Bill C-52 (Historical)

Retribution on Behalf of Victims of White Collar Crime Act

An Act to amend the Criminal Code (sentencing for fraud)

This enactment amends the Criminal Code to
(a) provide a mandatory minimum sentence of imprisonment for a term of two years for fraud with a value that exceeds one million dollars;
(b) provide additional aggravating factors for sentencing;
(c) create a discretionary prohibition order for offenders convicted of fraud to prevent them from having authority over the money or real property of others;
(d) require consideration of restitution for victims of fraud; and
(e) clarify that the sentencing court may consider community impact statements from a community that has been harmed by the fraud.

Standing up for Victims of White Collar Crime Act

[Daniel Petit, Conservative, Parliamentary Secretary to the Minister of Justice]

Mr. Speaker, I am pleased to speak today to Bill C-21, An Act to amend the Criminal Code (sentencing for fraud). This bill was first introduced as Bill C-52 during the previous parliamentary session.

The bill contains a number of measures to toughen penalities for those who commit fraud.

The bill sends a message to all those who think they can manipulate and mislead Canadians who have entrusted them with their hard-earned savings. Those who commit serious fraud have to suffer serious consequences.

This bill is also designed to improve intervention measures in the justice system with regard to victims of fraud. Serious fraud can have enormous, devastating effects on victims. We have to consider those effects and how to best deal with them.

The measures proposed in the bill will contribute substantially to boosting Canadians' confidence in the ability of the justice system to punish financial crime.

Bill C-52, the previous version of this bill, was well received by everyone. It passed second reading without difficulty and was supported by a number of witnesses at the Standing Committee on Justice and Human Rights. Hearings were held for some time on the proposed amendments to the Criminal Code and the committee heard from witnesses, particularly seniors' advocates and groups representing victims and police.

Perhaps it would be helpful to remind the House of the current state of the law on the issue of fraud. The Criminal Code already addresses all known forms of white collar crime, from security-related frauds—such as insider trading and accounting frauds that overstate the value of securities issued to shareholders and investors—to mass marketing fraud, theft, bribery and forgery, to name a few of the offences that may apply to any given set of facts.

The maximum penalties for fraud are already high. In particular, for fraud with a value over $5,000, the maximum term of imprisonment is 14 years. It was increased from 10 years to 14 years about five years ago. This is the highest maximum penalty in the code, short of life imprisonment.

Also, aggravating factors for fraud offences, which can be added to the aggravating factors applicable to all offences, are already in place in the Criminal Code. They require the courts to increase the penalty imposed to reflect certain circumstances, for example, if the value of the fraud exceeds $1 million, if the offence involves a large number of victims or if, in committing the offence, the offender took advantage of the high regard in which he or she was held in the community.

Canadian courts have clearly stated that for large-scale frauds, deterrence and denunciation are the most pressing objectives in the sentencing process. The courts have been clear that a serious penitentiary sentence must be imposed for large-scale fraud. We routinely see sentences in the four to seven year range for large-scale frauds. Most recently, of course, Vincent Lacroix was given a 13-year sentence for the massive security fraud he perpetrated in Quebec just a few years ago.

And of course, we cannot forget the case of Earl Jones, also in Quebec. The major Ponzi scheme he operated for decades in Montreal was uncovered last year and that is one reason the public is so interested in this issue. A few months ago, Earl Jones pleaded guilty; in mid-February, he was sentenced to 11 years in jail for having defrauded his friends and family of $50 million.

When delivering Mr. Jones' sentence, the judge stated that he had not only robbed the victims of their money, he had robbed them of their freedom and self-esteem. She also said that he is responsible for irrevocable changes in all the victims' lives and that this has left them all humiliated.

The courts are taking these frauds seriously, but this government believes that still more can be done to strengthen provisions in the Criminal Code, and that would allow Parliament to have some influence.

Parliament can send a clear message that it agrees with this trend toward tougher sentencing. One way of sending this message is to introduce a new mandatory minimum penalty of two years for large-scale fraud with a value over $1 million. Orchestrating and operating a fraud scheme worth more than $1 million is a serious crime and should carry a minimum two-year prison sentence. However, we know that many frauds cheat Canadians out of significantly more than $1 million. I have already mentioned the example of Earl Jones, who defrauded his family and friends of more than $50 million.

Clearly, the two-year mandatory jail term for fraud of at least $1 million must be considered a floor, not a ceiling. That is already the case, and the government agrees that higher-value fraud will certainly result in even higher sentences. Members will recall that Earl Jones was sentenced to 11 years, which is an appropriate sentence.

The two-year mandatory minimum sentence would not have had an impact in the Jones case because that was an outrageous case of fraud. The government wants to send the message that fraud in excess of $1 million, even though not as great as other cases, must also be treated seriously. Establishing this threshold brings a new perspective to fraud that does not greatly exceed $1 million.

The bill would add several more aggravating factors, such as: first, if the fraud had a particularly significant impact on the victims, taking into account their personal characteristics such as age, financial situation and health; second, if the fraud was significant in its complexity or duration; third, if the offender failed to comply with applicable licensing rules; and fourth, if the offender tried to conceal or destroy documents which recorded the fraud or the disbursements of the proceeds.

These aggravating factors reflect various aspects of fraud that are deeply troubling. The clearer Parliament can be with the courts about what these factors are, the more accurately sentences will reflect the true culpability of the offender and the serious nature of the crime.

The bill also includes a new sentencing measure to limit the possibility that a person convicted of fraud could have access to or control over another person's assets. This prohibition order can be for any duration the court considers appropriate. Violating a prohibition order will be an offence. This measure will help prevent future crime, which is better than just punishing the guilty party after the fact.

This bill also contains measures that address the specific concerns of victims of fraud. Restitution is defined as the return or restoration of some specific thing to its rightful owner. It can be a stand-alone measure in an offender's sentence or part of a prohibition order or a conditional sentence.

Restitution orders are particularly appropriate in the case of fraud offences. That is why Bill C-21 states that the sentencing judge in a fraud case must consider an order of restitution as part of the overall sentence for the offender. The court must inquire of the Crown if reasonable steps have been taken to provide victims with the opportunity to seek restitution. This step will ensure that sentencing cannot happen without victims having had the opportunity to speak to representatives of the Crown and establish their losses.

The bill would also amend the Criminal Code to ensure that the effects of fraud on victims have greater bearing on the sentencing. Addressing the needs and concerns of victims of crime has always been a priority for the government. Victims of fraud suffer major consequences, particularly financial, emotional, psychological and social ones. The sentences handed out by a court ruling on a fraud case must reflect the harm caused by the crime.

The bill contains two sets of measures that focus specifically on victims of fraud, one on community impact statements and one on restitution.

In order for the judges to be able to truly measure the terrible impact fraud has had, not only on each victim, but also on the community, the bill proposes amendments to specifically allow community impact statements to be taken into consideration as part of the sentencing hearing.

The current Criminal Code allows the judge to consider previously submitted victim impact statements during the sentencing hearing. The victims prepare a statement that describes the harm done to or loss suffered by them. The statement must be written but can also be read out before the court by the victim during the sentencing hearing. It may also be presented in any other manner that the judge considers appropriate.

In addition to the victim's official statement, the Criminal Code allows the court to consider any evidence concerning the victim when determining the sentence. Judges have given the term “victim” a broad interpretation, so that people other than the direct victim, including communities, can provide victim impact statements. For example, a victim impact statement was made by a synagogue on behalf of all members of the congregation in an arson case. In other cases, first nations bands have made statements describing the impact of a crime on their community.

I think we can all agree that communities, like individuals, feel the effects of crime. The proposals in the bill will make this more fully recognized in the laws.

We are proposing that when a court is determining the sentence for an offender charged with fraud, it should be able to take into consideration a statement by the community that describes the harm done or the loss suffered. The statement must be in writing, must identify the members of the community, must state that the person may speak on behalf of the community and must be shared with both the Crown and the defence.

Jurisprudence has indicated that victim impact statements serve three purposes. First of all, they provide sentencing judges with information on the impact or effect of the offence. Second, they help educate the offender on the consequences of her or his actions, which may have some rehabilitative effect. Third, they provide a sense of catharsis for victims. The provisions in this bill to create a community impact statement for fraud offences share these three purposes.

A community impact statement will allow a community to express publicly and directly to the offender the loss or harm that has been suffered. It will show that the community disapproves of the offender's behaviour. Having the opportunity to describe the impact of the crime will allow the community to begin a rebuilding and healing process. A community impact statement will also help offenders understand the consequences of their actions, which may help their reintegration process.

I would now like to address the provisions of the bill dealing with restitution.

Restitution is made when the offender pays the victim an amount established by the court. The Criminal Code currently provides for restitution for expenses incurred because of the loss or destruction of property, or damage caused to property, as well as pecuniary damages—in relation to a loss of revenue—for bodily or psychological harm. Furthermore, in the case of bodily harm or threat of bodily harm to someone living with the offender, such as a spouse or child, or other family member, the Criminal Code provides for damages for any reasonable expenses incurred by that person for temporary housing elsewhere.

An order for restitution is established during the sentencing hearing of a convicted offender.

It may consist of a stand-alone measure, or be part of a probation order or conditional sentence. It may only be made when the amount is readily ascertainable, and the offender's ability to pay, although not a determining factor, must be taken into account by the judge. Restitution orders are particularly appropriate in cases of fraud, which often entail significant losses for victims.

Our proposals provide that in cases of fraud the sentencing judge must consider an order of restitution as part of the overall sentence for the offender. The judge must give reasons when such an order is not included. Furthermore, the court shall inquire of the Crown if reasonable steps have been taken to provide victims with the opportunity to seek restitution. This step will ensure that sentencing cannot take place until victims have had an opportunity to speak to the Crown about restitution and establishing their losses.

Our proposals also include the addition to the Criminal Code of an optional form to assist victims in setting out their losses. The losses must be readily ascertainable and victims must provide supporting documents for their claims. The courts may continue to accept other forms of information regarding restitution. The form would not be mandatory. It would simply be available to facilitate the process for victims, the prosecutors and the judges.

These proposals should make restitution for victims a part of all fraud cases. These measures, along with the proposed changes regarding community impact statements, are intended to include the perspective of victims of fraud in the sentencing process in a more exhaustive and efficient manner. In that way, we hope that the proposals will improve the victims' experience and trust in the justice system.

This bill will go a long way toward improving the justice system's current procedures in cases of serious fraud. By creating a mandatory minimum sentence for fraud exceeding $1 million, by providing additional aggravating factors in sentencing, by creating a discretionary prohibition order with regard to sentencing and requiring consideration of restitution for victims, this bill represents comprehensive measures that take into account how serious fraud offences are to communities and individuals.

For that reason, I urge all hon. members to support this bill. It gives hon. members an opportunity to show their unequivocal support to victims of fraud. Victims of crime deserve respect from this House. I urge all hon. members to support this bill and to send it to the Standing Committee on Justice and Human Rights of which I am a member.

[Joey Davis, Earl Jones Victims Organizing Committee]

Good afternoon, Mr. Chairman and honourable members of the committee.

I wish to thank the committee for allowing me to come before you today to make a statement in regard to Bill C-52 on behalf of the alleged victims of the Earl Jones case of white collar crime.

I also want to thank the Conservative government and the members of the three other federal political parties for their meeting during the summer months, when the events of this tragedy occurred.

As victims of crimes committed by white collar criminals, we want to thank you for listening to our voices and our recommendations in tabling Bill C-52 against white collar crimes in Canada.

Before I begin my comments on Bill C-52, I would like to briefly remind you of the circumstances surrounding the Earl Jones case.

In July of this year, an invisible bomb exploded in the lives of over 200 people. In the first week of July, Earl Jones, this seemingly charming and erudite man, had locked the front door of his West Island business office, did not return phone calls or e-mails from worried clients, and went missing for nearly three weeks. This left a feeling of panic and confusion amongst all his former clients, until we mobilized ourselves and learned of the truth on the 12th day of July.

Some Quebec provincial authorities, meaning the Sûreté du Québec and the AMF, attended the first meeting with victims, as did the designated bankruptcy trustee RSM Richter and the bankruptcy attorneys, when it was announced that all the remaining assets of the Earl Jones Consultant & Administration Corporation assets had been seized and that the company had officially declared bankruptcy. No one knew why nor how Earl Jones went about being the author of their financial destruction.

The beginnings of any fraud start with trust. Earl Jones gained the trust of his clients, close personal friends, members of his own family, and his “enablers”--which I will explain a little further on--all a long time ago.

This particular case of fraud, or Ponzi scheme, is not that of a fly-by-night operation. This Ponzi scheme resulted from the deliberate planning of a determined financial predator laying the seeds of trust from the outset. As can be attested to by the various banking records and other documents uncovered within the bankruptcy, this Ponzi scheme was perpetrated over an extended period of 30 years of uninterrupted swindling. This level of betrayal has shattered the lives of his own family, his once close circle of lifelong friendships, and of course devastated the lives of all of his former clients.

Of the noted 185 creditors of the Earl Jones bankruptcy, those aged 50-plus and seniors comprise approximately 90% of the Earl Jones client registry, a list originally compiled by the Earl Jones Victims Committee of all former clients and alleged victims.

The financial as well as the emotional trauma suffered by these victims affects three generations within the family structure. These are the investors themselves, typically the grandparents who have lost all of their life savings; the adult children of the investors, who are now left to financially support their parents; and the children and grandchildren of the investors, whose inheritance and financial security have been stolen from them.

To quote some recent statistics on white collar crime in Canada, and based on published news reports in the Canadian press and on information available from RSM Richter, the trustee in bankruptcy for the Earl Jones case, of seven high-profile white collar crimes in Canada over the past five years, the Earl Jones Ponzi stands out as the single largest per capita loss, at an average loss of $477,000 per victim.

In our opinion, Bill C-52 can be summarized as a bill that attempts to, one, be a better deterrent of white collar crime through a new promise of mandatory prison sentences, and two, provides a greater sense of justice to victims, thanks to the knowledge that the criminal is going to jail and the fact that restitution from the perpetrator can now be addressed by the criminal courts.

To add strength to this bill that would raise the level of change threshold within the minds of the Canadian public, however, we strongly believe our specific recommendations would have an impact on providing that sense of deterrence and justice to victims of white collar crime.

Our first recommendation to ensure Bill C-52 reaches the level of change threshold required to make a meaningful difference in determining white collar crime relates to mandatory sentencing. While we see the introduction of the two-year mandatory jail time as positive, the deterrent power of this provision in the mind of the fraudster is less significant than its consideration of the total jail time he is likely to serve. What we are referring to here is the far greater deterrent impact that could be expected by commonly imposing 14-year sentences, coupled with the elimination of the one-sixth early release rule. I realize that the latter is a subject of Bill C-53, but it helps put in perspective our thoughts on the minimum mandatory sentence proposed in Bill C-52.

Our second recommendation is to introduce the limited temporary relief for victims of financial crime to mitigate the psychological and financial impact of fraud. A copy of this plan has already been forwarded to each of you, as well as to other government ministers at both the federal and provincial levels, for your review and consideration.

Without the means to financially survive for the first 12 months after being victimized by an act of financial crime, the restitution called for in Bill C-52 would likely come too late to prevent the terrible downward spiral of selling family homes, taking handouts from already financially stretched children, and making other personally devastating life adjustments. Bill C-52's call for restitution is admirable. Let's make it more meaningful by providing the victims with the proposed limited temporary relief survival bridge to restitution.

Our third recommendation is to identify and target not just the lead criminal who perpetrated the crime, but those financial institutions, associations, and professionals who, through egregious neglect, wilful blindness, or gross incompetence, “enabled” these crimes. These enablers should be the first line of defence in the protection of the financial investor from the financial predator. Yet it is incumbent on investors to do their homework and to be careful, but even an informed investor—particularly a senior citizen—will too often be outmanoeuvred by an experienced financial predator.

We recommend that Bill C-52 be amended to mandate a systematic identification and investigation of the potential enabling roles of those financial institutions, those associations, and those professionals in every future white collar crime case in Canada.

We further recommend that, if it is determined that these enablers could have reasonably been expected to have noticed and/or prevented the fraud that was committed, then they should have a legal responsibility to provide restitution to the victim just as much as the perpetrator of those crimes.

As a citizens group, the Earl Jones' victims organizing committee has been relentless in its desire for justice and restitution for all victims of financial crimes.

In conclusion, I wish to thank the committee for allowing me to present our views in shaping new legislation that will help protect Canadians against further white collar crimes.

Thank you.

[Larry Elford]

Thank you, Mr. Chairman.

I was saying that I'm here to tell you how to commit the perfect crime, possibly with the help of Bill C-52. I mentioned the Criminal Code of Canada and the fact that if I were to rob a financial institution, the Criminal Code would probably apply to me, but in a financial institution in Canada governed by the Securities Act in 13 provinces and territories, there's any one of a thousand methods that I've witnessed of robbing the savings of Canadians and Canadian taxpayers, and they're often not subject to criminal sanctions of any kind. Maybe on the fingers of my hand, I could come up with the number of criminal penalties against actual subjects in the last 10 or 20 years.

Investment crime is more likely to fall under the protection of securities commissions. That word is terrible to say: that securities commissions are protecting investment crime. But that's what I saw over 20 years of working in finance. Most of the time, the independent police agencies are not involved and not even notified.

I worked for 20 years in the financial industry. I found it nearly impossible to discuss ethics and honest treatment of customers. The culture of sales commissions and bonuses was far too strong. Most Canadians, however, are of a mistaken impression that our financial institutions are so trustworthy as to be above examination. I mentioned that I'd like to challenge that dangerous piece of conventional wisdom and that I'd like to go so far as to call it collective insanity.

Most Canadians have also been sold a story that our Canadian financial institutions are the world's strongest. While that may in fact be true, it ignores the possibility that they may be strong because they are legally allowed to be predatory and are protected from real competition and real examination in Canada. It ignores millions of dollars that I watched being skimmed from your investment returns and your pension accounts by predatory sales practices dressed up in a disguise of “investment advice”, damage that cuts the retirement of the average Canadian investor by half.

Also ignored are billions of dollars in damages every year from a system designed to place the interests of financial institutions ahead of their customers'—a system we do not speak of, but which exists in actual practice. It ignores investment frauds that are penalized by authorities in the United States, while here in Canada the same abuses are considered standard industry practice, and they continue to harm Canadians each and every day. Regulators in Canada are allowed to turn a blind eye to all of these. It ignores hundreds of billions of dollars in damages by companies like Northern Telecom, Global Crossing, Enron, Eaton's, and a thousand others that are used in some way to fatten investment bankers, lawyers, or CEOs at the expense of your financial security.

Financial abuse by the institutions we trust is costing Canadians more money each year than the cost of every other crime in the country combined. I used Justice Canada's website for my figures. Yet we act like good Canadians and we praise our financial institutions for being among the strongest in the world. It's a little bit like praising the schoolyard bully for being so well fed, after he has stolen everyone's lunch.

Let me reveal four simple ingredients I found in our financial system that allow billions of dollars of financial abuse to take place each and every year.

The first ingredient in making financial crime pay is having the ability to self-regulate, to have our own in-house policing system, and to use this system to often bypass real criminal investigation and prosecution. Part of this includes securities commissions, and 13 of them across the country act more and more like the corrupt sheriff in every Smokey and the Bandit movie I've every seen. They seem to feel that they too are above examination.

The second ingredient is that the financial industry, rather than the taxpayer, pays the salaries of these regulatory agencies. That means that clever financiers get to choose who to hire to regulate financiers. Imagine if you were a criminal mind and you had the ability to choose who you wanted to police yourself.

The third ingredient in making financial crime pay is to pay them about triple what they would earn in the same job elsewhere. The salary of the head of the Securities and Exchange Commission in the United States is capped at $162,900 per year. The 13 securities commission heads in Canada are paid as much as four times this amount, each one of them. I'm told there were once 90 staff members at the Ontario commission alone who were each paid more than the top man in the United States.

Overpaying our regulators makes them highly compliant, conflicted, and more willing to say yes to the financial industry. The Canadian public, on the other hand, does not pay their salaries, and members of the public are not usually even allowed in the front door of any securities commission in Canada. Instead, they are sent to non-government industry groups where they are spun around by an industry-run kangaroo court process. The public will not be helped but simply abused a second time. Please don't take my word on this; ask any abused investor.

If you were shopping for a list of ingredients required to make financial crime pay, last but not least is the ability to buy permission to violate the laws of Canada. In fact, 13 securities commissions, acting in concert, will allow any financial institution in the country to violate our laws simply by filing an application to do so. I have in my hand a list of several thousand such legal permissions that have been granted without informing the public of a single, solitary one. This is the greatest gift you could possibly ask for as a criminally minded financier: to be able to break any law you wished in this country in pursuit of profits.

Finally, we come to the helpful effects of Bill C-52. I see nowhere in this bill where it applies to public market fraudsters. In fact, my reading of it shows that subsection 380(2) of the Criminal Code, relating to public market fraudsters, has been removed or is not present in this bill. That would be a fantastic gift from the writers of this bill to yet again the financial markets of Canada; we can continue to hide our crimes inside our own private regulatory system with no outside oversight or interference.

Thank you for your time.

[Larry Elford, As an Individual]

Thank you.

Ladies and gentlemen, I'm here to tell you how to commit the perfect crime, perhaps with the help of Bill C-52. Let's call it “How to Steal Billions in Six Minutes and Never Be Caught”.

If I were to rob a financial institution in Canada, I am subject to the penalties of the Criminal Code; I think everybody knows that. If a financial institution, however, robs Canadians using any one of a thousand methods that I witnessed while working for financial institutions, they are not even subject to the penalties in this proposed bill, as I read it. They fall under the Securities Act. Investment crime is more likely to fall under the protection—yes, I said “protection”—of securities commissions in 13 provinces and territories than to be prosecuted. Most of the time, independent police agencies are not even involved.

I worked in the financial industry for 20 years and I found it nearly impossible to hold a discussion about ethics and honest treatment of customers, so strong was the culture and addiction to sales, commissions, and bonuses. Most Canadians, however, are of a mistaken impression that our financial institutions are so trustworthy as to be above examination.

I would like to challenge this dangerous conventional wisdom, and I'll go so far as to call it a form of collective insanity.

[Melanie Johannink, As an Individual]

Hi, I am Melanie Johannink, a recently severed Nortel employee and chair of the Nortel Bankruptcy Justice Committee, and as such, I have thoroughly read through the bill and would like to raise a concern.

Alleged fraud at the top of a public corporation also poisons the well. Observing the impact of alleged accounting fraud at Nortel between 2002 and 2004 has given me knowledge to understand how Nortel, in bankruptcy protection today, could have turned out with a different ending.

If Canada did a better job deterring financial fraud, Nortel could still be an ongoing concern in its tradition since 1895. If Canada had effective securities crime policing such as Gary Logan proposes to achieve with a new securities crime unit, then the alleged Nortel fraud would have been prosecuted by now. Instead, Nortel has had four different CEOs in eight years, with over 17 rounds of layoffs.

In 2000, the first OSC allegation of insider trading against senior officials occurred. In April 2004, with accounting and insider trading allegations, Frank Dunn was terminated with just cause. The RCMP launched a probe into Nortel's finances, and in June 2008, four years later, Dunn was arrested by the RCMP, as were two other former Nortel executives, charged with fraud affecting the public, falsification of books and documents, and producing a false prospectus.

The two subsequent CEOs after his departure were preoccupied with working through restatements, supplying documents for the various investigations, negotiating the class action settlement, and dealing with the reputation of the corporation at the same time.

In the technology industry, evolution of new technology and services is a constantly changing landscape. The competition is fierce. In my opinion, Nortel has had reputational damage affecting not only the shareholders and creditors, but also its customers. When the financial crisis hit, Nortel, to me, was ill prepared to weather the storm through the years of turmoil.

The Nortel situation demonstrates that alleged corporate fraud in public companies not only damages their shareholders and creditors but has wide-reaching effect on employees.

In 2009, seven years after the accounting restatement issues arose, we now have over 20,000 Canadian Nortel pensioners, long-term disabled, and severed employees facing significant income cuts, and through bankruptcy, the wallet is opened on the taxpayers' purse to pay for increased use of social security programs. Meanwhile, Nortel's executives continue to receive executive salary bonuses for reducing costs by putting retirees and former employees onto the public purse.

Bill C-52's effort to encourage more restitution settlements for the victims of fraud is an excellent idea, but when the prosecution of executives takes place up to 10 years after a corporation has gone bankrupt, what good is it to terminated employees who lost their jobs without severance when the company went bankrupt 10 years earlier?

In November 2008, the Deloitte Forensic Center and the Deloitte reorganization services group analyzed bankruptcy filings in the U.S. between 2000 and 2005 and SEC enforcement releases issued during the period. Their study concluded that companies issued accounting and auditing enforcement releases were three times more likely to file for bankruptcy than those not issued one, and 35% of the companies issued SEC accounting enforcement actions during the period filed for bankruptcy.

Terminated employees, pensioners, and long-term disabled persons need to be protected at the time of bankruptcy. An amendment to the Bankruptcy and Insolvency Act would be a way to ensure compensation to the pensioners, but upon bankruptcy filing, there is no opportunity for employee groups to file for civil lawsuits to remedy the damages caused to them by alleged fraudulent conduct due to the bankruptcy court stay. How can justice be served 10 years after the fact?

Other countries are not as lax as Canada. These types of offences should be taken very seriously and efficiently. If Bill C-52 includes public corporations, executives would work in an effective and transparent way to save themselves a fall from grace.

I have taken a day out of my employment insurance, what little moneys I am currently making, for you to hear my plea. I have full faith that Bill C-52 will be amended to include stiffer sentences for white collar crime committed at public companies.

[Mike Miles, As an Individual]

Good afternoon. Bon après-midi.

I'd like to start by telling you about the collapse of non-bank asset-backed commercial paper, or ABCP. This bogus short-term savings product was marketed with an R1 high credit rating—that's the same as a treasury bill—and a bank liquidity guarantee. Both attributes proved to be worthless. Thirty-five billion dollars of this misrepresented savings product was sold to Canadian retail owners such as myself, corporations, and all levels of government. The ABCP failure has removed at least $21 billion from the Canadian economy.

Without either our knowledge or consent, my wife and I had much of our retirement savings transferred from treasury bills into ABCP in July 2007. Two weeks later, this toxic product was worthless. We spent the next 18 months working with many of the other 1,800 retail ABCP owners to get our money back. In our case, we were able to use the Companies' Creditors Arrangement Act, or CCAA, court to force a settlement, whereby most of the retail owners were repaid in exchange for agreeing to support a restructuring. However, approximately three dozen retail owners who had savings of over $1 million were not repaid. A father of a disabled child who had no money to pay his bills committed suicide. All retail ABCP owners had their lives severely disrupted. Corporate and government owners have had to exchange their worthless paper for long-term notes, which may allow them to recoup some of their losses in 2017. The best available estimate is that this paper might eventually be worth 60 cents on the dollar. Equally unjust, the restructuring prohibits any of the injured parties, including those who voted against the restructuring, from suing the responsible parties.

There have been widespread allegations of misrepresentation or fraud in the manufacture, credit rating, and distribution of ABCP. My wife and I, along with others, have filed complaints with the Investment Industry Regulatory Organization of Canada, or IIROC. However, as of December 7, the self-regulatory agencies such as the Ontario Securities Commission, or OSC, and IIROC had not prosecuted any of the individuals or institutions that were responsible for this fiasco. Our representative’s appeals for assistance from the RCMP's integrated market enforcement team, or IMET, were simply referred to the self-regulatory bodies.

Small folks like ourselves were simply left to duke it out with some of the largest financial institutions in the country. Most retail owners were very fortunate to regain their savings. However, there was no opportunity to obtain compensation for 18 months of work or the personal turmoil and hardship this fraudulent savings product has caused. More importantly, the non-retail ABCP owners have lost their savings and none of the responsible parties has been held accountable.

Our experience with ABCP provides direct evidence of how the present system of dealing with white collar crime does not work to protect Canadian citizens. With this background, I offer the following comments on Bill C-52:

One, the present bill appears to be directed towards rogue fraudsters. However, with the ABCP collapse, we faced what appears to be fraudulent misrepresentation or fraud conducted by the banks and financial institutions who manufactured, rated, wholesaled, and retailed ABCP.

Two, as of December 7, the self-regulatory agencies have not laid any ABCP-related charges, despite having more than two years to do so. As indicated by the December 11, 2008, letter from Mr. Dean Buzza of IMET to Mrs. Diane Urquhart, who was retained to assist the ABCP retail owners, IMET has deferred investigations on this complex case to the self-regulatory agencies. That letter has been previously presented to this committee.

Three, given the complex nature of cases like ABCP and the failure of both the self-regulatory agencies and IMET to take effective action, Canadian citizens need a competent securities investment crime unit that is entirely independent from the self-regulatory agencies. This organization, which might be modelled along the lines of the securities crime unit that Gary Logan and Diane Urquhart spoke to you about, should have the mandate to aggressively investigate and prosecute individuals or corporations that employ those individuals and that commit white collar crime.

Four, the revisions to Bill C-52 propose that a judge should have the authority to order felons to repay fraudulently obtained funds. This authority should be expanded to include costs such as having to pay for a second mortgage due to expected funds not being available. These costs should be borne by both the individuals and the corporations they work for.

Five, the CCAA restructuring of ABCP was hampered by the international banks, who were a party to this alleged fraud, being given a court stay that allowed them to be exempt from a standstill agreement. That's a complicated way of saying this gave them undue power to influence the form of the restructuring, and it allowed them to dictate a blanket exemption from lawsuits for all parties. This is a gross miscarriage of justice, as ABCP owners were deprived of their ability to sue the perpetrators of this fraudulent product.

Yesterday, the Globe and Mail reported that IIROC is moving closer to a settlement with the major banks and brokerages that sold ABCP. Penalties are expected to be approximately $200 million.

My initial comments include that $200 million in fines is less than the reported legal fees incurred during the ABCP restructuring. It still leaves a net profit of $34.8 billion.

It has taken IIROC and OSC 28 months to announce, and I quote, “ongoing negotiations”. In contrast, the U.S. authorities invested and charged the perpetrators of a similar toxic scheme related to auction-rated securities in six months.

Finally, no criminal charges have been laid by IMET. It is my opinion that the responsible parties should be accountable to the criminal justice system and, where warranted, sent to jail.

I hope the lessons learned from the ABCP collapse will assist you in improving Bill C-52 and the procedures by which white collar crime is prosecuted in Canada.

Thank you very kindly for the opportunity to be here.

[The Chair, Conservative, Ed Fast]

I call the meeting to order.

This is meeting number 53 of the Standing Committee on Justice and Human Rights. Today is Wednesday, December 9, 2009.

You have before you the agenda for today. We'll be dealing with a number of issues. We'll begin by completing our review of Bill C-52.

We expect to go to clause-by-clause on this bill at our first meeting in the new year, on Tuesday, January 26. Committee members may want to take note of the fact that our meeting schedule in the new year has at least tentatively been changed to Tuesday and Thursday, not Monday and Wednesday, so our first meeting would be on January 26.

We have with us today a number of additional witnesses on Bill C-52. Then we'll move on, in our second half of the meeting, to hear Mr. Scott Andrews, who is the sponsor of Bill C-464, an act to amend the Criminal Code (justification for detention in custody).

At the end of our meeting, we'll undertake some committee business. It shouldn't take long. There are two items, and hopefully we'll get through those. I've asked the clerk to distribute a copy of the steering committee report, together with the budget for our travel to Winnipeg and Edmonton, so that you can review it ahead of time and so that we can deal with it in an expeditious manner at the end of this meeting.

Now we'll move to our review and consideration of Bill C-52. As listed on the agenda, we have a number of individuals as witnesses. We have Janet Watson, Mike Miles, Melanie Johannink, and Larry Elford. We also have, representing the Earl Jones Victims Organizing Committee, Joey Davis. We have, representing the Investor Recovery Pool Committee, Brenda MacMillan. We don't have someone from the Department of Justice yet. They may be coming.

In any event, we'll move forward with our witnesses. I think each of you has been told how much time you have to speak. Perhaps we'll start as listed on the agenda.

Ms. Watson, if you would, please start.

[Michael B. Murphy]

Thank you, Brian, for that very difficult question; I appreciate it--especially its length.

Look, the Criminal Code of Canada of course is not a collection agency mechanism. Having the element of restitution within the bill arguably creates some redundancy, because the restitution provisions are already there in the Criminal Code and the judge can use them. But I don't think it hurts to have it there as something that a judge can consider. I'm not looking at this as an academic, and I'm not representing the elaborate and well-researched views of the Canadian Bar. I'm looking at this from the point of view of victims' rights in the federal legislation and the Criminal Code.

While we are not doing a full revision of the Criminal Code, all the laws we have—Bill C-52, the Criminal Code, and its various amendments—are supposed to be a codification of community values. We might have to do this piecemeal, failing a full revision of the Criminal Code, with some emphasis on victims' rights.

Having it in there might lend some clarity to a judge's consideration in sentencing. According to my colleague from the Canadian Bar, if they can make restitution, they certainly will. So having it in there may affect the judge's views on sentencing.

I believe that Bill C-52 is a good start, but I also believe that it is an offer of partnership to the provinces. The civil forfeiture act that we envisage enacting in New Brunswick will allow us, where Bill C-52 fails, to go after these tools of crime. Sometimes it's a home; sometimes it's a larger property like an office building. Other tools include the mechanisms that they use, even the bank accounts. Whatever moneys are available could be tools of crime.

So it's a partnership, and I think it's a reasonably good start. It's not perfect, though, and we're doing things piecemeal.

[Suzanne Costom, Executive Member, National Criminal Justice Section, Canadian Bar Association]

I want to reiterate the thanks that Gaylene just expressed, both to the chair and to the committee, for allowing the Canadian Bar Association to express its views today on Bill C-52.

I want to start by saying that the Canadian Bar Association certainly understands and supports the thought process and the concerns that went into this bill. Anything that would deter crime and anything that would deter people from being victimized by white-collar crime is certainly something that the Canadian Bar Association wants to support.

As a Montrealer, I can tell you I recently walked into the lobby of my office building and overheard a gentleman telling another gentleman at the elevator that he'd been a victim of Earl Jones. He had lost absolutely everything. He had thought he was going to retire, but it wasn't looking so good for him. I can tell you, both as members of the committee and on a personal level, that these are things we are certainly heartbroken about when we hear them.

The other thing the Canadian Bar Association certainly supports is the concept of making victims whole. If restitution could be effected to victims through our criminal justice system, that would be a phenomenal result.

We recognize legislation that recognizes the particular features of particular victims and recognizes that different victims are heard differently, depending on the nature of the crime and the nature of the offender. All of those sorts of concerns, which we see reflected in this bill, are good concerns.

That being said, you have our brief, and so I'm not going to surprise you when I tell you that the Canadian Bar Association does not believe this bill should be passed into law. I'll tell you why. It's not because we don't sympathize with the concerns that have gone into the drafting of this bill. It is because we feel that the tools already exist in the Criminal Code.

What the bill does is to make more complex an already very complex criminal justice system, and we think it creates a risk with regard to the administration of justice and justice efficiencies at a time when our resources are such that we need to be working towards justice efficiencies and not away from justice efficiencies.

The other thing I'm going to say, which will not be a surprise to those of you who I know have heard submissions from the Canadian Bar Association before, is that we do not support any legislation that would tie the hands of judges. We, the lawyers, the defence lawyers, the crown prosecutors, the academics on the committee, have enormous confidence in the judges who mete out sentences day after day in the various courtrooms across our country. The hallmark of the Canadian justice system is proportionality in sentencing and the individualization of sentences. When we impose mandatory minimums like the ones being proposed in this law, we by definition move away from those principles, and that is something the Canadian Bar Association has consistently advocated against.

If I can be more specific and concrete with reference to how we believe the administration of justice is an issue in this bill, one of the expressions that jumped out at us is the expression in clause 2, which creates the mandatory minimum sentence of two years' imprisonment for a fraud when the subject matter of the fraud is in excess of $1 million. We're concerned about the breadth and scope, and also the ability to define, really, what the subject matter of the fraud is.

I will remind everybody--and I know that you all know this--that the Supreme Court has said since 1978, in the case of Olan, that in order for there to be a fraud there doesn't have to be economic loss. So you have a situation where the subject matter of the fraud may have been $1 million, but there may have been absolutely no economic loss whatsoever by any individual victims or by any communities. It would seem to us, given the sorts of concerns that went into drafting this bill, that we are very far away from what the goal of this legislation is.

Again, given that we've said before that the subject matter of the fraud is the triggering effect here, and given how important that's going to be, particularly to accused who are looking at being subject or not subject to a mandatory minimum sentence of two years' imprisonment, we foresee, from the justice efficiency perspective, that sentencing hearings are going to become much more complicated and much more complex.

There is no longer going to be any sort of admission as to what the subject matter of the fraud, if you will, will be. We're going to have a situation in sentencing hearings where we're going to have to trot every single victim into the courtroom in order for the crown to be able to prove what the exact amount of the fraud may have been, be it a potential risk, a potential loss, or an actual loss.

In the Criminal Code now, you might point out, there already is this concept of $1 million as an aggravating factor, and that's true. It was already in the Criminal Code. But in practice, I can tell you that what happened is that it was used as a signal to prosecutors, to defence lawyers, and ultimately to judges that the more significant the amount of the fraud, the more significant the sentence would be.

In that $1 million mark, the legislators had sent a clear message that this was particularly aggravating. In practice, what that meant was that if the fraud was $900,000, or if the fraud was $1.1 million, it was a big fraud, and that was an aggravating factor, but it didn't really matter that it be quantified very specifically. What's going to happen now, because an offender is facing a potential two years' imprisonment upon this $1 million trigger, is that this amount is going to be very, very important to quantify. So again, we're concerned from a justice efficiency perspective that it's going to create all sorts of blockages.

As an aside, despite the fact that we are not at all in favour of this mandatory minimum or of this triggering of $1 million, I would submit to the committee that if this part of the bill remains intact, this committee may wish to at least consider adding a provision for notice to the offender, which would require the prosecutor to notify the offender that they consider that the subject matter of the fraud is in excess of $1 million and therefore they will be seeking this mandatory minimum term. We think that's a fundamental justice sort of addition to the law that can make the law fairer, so we would ask you to consider that.

In terms of other sorts of administration of justice issues, one of the things we're concerned about, despite being in favour of restitution, is that the restitution mechanisms already exist in the Criminal Code. As we know, it's already one of the options that exist in the sentencing provisions of the Criminal Code. Again, I can tell you as a defence lawyer that when our clients can make restitution, we make it, because we know that is going to be very positively looked upon by the judges and hopefully will yield a less significant and less harsh sentence.

The concerns about restitution that were shared among the criminal justice section of the Canadian Bar Association came, believe it or not, from prosecutors, who were concerned that victims were now going to confuse them as being their lawyers, and not advocates of the public interest, because victims were going to turn to them and expect that they would deliver restitution. There is certainly a renewed emphasis on restitution in this bill in that the judge “shall” make inquiries of the prosecutor and the prosecutor “shall” make inquiries of the victim. I can tell you that in practice it happens all the time, but by spelling it out, the crowns in our committee were concerned that it would put them in a somewhat difficult position.

The other thing that I can tell you as someone who is involved in the criminal justice system as a day-to-day practitioner is that when victims of crime and fraud go to the police to lay a complaint, they are routinely told by police officers that if their goal here is to get their money back, they're in the wrong place, because that's not the goal of the criminal justice system. Again, one of the concerns of this committee is that by emphasizing restitution, and by making it a sort of presumption of restitution, people may start to look at the criminal justice system as a sort of collection agency.

The last point, which flows from what I just said, is on the short title of the bill. The criminal justice committee of the Canadian Bar Association has noticed that we've moved away from neutral short titles of legislation and now have short titles like the one we have here, which talks about “retribution” for victims of crime. We would respectfully submit that we might want to consider going back to more neutral titles for our short titles of bills.

Thank you.

[Gaylene Schellenberg, Lawyer, Legislation and Law Reform Directorate, Canadian Bar Association]

I'm beginning.

Thank you for the invitation to present the Canadian Bar Association's views on Bill C-52 to you today. I'm Gaylene Schellenberg, a lawyer with the legislation and law reform department of the CBA. The CBA is a national association of more than 37,000 members, including law students, lawyers, notaries, and academics. An important aspect of our work is seeking improvements to the law and the administration of justice. It's from that perspective that we appear before you today.

With me is Suzanne Costom, an executive member of the CBA's national criminal justice section. The section represents crowns and defence lawyers from every part of the country. Ms. Costom is a defence lawyer from Montreal who also practices in ad hoc prosecutions.

I'll pass it over to her to present the substance of our brief.

[Michael B. Murphy, Attorney General, Minister of Justice and Consumer Affairs, Province of New Brunswick, Government of New Brunswick]

Thank you very much, Mr. Chairman.

I am pleased to have the opportunity to speak in favour of Bill C-52 and to provide the committee with some information with regard to our government's position on it.

Before I touch on Bill C-52, I want to give you some background on our government's views with regard to our agenda on these matters and what has led us here today.

Part of my responsibility as Attorney General of New Brunswick is to support efforts that will increase the criminal justice system's efficiency and to promote reforms that will inspire a solid level of confidence in the system. I firmly believe that all law-abiding citizens have the right to live in a safe and secure community. They must be able to count on a criminal justice system that protects them against harm and the fear of harm. It is essential to maintain the public's confidence in our judicial system. They must be wholeheartedly convinced that the system protects them against harm and enables them to live free from the fear of becoming a victim of crime. They must have confidence that the system will deal appropriately with those who break the law.

Since I became Attorney General in June of this year--after three wonderful years as Minister of Health--I have supported many of the measures brought forward by Justice Minister Nicholson here in Ottawa. I believe the laws with regard to our criminal justice system must have meaningful and proportionate consequences for those who offend. There are very serious offences of a violent nature out there, but of course there are very serious offences of a non-violent nature that cause complete disruption to certain lives. Often those crimes are committed against our most vulnerable.

Just to give you some past record, we have in New Brunswick supported Bill C-25 in terms of losing the two-for-one remand. We believe remand lost its purpose with regard to the reason that there was a two-for-one credit.

We supported Bill C-15, with its mandatory minimum sentences for those involved in the production or trafficking of drugs, because it was to protect our most vulnerable, those being our children and those afflicted with drug use. I did see that close up as Minister of Health. That is a very sad picture across the country.

Of course, we're also pleased with Bill C-36, the faint hope clause, and the progress being taken towards passage.

In New Brunswick we have taken some steps to make our communities safer. Last week we partnered with the Child and Youth Advocate in his request that there be a law in New Brunswick for consumer protection. This stems from the report that there ought to be a law protecting children's online privacy in the 21st century. We partnered with them for a working group that includes the Child and Youth Advocate's office and the Department of Justice. We also put on that working group a member of the opposition in New Brunswick, because we do not believe--I am sure members of this committee will agree--that this is in any way, shape, or form a partisan issue.

The working group will come forward with legislation in the spring of 2010. We hope to bring that into the Legislature next fall. We believe this will complement Bill C-58, which, as you know, is the federal bill that will require mandatory reporting by Internet providers when it comes to child pornography.

For that reason, I have asked the officials in my department to form a working group with representatives of the Child and Youth Advocate's Office to study possible amendments to our province's legislation that would allow us to achieve these goals. The working group will be submitting its report to me in the spring of 2010.

With respect to the bill under consideration, Bill C-52, we're pleased that this is a bit of a crackdown on white-collar crime, because white-collar crime is committed most often at the expense of the life savings of our most vulnerable. These victims are, by and large, the elderly, those who sometimes do not have the wherewithal to see some of the red flags that are there, but we know one thing: all of these victims are individuals who worked their entire lives for what savings they have. Those savings may be $15,000, $50,000, $300,000, or possibly $1 million, but it means absolutely everything to them, so I want to make three points with regard to Bill C-52.

First of all, the New Brunswick Securities Commission has been active and effective in taking steps to protect investors from unfair, improper, and fraudulent practices, and I'm confident that Bill C-52 will complement the work of the securities commission in New Brunswick by providing for a minimum two-year sentence for fraud exceeding, cumulatively or in a single instance, $1 million. It will send a very clear message to those who believe they can perpetrate this crime.

On this first point, though, I'd like to say that while there is an inclusion of additional aggravating factors that can be applied in sentencing, I'm going to urge this committee to consider a figure below $1 million, and I will get into a story very shortly. Suffice it to say that $20,000, $30,000, or $50,000 means absolutely everything to a person who's worked all his or her life. The person gets it and starts to use it at the age of 65 and plans to use it very sparingly between ages 65 and 85 to make ends meet. When they lose that money because of a fraud, it is just as devastating to them as the loss of several hundreds of thousands of dollars or a million dollars.

The second point I want to make with regard to Bill C-52 is that the bill will require judges to consider restitution. In New Brunswick we have a provincial proceeds of crime unit that's been very successful, but we are also bringing forward a civil forfeiture act in January that I think will complement Bill C-52 and our proceeds of crime unit. The civil forfeiture bill in January will allow the Department of Justice, through its lawyers, to sue individuals who have used their property--whether it's their home office, their computer, their small office building, their big office building, or whatever--essentially as a tool of crime. They will sue for that property.

We have, in this country and in New Brunswick, seen far too many times someone who was sentenced to six months--or a year and a half, or even two and a half years--go back to the very large home or office building or whatever property the person had that had been used to perpetrate the crime. The civil forfeiture act that we envisage in New Brunswick will be in compliance with the same civil forfeiture act that's been tested before the Supreme Court of Canada and found valid. The civil forfeiture act under a different name in Ontario and British Columbia has been very successful; 99% of the time the defendants walk away, because they don't want to sign an affidavit outlining that they have a $20,000 income and $1 million in assets. They were told, I think it was in Ontario, that they had three years to be self-sufficient, and in fact that was attained after 18 months. As you know, it is on a balance of probabilities, which is somewhat easier in that sense than the “beyond a reasonable doubt” onus.

Lastly, I want to point out that if we are to succeed in the fight against securities fraud, it is crucial to be able to count on sufficient resources to provide the expertise required in the complex fields of investigation and detection. Canada's other orders of government have said that federal assistance is essential for improving their detection and law enforcement capabilities, and I echo their arguments. Increased probability of detection can be a key deterrent to crime.

Look, ten minutes is not a lot of time. It usually takes one of the Murphys ten minutes just to clear our throats.

Suffice it to say, I would think there is no magic in this $1 million figure. I think this Bill C-52 is a very good bill, and I applaud the government for bringing it forward. At the same time, you know, if you have 30 acts against individuals who lost on average $30,000, that can be just as devastating to that family or to many families as a bullet would be to any of those victims.

I think it has been a long time that we have been looking at the rights of the offender. We've certainly considered and we respect the charter, and we respect the principles of the Criminal Code of Canada, but there is no reason why we should not be theming within our federal acts, and our provincial acts, the rights of the victims of crime. I think all of these bills—federal and provincial—should consider that.

It is because we want to set the record straight.

We want to bring the pendulum back so that the people in the communities across this country know those acts are designed to protect them on deterrence and punishment, and on restitution. The restitution aspect can be accomplished in some part by Bill C-52 but also considerably enhanced by a civil forfeiture act's being brought forward in all the provincial legislatures.

I'm asking the committee to consider a figure below $1 million. I'm certainly fine with the two-year minimum sentence, but I do believe we have to consider that there is just no magic in that. There are an awful lot of people who can tell you a story where their lives have been ruined and their extended families' lives have been ruined on figures of $30,000, $40,000, or $100,000.

I'll conclude by saying this. There was a gentleman who came to my office about two months ago, and he had been defrauded of a figure many times smaller than $1 million. He was embarrassed. He was 75 years old. He was crying. He didn't know what to do, and the fact was that all I could tell him was that there would be an investigation by the securities commission with regard to fraudulent practices and that the prosecutors would deal with this and would look at the statute. I would have liked to tell this individual that there was a minimum sentence of two years for something such as that, but I couldn't. I would have liked to tell him that there would be a minimum sentence of two years for the amount he had been defrauded, which was every bit as powerful to his family as a bullet right through any member of his family.

Sometimes it takes the visuals, and sometimes it takes the story and the face of a victim before you to understand the significance of the crime. While we have acts of violence that are looked after by the Criminal Code of Canada, the repercussions of acts of white-collar crime against our vulnerable can be every bit as devastating as the violent act.

Thank you.

[The Chair, Conservative, Ed Fast]

We'll reconvene this meeting of the Standing Committee on Justice and Human Rights.

We now have with us a number of additional witnesses on Bill C-52. I'll just go through them for the record.

First of all, representing the Government of New Brunswick, we have the Attorney General and Minister of Justice, the Honourable Michael B. Murphy.

Welcome here.

We also have the Canadian Bar Association, represented by Suzanne Costom as well as Gaylene Schellenberg.

Welcome back.

The Department of Finance is represented by David Murchison, Manuel Dussault, and Joan Monahan.

Welcome to the three of you.

By video conference out of Toronto, we have Mr. Al Rosen, representing Accountability Research Corporation.

Welcome to you as well.

We'll begin with the Honourable Michael Murphy.

Each organization has ten minutes to present. Then we'll move to questions from our members.

Mr. Murphy, please.

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Thank you, Mr. Chair.

Members of the panel, most of my questions will centre on the integrated market enforcement teams, or IMETs.

You covered a lot of territory in your submission, so I think we need to drill down on what IMETs have been doing since 2003. In particular, since we're discussing whether there has been a growth in commercial crime activity—and I think there has been—it might be useful to put more flesh on the IMET bones.

I understand they were established in 2003 in Toronto, Montreal, Vancouver, and Calgary. Is there a plan to expand to other locations? Are they cooperating well with the prosecution services, forensic accountants, and financial advisers? Are there any statistics on the number of crimes that have been detected and brought to conviction by IMETs? Does this bill do anything for IMETs? Are you sufficiently resourced to do what you do?

What were Nick Le Pan's recommendations? He tabled a report, I understand, in 2007. He talks about tools and resources. You say that you're trying to meet those needs. How's that going? I wonder if in his 2007 report any of the aspects of Bill C-52 were the tools asked for. I suspect that it had more to do with resources; with bringing down the barriers between the financial sector, commercial crimes units, and prosecution offices; and with encouraging more cooperation and an easier flow of electronic information.

We're very much in favour of IMETs. Could you give us a history of how this has gone since 2003 and tell us where you want to go in the future?

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Thank you.

My next question has to do with the next paragraph on page 6 of your report, where you talk about the IMETs reformulation. You give a brief description of the fact that Mr. Nick Le Pan was appointed senior expert adviser to the RCMP to help you “develop and guide” the implementation of recommendations aimed at improving the IMETs.

Apparently, one of the challenges he identified through his recommendations is that of equipping the IMETs with the tools and resources they need to succeed in the environment they operate in. What are those tools and resources you need that you do not have sufficient of at this time?

I'm assuming that Bill C-52 will apply if in fact we succeed in convincing the government to bring in the amendment so that the mandatory minimum applies to these capital market frauds, which it does not do at this time. There are other resources and tools you need. What are they?

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Thank you very much, because I'm assuming that you've read Bill C-52 and that you would have therefore noticed that the amendment being brought for a minimum mandatory sentence does not apply to certain related offences such as fraud affecting the market, fraudulent manipulation of stock exchange transactions, insider trading, or a false prospectus.

Now, given what you've just talked about, would you not consider that as offences involving more than $1 million, these might be those to which a mandatory minimum sentence would and should apply?