of non-partisanship I will not offer party designations to that political interference. The reality was that there were very high levels of interference in both the Nova Scotia government and in the federal government of the day. The interference was such that I believe that some of the very irresponsible people who were involved at the corporate level and who were responsible for many of the decisions, or lack of decisions, and many of the people who were involved in the process of looking at the regulations surrounding the conditions within the mine, the bureaucrats of the day, had the assumption that there was a free track. There had been so much political interference, whether it was from people involved at the corporate level or people involved at the bureaucratic level who felt they had all sorts of latitude and elbow room, that many corners were cut.

The workplace practices that were in effect at that time were the most dangerous that could ever possibly be imagined. Unfortunately, following the disaster the hearings themselves bordered on being a farce simply because there were witnesses who should have testified but were not available because they were concerned about possible criminal sanctions being brought against them. As a result, those witnesses who were absolutely key and germane to the Westray inquiry, who should have been at the hearings and who should have been able to speak up under oath were not there.

After the inquiry closed, the decision was made that there would be no criminal charges. Of course by then, because the inquiry was concluded and we had the report, there was no way in realistic terms that those people could then testify. The decisions had already been made.

There also was a situation regarding the destruction of evidence in the mine itself. Decisions were made by people, and to this point I am really not clear, to flood the particular portions of the mine thereby removing the actual evidence of what had contributed directly to this disaster.

I had the opportunity, on behalf of my political party, to travel to Nova Scotia to take a look at this when I was formerly the solicitor general critic. I met with some very wonderful people, members of the families who were bereaved by these terrible events and by this avoidable accident.

I am sure the frustration of these families to this day is larger than we could ever possibly imagine, their frustration at the process they have been through and the very obvious fact that, most charitably, mismanagement cost the lives of their loved ones and, less charitably, to say that there was actual criminal negligence on the part of corporate officers that led to that.

Their frustration boiled over into bitterness and cynicism. I can recall one meeting in particular with the families. It was a quiet meeting. I think about 15 people were at the meeting. It was not a big town hall meeting. I was not there for any grandiose political reason. These people just wanted someone in Ottawa to listen, so I went and listened. The bitterness and the cynicism on the part of these families against the whole process was absolutely immense.

Having tried to stay non-partisan, I want to offer a criticism in the most non-partisan way that I can of the Liberal government that has been in Ottawa for 10 years. The families deserve better. This accident, as was noted by my friend from Halifax, took place 11 years ago. The events that followed were very transparent to anybody who turned on the nightly news.

We all know there was a deficiency and yet in the 10 year period that has transpired for the Liberals to be on the governing side of the House this is the very first time that we have been able to debate any action proposed by the government to overcome this problem.

That is grossly inadequate. It leads to the bitterness and the cynicism that is so easily understood on the part of these families. It leads to a cynicism of Canadians toward the entire political process.

How many times have we seen bills come before the House, be presented to the House and then die on the Order Paper when the Prime Minister calls an election and then be re-introduced and re-introduced. People want action. They do not just want words.

I give my friends in Nova Scotia this caution. What I suspect could very well happen as a result of the political opportunism that will be exhibited by the next Prime Minister of Canada, there will undoubtedly be an election called by April 4. If an election is called Parliament will be dissolved which is, by the way, totally unnecessary since there is another year and a half more that the House could be sitting without the political gyrations of the other side. As a result of the calling of that election, which I predict will be April 4, there is a high possibility that this legislation will die. I just want to give the people who are bitter and cynical about the political process a little forewarning that the legislation could very well die.

This is not good enough. Having given that criticism, and it is a very direct criticism, let me reiterate what my colleague, our justice critic, has said. We are prepared to work with the committee, to help the committee and to be part of the process so that at the end of the day we have good, logical, concise, practical, workable legislation so that the workers in the workforce of Canada will have the protection that they deserve.

[Jim Gouk, Canadian Alliance, Kootenay—Boundary—Okanagan, BC]

Mr. Speaker, I would like to advise that I will be splitting my time today with my colleague from the neighbouring riding of Kootenay--Columbia.

I am pleased to rise today to speak to Bill C-45 dealing with criminal liability for companies and organizations.

Over the years I have had several occasions to attend the annual day of mourning for workers who are injured or killed on the job. One of the sentiments that rings out at those meetings on those special days is that although numbers tend to be coming down for many companies, and many companies are very conscious of safety, even one death or injury is one too many. That is the premise which I believe the bill is approaching in terms of liability.

Many years ago, probably in the 19th century, companies were pretty horrendous places for anyone to have to work. The conditions were deplorable. The tactics they used were absolutely disgusting, and that was a large part of what caused workers' organizations and unions to form, because there was an incredible need for someone to stand up for workers against the very oppressive type of corporations that sometimes pervaded throughout our society.

Since that time, we have now what we refer to as the pendulum effect. Sometimes when the economy is going really strong, the unions have tremendous power to force things, maybe even beyond reason at times, on companies because there is such a need for the company to keep working, and so much profitability. At other times the pendulum swings the other way. Even now we can see the same thing returning back, where some corporations take advantage of that and use it as an opportunity to try to squeeze unions into conceding benefits for which they have fought.

One of the problems with the pendulum is we get no stability out of that. In my position as labour critic I saw a case where we have had strikes at the port of Vancouver. The government may have decided that it was appropriate to legislate people back to work because it could not take the disruption and because of what it would do to our economy. However a year ago one of the companies dealing with the grain workers had very little grain flowing into it so it was in labour negotiations with the union. The company actually locked the union out because it saved money by not bringing them in and having to cover benefits. It had alternatives. It was able to divert it to the different facilities that it had. The company did not have enough volume to keep its operation as well. Ironically, those same workers who would have complained with a different swing of the pendulum on being ordered back to work asked why the government was not doing it now. These are the kinds of shifts that we need to try to avoid.

We have the same thing in Bill C-45 in terms of liability on the part of companies. We need to address the problem of criminal liability on the part of persons within the corporation. By the same token, the bill needs to be written in such a way to ensure that we do not go to a point where there is no proper consideration for the criminal liability of people within a company, like the Westray example that has been quoted so much here today in this debate. We also need to ensure that the bill does not swing the pendulum too far and go from a point where people were not being held properly to account to a point where it is done in an oppressive manner.

There has to be an example of balance to put it in a common sort of term for the average person who is watching these proceedings today. The previous Liberal speaker quoted sections and subsections of the bill and some of the more arcane provisions in it, which is necessary. I am sure lawyers, judges and others who are watching need to know those types of details, although they have undoubtedly read the bill. However it is the general public whom we are largely here to represent, including the workers on whom this bill will have such a profound effect. We need to show them exactly what this means and why we feel we need to make these changes.

For example, I lend a car to someone. After the person borrows it, he or she goes out, gets impaired, gets into an accident that perhaps kills someone and very serious charges are pending against that person. It would be inappropriate if I were charged with the criminal responsibility for that accident as well if I had no knowledge whatsoever of what this person was going to do.

On the other hand, if the person were impaired when he borrowed my car and I knew that, then I should be held accountable for allowing him to take my car when he was in that condition.

That is the basic premise of how the bill needs to work. By all means we need to put in some kind of legislation that allows the courts to take criminal action against people who knowingly allow workers to work in conditions that are unsafe and that result in injuries or in the case of the Westray Mine many deaths. These are the types of things that need to be put in the legislation.

We believe the bill has conceptually a lot of merit. We agreed certainly in principle with the private member's bill that actually caused this bill to be written by the government. However the bill needs changes and improvements to make it truly a bill that works for all people. A bill that is imbalanced is not a good bill at all.

When it went from a private member's bill to government legislation, I think it might have lost something in the translation. That is not uncommon. That is why we have debate in the House to disclose what the issues are and to bring them forward. More important, that is why we send a bill to committee. A committee is supposedly master of its own destiny. It can examine the bill based on the debates held in the House by the various parties and from witness, many of whom have brought their opinions forward already. The committee can then decide to make changes that will make the bill, which has a lot of merit, into a bill that has more than just conceptual merit but indeed answers the concerns of workers throughout the country while at the same time ensures that it does not become oppressive against the other side.

We have to keep that pendulum in the middle. In fact we have to eliminate the pendulum and do something that is balanced and right, taking into consideration the needs and rights of both side, instead of something that takes a liability that was never addressed and takes it to a greater degree.

I am sure that members who spoke before me outlined the intricacies of the proposed legislation. I am sure my hon. colleague, who will be speaking next and who has put a great deal of time and background work into the bill, will bring forward the specifics on the kinds of things we need to fix to ensure this is a balanced bill.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I think perhaps the vacation was a bit too long.

I would like to thank the hon. member for his comments, particularly at the end of his remarks when he called upon the House to vote quickly in favour of Bill C-45, which meets a need he himself described very well.

I would like to ask him the following question: Since this bill is the result of repeated initiatives by opposition members, and since for many months, not to say years, the government appeared to be totally oblivious to the needs addressed by Bill C-45, what can explain his slow response to a need felt not only by the workers in many industries, but also by the opposition parties?

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, welcome back. I am delighted to be standing here to give a speech on a second piece of legislation today. It shows that we have a lot of legislation to cover this fall and a lot of work to do and that a lot of important things are being done to help Canadians.

I would also like to add a special welcome to the member for Dauphin—Swan River, who is a tremendous contributor to the House and who has been away for some time. We are all very happy to see him back.

Of course I also want to, as other speakers have, pay tribute to the families and friends not only of Westray but of other organizations where accidents have deprived families of their loved ones, and to the people who have worked toward improving the legislation, such as the friends of Westray and the steelworkers and all those who have contributed to getting to this stage with Bill C-45, the Westray bill, to address corporate responsibility for workers' safety.

I also want to thank many ministers and members of Parliament who came to my riding this summer to see the various problems and issues there first-hand. I think it is very important to Yukoners that so many saw these issues. They look forward to progress on such issues as placer mining. There was a problem, but now we are making progress on it.

Talking about mining, it has been the mainstay of the Yukon for the last hundred years, and while the bill of course does not deal only with mining, mining is a very important and special type of corporate entity. Often it is based around one mineral find and one property, and then the corporation dissolves thereafter. A way is needed to ensure that the corporation maintains safety in the perhaps short time it is in existence through the life of an ore body and that individuals responsible for unsafe actions are held to account.

In response to the standing committee's report, the government stated that the principles of sentencing in the Criminal Code should provide more guidance to the courts when imposing sentences on corporations. However, the government did not indicate its support for any particular changes. Indeed, it expressed concern as to the relationship between the criminal law and regulation and whether a form of community service order could result in managers who were culpable requiring their subordinates to do the actual community service work.

I am pleased to see that in Bill C-45 the government has gone beyond these concerns and has developed very substantive provisions that should result in much more effective and indeed creative sentencing of corporations.

The bill proposes three major changes. First, section 718.21 would provide the courts with what amounts to a checklist of 10 things that should be considered in setting the level of a fine. Second, proposed section 732.1 would open the way for the courts to take a supervisory role in rehabilitating a corporation. Finally, that section also points to the possibility of shaming the corporation.

Canadian law does not provide a mechanical process whereby the punishment is predetermined. Judges have a great deal of latitude to craft the appropriate sentence. I suspect that often judges find sentencing the most difficult part of their job. The guilt of the accused is often pretty clear. Indeed, often the accused pleads guilty and the only real question is what sentence to impose.

Courts are often criticized by the media and the public for the sentences they impose, but I believe that is the inevitable result of giving them the latitude we have. Neither the reporter nor the members of the public who read or hear the media report have to fashion a sentence that reflects the six, and sometimes competing, purposes of sentencing set out in section 718.

When a court has before it an individual who has pleaded guilty to a serious offence, who has expressed remorse, who claims to be dealing with his or her alcohol problems, and who has a family to support, the decision whether to emphasize denunciation and deterrence, perhaps at the expense of assisting the offender to rehabilitate himself, must be very difficult.

The task is no less difficult when a corporation is convicted. Of course, a corporation cannot be imprisoned and so fines are virtually the exclusive way of punishing a corporation. Even that is not without difficulty, since the individuals who actually committed the unlawful act and had the necessary criminal intent will not bear the cost of the fine. It will be borne by the investors and shareholders who are quite likely totally innocent.

Moreover, the corporation may have been transformed between the time of the commission of the crime and the imposition of the sentence. All the managers and employees involved may, for example, have been fired.

There is no way to ensure a perfect result. This does not mean that we should do nothing. Parliament should at least indicate to the courts the factors that they should consider when an organization has to be sentenced. The factors found in proposed section 718.21 are intended to reflect for corporations the factors that govern sentencing of individuals. Judges probably already apply many of these factors, but providing a list should result in judges having a more complete picture of the corporation. I believe that members will agree that the factors are comprehensive and appropriate. They are as follows:

First, the economic advantage gained by committing the crime. Clearly, the more money the corporation made the higher the fine should be.

Second, the degree of planning involved. Careful planning shows a deliberate breaking of the law and should be punished more than a case where the senior officers took advantage of an unexpected opportunity to make a quick, illegal profit.

Third, the need to keep the corporation running and preserve employment. Just as individuals should not be fined so heavily that they will not be able to provide for their families, so a corporation should not normally be bankrupted by a fine so its employees are thrown out of work.

Fourth, the cost related to an investigation and prosecution. Many corporate fraud offences require lengthy investigations and the cost to the public of detecting the crime and building a case should be considered by the judge.

Fifth, any regulatory penalties imposed on the corporation for the offence. Courts consider whether individuals have been punished in other ways, for example, by losing their jobs. Similarly, a court should consider whether the public interest is served by adding a large fine to the penalties that may have been imposed on the corporation by a body such as a securities commission or any other regulatory body.

Sixth, penalties imposed on managers and employees for their role in the crime. A court should consider whether a corporation has disciplined or even fired employees who participated in the offence. Doing so sends a powerful message to other potential wrongdoers in the corporation. Individuals who plays a role in breaking the law risk ending their career even if criminal prosecution is avoided.

Seventh, noting whether there have been previous convictions or regulatory offences. Just as the criminal record of an individual is very important to determining the appropriate penalty, so it is important for a judge to consider whether the corporation and its workers had been sanctioned for similar activities in the past, not just in the criminal courts but by regulators like occupational health and safety departments.

Eighth, restitution, which has been mentioned by other speakers today. Compensating victims shows that the corporation is trying to make up for the harm that it caused.

Ninth, attempts to hide assets to avoid paying a fine. A corporation that tries to pretend it is poor, rather than being open with the court about its financial situation, is showing that it has not changed its ways.

Tenth, measures taken to reduce the likelihood of further criminal activity. New policies and practices, like spot audits or changes in personnel, could indicate that the corporation has learned its lesson.

After considering all these factors, a court should have as complete a picture of the corporation's situation as it has of an individual's circumstances when it receives a pre-sentence report. Indeed, the factors may encourage the Crown and defence counsel to give serious thought to what is an appropriate fine leading to a joint recommendation. There is nothing wrong with negotiations on the level of the fine to be paid, provided everyone has considered the appropriate factors.

Although the factors are important, a potentially more effective tool for rehabilitating the offender and protecting the public from further crimes is the possibility of putting a corporation on probation. Courts often place individual offenders on probation. The court imposes conditions that allow the offender to deal with the underlying problems like substance abuse.

Probation is virtually unheard of for corporate offenders, but there may be circumstances in which probation would be appropriate to ensure that the corporation would take steps to reduce the chances it would commit further crimes .

The bill proposes to put into the code a specific section dealing with probation orders for corporations. The list of conditions the judge can impose begins with providing restitution to the victims of the offence, to emphasize that their losses should be uppermost in the sentencing judge's mind. But it then sets out conditions that may be imposed by the court to supervise the efforts of the corporation to ensure that it does not commit crimes in the future.

A court order can order a corporation to implement policies and procedures to reduce the likelihood of further criminal activity, to communicate those policies and procedures to employees, to name a senior officer to oversee their implementation, and to report on progress.

In its response, the government expressed a concern about the potential overlap of probation under criminal law and regulation, and that is an appropriate concern. It is noteworthy that Bill C-45 would require the court to consider whether another body would be more suitable to supervise the corporation. There is no need for the court to get involved in overseeing changes in a corporation's safety practices, for example, if a territorial or provincial occupational health and safety department is already doing so. Such an agency has trained inspectors and expertise that the courts lack.

Finally, the bill would give the court the power to require the corporate offender to inform the public of the offence, the sentence imposed, and the remedial measures being undertaken by the corporation.

Cheryl Edwards in her article on Bill C-45 in the August 22 edition of Lawyers Weekly called this possibility the most interesting of the proposed creative sentencing options. She wrote:

Imagine a court directing the posting of a criminal conviction and sentence prominently on a corporate website, in a corporate annual report, or in the news media. For many organizations the resulting profound impact on public relations and public image would far outweigh any monetary penalty.

I ask members to consider how a CEO would explain to the board of directors or to the annual general meeting of the shareholders having to run full page ads in the major dailies across Canada telling everyone that the corporation was guilty of serious fraud or killing its workers through criminal negligence? Surely the very possibility would be an incentive for the corporation to review its policies and procedures now to avoid the possibility of such embarrassment in the future.

These innovative proposals should be supported by all members. Therefore, I hope for the families and friends of future workers and for the safety of Canadians that we adopt Bill C-45 as quickly as possible before the House prorogues.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

It would die on the Order Paper for the third time if that were to happen.

Bill C-45 is a step in the right direction and we should work at committee stage to achieve the amendments that would clarify some of the issues I have raised in my comments today.

For instance, the bill should include a clause stating the exact test to be used when assigning liability to a corporation, a director or an officer personally. Those are the kinds of things that have to be done. We have to clarify the role and the responsibility of the parent corporation and its criminal responsibility. If none exist, then we must be mindful that actions taken against a corporation might be successful but may not in fact hold the primary offender to task. These are the things that I believe we have to do. In the end, we have to make sure that we can hold large corporations in our country responsible in a legal way in terms of the civil courts and in terms of the criminal law for any negligence that might have caused an unsafe working place and caused injury or death on the job.

Twenty-six people were killed in May 1992 in Westray. As I said at the beginning of my comments, their families and the people of that community have worked hard to change the law. We have now come a fair way over 11 years, but this bill has died on the Order Paper a couple of times so I appeal to members of all parties in this House to make sure it is a priority.

I do not know what the Prime Minister's plans are, and the member for LaSalle--Émard may not even know what the Prime Minister's plans are, but there is a possibility that come the eleventh of November the House of Commons may adjourn, and it may not come back again until February, with a new prime minister. I hope the government House leader and the other House leaders will make sure that if this is a short session one of the bills that passes in this session will be this bill on corporate responsibility. That is the least we can do as a testimony to those who died in Westray and a testimony to those who have fought so hard to make corporations responsible for any criminality or negligence in the workplace.

[Lorne Nystrom, NDP, Regina—Qu'Appelle, SK]

Mr. Speaker, I want to say a few words on Bill C-45 today. It is an important piece of legislation regarding corporate accountability and corporate criminal liability.

The bill comes from the disaster in 1992 at Westray mine in Pictou County, Nova Scotia. I looked at the Westray story, the first volume of the Richard commission when the report was tabled back in 1997. On the front page there is a quote from a French sociologist, the inspector general of mines in France back in the 1800s. He said “The most important thing to come out of a mine is the miner”.

Over the years we have seen many tragedies around the world and in this country and many people have died because of unsafe working conditions in mines. Many times the company that owns the mine, the directors and senior management team who make the decisions are not held responsible or liable for what has happened, for the human suffering, for the people who have died and for the people who have been injured.

Regarding the bill before the House today, I want first of all to commend the families who have put a lot of pressure on the federal Parliament and other parliamentarians to make sure we have legislation that addresses the issue of corporate responsibility. I also want to publicly acknowledge the work done by the trade union movement, particularly the steelworkers, in terms of lobbying for the legislation before the House.

I also want to put on the record that two members of my caucus, the member for Halifax and the member for Churchill, both had private members' bills that were discussed in the House. They were very instrumental in promoting the idea of doing something about corporate criminal responsibility for directors and for senior management teams of companies in this country.

Finally, throughout the process, which included a private member's motion by the now leader of the Conservative Party, the justice committee tabled a report in the House of Commons. In November 2002 the government responded and on June 12, 2003 Bill C-45 was tabled in the House.

I want to go over some things which may be a bit technical but which are important in terms of analyzing the bill. I want to say at the outset that we offer support in principle, as does the steelworkers union, to the bill before the House. We will be moving amendments in committee and arguing for changes to make sure we tighten and strengthen the bill at committee stage.

At the outset Bill C-45 attempts to provide a modern sentencing regime for corporations and other organizations. By exposing the decision makers to the consequences of their actions, the legislation represents a step forward in corporate accountability. There is now a body of law that has been extensively developed to assign civil liability for various regulatory offences and torturous acts. Often these means of redress are only available to government, creditors or shareholders, but not for the average worker, the average consumer, the average Canadian. That is where I hope the legislation would be a positive thing in the years that lie ahead.

The proposed legislation brings Criminal Code provisions in line with civil law liability by making corporations, the directors and officers of those corporations, responsible for their activities and for those of the representatives of the management of the company. This translates into greater accountability because decision makers will be obliged to undertake a more rigorous supervision and control over the actions of their employees and their agents, which we hope will prevent disasters such as that which we saw in Westray in Pictou County, Nova Scotia.

These Criminal Code amendments would also create greater accountability for corporations, because judicial action against corporations is not limited to one's financial relationship with the corporation. Instead, the crown would be able to prosecute a corporation on behalf of the public for wrongful conduct which, in its absence, would be absorbed by the public market. We must look carefully into what the legislation does in order to keep the parent companies accountable. That is something new in terms of what is in the legislation.

One thing to keep in mind is that there is a fine line to be walked between accountability and the public interest. For example, sometimes it would not make sense to indict a corporate director or other people in corporate management and impose massive criminal fines if those fines meant having to wind up a company which employs 500 people to meet those liabilities.

It is important to note that in a situation where a corporation is only competitive because of its low operating costs which were achieved only at the expense of worker safety, for example, a sweatshop, it may be in the best interests of the public to completely liquidate the company.

These are decisions that have to be made by the courts. We must not be afraid to wind up a company and that is at the discretion of the judiciary, and it is our job as legislators to message such a situation to the public. It would not make sense to impose a criminal fine for a negligent act that damaged the homes of a community if those fines are not going to be used for rebuilding those homes in that community.

The legislation or the courts should understand that there are broad mitigating circumstances to be considered in sentencing. These circumstances should include things like how widely held securities are, how many employees the company has, how many people depend on the operation of the company for a job, for taxes, and how many institutions or public services the company supports.

What I mean is that we have to pick the proper forums for our legal battles. It does not make sense to assign criminal liability where civil liability offers a better solution. If someone has been harmed by the negligent actions of a corporation, I think most people would want compensation and restitution. This can only be achieved in many cases through civil litigation. In some cases the director may well have to be the person directly responsible for the conditions that led to the negligent activity. In these cases, justice in the court of public opinion would only be served by incarceration.

We must be clear that both options need to be possible in order to achieve the maximum social good. That being said, I must be clear on the fact that public opinion often has a very short memory. Justice must first and foremost be served for the family who has lost a spouse, or a family who has lost a brother or a sister and now has to figure out how to care for the children or the family without the companionship, without the support, and yes, without the salary of the mother, the father or the brother or the sister.

Bill C-45 addresses this concern by adding section 732.1 to the Criminal Code whereby a judge may order the offender to pay restitution to a person for any loss or damage suffered as a result of the offence, or the judge may order the corporation to establish policies to prevent further offences. This section has an added benefit whereby anyone who cannot afford to take civil action against a corporation could be awarded restitution through the criminal prosecution of the offender.

I would be interested to see how this section would operate and we would have to find this out at committee stage. For instance, can a victim petition the court for a restitution order during criminal proceedings or is it solely at the prosecutor's discretion? It is curious to note that the section uses the term “person” as opposed to “persons”. I hope the legislation contemplates that more than one person could be affected by an offence.

There are many questions and concerns about this legislation as well. The legislation makes corporate negligence a criminal offence. However in law, negligence has nothing to do with intent. The civil test for establishing negligence lies on the balance of probabilities, whereas the criminal test in general is beyond a reasonable doubt. Would criminal negligence have to be determined on the balance of probabilities or on the question of reasonable doubt? Again this has to be determined at committee stage.

Corporate gross negligence should usually fall under the jurisdiction of both civil and criminal courts. Determining those tests will be outlined by the court. One can only hope this legislation will establish new avenues that will allow the courts to make the best possible use of the civil and criminal systems to deliver the broadest possible form of justice to the workers of Canada.

Where do civil claims stand in line against criminal fines? If there is a civil claim and a criminal fine, where does the civil claim stand in line against the criminal fine?

For instance, would a court order take priority over the claims of unsecured creditors, such as those of employees, secured creditors such as banks, or victims? For instance, if a civil court orders a corporation to pay a million dollars to a victim for a negligent act, a criminal court has fined the company a million dollars for the same act and the corporation has only enough to meet one order, then who will the court see is going to get paid first, the victim? Or do they share the awarded fine? I would not want to see the victim's damages jeopardized by the criminal court order, especially if the order is against a faceless corporation that cannot physically enter a prison anyway.

One can hope that this law exposing corporations to criminal liability would not deflect attention from the reality of the situation. A corporation is made up of shareholders, officers, employees and the assets of that particular company. The only people it makes sense to punish are the directors and officers, because in the end they are the decision makers. However, a director can hide behind a corporate name if the court is satisfied that it does not need to pierce the corporate veil in order to assign corporate liability to the directors personally.

But the point of the legislation is accountability. It is not enough to hold an office building responsible when the managers are the people who should be responsible.

One can hope that the opportunity to assign criminal liability would not reduce the diligence of regulators and litigants in civil courts, where there is a stronger incentive to make directors personally responsible as opposed to making the corporation responsible.

The legislation should be approved in principle as a positive step forward in terms of corporate responsibility, but the key thing is that this is just one tree of a larger forest. This piece of legislation is not the be-all and end-all. It must be complemented with more practical and responsive forms of redress, be they civil, criminal or regulatory in nature. By developing a more coherent cross-discipline regime, true accountability can be attained, because what we are really dealing with is a stack of issues that make up the whole.

One should keep in mind that the point of punishment is accountability and helping out the people who have been the victims. Criminal liability does not always meet those objectives because imprisoning an officer or making a corporation pay a fine to the Crown does not do anything to ease the hardships faced by the victims. In the end it is the victims who have to be compensated. Where a wrong has been committed, it is the victims who must have the compensation. Civil court, in that case, is really the most appropriate place to get justice for victims.

Certainly the principle of the bill is a good one and it is going in a certain direction: toward improving the law of our country. At second reading we certainly support the bill before us, but I think we have to work closely with our friends in the trade union movement and with other workers to maintain the political momentum for the bill. As it stands now, the justice committee is swamped and may not even give the bill the priority it deserves. Ultimately Bill C-45 could die on the Order Paper if this session of Parliament is not a long one.

[Inky Mark, Canadian Alliance, Dauphin—Swan River, MB]

Mr. Speaker, it has been a while since I have been in the House and I am certainly glad to be back.

I am very honoured to speak today on behalf of the Progressive Conservative Party on Bill C-45 proposed by the Minister of Justice, which is an act to amend the Criminal Code regarding the criminal liability of organizations.

Bill C-45 amends the Criminal Code to establish rules for attributing organizations with criminal liability for the acts of their representatives. It also purports to establish the legal duty of persons directing work which will ensure worker safety.

Clause 15 of the bill sets out the framework for courts to consider when sentencing organizations and also provides conditions for court imposed probations.

It is very important that those people who are giving the orders are held accountable for a lot of the things that happen in any organization. The Westray mine example demonstrates that liability should go right to the top. In fact, it should start at the top.

A number of aspects of the bill are very similar to the private member's motion tabled by the member of Parliament for Pictou—Antigonish—Guysborough. It began as Motion No. 455 and then changed to Motion No. 79 before it was passed, having received overwhelming all party support.

I realize that many of the issues of workplace safety fall under provincial jurisdiction. There are corporations in this world that hold no concern for their employees. They do not see them as people. They only look at the bottom line. I believe those days are gone. It is the responsibility of government to ensure that all people are held accountable for their actions.

The attempt of the bill, and of the PC motion which preceded it, is to remind government and parliamentarians that the House and all provincial legislatures throughout the country must do everything in their power to ensure that there is a safe workplace for those who engage in labour activity. If it costs a lot of money and input into making sure that the environment is safe, if that is necessary, it needs to be done.

We need safety in mines but also in farming, manufacturing industries and fish plants, wherever employees work. In any occupation where danger may be encountered, the workplace environment should be safe.

It is a daunting task to put into law provisions that will encourage those in the industry to abide by these legislative initiatives to ensure safety.

I am hopeful that the bill will help to ensure that those with the implicit responsibility for ensuring safety will abide, leading to a higher level of accountability among executives, CEOs and the management in companies. They need to be held accountable if they make decisions to place convenience or practicality over safety in the workplace.

The Progressive Conservative Party has concerns about the safety of employees. Too often we are accused of speaking only for the management of the corporate world, but the House can be sure that we are always concerned about how the corporate world operates and that it is responsible for its actions.

The bill will make corporations liable for permitting unsafe working conditions. For example, the maximum fine for a summary conviction offence for an organization has been raised from $25,000 to $100,000. As well, offences committed on behalf of a corporation by managers or people in positions of authority will also become offences.

Furthermore, directors and officers of corporations who participated in, knew of, or ought to have known of the act or omission that constituted the offence would be considered guilty of an offence and liable on conviction and penalty as if they personally had committed the offence. In other words, the courts shall make a determination based upon the individual's experience, duties, et cetera. No longer can those in management say that they did not know what was happening. By admission, omission is no longer a valid excuse. We are now putting in place rules and policies to make sure that the environment is safe for all people.

Although I do have some concerns regarding Bill C-45, I do commend the government for finally presenting a bill that attempts to deal with the problems in the criminal justice system and give a more clear direction to prosecution of these very often complex and cumbersome cases.

I must stress that the fundamental responsibilities for the safe operation of an underground coal mine or any industrial undertaking will rest with owners and managers.

Westray management, starting with the CEO, was required by law, along with good business practices and good conscience, to design and operate a mine safely. If this legislation had been in place, perhaps the story of Westray would have been different than it was. The significance of their failure cannot be overstated or mitigated. Others were also abdicating their responsibility, and thus the issue of shared responsibilities, which can be encompassed in both the criminal and civil context, was reflected in the recommendations from Mr. Justice Richard's report.

Business executives and corporate executives need to be accountable, and thus should be prepared to seek input from front line workers. This would allow employees to be part of management's schemes when it comes to safety. They should be relied upon to lend their knowledge and create the maintenance of a safe work environment. That is something that was also acknowledged in the report.

It is not a politically popular thing to say, but there was an element of culpability and responsibility on the workers themselves. This has to be taken into the entire context of what legislative change should occur to ensure that accountability and responsibility are held by all.

Businesses must also ensure that their employees are adequately supervised and constantly updated on safe work practices. That is a very important point. It is one thing to make the environment safe. It is another to make sure that the employees themselves are well trained, skilled, and know the safety policies that are put into place to ensure that they work safely.

It stands to reason that when weighing business goals, for example meeting production deadlines versus those of safety, shutting an operation down obviously has huge financial consequences, yet the human element should have outweighed the business demands. That is a new direction which the corporate world is following, that is, that the safety of people's lives comes first before the bottom line.

In closing I would say that business executives must promote and nurture safe work ethics and have an open and approachable attitude toward their employees. No one ever wants to feel the effect we felt in Plymouth with the Westray mine.

[Richard Marceau, Bloc, Charlesbourg—Jacques-Cartier, QC]

Mr. Speaker, I am pleased to initiate, on behalf of the Bloc Quebecois, the debate on Bill C-45 sponsored by the Minister of Justice and dealing with criminal liability of organizations.

Hon. members will recall that this bill was introduced at the very end of last spring's session, when the leadership crisis within the Liberal Party of Canada was at its peak.

At that time, people may have wondered just how far the government might go to get its bills through. The answer to that question provided today is pretty revealing.

It seems that the government will try anything it can to curb controversy, in order to keep a lid on the tensions within the Liberal caucus and the divisions within the government. As a result, it will opt as much as possible for passing legislative measures that will gain the support of the House and not stir up any debate.

That said, the odds are pretty good that the government leader will attempt to minimize the untenable situation his party finds itself in, and it is possible that we will not sit beyond November 7, the date of the coronation of the member for LaSalle—Émard as leader of the Liberal Party of Canada.

In the meantime, however, it is important for us to do our jobs conscientiously, because the Liberals do not seem to be on top of their game, and they have lost sight of our primary role: to legislate.

Coming back to the bill of concern to us today, I will state at the outset that the Bloc Quebecois will be supporting this amendment to the Criminal Code, and will also be in favour of its prompt passage in order to address an important ethical aspect in the role of corporations and organizations.

The objective of Bill C-45 is, in fact, to carry out an indepth review of the principles of law governing the liability of corporations and other associations of persons for all criminal offences.

It must be kept in mind that Bill C-45 is the outcome, first and foremost, of the efforts of ordinary members of this House and not an initiative by the government, which has put off taking action for a long time, too long we might say.

Before offering a historical overview, it would be worthwhile making reference to the findings of the public inquiry into the causes of the explosion that took place at the Westray mine in Nova Scotia.

This explosion, which took place several years ago, as hon. members will recall, left 26 men dead. The public inquiry revealed that the tragedy was in large part caused by the negligence of the bosses, who had turned a blind eye to some serious safety problems.

Thus, as I said, the government's inertia in enacting legislation is balanced by the tenacity of some members in trying to get substantial legislative changes passed so that such a situation cannot happen again, or, at the very least, there is a form of criminal recourse if a similar unfortunate tragedy were ever to take place.

The purpose of these private members' bills was to establish and clearly set out, under certain circumstances, the criminal liability of corporations for the errors of neglect or criminal intent committed by their directors or employees, and to create a new category of offence in the Criminal Code, with respect to companies that fail to provide a safe workplace for their employees.

Similarly, in June of 1999, a motion was brought forward to amend the Criminal Code and other federal legislation so that the directors and officers of a company would be held responsible for workplace safety.

At that time, the Bloc Quebecois supported the motion, but when Parliament was dissolved the motion was deferred. Since then, similar motions have been presented three times to the House, but the government, unfortunately, has dragged its feet until now.

Many similar bills have been introduced in recent years, and I think it is important to remind the House of the position taken in 2001 by my hon. colleague for Laurentides, with respect to Bill C-284.

In fact, the Bloc Quebecois supported passage of Bill C-284, but we also pointed out that in Quebec, an organization already exists, called the Commission de la Santé et de la Sécurité au Travail, or CSST, whose mandate is to ensure the safety of employees in the workplace.

Similarly, also in relation to that bill, we maintained that it was essential to adopt the proposal so as, legally, to establish a method of redress and to strengthen the Criminal Code, in order to prevent loss of life among workers.

The Standing Committee on Justice and Human Rights also held public hearings on this matter in the spring of 2002; it recommended and I quote:

That the Government table in the House legislation to deal with the criminal liability of corporations, officers and directors.

The government's concrete response to the Standing Committee on Justice and Human Rights and the ongoing efforts of members have resulted in Bill C-45, of which we are proud. We regret the delay, but the adoption of Bill C-45 will be our just reward.

This bill to amend the Criminal Code before the House contains eight key points that I want to list for my hon. colleagues and those interested in this matter.

The main changes pertain, first, to the use of the term “organization”, rather than “corporation”. This will broaden the definition, thereby affecting more institutions.

Second, companies can now be held criminally liable for the acts of their employees who are not necessarily in positions of authority or, as they are commonly referred to, the “higher ups”.

Third, the material aspect—the act of committing a crime—and the moral aspect—the intent to commit a crime, the mens rea —of criminal offences attributed to companies and other organizations no longer need be the work of the same person.

Fourth, the category of persons whose acts or omissions can constitute the material aspect, meaning the criminal act which can be attributed to a corporation or any other organization, is broadened to include all employees, representatives or contractors.

Fifth, with regard to crimes resulting from negligence, generally referred to as criminal negligence, the fault can now be attributed to the organization to the extent that one of the senior officers of the organization can be charged with the offence.

In the case of deliberate crimes, an organization can now be held responsible for the actions of its senior officers to the extent that a senior officer is party to the offence, directs other employees to commit an offence or, knowing that an offence will be committed by other employees, does nothing to prevent it.

It is important to clarify, nonetheless, that the acts or actions of senior officers must be committed with the specific purpose of procuring an advantage for the organization.

Similarly, the bill is designed to place the onus explicitly on anyone who undertakes to direct the work of other employees to take all reasonable steps to prevent bodily harm to these employees.

Finally, the bill also contains provisions for establishing general sentencing principles and probation conditions in respect of the organizations.

Before going any further in our deliberations on Bill C-45, it should be noted that in our justice system it is essentially jurisprudence that determines the conditions under which a company can be held responsible for a criminal offence.

In criminal offences that require culpable intent or intent to commit a crime, companies are only responsible for acts or omissions by people who may be said to constitute the directing mind of the company. In order for a company to be found guilty of an offence with culpable intent, it must be shown that the individual who materially committed the criminal act in the performance of his duties had implicitly or explicitly been given the authority to write policies for the company and to oversee their implementation.

For each situation, the court must decide whether the individual who committed the criminal act in the performance of his duties can be deemed the directing mind of the company. This is commonly referred to as the identification theory.

Ultimately, we are entitled to believe and maintain that, based on this approach, individuals who are the directing mind of the company personify the intentions of the company.

I could also enter into a technical argument justifying our support of Bill C-45, but I will settle for merely pointing out that this bill defines an organization as including a public body, body corporate, society,company, firm, partnership, tradeunion or municipality. Thus the term organization also includes any association of persons created for a common purpose, which has an operational structure and holds itself out to the public as such.

The main intent of the bill is to broaden the category of individuals whose actions and intentions may engage criminal responsibility of the organizations they represent. Therefore a differentiation will be made between two groups of individuals, namely representatives and senior officers, whose conduct may constitute a criminal offence attributable to an organization.

Thus a representative includes essentially any person who works on behalf of an organization or is affiliated with it, which generally means a director, partner, employee,member, agent or contractor of the organization. In this view, a senior officer means a representative who plays an important role in the establishment of the organization's policies or is responsible for managing an important aspect of the organization's activities.

The effect of this new designation will be to change the present state of the law by introducing new elements to the theory of identification.

It is also proposed to add sections to and expand existing sections of the Criminal Code to take into account in sentencing a reality peculiar to organizations. The same goes for the definition of specific conditions of probation applicable to organizations.

Once passed, Bill C-45 will increase from $25,000 to $100,000 the maximum fine for an organization under summary conviction or convicted of lesser offences.

There is currently no limit set on the maximum amounts of fines for criminal acts or more serious offences, a situation that the proposed legislation does not address. However, the bill specifies factors the court will have to take into account in setting the amount of fines.

For example, the courts will have to take into account aggravating factors such as the degree of planning and any financial advantage realized by the organization as a result of the offence or, conversely, mitigating factors such as efforts made by the organization to reduce risks.

Before concluding, I want to reiterate the support of the Bloc Quebecois for the principle of Bill C-45 at this stage of the legislative process. The committee stage will also provide an opportunity to consider further the proposed legislation and, above all, ensure once and for all that there are no loopholes organizations can use to abdicate their responsibilities.

I remind the House that the current state of the law forces us to establish a regime of criminal responsibility for businesses that is effective and takes into account the differences between an individual and an organization. I also look forward to hearing what my hon.colleagues have to say on this matter. I remain convinced that we will be able to pass this legislation with diligence for the benefit of our fellow citizens thanks to, among other things, the evidence we will be hearing in the Standing Committee on Justice and Human Rights.

[Vic Toews, Canadian Alliance, Provencher, MB]

Mr. Speaker, I am pleased to rise today to discuss this bill, an act to amend the Criminal Code (criminal liability of organizations).

The incident that took place in the Westray Mine near New Glasgow, Nova Scotia in 1992, in which 26 miners were killed, resulted from gross negligence on the part of managers, directors and workplace inspectors. It was a tragedy that could have been prevented. It was a crime that should never have taken place.

I think it is appropriate that we have this discussion to determine whether that action on the part of the corporation and its directors in fact should result in the criminal penalties being proposed here.

The inquiry released in November 1997 by Mr. Justice Peter Richard made the recommendation for the federal government to institute a study of the accountability of corporate executives and directors for the wrongful or negligent acts of the corporations and suggested that the government introduce amendments to ensure that corporate executives and directors are held accountable for workplace safety and health.

In the last session of Parliament, a private member's bill to deal with this issue, Bill C-284, was approved in principle by all parties in the House of Commons, including the Canadian Alliance. However, at that time we cited concerns about the legislation and maintained that certain constitutional issues must be addressed before the bill could be passed.

In May 2002, the justice committee referred the subject matter to the Department of Justice in order to draft legislation in accordance with the objectives of the bill. The result is Bill C-45.

Bill C-45 accomplishes three main goals: first, it makes changes to the Canada Labour Code to protect against workplace hazards; second, through changes to the Criminal Code, if employers and managers do not take reasonable measures to protect employee safety and harm results, the organization could be charged; and third, it expands conditions for liability.

I fully agree that the issue of corporations providing safe working conditions for employees must be addressed by the federal law. I agree that it is not sufficient that we simply have provincial legislation in place. However, I would at the same time caution members of the House against passing legislation that could be legally or constitutionally flawed. If the legislation is in fact put to use in the future, let us not put the families of future victims through the agony of a trial only to find out that there are legislative or constitutional flaws that make the entire legal proceeding under these provisions defective.

It should be noted that one defence that previously existed under the Criminal Code has been repealed by this legislation. For example, section 391 of the Criminal Code states:

Where an offence is committed under section 388, 389 or 390 by a person who acts in the name of a corporation, firm or partnership, no person other than the person who does the act by means of which the offence is committed or who is secretly privy to the doing of that act is guilty of the offence.

Without this defence, concerns have been raised that a person could be held responsible for an offence even if he had no knowledge of the commission of that offence. While the motivation behind the bill and its predecessors are obviously well intentioned, and I think strive to meet an existing need, we must carefully consider the implications of these amendments. That is why we need to be careful in the context of our constitutional framework to ensure that they do in fact comply with the requirements of our Constitution.

In further discussion on the bill it must be remembered that the one of the principal reasons that businesses choose to incorporate in the first place is to protect shareholders and directors from personal liability arising from the activities of the business. I am not suggesting that simply because individuals have arranged their affairs in such a way as to avoid personal responsibility it should excuse criminal conduct. Criminal conduct should be punished whether it is done directly by individuals or indirectly through the mechanism of the corporation.

Executives, directors or other officers and employees of the corporation presently do not and should not have the benefit of immunity from criminal liability. Under our current Criminal Code provisions, they are legally accountable for their own personal wrongdoing. As well, corporations can be held criminally liable in their own right. In cases of offences of absolute or strict liability, a corporation would be subject to penal liability for unlawful acts or omissions of such persons who, because of their position or authority in the corporation, may be said to constitute the directing mind of the corporation.

However, this bill expands further conditions of liability, which must be carefully studied once the legislation is referred to the committee.

Another matter to consider is that this legislation could create concerns among corporations, be they large or small, successful or struggling. I am not suggesting that we jeopardize the health or safety of our workers at the expense of economic growth and jobs, but we do have to be mindful of the impact that these amendments may have if the legislation is not legally or constitutionally sound.

Furthermore, some businesses may have difficulties in attracting viable candidates to sit on a board with the prospect of such Criminal Code penalties. Smaller or struggling companies would be at a particular disadvantage if such standards for accountability were universally applied.

The question that must be asked is whether these provisions will dissuade from managing corporations precisely those who could provide the appropriate guidance to strengthen the health and safety of the workers. If we pass legislation, will it discourage those individuals in our society who would make responsible directors and managers from in fact directing and managing those corporations? If by our legislative action we frighten those individuals, we then leave corporations in the hands of those who do not care about the safety of workers and that is a situation that we need to avoid. Given the civil liability that has attached to directors, will this increase the difficulties that many corporations find in attracting qualified and competent directors?

I think everyone here wants a safe workplace. They want viable economic units that create jobs and keep the engine of wealth moving in this country. We need to balance these concerns against some of the proposals being made here. I am not in a position yet to say whether these amendments in fact do that in an inappropriate way. On a reading of the legislation, I find much to commend it.

We do not want to create the situation where we dissuade competent people from becoming the directing minds of corporations. We want to encourage competent people who exercise sound skill and judgment to continue working through the vehicle of corporations to ensure that jobs are preserved and created in Canada.

Again, that is an issue we need to bear in mind given the difficulty that many corporations today may have in attracting directors to their boards.

In summary, I think it is important to be careful that this legislation does not open up the door to penalties for people who may not have acted with criminal intent. That, I think, is the major issue the House needs to consider. Our Constitution does not support imposing criminal penalties where there is no criminal intent. If we pass legislation that is constitutionally flawed, it does not help the families of those workers who may face a tragedy in the future. I want to hear from witnesses at the justice committee before formally proposing any amendments to the legislation.

I would like to note that the member for Kootenay--Columbia and other Canadian Alliance representatives have done a substantial amount of work in this area. They have met with representatives of the Westray victims' families and other parties around Antigonish. In fact, the member for Kootenay--Columbia will be addressing this legislation and will share some of the insight he has gained.

I want to say that the Canadian Alliance supports the intent of this legislation and we look forward to working proactively to overcome any identified legal and charter concerns that may be present in the proposed legislation.

[Paul MacKlin, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, just before the break we were talking about the issue of probation as it related to Bill C-45 and I would like to carry on with that thought.

Probation is possible for a corporation but it is virtually never imposed. We believe there may be circumstances where the court wants to ensure as best it can that the corporation will change its ways and commit no further crimes and recognizes that a heavy fine would cripple the corporation's efforts to reform.

In those circumstances probation makes sense for the corporate offender. Accordingly, we propose that a court be able to order an organization to establish policies to reduce the likelihood of further criminal activity, to communicate those policies to employees, to name a senior officer to oversee their implementation and to report periodically to the court.

We propose as well to give the court the power to order the organization to inform the public of the offence, the sentence and remedial measures being undertaken by the organization. Not only will this allow the public to decide whether it wishes to continue to do business with the organization after the conviction, we believe it could also be a powerful deterrent. No corporation would want to risk having to take out ads in the various media to tell Canadians it has been criminally negligent or it has been committing fraud.

Finally, we are proposing that the maximum that can be imposed on a corporation for a summary conviction offence be quadrupled to $100,000 from its $25,000.

The changes that we are proposing will give Canada a regime for determining the criminal liability of organizations and for sentencing them in a manner that is appropriate for the complex business arrangements that are common today.

I am proud to present Bill C-45 to the House for its consideration.

[Paul MacKlin, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker,I am pleased to begin the debate on Bill C-45, an act to amend the Criminal Code concerning the criminal liability of organizations. The bill will transform the principles contained in the government's response to the 15th report of the Standing Committee on Justice and Human Rights looking into provisions in the Criminal Code. The standing committee's report was the result of hearings that were prompted by the debate on Bill C-284 sponsored by the hon. member for Churchill.

Fundamentally the bill has its origins in the tragic deaths of 26 miners in the Westray mine explosion in May 1992. I will not review in detail the lengthy and ultimately fruitless criminal proceedings that followed the investigation of the explosion. All members are aware that the company that operated the mine, and two of its executives, were charged with manslaughter. The trial judge ordered a stay of the charges because of problems with disclosure of evidence by the Crown. Although the appeal courts overturned that decision, the prosecution decided it could not go forward.

The Government of Nova Scotia appointed Justice K. Peter Richard to conduct an inquiry into the disaster. The inquiry itself was delayed by legal proceedings but when hearings got underway, the evidence disclosed, in Justice Richard's own words, “a complex mosaic of actions, omissions, mistakes, incompetence, apathy, cynicism, stupidity and neglect”. Justice Richard ultimately made 74 recommendations to enhance workplace safety. These recommendations dealt with such issues as training, ventilation, mine safety and the like.

The United Steelworkers of America, to their credit, have been the untiring champions of the families of the Westray victims. They urged Justice Richard to recommend fundamental reform of the criminal law as it affects workplace safety and the responsibility of corporate directors and officers for maintaining a safe workplace.

Justice Richard concluded that this was beyond his mandate but he did make recommendation 73:

The Government of Canada, through the Department of Justice, should institute a study of the accountability of corporate executives and directors for the wrongful or negligent acts of the corporation and should introduce in the Parliament of Canada such amendments to legislation as are necessary to ensure that corporate executives and directors are held properly accountable for workplace safety.

In this Parliament all members of the standing committee have given careful consideration to both the issue of the role of the criminal law in promoting workplace safety and the general rules that should govern the liability of corporations and their officers and directors.

A discussion paper setting out the issues and reviewing the evidence of other countries, which had been prepared by the justice department, was provided to the committee. The committee heard from officials of the justice department and other experts. It heard moving testimony from victims and relatives of victims of industrial accidents. The 15th report of the committee recommended “that the government table in the House legislation to deal with the criminal liability of corporations, directors and officers”.

Clearly all parties in the House felt that it was time for fundamental reform in this area. The government in its response to the report reviewed the evidence that had been heard by the committee and agreed on the need for reform. The government also concluded that there was no perfect system in other countries that Canada could simply copy. The report therefore set out the principles that would guide the drafting of a made in Canada approach to the problem of corporate crime.

However, just as reform of the criminal law was not the primary focus of Mr. Justice Richard's report, this bill is not the primary response of the Government of Canada to the Westray tragedy. The government has already acted decisively to promote workplace safety because prevention of accidents is always better than prosecutions after a tragedy.

In 2000, amendments to part II of the Canada Labour Code established a number of improvements to occupational health and safety in workplaces under federal jurisdiction. Three fundamental employee rights were established: the right to know about hazards in the workplace; the right to participate in correcting those hazards; and the right to refuse dangerous work. The role of workplace health and safety committees and of policy health and safety committees was strengthened.

Bill C-45 builds on those changes by proposing to include in the Criminal Code a new section, section 217.1, which provides that everyone who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person or any other person arising from that work or task.

The importance of having such a duty in the Criminal Code is that if there is a breach of that duty, wanton and reckless disregard for the life or safety of people, and injury or death results from that breach, a person can be convicted of criminal negligence causing death which is punishable by up to life imprisonment, or criminal negligence causing bodily harm which is punishable by up to 10 years imprisonment.

Members will note that this duty is not specific to corporations. Many corporations already have a similar duty. The Canada Labour Code for example provides in section 124 that “every employer shall ensure that the health and safety of work of every person employed by the employer is protected”.

As well, a duty of care to workers may exist in provincial legislation or under the common law. Breach of these duties can currently lead to criminal charges where there is reckless disregard for the safety of others.

Bill C-45, if adopted, will have its greatest impact on the liability of corporations and other associations of persons for all criminal offences. The definitions of “representative” and “senior officer” and the rules for attributing criminal liability for negligence offences and other offences set out in proposed sections 22.1, 22.2 and 22.3 will modernize the approach to criminal liability of all corporations.

Members will have noted that although the standing committee held hearings on corporate criminal liability, the bill refers to “organizations” which is defined broadly to include all major participants in the economy and all associations of persons created for a common purpose, having an operational structure and holding itself out to the public as an association.

There has been a great deal of creativity shown by corporate lawyers in developing new structures, for example, limited liability partnerships and joint ventures. Quite simply we want to ensure the Criminal Code applies to every organization of persons without any artificial distinctions based on how those persons chose to structure their legal relations.

In practice of course, corporations are likely to be charged far more frequently than other forms of association because of their dominant role in Canadian society. The proposed rules for attributing criminal liability to an organization are necessarily complex because the criminal law requires proof of both the commission of a prohibited act and that the person had the necessary mental state.

Since organizations can only act through individuals, the fundamental problem with which the law has struggled is to decide whose acts are to be considered the acts of the organization and who in the organization has to have the necessary guilty mind for the organization itself to be considered as having a guilty mind.

Until now, Parliament has been content to have bodies, corporate societies and companies included as persons and to leave it to the courts to develop the tests for determining when they are criminally liable. At first, the courts were reluctant to find that a corporation could commit a crime, but case by case they have built up rules for holding corporations accountable for crimes carried out in their name and for their benefit by their employees and officers.

With respect to the first question, namely, whose acts should be considered the acts of the organization, we propose that the acts of representatives are the acts of the organization. Representative is defined broadly so that it includes not just officers and employees, but also agents and contractors. As long as they are acting within the scope of the authority given them by the organization, their actions should be the actions of the corporation.

As for whose guilty mind should be the guilty mind of the organization, the government in its response stated that it found the Supreme Court approach too narrow because of its insistence that a directing mind had to have executive decision making authority on matters of corporate policy.

Through the definition of senior officer, we propose to broaden who can be the directing mind by including, in addition to those who would already be so considered, a person who has an important role in establishing policy rather than having to have the ultimate power to make policy, and a person who is responsible for managing an important aspect of the organization's activities even if that person has no policy making authority whatsoever. The proposed change reflects the way that large modern corporations are organized.

While the courts would still have to decide in each case whether a particular person is a senior officer, I believe the proposal clearly indicates our intention that the guilty mind of a middle manager should be considered the guilty mind of the corporation itself. For example, the manager of a sector of a business such as sales, security or marketing, and the manager of a unit of the enterprise like a region, a store or a plant, could be considered senior officers by the courts.

An organization would be responsible for crimes based on negligence where the acts and omissions of its representatives, taken as a whole, are negligent and its senior officers showed a marked departure from the standard normally expected in the circumstances.

In a tragedy such as Westray, it may not be possible to find a single representative of a corporation who was criminally negligent. The deaths may have resulted from a series of actions and omissions by many representatives. Even though no single individual might be convicted of a criminal offence, it may be possible for the corporation operating the mine to be criminally liable. For example, if three employees simultaneously turned off three separate safety systems and death resulted, these employees might not be subject to criminal prosecution because they each believed that turning off one system would not endanger anyone because the other two systems would still be in operation. However, the corporation might be charged with criminal negligence.

For the court to convict the company that operated the mine, the Crown would have to show that the management fell well below the standard of care that would be expected in the circumstances. In making this determination, the court would have to consider industry practice and procedure. If other companies have a system to ensure that no more than one safety system could be turned off at a time, the court could well conclude that the accused corporation had fallen far below what was reasonably to be expected and convicted.

For all other criminal offences, we are proposing that the organization be criminally liable whenever a senior officer with intent to benefit the organization commits the prohibited act, or uses representatives lower down in the organization, or outsiders to commit the act, or fails to act on knowledge of criminal activity by its representatives.

An organization should not be able to avoid criminal liability by turning a blind eye to indications that its representatives are committing crimes.

All of these changes reflect the positions taken by the government when it tabled its response. At that time the government indicated that the Criminal Code should provide more guidance for the courts when they impose sentences on a corporation, but we made no specific proposal.

The Criminal Code contains principles of sentencing and aggravating factors for judges to consider, but mainly they are applicable to the individual. For example, it is an aggravating factor to abuse a spouse or a child in committing the offence.

We are seeking, through the proposed new section 718.21, to assist the courts in determining an appropriate sentence for an organization. Of course, jail is not an option for a corporation. Therefore, in practice the court has to decide how heavy the fine to impose.

In determining that fine the court should consider the moral blameworthiness of the organization through such factors as the profit it made and the planning involved in the offence. It should also consider the public interest. Except in unusual circumstances, a fine should not be so high that the company is bankrupted and morally blameless employees lose their jobs.

Just as the criminal record of an individual is very important in determining sentence, the court should take into account any previous criminal convictions and convictions for regulatory offences of the organization and its personnel involved in committing the offence.

Finally, rehabilitation of the offender is always important. An organization may have shown that it is determined not to commit further offences by imposing penalties on managers involved in the commission of the offence or by paying restitution to victims.

We are also proposing to encourage the courts to innovate by setting out optional conditions of probation geared to the corporate offender in the proposed new subsection 732.1(3.1). Probation is possible for corporations, but it is virtually never imposed.

We believe there may be circumstances where the court wants to ensure as best it can that the corporation will change its ways and commit no further crimes.

[John McCallum, Liberal, for the Minister of Justice]

moved that Bill C-45, An Act to amend the Criminal Code (criminal liability of organizations), be read the second time and referred to a committee.

Parliament of Canada Act

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, it is great to be back to make a couple of speeches on the first day of the autumn session of Parliament. I would like to welcome everyone, especially the new pages. I would like to assure my constituents in Yukon that the new pages have already completed the most important part of their training and fully understand that Yukon is the best constituency in the country.

Before I go into details on the amendment to Bill C-34, the previous speaker discussed the general legislative climate this fall. I would like to follow up on that because it is a very aggressive and detailed legislative agenda and I hope people do not lose track of that.

There are many bills that we are in the midst of bringing forward and must continue with such as, Bill C-34, which we are talking about now; but also Bill C-13, assisted human reproduction; C-22, family law; C-38, marijuana; Bill C-45, which I hope to talk about later today concerning the Westray bill for worker safety; Bill C-46, market fraud; Bill C-19, resource taxation; Bill C-6, first nations specific claims resolution for the economic development of first nations; archives legislation; bills related to child pornography and the sex offenders registry; citizenship; as well as urgent veteran's needs.

And then of course all the committees are working. The finance committee will be doing its pre-budget work. There are always important issues in foreign affairs. The health committee has to work on the West Nile virus and the agriculture committee on mad cow disease.

This is a very detailed agenda and continues to be one of the most productive legislative agendas we must get through. I hope people do not get sidetracked in the House or in the media about other things or go off these important changes that affect real people in Canada.

I am pleased to address the NDP amendment at report stage with respect to Bill C-34, a bill which would establish an independent ethics commissioner reporting to Parliament. The amendment proposes the deletion of clause 38 of the bill in its entirety.

This clause would change subsection 2(2) of the Federal Courts Act by adding references to both the ethics commissioner and Senate ethics officer so that the activities of the ethics commissioner and Senate ethics officer are not subject to review by the Federal Court, whether by judicial review or by appeal.

The Parliamentary Secretary to the Government House Leader has already explained why the NDP amendment is inappropriate and should be rejected. I want to comment on the need to preserve the House's privileges in this area.

The House and its members have traditionally been responsible for their ethical conduct. This is a tradition we in the House have had since Confederation and which we share with other parliamentary democracies.

Let me set out how the bill preserves this tradition of parliamentary privilege and ensures the House's accountability to Canadians.

Clause 38 amends a provision in the Federal Courts Act which itself exists for greater certainty to ensure that the activities of Parliament and parliamentarians are excluded from review by the Federal Court. Given the role of the ethics commissioner and the Senate ethics officer in dealing with the conduct of parliamentarians, it is logical that those provisions be extended to these two officers of Parliament.

This clause is but one of several provisions in the bill intended to ensure that the House, and not the courts, continues to have the ultimate responsibility, and accountability, for the ethical conduct of its members. For instance, the bill would create an ethics commissioner as an officer of the House.

Section 72.05 includes express recognition that the ethics commissioner “enjoys the privileges and immunities of the House of Commons and its members in carrying out his or her duties and functions”. This section also provides express recognition that the bill does not in any way limit the powers, privileges, rights or immunities of the House or of its members.

Further, Section 72.12 would ensure that the ethics commissioner and his or her staff could not be taken to court in respect to their official activities. This section also acknowledges that the commissioner and his or her office are protected by the privileges and immunities accorded to Parliament as an institution. Similar provisions have been made for the Senate ethics officer throughout the bill.

Collectively, these provisions, including clause 38, are essential if we are to create an ethics commissioner who, in respect of matters pertaining to members of the House, is to function as the legislation requires and is accountable to the House.

In this regard, the bill states that the ethics commissioner's functions in relation to members would be carried out “under the general direction of any committee of the House of Commons that may be designated or established by the House for that purpose”.

Canadians expect members of the House to establish and abide by ethical rules. This is only proper because as parliamentarians we are ultimately accountable to the public, both for our own ethical behaviour and for the steps taken by the ethics commissioner as an officer of Parliament.

In our view, the proposed amendment would seriously undermine Parliament's long standing privileges, the ability of the House to properly assign duties and functions to the ethics commissioner, and the House's ultimately accountability for the ethical conduct of its members.

It would undermine the ability of the House to govern its affairs and would open up the possibility that the courts might be called upon to second guess or review the actions of the ethics commissioner.

Canadians have every right to expect that the House would create and enforce the highest ethical guidelines for members. They know and expect that the House and its members are ultimately accountable for the ethical code it will implement. They do not want parliamentarians to transfer this responsibility to the courts. Accordingly, I would encourage members of the House not to support the amendment.

I want to conclude by again referencing the previous speaker's speech when he commented on the tremendous potential leadership awaiting in the wings for the country and how popular that is with Canadians. We will have a great transition to even more exciting times, but as I was saying at the beginning of my speech I hope that the important things that affect the lives of Canadians, which I mentioned and the number of bills that we will be dealing with throughout the fall, winter and spring, would not be lost in the simple transition of politics.

Criminal Code

[Martin Cauchon, Liberal, Minister of Justice and Attorney General of Canada]

moved for leave to introduce Bill C-45, An Act to amend the Criminal Code (criminal liability of organizations).

(Motions deemed adopted, bill read the first time and printed)

International Transfer of Offenders Act

[Wayne Easter, Liberal, Solicitor General of Canada]

moved that Bill C-33, An Act to implement treaties and administrative arrangements on the international transfer of persons found guilty of criminal offences, be read the second time and referred to a committee.

Mr. Speaker,I rise today to speak at second reading of Bill C-33, the international transfer of offenders act. I am proud to sponsor the bill for a number of reasons, in particular because of the public safety and humanitarian objectives that the bill will further.

The current Transfer of Offenders Act came into force in 1978 following a United Nations meeting where member states agreed that international transfers were desirable because of increasingly greater mobility and the need for countries to cooperate on criminal justice matters.

The Transfer of Offenders Act authorizes the implementation of treaties between Canada and other countries, including multilateral conventions for international transfer of offenders. The Transfer of Offenders Act and the treaties serve essentially a humanitarian purpose. This is important. Imagine for a moment that a citizen of Canada is incarcerated in a country whose language and culture is foreign to him or her. Add to this an unfamiliar environment, a lack of contact with family and friends, food that is incompatible with the person's dietary requirements, unsatisfactory health and sanitary conditions and/or difficult conditions of incarceration.

It goes without saying that these factors increase the pains of imprisonment for offenders, and the hardships they face often translate into hardships for their families at home.

But there are other reasons for the legislation. The Transfer of Offenders Act serves an important public protection purpose. Offenders incarcerated in foreign states may be deprived of the opportunity to rehabilitate themselves in the absence of treatment programs in those countries, in the absence of a structured parole system, and in the absence of direct contact with family and friends in their home community. As a result, the chances of long term reintegration of these offenders, and ultimately of better public safety, are greatly reduced. This holds true even when offenders are incarcerated in a country with social standards and customs relatively similar to Canada's.

The Transfer of Offenders Act ensures that the offender does not escape justice. There is no free ride. When Canadian offenders are transferred to Canada to serve the remainder of the foreign sentence until warrant expiry, they arrive here under the supervision of the Correctional Service of Canada or of provincial correctional authorities who oversee their gradual and controlled reintegration into society. I think we can all agree that this is far better than simply deporting offenders back to Canada at the end of their sentence without any controls or supervision.

There is no doubt that most states wish to cooperate with one another on matters of criminal justice. All states attempt to deter prohibited conduct through the enforcement of criminal laws and penalties. Modern technology and global travel have led to increased opportunities for the commission of crimes in countries other than one's own. Therefore, states have a common interest in cooperating to prevent and respond to criminal conduct. This actually protects the sovereignty of states by preventing offenders from escaping justice, and this is exactly what the transfer of offenders scheme allows states to do.

Every year, about 85 Canadians are transferred to Canada under a treaty or a multilateral convention for the transfer of offenders. Since 1978, only technical amendments have been made to the Transfer of Offenders Act. Since then, more substantive issues have been identified. Policy issues relating to international transfers have expanded due to Canada's greater experience with treaties and legislative amendments brought about by the Corrections and Conditional Release Act in 1992, Bill C-41 on sentencing in 1995, and Bill C-45 on sentence calculation reform in 1996.

As a result, my department consulted with 91 private sector and government agencies and then conducted a comprehensive review of the Transfer of Offenders Act. This resulted in proposals to amend the legislation that would reflect traditional international treaty principles, close identified gaps, ensure consistency with other legislative provisions, and improve efficiencies.

In recent years, statements of purpose and principles have been added to federal legislation for several reasons: to provide a clear indication of the intent of the legislation; to ensure parliamentary endorsement of the approach and policy behind legislation; and to aid in the interpretation of provisions.

Bill C-33 would do exactly that. It would specify that the purpose of the new international Transfer of Offenders Act is to contribute to the administration of justice and the rehabilitation of offenders and their reintegration into the community by enabling them to serve their sentences in the country of which they are citizens or nationals.

Over the years, Canada has promoted key principles to guide international transfers of offenders, and in particular, the notion of the offender's voluntary consent to the transfer. This notion is based on the traditional humanitarian objectives of treaties. The prospects for an offender's successful institutional adjustment, rehabilitation, and community reintegration would likely be compromised if an offender were forced to transfer against his or her will. Foreign states may also be less inclined to approve a transfer on humanitarian grounds if the offender has not willingly consented. This is why Bill C-33 would reflect this important principle.

The bill also contains the important principle that offenders are to be informed in advance of the terms and manner in which their sentences will be completed in Canada. It would also require that a foreign offender requesting a transfer to his or her home country be provided with information from that foreign state about how the sentence is to be served in that state. This would ensure that the offender's consent to the transfer is truly informed.

The current Transfer of Offenders Act makes provisions for the transfer to Canada of young offenders committed to custody, but not for young offenders on probation. This is inconsistent with the provisions which allow for the transfer of adult offenders both on probation and in custody. Bill C-33 would close this gap by providing for the transfer of young offenders on probation in the new act. Moreover, there is no provision in the current act that allows for the transfer of Canadian children. Bill C-33 would close that gap as well by providing for the transfer to Canada of children less than 12 years of age. The bill also specifies that children transferred to Canada would not be detained by reason of the foreign sentence. They would be dealt with in accordance with the law of the receiving province or territory. By widening the net, so to speak, the bill would further the humanitarian objective of the act.

The current act provides that Canada may enter into a treaty, international agreement, arrangement or convention only with recognized foreign states. The dissolution of the U.S.S.R. and Yugoslavia highlights the problem of dealing with territories or jurisdictions not yet recognized as foreign states. Several years may pass before the jurisdictions are formally recognized as foreign states. In the meantime, Canada cannot enter into a treaty with them. Canadians incarcerated in these jurisdictions and offenders from these foreign entities do not have access to the international transfer process. There may also be instances where a treaty does not exist between Canada and a foreign state or where one has been negotiated but ratification is still years away.

However there are compelling reasons to return an offender to the home country such as harsh conditions of detention. Moreover, some foreign states may be less inclined to consider a formal arrangement with Canada but willing to negotiate less formal arrangements for the transfer of offenders on a case by case basis.

To provide access to international transfers in such circumstances, Bill C-33 would authorize the negotiation of administrative arrangements with a foreign state or a non-state entity. This would make the legislation more responsive to international developments. It would also allow Canada to bring its citizens home but always under the supervision of Canadian correctional authorities to oversee the offenders' gradual and safe reintegration.

The development of transfer agreements is beneficial to most offenders. To date, a limited number of states are bound by treaties and conventions on the transfer of offenders but the numbers are increasing and this is highly desirable. The main drive toward the international transfers of offenders is humanitarian. Serving a sentence in a foreign state increases its severity. An offender in this situation is likely deprived of contact with family and of the opportunity to reintegrate into society. This is not in the interests of the offender, the family or indeed the community.

Enforcement of a foreign sentence by the receiving state benefits the offender and both states involved. Objections to the effect that the enforcement of foreign sentences will infringe Canada's national integrity or that the foreign sentence will be improperly enforced in Canada are unfounded. These objections are fuelled by fear of the unknown rather than by informed policy reasons. The government and hon. members of the House should not allow such objections to stand in the way of the humanitarian effort that underlines Bill C-33.

Canada's Transfer of Offenders Act and associated treaties and conventions has been successful in achieving their goal and continue to be a permanent feature of the international relations between our country and many others. The progress made in this area is considerable. Since 1978, approximately 1,000 Canadians have been brought to Canada and more than 100 foreign offenders have been returned to their country of citizenship. The numbers are not large but that is because the notion of transfer of offenders is still relatively new and much is still being learned.

Let me say in closing that there is a clear need for legislative flexibility in Canada to further the humanitarian objective of transfers. There is a clear need for international cooperation in matters of criminal justice and there is a clear need for public protection with the safe and gradual reintegration of offenders into society.

Bill C-33 would respond to those needs by incorporating traditional international treaty principles, closing identified gaps and ensuring consistency with other legislative provisions. Bill C-33 would further contribute to these objectives by expanding the class of offenders who may be transferred and of jurisdictions with which Canada could enter into transfer arrangements.

For all these reasons, I urge the hon. members of the House to support Bill C-33 and see it through to completion.