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

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, I am pleased to take part in the debate on Bill C-52, Retribution on Behalf of Victims of White Collar Crime Act.

I believe this is something that has unfortunately affected too many victims in recent years. We have every right to expect the government to amend legislation to reflect this situation, which is not new. However, in the context of the deregulation of financial markets and changes in technology that now make possible operations previously impossible to hide or to carry out, it is clear that the government must modernize our laws in this regard.

Unfortunately, the bill the government has introduced is way off the mark. In fact, it appears more like a public relations operation to show that the government is doing something. It looks more like a public relations move in keeping with the ideological battle the Conservatives are waging to introduce into Canada a sort of justice based on the American model, which is currently being challenged by the harsh economic reality.

In California, for example, more is spent on the prison system than on universities, because the laws have been tightened over the years automatically and without thought. The problem is a serious one. California, on the brink of bankruptcy, has had to release 40,000 prisoners because it could no longer feed them.

In order to avoid the extremes a number of American states had to face, it seems to me there should be a much more vigorous and broad public debate on the type of justice we want, rather than what the Conservatives are offering us. They in fact are offering us measures piecemeal that aim to establish a justice system that has nothing to do with the values of Quebeckers and Canadians, I am convinced, with no public debate and no real examination of all the aspects.

This bill is therefore off the mark, as it will not contribute in any way to fighting white collar crime. On the contrary, it includes a whole series of neo republican Conservative themes, on minimum sentences, for example. I will come back to this.

There should be a debate on the way to modernize our laws, in matters of justice, in particular, but it applies to everything to do with the regulation of the financial sector. It is very clear that we cannot continue in the environment engendered by the 1990s. There must be new regulations for the financial sector worldwide and within individual countries. The debate must get underway. It is in this context that the Bloc Québécois has decided to vote in favour of this bill, even if it does not meet the target it claims it wants to meet, so that it may be studied in committee. At that point we can introduce measures that might bring real solutions to white collar crime.

Very clearly, this kind of debate cannot be held piecemeal, as the Conservatives are trying to do with nearly half of the bills before us amending the Criminal Code or dealing with the justice system. We have to have a genuine debate where all of the principles on which a justice system should be based are front and centre in the public discussion. Obviously, the members of this House must be participants, but Canadian and Quebec society as a whole must also take part. The bill will be considered in committee and a number of proposals will be made that seem to us to be much more promising than what we see in the bill. Once again, the bill does not reach all the targets it says it wishes to reach.

When we look at it closely, as I will have an opportunity to do in a moment, we see there is a fly in the soup, as one of my friends used to say. That means there are some hitches, some measures are proposed that are essentially a smokescreen.

I will start right off with the question of minimum sentences. The Conservatives want to implement minimum sentences everywhere.

We are currently debating Bill C-42, which proposes to eliminate conditional sentences in order to create two things at opposite ends of the spectrum. We will have either suspended sentences or minimum sentences of imprisonment for two years. That is going to be completely untenable for judges. We will have situations in which accused persons who should have been given a conditional sentence, for example, find themselves with suspended sentences or with no sentence at all, in order to avoid a minimum of imprisonment for two years. There will also be people who will be sentenced to two years for whom a different approach should have been taken, in terms of rehabilitation. What we are seeing in C-52 is a debate that has run through this entire Parliament, an obsession on the part of the Conservatives.

Minimum sentences serve no purpose. That is shown by every study, and I think the example of Americans, or of the USA, as my colleague from Sherbrooke likes to say, demonstrates this clearly. That society has one of the highest incarceration rates in the world, and that incarceration rate in fact has a perverse effect, because it artificially lowers the unemployment rate. Every time the unemployment rate in Canada and Quebec is compared to the rate in the United States, we have to add 1 to 1.5 percentage points to it. There are so many people in prison, for all sorts of sometimes relatively minor offences that could be remedied by other kinds of interventions. As I said, the incarceration rate means that an entire segment of the population that could be in the labour force is artificially and temporarily eliminated from the statistics.

That does not have any dissuasive effect. The United States is not a society at peace with itself. People may feel safe, but they do not feel at peace. They close themselves off now in gated communities where they are isolated from society. This is not a well-integrated society at peace with itself. It is not even real safety, just the appearance of safety. This is what happens in a country that has increased the number of offences with minimum sentences. They have no dissuasive effect.

Fraud over $1 billion is pretty rare. Not only is it unusual, but when it happens, the sentences are for more than two years. A provision was included in Bill C-52, but it is just for show, to say that the Conservatives will be tougher. The reality is that whenever there is fraud over $1 million, judges take all the circumstances into account and pass sentences of more than two years. The Conservatives are flogging a dead horse here, but no one is fooled. It is just an insidious ideological campaign conducted around justice and how justice is perceived.

When we asked the Minister of Public Works to give us an example of a case of fraud over $1 million in which the sentence was for less than two years, he was unable to provide one because these cases do not exist.

In cases of fraud of this magnitude, the sentences are about six or seven years.

The Conservatives created the impression they are passing tougher laws, but it is just a public relations exercise. This may also have been a bill that was quickly cobbled together by the Conservative government in view of the disgust expressed by much of the public and the victims of the various fraudsters. There were Vincent Lacroix and Earl Jones, of course, but also various other people in financial and business circles who have behaved badly over the last few years. I am thinking, for example, of the fiddling with the books at Nortel and at Enron in the United States. The government probably wanted to act in view of all the public pressure but did something that will not produce results. This bill is terribly makeshift.

They have also added aggravating circumstances. If you look at the court's decision in the Vincent Lacroix case, you will find that all the aggravating circumstances put in the bill by the government—for example, the psychological effects of fraud on the victims—were included in the reasons given by the judge, in the Vincent Lacroix case, to justify his sentence. If my memory serves me well, he was sentenced to 12 or 13 years.

Once again they are flogging a dead horse. They are trying to give the impression that they are making tougher laws to deal with economic crimes and white collar criminals. But in fact they are just codifying the existing decision-making process used by the courts.

Restitution orders are another example. It is quite logical to ask fraudsters to return the stolen money to victims when possible. However, these restitution orders already exist. They are expanded somewhat in the bill.

We can also question whether or not it would be feasible, in the case of Vincent Lacroix, Earl Jones and many others, to recover the money—given that nothing is being done about the means used by these fraudsters to make it disappear, either through financial schemes or tax havens. I will come back to that.

The prohibition restricting the activities of convicted offenders is interesting. But that, too, is an existing practice whose scope has been broadened.

When we take stock of what Bill C-52 has to offer, we find that there is nothing new in the bill and that the measures are often inferior to what we already have in our system.

I would like to mention the example of the minimum sentence of two years once again. If the current standard is six or seven years, are they giving judges and the courts a signal that sentences should be lower? That is exactly how this bill, if it is ever passed, could be interpreted by some judges.

So they missed the target. The Bloc is taking it to committee in order to broaden the debate on the real ways to fight economic crime. One of these ways is advocated by the legal profession and those who write about crime or legal matters and it is eliminating the granting of parole after one-sixth of the sentence has been served.

Since the start of the week, the responses by the Minister of Public Works and Government Services and the Minister of Justice have intimated that this is a highly complex matter, when in fact, it is a matter of repealing two sections of the Criminal Code.

A decade ago, parole was not granted after one-sixth of a sentence had been served. This practice appeared over the course of the years. So, we could backtrack, given that it does not allow for criminals found guilty to be sentenced or to serve much of their prison term. So the matter of serving one-sixth of a sentence can easily be reversed by repealing the two sections that gave rise to this measure.

They do not get it. There is no logic in the responses by the Minister of Public Works and Government Services and the Minister of Justice. Why is the government delaying the implementation of this measure, which has the full support of all groups and which would be very easy to implement?

Today in question period, the leader of the Bloc Québécois wondered whether the Conservative government—and this brings me back to my introduction—did not want to use a perfectly logical, effective and fully supported measure, namely eliminating parole after one-sixth of a sentence has been served, in order to include other measures which are far less popular, effective and transparent.

We are used to having these little poison pills with the Conservative government in connection with perfectly valid measures that have the support of consensus and has been proposed often by the opposition. I would point out that the Bloc has been proposing eliminating parole after one-sixth of a sentence since 2007. This is not something we invented in response to the white collar crimes of recent months. It comes from in-depth study by the Bloc and its supporters over the years. This is what we fear, and our fears are based on experience.

One I remember, for example, is the bill that created a whole set of tax measures, into which the government had inserted a little, tiny clause that meant that funding could be denied for films or works that were considered not to be in the public interest. If I recall correctly, that was Bill C-10. No one had noticed it in this House, in spite of the work done by the Standing Committee on Finance. The Senate noticed it, and the government, rather than take responsibility for the problem and eliminate it, did its utmost to try to keep it. This is one example, but we have seen a number of others over the several sessions since this Conservative government has been in office.

Eliminating parole after one-sixth of sentence would be an extremely easy thing to do. We could include it in this bill. We could even, in the cases of Vincent Lacroix and Earl Jones, make sure that the two of them serve a healthy portion of their sentences rather than what will be the case as a result of this government’s inaction. In January 2011, Vincent Lacroix will be as free as a bird, or very nearly. I cite these two examples again because they are the best known in Quebec.

This bill does not include those elements. Another major element that has not been talked about and that the government does not want to talk about is the question of tax havens. I come back to what I said a moment ago. This means that people commit fraud and think they will be able to come out of it just fine, based not just on the fact that they will be released after one-sixth of their sentence, but also on the fact that as a result of all sorts of mechanisms that are allowed under the Canadian Income Tax Act, that money will be sitting in tax havens, safe from the Canadian tax authorities. The negligence of the Conservative government on this issue is blatant.

Two weeks ago, Statistics Canada revealed that, if I recall correctly, there is $146 billion owing from Canadian taxpayers. These are mainly very wealthy individuals. As we know, an ordinary taxpayer does not have the resources to pay the accountants and lawyers they need to make use of all these mechanisms. There are also companies, the banks among them. We know that the Canadian banks, in particular, use tax havens to a huge extent. This is money that is sitting in tax havens, as a result of negligence on the part of Liberal or Conservative governments. Eventually, when these fraud artists are released, they are going to be able to get the victims’ money back, safe from the Canadian justice system and Canadian tax authorities and, it has to be said, with the complicity of the Conservative government of Canada.

Here is one of the examples we gave this week. It had to do with signing an agreement to weaken the border between Panama and Canada. Everyone knows that Panama is a tax haven. It is notorious. We just signed an agreement to make it even easier to transfer money from Canada to Panama. That is completely counter to current policy directions espoused by responsible governments, such as the administrations of President Obama and President Sarkozy, who have condemned the situation and are seeking solutions. Not only are our government and our Minister of Finance not seeking solutions, they are creating new problems.

Here is another example in addition to the agreement with Panama. They are not doing anything about the tax agreement with Barbados. When the Conservatives were in opposition, they made much of the fact that Canada Steamship Lines, which belonged to the Minister of Finance, Paul Martin, who later became Prime Minister, used schemes allowed in Barbados to avoid paying taxes in Canada. Not only have they maintained the tax agreement with Barbados since coming to power, they have reversed a decision made in one of the budgets to prevent double deduction of interest in the case of foreign investment. We are moving backward instead of forward like almost all of the other G20 countries.

It is all smoke. We will study the bill in committee and come up with concrete solutions for the justice system, specifically with regard to the practice of serving only one-sixth of a sentence, and, more generally, for ways to curb the use of tax havens by fraudsters who shelter their assets from Canadian justice and tax law, and we will find ways to give the stolen money back to the victims. That is what the Bloc Québécois will do in committee.

[Gord Brown, Conservative, Leeds—Grenville, ON]

Madam Speaker, I am very pleased to speak to Bill C-52. We hope this bill will tackle white collar crime.

Recently when the Minister of Justice introduced the bill, he said that fraud can have a devastating impact on the lives of its victims, including feelings of humiliation for having been deceived into voluntarily handing over their life savings. All too often this type of despicable act happens where people take advantage and prey on those who are vulnerable. Often they should know better, but unfortunately they are taken advantage of.

Bill C-52 contains six measures, all of which are designed in some way to enhance the sentencing process for offenders who are convicted of such fraud. The first element is the mandatory prison sentence where Canadians are most concerned about large-scale frauds that wipe out people's life savings and demonstrate extreme greed and indifference to others.

To address this concern, the bill includes a mandatory prison sentence of two years for any fraud or combined frauds which have a value of over $1 million. The mandatory prison sentence would act as a floor, for a variety of aggravating factors would also be applied to raise the actual sentence well above the two year range in many cases. We all know that more than two years is clearly justified in many of these cases.

There are currently four statutory aggravating factors for fraud in section 380.1 of the Criminal Code. This bill will add new aggravating factors to that list to set out additional characteristics of fraud which are particularly troubling. The new factors will focus on: one, the impact of the fraud on its victim; two, the complexity and magnitude of the fraud; three, failure of the offender to comply with applicable rules and regulations; and four, any attempt by the offender to conceal or destroy records relevant to the fraud.

Another measure will require the sentencing court to state on the record which aggravating and mitigating factors it has applied. This is to ensure transparency in sentencing and to ensure that the statutory rules in section 380.1, which sets out aggravating factors and factors that are prohibited from having a mitigating impact, are effectively applied.

The bill also gives the courts a new sentencing tool aimed at preventing the commission of further frauds and victimization. The court will be able to order as part of a sentence that the offender be prohibited from having work or remuneration, or volunteering in a capacity that involves having authority over another person's money, valuable securities or real property. The order is discretionary and is available for any period up to life.

The two final measures are aimed at improving the responsiveness of the justice system and the sentencing process to the needs of the victims. We really are here to stand up for the victims. We have to put these mandatory prison sentences into place. I know that some members on the opposition benches often do not support mandatory prison sentences and mandatory penalties as a deterrent but I can say that we do on this side of the House. I am glad to see that other parties are actually supporting this legislation. We do support these mandatory penalties and mandatory prison sentences to act as a deterrent.

I had a bill before the House in the 39th Parliament that proposed a mandatory prison sentence. That bill in fact got through second reading, so I was happy to see that members of the House in that Parliament did support these types of penalties and prison sentences as a deterrent.

Getting back to Bill C-52, three points of caution are needed. No criminal law reform can change the bottom line, namely, that if the offender does not have any or adequate assets, restitution may be a hollow remedy.

It should also be kept in mind that the crown is responsible for making the sentencing submissions. Victims will not have standing to advance their restitution request.

Finally, we cannot establish a collection mechanism for restitution ordered as part of the sentence as this would require extensive provincial co-operation and tracking. The cost would be prohibitive.

Another measure in the bill will specifically acknowledge the courts may consider a statement prepared by a representative of a community or definable group for consideration at sentencing for fraud cases.

Courts are already somewhat receptive to considering community impact statements describing the impact of a crime on a community as a whole in some cases. In fraud cases, for example, a large-scale fraud which has many identifiable victims in a small town could have an economic impact on that whole town. We have seen these types of cases in many communities throughout Canada.

We talk about the mandatory prison sentence and as I have said before, I strongly support these types of penalties to act as a deterrent. Earlier today a member from the Bloc Québécois asked if there were any cases where a person who has committed fraud over $1 million has been given a sentence that was under the two years that is being proposed in the bill. The truth is that there are. I would like to speak about some of those cases that were before the courts.

There was one case where the accused authorized loans to fictitious people, was charged with fraud over $5,000, and the fraud amounted to more than $4 million and lasted four years. The scheme was set up by another person and the accused merely implemented it. The aggravating factors were abuse of trust and that large numbers of fraudulent transactions were made over a period of time. The mitigating factors were the accused had no criminal record, he did not personally benefit and was also a victim of fraud. In that particular case there were two years less a day and the party to the offence received a sentence of four years. That case was not reported.

There was another case where the accused was charged with three counts of fraud over $5,000 relating to two loans totalling in excess of $3 million and the ongoing trading of shares. In that case there was a conditional sentence of two years less a day followed by a year of probation.

These are the cases which the Bloc Québécois wanted to know about.

There is another case where the accused pleaded guilty to fraud involving a GST remittance and payroll remittance over a five year period. In that case there was a 42-month penalty.

In another case the accused pleaded guilty to fraud over $5,000 for defrauding the Bank of Nova Scotia of $1.8 million in a one-month period. In that case the sentence was 26 months. I could go on and on. In another case the accused pleaded guilty to 28 counts of fraud spanning four years and totalling more than $1.5 million related to the sponsorship program. There was a restitution order.

There is another case where the accused was involved in the sponsorship scandal and pleaded guilty to 15 counts of fraud totalling $1.5 million. There was a sentence of only 18 months. In another case the accused was charged with fraud over $5,000 and defrauding the government in the amount of $1.1 million. The sentence was community service and what most would consider generally light penalties. In another case the accused operated a company that defrauded banks of over $2.5 million where the sentence was two years less a day plus a restitution order.

We see there is quite a number of cases where if a mandatory sentence were brought forward, there would have seen a much greater penalty for the accused. It is hoped that these additional mandatory prison sentences and penalties will once again act as a deterrent. I know that is what Canadians are looking for. They are hoping that many of these types of despicable acts are stopped.

Let me talk more about what the bill really can do. I keep talking about the important part of the bill being the introduction of the mandatory minimum prison sentence of two years. It will provide additional aggravating factors for sentencing for fraud and permit the court to receive community impact statements. The impact to victims and their families can be devastating.

We have heard about cases in the news recently. We heard the hon. member for Elmwood—Transcona talk about the Ponzi schemes. We all know about a case currently in Quebec. We also know about Bernie Madoff and the impact he had on many families in the United States.

That is why this type of legislation is so needed and demanded by Canadians. We as a government are taking action. Our Minister of Justice brought the bill forward. I have sat through the debate today and heard members from all sides talk about how important this bill is for Canadians.

One of the questions is why the proposed measures deal only with fraud and not other white collar crime offences. The offence of fraud really is extremely broad and flexible and can be charges in a wide range of conduct. While there are many different offences in the Criminal Code that can apply to any given set of facts, it is the offence of fraud that gets charged far more often than other offences. It remains the primary offence for going after those who deceive honest Canadians.

As members of the House, we are here to stand up for honest, hard-working Canadians and ensure that their interests are protected and that they are protected from those who would attempt to take their hard-earned savings and money they have put away to make sure they are looked after in their retirement.

Prosecutors often tend to avoid more of the specific offences because the basic fraud offence can cover the same ground and it may be easier to prove.

This legislation would be applicable in many of the cases that we are seeing.

I keep talking about this, but having a mandatory prison sentence hopefully will act as a deterrent. Sometimes the perpetrators of these particular crimes see such light penalties and the time that they may or may not have to spend in prison, depending on the judge, not as a deterrent. Sometimes acts may be committed that otherwise might not have been committed had there been a deterrent.

In 2004 the maximum sentence was increased from 10 years to 14 years in prison. The maximum penalty for specific securities-related fraud offences was also increased. Fourteen years is the longest maximum penalty in our law for non-violent crimes and it is the highest maximum penalty for a property offence.

It is clear that fraud is a very serious criminal offence. I would hope that in these cases the judges would use prison sentences that far exceed the two years when it is applicable, but in this particular bill, the minimum would be two years.

Recent events, including the Earl Jones case in Montreal, continue to attract significant interest across the country. This is what I have been talking about. It is that significant interest across the country with respect to our existing criminal law regarding white collar crimes.

Canadians really are concerned about large scale frauds that wipe out people's life savings or retirement savings and really demonstrate extreme greed and indifference to others. These proposed reforms are designed to ensure that sentences imposed in these cases adequately reflect the severe impact they have on the lives of the victims. As I said before, that is what we are here as parliamentarians to stand up for.

I did talk about some of the cases that have been handed down by the courts which really demonstrate the need for this bill. I would like to talk a bit more, specifically, about the mandatory prison sentence and how large-scale frauds would be punished under the bill.

As I said before, the maximum penalty for fraud is 14 years. It is the highest penalty in our criminal law, short of life imprisonment.

In this bill, we are introducing that mandatory prison sentence for fraud when there is a value over $1 million. It is not necessary that any particular victim be defrauded of over $1 million as long as it is accumulative, that together the frauds, where the offender has been sentenced, exceed $1 million in total.

I guess the best way to describe it is that a fraud of this size can only be described as large scale and would have been the result of a great deal of time, energy and planning and a significant amount of deception to have defrauded one or more people of over $1 million, all of which demonstrate a high degree of moral culpability. Such frauds demonstrate a tremendous amount of contempt and disregard for law-abiding Canadian citizens who fall victim to them.

The law should be clear that any fraud of that scope must be met with a minimum term of imprisonment. This is why we talk about this mandatory prison sentence of two years. Once again, I cannot say it enough that we need to put that type of penalty in place to act as some sort of deterrent.

We are seeing that this mandatory prison sentence of two years is lower than some of the sentences that the courts are currently handing down. Some sentences, we hear, are in the four to seven year range for these large scale frauds, which would be much more than $1 million, but there is no minimum sentences set out explicitly in the Criminal Code.

Currently, the court can take into account some of the mitigating circumstances in individual cases and end up with a sentence that is lower than two years. Therefore, it is appropriate for this Parliament to give guidance to the courts and to Canadians by clearly stating that the mandatory sentence be laid out clearly in these cases, and the mandatory minimum would serve as a starting point for a sentence calculation. A variety of aggravating factors, which are often applicable to a fraud of this size, such as its complexity, its duration, its large number of victims and the fact that the fraud involved a breach of trust, would also be applied to raise the actual sentence. I hope the judges do in fact hand down sentences that are well above the two year range.

The frauds that are of great concern to Canadians today are for these amounts that are well above $1 million, sometimes 100 times more than that amount and often above. Clearly, sentences for these types of frauds would be well above the starting point of two years, which is set for frauds of just the $1 million that we have been talking about. This measure would send a clear message to all that serious consequences await anyone who is thinking of getting wealthy by scamming Canadians.

We are seeing right now that there are some aggravating factors that are currently being considered by sentencing courts. There are already several mandatory aggravating factors for fraud offences in the Criminal Code. For instance, if the fraud involved a large number of victims or if, in committing the offence, the offender took advantage of the high regard in which he was held in the community, as well as under section 718.2 of the Criminal Code, there are generally applicable aggravating factors that could be applied.

In the context of fraud, the factor that arises most frequently is if the offender abused a position of trust or authority in committing the offence. We see that all too often.

In conclusion, I am happy to see, having sat through this debate here in the House and having heard from members from both sides of the House today, that they want to get this bill to committee and are open to bringing forward additional potential amendments to see the support in this Parliament to get this bill through so that the fraudsters and those who would take advantage of vulnerable Canadians will be punished accordingly.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am pleased to speak to Bill C-52 today and I am also pleased that the government has introduced the bill. The NDP caucus will be supporting the bill at second reading to get it to committee where we can perhaps make some improvements to the bill as it is written now.

The bill provides a mandatory minimum sentence of imprisonment for a term of two years for fraud with a value that exceeds $1 million. I questioned the government this morning about how it determined the $1 million because it seems to me that fraud is a serious issue no matter how big it is. In law it is certainly something that lawyers thrive on. I am sure that we will find lawyers trying to argue whether or not fraud was $1 million or whether it was under $1 million, and there will be huge arguments about that.

Perhaps the threshold should be a lot lower than $1 million. I am just not sure about that issue. I asked the government that question and I did not really get a good response. I know one of the government members asked that very question as well and I do not recall whether the member received a satisfactory answer either.

The bill provides additional aggravating factors for sentencing. It creates a discretionary prohibition order for offenders convicted of fraud to prevent them from having authority over the money or real property of others. It requires consideration of restitution for victims of fraud and it clarifies that the sentencing court may consider community impact statements from a community that has been harmed by the fraud.

I want to go back to the issue of restitution for victims of fraud. This is a provision of the bill which on the surface sounds good. I certainly hope that victims see some restitution as a result of this particular provision, but I would not want people to get their hopes up very high on this particular issue. Over the years my experience has been that there are probably very little restitution possibilities when dealing with these fraudsters.

The whole argument about schemes, frauds and Ponzi schemes really boils down to issues of people who are less than honest, bilking people of hard-earned savings and monies, and then in fact spiriting the money away into tax havens. While the economy is good, these schemes tend to thrive because if the stock market is going up and as the economy is expanding, it is easy for them to cover their tracks and hide the fact that they are engaging in a fraudulent activity.

It is when the economy goes down as it has right now that we see these schemes start to collapse because they cannot pay out the returns that they have promised people.

I would suspect there are many more of these beneath the surface. If the recession were to deepen, get worse or to last a longer period of time, we would see more of these schemes exposed. At the end of the day, after all the litigation and investigation, there is really going to be nothing there for the victims.

Therefore, why make these promises that victims are going to get their money back when we know that it is not going to happen. Having said that, I still think that it is a good provision in the bill. It is something that we should put in the bill just in case there is some money left over for restitution.

However, there are many difficulties with this whole area and I think the parliamentary secretary alluded to it in the last part of his speech in which he said that bringing in a bill such as this only provides for part of the problem.

This bill deals with the problem after it becomes a problem. What we want to do as a Parliament, as a government, as a society, is to deal with these issues before they become a problem. We want to be able to catch the Bernie Madoffs before they embark on their programs of bilking people out of money.

I want to use Bernie Madoff as an example, where Harry Markopolos was able to uncover Bernie Madoff 10 years ago. Ten years ago Harry Markopolos, who was working at the time for Rampart Investment Management in Boston, was asked if he could duplicate Madoff's strategy. It makes sense that if people are competing in a market and can offer 30% returns on 90-day certificates that they will have a lot of customers, but in addition to having a lot of customers, there are going to be a lot of people who want to duplicate their system and compete with them because they are obviously making a lot of money.

When Harry was asked to do that, he immediately became suspicious because Madoff never reported losing money in any month. In a country of 300 million people and a securities commission that is supposedly a watchdog, why was no one questioning the fact that Bernie Madoff had never reported losing money in any month?

He said that he knew it was a fraud in about five minutes. He took his information to the Securities and Exchange Commission. When he went to the Securities and Exchange Commission, he was rebuffed because Bernie Madoff had been a big, known figure at the time, had been involved in the industry, and had a good reputation. In fact, I believe one of Bernie Madoff's sons-in-law was actually working for the securities commission as an investigator. So we can see it is one little happy family down there at the securities commission.

When Harry Markopolos came forward and presented the entire case 10 years ago, 1999, to the securities commission, he was told to get lost, essentially. He went back several times, and in fact at a certain point he was concerned and was checking his car for bombs and so on. I think his comment was that Madoff had something like 65 billion reasons to wish him out of the way.

Once again, that is a great example of the system not working. So what did we learn from that? We learned that we have to have proper regulatory bodies that are not populated by people from the industry, that it should not be taking people from the mutual fund industry, the securities industry, out of a company that they have worked for, for 20, 30 years, and they know all the players, and pop them in, sort of like a retirement package, the securities commission that is watching the same company that they have been working for all these years.

It is just one happy little group that parties together, socializes together and who know each other. How can we possibly expect that they are going to be doing a proper due diligence and investigating one another? We need more police-type forces here. We need investigative forces.

That was the weakness of the securities exchange in the United States. Now some changes have been made. There are some tough people in there, effective in January, and hopefully they are going to right the ship.

It seems that all of these bodies tend to drift over time and until something happens everybody is reasonably happy. Then something blows up and we realize that, well, no, these were the wrong people running the ship.

Let us take a look at our own securities commission in Ontario. One of the big arguments we have had in the House, and I know my Bloc colleague understands it well, is the whole idea of the national securities regulator. Being from Manitoba I know that over the last few years we have been opposed to that. I see the arguments for having a national regulator. The other G7 countries have it and it is probably a good idea, but what the government is missing in its analysis is not what it is called, whether it is a national regulator or 10 provincial regulators, it is who do we have running the regulators? Who is running the national regulation system?

If we had a national securities regulator and filled it with people who worked in the industry, then we would not have any better results than we have right now with the Ontario Securities Commission. It has a very sorry track record, a terrible record of imprisoning almost no one. It may have been lucky to catch three or four people in the last 10 years and this is even when the whole case was given to it. Even when the whole thing was put right in front of it, it still could not somehow take action.

In the United States, however, we see more activity in that area, but it comes from the judicial system in the United States. Let us take Conrad Black as an example. He did his crimes in Canada, as a matter of fact, I believe it had to do with non-competes that he was signing with CanWest when it was buying all those newspapers and there were $40 million worth of non-compete agreements in each one of these deals that he got, and his shareholders went after him when they realized that he was taking the $40 million when it should have belonged to Hollinger.

Conrad was a Canadian. I know he became a British citizen at some point, but he was a Canadian. He operated here his whole life. He had his companies here and yet surprise, he is doing time in a Florida jail. By all accounts I gather he is having a great time down there. It does not seem like a very tough jail he is in and he seems like he is happy enough that he might want to stay there a little longer based on the last transmissions we heard from him. But, my point is that the public must have confidence in its government to protect it. When we see people like Conrad Black and Madoff literally just walking away and when they do get caught, they do not spend much in the way of jail time, it is a problem. It breeds cynicism within the public.

That is why I was intrigued by another part of the Bloc's argument today that the sentences should be longer than one-sixth of the sentence. Mr. Vincent Lacroix, who is just one example of many, received an eight year sentence, but because people can get out of jail after serving only one-sixth of their sentence, this man was back on the streets in only two and a half years. So once again the public questioned this. If his sentence was eight years, then what is he doing knocking on my door after only two and a half years? What kind of a system is this that allows that?

Perhaps it is the Bloc's intention to introduce an amendment at committee to rectify this situation or to deal with it in some sense, but if we are going to give Mr. Lacroix two and a half years, then that is what the penalty should be. Do not have a judge say that he is supposed to spend eight years and then after only one-sixth of his sentence, how does he get out of that? I would like to know how the government is planning to deal with that issue because once again, I thought that was a very good argument the Bloc had.

I have to say at the outset that I am so impressed with the lawyers in this Parliament. I have never seen so many lawyers in one place outside of a legal convention. There are some extremely smart lawyers here, and the Bloc caucus is just one example that has several lawyers. The Liberal caucus and the NDP caucus have some, and I am sure there are a few really smart lawyers on the government side too. I have been listening to them very closely. However, their whole approach to the legal side of things has sort of been more along the lines of how it appears from a political point of view. That is the argument, I suppose, and they do not take the view of the legal family represented in the other parties in opposition. They simply go along with the government line that somehow, if they could showcase the bill as being tough on crime as opposed to smart on crime, that will pay off in getting votes back home.

All we have to do is look at the minimum sentence laws in the United States. That is the subject of another bill which we will be getting to fairly soon. In the 1980s California had Ronald Reagan's three strikes and you are out regime. His solution was to build a lot of prisons, and of course his buddies were building private prisons, so he could reward his friends as well. They built wall-to-wall prisons and put people in prison. I do not have the stats handy, but the United States stands alone in terms of the number per hundred thousand people who are incarcerated. The crime rate in the states has not gone down one bit. It is probably even higher than it has ever been. Just recently, because of budgetary problems, Governor Schwarzenegger, who would hardly be soft on crime, and who is a Republican, though hardly a George Bush Republican, has had to release thousands of people from prison because it has been found that the minimum sentence laws do not work.

I am just pointing out to the member of the government that there are all sorts of evidence and examples of crime approaches that work, and there are examples of those that do not work. I gave examples before about car theft in Winnipeg, about how putting immobilizers in cars and having teams of police investigators going after the limited number of car thieves who steal the maximum number of cars has produced results. That is something that works. That is what the government should be doing. The government is mandated by the public to be here to find solutions that work, and not just stuff that knocks an MP's rating up five points in the polls overnight. That is what Conservative members have been doing.

The other argument that the Bloc has made, which I find really important, is with regard to the issue of tax havens. We had a Liberal government for years and years before that had ample opportunity to deal with the whole issue of tax havens. We even had a Prime Minister who had a bunch of his boats registered in some foreign country. It might have been Panama.

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.

Business of the House

[Jay Hill, Conservative, Leader of the Government in the House of Commons]

Mr. Speaker, I will proceed in the same order in which my colleague presented his questions.

We will continue today with our government's justice program because this is a justice week. We will be starting with our latest edition, Bill C-52, the retribution on behalf of victims of white collar crime bill.

That bill will be followed by Bill C-42,, the conditional sentencing legislation; Bill C-46, the investigative powers legislation; Bill C-47, the technical assistance for law enforcement legislation; Bill C-43, legislation to strengthen Canada's corrections system; Bill C-31, modernizing criminal procedure legislation; and Bill C-19, the anti-terrorism act.

All of these bills are still at second reading, but members can see from the long list that we do have many pieces of legislation to debate and hopefully move through the legislative process.

We will continue with these law and order bills tomorrow and next week when we return from the weekend. As is the normal practice, we will give consideration to any bills that are reported back from committee as well.

On the issue of an allotted day, Wednesday, October 28 shall be the next allotted day.

We will then resume consideration of the government's judges legislation on Thursday following that opposition day.

As my hon. colleague from across the way mentioned, speaking of our justice agenda, I should add that I was extremely pleased to see that despite the Liberals' best efforts to try to gut the bill, it was passed in the other place. For those who are not aware, there were 30 Liberal senators in the other place at the time when they were voting on those amendments. All of them voted for the amendments that would have gutted that legislation. Fortunately, the Conservatives in the other place were sufficient in number to defeat those amendments and actually pass Bill C-25, the truth in sentencing legislation. It actually received royal assent earlier today.

I would like to thank my hon. colleagues, the Conservative senators, for all the good work they did in pushing that bill forward and for all the good work they are doing in pushing forward other legislation.

The House dealt with Bill S-4, the legislation to crack down on identity theft. It was passed and received royal assent as well today.

The House resumed from 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.

Retribution on Behalf of Victims of White Collar Crime Act

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Madam Speaker, I am pleased to speak on behalf of the Bloc Québécois to Bill C-52 relating to economic crimes.

I am particularly pleased because our colleague from Abitibi—Témiscamingue had an opportunity today to deliver the main position of the Bloc Québécois. As we know, before our colleague from Abitibi—Témiscamingue became a member of this House, he was a criminal lawyer for 30 years.

We also have our justice critic, the member for Marc-Aurèle-Fortin, who is also a criminal lawyer, and who of course was Attorney General of Quebec and was also a senior official in the ministère de la Sécurité publique in Quebec.

When the Bloc Québécois analyzes bills, it does so thoroughly. For two days now, the Bloc Québécois has been asking the Minister of Justice to provide a list of the cases in which criminals and fraud artists defrauded people of over $1 million and were then given sentences of less than two years.

For two days, our Conservative colleagues have had their research service working on it. This has to be examined, because we must never forget that the legal system we have inherited from our parents and our grandparents is based on precedent, and so is obviously a constantly evolving system. I hope the examples the Conservatives have cited for us are recent law and are new decisions or the most recent decisions.

It is too easy to engage in demagoguery, particularly when it comes from the Conservatives, because they have decided to do politics the easy way. It pays to be tough on crime, because often the public listens to the media, and obviously both the press and the electronic media often sell papers or attract viewers by inflating a news item and trying to sensationalize it. That is how our democratic societies work, and that is fine.

The public can make up their own minds. They watch more than one television network. They are not all the same. They can read more than one newspaper and they do not all have the same opinions on a subject. That is fine. Except that when a political party like the Conservative Party decides to jump to conclusions, it is very easy and it is demagoguery at its worst when they try to take a single trend and apply it to a party’s agenda. And they think this is the way to win elections.

Obviously, they may think this has borne fruit for them, except that in Quebec, Quebeckers are much more vigilant in terms of how justice is administered, and they get to the bottom of things. That is why, election after election, a majority of the members they elect to this House are from the Bloc Québécois, which gets to the bottom of things before taking positions.

In Quebec, we have had to deal with major white-collar crime cases. We are talking about the Norbourg case, with Lacroix, and the Earl Jones case. Obviously, these are perfect examples of criminals who have abused the system. These fraud artists had built up their system over a number of years. These were not occasional frauds. These are criminals who built an entire empire, one that made a lot of profit for them personally. They were able to live the high life, they had a wonderful life, and obviously, with the outcomes we have seen when the economic crisis hit, everything collapsed and all the houses of cards they had built crumbled.

This clearly left victims, people who lost a lot of money, in distress. Once again, when I talk about a government’s skill at exploiting public opinion, that is what it is trying to make us believe, that Bill C-52 is going to solve the problem.

What the victims of Vincent Lacroix and Earl Jones are looking for is to recover their money. It is wrong to say that the bill will enable victims to do so. It will not make recovery of the money possible.

Once again, it is all very well to say the guilty person will be required to reimburse something, but they have to have assets left to do so. The fact of the matter is that, in the cases of Vincent Lacroix and Earl Jones, it becomes clear very quickly that the money has disappeared because they had set up the system years previously. Perhaps the Conservatives are fooled, but we in the Bloc Québécois are not. The money has disappeared and is probably to be found in tax havens protected by the government. The Bloc has, for a number of years now, called on both the Liberals at the time and the Conservatives to abolish tax havens, and they do nothing about it. This bill is not going to make it possible to recover all the funds in tax havens that might be held by white collar criminals. It has absolutely no impact on tax havens.

So, once again, the victims are stuck and for good reason. The Minister of Justice's strategy was to publicize this bill before introducing it in the House. Today, the leader of the Bloc Québécois rose on a point of order about this. I know that the Chair will consider the matter and rule on the Conservatives' new approach, which is to short-circuit the House of Commons. Our prime objective, however, is to enact legislation. This is the first time in the history of Canada that a government has decided, in an effort to influence public opinion, to release the bill directly in the media before parliamentarians have seen it.

Once again, why did they do it? Out of sheer partisanship. This is the Conservative approach to politics. I repeat. Quebeckers are not fooled. The people of the rest of Canada, however, clearly are fooled by the Conservatives' behaviour. That is their problem. Quebeckers have understood the messages. Nevertheless, for non partisan purposes, the Bloc, on our return to the House of Commons in September, sought the unanimous consent of the House to table a measure regarding the abolition of the granting of parole after one-sixth of a sentence has been served. The Conservatives will try to convince us that there must be a minimum sentence of two years for crimes involving over $1 million.

All that that accomplished—the fact that the Conservatives waited—is that criminals in Quebec, the Vincent Lacroix types of this world, are pleading guilty. Earl Jones is in the process of doing the same thing. Vincent Lacroix decided to plead guilty in September. Earl Jones is getting ready to plead guilty. They are doing so precisely to avoid having a bill, such as the one introduced by the Bloc Québécois to abolish parole after one-sixth of a sentence has been served, come into effect before they are sentenced, so they can be paroled after serving one-sixth of it. That was the twisted part. The victims are not reimbursed, and these criminals can be released after serving one-sixth of their sentence.

Vincent Lacroix was sentenced to eight years in prison. He got out after serving one-sixth, or 15 months, of his civil court sentence. He was sentenced in criminal court as well as a result of legal proceedings instituted by the AMF. He decided to plead guilty to these criminal charges. He was sentenced to 15 years in prison but will be eligible for release after serving one-sixth. This means we will see Vincent Lacroix back on our streets after two and a half years. That is what the Conservatives are trying to stuff down the throats of Quebeckers.

But Quebeckers have already moved on. They know we have to get rid of conditional release after one-sixth of the sentence for these criminals. Why? These criminals are obviously not what are usually considered dangerous. They have not committed armed robbery. Ultimately, though, they are just as dangerous because they get to their victims psychologically. I know, of course, that the Conservatives have a bit of a difficulty with psychology and things like that. I know quite a few of them who find that sort of thing difficult. But that is where Quebeckers are now, and that is what the Bloc Québécois expected.

In a spirit of non-partisanship, therefore, the Bloc Québécois is saying today that it will vote in favour of this bill so that it can be sent to committee and improved. As it now stands, it will not resolve the problems of the victims.

The minister’s attempt to hold a press conference to unveil his bill failed miserably because the victims were not convinced when it came to their two major problems: the reimbursement of their money and ensuring that these criminals do not return to our streets after two and a half or three years. This bill does nothing to resolve these two problems.

It is hard because we are dealing with a government that has the entire bureaucracy and tremendous resources at its disposal. It uses them to promote itself. It even makes cheques out with the Conservative Party logo on them. It is quite the thing to see them in action. They use government advertising dollars to sing the praises of their own political platform.

The Conservatives will not succeed, though, because they are not achieving the objectives, at least in Quebec. It is difficult for them because they are on the wrong path. We have experts here. The hon. member for Marc-Aurèle-Fortin and the hon. member for Abitibi—Témiscamingue are well-known criminal lawyers. The hon. member for Marc-Aurèle-Fortin was the Attorney General of Quebec. But the Conservatives are not listening to common sense.

That is the message the Bloc is delivering here. That is the hand that the Bloc reached out to the government in September. First the Bloc Québécois tried to show that there are criminals who are prepared to plead guilty because they will be eligible for parole anyway after serving a sixth of their sentence. Why not unanimously support a Bloc Québécois bill to abolish conditional release after a sixth of the sentence? That would prevent the Vincent Lacroix’s and Earl Jones’s of this world from serving a two-and-a-half year sentence when they should be serving 15 years. Even if they got a 25-year sentence, they would only serve a couple more years if they served just one-sixth. In that case, they would serve four years instead of two and a half before returning to the streets. That is the reality. We do not know whether a two-year minimum is enough. Lacroix got eight years and was released after 16 months. If he pleads guilty, he will be sentenced to 15 years in prison but will be back on our streets after two and a half years. That is the reality and that is what the victims find so infuriating.

The second problem has to do with restitution. There is no mention of compensation or a compensation fund in this bill. The Conservatives are introducing a compensation process by saying that the guilty party will have to compensate his victims. That already exists in the Criminal Code. The problem with organized fraud by the likes of Vincent Lacroix, Earl Jones or Cinar is that there is no solution in this bill. For weeks, the Bloc Québécois and its leader have been saying in this House that there was fraud in the case of Cinar. There was collusion at the Department of Justice under the Liberals. The press took note of that. Again, the Minister of Justice rose in this House to ask whether we had new information to reopen the case. We see new information in many of the newspapers in Quebec. They probably do not read newspapers from Quebec. We can see what impact it has on them politically not to do so. They would be well served to read the Quebec media, which has all the details on this affair. The people of Quebec have decided to clean house. They truly want white collar criminals to stay in prison for the duration of their sentence, be it 15, 20 or 25 years. Criminals have to serve their sentence.

People who lost their money want to be compensated whether it is the government that does so or not. Some may have submitted requests, but they want someone to go after the money hidden in tax havens by the criminals. People are under the impression, and I agree with them, that when the criminals get out after serving one-sixth of their sentence, or after a year and a half or two years and a half, they get on a boat or plane and are never seen again. They will live out their days under the sun thanks to the money they stole from their victims. It will be thanks to the Government of Canada because the elected members of this House will not have been intelligent enough to understand what the Bloc Québécois has been trying to say for over three years now.

Requests were submitted to the government In 2007 and again in 2009. We have been saying that the system needs to be fixed. It is time to take action. It is no time to be ideological and keep bleating about being tough on crime, as the Conservative MPs are doing. Tough on crime, tough on crime; it is rather redundant.

We have to be able to prevent white collar criminals, the likes of Vincent Lacroix and Earl Jones, from returning to society and the community after 16 months. That is what happened with Lacroix after his first trial even though he was sentenced to eight years imprisonment. He was recently sentenced to 15 years but in two and a half years he will be out again.

Quebeckers do not want this to happen any more. Victims who have lost money want restitution and want us to simply abolish tax havens because that is where the money is.

Once again, the member for Marc-Aurèle-Fortin has proposed a special squad of accountants. The RCMP should set up such a squad to track the money in these tax havens.

I realize that this is a problem for the Conservatives. When tax havens are allowed and, through bilateral agreements with certain countries, you encourage citizens to invest money in them, you are not too keen on having the RCMP investigate the money that is transferred to these countries.

Those countries that have signed an agreement with Canada would surely call to tell us to not set up a squad to conduct investigations in their countries. We should simply break our ties with these countries and establish special squads of chartered accountants, specialized accountants and certified general accountants who would conduct investigations.

If we look back in history, Eliot Ness was finally able to charge Al Capone with the help of the US Internal Revenue Service. That is how they sentenced the most notorious criminal in America. It was not by trying to arrest him for crimes committed because they were never able to prove them. They convicted him of tax evasion and that is how they were able to nab him.

That is the reality. We must use our tax system in order to follow the money trail. Day in and day out, victims tell us that they do not understand how they were drawn into such an affair. What is worse, they find themselves back where they started but with no money.

Then we learn that people like Earl Jones and Vincent Lacroix have no money left. People find it very difficult to believe—as I do—that these fraudsters have gone through hundreds of millions of dollars just like that. Earl Jones traveled all around for three weeks before being taken into custody.

The authorities looked for him worldwide. Search calls went out. Was he in England or another country? We were told that he was here, but he was able to stash all his money away and that is what we need to find out. I understand why people are cynical. They are saying that since he pleaded guilty, no one can know what is going to happen and we will not learn any more. They are right because Canada does not have a specialized RCMP investigation team to trace those funds. That is a fact.

Once again, and with a great deal of respect from all the members of this House, the Bloc Québécois introduced such measures and called for the unanimous consent of the House, which we did not obtain. Our request was simple, that is, simply to abolish the practice of parole after one-sixth of the sentence for white collar criminals. Our request was not complicated. We asked for unanimous consent, and the Conservatives said no.

Yesterday the Minister of Public Works and Government Services told us that more research was needed and that it was complicated. However, it is not complicated to say that white-collar criminals will not be entitled to early parole and will have to serve their full sentence. It is not complicated. It would have been a simple question of adding a few paragraphs to the legislation. We can do that. But, no, they want to completely overhaul the entire parole system.

So for four years now, they have been amending the Criminal Code section by section, one at a time, according to what is happening in society. There is no Conservative plan to amend the Criminal Code. They are doing it piece by piece. When a crime is committed and the public interest has been captured by the media, they introduce a bill. In the case of parole, they have decided they want to make a number of amendments. Once again, the Conservatives should pay attention to the wisdom of Quebeckers, represented here by the Bloc Québécois.

[Kevin Sorenson, Conservative, Crowfoot, AB]

Madam Speaker, it is a pleasure to speak to Bill C-52, an act to amend the Criminal Code, which deals with sentencing for fraud.

Before I get into the body of my speech, I want to say that during the break last week and the summer recess, members had the opportunity to go into their constituencies and hear the real concerns of constituents. Not so much during the summer but during break weeks when the schools are still operating, we have the opportunity of going into the schools and speaking to students in grade 6, grade 9 or grade 12 where the curriculum deals with governance and governing.

We have the pleasure of telling students part of what our job in this place is. We have the responsibility of representing constituents, their ideas and concerns here in this remarkable institution. We also have the responsibility of taking their concerns and building law. Sometimes we see a real common sense need for a law change. Other times we hear about certain aspects of law that should be changed to address certain concerns.

The bill we are debating today deals with the frauds that we have heard about more and more often over the past number of years. Stories have come out of the United States. Stories have come out of every province in Canada. They have been around for a long time.

It seems that as time goes on, there is a greater propensity for people to get involved in schemes that are the plan of someone who has sat down, concentrated and drawn up a Ponzi scheme or some type of scam. People get involved in things that may have a certain degree of common sense to them but later they find out that it has drifted and become fraudulent and the people who have perpetrated those offences have done it knowingly. Members have an opportunity to speak about that in the House.

In my riding numerous people have phoned me about these types of scams, schemes and frauds. These things have cost them. We can sit back and think of all the terms that we use, such as, buyer beware, huge risk investments, all those types of things, but speaking to these people on the phone or sitting down in a coffee shop and dealing with individuals who have been hit hard in some cases, there are tears, passion and emotion. In some cases they have lost everything.

In his speech earlier, the minister described what fraud looks like today and why it is a problem for Canadians. Today's criminals are very sophisticated. Any Canadian could fall victim to their schemes.

As the minister said, there are numerous threats to Canadians when it comes to fraud. He mentioned a number of them. There are organized crime frauds. There are forgers, those who work their way into a fraudulent scheme by forging documents that look very official. There are fraudulent telemarketing scams, Ponzi schemes, security frauds, bogus charity scams, accounting frauds, all sorts of mail and personal information theft and many other schemes. It is becoming increasingly difficult for Canadians and their families to detect when they are dealing with legitimate businesses and legitimate charities, or with others that may be fraudulent.

A problem is that by the time many Canadians find out that what they have just invested in or what investments they have had for a number of years have been determined as being fraudulent, in some cases it is far too late. They have handed over their hard-earned dollars for an investment that appeared worthy and safe, but it was not.

Most of my riding is rural. In some cases, although our Internet connections may not be all that great, pretty well everyone is on high speed Internet. Many of the rural communities are not on high speed Internet yet, but through wireless and other things, we have access to it. We are as vulnerable as anyone living in the big cities. All Canadians have money they want to invest. We want to prepare for retirement. We want to be protected from losing the money we worked hard to earn.

In my constituency we see transfers of farms into the hands of the next generation. We see that less and less all the time because the next generation is not really buying into this whole farming thing, but that is another story. However, at some point we do see a transfer of farmland or business or however people have made their livelihood, and as they are ready to move into their retirement, they realize they have a little nest egg. They have cash in the bank. They have sold their farm. They have had their farm sale and they have the proceeds from the sale of the machinery. They have paid off some debts. There may be a small little nest egg left. Many times they are approached by those who are slick, who say they have a way for them to turn that little nest egg into a much larger one, and those people become vulnerable.

There are people in my constituency, indeed probably some who are related, who have received a phone call telling them they have won some gift if they pay for the shipping. They received that one gift, and that was real. They received their gift. Then all of a sudden they are told that if they send more money, they will get a bigger gift, and they have been chosen out of a lot of people. Pretty soon they have invested thousands and thousands of dollars into a scheme. The more they put into it, they realize that they have to keep contributing to the scheme or they could lose it all, so that is what they have done. They have been enticed into it. They are honest and good people who have never, ever thought of breaking a law or being caught up in something like that. The people at the other end are involved in organized crime or they are fraudsters. They do this to hundreds and hundreds of people. They do this to many people in my riding. I know this because I get the phone calls.

At some point Canadians and people around the world are defrauded out of millions of dollars. In some cases it is only $10,000, $15,000, $20,000, but the cumulative effect is that millions of dollars are made by those who say that they will set up a scheme to make some money.

In some cases, we know that the losses can be devastating to individuals and families. I will not go into the devastation that it causes, but we have heard about these losses ending in the break-up of a marriage, the break-up of a family.

A case was reported in the Calgary Herald about a son who knew that something was not right and that something was going on, so he investigated. He was one of the key individuals who brought down a Ponzi scheme into which had been drawn hundreds of people and cost Canadians millions of their retirement dollars. This is part of their response to those types of issues and those types of concerns that Canadians have.

Our government has been elected and re-elected to stand up for Canadians. Today with Bill C-52, we are helping Canada's criminal justice system stand up to fraud. The bill will improve the Criminal Code sentencing provisions for fraud to ensure that sentences imposed on offenders adequately reflect the harm they cause.

Once again we are putting the rights of the victim before the rights of the criminal. In most of our justice legislation, we believe the protection of society is the guiding principle. Bills like this serve to act as a deterrent to those who knowingly set up such a scheme.

For the type of legislation we bring forward today, frauds that have a value of $1 million or more, there will be a minimum sentence of two-year imprisonment. If the fraud was larger than that, as so many are or if there were other aggravating factors at play, the sentence could be well above the two years. This may seem lenient, particularly to victims who have been severely hurt by a white-collar crime. Again, I would remind them that this puts in place minimum sentences.

A number of years ago, a former government said that it would get tough on this kind of thing and it increased the maximum sentences. The problem is very seldom do we see where a judge ever imposes anything close to a maximum sentence. There may have been in a few cases. In many cases, those who set up such schemes, never see any jail or any prison time. This would give certainty to the fact that those who devised such fraudulent schemes would see time in prison.

Bill C-52 goes much further than that. It would also add additional factors to the list in the Criminal Code for fraud offences. The bill provides that if the fraud had a particularly significant impact on the victim because of their financial situation, health or other factors, age or retirement, then these factors should be considered as aggravating and increasing the sentence handed down to the perpetrator of the crime.

As well, Bill C-52 provides that the more sophisticated or complex the fraud is and the longer it lasted, the higher the sentence should be. If offenders broke regulations or if they concealed or destroyed records that would show where the money went and help recover it, that is if they tried to destroy evidence that would serve against them, then these factors should be considered as well and cause an increase in the sentence handed down to the convicted fraudster.

I mentioned just in passing that the legislation will serve as a deterrent. That is what we are trying to do. We are trying to prevent future frauds. The prevention element is found in the new prohibition order, and this can be part of the offender's sentence.

Bill C-52 would make it so that offenders could be prohibited from having authority over another person's money, real property or valuable securities in any employment or any volunteer capacity after they served out their sentence. This means anyone convicted of deceiving innocent people through fraudulent means, enticing them into handing over money or tricking them or whatever, the individual could be prevented from doing it again.

If this measure is used against a fraud artist and that fraud artist continues his or her ways, then the person failing to abide by a prohibition would itself become an offence. We are also insisting that the sentencing court consider if restitution can be ordered. This is where we really give the victims their day in court.

Last night I sat down and read through the bill a number of times. One of the things I noted in it and which we have advocated for a number of years is the whole idea of restitution. The bill states:

As soon as practicable after a finding of guilt and in any event before imposing the sentence, the court shall inquire of the prosecutor if reasonable steps have been taken to provide the victims with an opportunity to indicate whether they are seeking restitution for their losses, the amount of which must be readily ascertainable.

It asks the victims to be prepared to list the amounts that they have lost. It makes it much more accountable in the fact that it is not just rumour that they have lost millions or thousands. It asks specifically how much they have lost and if it will move forward to restitution.

If the bill passes, the sentencing court can consider if restitution can be ordered. We give them their day in court, because the bill also allows for a community impact statement. We have heard about victim impact statements, which are very similar, but this would be an individual who speaks on behalf of the community or constituency of people who have been taken in by such fraudulent activity. In Bill C-52, we make provisions for the delivery in court before sentencing of the community impact statement.

We talk about one or two families or a retired family being hurt, and I have made reference to it in my speech. In many cases people have been hurt by the same scheme. Entire towns or communities can really be affected, although it can be interprovincial and intercontinental as well. The productivity and economies of those communities can be affected in a major way. We are providing an opportunity for these people to speak as an individual or as a community. We are also adding those statements to the considerations before he or she is being sentenced.

I was watching CBC one evening after a certain Ponzi scheme came to light. The individuals had been charged and arrested. I watched as the media covered the victims. One woman spoke on how her sister, I believe, had ended up taking her life for a number of reasons. It was not just because she had lost a lot of money in the scheme, but in some ways it was because she could not live with the fact that she had been sucked in. Other people were asking her how she could be sucked into such a scheme. It absolutely demoralizes the person who has been taken.

I have made some poor investments in my time and I stand back and I think shame on me. However, for some of those who have invested in a scheme where there is nothing to show for it, the shame and disappointment is beyond what they are able to cope with.

We have watched stock markets rise. We have seen people invest in markets and make a significant amount of money. We have seen recently where those markets have cooled down and fallen. People have lost money, but they realize the risk of the stock market or of those types of investments. However, when people put their investment into a program or plan that they believe has very little risk and they lose everything, in some cases it is more than they can live with.

I urge my constituents and all Canadians to take these types of schemes very seriously and to visit the RCMP website. There is excellent information on frauds that are occurring and how to protect themselves and their families. As the Minister of Justice has said, education is our first line of defence. I would encourage my constituents and all Canadians across the country to educate themselves.

I remember parents and grandparents saying, “If something sounds too good to be true, chances are it is”. Although we have seen a lot of things that paid off when we had the strong economy, we now have to educate ourselves. The more Canadians know, the better they will be able to protect themselves. I am proud that our government is standing up to the fraudsters and trying to protect innocent, vulnerable Canadians from them.

I appreciate the opportunity to bring this important issue forward and to speak on it here in the Parliament of Canada.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, I do not accept the premise of my hon. colleague's question, but I do support the fact that there are other measures that could be taken as we proceed.

As I mentioned in my comments, this is a springboard for further discussion to move other pieces of legislation forward. In fact, we are dealing with Bill C-52. We are looking at minimum mandatory sentencing. We need to deal with economic crime and the serious effect that white collar crime has on families and communities across the country.

There is a provision within the proposed legislation. It is very exciting. Restitution will be required in the sense that the judges will now have to work with the victims. There will be an online form. They will be able to work with the Crown prosecutor and ensure that the dollar value is calculated. If restitution is not provided, the judge has to provide reasons.

This is one of the most proactive aspects of this bill. We want to make sure that people get the money back. It is often said that these carpetbaggers take the money and do not pay it back. They have to pay it back and they also have to do the time that fits the crime.

This is one step in the journey of many bills that are in the House. With the way it is right now, criminals could receive house arrest for committing a crime. That is ridiculous. We need to continue to support this as a whole House. This is a non-partisan issue and it is for the benefit of all Canadians.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Madam Speaker, it is a pleasure to rise in the House this afternoon to speak on a very important piece of legislation, the subject of Bill C-52, An Act to amend the Criminal Code (sentencing for fraud).

The bill would target the fraudsters who have recently been the focus of so many stories in our local papers and discussions at local coffee shops around the country.

Let me speak a little bit about what fraud looks like today and why this is a problem that truly deserves our attention.

Some of today's criminals are so sophisticated and imaginative that anyone could fall victim to their schemes. The variety of fraudulent schemes is mind-boggling. These are organized crime gangs that forge lawyers' documents and real estate title documents, and fraudulently sell or mortgage properties that do not belong to them. There are reported incidents literally of houses being sold out from under homeowners or homeowners returning from absences to find strangers living in their houses. It is hard to believe.

There are still the old-fashioned telemarketing scams of various sorts. People are called out of the blue and told they have won a contest or a prize, offered a desirable item to purchase or asked to make a charitable donation to a good cause.

We all have a responsibility to do our due diligence, but often it is hard for Canadians to distinguish legitimate businesses and charities from those which are scams. The result is that the Canadians and foreigners continue to be defrauded out of millions. Familiar to so many of us are the securities frauds, the Ponzi schemes as they are often known as, accounting frauds which specifically overstate the value of a stock, and other complex schemes designed to trick investors into making investments they would not otherwise make if they knew what was really going on. In these cases, as we know, the losses are just staggering.

These securities frauds have also had the horrible effect of diminishing the confidence Canadians have in the capital markets, in Canadian companies, and in the regulatory authorities that are supposed to ensure that business practices are transparent and accountable. And the list goes on and on.

PhoneBusters, the Canadian Anti-Fraud Call Centre, lists over 20 different types of scams which are currently active. Some are particularly frightening.

In one scam, which PhoneBusters calls the “Hitman Email”, consumers apparently receive emails sent by a supposed hitman who says he has been hired by someone to assassinate the recipient. The sender demands a large sum of money in return for not carrying out the mission.

Of course, many of us receive that mysterious email from the Nigerian prince to send $20,000 and we will be rewarded handsomely.

Other scammers prey on people's affection for animals. We all love animals. A photo of a dog is advertised with a caption saying that the owners are moving and that new owners are being sought; whereas just for a small fee, if someone sends it, the animal could be theirs and as soon as the money is sent, there is no animal and the money just seems to disappear.

There is also the home renovation fraud. I represent the constituency of Kelowna—Lake Country where there are many seniors and they are often susceptible to smooth-talking salesmen. There are fraudulent travel advertisements on eBay and other online classified site scams. The list is endless.

Fraudsters could be such productive members of our society if only they used their creativity in law-abiding ways. Instead, they take advantage of innocent people for their own gain.

In my own riding of Kelowna—Lake Country, last month Gloria Lozinski told CTV Canada AM that her sister committed suicide when she realized she lost her life savings, about $300,000, in the Ponzi scheme based out of Alberta. Lozinski said her sister, Edna Coulic, called her to tell her what had happened. “She said she lost everything,” Lozinski explained. “I asked her to elaborate and she said she [just] got conned. Lozinski said Coulic was convinced that she was set to get a big return and that the people involved did everything to convince her that was the case. “They had her believe she had to get a safety deposit box”, Lozinski said. When she realized there was not going to be a return, Coulic contacted the people involved several times, pleading with them to return her money, said her sister. “Edna became Edna no more,” her sister said. Her demeanour had changed. She became anti-social and depressed. Shortly after, she took her life.

This is the kind of devastation that white-collar crime has on the lives of real people, people in my riding and families across the country. After decades of indifference, Canadians are now waking up to a world in which there is a scam around every corner. No one is immune.

These are true crimes which cause true suffering, and it is time that criminal justice began to take fraud seriously again.

This bill would improve the Criminal Code sentencing provisions for fraud to ensure that sentences imposed on offenders adequately reflect the harm they cause. For frauds which have crossed a certain monetary threshold, that is to say that they have a value of $1 million or more, there would be a minimum sentence of two years imposed. Of course, if the fraud was larger than that, as so many are, or if there were other aggravating factors at play, the sentence should be well above two years.

Speaking of aggravating factors, Bill C-52 would also add additional factors to the list in the Criminal Code for fraud offences. The bill would make clear that if the fraud had a particular significant impact on victims because of their financial situation, their health or any other factor, that should aggravate the sentence. Likewise, the more sophisticated or complex the fraud is, the longer it lasted, the higher the sentence should be.

If the offenders failed to comply with application regulations, such as those which require them to have a licence to sell securities or if they concealed or destroyed the records which would show where the money went, these factors would also increase the sentence.

Bill C-52 also seeks to help mitigate future frauds. The prevention element is found in the new prohibition order which can form part of an offender's sentence. When ordered by a judge, the offender could be prohibited from having authority over another person's money, real property or valuable securities in any employment or voluntary capacity.

This is very important, the fact that justice needs to be seen to be done. There has to be truth in sentencing. This means that convicted fraudsters can be prevented from deceiving others into handing over money again. Failure to abide by this prohibition would itself be an offence.

The bill would also 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 the individuals, has suffered from the fraud.

This is a very important addition, the fact of a community impact statement. Some people may not have been personally defrauded, but it has had a holistic impact on the seniors population or a condominium complex or strata or a group of investors.

I encourage all Canadians to visit the PhoneBusters website to better inform themselves of the scams that are swirling around their mailboxes and telephone answering machines. There is also excellent information on the RCMP website and the websites of local police forces. Consumer agencies also have lots of useful information.

We have awakened in this country to the world of fraud that has previously gone unseen. Education is our first line of defence. The more Canadians know, the better they will be able to protect themselves beginning with the first tenet, if the offer seems too good to be true, then it probably is.

I am confident the measures in this bill will help send a strong message to the fraudsters out there that their time is up. They are doing a cost-benefit analysis and saying that it is not too bad, they can take a risk because the reward is greater. Not anymore.

I am pleased that this bill can act as a springboard for discussion and raising awareness about fraud more generally. I am hopeful and encouraged by the members who have spoken here today. I encourage all hon. members to support this bill and to help ensure it is passed into law as quickly as possible.

[Lois Brown, Conservative, Newmarket—Aurora, ON]

Mr. Speaker, I am pleased to be splitting my time with the member for Kelowna—Lake Country today.

I am pleased to have the opportunity to speak on the subject of Bill C-52, which amends the Criminal Code with respect to tougher sentences for fraud.

This bill contains a number of provisions that will help to ensure that perpetrators of serious fraud receive tougher sentences. These measures will send a strong message that fraud is a serious crime for which there are serious consequences, and this in turn will increase public confidence in the justice system, particularly in light of some recent high-profile fraud cases we have been hearing about in the media.

Under Bill C-52, the harm suffered by victims of fraud will be an important consideration for judges when imposing sentences on offenders convicted of fraud. The Government of Canada is committed to responding to the concerns of victims of all types of crime, including fraud and white-collar crime.

Today I would like to focus my remarks on two of the measures in this bill that centre on the need to consider the harm done to victims.

Bill C-52 contains provisions designed to encourage the use of restitution orders in fraud cases. The Criminal Code currently enables judges to order offenders to pay restitution to victims in appropriate circumstances. Restitution may be ordered to help cover monetary losses incurred by victims as a result of bodily or psychological harm or damage to property caused by the crime. It may also be ordered to cover the expenses incurred by the members of the offender's household as a result of moving out of the household in cases of bodily harm or threat of bodily harm.

The amount of restitution must be readily ascertainable and not in dispute. It cannot be ordered for pain and suffering or other damages. It can be assessed only in civil courts. Restitution may be ordered as a stand-alone order or as a condition of probation or a conditional sentence.

Bill C-52 would require judges to consider restitution in all cases of fraud involving an identified victim with ascertainable losses. Under these proposals, if a judge decided not to make a restitution order, he or she would have to give reasons for declining to do so.

In addition, before imposing a sentence on an offender found guilty of a fraud offence, Bill C-52 would require a judge to enquire of the prosecutor whether reasonable steps had been taken to provide victims with an opportunity to indicate whether they were seeking restitution. This provision is designed to ensure that sentencing does not take place before victims have had a chance to indicate that they would like to seek restitution from the offender, and would allow time for victims to establish the amount of their monetary losses.

Finally, Bill C-52 includes a standard form for claims for restitution in cases of fraud. While the use of this form would not be mandatory, the availability of a standard form should facilitate the process for victims who are seeking restitution.

Taken together, the proposals in Bill C-52 concerning restitution, if adopted, should ensure that victims are given the opportunity to seek restitution from offenders found guilty of fraud and encourage courts to make greater use of restitution orders in appropriate cases.

Bill C-52 also contains provisions aimed at encouraging courts to consider the impact that fraud can have not only on individuals but also on groups and communities. The Criminal Code currently requires courts, when sentencing an offender, to consider a victim impact statement describing the harm done to or loss suffered by a victim of the offence.

Canadian courts have already, in previous cases, considered victim impact statements made on behalf of a community. When a group of people have been targeted for fraud, many of them, including even some who are not financially impacted, may suffer consequences. Bill C-52 would explicitly allow courts to consider a statement made by a person on a community's behalf describing the harm done to or losses suffered by the community when imposing a sentence on an offender found guilty of fraud. These community impact statements would be an effective means by which a particular community, such as a neighbourhood or a senior's club, for example, could make the court more fully aware of the harm suffered as a result of the fraud.

Recent events, including those in Quebec and Alberta, have highlighted the terrible impact that white collar crime can have on individual Canadians and our communities. Bill C-52 would go a long way to ensuring that the harm done to, and losses suffered by, victims are recognized as important factors that must be taken into account when dealing with those who perpetrate these reprehensible crimes.

While improving the responsiveness of the justice system for victims of fraud is obviously a priority for this government, other aspects of the bill go straight to the heart of the sentencing process and affect the sentence that fraudsters can expect to receive.

Briefly, the bill would clearly instruct courts to impose a minimum sentence of two years for fraud with a value over $1 million. Many frauds are well over that amount so we would expect significantly higher sentences in those cases.

The bill also describes additional aggravating factors which should be applied in sentencing the accused, including consideration of the particular impact the crime had on its victims.

Finally, the bill would permit a sentencing court to help prevent additional victimization by ordering that the offender in no way work or engage in volunteer activities that involve having authority over people's money or real property.

Taken together these proposals represent a complete package of reforms to reflect the seriousness of fraud offences for communities and individuals.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Mr. Speaker, the NDP will be voting in support of Bill C-52 at second reading to get it to the committee. However, the government is acting after the horse is already out of the barn. The victims want restitution in these situations, but they are not going to get it. A lot of false hopes are being raised for the public.

As the Bloc member mentioned, the government shows no initiative to close down the tax havens in the Cayman Islands, where these fraudsters are hiding their money. We have to stop the fraudsters in the beginning before this happens by strengthening the regulatory bodies. We have to get rid of the industry insiders who are sitting in the regulatory seats, and we have to license the participants and properly police them.

If we do all of that, we are not going to have the problems that we are having right now.

[Jack Harris, NDP, St. John's East, NL]

Mr. Speaker, I am pleased to speak today to Bill C-52 which proposes amendments to section 380 of the Criminal Code of Canada dealing with fraud and affecting the public market.

This is one of a series of crime bills which are brought before the House as part of the government's PR attempt to make it look as if it is tough on crime and other people in this House do not seem to be. I say that with some deliberation because it is part of the PR campaign. Otherwise, why would the government release this bill to the media before it even presented it to the House? I know that was the subject of a debate earlier today, as to whether it is a breach of privilege or not, and I understand the Speaker will rule on that at some point, but as part of the government's approach to this, it seems this is aimed at public relations.

Now that does not mean we will not support it because I think Canadians do want to know that parliamentarians care about white collar crime. It is important, particularly the kind of crime that affects people whose savings have been taken, supposedly in good faith, by people for investment or other purposes and they are defrauded of their savings, their pensions or their right to benefit from the money they entrusted to other people.

However, this bill would not create any new crimes. In fact, the real problem with white collar crime, in particular frauds of this nature, is not the lack of sentencing tools available but the lack of prosecution and proper investigation.

We see lots of frauds when they are complained about but the investigations take one year, two years, sometimes three years before they are actually prosecuted. That seems to be the real weakness in the prosecution of crimes.

If we are going to be tough on crime, supposedly, we ought to be very adept at conducting prosecutions, doing investigations and providing resources for that particular purpose, but that is where our system is lacking. It is not lacking at the other end. I will give an example.

One of the provisions of this bill, and perhaps even the major provision that the government likes to wave around, is one that would provide for a two-year minimum sentence for frauds involving over $1 million. Again, that is not necessary because judges will recognize the value of the fraud in determining a sentence.

We had a sentencing in our province of Newfoundland and Labrador six or eight months ago involving a fraud of considerably less, perhaps less than $200,000, and the sentence given was two years less a day for a fraud involving about one-fifth of the million dollars that has been put forth here as a minimum sentence.

It is a perception that the government is trying to use for a public relations purpose as opposed to the reality of the need for a mandatory minimum sentence.

The bill itself is not a very strong reaction to the need to provide protection to the public on issues of fraud, particularly fraud affecting the markets, securities and the type of fraud that goes on in our country that receive a lot of headlines when they happen. It is the tools of prosecution and the tools of investigation that seem to be inadequate. On the sentencing end, that is a different story.

What do we have here? Well, the judges can consider restitution. In fact, the Criminal Code has provision for restitution orders under sections 738 and 739. There is no compunction here for the individuals to pay restitution. It really just stipulates that the court shall consider making a restitution order under sections 738 and 739.

I would suspect that the judges do not need to be told. These judges are intelligent, educated people who are administering the Criminal Code and who are being advised by prosecutors when a situation calls for restitution. Surely, the government is not suggesting that a judge would not consider making a restitution order where one was warranted.

How strong is that in terms of an additional tough on crime sanction? Surely, particularly in the case of fraud where a victim has been deprived of his or her savings, pension or income, that restitution would be a top priority in any sentencing regime without the need for some specific direction to the court.

The government seems to be suggesting, and I hear it as part of their rhetoric from time to time when its talks about these liberal judges, et cetera, that somehow these judges do not care about the victims of crime. As of next April, I will have been a member of the practising bar for 30 years. In my experience the judges are extremely concerned about the victims of crime, particularly when there is an economic crime where the possibility of restitution exists. That would be the number one priority.

Obviously there have been a lot of changes in our Criminal Code over the last number of years concerning victim impact statements and the possibility of those individuals who are victims of crime coming before the court and telling of the financial and psychological impacts, the kinds of things for which the bill provides. That happens all the time.

The aggravating factors must be considered and I do not see anything particularly wrong with enumerating them, but they are also part of the precedence of our court. Aggravating factors in sentencing would include the kinds of things that are suggested, the impact of the fraud on the victim, whether the offender complied with applicable licensing rules or professional standards, the magnitude, duration and complexity of the fraud and the degree of planning. Degree of planning and premeditation is always a consideration when a judge is looking at sentencing.

While these things may add, to some extent, to the recognition that there are particular issues with respect to fraud that ought to be taken into consideration, the bill is substantially weak in that regard.

What is really needed to protect Canadians from the kind of frauds that we are talking about is better regulation, the kind of regulation that needs to ensure that the individuals who are taking people's money and investing it in trust are protected by significant regulations. This is the kind of thing that the government seems to avoid. It wants to have a free market. It does not like big government, too much bureaucracy or too much regulation. However, the way to help Canadians avoid being victims of this kind of crime is prevention.

One of the most significant deterrents to criminal behaviour is not necessarily the sentencing, and this is also true for many other criminal laws, it is whether people will be caught. That is a big, or bigger, deterrent. There is no point in having a sentence available if they are getting caught and we see no prosecutions. We see individuals not being investigated properly. We see people not being protected.

There is a lot of media attention being paid to the kind of sentences that take place in the United States. Recently, Bernie Madoff was sentenced to 150 years in jail. Somehow people think that is a great disincentive to committing a crime. I do not see how that is more of a disincentive than 120 years, or 130, or 75 to a 60 or 70-year-old man. It is only foolishness.

That is the kind of hyperbole that the Americans have gone to in order to somehow convince people there is a deterrence effect. Bernie Madoff carried on his fraud for 25 years without being caught. That is the biggest incentive to commit crime, that people can get away with it for many years without being caught.

We need a system that better regulates, investigates and ensures that people who handle the money of individuals are subject to the kind of regulation, intense scrutiny and high standards that should be expected of people who act in those kinds of positions of trust. That is where the problem is.

First, if we want to be tough on crime, we should ensure that the people who commit crimes have a disincentive because they will be caught if they carry on this type of behaviour. Second, if there are any complaints being made, they are thoroughly and swiftly investigated. These are perhaps more important, by far, than the kind of measures that exist in this legislation.

The mandatory minimums, we have a problem with that. Our party is committed to sending the bill to committee, so we will support it at second reading.

The bill itself is weak. It does not provide the kind of protection that people need and it is not really much of an improvement over what we have had before. However, there does need to be a message sent that white-collar crime is taken seriously. It is important that society is not satisfied to let people, who happen to engage in this kind of fraud and behaviour, get away with it. They should not be treated any differently than other criminals. These are serious crimes and that they ought to be taken seriously.

If we really take them seriously, we would ensure that they are investigated promptly, that every complaint be followed up seriously, that there be considerably greater regulation and control over people who handle money from members of the public who have been offered rates of return. The Government of Canada needs to play a stronger role. It is not simply a matter of the government saying it is tough on crime. It wants to have mandatory minimums for any crime it can think of and make it look as it is tough on crime but the other parties do not support that. There has to be some sense in this kind of amendment. We just cannot willy-nilly amend the Criminal Code and hope people will believe that somehow they are better protected. In my view the increased protection provided to ordinary Canadians by this legislation is not very strong.

Maybe the message will get out somehow so people feel that being tough on crime is going to deter those people, but what is the mandatory minimum of two years going to do? Will that convince someone only to defraud someone to the extent of $900,000 instead of $1 million? Can they get under the wire and avoid the mandatory minimum sentence? This is foolishness, the very idea of mentioning it brings up the fact that this is a fairly arbitrary type of number.

As I mentioned earlier, we can give greater than two year sentence for a fraud of significantly less than $1 million when it is deserved, when the aggravating factors are there and when premeditation is there. When the victims have been harmed to the extent that they have been harmed in other cases, the courts have adequate tools to provide the kind of deterrence as required. That is what we are talking about.

The Criminal Code is supposed to be a tool for the use of society and of courts and judges to satisfy the prevention of crime, the protection of society, the punishment of criminals and to help victims as much as they can be helped by the courts in these circumstances.

The question is this. Does this make that tool more effective? Maybe it sends a message, but I have never been a big fan of mandatory minimums. They can be a deterrent to a proper sense of justice. I am not suggesting there may easily be circumstances where someone defrauds more than $1 million is not entitled to a sentence greater than two years. I do not think we need to tell judges that. In fact, perhaps all we are doing, by suggesting a mandatory minimum of two years, is playing catch-up with what the judges are already doing.

Anyone who closely follows sentencing decisions, the courts always take into account what the community feels, the reaction of a community to a particular type of crime. An offence is more than just an offence against certain individuals. It is also an offence against community standards. If the community is very concerned about this type of crime, about people being taken advantage of in fraud circumstances, there will be a stronger response from the judiciary.

We have seen that already when the white-collar criminals get before the court. Our problem is, despite all the high profile cases we see in the United States, we do not see very many in Canada. How many prosecutions have there been? There have been so few that they are sensational when they come forward. What jail is Conrad Black in? He is not in a Canadian jail. He broke all these laws in Canada, but he is not in a Canadian jail, he has not been prosecuted in Canada.

We do not see many Canadians who have been prosecuted for white collar crime. There is a lack of substantial action by the Government of Canada to ensure white-collar crime is pursued, investigated properly and brought quickly to the courts for a decision. I do not assume anybody who is charged is guilty, but it should be brought quickly to the courts. A proper investigation should be done and the matter should be brought before the court. If a decision is made that the person is guilty of this kind of crime, the person should be treated as quickly and as appropriately as possible.

Passing legislation in the House for the sake of passing legislation and for the sake of having another bill to add to the government's list of tough on crime bills, which for various reasons other parties may or may not support, is just playing politics with the reality of a serious problem about which Canadians are concerned.

The people in Montreal who have been victims of Mr. Jones, who has yet to be convicted of any crime, have lost the money they invested with him. He has been accused of serious crimes. The consequences for those individuals are absolutely devastating. When people are dependent upon an income from funds they have deposited so they can live in an apartment and have a lifestyle for which they have saved and are all of a sudden thrown out of that and cast into poverty, it is absolutely devastating and ought not to happen. That is why it is a crime.

Why does that happen? It does not happen because the sentences are not strong enough. It happens because the kind of regulation under which this activity takes place is not strong enough. People need the ability to complain about alleged fraud and have those complaints taken seriously. When someone does complain, it should raise a red flag, an investigation should be triggered and it should be stopped and prevented long before it gets to the stage where hundreds and perhaps thousands of people have been defrauded and have lost their savings and investments. A more vigorous approach to investigation, prosecution and prevention are the important factors we would like to see pursued, not merely some changes in the Criminal Code, which are frankly quite weak.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, I applaud the member for giving great notice to the Minister of Justice of the first question he is going to ask at committee. Let us get the answer, because it is an important question. Just how many times has the sentencing for serious fraud offenders involving large amounts of money gone in the wrong direction, at least from the point of view of the common man?

Bill C-52 is an important reform, and there are reasons it is happening now and going ahead as opposed to having happened 25 or 50 years ago.

The Parliamentary Secretary to the Minister of Transport suggested that opposition parties were joining the Conservatives in their get tough on crime agenda. I just want to signal as one member that that is absolutely not the case, but there are many members in the House, and I think all opposition parties are going to support the bill for good rational reasons.

I would like the hon. member to comment on the insinuation that somehow the get tough on crime agenda has been adopted by all parties in the House.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am pleased to rise on behalf of the Bloc Québécois to debate Bill C-52 , which is getting off to a bad start.

This bill was announced by the Minister of Justice on Monday morning. For the past few weeks we have been asking questions in the House. I hope that my colleagues opposite, who are always reading notes, will remember that the Bloc Québécois was already asking questions about this bill on June 15, 2007. It was announced with great fanfare everywhere in Canada but in the House of Commons.

On Monday, the bill was announced in Calgary by the minister, in Montreal by the Minister of Public Works and Government Services, and in an Ottawa hotel by the Minister of Justice. The only thing they did not do was distribute a copy of the bill to the journalists present. However, they explained what it was all about. They are giving this bill a poor start in life.

We would like to tell this House that we will be voting in favour of the bill. I hope that my Conservative colleagues will finally understand that we are voting for this bill not because we support their agenda but because we intend to study it in committee and make substantial amendments. I hope that is clear to our Conservative friends. They should not believe that this bill will be passed handily. We will be making improvements in committee.

The chair of the Standing Committee on Justice and Human Rights told the House yesterday that all bills would be studied quickly in committee. I have good and bad news for him: the good news is that I hope he will be chair of the committee for a long time; the bad news is that we will take whatever time is necessary to study this bill thoroughly and, in particular, to add what we believe a bill should contain, that is, sufficient measures to fight, rein in or at least adequately punish these white collar criminals.

I am going to share a true story. A man from Quebec just pleaded guilty to charges of fraud, so we can talk about it. Vincent Lacroix defrauded 9,000 investors. It is true, so I can say it. I am not talking about Mr. Jones, who also defrauded a lot of people. I am talking about Mr. Lacroix, who scammed people out of more than $150 million.

The bill has good intentions, but does anyone believe that the $150 million Vincent Lacroix stole is still sitting in a Canadian bank account? I hope that nobody in the House is naive enough to believe that the money is still in Canada.

This bill has two big problems. If we want to go after white collar criminals, we have to go after tax havens. I will explain what tax havens are, because I have a feeling that my Conservative colleagues do not really get it.

Their government has supported tax havens, and even helped create them in the first place in countries like Panama, Jamaica, the Bahamas and the Cayman Islands. Anyone in Canada can deposit a million dollars in an account anywhere—be it Jamaica, the Caymans or Panama—but the money must be declared. Interest earned on the money must be declared. Money and interest invested in other countries must be taxed in Canada. But some people conveniently forget that they have put money in accounts in other countries, and they conveniently forget to declare it. Consequently, those countries become tax havens.

What do people think white collar criminals do? We are taking on extremely smart criminals here. We have to be honest and tell it like it is. These criminals are brilliant. They plan their schemes carefully. They spend months, even years, planning their schemes.

What do they do? They cheat people and take their money.

Are they going to deposit $150 million in some off shore account overnight? No, instead they will deposit small amounts: $1 million, $500,000, $2 million, $700,000. They deposit money outside of Canada a little at a time and then forget about it. They also forget to pay back those who gave them the money to invest. So they are in fact stealing from and cheating people.

Until we eliminate tax havens, this bill is doomed to failure. It is not complicated; it is doomed to failure if this government does not understand and agree that tax havens must absolutely be eliminated in conjunction with this bill, because that is where the money goes.

I hope there is no one—least of all the hon. member for Lévis—Bellechasse—naive enough to believe that Vincent Lacroix's money is still in Canada. I hope nobody believes that, because if they do, they are out in left field.

There are two important points here. The first, which I already addressed, is that tax havens must be eliminated. We have already asked the minister about this. This is about criminal law. Some of us have practised criminal law. I did for 30 years. I can say for sure that during my entire career, I never saw anyone sentenced to less than two years for fraud involving over $1 million or $2 million. I have never seen that.

Mr. Burns from the Trois-Rivières area just pleaded guilty to fraud involving $4 million. He stole $4 million. Does anyone really believe that this man will be sent home to put his feet up and relax, as the members across the floor would have us believe? Please. The proof is that the organization that monitors Quebec's financial markets prosecuted Vincent Lacroix and managed to get a sentence of 12 years. That sentence was reviewed, re-examined and reduced by the court of appeal.

That is not the end of it. Mr. Lacroix was convicted and has just pleaded guilty to fraud in the amount of $150 million. Is it possible that he will be given a sentence of less than two years? What is he going to do? I will tell you what he is going to do. He has pleaded guilty and the judge has sentenced him to 12 or 13 years. If the one-sixth rule is not eliminated, he will be eligible for release after serving one-sixth of his sentence. That has been requested. Let us do the math: dear Mr. Lacroix will be eligible to get out of prison after one-sixth of his sentence, in a year and a half or two years. He will then be 50 years old. And what will he do then? He will get on a boat or a plane or a train or a subway, or get in a car, or all of them if necessary, to get as far away as possible and go to whatever tax haven he has put his money in. That is why speedy action must be taken.

And that is the problem with this bill. At present, it is not possible, because the government is going about it piecemeal, amending anything at all in the Criminal Code, and introducing things. I think the Minister of Justice neglected and forgot to look at his Criminal Code when he introduced this bill, because when we consider the victims, the court has to be sure, before sentencing, that the victims have been heard. That is in section 718 of the Criminal Code. Why is he putting this in the bill? It is not necessary, because it is already there. What point is there in putting it in again? It is just one more thing to complicate the Criminal Code, according to the judges.

We are saying that the one-sixth of sentence rule has to be eliminated, and that we have to tackle tax havens. This is urgent. It has to be done at the same time as this bill is supported, amended, changed and chopped up in committee. It all has to be done at the same time, and the parole system has to be eliminated.

The best one is what I heard in this House yesterday afternoon, when the Minister of Public Works and Government Services told this House that the Minister of Public Safety was currently looking at the parole system and did not want to go at it piecemeal, and rather wanted to make comprehensive changes. That is really laying it on a bit thick, since that is exactly what they are doing in the Criminal Code.

They are chopping it up and amending it. If it is not section 742, it is section 350. If it is not section 350, it is section 132. This government will amend anything anywhere, without making sure there is any logic behind it. That is what the judges are criticizing it for. It has been criticized by the Quebec bar and in argument in various court cases. Unfortunately, judges cannot speak and do not often speak. When they do, however, particularly retired judges, they say that this government has no vision.

Tough on crime: that means nothing. It means nothing when they do not take all the appropriate action.

This bill is like Bill C-42 yesterday. They are eliminating conditional sentences. Where will those people end up? Unfortunately, they will end up in the prisons of Quebec, the prisons of Ontario, the prisons paid for by provincial governments . The prisons in Quebec are overflowing right now. The same is true in Alberta, in Vancouver, and everywhere in Canada. They are thinking no further ahead than to respond to a supposedly immediate need.

It is really too bad, but this bill does not meet society's needs at the moment. This is something the Bloc has criticized and will continue to criticize. In addition, the bill could send the wrong message. Fraud in the amount of $2 million or more warrants a sentence of two years or more in prison. In other words, someone committing fraud in the amount of $1.5 million would deserve a six month prison sentence perhaps. That is what it says. It runs the risk of sending the wrong message and resulting in lesser sentences. At the moment, the average sentence for fraud of over $2 million is at least five years, and I checked out only the sentences in Quebec and some elsewhere in Canada. I did not look further afield. It is a minimum of five years. What have they done with this bill? We do not need this. The sentences already exist and they are longer than two years.

Other things must be dealt with. They have been telling the Bloc for a very long time that their tough on crime policy requires a series of measures that, in combination, will ensure that crime is fought properly. For example, a police squad has to be established. We have to stop thinking the RCMP is limited to catching drug dealers. It will have to become specialized. There will have to be special squads, which some of us call the accountants or auditors, that may consist of police officers. Some officers did not know the other side of this. In the past, there were police officers who knew about drugs. That is good and can continue, but special squads will have to be set up and the people in them will have to be able to read a balance sheet and follow a trail.

I have explained that to the Minister of Justice. I do not think he understood, so I will explain a little more to him. Does he think that the funds appearing on balance sheets exist? Those who commit fraud for huge sums do all sorts of things. They are really brilliant. They can have balance sheets say things that practically no one can understand. It takes special squads. The banking regulations must be tightened. Bank secrecy is all very well, but today, in our situation, the banks must cooperate with the police squad on the trail of white collar crime. The Income Tax Act must be amended.

In addition, I hear my colleagues opposite talking about confiscating assets. I heard the member from the Quebec City region, the Parliamentary Secretary to the Minister of Justice, who sits on the Standing Committee on Justice, say on air yesterday that it will be possible to remove and seize assets belonging to white collar criminals. Is someone in this House dreaming? Do they think that white collar criminals bought themselves 44 houses, three castles and four boats? Oh, come on! They buy themselves a house and maybe a cottage, but all the money is in tax havens. Often, the house is not in their name but in the name of their brother or sister. How will it be proven that the house was purchased with assets or money from the fraud perpetrated by Vincent Lacroix? Good luck! That is what is happening now. So, this money has to be tracked and the special squads will be able to do it.

I was talking about tax havens, and they should certainly be eliminated. They are a great place for hiding money, stealing and committing fraud. We should also abolish the right to parole after one-sixth of the sentence has been served.

I would go even further. Although I was a criminal lawyer and defended people accused of serious crimes, I have always said and will continue to say in the House that parole should be earned. That should be included in the bill because people who do nothing, who just sit in prison and wait for a quarter or a sixth of their sentence to go by, are not doing anything to earn their release. They are just sitting and waiting in these schools for crime, which is what penitentiaries are. If they do nothing, they do not deserve parole. It has to be earned.

Programs have to be made available. If people do not participate in them, they should serve their full sentences. That is what we say and what I have been repeating in the House ever since I was elected in June 2004. Criminals must serve their sentences. We do not need minimum sentences. They do not solve anything. But criminals must serve their sentences. As things stand now, people sentenced to three years in prison do not even serve eight months.

Nothing can be done with people like that. They are sent to prison for three years and get out after eight months. They have learned nothing. That is the problem the Conservatives do not understand. If we want to deal seriously with crime, we have to deal seriously with the reason why criminals are able to get out most easily, and that is parole. We have to put an end to this system which allows people to be released after serving one-sixth of their sentence. They do not even serve a third of it. Conditional release has to be earned.

We think this bill should be studied in committee and the justice minister should appear before the committee. I already know what my first question will be for the minister. I hope he will be prepared and that someone on the other side will tell him. Has he ever seen sentences of less than two years handed out in cases of fraud over $1 million? If someone can answer that, I would like a response as soon as possible. This kind of fraud generally attracts sentences of six or seven years.

At this stage, I can say that the Bloc Québécois will be in favour of the bill. However, I would not want this to be misunderstood. I will say it one last time. It is not at all because we agree with the Conservatives’ tough on crime program. It is because we want to amend this bill to reflect what modern Quebec society wants.