Bill C-46 (Historical)

An Act to amend the Criminal Code (capital markets fraud and evidence-gathering)

Criminal Code

[Vic Toews, Canadian Alliance, Provencher, MB]

My colleague from British Columbia is reminding me of the young offenders act.

I was a provincial minister of justice in Manitoba, and I remember arguing with the federal government. It gave us a few million dollars, but its contribution fell short of the implementation costs of the young offenders act. The provinces were then stuck with the prosecutions.

In order to administer its own legislation, the federal government is probably paying somewhere in the range of 10%, 15% or 20%. I say to those provinces that might be charmed with $120 million to get exactly what they are getting in writing. They should not take the word of those guys. We have seen them fail in honouring their word time and time again.

Under Bill C-46 the Attorney General of Canada would be permitted to prosecute a narrow range of cases that threaten the national interest and the integrity of capital markets. Frankly, I would say to the provinces to let the federal government prosecute them all. Then the federal government will find out how expensive, cumbersome, and complicated it is to prosecute these cases. There are thousands of justice department lawyers who draft all this legislation, lawyers who do not have to go into court to defend that legislation and prosecute under it.

We have seen these lawyers draft gang legislation that is absolutely worthless because it is so complex. We are fighting a 21st century problem in terms of gangs with 19th century legislation. We have lawyers in the justice department who are more concerned about what the courts will say about the charter of rights than actually prosecuting criminals and telling the courts why it is important to put these criminals away.

We have turned the system on its head and now the Attorney General of Canada says he would prosecute a narrow range of these crimes. I say to the provinces to let the federal government prosecute all of these cases. It will see that the $120 million will maybe last one year, not over five years.

Generally speaking, however, with the exception of the resourcing issue and with the failure of the government to place minimum sentences, I am in support of the general thrust of the legislation. Canadians agree that confidence in our nation's corporate sector and stock markets must be retained. However, it is difficult for Canadians to take the justice minister and his parliamentary secretary seriously when they say it is important to be tough on corporate abuse of money invested by the public when nothing is being done to prevent the abuse of taxpayers' dollars by the Liberal government.

Just two weeks ago, the member for St. Albert revealed that a former assistant to the heritage minister spent over $50,000 on food and travel in just under two years and had not provided adequate information for most of the bills. Last week, or the week before last, concerns over $600,000 in questionable expense accounts by the director of the National Gallery of Canada added to this growing list of waste and mismanagement. The list is not limited to staff or appointed officials. It extends all the way up to the upper echelons of government.

Last year, private companies such as Groupe Everest and Lafleur Communications came under criminal investigation after intense pressure from the Canadian Alliance. The Auditor General's report said that senior bureaucrats broke every rule in the book by awarding contracts to these Liberal Party contributors.

Corruption in the sponsorship program has led to revelations of waste in $230 million of government advertising spending. Several Liberal ministers have been forced to resign after even the Prime Minister could no longer defend their actions.

The former public works minister, Alfonso Gagliano, was implicated in questionable advertising contracts and was conveniently shuffled out of cabinet into a Liberal patronage position as ambassador to Denmark.

The former defence minister was fired following the revelation he gave an untendered contract to a personal friend. The former solicitor general came under investigation by the ethics counsellor and resigned after he was found to have breached ethical guidelines in giving contracts to party friends.

This is the government that now says we have to get tough on the private sector and the abuse of the money that the public invests in capital markets. Yet this is a government that has taken absolutely no steps to clean up its own House. It is another example why government members do not want to see minimum sentences in place.

They simply want, as I said earlier, to wink at the judges and say that this is just business as usual and that the government must up the end of the sentences, but the judges should not worry because they can do whatever they want on the bottom end.

The justice minister is quick to point out that 55% of Canadians have lost confidence in the stock market as a result of recent corporate scandals. It is funny how he forgot to mention that the 2002 poll showed that 69% of Canadians viewed the federal political system as corrupt.

Here the justice minister is motivated to act in respect of the private sector when 55% of Canadians want to see changes in the stock market. Yet when 69% of Canadians say that the federal system is corrupt, there is an absolute silence coming from the justice minister and his parliamentary secretary in respect of this very important issue.

Canada's federal Liberal government needs to get busy cleaning up its own house if it is to have any credibility in enforcing any new laws designed to deter corporate crime.

Having said that, I think it is important for members to follow the legislation closely, bring forward appropriate amendments and support legislation that indeed deters fraud in capital markets. This is an important bill and at this point it should be advanced.

[Vic Toews, Canadian Alliance, Provencher, MB]

Mr. Speaker, I am pleased to participate in today's debate on Bill C-46, an act to amend the Criminal Code dealing with offences related to capital markets fraud. This legislation has been developed in reaction to corporate scandals that have surfaced in the United States and weakened investor confidence in capital markets worldwide. Similar American legislation was passed last July, the Sarbanes-Oxley Act of 2002.

As we have heard from the Parliamentary Secretary to the Minister of Justice, Bill C-46 proposes a number of changes that are intended to strengthen confidence in the markets, and protect investors from fraud and other unlawful conduct.

Under the new legislation we would find a new Criminal Code offence prohibiting insider trading which would carry a maximum penalty of 10 years imprisonment. A second new Criminal Code offence would prohibit employment related threats or retaliation which would protect so-called whistle-blowers, carrying a maximum sentence of 5 years imprisonment. The maximum sentences for existing fraud offences in the Criminal Code would be increased up to 14 years imprisonment from the current 10 years, while the penalty for fraudulent manipulation of stock exchange transactions would be increased to 10 years from 5 years.

The parliamentary secretary indicated that there would be specific aggravating factors for sentencing which would now include the extent of the economic damage done by the offence. Current mitigating factors, as he indicated, such as reputation or status, would be inapplicable to those committing serious capital market frauds if they were to rely on those very factors to commit the offence.

These are the concerns that I have in respect of this bill and they do relate to the sentencing provisions. This is a government that has consistently stated that it will get tough on crime. If we go to the Youth Criminal Justice Act or to the dangerous offenders legislation, there have always been those nice, colourful catch phrases designed to lead people from the truth of what the legislation was all about.

Last week we saw the Supreme Court of Canada correct the former minister of justice, who said he was bringing in legislation to protect Canadians from dangerous offenders. In fact, when the legislation was analyzed, as it was by the courts and confirmed by the Supreme Court of Canada, the legislation that was passed in 1997 made it easier for criminals to avoid staying behind bars. The option of a long term offender status now allows these dangerous offenders to apply under long term offender status and receive community based sentences or a form of parole.

The other point that the government has consistently stated when it talked about getting tough dealt with increasing maximum sentences. However, everyone knows it is not serious about taking steps to prevent crime by putting meaningful consequences in place because in fact what it does is never put minimum sentences in place. Whether a sentence is 10 years or 14 years, we have seen what the courts have done. They have simply applied the other avenues to allow individuals to escape responsibility through the use of conditional sentences, suspended sentences or other types of alternatives to incarceration.

I have seen that happen in the legal profession that I used to be a part of. When I started out in the practice of law, it was not uncommon for lawyers who defrauded clients to receive substantial penitentiary sentences.

Over the last number of years, of course, those lawyers who defrauded individuals, who caused incredible damage to people's savings and to the reputation of the law society, have been receiving conditional sentences. They have been able to avoid going to prison because of the tendency of the courts now, as directed by the legislation, to consider alternatives other than incarceration.

Here we see again the same kind of pattern. We hear the government say it will get tough on people who defraud investors, and yet it puts no minimum sentences in place. What the government is doing is simply winking to the judges and telling them not to worry about what it is saying about tough sentences, they can do whatever they like.

Given the direction that judges are required to follow in other parts of the Criminal Code, we will see the same kind of sentencing patterns and the alternatives to incarceration with Bill C-46. It has happened in the context of dangerous offenders and young offenders. It has happened in virtually every so-called sentencing reform that the government has brought forward. My concern is that if we want to get tough on individuals who defraud investors in the markets, minimum sentences must be put in place.

The parliamentary secretary indicated that additional investigative and prosecutorial resources would be provided in the most serious cases of capital markets fraud, including up to $120 million of federal money over the next five years. That amount is a joke. We have recently seen in the context of the Alberta gang trial where over $20 million was spent just to defend individuals, and the trial ultimately collapsed. The tens of millions of dollars that was spent in that trial is all gone. The sum of $120 million will go absolutely nowhere if we want to be serious about prosecuting this kind of fraud.

I noted the parliamentary secretary stating that the government would make some kind of agreement with the provinces. All I can say to the provinces is to beware. We have seen these kinds of agreements with the federal government before. Let us recall the medicare partnership of fifty-fifty. Now the federal government pays about 15%. Let us recall the deal on legal aid of fifty-fifty partners. Now the federal government is at about 15% or 20%.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to speak to Bill C-46. I have concerns about whether it will get through the House business and provide the confidence which is so required. Nevertheless hopefully that will happen.

I would like to ask the hon. member specifically about the commitment to have prison time set forth. The sentences are weaker than in the United States. My concern which are Canadians, be they pensioners or investors or businesses, affected by these scandals. We have individuals who might eventually walk away with a minimum sentence or a sentence that does not have prison time and this could virtually have an effect on someone's life for 10, 20 or 30 years as well as the assets of their family.

I want to ask specifically about that part of the bill and what else could be looked at in committee stage to increase the enforcement. Right now I see this as using kid gloves in dealing with corporate crooks, and that will not build confidence.

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

Mr. Speaker, investor confidence is crucial to the life of Canada's capital markets and to our economy as a whole. American corporate scandals shook the credibility of global capital markets in 2001 and 2002. Multi-billion dollar accounting deceptions and other corporate scandals dominated international business media headlines during this period. Because of their far-reaching effect, these scandals have damaged investor confidence well beyond the American borders.

A survey conducted in 2002 revealed a dramatic drop in investor confidence following the collapse of WorldCom, with the majority of those surveyed believing that both the American and Canadian economies will continue to suffer as long as similar corporate misdeeds impact as they do on investor confidence.

In addition, a public survey in 2002 suggested that the majority of Canadians have lost confidence in the stock market and that Canadians show support for initiatives that are aimed at boosting financial transparency and stiffening penalties for those who transgress.

Currently, in partnership with provinces, regulators and law enforcement, the Government of Canada is working very hard to ensure the integrity of Canada's financial markets, although in the wake of recent American corporate scandals, the Government of Canada wants to make certain that this work will not only continue but is strengthened.

On September 30, 2002, the Speech from the Throne committed the Government of Canada to:

reviewing and where necessary changing its laws and strengthening enforcement to ensure that government standards for federally incorporated companies and other financial institutions remain of the highest order.

The Government of Canada has committed to constructing a response that is tailored to investor and law enforcement needs. One aspect of Canadian law that had to be addressed was criminal legislation dealing with serious capital markets fraud.

The government has come forward with legislative enforcement measures to deter the would-be perpetrators from committing serious capital markets fraud offences, to facilitate the gathering of evidence against those who have committed serious fraud offences, and to ensure that those who are convicted of such offences are punished appropriately.

I am pleased today to debate Bill C-46, an act to amend the Criminal Code, dealing with capital markets fraud and evidence gathering. This bill represents the government's response to the criminal law dimension to market misconduct, a very important step toward restoring investor confidence in our capital markets and in our economy generally. As members will soon hear, and which will become plainly obvious, those who engage in capital markets fraud will face a significantly increased risk of being caught, charged, convicted and punished.

The key to deterrence is greater certainty of detection and prosecution and the prospect of appropriately severe punishment. We can therefore also hope and expect that an enhanced criminal justice response to market fraud will serve to dissuade many who might otherwise contemplate such unlawful conduct.

I would like to turn to the IMETs part of the bill. First, to strengthen the national enforcement presence pertaining to serious capital markets fraud offences, budget 2003 included $30 million in funding to create up to nine integrated market enforcement teams, or what we refer to as IMETs. These are composed of RCMP investigators, forensic accountants, and federal prosecution service legal advisers and prosecutors in Toronto, Montreal, Vancouver and Calgary.

These teams would investigate serious Criminal Code capital market fraud offences that are of national significance and involve publicly traded companies whose actions have posed a genuine threat to investor confidence and economic stability in Canada. These teams will make use of existing Criminal Code provisions and those in new measures in Bill C-46 once the bill is passed into law.

Bill C-46 addresses four key areas in particular: first, new offences; second, sentencing measures; third, concurrent federal jurisdiction to prosecute certain offences; and fourth, enhanced evidence gathering tools.

Our review of the Criminal Code in the light of the American response to the crisis in investor confidence showed that we already have strong and effective laws to deal with capital markets fraud, including an effective fraud offence and offences of obstruction of justice and for filing a false prospectus and so on.

What we did find was that there appeared to be two gaps. Bill C-46 would effectively fill those gaps. In particular, Bill C-46 would create new offences for, first, prohibited insider trading and, second, employment related intimidation aimed at deterring corporate insiders from reporting illegal conduct and assisting the authorities.

When insiders of corporations use their special access to material inside information that is not available to other investors in order to benefit themselves, the investor confidence that is required in order to sustain the credibility of our vital capital markets can be seriously undermined. This activity can cause significant economic harm to individual investors, firms and the integrity of the Canadian economy as a whole.

Improper insider trading is currently prohibited under the provincial securities laws and under the Canada Business Corporations Act. However, the use of the criminal law is a necessary additional instrument for deterring this kind of corporate malfeasance because of its symbolic value and because of the more severe penalties available.

The addition of an offence to the Criminal Code to prohibit and punish improper insider trading as a criminal offence would provide an additional tool to deal with those cases that merited a more severe response and ultimately would help stabilize investor confidence.

Members may recall how insiders who disclosed illegal conduct played an important role in uncovering the recent American scandals. Our Criminal Code does contain certain offences that prohibit intimidation, which basically means trying to stop someone from doing anything they would otherwise have a right to do, such as talk to the police, by threatening them with violence or harm. The Criminal Code also prohibits attempts to obstruct the course of justice, which relates to interference with investigations and the prosecution of crime.

Threats and actions directed at a person's employment, done with the purpose of preventing them from cooperating with law enforcement or to punish them where they have done so, are not adequately covered by these existing offences.

Once again, the Government of Canada has responded. The addition of a targeted offence in Bill C-46 will help to deter this kind of inappropriate conduct on the part of employers and will consequently help encourage insiders to cooperate with law enforcement. This new offence will send a strong message that this form of intimidation will not be tolerated. I would like to point out to members that this offence will apply to efforts to stop employees from speaking to a law enforcement body about any kind of illegal conduct, not just securities fraud.

Encouraging those with knowledge of wrongdoing to cooperate with the authorities will facilitate the detection of capital markets fraud and other forms of corporate malfeasance, as well as aid in the enforcement of federal and provincial offences under securities regulatory laws and other laws governing corporate actions.

Now I would like to talk about the sentencing that the bill encompasses. In keeping with the Government of Canada's commitment to ensuring that those convicted of capital markets fraud and white collar crime in general are punished appropriately for their wrongful conduct and the harm they cause to Canadians, Bill C-46 contains significant sentencing proposals.

In addition to the 10 year maximum sentence for the proposed insider trading offence and the 5 year maximum sentence for the proposed employment related intimidation offence, Bill C-46 also would increase the maximum sentence for fraud from 10 years to 14 years and double the maximum sentence for fraudulent manipulation of the stock market transactions from 5 years to 10 years. It should be noted that a maximum prison term of 14 years is the highest term of imprisonment in the Criminal Code short of imprisonment for life.

These sentencing initiatives therefore raise the maximum sentences for capital markets fraud to a level that recognizes their serious nature and crippling effects that they can have on our economy.

In addition, as a direction to our courts, Bill C-46 includes a codification of aggravating and non-mitigating sentencing factors for fraud and other market related offences, ensuring that the sentences the courts hand down for these offences will reflect the seriousness of the economic and social damage that such offences can inflict on our society. The government believes these codified factors will also improve the sentencing of white collar crime in general.

Let me deal with the area of concurrent jurisdiction. The partnership is a key and breathes life into Bill C-46. As such we propose to use concurrent prosecutorial jurisdiction over fraud to supplement provincial jurisdiction and provincial resources in regard to the major cases of capital markets fraud that are the focus of integrated market enforcement team initiative.

Federal involvement would be limited to a narrow range of cases that threaten the national interest in the integrity of capital markets.

Let me be clear. We do not intend to replace or overtake provincial prosecutorial jurisdiction but rather to compliment it. To this end officials within the Department of Justice have been engaged in a dialogue with provincial prosecutorial authorities on the development of joint protocols that would protect provincial jurisdiction while allowing for supplementary application of federal prosecutorial resources where necessary and desirable.

To ensure proper coordination, the Government of Canada will work with the provinces to establish prosecution protocols that will ensure a coordinated and effective implementation of the concurrent jurisdiction. The concurrent jurisdiction proposal responds to an immediate national concern of investor confidence in Canadian financial markets. Through effective partnerships with our provincial colleagues, we can strengthen investor confidence and bring those who threaten it to justice. I look forward to continuing this relationship.

We also have to look at how we gather evidence in situations of this type. I would turn to the provisions of Bill C-46 that relate to this evidence gathering.

In the Speech from the Throne the government committed itself to creating better tools to enhance the evidence gathering capabilities of investigators. Bill C-46 does just that with Criminal Code amendments that create production orders. Production orders are similar to search warrants. Whereas a search warrant allows police to search a certain place for evidence, a production order compels a person to produce the relevant information to the police.

Although this investigative tool is new to the Criminal Code, it already exists in Canadian law, notably under the Competition Act and in limited circumstances under other statutes. Further, it could also be characterized as a codification of current practices. For example, today when a police officer enters a bank with a warrant to seize records, he does not usually shut down the bank to get those records. Nor will he seize the bank's computer system.

What generally happens is that the holder of the information sought in the warrant will generally produce that information to the police himself. The reason for this is twofold: first, it is more convenient for the bank, since its business operations are not being interrupted; and second, it is more cost effective and less time consuming for the police.

The production orders in Bill C-46 have been introduced in the context of the capital markets fraud, however, as crafted they will not only apply to capital market investigations but also to all Criminal Code offences where a regular search warrant could be obtained. Because the new production orders have this broad scope, we thought it was necessary to include the same judicial safeguards required by the Criminal Code search warrant provisions.

Law enforcement agencies and crown prosecutors have been asking for a new investigative tool for some time and with the proliferation of the Internet and the widespread adoption of new communications technologies, the timing is right for this form of investigative tool.

The production orders will solve a number of nagging issues for investigators including extraterritorial searches and timing issues. Under these new orders, persons who have possession or control of documents, data or information will have to produce that information whether it resides in Canada or abroad. Thus, as long as they have possession or control over the relevant information, they will be required to produce it no matter where it is located. This solves the problem that has in part been created by inexpensive overseas data warehousing.

Second, the new production orders will be time sensitive so that the third party served with the order will either have to produce the information within the time specified in the order or report back to the court within the specified time as to why he or she cannot comply. This solves the problem of the inherent nature of informal arrangements which is they are informal and they often lack specific mechanisms such as timing mechanisms.

In some cases police have had to wait for up to a year to obtain information from a third party holder of that information. This bill introduces two types of production orders to the Criminal Code to enhance the general evidence gathering capabilities of the investigators. The general production order will require a person other than the individual under investigation to produce documents, or data or to create a document based on the existing documents or data and produce it.

For example, a production order served on a bank could require the bank to compile existing but non-related information on a client and give it to the police. Before issuing the order, the judge or justice must be satisfied that there are reasonable grounds to believe an offence has been committed, that the specific documents or data will afford evidence relating to the commission of the offence and that the recipient of the order has possession or control of these documents or data. These are the same basic judicial safeguards as required by the existing Criminal Code search warrant provisions.

The second type of production order is the specific production order. It has been designed to be a first step investigative tool and is limited to specific types of information for which there is a lower expectation of privacy. A judge or justice will have to be satisfied that there are reasonable grounds to suspect that the information will assist in the investigation of an offence. This type of order, with a narrower scope, would only apply to financial institutions and other organizations specified in the legislation.

Therefore, the general details relating to bank accounts such as the name of an account holder, or type and status of an account could be obtained through a specific production order.

I am pleased to have spoken to this bill today. The bill reflects the government's criminal law response to serious securities fraud that poses real risk to investor confidence in the stability of our markets and economy.

[Paul Devillers, Liberal, for the Minister of Justice and Attorney General of Canada]

moved that Bill C-46, an act to amend the Criminal Code (capital markets fraud and evidence-gathering), be read the second time and referred to a committee.

Business Of The House

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

Mr. Speaker, the hon. member across is a little impatient with his future holidays. He will probably have to wait some time.

This afternoon we will continue to debate second reading of Bill C-48, the natural resources taxation bill. I understand that the bill is nearing completion.

When it is complete, we will then debate Bill C-50, the veterans' benefits bill sponsored by my colleague, the Minister of Veterans Affairs, followed by the consideration of the Senate amendments to Bill C-10B, the cruelty to animal bill.

If time is left, we would deal with third reading of Bill C-17, the public safety bill, and second reading of Bill C-46, the market fraud bill.

In the unlikely event that we do not complete all of that this afternoon, on Friday we would begin with a reference to committee before second reading of Bill C-41, the amendments and corrections bill. The opposition House leader and I have had a brief conversation about this

We would then proceed with Bill C-37, respecting improvements to Canadian Forces pension benefits.

We will then return to any bills already mentioned today in the unlikely event that some of them are not fully completed.

On Monday, we would begin with Bill C-17, the public safety bill, and then return to the list previously described.

Tuesday, September 30, and Thursday, October 2, shall both be allotted days.

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.

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 present Bill C-46, An Act to amend the Criminal Code (capital markets fraud and evidence-gathering).

(Motions deemed adopted, bill read the first time and printed)