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

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

Mr. Speaker, our government addresses these issues in a wide range of areas, including tax law. However, in this case, we are talking about Bill C-52.

As I said, there are substantial improvements in this bill on the matter of fraud. There are some egregious cases of fraud going on in Canada and some famous ones going on throughout the world. This would help in bringing the fraudsters to justice.

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

Mr. Speaker, I would invite the hon. member to read sections 718 and following of the Criminal Code, which he surely has not done. He would see that under the provisions of the Criminal Code, the court is now required to call before it the victims of criminal acts to get their opinion on the sentence to be handed down.

I have a much more important question to ask. I will come back to it in a few minutes. If he is introducing this bill, will he also eliminate tax havens?

Allow me to explain because I do not think he understood. I will speak slowly. An individual commits several millions of dollars in fraud. What do these white collar criminals, who have spent a great deal of time setting up the fraud and who are very intelligent, do? They invest in tax havens. Would the whip like me to name a few? I think the hon. member knows what I am talking about because his government is already supporting them.

If they are asking us to pass Bill C-52, will they put an end to tax havens while they are at it?

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

moved that Bill C-52, An Act to amend the Criminal Code (sentencing for fraud), be read the second time and referred to a committee.

Mr. Speaker, this is the real beef. This is what they have all been talking about and now they are going to get it.

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

The objective of this bill is clear and simple. It would amend the Criminal Code to improve the justice system's response to the sort of large-scale fraud we have been hearing about so much lately. The bill would send a message to those who think they can outsmart Canadians and dupe them into handing over their hard-earned savings. On the contrary, the bill would make clear that fraud is a serious crime for which there are serious consequences.

It is also designed to improve the responsiveness of the justice system for victims of fraud. These proposed measures would send a strong message to the victims of fraud that the crimes committed against them are serious and the harms they suffer will be taken into account and addressed to the greatest degree possible. Overall, the measures in this bill would do much to increase Canadian's confidence in the justice system.

Before I describe the measures in the bill, it is worthwhile to consider the current state of the law. The Criminal Code already addresses all known forms of white collar crime, from security related frauds, such as insider trading and accounting frauds that overstate the value of securities issued to shareholders and investors to mass marketing fraud, theft, bribery and forgery, to name a few of the offences that may apply to any given set of facts.

The maximum penalties set out in the code are high. In particular, for fraud with a value over $5,000, the maximum term of imprisonment is 14 years. This is the highest maximum penalty in the code, short of life imprisonment.

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

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

The courts are starting to take these frauds seriously but this government believes that still more can be done to strengthen the Criminal Code's responses in these cases to send a clear message that Parliament is in agreement with this trend toward tougher sentencing. To this end, Bill C-52 proposes reforms that are designed to ensure that sentences imposed in these cases adequately reflect the severe impact they have on the lives of the victims, many of whom have lost their life savings or retirement savings.

One measure in this bill that is particularly significant is a new mandatory minimum penalty of two years for large scale frauds. As I mentioned, more and more courts across the country are recognizing the devastation that can be caused by large scale frauds and have emphasized that deterrents and denunciation must be front and centre in sentencing offenders in these cases. The government wants to carry this message forward and clearly establish a minimum penalty for frauds with a value over $1 million.

Many frauds cheat Canadians out of significantly more than $1 million. We have read recently of frauds in the hundreds of millions, but the line must be drawn somewhere and this government believes that if a person orchestrates and carries out a fraud of at least $1 million, this is a very serious crime that demands a term of imprisonment of at least two years.

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

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

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

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

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

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

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

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

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

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

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

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

The courts have found that it is not possible to make an order when the amount is not readily ascertainable or when it is difficult to apportion the amount among several victims.

To further assist victims, our proposals include an optional form to assist victims in setting out their losses. The form identifies the victim, their losses and clarifies that the victim needs to provide receipts, bills or estimates in order to assist the court in making the restitution order. In all cases, these losses must be readily ascertainable.

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

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

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

The Criminal Code currently provides that judges may consider a statement made by a victim of a crime known as a victim impact statement. The purpose of this provision is to provide the sentencing judge with additional information on the harm or loss suffered as a result of the offence. This statement is delivered in the context of a hearing on sentencing of a convicted offender.

Jurisprudence has indicated that the victim impact statement serves three purposes: to educate the offender on the consequences of her or his actions with some rehabilitative effect, to provide a sense of catharsis for victims, and to provide sentencing judges with the information on the impact or effect of the offence. The provisions in this bill to create a community impact statement provision for fraud offences share these three purposes: education, catharsis and information.

The Criminal Code indicates that the victim impact statement should describe the harm done to or loss suffered by the victim. The Criminal Code details the procedure for presenting the victim impact statement, which includes a requirement that the statement be in writing and be shared with the Crown and defence. The victim impact statement provisions of the Criminal Code also provide that the court shall consider any other evidence concerning the victim for the purpose of determining the sentence.

The courts have given the term “victim” a broad interpretation, so the people other than the direct victim, including communities, have been permitted to provide victim impact statements. Victim impact statements made on behalf of communities that have been considered by the courts include: a victim impact statement made by a synagogue on behalf of the members in an arson case and a victim impact statement from a first nations band describing the impact of the theft of band money, and the murder of a first nations child on a first nations community. These cases and others offer examples of the courts' recognition that communities are affected by crime.

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

It is our view that these community impact statements will affirm several principles of sentencing that are laid out in the Criminal Code: denunciation, deterrence and rehabilitation. A community impact statement will allow a community to express publicly, and to the offender directly, the loss or harm that has been suffered to allow the community to begin a rebuilding and healing process. It will show the community denunciation of the conduct of the offender. It will assist offenders in their rehabilitation to understand the consequences of their actions.

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

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

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

Introduction of Bills

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

Mr. Speaker, I thank my hon. colleague for his intervention, but I would submit that there certainly has been no breach of confidentiality here, and therefore there should be no question of privilege found.

Let me point out that this bill was not leaked to the media. In fact the Minister of Justice held a news conference, that is true, and he gave an overarching viewpoint of the bill, but he did not go into specific details of the bill itself. That is a key point.

I would point to a previous ruling on March 15, 2001 by the Speaker, who ruled on a question of privilege concerning the fact that the media was briefed on a bill before members of Parliament. I will quote from that ruling:

To deny to members information concerning business that is about to come before the House, while at the same time providing such information to the media that will likely be questioning members about that business, is a situation that the Chair cannot condone.

However, that was certainly not the case with Bill C-52. In fact I would submit, as my hon. friend obviously knows, the members of Parliament were given an advantage over the media.

Bill C-52 was introduced yesterday. It will be called for debate today. In fact, since the government recognized, because of the shortness of time, that we did not want to have the opposition members unaware of the contents of the bill, we gave an embargoed copy of the bill to all of the opposition parties yesterday so they would be able to discuss it in detail at their own national caucus meetings. In other words, we gave them ample opportunity to study the bill before we debated it.

I would point out that they had the opportunity to study the bill before the Minister of Justice made his comments to the media.

Once again, there is no case whatsoever for a question of privilege. I would also point out the obvious, as the Speaker very well knows, that questions of privilege are only to be made if something actually impairs the ability of a member of Parliament to do his job. There is no impairment whatsoever in this case, because opposition parties had copies of the bill before any comments to the media were made.

Mr. Speaker, I know you will take this under your very wise consideration. I look for a response as quickly as possible.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I would like to raise a question of privilege about something that has concerned me a great deal for some time now, but that we have witnessed first-hand this week. I am talking about public disclosure of government bills that have not yet been introduced in the House.

I want to draw your attention specifically to the press conferences held in various locations across Canada on Tuesday to announce the measures in Bill C-52, which was introduced in this House yesterday by the Minister of Justice and the Minister of Public Works. I am also talking about a press release issued by the Minister of Justice and his parliamentary secretary.

In fact, the ministers went so far in disclosing the measures in this bill that before we even read it, we had a detailed knowledge of the measures it contains. When I read Bill C-52, I also noticed that the copy I received 24 hours after the press conference, but before the bill was introduced, was marked “Secret until introduced in Parliament”.

When we read Bill C-52 once it had been introduced in the House, we found that we already knew everything it contained, because we had read about it in the morning papers and heard about it on the television news the day before. This is highly unusual. In our opinion, publicly disclosing the content of a bill that was on the order paper when the disclosure was made constitutes contempt of Parliament.

According to Maingot, contempt of Parliament is “an offence against the authority or dignity of the House”.

May defines it as follows:

...the House also claims the right to punish, as a contempt, any action which, though not a breach of a specific privilege, tends to obstruct or impede the House in the performance of its functions...or is an offence against the authority or dignity...

Maingot and May also state that contempts cannot be codified and that contempt may exist even where there is no precedent.

Mr. Speaker, although you have not ruled on a matter identical to the one at issue today, you have addressed the question of the confidentiality of bills on the order paper. In a ruling rendered on March 19, 2001, you said: “—the convention of the confidentiality of bills [on the order paper] was necessary, not only so that members themselves would be well informed, but also because of the pre-eminent role that the House plays [and must play in the] affairs of the nation”.

Later that same year, the House Standing Committee on Procedure and House Affairs considered a point of order concerning the disclosure of the contents of a bill and commented as follows in its 40th report: “The Committee reiterates its position that it views the disclosure of bills prior to their tabling in the House of Commons, while on notice, with extreme seriousness. Members of the Committee are committed to protecting the privileges of the House of Commons and of its Members in this regard”.

These two passages indicate that there is a convention requiring that the contents of bills on the order paper not be divulged. I believe that the convention exists because members of Parliament have an important role to play as legislators. Consequently, they should be the first to know the contents of bills so that they can do their work well, and the Speaker must do everything in his power to honour that role and enable members to fulfill their duty.

In a ruling issued on November 6, 1997, the Speaker of the House at the time said that issues affecting the role of members of Parliament as legislators were not insignificant. Even then, he warned the executive that “this dismissive view of the legislative process, repeated often enough, makes a mockery of our parliamentary conventions and practices”.

We take our role as legislators very seriously, and we do not vote on a bill until we have carefully examined all of its provisions. By disclosing details about the measures in Bill C-52 over 24 hours before it was introduced in this House, the ministers, and the Minister of Justice admitted it himself, wanted to put pressure on Parliament. By increasing pressure on me and on all opposition members to make a decision about this bill before it was introduced in the House, the ministers wanted to prevent us from doing our work with all due diligence and care. The laws that we enact are not mere political tactics; they are measures that will apply to all citizens of this country for a very long time.

But that is not all. I believe that the actions of two government ministers on Monday constituted a serious offence against the dignity of this House, and as such, constitute contempt of Parliament. By publicly disclosing the contents of a bill—while the bill was on the order paper—to admittedly put pressure on Parliament, the ministers undermined the authority and dignity of the institution of the House of Commons.

I would like to quote the current President of the Treasury Board, when he was speaking about a similar question of privilege on March 14, 2001. He said:

If the House is to function with authority and dignity then it must be respected, especially by the executive. Every elected member is not the servant of the executive. The executive is the servant of each and every elected member. When a member of the executive thwarts the parliamentary process they deny the rights and privileges of each member and destroy the authority of the House. If the House is to function with authority and dignity then it must be respected, especially by the executive. They are responsible to parliament, not to the media.

I completely agree with these comments. I believe that the actions of the two ministers, the Minister of Justice and the Minister of Public Works, constitute a contempt of Parliament, and if you feel that there is a prima facie case in my question of privilege, I am prepared to move the appropriate motion.

Retribution on Behalf of Victims of White Collar Crime Act

[Rob Nicholson, Conservative, Minister of Justice and Attorney General of Canada]

moved for leave to introduce Bill C-52, An Act to amend the Criminal Code (sentencing for fraud).

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