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.

Retribution on Behalf of Victims of White Collar Crime Act

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Madam Speaker, I certainly agree with my colleague, the member for Elmwood—Transcona, in his call for efforts to crack down on fraudsters who bilk Canadians of their hard-earned dollars and who make personal gain by the extensive use of tax havens.

My point throughout this whole debate has been that the government needs to do much more than this little effort under Bill C-52, however significant it is. Many of the experts in the country today wonder whether the new legislation would be more effective than the current regime.

Eric Gottardi, a Vancouver criminal lawyer who is part of the Canadian Bar Association's criminal justice section, said:

I don't think it's going to have a significant impact. It's really a codification of existing principles. The reality is, it actually doesn't change much in how the law operates right now.

The experts say that a fraud of more than $1 million already earns a criminal a two year sentence in almost every case, and the newly announced list of factors that judges need to take into account when sentencing fraudsters is already part of the process. The list includes paying attention to the financial and psychological impact of the fraud, whether the offender broke licensing rules and standards, and the complexity of the scheme involved.

Others have said that the government misses the point. "It's pathetic," said Toronto-based forensic accountant Al Rosen. "The main issue is, no one is out there to chase those people in the first place".

That is really why I say the government has to go much beyond this. It must bring in a corporate Canada accountability bill. It must move on white collar crime in all of its aspects. It must ensure that we actually stand up for Canadians who have lost so much in the past and could be victims again unless we bring a comprehensive approach to the table.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I am pleased to join in the debate and indicate, as others have, our support for Bill C-52. We acknowledge that it is a step in the right direction by the fact that it sets a mandatory minimum sentence of two years for people convicted under section 380 and it takes measures to deal with widespread and rampant white collar crime in our society today.

However, like others have said in the debate, where is the rest of the strategy? Where is the meat that will really crack down on corporate and white collar crime? Why has the government been so slow to take this step? Why is it limiting its other actions on the question of a national securities regulator when what this country needs is a complete strategy dealing with white collar crime, and a corporate Canada accountability act.

That is my suggestion to the House today and it is something New Democrats have proposed in the past. I would urge the government to consider going beyond this tiny move in the right direction and consider comprehensive measures that Canadians are so desperate for.

The debate makes us all ask whether we are talking about good cops, bad cops or just no cops, which is the problem with respect to white collar crime. We know the situation is very serious. It has been estimated that Canadians lose billions of dollars annually to white collar crime. Canadians have said, time and time again to the current government and the previous government, that they want action in this regard. They have actually said, through significant polling, that white collar crime is at the top of their minds when it comes to crime in this country today. Recent polling has suggested that Canadians rank economic crime at the top of the list of other crimes. In fact, 67% of Canadians said that economic crime was their number one issue when it came to crime. That ranks just ahead of gang violence at 66%, gun crime at 54%, organized crime at 54% and terrorism at 14%. We can see very clearly that this is an issue that Canadians want government to do something about as quickly as possible.

For many Canadians, the bill today, no matter how significant a step, is really too little too late. I do not need to tell the House how many Canadians have been victims of white collar crime. We have been calling for action on this for a long time and so little has been done.

Twelve years ago, Canadians were shocked to learn the sordid details of a too good to be true deal gone bad. Hon. members will remember the Bre-X scandal. It rang the alarm bells. Thousands of investors saw millions of dollars lost overnight as a corporate hoax was revealed. Did we learn from that? No. What followed was Magnex, Livent, Corel, CINAR, Cartaway, Golden Rule, Castor Holdings, Norbourg, Portus, Nortel, Conrad Black, Bernie Madoff, and the list goes on and on.

Investigations are launched, but very seldom are people put behind bars and criminal charges upheld. This is not right, obviously, for these are not victimless crimes. It is truly an urgent issue for Canadians and it is time for the government to come forward with a complete set of strategies and policies to protect investors and employees.

Back in 2004, the Governor of the Bank of Canada used the term “wild west” to describe Canadian financial regulations. I think that was an appropriate description of what was happening all around us. He, along with many others, called for government to do something about the wild west and to put in place measures that would bring some order to the wild west and, in fact, to hire a sheriff to get the job done.

Every other country in the G8 has done something to deal with corporate crime and introduce sweeping accountability rules, every one except Canada. It is time to do something about this issue and bring in rules for investors. It is time to protect employees who blow the whistle on corporate fraud. It is time, after years of Liberal neglect and Conservative indifference, to bring in rules that will reduce corporate crime and white collar crime in Canada.

I have a few suggestions to make, and this is consistent with our previous announcement for having a corporate Canada accountability act.

The first point I want to make has to do with the regulatory field. As the member for Elmwood—Transcona mentioned in his question, I do not think it is good enough to simply call for a national securities regulator without the rest of the pieces of the puzzle in place. It ignores the fact that many provinces, in the absence of any kind of federal leadership, filled that vacuum with their own initiatives. The passport system actually took off and is now active across this country.

We do not need a national securities regulator in this country. We need a Canadian body that coordinates provincial securities regulators and brings a unified response to this whole area. A pan-Canadian approach is needed. Forget the challenges to the Supreme Court. Forget the bullying in this House. Let us start to do something about the whole package that is required and not one single issue, either in terms of a national securities regulator or, in the case of this bill, one particular move with respect to the Criminal Code.

Second, we need new accounting oversight committees and independent auditors. They should be legislated, similar to what happened in the United States and Australia as a result of the Enron scandal. Canadian executives should face new provisions for disclosure to shareholders and changes in law to ensure that independent board members are truly independent.

We also need to fight for Canadian workers and businesses. We recommend that the government bring in much more stringent whistleblower protection and apply the regulations that we now have and enhance them so that there are new rules for corporate perks.

Yesterday in the United States, we saw President Obama stand up to the automobile executives who are ripping off consumers and turning to the government for a handout, all the while flying in their private jets and flitting off to exotic summer retreats. Finally, someone in this world has stood up to that kind of ripoff and corporate crime and has said that enough is enough. That is what we need to do in this country.

Finally, as part of this overall plan, we need to ensure that Canada is no longer known as a place where people can squirm away from corporate fraud. We need to put in place the right provisions to police the financial wild west. That means an increased and independent mandate for the RCMP integrated market enforcement team, bringing in international standards in Canadian corporate accounting and law, and an examination of new laws to prevent non-compete payments.

We have been through Bre-X. We have been through Nortel. Just yesterday, people gathered on the steps of the Parliament buildings to express their deepest concerns and cries for help because their life savings have been lost as a part of the Nortel sale. That company had previously squandered public moneys and had been ordered to pay $2.7 billion back in 2006 to shareholders as a result of a lawsuit under U.S. securities law.

In the United States, there is the Sarbanes-Oxley law, which actually has the teeth to crack down on white collar crime. We in this country need something similar that approaches this issue from a comprehensive point of view. We need corporate accountability. For too long, Canadian investors and companies playing by the rules have shouldered the burden of fraud. Ordinary Canadians lose big because of corporate fraud and cooked books, and the prosperity gap only widens.

Let us begin today with a campaign for fairness in the markets and for a corporate Canada accountability act to ensure that the government and the ministers responsible admit the problems and help Parliament fix it. We cannot do nothing at this point. The government knows that it can take this kind of commitment from us to the bank.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Madam Speaker, what I am simply suggesting is that our law enforcement officers need to be given an arsenal of weapons in order to go after white collar criminals who deprive people of their life savings or their retirement savings. One significant aspect of that is to have a national securities regulator who will have strong enforcement of our securities laws across the country. This has been pointed out by many experts in the field of securities law as one of the essential elements of going after these white collar criminals.

However, that is not enough, which is why this government has taken the effort to put forward Bill C-52 to significantly strengthen the penalties for white collar crime. We are sending the message that white collar crime is not acceptable in our society and people will pay a heavy price if they continue to do these things to vulnerable seniors, retirees, savers and law-abiding citizens of this country,

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Madam Speaker, I am pleased to add my strong support to Bill C-52, An Act to amend the Criminal Code (sentencing for fraud). This bill is a message to fraudsters in the headlines and a response to the victims who have suffered due to the greed and deceit of these fraudsters. The message is that our law will not tolerate this conduct and that serious sentences will result.

As this government has said time and again, it is time to put the concerns of victims at the forefront. While Bill C-52 may not restore their life savings and may not deter all future fraud, it does demonstrate that we mean business when we say that those guilty of fraud will be held accountable.

The troubling aspect of fraud is that any one of us could be a victim. Even though we may be careful in all our personal financial matters, today's white-collar criminals are clever and smooth, and even the most cautious investor could be caught in a fraudulent scheme. It is a shame that these fraudsters could not put their cleverness to good use to the benefit of society in such tough economic times.

Other speakers have highlighted the nature and scope of fraud today, and I am sure we can all think of other examples. We know that such schemes are not limited to organized crime.

We have heard a lot about Ponzi schemes recently, but we have also heard about the impact on victims of a wider range of other types of fraud. The impact on the victim of a $500 fraud may be just as devastating as the impact of a $1 million fraud if the victim has limited means. These reforms address the offence of fraud regardless of value, although there are mandatory minimum sentences applicable for fraud of over $1 million.

Fraud, regardless of the value, is a real and serious crime with real and serious consequences, and it is time that everyone in the criminal justice system took fraud seriously. Bill C-52 is an important step in the right direction. It will improve the Criminal Code sentencing provisions for fraud to ensure that sentences imposed on offenders adequately reflect the harm they cause.

For fraud that has a value of $1 million or more, that in the “large scale” category, a minimum sentence of two years will be imposed. I should make it clear, though, that this is only a minimum and where the fraud is larger than that, as it is so often, or if there are other aggravating factors, the sentence should be well above two years and can go as high as 14 years.

The bill is not just about the ultimate sentence for the offender. It is also about the victim's role in the sentencing process. The Criminal Code has evolved over the years to improve the experience of victims in the justice system and to provide a role, albeit limited, for victims of crime. These provisions include victim impact statements and the opportunity to present such a statement along with consideration of restitution at sentencing, testimonial aids and publication bans on the victim's identity, where needed.

Bill C-52 will further address the need to consider victims of crime when sentencing the offender for fraud. For example, the reforms will make clear that if the fraud had a particularly significant impact on the victim because of his or her financial situation, health or any other relevant factor, that should aggravate the sentence. In other words, those factors, as well as others, should move the sentence up toward the maximum. I would note that this is another aspect that will be welcomed by victims, because all victims agree that no one else should suffer as they have and that such fraud must be prevented from happening in the future.

A new prohibition order can be part of an offender's sentence. When so ordered by a judge, the offender can be prohibited from having authority over another person's money, real property or valuable securities in any employment or volunteer capacity in the future. If the offender does not respect this prohibition, he or she can be charged with a separate offence.

As mentioned, the Criminal Code already permits victim impact statements and provides for restitution to be part of the sentence in appropriate circumstances. Bill C-52 highlights the importance of both measures when it comes to fraud.

The Criminal Code currently provides that judges may consider a statement made by a victim of crime, known as a victim impact statement. Its purpose is to provide the sentencing judge with additional information, in the victim's own words, on the harm or loss suffered by the victim as a result of the offence. The statement is shared with the offender in advance, and victims may be cross-examined on the statement. Although this cross-examination rarely happens, it does ensure that the statement stays focused on the harm caused and not on recommendations about the sentence.

The statement provides judges with information on the impact or effect of the offence. For victims of fraud, the impact will be significant and can extend not only to their financial loss but to their sense of trust and overall well-being.

The bill also acknowledges that it is not just the actual victim of fraud who will suffer a loss or an impact. If the victim has been stripped of his or her savings, then they will not be buying goods and services, participating in leisure and charitable activities, pursuing their hobbies and interests or enjoying life in their communities.

The provisions in Bill C-52 recognize this and go a step further than the victim impact statements by enacting a community impact statement provision for fraud. Community impact statements are not unheard of, quite the contrary, but the code does not specifically provide that the court should consider such statements. The existing victim impact statement provisions in the code include that the court may also consider any other evidence concerning the victim for the purpose of determining the sentence.

This authority has led some courts to broadly interpret the term victim so that others impacted by the crime, including communities, have submitted statements at the time of sentence. There have been several examples in the case law of the courts' acceptance that crimes have an impact on the community as a whole.

Bill C-52 would make that recognition clearer with respect to fraud. When an offender is sentenced for fraud, the court may consider a statement made by a representative of the community describing the loss or harm to the community. The statement must be in writing, identify the community, clarify that the person can speak on behalf of the community, and be shared with the crown and the defence. So, for example, as I mentioned, where the victim cannot participate in the activities and the economy of his or her community, that community may suffer and that community may seek to submit a community impact statement.

As other speakers have noted, community impact statements are quite consistent with the purposes and principles of sentencing that are laid out in the Criminal Code, in particular, to provide reparations for the harm done to the victims or the community and to promote a sense of responsibility in offenders and acknowledgement of the harm done to victims and to their community.

I would also like to note the reforms regarding restitution.

Many speakers have noted the need for victims to actually receive restitution. No one disagrees that this should occur, but the reality is that if there is no money or not enough money to address the victim's losses, this cannot happen.

Restitution, to have any real meaning for the offender, must be paid by the offender to the victim. Where offenders can do so, they often do, so they can get a lesser sentence, but if they cannot make restitution, it is likely pointless to suggest that they do only to dash the hopes of the victims later.

We also need to keep in mind that we are reforming the criminal law and the sentences for fraud. The sentence must take into account a range of factors and restitution can be a part of that sentence, but if the restitution is not paid, the offender is still serving the other parts of his sentence and that restitution debt will remain to be paid. I should also note that the ability of an offender to pay restitution must also be considered before this is included as part of his or her criminal sentence.

As noted, restitution is the payment by the offender to the victim of a specific amount that reflects the financial losses of the victim. An order for restitution may be made as part of the overall sentence imposed on the offender as a stand-alone measure or as part of a probation order or a conditional sentence.

Of course, a conditional sentence should not be an option for fraud and it will not be an option for fraud once Bill C-42, the conditional sentence bill, is passed, because it carries a 14-year maximum penalty.

Bill C-52 would make a real difference in addressing fraud. No one disagrees that other initiatives are also needed: prevention, regulation, enforcement and prosecution.

In summary, the bill would help to improve the responsiveness of the criminal process for victims of fraud. It would require the sentencing court to consider if restitution should be ordered and it would permit the court to receive a community impact statement in cases where a community, in addition to individuals, have suffered from fraud.

I would encourage all hon. members of the House to support this bill and ensure that it becomes law as soon as possible.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Speaker, I think the member is himself confused, because I really was very clear, even if in ten minutes, it is not possible to discuss all the ins and outs of a bill. One thing is sure, he has just shown how confused he is. He says that there is a problem with my remarks when I say we have to be critical of the fact that Vincent Lacroix will be able to get out after two years and two months. Why can he get out then? Because the law as it stands allows him to. Parole after one-sixth of a sentence is served is a fact. So, after serving one-sixth of his sentence of 13 years, as set by the judge, who, in my opinion did a good job, he will get out.

What we in the Bloc are saying is that parole after one-sixth of a sentence is served must be eliminated. I do not know if the member was present when Parliament resumed on September 14. Right off, on arrival, we introduced a bill to abolish parole after one-sixth of a sentence. Let us take the example of someone like Vincent Lacroix. That is his name. I do not know whether the hon. member has been following the news in Quebec recently with regard to economic crimes, but the man defrauded 9,200 people of $130 million. His name is Vincent Lacroix. If parole after serving one-sixth of a sentence were abolished, he would be in prison for 13 years, not just two years and two months.

That is what we are criticizing, and I do not see how minimum sentences would change anything. Bill C-52 would have told the judge who considered the case of Vincent Lacroix that he had to be given a minimum of two years for his fraud. A fat lot of good that does us. He gave him 13 years. He certainly would not give anyone like Vincent Lacroix two years, or he would have his head taken off in Quebec. This is why I would say the hon. member is confused and not me.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Madam Speaker, I am pleased to take part in this debate on Bill C-52 introduced by the government.

I want to begin my speech by making a comment. When this bill was announced, we were surprised, or maybe not that much, since other ministers have behaved this way, to learn through various press conferences held across Canada, in Ottawa, Montreal and Edmonton, that the substance of this bill was being released before we as parliamentarians and legislators knew about it and had a chance to look at the bill and what it entails. This government once again is using a very important matter, that of economic crimes, to do some marketing.

This is not the first time I have seen this. I just want to give the government a friendly warning. They did the same thing during the last budget. Before the budget was tabled, a number of ministers made targeted announcements. Take for example the agriculture portfolio, for which I am the Bloc Québécois critic. The Minister of Agriculture made an announcement on measures that he wanted to implement before the budget was even tabled. When the budget was tabled, it was not at all what the farmers expected and it did not address their concerns. The government leaked information for the sake of publicity but we could not react because we did not have the exact wording of the budget in front of us.

That is how the story of this bill began.

Nevertheless, in order to be consistent with all the interventions it has made in the House, the Bloc Québécois is prepared to go over this bill in committee. It will need some minor and some major changes. Over the next few minutes I will explain what could be done to make this bill acceptable and effective.

The government's Bill C-52 is just not good enough. We will send it to committee, we will study it thoroughly, and we will recommend some much-needed changes.

The first problem is that this bill proposes minimum sentences.That is the Conservative government's pet project. It wants to put minimum sentences all over the place. We have to make sure that imposing minimum sentences for economic crimes will really make a difference. These offences are known as white-collar crimes, or maybe lace-collar crimes if the offender is a woman. Regardless, we are talking about people like Vincent Lacroix and Earl Jones, who are fraudsters. We are seeing more and more cases like this. It could be because people are speaking up about it more than they used to. Or maybe it really is happening more often than before. I do not know, but we have to get tougher and tougher on these people.

The first point I want to make is that minimum sentences are not a deterrent. During question periods and press conferences, the minister has been unable to think of one single major fraud case in which the sentence has been less than the two years proposed in Bill C-52. Under this bill, there will be a minimum two-year sentence for fraud cases over $1 million.

We asked the Conservatives to find one single ruling, one precedent, one case in which the judge sentenced someone convicted of fraud in excess of $1 million to less than two years, two years less a day, one year or six months in prison. The minister himself has been unable to provide a single example.

After researching the issue, we learned that typical prison sentences in fraud in excess of $1 million cases have been around six or seven years. The most recent example that comes to mind is Vincent Lacroix, who was sentenced to 13 years in prison but will be eligible for parole after serving one-sixth of that time, so will probably not serve all 13 years in jail. That is the problem. The problem is not what is in the bill, but what is not in it.

The bill talks about aggravating factors, among other things. The courts already take the aggravating factors into account. Most, if not all, of the aggravating factors in the current bill were addressed in the Vincent Lacroix ruling. This means that the judge who presided over this case had full flexibility to add aggravating factors. One need only read the ruling to see that the new Bill C-52 would not have changed much in Vincent Lacroix's case.

This is already the case with restitution orders, which are broader in scope in the bill, but experts have raised concerns about the feasibility of these measures in practice. That remains to be seen. I think it would be good for the committee to hear from these experts and from the government to see how we could make these restitution orders effective.

Orders that limit the activities of offenders are a little better and more useful. But this, as well, is at best an extension of a practice that already exists in the Criminal Code. That is one thing that could be acceptable in this bill. But we believe—and I am not the first Bloc Québécois member who has spoken in this House—that it is missing the obvious.

We believe that the problem with parole is not when they are going in, but when they are coming out. What happens is that criminals—and this is what people object to—receive prison sentences that are standard, appropriate, and accepted by the public, but they are released before their sentence is up.

A guy like Vincent Lacroix gets 13 years in prison for what he did. People in my riding are telling me that a 13-year sentence for what he did makes sense. What does not make sense is that he could be released sooner, thanks to the parole system and the one-sixth of a sentence option that this government refuses to eliminate. The Bloc Québécois has been calling for it to be eliminated.

As soon as the House resumed, we introduced a bill. The parliamentary secretary said it is really complicated. Yet the bill is very simple; it eliminates the one-sixth practice. With this measure, Vincent Lacroix could therefore not get out after two years and two months, which is what one-sixth of a 13-year sentence would work out to. People are upset. They are not happy, and with good reason.

The same thing goes for Earl Jones. Vincent Lacroix and Earl Jones could therefore benefit from this practice of parole after one-sixth of a sentence has been served. I would remind the House that Lacroix's crimes affected 9,200 victims. He stole over $130 million from people and not one cent of it was recovered. They will never see that money again. A sentence of 13 years is acceptable, but if he is granted parole after serving one-sixth of it, he will get out in two years and two months.

The figures I just gave regarding the victims are an indication of what a problem this is. In addition, we are not doing anything about tax havens. We think this presents a good opportunity, at committee, to try to add measures to this bill to eliminate tax havens, since we know that is where crooks stash their spoils.

What good will it do to order restitution of hidden money? Unfortunately, fraud artists are generally smart people who plan ahead. They defraud their victims over a number of months and years, and the smarter they are, the better their scheme will be. Unfortunately, they will manage to hide the money they steal from people. They will even tell themselves that, if worst comes to worst, they will spend some time in prison, but that when they are eventually released, they will be able to recover the stolen money from the tax havens where they hid it.

This is where we can take action to ensure that these people cannot hide the money they have stolen and that the victims can get their money back.

Amending the Income Tax Act to prohibit the use of tax havens would obviously be a big improvement. As we know, tax havens allow individuals and companies to hide money and avoid paying tax.

I will conclude on the issue of tax havens. I would like to make three points before I finish. We want to repeal the provisions that allow companies to use a strategy known as double deduction. The Bloc Québécois proposes to amend a section of the Income Tax Regulations that allows Canadian companies to set up what are known as international business corporations in Barbados. We also plan to oppose the ratification of any free trade agreement with countries that are on the OECD banking transparency greylist or blacklist.

In conclusion, I believe it would be a good idea to send this bill to committee and make the necessary changes to it, especially as regards parole after one-sixth of a sentence has been served and tax havens.

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

Through you, Madam Speaker, I will answer my hon. colleague's question, which was a fair and appropriate one.

Here is how things work in the parliamentary system. First, the minister of Justice introduces legislation. That is how Bill C-52 was introduced. Then, another minister, namely the minister of Public Safety, has authority with respect to what is called detention. When a judge hands down a sentence, the minister of Public Safety is the one who steps in and has jurisdiction, at the parliamentary level, to introduce this kind of legislation.

The member raised the issue of parole after one sixth of the sentence. I will suggest to him that, for one thing, what the Bloc Québécois introduced was a really incomplete bill that cannot be implemented or would be difficult to implement. So, we have to take a more serious approach and introduce legislation that will deal with parole after one sixth of the sentence and, after both bills have received royal assent, will actually apply to the various individuals wo will be convicted. Then, after parole after one sixth of the sentence is repealed, they will serve a two-year sentence. This is a baseline, however, which means that the judge may go higher and sentence them to more than two years, for as long as four, five, six or seven years.

The House resumed consideration of the motion that Bill C-52, An Act to amend the Criminal Code (sentencing for fraud), be read the second time and referred to a committee.

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Through you, Mr. Speaker, I will answer my hon. colleague's question.

Let me start by saying that I find this to be a very good question. Both abroad and within our borders, individuals having authority over the money of others have indeed been seen to engage in embezzlement.

I would point out that we are living in a country governed by law, however, and that in many provinces, including mine, numerous companies fall under provincial jurisdiction, while others fall under federal jurisdiction.

Currently, in each province, there is a slew of securities commissions, and this forces us to seek a balance and to closely consider how the system will work and how these white-collar criminals will be caught. While this is the general term used, we cannot paint everyone with the same brush.

Bill C-52 will at least open a door for dealing with such individuals. Regarding Vincent Lacroix, for instance, it was pointed out that he had a government licence and an established office, which meant that he met the requirements for getting into that line of business. But the fact remains that this man defrauded 9,200 people. He has fleeced 9,200 people. He is currently being prosecuted and was, in fact, sentenced to 13 years of imprisonment. That is a stiff sentence, in my opinion, considering that the next stiffest sentence is life imprisonment.

I therefore think that Bill C-52 will provide greater control over these types of situations.

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

Mr. Speaker, I am very pleased to have the opportunity to speak on the subject of Bill C-52, An Act to amend the Criminal Code (sentencing for fraud). This bill contains a number of provisions that are designed to ensure that people who devise and carry out serious fraud offences receive tougher sentences.

The objective of this bill is clear and simple. It would amend the Criminal Code to improve the justice system's response to the sort of large-scale fraud we have been hearing about so much lately.

The bill would send a message to those who think they can outsmart Canadians and dupe them into handing over their hard-earned savings. It would make clear that fraud is a serious crime for which there are serious consequences.

It is also designed to improve the responsiveness of the justice system for victims of fraud. These proposed measures would send a strong message to the victims of fraud that the crimes committed against them are serious and the harms they suffer will be taken into account and addressed to the greatest degree possible.

Overall, the measures in this bill would do much to increase Canadian's confidence in the justice system.

Before I describe the measures in the bill, it is worthwhile to consider the current state of the law. 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 set out in the code are high. In particular, for fraud with a value over $5,000, the maximum term of imprisonment is 14 years. This is the highest maximum penalty in the code, short of life imprisonment, obviously.

Also, mandatory aggravating factors for fraud offences are already in place. They require sentencing courts to increase the penalty imposed to reflect, for example, where the value of the fraud exceeds $1 million, the offence involves a large number of victims and, in committing the offence, the offender took advantage of the high regard in which he or she was held in the community.

Our courts have clearly stated that for large scale frauds, deterrents and denunciation are the most pressing objectives in the sentencing process. The courts have been clear that a serious penitentiary sentence must be imposed in large scale frauds. 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 my province, Quebec, just a few years ago.

The courts are starting to take these frauds seriously, but this government believes that still more can be done to strengthen the Criminal Code's responses in these cases to send a clear message that Parliament is in agreement with this trend toward tougher sentencing.

To this end, Bill C-52 proposes reforms that are designed to ensure that sentences imposed in these cases adequately reflect the severe impact they have on the lives of the victims, many of whom have lost their life savings or retirement savings.

One measure in this bill that is particularly significant is a new mandatory minimum penalty of two years for large scale frauds. As I mentioned, more and more courts across the country are recognizing the devastation that can be caused by large scale frauds and have emphasized that deterrents and denunciation must be front and centre in sentencing offenders in these cases.

The government wants to carry this message forward and clearly establish a minimum penalty for frauds with a value over $1 million. Many frauds cheat Canadians out of significantly more than $1 million. We have read recently of frauds in the hundreds of millions, such as the case in Alberta.

But the line must be drawn somewhere, and this government believes that if a person orchestrates and carries out a fraud of at least $1 million, this is a very serious crime that demands a term of imprisonment of at least two years.

Of course, this two year mandatory jail term is a floor, not a ceiling. If Parliament declares that a $1 million fraud must result in at least two years in prison, then, naturally, larger frauds will result in even higher sentences. The application of aggravating factors to the sentencing process will also help guide the process for determining the ultimate sentence.

The Criminal Code already contains several aggravating factors that can be applied to a fraud conviction to enhance the sentence.

The bill would add several more aggravating factors, such as: if the fraud had a particularly significant impact on the victims taking into account their personal characteristics such as age, financial situation and health; if the fraud was significant in its complexity or duration; if the offender failed to comply with applicable licensing rules; and 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 nature of the crime.

Another important measure in the bill is the introduction of a power which would enable the sentencing court to order that a person convicted of fraud be prohibited from having control or authority over another person's money or real property. This prohibition order can be for any duration the court considers appropriate. Violating a prohibition order will be an offence.

This measure is aimed at preventing future crime. The idea is to prevent the offender from having the opportunity to commit another fraud. There are several prohibition orders already in the Criminal Code, such as the one which can be imposed on individuals convicted of sexual offences against children, prohibiting them, among other things, from working in schools or other places where they would be in a position of trust or authority over young people.

I would like to devote a few minutes to the proposals in the bill which address the specific concerns of victims of fraud. Consideration of, and support for, victims of crime has been a hallmark of this government, and this legislation is no exception.

There are two measures in the bill that touch directly on the interests of victims: our proposals on restitution and on community impact statements.

Let me begin with restitution. Restitution is defined as the return or restoration of some specific thing to its rightful owner. It is distinct from compensation which, in the Canadian legal system, is a scheme of payments managed and made by provincial or territorial governments to assist victims of crime.

Restitution is the payment by the offender of an amount established by the court. The Criminal Code currently provides for restitution for criminal offences including: damages for the loss or destruction of property, bodily or psychological harm, bodily harm or threat to a spouse or child.

An order for restitution is made during the sentencing hearing of a convicted offender. It is part of the overall sentence provided to an offender as a stand-alone measure or as part of a prohibition order or a conditional sentence.

Restitution orders are particularly appropriate in the case of fraud offences. In several recent high-profile cases, we heard media accounts of thousands of dollars taken by offenders. These shocking cases of duplicity have deprived many innocent Canadians of hard-earned savings, and in truly awful cases, of retirement funds. It will be the judge's decision in each trial as to whether restitution is appropriate.

Our proposals provide that in the case of fraud, the sentencing judge 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 indicate whether they are seeking restitution. This step will ensure that sentencing cannot happen without victims having had the opportunity to speak to the Crown and establish their losses.

To further assist victims, our proposals include an optional form to assist victims in setting out their losses. The form identifies the victim and their losses and clarifies that the victim needs to provide receipts, bills or estimates in order to assist the court in making the restitution order. In all cases, these losses must be readily ascertainable. The courts have found that it is not possible to make an order when the amount is not readily ascertainable or when it is difficult to apportion the amount among several victims.

Taken together, these proposals would increase the likelihood of orders of restitution being made. It is our hope that these proposals will increase the responsiveness of the legal system to victims of fraud.

I would note that the Federal Ombudsman for Victims of Crime recommended improvements to the restitution scheme in one of his first recommendations to the Minister of Justice. These proposals, while not as exhaustive as those the ombudsman urged, are steps along the road to improving the experience of victims in the justice system.

The second element of the bill relating to victim issues is the proposal to create community impact statements.

The Criminal Code currently provides that judges may consider a statement made by a victim of a crime, which is known as a “victim impact statement”. The purpose of this provision is to provide the sentencing judge with additional information on the harm or loss suffered as a result of the offence. This statement is delivered in the context of a convicted offender's sentencing hearing. Jurisprudence has indicated that the victim impact statement serves three purposes: to educate the offender on the consequences of her or his actions, which may have some rehabilitative effect; to provide a sense of catharsis for victims; and to provide sentencing judges with the information on the impact or effect of the offence. The provisions in this bill to create a community impact statement for fraud offences share these three purposes.

The Code indicates that the victim impact statement should describe the harm done to or loss suffered by the victim. The Criminal Code details the procedure for presenting the victim impact statement, which includes a requirement that the statement be in writing and be shared with the Crown and the defence.

The victim impact statement provisions of the Code also provide that the court shall consider any other evidence concerning the victim for the purpose of determining the sentence. The courts have given the term “victim” a broad interpretation, so that people other than the direct victim, including communities, can provide victim impact statements. Victim impact statements made on behalf of communities that have been considered by the courts include: a victim impact statement made by a synagogue on behalf of the congregation in an arson case and a victim impact statement from a first nations band describing the impact of the theft of band money and the murder of a first nations child on a first nations community. These cases and others offer examples of the courts' recognition that communities are affected by crime.

Our proposal would make the recognition clearer in the law. We are proposing that, when a court is sentencing an offender for the offence of fraud, the court may consider a statement made by a community describing the loss or harm to the community. The statement must be in writing, identify the members of the community, specify that the person can speak on behalf of the community and be shared with the Crown and the defence.

It is our view that these community impact statements will affirm several principles of sentencing that are laid out in the Criminal Code: denunciation, deterrence and rehabilitation.

A community impact statement will allow a community to express publicly, and to the offender directly, the loss or harm that has been suffered to allow the community to begin a rebuilding and healing process. It will show the community denunciation of the conduct of the offender. It will assist offenders in their rehabilitation to understand the consequences of their actions.

In sum, this bill would help to improve the responsiveness of the criminal process for victims of fraud. It would require the sentencing court to consider if restitution should be ordered and it would permit the court to receive a community impact statement in cases where a community, in addition to individuals, has suffered from the fraud.

This bill represents an important step forward toward improving the current criminal justice system response to serious fraud. By creating a mandatory minimum sentence for fraud over $1 million, adding aggravating factors for sentencing that highlight the serious consequences of fraud, introducing a prohibition order as part of a sentence, and requiring mandatory consideration of restitution for victims, this bill represents a complete package of reforms to reflect the seriousness of fraud offences for communities and individuals.

For these reasons, I urge that all members support this bill. This bill offers members an opportunity to show their unequivocal support for victims of fraud crimes. Victims of crime deserve no less than the respect of the House. I urge all members to support this bill and send it to committee for study.

The House resumed from October 22 consideration of the motion that Bill C-52, An Act to amend the Criminal Code (sentencing for fraud), be read the second time and referred to a committee.

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, it is a pleasure in the brief time remaining to speak in favour of Bill C-52, which is a much needed piece of legislation.

Over the course of the last few months, unfortunately, we have seen some very serious white collar crimes occurring in North America and elsewhere which have literally ruined the lives of thousands, if not hundreds of thousands, of North American residents.

We have all read the stories about Bernie Madoff and Earl Jones and how those two individuals set up Ponzi schemes that have literally bilked unsuspecting citizens of their entire life savings in some cases. This piece of legislation seeks to address those inequities. We seek, by this piece of legislation, to set in place a legislative process that would ultimately cause the Bernie Madoffs and the Earl Joneses of this world to think twice before they even begin to enter into the Ponzi schemes that we have seen.

As much as anything, this piece of legislation would send a very strong message to those people who are considering trying to set up a Ponzi scheme, a money for nothing, cheques for free type of thing, where they prey on innocent people.

Many times those innocent victims are senior citizens, people who have invested their life savings in a scheme because they trusted the individual who brought the so-called investment opportunity to them in the first place.

Think of the shock, think of the depression that some of these people would be feeling after they found out that their entire life savings, which they counted on to live on in their golden years, was completely gone. Many of these people have considered drastic steps, such as suicide. Some have attempted suicide. What have we done to try and correct it up to this point in time? We have done precious little.

Many times we have seen examples where fraudsters have gotten away with literally a slap on the wrist. They have served their sentences, whatever they may be in length, in conditional arrest, in the sanctity and the safety of their homes. This is no way to send a strong message to those would-be criminals out there that this has to stop.

We have to protect Canadians, and by protecting them I mean ensuring that if there are Ponzi schemes out there, if there are people out there who would even attempt this type of scheme to bilk money out of innocent victims again, they will be dealt with severely.

That is what this bill is about and that--

[Alice Wong, Conservative, Richmond, BC]

Madam Speaker, the bill contains a number of provisions that are designed to ensure that people who devise serious fraud offences receive tougher sentences. The objective of the bill is clear and simple. It would amend the Criminal Code to improve the justice system's response to the sort of large scale fraud we have all been hearing so much about lately.

New Canadians are among those who are vulnerable to fraud. They choose to come to Canada because they trust our justice system. They believe that those who commit crimes will be sentenced and put behind bars. However, when they unfortunately become victims of fraudsters they are appalled to discover that these criminals can easily walk away without any serious consequences and start committing those same crimes again. The victims cannot get their hard-earned money back and there is no protection for them.

Bill C-52 would send a message to those who think they can outsmart Canadians and dupe them into handing over their hard-earned savings. On the contrary, the bill would make clear that fraud is a serious crime for which there must be serious consequences.

It is also designed to improve the responsiveness of the justice system for victims of fraud. These proposed measures would send a strong message to the victims of fraud that the crimes committed against them are serious and the harms they suffer would be taken into account and addressed to the greatest degree possible.

Overall, the measures in the bill would do much to increase Canadians' confidence in the justice system.

I would like to speak for a while about the restitution element of the bill. Restitution is defined as the return or restoration of some specific thing to its rightful owner. It is distinct from compensation which in the Canadian legal system is a scheme of payments managed and made by provincial or territorial governments to assist victims of crime. Restitution is the payment by the offender of an amount established by the court. The Criminal Code currently provides for restitution for criminal offences including: damages for the loss or destruction of property, bodily or psychological harm, bodily harm or threat to a spouse or child.

An order for restitution is made during the sentencing hearing of a convicted offender. It is part of the overall sentence provided to an offender as a stand-alone measure, or as part of a probation order or a conditional sentence.

Restitution orders may be particularly appropriate in the case of fraud offences. In several recent high profile cases we hear from media accounts of thousands of dollars taken by offenders. These shocking cases of duplicity have deprived many innocent Canadians of hard-earned savings and in truly awful cases of retirement funds. It will be a decision in each trial as to whether restitution will be appropriate.

Our proposals provide that in the case of fraud the sentencing judge must consider an order of restitution as part of the overall sentence for the offender. The court shall inquire of the Crown if reasonable steps have been taken to provide victims with the opportunity to indicate whether they are seeking restitution. This step will ensure that sentencing cannot happen without victims having had the opportunity to speak to the Crown and establish their losses.

The courts have found that it is not possible to make an order when the amount is not readily ascertainable or when it is difficult to apportion the amount among several victims. To further assist victims our proposals include an optional form to assist victims in setting out their losses. The form identifies the victims, their losses and clarifies that the victims need to provide receipts, bills or estimates in order to assist the court in making the restitution order. In all cases these losses must be readily ascertainable.

Put together, these proposals will increase the likelihood of orders of restitution being made. It is our hope that these proposals will increase the responsiveness of the legal system to victims of fraud.

I would note that the Federal Ombudsman for Victims of Crime recommended improvements to the restitution scheme in one of his first recommendations to the Minister of Justice. These proposals, while not as exhaustive as the ombudsman urged are steps along the road of improving the experience of victims in the justice system.

This morning a member opposite asked what the government is doing to prevent offenders from committing further crimes. Canadians are deeply troubled by the possibility that convicted offenders will be able to resume their activities and defraud yet other Canadians.

To address concerns about the potential for repeated behaviour, the bill includes a new sentencing measure which allows the sentencing court to order that a person convicted of fraud should be prohibited from having employment or engaging in volunteer activities that involve having authority over other people's money, real estate or other valuable securities. The court could prohibit the offender from engaging in such conduct for any length of time it considers appropriate, including any period during which the offender is serving a prison sentence. Breach of the prohibition order would be a separate offence.

By preventing the offender from having the opportunity to commit another fraud, the bill would help to minimize the further victimization of Canadians.

There are several prohibition orders already in the Criminal Code, such as the one which can be imposed on someone convicted of sexual offences against children, prohibiting them, among other things, from working in schools or other places where they would be in a position of trust or authority over young people.

I am confident the measures in this bill will help send a strong message to the fraudsters out there that their time is up. I am also pleased that the bill can act as a springboard for discussion and raising awareness about fraud more generally.

I hope all hon. members will support the bill and help to ensure it is passed into law as quickly as possible.

[Alice Wong, Conservative, Parliamentary Secretary for Multiculturalism]

Madam Speaker, I am pleased to have the opportunity to speak on the subject of Bill C-52, An Act to amend the Criminal Code (sentencing for fraud). The bill contains a number--

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I thank the hon. member for his question.

Regarding the first aspect, ideally, we would like to see the bill go directly to committee. But the way things are going now, and given that second reading has begun, we can no longer continue this way. As I already indicated, we will be voting to send it to committee, but of course our final decision will be based on any amendments that might be made to Bill C-52.

Regarding the second aspect of his question, I completely agree with him. The government has other tools at its disposal and could have used other means to send a clear message to criminals that the government will work tirelessly to recover any money misappropriated through fraud.

Take Cinar as an example. The company itself admitted to cheating the government by lying about its level of funding for the Robinson Sucroe series. Instead of the 25% it claimed, it had only 10%, but it was able to apply for tax credits. It admitted this in the Court of Appeal on September 25, 2009, and in spite of that fact, the Department of Justice and the Canada Revenue Agency are doing nothing. That company is getting off scot-free. The message being sent here is that, in Canada, a good crook will have no problem with the Conservative government.