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.

Response to the Supreme Court of Canada Decision in R. v. Tse Act

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I would like to thank my colleagues for that great round of applause as I start my speech.

I am very pleased to rise today to stand up and talk about our points relating Bill C-55, An Act to amend the Criminal Code in response to the Supreme Court of Canada's decision.

I know that we are coming to this with 19 days to go before it is supposed to be taken care of. As New Democrats, we recognize the importance of this and will be supporting it at second reading. We are in favour of sending this legislation to committee for review.

This enactment amends the Criminal Code to provide, in response to the Supreme Court's decision, safeguards related to authorization to intercept private communications without prior judicial authorization under section 184.4 of the act.

Notably, the enactment states that it:

(a) requires the Minister of Public Safety and Emergency Preparedness and the Attorney General of each province to report on the interceptions of private communications made under section 184.4;

(b) provides that a person who has been the object of such an interception must be notified of the interception within a specified period;

(c) narrows the class of individuals who can make such an interception; and

(d) limits those interceptions to offences listed in section 183 of the Criminal Code.

I was talking earlier about how this really has come down to 19 days. I believe my colleague from Winnipeg North asked this question repeatedly today. The Conservatives have had a year to act on this. Why now, in the eleventh hour, are we having to deal with this so quickly? If they are truly looking at what can make great legislation, it is the debate and involvement of all members of Parliament from all sides.

However, once again, we see the Conservatives bringing forward legislation at the eleventh hour so that we all have to come together very quickly to try to pass something that we, of course, want to give due diligence and a good once over. Unfortunately, we have seen from the Conservatives time and time again the lack of opportunity for debate.

How many times is it now that the Conservatives have used time allocation to shut down debate when it comes to important bills? I believe that we are up into the 20s if not the 30s. We have seen budget bills and other legislation affecting the services Canadians rely on shut down at every opportunity. It is unfortunate that we once again have to come to an eleventh hour conversation to ensure that we can get legislation to committee.

This new legislation is simply an updated version of the wiretapping provisions the Supreme Court deemed to be unconstitutional. The court has established new parameters for the protection of privacy, and we expect this legislation to be in compliance with those standards.

Canadians have a good reason to be concerned about the Conservatives' privacy legislation. Their record in this area is not very encouraging. We need to continue working for the public to uphold the rule of law, the Constitution and the Canadian Charter of Rights and Freedoms.

If we go back, not too long ago, we had the inception of Bill C-30. Back in February of 2012, the Conservative government tabled Bill C-30, which would give authorities the power to access the personal information of Canadians without a warrant. That bill raised serious concerns about personal privacy and fundamental rights and freedoms. Bill C-30 was a compilation of three bills that made up lawful access in the last parliamentary session: Bill C-50, Bill C-51 and Bill C-52. The Conservatives were then building on legislation first spearheaded to propose providing public safety authorities with surveillance powers over digital information in 1999. This led to a huge uproar from people from coast to coast to coast who were concerned about this legislation and how it would enable law enforcement to access a citizen's personal information without a warrant.

Right now, we have seen the Conservatives quickly change their tune in this new bill they have brought forward. With the government trying desperately to comply with the Supreme Court ruling within the prescribed time frame, which is April 13, 2013, the Supreme Court of Canada ruled that the authorization of the emergency power to intercept without authorization by the court in situations of imminent harm could be justified under the Canadian Charter of Rights and Freedoms.

The Supreme Court held that section 184.4 of the Criminal Code, interception in exceptional circumstances, enacted in 1993, was unconstitutional because it did not include any accountability measures. The court gave Parliament until April 13, 2013, to amend the provision and make it constitutional.

The Conservatives have proposed amendments that appear to be a direct response to that decision in that they add safeguards to constitute notification and reporting under section 184.4 of the Criminal Code. The legislation would require giving a person 90 days' notice, subject to an extension granted by a judge after his or her private communications had been intercepted in situations of imminent harm.

These amendments would limit the authority of the police to use this provision. All peace officers can avail themselves of it at present and would restrict its use to offences listed in section 183 of the Criminal Code. The proposed amendments appear to be a direct response to the court's instruction.

If we are to look at those in a little more detail, 184.4 outlines:

A peace officer may intercept, by means of any electro-magnetic, acoustic, mechanical or other device, a private communication where

(a) the peace officer believes on reasonable grounds—

Reasonable grounds is very important.

—that the urgency of the situation is such that an authorization could not, with reasonable diligence, be obtained under any other provision of this Part;

(b) the peace officer believes on reasonable grounds that such an interception is immediately necessary to prevent an unlawful act that would cause serious harm to any person or to property; and

(c) either the originator of the private communication or the person intended by the originator to receive it is the person who would perform the act that is likely to cause the harm or is the victim, or intended victim, of the harm.

If we look at R. v. Tse, this appeal concerned the constitutionality of the emergency wiretap provision in section 184.4 of the Criminal Code.

In this case, the police used section 184.4 to carry out unauthorized, warrantless interceptions of private communications when the daughter of an alleged kidnapping victim began receiving calls from her father, stating that he was being held for ransom. Approximately 24 hours later, the police obtained a judicial authorization for continued interceptions pursuant to Standing Order 186 of the code.

The trial judge found that section 184.4 contravened the right to be free from unreasonable search or seizure under section 8 of the charter and that it was not a reasonable limit under section 1. The Crown appealed the declaration of unconstitutionality directly to this court. The Supreme Court dismissed the appeal.

Section 184.4 permits a peace officer to intercept certain private communications without prior judicial authorization if the officer believes, on reasonable grounds, that the interception is immediately necessary to prevent an unlawful act that would cause serious harm, provided judicial authorization could not be obtained with reasonable diligence.

In principle, Parliament may craft such a narrow emergency wiretap authority for exigent circumstances. The more difficult question is whether the particular power enacted in section 184.4 strikes a reasonable balance between an individual's right to be free from unreasonable searches or seizures and society's interest in preventing serious harm. To the extent that the power to intercept private communications without judicial authorization would be available only in circumstances to prevent serious harm, this section strikes an appropriate balance. However, section 184.4 violates section 8 of the charter, as it does not provide a mechanism for oversight and, more particularly, notice to persons whose private communications have been intercepted. This breach cannot be saved under section 1 of the charter.

When we look at all of those details, what do we truly want as New Democrats? What should we all want as parliamentarians? To start off, we are in favour of the legislation as presented being sent to committee for review. It is essential that we play our role as members of Parliament. It is essential for us to investigate measures that include oversight and accountability, which is also the court's opinion, and we expect nothing less. We will work for the public to uphold the rule of law, the Constitution and the Canadian Charter of Rights and Freedoms.

Members do not have to take my or the NDP's word for it, as there are many others out there who validate it. Michael Geist in OpenMedia said:

—Bill C-30 may be dead, but lawful access surely is not. On the same day the government put the bill out its misery, it introduced Bill C-55 on warrantless wiretapping. Although the bill is ostensibly a response to last year's R v. Tse decision from the Supreme Court of Canada, much of the bill is lifted directly from Bill C-30.

As I mentioned earlier, Bill C-30, an act to enact the investigating and preventing criminal electronic communications act and to amend the Criminal Code and other acts, which was also referred to as the protecting children from Internet predators act, did many things. There was a lot to be said from coast to coast to coast about many of things presented in that bill.

At the time, we supported making changes to ensure that the police would have powers to address the emerging threats posed by cybercrime, and we supported efforts to bring policing into the digital age. However, a number of that legislation's provisions unnecessarily eroded the privacy rights of ordinary citizens. We believed that we could aggressively go after criminals at the time of Bill C-30 and punish them to the full extent of the law without making false comparisons to child pornographers and treating law-abiding Canadians like criminals.

To reiterate, Mr. Geist has mentioned some of his concerns with Bill C-30 that are emerging again with Bill C-55. If people like Mr. Geist are thinking this, then of course we need to get Bill C-55 to committee to review all of the things that were previously in Bill C-30 and that may now be in Bill C-55 and that Canadians from coast to coast to coast may be upset with.

To mention others' views on Bill C-55, Chris Parsons from the blog “Technology, Thoughts, and Trinkets” states:

—the Canadian government struggled to explain the legislation—and the need for all of its elements—to the public. In the face of public dispute over the legislation’s need the government sent the legislation to Committee before Second Reading. The Canadian Association of Chiefs of Police strongly supported the government, as did individual police chiefs from around the country. This extended to calls for examples of where the legislation would have helped to resolve criminal cases; to date, though, few substantive examples were found.

That sums it up right there.

Political pressure recently, in our opinion, led to the failure of Bill C-30. However, some of its measures have been reiterated in other federal legislative proposals. Civil libertarians have succeeded in their fight against lawful access, but it is important to note that some aspects of Bill C-30 were transferred outside the parliamentary process a few months ago, but the failure of Bill C-30 does not mean the non-parliamentary processes will be stopped as well.

Parliament is generally informed of the use of wiretapping so it can be aware of the frequency and the circumstances of its use. However, when 184.4 is invoked, there is no disclosure obligation. There is no need to let anyone know. The court stated that a requirement to keep records of the use of wiretapping, under 184.4, would also increase accountability, but would not be necessary if there was an obligation to provide prior notice.

In summary, we will support the bill at this time. We are in favour of the legislation getting to committee for review. However, it makes us want to ask some questions. It makes us wonder what precautions the government has taken to ensure the legislation is truly in compliance with the Supreme Court's ruling. We truly need more than 19 days to understand if this will be in compliance. Yes, we want to act quickly on this, but not at the eleventh hour.

Can the government explain how the Department of Justice's assessment of the legislation's compliance with the charter and the Constitution was carried out? Why has the government waited so long to address a relatively simple matter relating to freedom and public safety? We are pleased that the government listened to the public on Bill C-30 , and Bill C-55 seems to be a step in the right direction. However, why did the government dig its heels in for so long rather than admit it was wrong and work with the opposition to resolve the problem? As members of Parliament, we are here to work together to resolve problems. What measures from Bill C-30 has the government brought back and are now outside the scope of the House of Commons?

Those are some of the things we truly need to have addressed, now in this debate, the debate that we will carry on and the debate that we will have when the bill gets to the committee stage. Many of those questions will need to be answered. We hope we can get the answers from the government for those questions when we get to committee. Unfortunately, what we have seen time and time again is that is not the case. I can talk about committees that I have sat on where we have brought forward legitimate amendments, ideas and propositions and every one of them has been denied. The Conservatives do not accept amendments, they will not listen to reason and for some reason, they just do not get that we are all trying to do this together. We are in this together to try to make laws and legislation better from coast to coast to coast for Canadians.

At the end of the day, I hope this time—and we are always hoping that a glass is half full—that when it gets to committee, if we have amendments, if we recognize that something was missed in trying to deal in such a quick fashion on the Supreme Court's ruling, that we can work together to resolve it and get this done quickly.

Disposition of Abolition of Early Parole Act

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Mr. Speaker, I would like to participate in the debate on the motion to prevent debate on the content and substance of Bill C-59. I find it rather odd that the Bloc has supported the government's attempt to stifle any attempt at debate on the substance of this bill.

No one in the House can accuse the Liberals of not supporting the idea of eliminating parole eligibility after one-sixth of the sentence is served for economic crimes. Two years ago, my colleague from Bourassa, our candidate in Saint-Bruno—Saint-Hubert and our member for Lac-Saint-Louis participated in a press conference with several of Earl Jones' victims to call on the government to quickly bring forward a bill to eliminate parole eligibility after one-sixth of the sentence is served, especially for criminals who commit major fraud and have multiple victims.

No one can accuse the Liberals of not supporting that idea. I think it is really dishonest of the government to make that kind of accusation when it knows very well what the Liberals' position is. This was pointed out by my colleague from Notre-Dame-de-Grâce—Lachine.

Now I would like to talk about the debate and the fact that the Conservatives and the Bloc members want to limit the scope of the debate. Just seven months ago the members of the Bloc rose in the House to criticize the government for doing the exact same thing it is doing now with Bill C-59. The government moved a motion to block debate.

Last June, the member for Saint-Maurice—Champlain rose in the House to criticize the government for moving a motion to block debate on the Canada-Colombia Free Trade Agreement Implementation Act. The Bloc member for Hochelaga also rose to oppose a government motion to block debate on Bill C-9, the Jobs and Economic Growth Act, by imposing time allocation.

We are opposed to this time allocation motion because we believe that Bill C-59 addresses a very important issue. Furthermore, for two years now, the Liberals have been calling on the government to eliminate parole eligibility after one-sixth of the sentence is served for economic crimes like those committed by Earl Jones, Vincent Lacroix and others.

I think it is a shame that some would have people believe that the Liberals do not want to protect victims. That is simply not true. When the government introduced Bill C-21 on economic crimes and it was referred to committee, the Liberal justice critic proposed an amendment to the bill to eliminate eligibility for parole after one-sixth of the sentence in cases of economic crime. The Conservatives and the Bloc defeated the motion.

Every MP is entitled to his or her opinion on bills that we are called on to debate in the House. It is a fundamental aspect of the democratic process. The operative word here is “debate”, and the collusion between the Conservatives and the Bloc is preventing us from acting as responsible parliamentarians.

We would like to hear from experts. We want to know how this bill will truly address a gap in the law, how it will do justice to victims, how this bill will improve the chances of rehabilitation for those who once lost control of their lives.

Perhaps we should indeed eliminate parole after one-sixth of a sentence for offenders who have committed serious economic crimes and left a number of victims.

However, for non-violent criminal acts that are not fraud, we believe that evidence has shown that parole after one-sixth of a sentence has been very effective and that the rate of recidivism is much lower.

We will never know what the experts might have said since this closure motion eliminates any chance to consult experts. With this government so eager to control everything, it has become somewhat of a tradition to just pass a bill without any idea of the facts that might call it into question.

The Liberals are against this closure motion. It is not justified, and we regret that the Bloc has decided to join the Conservatives to limit the debate on this bill. As far as the substance of the bill is concerned, in the past and still today, no one could accuse the Liberals of not showing their support for eliminating parole after one-sixth of the sentence for economic crimes.

In order to illustrate the government's intellectual dishonesty, I would like to present a chronology of the Conservatives' failures in their so-called fight against crime.

I am referring here to the various bills that have died on the order paper for all sorts of reasons or that have remained in the House or at committee indefinitely.

Here they are. Bill C-15, An Act to amend the Controlled Drugs and Substances Act and to make related and consequential amendments to other Acts, died on the order paper when Parliament was prorogued; Bill C-19, An Act to amend the Criminal Code (investigative hearing and recognizance with conditions), died on the order paper before the House had a chance to vote on it; Bill C-26, An Act to amend the Criminal Code (auto theft and trafficking in property obtained by crime), also died on the order paper. It is certainly not the opposition that forced the government to prorogue Parliament.

Bill C-31, An Act to amend the Criminal Code, the Corruption of Foreign Public Officials Act and the Identification of Criminals Act and to make a consequential amendment to another Act, died on the order paper, and Bill C-36, An Act to amend the Criminal Code, on the faint hope clause, died on the order paper before being brought back this session. One committee meeting was held on Bill C-46, An Act to amend the Criminal Code, the Competition Act and the Mutual Legal Assistance in Criminal Matters Act, before it died on the order paper. Bill C-52, An Act to amend the Criminal Code (sentencing for fraud), which is related to Bill C-59, the bill we are dealing with today, died on the order paper when Parliament was prorogued. Bill C-58, An Act respecting the mandatory reporting of Internet child pornography by persons who provide an Internet service, died on the order paper. The prorogation of Parliament killed many bills.

Among the bills introduced by the Minister of Public Safety was Bill C-34, the Protecting Victims From Sex Offenders Act, which also died on the order paper. The bill to deter terrorism and to amend the State Immunity Act died on the order paper. Bill C-43, An Act to amend the Corrections and Conditional Release Act and the Criminal Code, died on the order paper. Bill C-47, An Act regulating telecommunications facilities to support investigations, died on the order paper. Bill C-53, An Act to amend the Corrections and Conditional Release Act (accelerated parole review) and to make consequential amendments to other Acts, died on the order paper. Bill C-60, An Act to implement the Framework Agreement on Integrated Cross-Border Maritime Law Enforcement Operations between the Government of Canada and the Government of the United States of America, died on the order paper.

To date, no meetings have been held to discuss Bill C-16, An Act to amend the Criminal Code. Bill C-17, An Act to amend the Criminal Code (investigative hearing and recognizance with conditions), was given first reading 51 days after Parliament was prorogued, and the committee still has not met to discuss that bill.

Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), was fast-tracked at committee in just one meeting and still has not reached second reading. Bill C-22, An Act respecting the mandatory reporting of Internet child pornography by persons who provide an Internet service, was given first reading 64 days after Parliament was prorogued, and the government delayed it for 26 days at report stage because of the debate on the short title.

Bill C-48, An Act to amend the Criminal Code and to make consequential amendments to the National Defence Act, was given first reading 89 days after Parliament was prorogued, and we are still waiting for the next step. Bill C-50, An Act to amend the Criminal Code (interception of private communications and related warrants and orders), was given first reading after 94 days, and we are still waiting. First reading of An Act to amend the Criminal Code, the Competition Act and the Mutual Legal Assistance in Criminal Matters Act took place 243 days after Parliament was prorogued. Bill C-53, An Act to amend the Criminal Code (mega-trials), was given first reading and nothing more.

Bill C-54, An Act to amend the Criminal Code (sexual offences against children) only made it to first reading. Bill C-5, An Act to amend the International Transfer of Offenders Act was introduced at first reading by the Minister of Public Safety 15 days after prorogation. Two committee meetings were held and nothing has happened since. As for Bill C-23B, An Act to amend the Criminal Records Act and to make consequential amendments to other Acts, we are still waiting. After a few meetings on the subject, the minister was supposed to come back with amendments that he felt were necessary in order to make the bill more comprehensive and definitely more respectful. Bill C-39, An Act to amend the Corrections and Conditional Release Act and to make consequential amendments to other Acts was introduced for first reading 104 days after prorogation and we still have not met in committee to discuss it. Bill C-49, An Act to amend the Immigration and Refugee Protection Act, the Balanced Refugee Reform Act and the Marine Transportation Security Act was introduced for first reading 232 days after prorogation and there it remains. Bill C-52, An Act regulating telecommunications facilities to support investigations was also introduced for first reading 243 days after prorogation and we are waiting for the next step. The Senate introduced Bill S-7, An Act to deter terrorism and to amend the State Immunity Act for first reading 49 days after prorogation and we are still waiting for the next step. Bill S-10, An Act to amend the Controlled Drugs and Substances Act and to make related and consequential amendments to other Acts was introduced for first reading in the Senate 60 days after prorogation. Bill S-13, An Act to implement the Framework Agreement on Integrated Cross-Border Maritime Law Enforcement Operations between the Government of Canada and the Government of the United States of America was introduced for first reading 237 days after prorogation.

I am pointing this out to prove that it is not the opposition parties that are slowing the process down. For all sorts of unknown reasons, the government introduces these bill and then goes no further with them.

To conclude, I would like to question the justification for Bill C-59 and the fact that the Conservatives and the Bloc felt this was urgent enough to warrant this closure motion, which is an affront to parliamentary dialogue.

Standing up for Victims of White Collar Crime Act

[Alan Tonks, Liberal, York South—Weston, ON]

Madam Speaker, I am pleased to speak to Bill C-21. While it has been a bit of time since we talked about the bill, perhaps I will give an overview.

Bill C-21 has been put together to address the issues of white-collar crime. It behooves us to reflect a little on how white-collar crime has changed since generations of our constituents and, in fact, generations in Parliament.

The nature of white-collar crimes then were equated with the proverbial jokes associated with the door-to-door vacuum salesmen or whatever. I say that in a manner of juxtaposing, not in levity. The nature of Ponzi schemes are quite different. They involve the manipulation of shares and pyramid type sales. They victimize citizens of all ages, in particular those citizens who are not familiar with up-to-date technologies.

I am reminded of this. In my constituency, even as late as yesterday, calls were coming into my office with respect to seniors being met at the door by people who wanted to look at their water heaters. Then they tried to get them to enter into agreements to replace the heaters. Some people signed on the dotted line only to find the scheme dramatically raised their charges. There are legal implications involved and very serious things happen.

We need to look at our constituencies and ensure we have a legislated regime in place that is understandable. They need to know the kinds of technology and the victimization used. Only a few months ago the government brought forward legislation aimed at looking at the kind of technology used and the type and extent of victimization, where seniors, in particular, were robbed of the ownership to their homes. They had been tracked for months through the interception of their mail. Their accounts were skewed and the banks were unfortunately transferring ownership of their properties. They were duped and victimized in a manner that we could never really understand perhaps 20 or 30 years ago. However, with the kind of technology and the criminal insights used, victims of all age categories are subjected to these kinds of things.

With that background, I am pleased to respond to Bill C-21. I will give an overview of the bill and then I will look at perhaps some of the shortcomings where the bill could have been firmed up even a little more. Perhaps in the future it will be.

The bill includes a mandatory minimum sentence of imprisonment for two years for fraud valued at more than $1 million. It provides additional aggravating factors for sentencing. It requires consideration of restitution for victims, allows sentencing courts to consider community impact statements, to issue prohibition orders, preventing convicted persons from transacting property and money of others.

We are in favour of the bill, but it does not go far enough and I will try to elaborate a little on that.

We believe the amendments put forward by our party, which were not accepted by the combined opposition, the government and the other two parties, would have strengthened the legislation. As illustrations of that, the Liberals proposed that mandatory minimum sentences of two years should apply to practices such as market manipulation of shares and Ponzi schemes.

The bill does not do enough to eliminate accelerated parole review for white-collar criminals. Canadians investors, especially seniors, do not deserve to be victimized by white-collar criminals. They deserve better than what the government has presented through this bill.

The principles behind the stricter sentencing rules are important, but they are not enough to prevent frauds from happening. Sentencing is important, but prevention, as has been said many times with respect to the criminal justice system, is equally as important in white-collar crime. We would like the government to consider why it has not used this opportunity, as it has in the past, to do more with respect to prevention.

Finally, although we are glad to see the legislation, we also call on the government to act on white-collar crime, as it has been overdue for years.

I will go through a few of the shortcomings of the bill.

While we support the bill on stricter sentencing guidelines, we are concerned it is too narrow in scope to truly be effective in the full spectrum of fraud with which it attempts to deal. The bill does not limit early parole for those crimes and it does not address the lack of police resources currently allocated for white-collar fraud. As I said before, we put forward amendments that were aimed at strengthening the bill by extending the two-year minimum sentence provisions to practices such as market manipulation of shares and Ponzi schemes. The amendments were rejected by the other parties.

The legislation was introduced in response to high profile white-collar crimes, including Norbourg Financial Group and the Earl Jones issue in Quebec. In the wake of the Madoff Ponzi scheme's revelations in the United States, many Canadian investors have grown increasingly concerned about this type of white-collar fraud.

Other than the title, the bill is the same as Bill C-52, which was introduced during the previous session, but died at prorogation.

What are the major components of the bill?

The bill introduces mandatory minimum sentences of two years for fraud involving over $1 million, regardless of the number of victims. It specifies aggravating factors to be considered at sentencing, including the psychological and financial impacts of victims, the age and health of victims, as well as the magnitude and duration of the fraud. It requires the court to indicate what mitigating and aggravating factors were considered relating to the sentence.

It allows the court to prohibit an offender from assuming any other position, volunteer or paid, that involves handling other people's money. It goes without saying that is highly desirable. It requires the judge to consider the whole manner of restitution, which is the repayment to victims where possible, and it requires judges to consider community impact statements.

Generally speaking, it is interesting to juxtapose a cross-section of stakeholder reaction with respect to this bill. It has been mixed. Victim groups have been lobbying the government to strengthen white collar criminal provisions. Some have expressed the view that the bill falls short because it fails to address the accelerated parole review rule.

The Canadian Bar Association has expressed its opposition to the bill, citing that it would increase pressures on an already taxed criminal justice system and does not improve on what is already available in the Criminal Code. It also opposes the mandatory minimum sentences in favour of judicial discretion at sentencing.

From a policing perspective, however, the RCMP has expressed its support for the bill, indicating a mandatory sentence for such crimes has the potential to be used as a deterrent. In spite of what I said earlier, the RCMP takes that position.

In terms of amendments, as I mentioned rather obliquely before, the Liberal justice critic introduced an amendment in committee that would add market manipulation of stock prices, shares, merchandise, or anything that is offered for sale to the public to the definition of what could be punishable by a two-year minimum sentence. The amendment failed in committee as the government, Bloc and NDP voted against it.

The Liberal justice critic also recommended that an amendment be introduced to modify the Corrections and Conditional Release Act in order to eliminate the one-sixth accelerated parole review rule for white collar criminals. This amendment was ruled out of order by the committee chair and was subsequently upheld on a challenge with the support of the Bloc.

A technical amendment, however, was adopted with support by all the parties. The amendment would require the court to issue an explanation of a restitution order only when a victim seeks restitution and the court decides not to make such an order. The amendment addresses concerns by the Canadian Bar Association to relieve some pressures on an already taxed system.

In my overview of the legislation, I indicated the type of victimization that occurs. I also talked about enforcement and what the government has in place in response to the issue that was raised. In terms of integrated market enforcement teams, these IMETs under the program have been put in place, funded through the RCMP. They are operational in four of Canada's major financial centres and their mandate is to investigate and lay charges for serious Criminal Code offences involving capital markets.

While the legislation does not, in the Liberal Party's view, go far enough with respect to that kind of victimization that takes place under the Criminal Code with respect to shares and Ponzi schemes, there actually is an enforcement regime in place called the IMET program. According to the 2007-08 IMET annual report, the program's total budget increased from $13 million in fiscal 2005 to $18 million in fiscal 2008 and is approximately $30 million today.

The investigations indicate how important it is that we deal with this particular issue.

In 2008-09, 17 individuals were charged with almost 1,000 counts and 5 individuals were convicted. Their sentences ranged from 39 months to 13 years.

According to the RCMP's 2009-10 Report on Plans and Priorities, it is anticipated that annual funding of $30 million will be allocated in the fiscal year to support the investigation and prosecution of fraud offences.

I posit that the investigative processes and the teams are in place.

According to the statistics, a compelling case could be made for focusing additional attention, which the bill does not, on this kind of crime involving shares and Ponzi schemes and so on.

An adult criminal court survey, which collects information on appearances, charges laid and so on with respect to this kind of fraud, found that a prison sentence was imposed in almost 4,000 cases in 2008. In the same year a conditional sentence was imposed in nearly 1,000 cases. Probation was given in 6,000 cases. Fines were levied in 1,200 cases. Restitution was granted in nearly 2,000 cases. Other sentences were imposed.

These statistics do not provide details on the monetary value of the fraud or the type of fraud, which can include securities-related fraud, such as Ponzi schemes, insider trading, accounting frauds that overstate the value of securities, as well as mass marketing fraud, mortgage and real estate fraud and many other deceptive practices.

I only include these statistics to indicate that as the bill was going through committee, the statistics were available and the issue with respect to share manipulation was not addressed and is not addressed in the bill. The bill could have been improved had the opposition's amendments been accepted.

Despite the lack of statistics, in the bill, sentences are imposed on fraud over $1 million. Before and after Parliament's introduction of conditional sentences, a case of large scale fraud by persons in a position of trust have typically resulted in substantial jail sentences. The range has been estimated at between 4 to 15 years for large scale fraud although a sentence of less than two years and conditional sentences have been imposed where there have been important mitigating factors.

Clause 3 of the bill adds four aggravating circumstances which we believe improve the situation that I have referred to. Those circumstances are: the magnitude, complexity, duration and degree of the fraud; the offence had a significant impact on the victims; the offender did not comply with licensing requirements or professional standards; and, the offender concealed or destroyed records related to the fraud or the disbursement of the proceeds of the fraud. That will substantially improve the legislation that presently exists.

For that reason we are in favour of the legislation. We do however rest our case on the fact that an expansion of the bill could have dealt better with share and stock manipulation and the kind of Ponzi schemes that have victimized thousands of people.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, Bill C-21, An Act to amend the Criminal Code (sentencing for fraud) is a bill we have seen before.

In fact it was with us in the last session of Parliament as Bill C-52. We went through some process on it, but as members are probably aware the House was prorogued. When prorogation occurs, all the bills die and have to start again unless the government chooses to reinstate them at the same position they were when prorogation took place.

As a consequence to that prorogation we have this bill. It is an interesting bill. It has an interesting short title, Standing up for Victims of White Collar Crime Act. If people heard that, they would have an image of what they think this bill might do, but in fact this particular bill does not deal with all white collar crimes. It deals with fraud over $1 million, and whether or not there is going to be a mandatory minimum sentence. It is somewhat misnamed. I will comment more on the short title later.

When the bill came back in the current session, it took another 60 days before the government brought it forward for second reading. Second reading occurred on October 4 and 5. I had a look at the debate. It was the same bill and pretty well the same speeches as were given in the last session.

It then went to committee and it was another 60 days before the committee got around to it. That is an indication of another problem, and it is that the justice committee is a very busy committee. There are an awful lot of justice bills, which arguably could have been combined with other bills and put in an omnibus bill. There are going to be the same witnesses if we are dealing with the Criminal Code or sentencing provisions. Chances are it is going to be the same interveners, the same witnesses and the same government officials.

The government has this thought that possibly if it takes every little change that it wants to make to the Criminal Code and gives it its very own bill, and the number of bills gets up high, people will say “My goodness, look at all the wonderful criminal justice bills we have here. Are we not tough on crime?”

I think someone actually did a little analysis and found out that 15 of the bills could have been handled in 3 bills alone. It gives the idea that there might be something to look at here, and maybe not to be too quick to judge a bill as to its scope or the ambit that it covers because it is a mirage.

The committee finished on November 30, and now a couple of weeks later we have third reading. Now we are going through this. The first thing that happens is that the government gets up and says that all the parties are supporting it, so why do we not just forget debating; we will just vote and pass the bill. It says we are delaying it and we should not be delaying the bill.

If we look back at the prorogation, the recalibration of the government, it was kind of an interesting excuse for doing things. If the truth be known, if the government wanted to say the truth, it was on its heels and in great difficulty, and the only way it could get out of it was to shut this place down, let things cool down and have some thinking time so we could come back and have a better start. I do not want to be too cynical about it, but the evidence sure does speak for itself.

The bill itself, as I indicated, has to do with sentencing for fraud. This is what this bill is about. It has a few elements, and they are included in the summary. It says that:

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;

This is only relevant to fraud where the aggregate value exceeds $1 million. Obviously that is not all white collar crime. There are certainly some big name cases.

Part (b) of the summary says that the bill would:

provide additional aggravating factors for sentencing;

Although there is a proposed mandatory minimum, the sentencing for fraud at this level is usually significantly more than two years. But the number of years, which I think could go up to 14 years, is actually the longest term of sentencing currently, second only to life imprisonment. This already has penalties as high as one can get. That is a ceiling. We are talking about a floor in this bill.

The next part says it would:

(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;

That makes some sense and there are some provisions here.

It also would:

(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.

In a number of cases, there are some very interesting people who are involved and they hurt a lot of people. The victims were in fact their friends and family.

When this bill went to committee, and this is a bill that the members of the justice committee are well familiar with, they reviewed it and the bill had to be reprinted as a consequence of their work. But the only change they made was to add the words “a victim seeks restitution and”. Those are the words that are added to this bill that was originally tabled at second reading.

To put that in context, this has to do with restitution. The full section, subsection 380.3(5), will read in total now, in this amended bill from the committee:

If a victim seeks restitution and the court decides not to make a restitution order, it shall give reasons for its decision and shall cause those reasons to be stated in the record.

Earlier today I asked a question about this and it actually revealed something really interesting to me. I am not a member of the committee, but I followed the debate very closely.

This basically says that if a victim wants restitution and the court decides not to do a restitution order, the court has to give reasons. I asked, why should the court not give reasons in all cases of fraud as to why it is not ordering a restitution order?

It would make some sense to me that people have to know why the courts do what they do and why they have made certain decisions. It may mean that it is very clear that there are no assets, but the fact that a victim has decided for whatever reason that he or she is not going to seek it does not mean that he or she is not entitled to it and should not get it. In this particular case, it is simply a matter that if the court is going to decide that it is not going to make a restitution order, I thought in all cases it should give reasons for its decision.

I raise this because the chairman of the justice committee spoke earlier, and has asked a number of questions, basically encouraging people to stop talking and just vote and pass this bill because we are delaying it, after the Conservatives wasted over a year with all their shenanigans and here we are finally getting a chance to talk about this bill.

It was one of those moments when somebody says that there is a reason it is there. I had to find out and I went and asked somebody.

The parliamentary secretary did not indicate, but as it turns out, the reason this is here is that one of the intervenors was the Canadian Bar Association, which said we needed to put this in. Effectively what this does is relieve the courts from a requirement to do a restitution order and to write up the reasons for its decision if the victim seeks restitution.

Now we are talking about money. We are talking about the Canadian Bar Association saying this will bog down the system if all of a sudden the courts have to explain their decisions in cases where they said it would not affect the victim so they would just move forward.

It does raise the point, and I know a number of members have raised it in debate already, that we have cases where the Government of Canada, the federal government, passes legislation and then it gets promulgated, it becomes part of the law, part of the Criminal Code or other legislation, and then it is up to other jurisdictions to enforce the laws. We have cases now where even the smallest thing about saving some time for the courts, so they do not have to write up reasons for decisions on restitution orders, will save them money and it is worth doing and it is worth changing the bill to make sure that they can save a little bit of money. That pales in comparison to what is happening out there in the real world.

We have heard a lot about Ponzi schemes, basically pyramid schemes of a sort, and about Bernie Madoff. It is in the news every day and I do not have to say anything more there. Earl Jones is another one, where 150 clients were defrauded of some $50 million; he was sentenced in February of this year to 11 years.

One person who has not been mentioned is a Canadian case, Tzvi Erez, who is a very renowned pianist. He got involved in a so-called Ponzi scheme and he defrauded 76 investors out of $27 million. This is not insignificant and this is precisely what the bill is supposed to deal with, right? Wrong. The charges were dropped in this Ponzi scheme of $27 million, the reason being that the police made the argument that either we want them to deal with the rape case or the homicide case or we want them to deal with the Ponzi case. We made the decision that it was more important for us to deal with a rape or a homicide. It would take far too long. It was a very complicated scheme. It would take years to do and would be very costly. It would drain the courts and so many cases would not be dealt with. Does that not tell us something?

The Canadian Bar Association says it does not want the courts to have to give reasons for a decision, because it will save them a little bit of money. The police in Ontario and Attorney General Chris Bentley are basically saying they do not have the resources to deal with someone who defrauds Canadians of $27 million.

How can we say that we are being tough on crime and those criminals when, within the system, in a case such as that, the magnitude of that, the charges will not be pursued?

I am not sure that the people who were defrauded are very happy about that. I am not sure of their personal economic circumstances, but obviously there are only 76 of them representing $27 million, so they are significant investors. But we do not discriminate against people in their financial situation. People who are in good shape versus those who are living from paycheque to paycheque are covered by the law equally and things should be done, but the fact is that this was a matter of the courts in the provinces not having the resources to be able to enforce the law. How is that possible? How is it possible that we get to those situations?

We have now in the Criminal Code that fraud over $5,000 is actually subject to a maximum term of 14 years. But in this case, Bill C-21, the only difference between that and dealing with it under existing law is that Bill C-21 provides for a mandatory minimum of two years. If that is the only difference and we have cases that are being thrown out because the provincial courts cannot enforce the law, how can government members say this is their bill, Bill C-21, and they are very proud of it?

The short title, which happens to be much longer than the actual title, is the “Standing up for Victims of White Collar Crime Act”. It is not. In fact, it is a sentencing bill and it amends the sentencing.

It says that if it is over $1 million in terms of aggregate value of which people were defrauded, a mandatory minimum may be applicable. But time after time, members of the justice committee got up and said that the penalties being given out in the courts now when those cases are heard are well over two years and that this mandatory minimum is really not going to achieve very much. So how can they boast that they are taking care of victims of white collar crime when this bill, with all the work and all the time and all the complaints about delay, in fact does very little and is going to affect very few cases? Even if there is not a mandatory minimum, using the court's discretion they can get up to 14 years anyway.

People should be a little disappointed that the government doth protest too much about delay of this bill, because any delay that has occurred in this bill has been the government's doing by various things such as prorogation and by stacking up bills, and I want to talk a bit about that.

As I said, someone did an analysis and found out that 15 justice bills could have been done in three omnibus bills, because bills that relate to the same sections of the Criminal Code or other justice matters can be combined, when they have the same or similar elements and we are going to be dealing with the same witnesses, the same intervenors and public interventions as well.

If that is the case and if the government really wants to show that it has the public interest at heart and that people who commit wrongdoings, who commit serious fraud, are going to be dealt with on a timely basis, it would say that will be shown when legislation actually passes. But we have not had very many of these bills even pass, because of all the delays and the lumpiness of the parliamentary calendar. We just seem to have these breaks, and now there are rumours of a spring election and maybe most of these bills are going to die. There will be another Parliament and these will be back again with the same slogan: “We are getting tough on crime”.

They cannot be tough on crime if they cannot pass legislation that is going to be effective. They cannot be tough on crime if the provinces that are responsible for enforcing it do not have the resources to apply the law and they allow people to get away because they cannot lay those charges.

If one is not part of the solution, one must be part of the problem, and what I heard today from a number of members was that we need a strategy.

I thought one of them was fairly comprehensive. I am not going to repeat it, but one of the critical elements of a strategy is to have these kinds of cases dealt with by a joint task force such as the RCMP and other agencies that have experience and expertise in dealing with serious fraud and complicated schemes. To go through the regular process has been a problem and that is where the money goes, but if we have an efficient system of processing and we have this expertise built up, these laws can be enforced. But we need to work with the provinces and other jurisdictions that are involved, because there is no point in passing laws that will never be enforced or in fact never passed because a government is really only interested in recycling them for the same purpose of having a political slogan about being tough on crime.

It is not honest to tell Canadians that, and if Canadians would look at the transcript of the debate today, they would see significant examples and testimonials from members of Parliament that in fact the government has been using these bills for political purposes rather than for the best interest of Canadians.

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

Mr. Speaker, I think my friend, as the neutral arbiter as chair of the committee, does not get enough occasions to be raucous as he just was and I will let it slip like water off my back the fact that I was disingenuous or that I am misleading Canadians.

We support the bill. I said that at the beginning. It is too little and too late. Sorry for the criticism, but the member should get used to it.

His community of Abbotsford has not been at the bottom of crime statistics in Canada. Whether it was auto theft or murder, it has been at the top. So I would think he has a very deep interest in doing something more quickly than five years to get to a white collar crime bill that does very little.

I said that very clearly. It does very little about getting money back to victims of white collar crime, about resourcing police officials to detect white collar crime; and how about dealing with federal prosecutors who are under contract and cannot get enough money to staff the courts? How about that to fight white collar crime?

The parts that are good in the bill talk about section 380.1, which allow more sentencing principles that already exist but give a very clear direction to the judges that they should take into account the amount and degree of trust, fiduciary-wise, that an investor, or an embezzler or a fraudster has, when sentencing

As I said, it is mild and it is good, and we can support it. We are voting for it wholeheartedly. We would have voted for Bill C-52 had the government not prorogued. I just wish the member would not say that I was disingenuous. I have always been too blunt for my own good.

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

Mr. Speaker, it is my pleasure to rise in the House to speak to Bill C-21. Following on the remarkable comments of my friend and colleague from the justice committee and the Bloc member's comments, it is a good theme to continue.

Much of the Conservatives' anti-crime agenda purports to help victims. It purports to take victims' rights over those of offenders, over those of politicians, over those of many other groups in the community. However, much of what they actually do in terms of the legislation has little positive impact on the victims at all.

I think in the area of white collar crime more than anything where what was taken away, in terms of assets or wealth, is sought to be restored, this is the most apt example of how not seizing on the goal of anti-white collar crime, which is the restoration, restitution, recovery of wealth lost, the government is doing a disservice.

In other forms of crimes, I suppose one could argue very cogently that that which was taken away, whether it was life, liberty, or sense of security, cannot be easily returned. They are not things that are in the marketplace. It is very difficult in the case of a violent crime to return the victim's sense of security. It is not a market commodity.

In this case, however, we are talking about the victims of white collar crime whose wealth, nest eggs and futures have been stolen through deceitful and fraudulent means by someone else. It would seem to me that in addition to increasing penalties, which is really all this bill would do, the government, which has now been in power for five years, even administratively without having to come to this place, which it really does not like to do very often anyway as its record on prorogation shows, might have administratively notched up its game on the recovery of assets.

Instead, as I will show in my speech, it has been left to the devices of the provinces with respect to their powers under property and civil rights.

I want to apologize in advance if my speech seems a little familiar, but there is a recurring theme on these bills in justice. I sit on the committee; I have for five years. All the time we see bills, and this case is no different, that seem to the other side to be strong electorally and politically, but not so strong on policy.

We have seen bills on auto theft, on the reporting of child Internet pornography, and now this one on white collar crime, all of which have pithy and exciting titles which, on a quick reading of the short title, would lead people to believe that the problem is solved, that we have a cure and there will be no more white collar crime, no more child pornography, no more auto theft.

That is not at all the case. The government's steps are baby steps toward those evils in our community and, as with all Conservative government agendas, the sound bite of the short title is more important than the pith and substance of the legislative tool.

The government's publicity machine will go to work and tell everyone that Bill C-21 emphasizes standing up for the victims of white collar crime and that Canadians will feel a lot safer about their nest eggs.

Electorally it is a gamble. There is the saying that one can fool all of the people some of the time, or one can fool some of the people all the time, but the message to the government today on these legislative bills toward crime with their very sexy short titles is that the government cannot fool all of the people all of the time.

It has been five years. We have to start thinking in the Parliament of Canada that the Conservatives have driven the government's legislative agenda for five years. I would love to see a survey as to whether people feel safer in all areas, but let us concentrate on white collar crime. I would love to know whether people feel they are less likely to be made the victims of losing their nest eggs and fortunes than five years ago when many of the tools that the Conservatives possess as government could have been used.

Let us take a quick look at the history. It has been a very prolific period these last five years for embezzlers and fraudsters. Today, Madoff and Earl Jones are household names, but they were not 5 or 10 years ago. There has been a real run on fraud, Ponzi schemes, investment schemes, direct mailing and direct investment schemes. These have taken a lot of wealth out of communities in Canada, largely from people who have saved all their lives for retirement, which in some cases now they cannot afford.

If we look at the title of this bill, it is obvious the bill falls short of the expectations. It does not make Canadians safer. The Earl Joneses and Vincent Lacroixs of this world are still around. Last month, in fact, Carole Morinville was arrested in Montreal in another Ponzi scheme investigation. These investigations are not carried out solely by the Conservative Party or the government; they are all conducted by police forces.

What do we hear from police forces? They are under-resourced. What do we hear from the government? The government says that it has added 1,000 more RCMP members. It has not. It is a shell game. The government does not deliver on what it promises with respect to manning police forces across the country. Ask any police force that question.

Ask the people of Moncton—Riverview—Dieppe whether they are happy that the government has not moved on giving the 10% subsidy it gives to every other RCMP force in Canada, except the one in Moncton—Riverview—Dieppe. That is the same as saying that one out of ten crimes will not be investigated or prosecuted. That may be okay for the nine cases where the criminals are prosecuted, but what about that other case? There will never be the chance to have an investigation and prosecution in that other case because the government will not stand up for its principles with respect to prosecuting criminals.

The government has been in power for five years and gives lip service with short titles and publicity bills. It is not enough. Over five years, as I have mentioned, serious things have happened. White collar crime is far more serious than it was when I was first elected.

White collar crimes and tax fraud are very serious problems. These crimes wreak havoc on the lives of victims. People can lose an entire lifetime's worth of savings overnight. When people lose their entire life savings, they lose faith in the idea that if they are doing their part, if they work, they will get their fair share.

This nation-wide loss of faith is dangerous because it can be passed on from one person to the next. The government is thus called upon to take action to protect the victims of these financial crimes and to protect people's faith in the integrity of the financial system. We all saw the damage that a pyramid scheme or Ponzi scheme can cause to the victims and to a country's reputation when Bernard Madoff was caught in the United States. We cannot allow such a thing to happen again.

We cannot stand by idly. The bill simply does not follow up on its promise to protect victims of white collar crime entirely. What does a mandatory minimum sentence of two years do for the victims of Earl Jones when he is already in jail under sentence for 11 years?

The lessons of the Madoff affair in the United States tell us that the damage to the victims would have been far less if the financial authorities had been better empowered by regulation and better equipped in resources and staff to apprehend and stop the carnage.

Why is the government peddling its minimum sentences into this area? Is this comforting to the victims of Earl Jones? He is in jail for 11 years. There may be a requirement to reconsider a restitution order, but the money is usually gone. The money is gone and the person is usually locked away for more time than the mandatory minimum set out in the bill.

I really think the government should take the next step outside of an amendment to the Criminal Code and review the financial regulatory system and the funding of our financial regulation enforcement, because it is what Canadians need to protect their investments.

The response from the finance minister might be that the Conservatives have a financial regulation overhaul, review and reform under way, that they are proposing a single regulatory agency, which will be voluntary, and will be located in Toronto. I assume that is the plan; it is where the finance minister is from. I have not heard a lot of people against that in the government, but if it was suggested it be moved to Moncton, they might have a different song to sing. I have nothing against Toronto. There is no question that the TSX is the largest index in the country.

It is an issue of provincial regulation. We have seen the government step into areas of provincial domain on many occasions before. Occasionally it takes a first ministers conference on these issues to decide what are the real ills in society with respect to white collar crime and what are the tools best suited to combat them.

People whose life savings have been taken away by a scheme will not be comforted by a Criminal Code amendment. They might be comforted by a federal-provincial announcement that a joint task force, which applies throughout the country, will concentrate on cracking down on Ponzi schemes and fraud in the general sense. They might, at that press conference, say that they are quite comfortable with the Criminal Code and with what has existed before.

If the justice minister had a TV show, it might be called “PJ”, pure justice. The Conservatives march in here before the evening news with a bill to protect Canadians from white collar crime, and the government indicates that is the cure. What Canadians will not know, and maybe it is our job to let them know, is that part X of the Criminal Code between sections 380 and 432, and on pages 280 to 304 of the short version of the code, those 25 pages in the compact pocket Criminal Code cover fraud.

So on the idea that someone looking at a newscast would think the government is enacting new legislation, legislation that did not exist before, that is just misleading.

We ought to say, yes, there are some amendments here that we can certainly stand behind, no question. But our response is three-fold.

First, these are minor amendments to the Criminal Code. The Criminal Code already has provisions in place to combat fraud.

Secondly, there is so much more that the government could have done in five years in office, working with the provinces to surgically crack down on the sources of fraud through the regulatory reforms that might be proposed.

Finally, if the government really cared about moving legislation along, especially legislation such as this that is not going to be opposed, why did it prorogue? Why did the government limit debate? Why did it shut down Parliament if it really wanted bills passed?

It is a good question, but we have never heard a real good answer. We did hear the word “recalibration”. Tell that to the victims of white collar crime. We could tell them that we are waiting to crack down on white collar crime, so could they recalibrate their losses? That one would not really fly.

There were fake fears about the governance of the country. People who have lost their savings want a government that will respond.

They might be shocked to know that, five years after the government took power, there was a bill that moved the yardsticks a little bit, a bill that no one would really object to, that could have been passed a long time ago, but the Prime Minister and his gang decided to pull the plug on Parliament, so it could not be passed. People should know that every time the plug is pulled on Parliament by prorogation, bills that are on the order paper, bills such as this, are killed. Prorogation stops everything.

This bill had a previous incarnation, called Bill C-52. It never became law because it was stopped in its tracks, and here we are, debating Bill C-21.

Ironically, sometimes the new incarnation is better. Because they have let it go so long, there are changes in the communities and in law enforcement techniques that have been incorporated into the new bills. So the argument that it is exactly the same bill and we are just bringing it back in every case does not fly. We want to hear the evidence to date about what is going on, in order to get the best bill on the books to combat white collar crime.

What was the reason for prorogation? Did the government think opposition parties were for white collar crime? Has anyone ever seen in a pamphlet, on the news, on the airwaves, in the blogisphere, in Twitter, Facebook or otherwise, that any Liberal, NDP or Bloc member is for white collar crime? Has anybody ever stood up and said that? I do not think so. It is preposterous. So why did the government not come forward earlier with this legislation?

The chairman of the justice committee asks, why do we not fast-track the 80 bills, or whatever number there are now? Why can we not get the job done? Why do we not stand up for Canada? It is a tired speech. The Conservatives are the ones who pulled the plug on their own bills, cutting off their nose to spite their face, and when they do come forward with legislation, it only effects change in the most minor of ways.

Carole Morinville is the case that I mentioned a minute ago. She was an unlicensed security adviser who was arrested for what financial authorities believed to be another Ponzi scheme. That case might have been better dealt with by a task force, by people knowledgeable in the financial regulation industry. It might have been something that the government would oversee and help with, rather than saying that opposition parties are against bills with Criminal Code amendments that really do not affect what is going on out there.

I have gone on at some length about the government attitude of not really helping victims. The provinces have really leap-frogged the federal government. We have seen it with respect to auto theft and many other areas, such as white collar crime.

Since the government came to office, a number of provinces have ratcheted up the provisions they have under the property and civil rights sections of the Constitution to enhance their powers of seizure and forfeiture for crimes committed, and not just in the white collar crime area. The provinces did that pretty much on their own, because they were not getting a lot of legislative resources through funding of policing or joint task force help from the federal government.

Then the other end of it is, what could the government have done with respect to the proceeds of white collar crime? It does not all just disappear into ether; it does not just disappear into thin air.

There is no way Bernie Madoff could have spent all the money he took, nor Earl Jones, so it went somewhere. The usual suspects are the international banking community. What has the government done with respect to international banking reform?

When we bring up the government and the international stage, we could be here for days talking about how it has embarrassed Canada, whether it is a seat on the United Nations, whether it is Copenhagen, whether it is the environment, and so on. But what has it done with respect to reforming the international banking system? What pronouncement has come forward from the Minister of Finance, the Minister of Justice, the Minister of Foreign Affairs and others with respect to saying, “We want to crack down on white collar crime because we know where some of this money may be going; we have looked into it; we are doing our job; we are getting the job done”? They are not getting the job done. We have heard of no serious reforms in this regard.

What Canada needs, much as every other country, is an overarching national scheme of financial regulation with international components. We cannot wait for these crimes to happen and then say that we will be tough on crime with mandatory minimums. This approach is proven not to work. It will not keep Ponzi schemes from happening and it will not bring the money back to our church programs, our school programs, the family nest eggs and investment funds and community funds in general that have disappeared. We need to stop these funds from being defrauded in the first place, before it is too late.

The case I come back to in conclusion is that of Carole Morinville, who was not even an accredited investor. She should never have got her hands on the honest citizens' investments. At the very least there should have been officials with some authority tracking her activity to stop her before it was too late.

What it comes down to is resources and support beyond tinkering with the Criminal Code. The government has not shown its trust in police officials by funding them adequately. It has not shown its co-operation with provincial and territorial partners by having adequate and frequent meetings on this topic. It has not stuck its head out of the foxhole of its own parochialism on the international stage to be even a follower, let alone a leader, on reforming the international banking system to find the money that has left so many Canadians destitute and without hope.

As parliamentarians, we must restore hope in the system. I hope the government will get to work on these needed reforms.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Madam Speaker, I was really hoping that somebody from that side was going to ask me this question. I have two answers.

First, on the NDP's role in protecting victims, I always remember the session we had with Gord Mackintosh, who was the attorney general at that time for Manitoba. We were having a debate on how we deal with crime, and in particular the victims, and he said that there is not a political movement or political party in this country that has greater claim to protecting members of society, in all of the work that it has done, not just in crime areas but in all areas. That is our responsibility in the crime area, in the criminal justice system area, as it is in protecting people, to see that they have adequate housing, that our foreign affairs protect them, and we could just go down the list. That has been a guiding principle for me since I have had that discussion with him, because it is true. As a political movement and as a political party, as social democrats, our primary responsibility has always been to take care of people in our constituency base.

I want to answer the question about whether we want more debate on this by responding with a question. Did the member, did the Minister of Justice and the parliamentary secretaries for justice and public safety go to the Prime Minister and say to him, “How come you keep proroguing? How come you keep having elections when you promised to work at fixed dates?"

Did those members on that side, who claim to be concerned about victims, say to the Prime Minister, “We have had Bill C-52. That was the predecessor to Bill C-21. It sat on the order paper. It got knocked off the order paper because you prorogued. How can you keep doing this? We have 15 or 16 crime bills, public safety bills”.

Did they go to the Prime Minister and say, “Stop doing this. If you are really concerned about victims of crime in this country, and we believe that these bills are going to make a difference, why do you keep putting them off?”

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Very well, I thank you for those points of clarification.

I am sure you know that when the government tabled Bill C-52, which is the previous version of Bill C-36, a number of consumers were concerned that the law could apply to natural health products. An addition, clarification or change was brought. In subsection 4(3), which deals with the application, the following is clearly stated:

4.(3) For greater certainty, this act does not apply to natural health products as defined in subsection 1(1) of the Natural Health Products Regulations made under the Food and Drugs Act.

Can you tell me why, in this case, people today are still concerned by the fact that Bill C-36, the latest version of the act respecting the safety of consumer products, might affect natural health products?

Standing Up for Victims of White Collar Crime Act

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

Mr. Speaker, I am pleased to take part in the debate on Bill C-21, the purpose of which is to impose harsher sentences for economic crimes.

Since I will probably be the last speaker to rise on this bill this evening, I will give a brief overview and remind everyone that the bill contains the following measures: two-year minimum sentences for acts of fraud exceeding $1 million, and the addition of aggravating factors including financial and psychological impact on victims; failure to comply with professional or licence-based rules; and, the scope and complexity of the fraud, including the time and level of planning that went into it.

The bill also sets out a broader definition of victims. The court may entertain a written statement outlining any impact on the community including losses resulting from the fraud. The term "victims" may therefore denote more than any one individual, or individuals, directly affected, and may include an entire community or particular group that has suffered at the hands of fraudsters.

Other measures are also included in the bill: an option for the courts to make an order for the restitution of property and, failing this, an obligation on the court to explain its decision; and, lastly, the option for the courts to prohibit fraudsters from certain activities.

We agree with the principle of this bill. The Bloc Québécois would like to improve the bill in committee and address a number of major shortcomings. Over the next few minutes, I will speak to a number of these shortcomings.

It can be a lot better. In September 2009, we called for the implementation of concrete measures to fight fraud. Americans are not the only ones to be affected by major fraud; it is happening the world over. Unfortunately, we have our own examples of this in Quebec.

During today’s debate on Bill C-21, several members have given examples of cases of fraud that have occurred in almost all corners of the world. There have been financial scandals in Quebec including the Cinar affair, Norbourg— a sadly notorious case—and Earl Jones, whose acts have laid bare weaknesses in the current system’s ability to monitor and fight crime. When we broached the subject, instead of rallying behind us, the Conservatives immediately decided to put forward their own measures. We are of course in favour of some of these measures, but we do not understand why it seems as if the job was botched and done in a panic for the purpose of looking after their own interests, while the victims are simply asking the government to act, and to act quickly.

We will probably never be successful in completely eradicating fraud, which never stops. While listening to the news earlier on Radio-Canada, I heard that the Insurance Bureau of Canada just issued a warning about a fresh wave of fraud affecting auto insurers, and that the IBC decided to warn its insurers. An investigation had shown a spike in the number of completely staged car accidents. People are deliberately having car accidents in order to make fraudulent insurance claims. It is probably not brand new, but there is apparently a wave of this hitting the industry right now.

When I was a journalist, I covered an event based on information obtained by the police. In fact, after noticing that the water level of a lake had risen—it was an abandoned pit—cranes regularly went and dragged out cars from the bottom of that lake. People had pushed their cars in there in order to claim insurance. Thus, there is nothing new under the sun.

It will be tough to completely stop these acts of fraud. At least if we manage to put concrete measures in place—and I believe that some of my colleagues from the Bloc Québécois have referred to such measures here over the course of the day—that that will have a dampening effect on these financial scandals.

On September 2, 2009, the Bloc Québécois introduced a series of measures to improve the system and make crimes harder to commit, easier to detect, and subject to tougher penalties. A comprehensive approach is needed in order to understand, and effectively fight, this type of crime. In response, a couple of days later ,on September 16, the government came up with a bill which was supposed to include minimum sentences, aggravating factors and the option for the courts to make an order for the restitution of property. That was Bill C-52, which is now Bill C-21.

This bill contains very few measures and will be only minimally effective. I will speak a bit later about the measures favoured by the Bloc Québécois. In this the bill in its current form, the Conservative’s primary measures include minimum sentences. They have no deterrent effect, just as in other areas. Acts of fraud over $1 million are rare. The Minister was unable to cite a single case of major fraud for which the sentence handed down was less than the suggested two years. In fact, 6- to 7-year sentences were generally handed down in these cases.

The courts already took into account the aggravating circumstances that have been included here. So this addition does not change much. Almost all, if not all, the aggravating circumstances listed in this bill were included in the Vincent Lacroix decision, which sadly is a well-known example. It makes you wonder whether the Conservatives just copied and pasted the decision because they told themselves that was what they needed to do.

Therefore, the judge in this case had the tools at his disposal. We do not need to reinvent the wheel. We must improve the situation and put an end to such financial scandals instead of redoing what has already been done. It would not change much. A bill that contains the same measures that judges are already using will not help fraud victims.

Restitution orders already exist. They are broader in scope in Bill C-21, but experts have raised concerns about the feasibility of these measures in practice. I am not an expert, but I know that committee members from all of the parties will be able to question these experts about all of the proposed measures.

The part of the bill that restricts the activities of convicted offenders is interesting. But that, too, is at best an existing practice whose scope has been broadened.

Thus, Bill C-21 is missing the most important measure, that is, abolishing parole after only one-sixth of the sentence has been served. We have been calling for that for quite some time. When I say “we”, I mean that is what the people of Quebec want. I am not deaf and blind to what is happening in the rest of Canada, where people have also been calling for that, but especially in Quebec, because of the cases mentioned earlier—Norbourg, Earl Jones, Cinar—people are particularly aware of and angry about the fact that, although the sentence might appear harsh, someone can be released after serving just one-sixth of the sentence. That is the main source of frustration.

Despite Bill C-21, Earl Jones and Vincent Lacroix will be able to benefit from this mechanism to get out of prison before having served a sufficient amount of their sentence. We know that minimum sentences do not solve this problem. We limit any room to manoeuvre for the judge who has to examine all the circumstances of the crime. Just because someone appears before a judge for committing a crime does not mean there are no extenuating circumstances. The judge needs enough room to manoeuvre to give an accused who is eventually found guilty four years in prison for precisely what happened and the role he played. Another person involved in the same crime might end up with 7, 8 or 10 years because the circumstances were not necessarily the same. We have to give the judge this room to manoeuvre so that he or she can use a balanced approach.

When we impose minimum sentences, there is no room for second thoughts. Regardless of the extenuating circumstances, a person who commits a crime and is found guilty will be given two years in prison, while under the current system he might have done a bit better than that. Depending on the case, we might be too strict or not strict enough, especially when minimum sentences are involved.

We are not addressing tax havens either. We heard that a few times in the speech before mine. That is where the fraudsters hide their loot. What point is there in ordering restitution of the hidden money when we are not addressing the issue of tax havens?

The Bloc Québécois has prepared a six-point plan to deal specifically with white-collar crime. They are effective measures. We also want to restore the confidence of victims and citizens in general. This confidence has been clearly undermined for two main reasons. I spoke earlier about release after serving one-sixth of a sentence. There is also the notorious two-for-one credit for time served before sentencing, which makes it possible for someone convicted of a crime to have double the amount of his time spent in preventive custody deducted from his sentence. He will obviously get out more quickly.

On September 2, 2009, to make life difficult for fraudsters and to prevent other investors from losing their life savings, the Bloc Québécois presented a plan to fight white-collar crime. This balanced plan consists of six measures: three of them target crime prevention in particular, two ensure that justice prevails when a guilty verdict is handed down, and one helps victims.

First, we are calling for the complete elimination of release after serving one-sixth of a sentence. If I remember correctly, when this session of parliament began, it was the first thing we asked for because we were right in the middle of the scandal of Vincent Lacroix from Norbourg. We expected all parties in this House to allow us to fast track this legislation. Unfortunately, the Conservatives did not agree.

We are also asking that the Criminal Code provisions on confiscating proceeds of crime be amended to include fraud of more than $5,000.

Next, we are calling for police forces to be reorganized, what concerns us here in the House of Commons and at the federal level being the RCMP, to create multidisciplinary squads specializing in economic crime. At present, the police are extremely competent, but we need to expand the range of skills, including for tax fraud cases, which are now significant and which very often exceed the basic skills of a police force. We have to have experienced accountants and lawyers who are well versed in all the tricks developed by these big fraud artists, particularly given that the fraud is often committed at the international level, using tax havens. The work of a mere investigator is not going to uncover all the ins and outs of these. When fraud artists, criminals, on this scale are discovered, we realize everything they have managed to do with sleight of hand and shell games to defraud thousands of people, often out of millions of dollars. And then we realize that we need to have multidisciplinary squads composed of people with a variety of skills, to be able to explain properly to the investigators exactly how these people have managed to operate. We would not have those people just to uncover things, but also to combat fraud artists who might be tempted to continue in that vein.

We are also calling for banks to have an obligation to report irregularities in trust accounts to the Autorité des marchés financiers and the user’s professional body. We recently had an example of this, and investigators are still trying to wade through this scandal: people used a bank to commit tax fraud, it seems, and to evade taxes, by investing the money in Switzerland. Obviously, we will know more as the investigation progresses.

We are also calling for a review of the amendments that could be made to the Income Tax Act to assist the victims, in particular by introducing a provision to allow victims of fraud to deduct the stolen money from their income, instead of those amounts being considered to be capital losses. Often what we try to do in these situations, as is to be expected, is either to combat the fraud or to arrest the people who committed it. Sometimes, however, we may unfortunately forget the victims. Well, in the measures proposed by the Bloc Québécois, the victims are not being forgotten. And so when we study Bill C-21 in committee, we will ask that we be able to make that amendment to the Income Tax Act.

We are also asking that the Income Tax Act be amended to put an end to the use of tax havens. This practice allows individuals and companies to hide money and avoid paying taxes. Many examples of this have been mentioned here in the House today.

I have a few minutes left to go into detail about my first point. Since 2007, we have been proposing that the chance of parole after serving one-sixth of the sentence be abolished. This idea is not new. It is not that we have just now realized what needs to be fixed. For three years, we have been asking that this measure be abolished as it undermines the credibility of the justice system. Abolishing it would allow us to extend prison sentences for those who commit fraud, even for those who have already been arrested and who are awaiting their criminal trial. It would contribute to restoring—

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

Mr. Speaker, I am very pleased to speak to Bill C-21, An Act to amend the Criminal Code (sentencing for fraud).

Bill C-21 was introduced in the House on May 2, 2010 by the Minister of Justice. In fact, it is identical to Bill C-52 which was introduced during the second session of this Parliament, and did not become law because of prorogation, which we are very familiar with around here, on December 30, 2009.

The intent of the bill is to help crack down on white collar crime and increase justice for victims through measures that include a two-year mandatory minimum sentence for fraud over $1 million, additional specified aggravating factors for the court's consideration in sentencing, a new type of prohibition order, new obligations on the judge with respect to restitution orders, and a new type of impact statement to consider in sentencing.

The fraud provisions of the Criminal Code were most recently amended in 2004 in response to global impact of corporate scandals associated with companies such as Enron, Tyco and WorldCom. These amendments created a new offence of improper insider trading, increased the maximum sentence for the offences of fraud and fraud affecting the market from 10 to 14 years, and established a list of aggravating factors to aid the courts in sentencing.

The federal government also announced it would create a number of integrated market enforcement teams composed of RCMP officers, federal lawyers and other investigators, such as forensic accountants, to deal with capital market fraud cases.

Now the question is, with all of this supposed action on the part of the government, why are we not seeing results? Why are these fraud schemes still being uncovered?

We have to go back a number of years. I think most people have heard of Charles Ponzi and Ponzi schemes, but there are still a lot of people who are not familiar with the concept. A very large percentage of fraud schemes that are uncovered are in fact of this type.

Essentially, it is the use of investors' money that is taken in today to pay off previous investors. What happens is that organizations offer high rates of return and they entice people to give them money. Then, rather than invest the money in proper facilities, they simply use the money to give a promised return to their previous investors. We know that in doing that, eventually things are going to fall apart.

These schemes tend to go along. In some ways they are similar to the chain letter concept that people are familiar with. While the market is expanding, as happened in the 1920s and in the 1990s, these schemes can continue unabated for a number of years before they are found out. Eventually they are all found out because when the market drops, the people who are running the scam do not have the funds available to pay out. It essentially becomes a run on the bank. Everyone wants their money back, and they do not have the liquidity to do it. Basically, they run out of people to invest in their scheme.

In the case of Charles Ponzi, he collected approximately $9.5 million from 10,000 investors by selling promissory notes paying a 50% profit in 45 days. As a matter of interest, Charles Ponzi lived in the United States for a number of years, but there is a Montreal connection. In 1907, Ponzi moved to Montreal and became an assistant teller in a newly opened bank basically servicing new immigrants to the city. The man who owned the bank paid 6% interest on bank deposits, double the going rate at the time.

I emphasize the fact that the success of these schemes is based on people's greed, in that they are offering a very high rate of return. That is something the public should be very aware of. On checking the market and the banks, people will see that the average rate is roughly the same among the banks and institutions. When one institution offers double the rate, then people should be suspicious that something is wrong.

Even today, if one financial institution comes out with an offer that is higher than the others, people should not be lining up to buy that investment. People should be questioning why the institution would offer a higher rate of return. Perhaps it is short of money and may not be able to pay investors back.

In this case, Mr. Ponzi eventually rose to be the manager of that Montreal bank. He found out that the bank was in serious trouble because of bad real estate loans. Does this sound familiar? This was in 1907, in the last century, not in 2007. The bank was funding interest payments not through profit on investments, but by using money deposited in newly opened accounts. The bank eventually failed. The owner ran away to Mexico with a large part of the bank's money. This is how Mr. Ponzi got started. At the end of his career, I believe he died penniless and was not able to hide his ill-gotten gains.

However, that is not the case with the modern versions of the Ponzi scheme, in the sense that the schemes we see now are sophisticated and are planned well enough in advance that the money, as one of the members mentioned earlier, is sent off to tax havens. In 1907, Mr. Ponzi probably did not have the wherewithal to take his ill-gotten gains and get them off to Panama, Switzerland, or other tax havens. Perhaps he even believed that his scheme would never end. Maybe he misunderstood what he was doing.

The same cannot be said for an investor like Bernard Madoff, who essentially stole $65 billion. We are not talking about millions; we are talking about billions, $65 billion. This is a guy who opened the stock exchange on a routine basis. He knew all the players. He was an insider. He was a guy who was approached for advice.

Ten years before Bernie Madoff was arrested, there were attempts to gain the attention of the Securities and Exchange Commission in the United States with information. It was well documented before the House of Representatives in the United States last year when Harry Markopolos detailed the whole sordid history. Ten years prior to that he had worked for Rampart Investment Management in Boston and his boss asked him whether he could duplicate Madoff's strategy. He said that the funds police each other. In the competitive world of business, competitors watch each other. It was not a surprise to other competitors in his field that he could produce returns because it is to be expected that some funds will out-perform others, but to do it on a consistent basis, month after month, year after year, raised red flags.

Somewhere along the line, Bernie Madoff's fund should have had a loss. At least once over a 10 year period, he should have shown a loss. Even the best of funds that go up on a routine basis do not go up forever. If the sector the funds are invested in does well, it will do well for maybe six months or a year, but it will not do well each and every month, year after year. Bernie Madoff's fund raised a red flag.

Harry Markopolos figured this out very quickly. He gave information to the SEC, but it did not listen to him. The SEC on several occasions checked Bernie out. It investigated his funds annually and stated that his returns were on the level. The SEC, the cop that was supposed to police the fund, did not do its job. It did not do a proper report, and this allowed this ponzi scheme to continue unabated year after year. Meanwhile, more people and organizations bought into the fund. This shows that deregulation has created a big problem in the United States.

Members will know that in the 1920s, after the stock market crashed, the president of the day was looking for somebody who could regulate the financial institutions and the stock market on Wall Street. Many members will know that he recruited none other than Joseph P. Kennedy, who had made large amounts of money in the wild and woolly unregulated markets of the 1920s. Justifying his appointment of Mr. Kennedy, the president said something to the effect that it took a thief to catch a thief. A lot of the rules put in place under Mr. Kennedy stayed in place for many years.

The system operated fairly well under those rules until, during the Bush years, Republicans adopted a philosophy of deregulation. The whole idea was to deregulate world markets. All financial institutions had to go global, and the way to do that was to have super financial institutions.

We saw this happen more or less in Canada when the current Conservative government was in opposition and the Liberals were in power. Canadian banks were trying to get the government to deregulate, which would have allowed them to swallow each other up and get bigger.

To the Liberal government's credit, it did not do go this way. That is why the current Conservative government is not in the mess that it could be in right now. I am sure the Liberals were all for deregulation, but had they had their way we could be in as big a mess as Ireland, Iceland, Portugal, or any of the other countries that opted for a deregulated environment.

A big part of the puzzle is to deal with this deregulated environment and try to pull the whole system back under some kind of control. The United States is doing that. It is starting to re-regulate huge sectors of the investment industry, the banking industry, in an effort to combat this type of activity. In spite of that, the American system over the last 10 years had a much better track record than the Canadian system. All we have to do is look at the number of bad guys that the Americans put in prison over the last few years and compare it to how many the Canadian system put in prison. We would have to look long and hard to find anybody who ever went to jail in Canada for white collar crime and fraud. There may be one or two, but that is about it. We are talking about single digits.

In the United States, several hundred people were put in jail for their white collar crimes, including the people who ran WorldCom and the people who ran Enron. Conrad Black, a Canadian who committed his white collar crimes in Canada, was not touched by Canadian authorities. In fact, he was eventually prosecuted and put in jail by the American system, the same system that spawned Bernie Madoff and the Ponzi scheme and the same system that is now attempting to re-regulate itself.

In Canada, a parallel country, we were not very aggressive on enforcement and the prosecution of these white collar criminals, judging by our record, and we are not looking at re-regulating. So I would say we have a long way to go. The government is bringing in this bill, which we will be supporting to get to committee as we did the last time before the bill died after the House was prorogued, but remember that this is just a small part of the whole puzzle that the government should be dealing with. The government should be looking at setting up some sort of task force to look at re-regulation. No doubt it will, in view of what is happening in the United States.

We also have to look at tax havens. We had a very comical situation here last week. We were debating the implementation of a free trade deal with Panama, which is on the tax haven list of the OECD and a list in France indicating that it is a tax haven; 350,000 private companies are hiding money in Panama and the government is talking about getting a free trade deal in place with Panama when even the Americans will not do it because Panama will not sign on to the OECD protocols about exchange of financial and banking information. On the very day that this was happening, The Globe and Mail carried an article about an employee of a Swiss bank who left the bank and went to France with computer disks containing several thousand accounts. But 1,800 Canadians are on that list. The government was somewhat embarrassed, because there were these 1,800 people who, by the way, had to invest a minimum of $500,000 in the Swiss bank.

They were flat-footed because they do not have the answers. They have not done anything on cutting down tax havens and trying to stop tax evasion. They have a moratorium. Two years ago when a similar bank employee from a Liechtenstein bank walked away with computer disks and went to Germany and sold them to the German government, Canada found that there were 100 people from Vancouver on the list. What happened? They were given amnesty.

The Conservatives say that if anybody wants to come in and admit they have money in Panama or someplace they should not have it, they are free to do a voluntary reporting and the government will not do anything to them. It will not even tap them on the wrist. If they pay the back taxes, they are home free. Is this any kind of message to be giving people out there, telling them that they will have an amnesty if we catch them?

Now we have 1,800 people whom we have uncovered, not because of all this police activity, but because of a bank employee.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I am pleased, as the member of Parliament for Don Valley East, to rise and speak on Bill C-21. This bill is particularly important where I am concerned. As an accountant, as an FCGA, as a fraud investigator, I think it is high time this bill was introduced.

So that people understand what is involved in the bill, we need to give a little background.

The legislation was introduced in response to several high-profile white collar crime cases, including Norbourg Securities and Earl Jones in Quebec, and in the wake of the Bernie Madoff Ponzi scheme and revelations in the U.S., many Canadian investors have grown increasingly concerned about white collar fraud.

Other than the title, this bill is the same as Bill C-52, which was introduced during the previous parliamentary session and died at prorogation while at committee.

Bill C-21 has several components that need to be reviewed and addressed in committee.

It introduces a mandatory minimum sentence of two years for fraud involving more than $1 million, regardless of the number of victims. It specifies aggravating factors to be considered at sentencing, including the psychological and financial impact on victims, the age and health of victims, and the magnitude and duration of the fraud. It requires the court to indicate what mitigating and aggravating factors were considered in relation to the sentence.

It allows the court to prohibit an offender from assuming any position, voluntary or paid, that involves handling other people's money or property. It requires judges to consider restitution where possible and when possible, and it requires judges to consider community impact statements at the time of sentencing.

This bill is very close to home, as I know a number of constituents who were involved or who gave money, their life savings, to this Colgate whitening thief and were told that they would get a 400% return. People think anybody who is involved in a Ponzi scheme or who partakes in it is greedy or does not know what they are doing. I think it is the lack of financial acumen that gets people involved and it is the hype.

It is important that the government realizes that when it prorogued Parliament, Bill C-52 went to bed, and Bill C-21 has been introduced, but in the meantime a lot of people have suffered and this suffering could have been prevented. Vulnerable Canadians, taxpayers, have lost their total savings in this scheme. People have lost their houses. People have lost their jobs. People have become depressed because they lost all their money. It was important when we were studying Bill C-52, which is now Bill C-21, that it should have been there. It should have been in place. It should have been able to help those very vulnerable people.

The impact of white collar crime costs the taxpayers and the treasury a lot of money, because hard-working Canadians have lost their money. The fraudsters are committing fraud against these vulnerable people. Fraud is not victimless. Fraud preys on the weak and the vulnerable in society. We, the Liberals, support sending the bill to committee because we believe it is the right principle.

The principles behind the stricter sentencing rules are very important, but we also know that they are not enough to prevent these frauds from happening. Sentencing is important, but prevention is equally important in white collar crime.

I would like to know why the government does not use this opportunity to do more. The opposition and the public have been calling on the government to end the one-sixth accelerated parole provision for these types of offenders and the government has not acted yet. We hope that by sending it to committee we can have some practical changes.

While we support the bill's focus on stricter sentencing guidelines for white collar criminals, we believe the scope is too narrow to be truly effective in the fight against fraud. We would like to see that when it goes to committee there is a wide consultation with the stakeholders, the people who have been marginalized, the people who have been robbed of their hard-earned dollars. We would like to see that the financial industry is also engaged in this discussion, because they are the ones who probably regulate the financial industry, the people who do our investments, et cetera, and it is important that these people are also held to a very high standard and that there is important legislation to ensure that fraud is not committed by professionals or by any other laymen who would bring about a Ponzi scheme.

The stakeholder reaction to the legislation has been mixed. While victim groups have been lobbying the government to strengthen white collar criminal provisions, some have expressed discontent that this bill falls short, as I mentioned, because it fails to address regulation or the one-sixth accelerated parole review rule.

The Canadian Bar Association has expressed its opposition to this bill, citing that it would increase pressure on an already taxed criminal justice system and not improve on what is already available in the Criminal Code. Furthermore, the Canadian Bar Association opposes the mandatory minimum sentence in favour of judicial discretion at sentencing.

The RCMP has expressed its support for the bill, indicating a mandatory sentence for such crimes has the potential to be a useful deterrent against criminal activity.

If we come to what this bill would really do, many times in the House we have heard that there is no greater fraud than a promise not kept. The bill died on the order paper last year, taking with it the life savings of every Canadian who has fallen victim to fraud since then. However, this bill, as I have reiterated, would not be enough. It is important to send it to committee. It would send the right message, but words without deeds ring hollow to Canadian mothers now finding themselves wondering how they will feed their kids, or to grandparents without anything to leave behind, or to families that have lost their savings and have had to give up their houses, their cars, everything, to put food on their table. The financial security of families has been ruined while this bill died at prorogation.

I hope the government will not delay by doing any more photo ops but will put enough meat on the table and will help the opposition parties in their desire to bring justice to those who are seeking justice.

While the government was doing its press conference, Canadians, as I mentioned, have lost their savings. It is important that the bill move forward at a quick pace and be sent to committee for further study.

The bill provides nothing, for example, for the prevention of crime, only punishment after the fact. No jail sentence and no restitution can make up for the sense of betrayal and hurt that follows fraud. No jail sentence and no restitution can restore the confidence or livelihood of a Canadian cleaned out by someone who the victim had grown to trust, a new parent without a nest egg, or a dying grandparent without a bequest. Prevention keeps Canadians safe. Nothing is more important to the livelihood of Canadians, and nothing in this bill provides a hint towards it.

I have heard a lot of stories from people who have been defrauded. They had been approached by people who they considered friends and trusted and they were taken for a ride. Colgate whitening comes to mind. People sometimes do not know the difference between a fraudster and a genuine investor. We have seen it in people trying to sell electronic Canadian stamps, without realizing that it is the purview of Canada Post.

How do we keep Canadians safe? In order to keep Canadians safe, it is important that the bill be sent for study and that there be a high level of consultation but that Canadians be given an opportunity to be engaged or educated in fiscal management. There should be an opportunity to have transparency and clarity as to what one can feel is a good investment or bad investment. Nobody is asking the government to oversee this. We are asking that the bill have provisions for prevention.

The bill fails to keep Canadians safe because it prefers punishment to prevention. I believe this is in line with the Conservative government's perspective on crime. Crimes are complex. Crimes are best considered by judicial experts, men and women of the bench with entire professional lives dedicated to finding fair and balanced judgments.

I am not sitting as a judge and neither is any member of the House, but as an accountant, financial consultant and fraud investigator in my previous life, I think it is important that people realize that there are ways in which prevention can take place. Everyone says that prevention is better than a cure, and nobody knows it better than those who are victims of fraud.

When I talked about the Canadian Bar Association, it is opposing this bill for a very simple reason. It is keenly aware that what might work in Gander likely does not work in Moose Jaw or Toronto and what is appropriate today might not be appropriate tomorrow. Cases are unique and it is both reckless and irresponsible to assume that we in the House could tell a justice presiding over a case that we are more qualified than he or she to determine the appropriate sentence for a particular crime.

The bill provides for a mandatory minimum sentence for the commission of a fraud exceeding $1 million. While this seems to be reasonable, I believe it is not for us in this place to impose such conditions upon the trained, qualified and professional judges presiding over decisions. There should be guidelines, not minimum sentences, and judicial discretion, not rigid mandates from a place far away. When a crime is committed in, say, Don Valley East or Toronto, I want a judge in Toronto to examine the case on its own merits.

Bill C-21 is worthy of further examination. It sets the right tone. It should be sent to committee for further study.

However, the bill does not do enough to reassure those people taken in by the Earl Jones fraud, the Norbourg security fraud, the Bernie Madoff Ponzi scheme, the Colgate scheme, or the many other schemes that we know of or that have not been reported. It does not assure the wounded victims of past fraud or the hesitant investor that we need now more than ever in this period of economic uncertainty a prevention tool. This is an important first step. I hope that the House will send the bill to committee and that we will have a logical and thorough discussion of the bill so that it may help others avoid such problems.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, Bill C-21 is a reincarnation of Bill C-52. It is important, in terms of the credibility the government has or maybe, more important, does not have with regard to its so-called “getting tough on crime” agenda, to understand the history of this legislation.

On October 21, 2009, as a result of a number of notorious incidents, the Earl Jones one in Montreal being the more current one at the time, Bill C-52 was introduced into this House. There was a very brief debate on it. There were signals from the opposition parties of a willingness to deal with the issue of white collar crime, which is what it was about.

It went to committee quite rapidly and we had hearings on it in November 2009 and into December 2009. We did not complete it. I would estimate that we heard from 10 to 15 witnesses over that period of time, some giving us a great deal of detail, quite frankly, about the frailty of the legislation but information and evidence that was really necessary for us in our consideration.

We, of course, then had the notorious prorogation. We wonder about the level of integrity at the time that decision was made. The government knew the horror stories and the suffering of individuals and groups in the country. It knew about the need to get serious about dealing with white collar crime.

Without knowing what was going on in the Prime Minister's mind at the time, I would have to say that he probably gave absolutely no consideration to this bill or to that suffering when he made the decision to protect his government from the Afghan detainee issue being continuously raised in this House. He put off the House for an extended period of time beyond what was originally scheduled.

As I think most Canadians now know, when prorogation occurs, the parliamentary agenda is wiped clean. Any bill that is outstanding at that time from the government side is regulated to the dustbin and we have to start all over again, which we did when we finally came back in February 2010.

However, we did not see the bill right away. The new bill, Bill C-21, which we are debating this afternoon, was not presented to this House until May 3 for first reading. It was not put on the order paper for debate at second reading until today. So we lost all of that time through the spring and summer.

It is quite possible that the justice committee may have dealt with it fairly quickly, because of the amount of work we had already done, and had it back to the House for third reading, amended, I can assure members. All opposition parties are quite concerned about how weak the bill is. It is almost useless as it is now. However, we have some real hope, because of what we heard from a number of witnesses and some of our ideas, that it could be strengthened to the degree that it would be worthwhile to pass into law. However, we never got the opportunity to do that until today.

I am certainly signalling, on behalf of my party, as the other opposition parties have, that we will support this going to committee so that we can do something serious about this as opposed to what is contained in Bill C-21.

I have another point to make before I go to the actual particulars of the bill. We have heard that a series of amendments to the legislation are necessary if we are to have any meaningful impact on white collar crime. The government has had all that evidence since December 2009 when it decided to prorogue and knew the bill would go down into the dustbin. It had the better part of 10 months to implement those corrections in Bill C-21 but it did not do anything. Bill C-21 is exactly word for word the same as Bill C-52. There are no changes at all.

We had some very good evidence. I mean that in the sense of people who knew what they were talking about, as opposed to the government on this issue, and who came forward with very specific changes that needed to be made. Some of it was just cleaning up wording. In other cases, it was implementing meaningful amendments that would have a meaningful impact on fighting this type of crime. Did we get any of it? Absolutely nothing, not one change. Bill C-21 is word for word of what we already had in Bill C-52, which was showing, because of that evidence, to be so wanting.

It is important for those who have maybe not followed this issue, and I do not think there is a lot of Canadians who have not, to set the scene. I want to credit this information from a forensic accountant by the name of Mr. Al Rosen, who came before us with a brief presentation in writing and then expanded on it before the committee, both in his verbal presentation and in response to a number of questions from the members of Parliament, who sit on the Standing Committee on Justice and Human Rights.

He set out by saying that we had to understand where we are at, so he went through a series of the events that we had in the early part of the 20th century. He went back a bit into the latter part of the 19th century, but mostly he dealt with the 20th century. He told us to look at what we had done: Bre-X Minerals, that scandal; Nortel Networks, overstated assets, financial statements, he pointed out, restated four times and then watched the stock price collapse; dozens of business income trusts that in effect were pyramid schemes, Ponzi schemes; and the non-bank asset-backed commercial paper and all of the misrepresentations that went on with that.

At the core, if we look at the financial collapse that has occurred around the globe, that collapse is very much as a result of that asset-backed commercial paper that did not have any assets behind it. I have already made reference to the Ponzi schemes such as the one in Quebec with Earl Jones and the major one in Alberta.

He went on to point out at the same period of time the lack of response, both at the provincial and federal levels, around regulatory changes that would have gone some distance to avoid these losses. He was quite critical of governments in that regard.

He also then went on to point out that there had been Supreme Court of Canada decisions that in effect needed to be corrected. It was the permission that was granted. He made reference in particular to the Hercules management case in 1997. In effect, the court said that it was okay if a person misstated on audited statements, even though they were misleading to the public, would lead shareholders to perhaps buy in when in fact if the real truth were there, they would not have done so. He referenced the weakness in our civil courts when people would go for restitution, the length of time it would take and the long trials when it was large sums of money like this. He also mentioned the lack of prosecution in Canada and pointed out the number that went on in the U.S.

I took that with a bit of a grain of salt when we already had reference to the Madoff situation and any number of other collapses in the United States of major corporations. Although the U.S. has a more rigid and forceful approach to prosecuting, it certainly has not had the effect of deterring major crimes there.

We need to look at that. This is the context that we were dealing with when we first dealt with Bill C-52 and now Bill C-21.

The information in the brief from Mr. Rosen is not secret. It is in the public domain. The Justice Department certainly knows about it. I assume at least some members of the government are aware. One would have, and I certainly know I did, the expectation that Bill C-52 and now Bill C-21 would actually address these problems in a meaningful way. It does not. It is as simple as that.

If I can do a quick summary, this is what it would do. It would introduce a mandatory minimum. The be all end all of all solutions of all crime problems in the world, according to the government, is to slap a mandatory minimum at it, punish somebody. Maybe it would be better if we tried to prevent the crime from happening, in the first place. Anyway it would slap a mandatory minimum of two years for any fraud that is committed over $1 million.

When we heard the evidence, we heard about the huge number of Ponzi schemes, other fraud schemes, some of these schemes being mail solicitation, phone solicitation, email over the Internet type of solicitor, all of it completely fraudulent. However, more than half of those are under $1 million. Therefore, that section would not apply. The panacea for everything else will not be applicable for a large number of the white collar crimes that are committed in Canada on a yearly basis.

The Conservatives also have imposed additional burdens on our courts as to how to deal with this. It was quite interesting to see the brief from the Canadian Bar Association. I am sure the Bar Association would be upset if I used the term viciously, but it was a pretty vicious attack on the bill.

I will use this as one of the two or three examples of where the association attacked the bill. It introduced the concept in the sentencing process that if someone were convicted of a crime under this law, there would be a community impact statement. Anyone who practises law in the criminal courts, the first question that will pop out is, what is a community impact statement? We have never had that in the Criminal Code or any other sentencing provisions under provincial legislation. It is a totally new concept.

Maybe the government is being creative here. Unfortunately, it is just about useless because we have no idea what the community is going to be. It does not define that in any way. It does not put any parameters on it, any limits on it. It is not clear if it talks about it in the singular. Could more than one community impact statement be done? We may have different groups that have been impacted by it. It is extremely poorly drafted with regard to this area and a number of others.

I go back to my opening comments about the length of time. The government has had now 10 months when it could have corrected a number of these points, and this is one of them.

I am intrigued with the concept of the community impact statement. I think it is possible that in fact we may be able to develop one that is useful to victims of these types of crimes so the court has a full picture of the impact, not just on individuals but the kind of impact it may have on a community as a whole.

We have seen this a number of times when we have so-called a financial adviser consultant trustee type of person who will swindle money from a significant proportion of small communities, a community that trusts the person, who almost always is a male. It gives him its money on the basis that he will handle it properly. It then has a major impact on that small town or small village because a great deal of money has been taken out of circulation.

We can see where it would make sense to do that. The bill does not make any sense in that regard because it is probably going to end up being fairly useless.

Unless we define more clearly what community groups would be entitled to bring forth that statement, it has the real potential to clog up our courts by making the sentencing process much longer than it might be otherwise if the bill were drafted properly.

One of the other provisions in here, and again it is typical of the government's overreach when dealing with both making up crimes and dealing with them by way of punishment, is for a prohibition order. I have no argument with that, and I think any lawyer who has practised law in the criminal courts would say that, yes, people who commit these kinds of crimes should be prohibited from being able to do that either indefinitely, depending on the size and nature of it, or at least for specified periods of time once they have served time in jail or other punishment.

However, the government did not stop at that. What did was made it impossible. For instance, if I am Bernie Madoff living in Canada and I have stolen $65 billion, I could be prohibited from ever being a financial consultant adviser again. However, under this bill I would be prohibited, given how broad the prohibition order is, even from being a sales clerk in a grocery store or retail outlet because I would be handling somebody else's money. Even though the extent of the money I would be handling may be $50 for a shirt, under this prohibition order I would not be able to take that job.

This is typical of the overreach. The Bar Association, I think without being it, were very effectively sarcastic about how badly drafted this was and how much of an overreach it was.

Another provision in the bill is with regard to restitution orders. Here is where we get into the courts perhaps getting backlogged by additional responsibilities. The bill mandates that it is an absolute must if the judge does not make a restitution order, to give a written reason for not doing so.

There are times when it is obvious why a restitution order will not be made. I will use the example again of Mr. Madoff and the $65 billion. The guy is completely bankrupt. He is ill, or I understand there is some concern with his health. He is quite elderly and he has no opportunity to ever make restitution.

If one is gong to make a restitution order in our courts, there must be some basis for doing it. A judge cannot just say that Mr. Madoff has stolen $65 billion and he has to pay it back. There has to be a basis upon which to show that the judge has looked at the financial circumstances and the ability to earn income in the future and order an amount in a restitution order.

That takes time. It takes the time of police officers because they have to investigate. It takes the time of the prosecutors because they have to present that case. It takes court time as the judge is considering the evidence being put before him or her when it is obvious that a restitution order is meaningless and should not be wasting court time and the time of those professional people in doing it.

Again, this is very badly drafted legislation. There are other parts of the restitution order provisions that simply do not make sense in terms of any quality of legislation that the House or the government should pass, but they have in fact done that.

It is quite clear, mostly because of the Earl Jones case and the pressure for which I will give credit to my colleagues from the Bloc Québécois, my colleague from Outremont, parliamentarians from that province and from the legislature in Quebec City, that something has to be done. Earl Jones was just the epitome of it and we could not just sit on our hands any more.

Rather than deal with it at that point, what did the government do? We could understand that because it was under political pressure, it could come forward with a lousy bill, which we could clean up at the committee. When it got to the committee and we had the evidence and solutions for a number of the issues, what did the government do? Absolutely nothing. It came back to the House and presented the same bill again.

I want to make one more point around the regulatory functions that need to be cleaned up both at the provincial level and at the federal level. There is a lot of preventative work that could be done in this area if the government got at it.

The other thing is with regards to enforcement of our laws. We need much more effective teams of specialists that can fight white collar crime, identify it and prosecute it effectively. We do not have those teams in place at this point. The government should be moving on that.

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

Mr. Speaker, I am pleased to speak to Bill C-21. I listened carefully to what my colleague from Moncton—Riverview—Dieppe in New Brunswick was saying, and I totally agree with him: Bill C-21, which was previously Bill C-52, is pure improvisation.

Let me try to dissect this bill in the few minutes I have left. In September 2009, roughly a year and a half ago, there were the Norbourg and Earl Jones cases and other similar cases. The government told us that these were separate and specific cases, that the law would take care of them, and that it would not get involved. Finally, the government intervened on October 21, 2009, by introducing Bill C-52, which, following prorogation of the House, became Bill C-21. If the government had not prorogued the House, this bill likely would already have been studied, amended and brought into force, and white collar criminals might have received longer sentences than those provided for in the act.

This bill imposes a minimum two-year sentence for fraud in excess of $1 million. Something does not add up. The Bloc Québécois will vote in favour of referring this bill to the Standing Committee on Justice and Human Rights. I would advise the government not to push us into passing this bill quickly. We will probably change it considerably to have it reflect reality more than it does right now.

We had already started asking the Minister of Justice questions about this, but he was unable to cite case law with sentences of less than two years for fraud to the tune of $1 million. Something truly does not add up.

Let us explain this to those watching. The government wants to crack down on white collar criminals. Who are these people? They are extremely well-informed criminals who know exactly how the system works and how to set up businesses in order to defraud individuals or take money away from them.

It is much easier to talk about armed robbery. Someone walks into a bank, credit union or convenience store with a loaded or unloaded weapon to commit theft. When the time comes to sentence that individual, the crime is more visible and it is much easier to prove that the crime was committed. White collar criminals on the other hand defraud people by making promises and asking for their money. They might guarantee annual returns of 5%, 10%, 15% or even 20% or more. They have a flair for attracting people. They tend to be smooth talkers. They can create a financial system that borrows money from one person to pay back another, and so on. This leads to cases like that of Earl Jones or Norbourg.

This has to stop and the message must be clear. And a minimum sentence for fraud over $1 million will not solve the problem, because clearly, prison sentences are also given in the case of fraud over $1 million.

Despite extensive research, I do not know of any sentences handed down for fraud over $1 million that did not include jail time. That does not exist. What is needed are prison sentences for criminals who defraud people of $100,000, $200,000 or $500,000. Now that would be a start. But do we need to add that in a bill? This is where I have a problem with the Minister of Justice. I do not know who his advisers are, but I am convinced that those around him forgot to tell him about section 718 of the Criminal Code.

I have a few minutes and I do not want to put anyone to sleep, but this is important. When we are preparing bills of this nature, it is important to know where we are coming from in order to know where we are headed. What does section 718 say? It has to do with guidelines for judges:

The fundamental purpose of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives:

(a) to denounce unlawful conduct;

(b) to deter the offender and other persons from committing offences;

(c) to separate offenders from society, where necessary;

(d) to assist in rehabilitating offenders;

(e) to provide reparations for harm done to victims or to the community;—I will come back to this in a moment— and

(f) to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community.

After reading this, we see that it is all right there in the Criminal Code. What does the Bloc Québécois want? It does not want mandatory minimum sentencing. That solves nothing, as we know. We have the proof; it has been settled and everyone knows it. We have studies that prove and confirm that mandatory minimum sentences do not reduce crime.

I will repeat it for the interpreters. I am sure that they interpreted all that very well but I would like my friends opposite to get it completely: mandatory minimum sentencing does not solve the problem of crime. This is not coming from us, but from studies by the Department of Justice, Public Safety Canada and especially U.S. studies. We know that our friends opposite like to boast that they are tough on crime, just like the Americans. However, the Americans are beginning to realize that it solves nothing. It solves nothing in Australia, Great Britain or New Zealand. It has been proven in black and white.

Paragraph 718(e) of the Criminal Code provides for this. I will read it again because there is one small thing they have failed to understand:

(e) to provide reparations for harm done to victims or to the community;

There is nothing in this bill. We will tackle it when the bill goes to committee.

In addition, the bill maintains the infamous provision for parole after serving one-sixth of a sentence. We would have expected the government to immediately remove that from a bill like this.

Right now, we have the perfect example of a man who was convicted. His name is Mr. Lacroix, of Norbourg. He defrauded his victims of $130 million. He received a sentence of 13 years in prison. He is eligible for parole after he serves one-sixth of his sentence, so 13 years divided by six. I can announce that he has already been released. Yes, he is out of prison. He defrauded his victims of $130 million, and his victims are either bankrupt or dead. Yes, some of them have died. And the same thing will happen with Earl Jones. Earl Jones defrauded his victims of $55 million. He just pleaded guilty and was sentenced. He is eligible for parole after serving one-sixth of his sentence. We need to get rid of that. It is urgent.

The problem is not to impose minimum sentences. We have always said that, and we will repeat it, because the members opposite do not seem to understand.

The public no longer has faith in the judicial system. They are not shocked by criminals receiving minimum sentences; they are shocked by the fact that the criminals do not serve those sentences. When someone is sentenced to 13 years in prison, the public expects that this individual will at least spend some time in prison. White collar criminals are eligible for parole after serving one-sixth of their sentence, and they generally do not have a criminal record, as we can see from research statistics. These individuals are not highwaymen; they are well-organized fraudsters.

According to our correctional services, this means they are not dangerous and there is little or no risk of them reoffending. Therefore, they are released after they serve one-sixth of their sentence. That is what shocks the public, and that is what is not in this bill. We would have expected the bill to abolish the principle of granting parole after one-sixth of the sentence has been served. We will have to see if it is possible to include this measure.

What is more, this may send the wrong message. The courts already consider the penalties. We need to stop instructing judges to impose minimum prison sentences. These honourable judges, whether presiding over the initial hearing, the Court of Appeal or the Supreme Court, have always said that they do not necessarily need a guide for imposing minimum prison sentences. Everything is already set out in the Criminal Code. They would rather have us tell them if this crime, because of its severity, deserves not a minimum prison sentence, but a longer one.

The government is not using this bill to deal with the issue of tax havens. My colleague, the member for Hochelaga, who is also the Bloc's finance critic, can come back to that in another plea, if I may use that expression.

Computers have made it easy to transfer money electronically these days. A well-organized fraudster can, with the click of a mouse, transfer tens of millions of dollars to places that our federal government has agreed to recognize as tax havens, such as Barbados or the Cayman Islands. We are just starting to discover that many of them are choosing Switzerland, and if it had not been for the HSBC Bank and, more importantly, an individual who left with more than 100,000 names, we never would have known that thousands of Canadians have accounts in Switzerland.

I do not have a problem with someone having an account in Switzerland. However, you need a minimum deposit of $500,000 to have an account with the HSBC Bank in Switzerland. That is a problem. I am not saying that people do not have the right to do it, just that the individuals that have money in accounts in Switzerland or other tax havens should have to declare it. They are supposed to do it under the Income Tax Act, but they do not. Despite our requests, the government has not intervened. And God knows that we have asked the government to get involved with the issue of tax havens a number of times. Mechanisms absolutely have to be put in place to address these tax haven kingdoms.

We have suggested several ways to combat economic crime. I would like to read what we have proposed.

We strongly suggest abolishing parole after one-sixth of a sentence is served. Also, the Criminal Code measures to confiscate the proceeds of crime need to be amended to include provisions covering fraud over $5,000. I am translating, because it must be explained.

Consider the example of someone guilty of fraud worth hundreds of thousands of dollars. What we are suggesting is that under the Criminal Code, if fraud over $5,000 is committed, authorities could confiscate all proceeds of crime from that individual. So if that individual stole hundreds of thousands of dollars from other people by fraud, we must be able to confiscate that individual's home, country home, cottage, chalet in Switzerland, and so on, in order to pay back the victims. Indeed, that is the goal; there is nothing new here. That is already in the Criminal Code. Section 718 states: “(e) to provide reparations for harm done to victims or to the community”. It is clear in the Criminal Code. It would be pointless to add anything to it. We simply need to ensure, with this bill, that such individuals' property is confiscated.

That is important when fraud of this nature takes place. We do not believe in minimum prison sentences for fraud over $1 million. Harsher sentences are needed, but they are also needed for people who commit fraud under $1 million. One way of doing this is by including provisions to confiscate the proceeds of crime for all fraud over $5,000.

We are also recommending that police forces be reorganized to include multi-disciplinary teams that specialize in economic crimes. We currently have multi-disciplinary teams to go after organized crime, to go after child pornography and to go after drug trafficking. It is high time we had this type of multi-disciplinary team to go after economic crimes.

We are recommending that banks be required to report irregularities in trust accounts to the Autorité des marchés financiers, the relevant professional order and the user. Allow me to explain, because I may have lost a few people. Every professional that must and can hold money for individuals—lawyers, notaries or accountants—has to have a trust account. A lawyer who receives a retainer has to deposit that retainer in a trust account and keep a record of that account. Generally speaking, many withdraw money from that trust account and often the banks realize that something fishy is going on. Money goes in and money goes out, and sometimes too much money goes out. We could start doing something about that.

I see that I am running out of time. I would just like to say that we are suggesting that a number of other changes be made to the Income Tax Act. We will be able say more about that in committee.

We absolutely must do two things. We absolutely must abolish parole after serving one-sixth of a sentence. We have to ensure this bill removes that provision because those who commit economic fraud are generally well organized. We also have to find ways to provide restitution to victims in order to fully respect section 718 and subsequent sections in the Criminal Code.

That is why we will look forward to seeing this bill in committee.

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

Mr. Speaker, I agree that the regulators have primary due diligence control over many of the frauds, but not all fraud comes from the markets.

However, the three biggest incidents recently have been Vincent Lacroix, who got 13 years; Earl Jones, who I think got 11 years; and Stan Grmovsek, who got 39 months. The biggest problem with this bill is that they were treated by the law that exists probably no different from the way they would have been if this bill were law.

This law was delayed because of prorogation. Therefore, for the year or two that it has taken to get the bill this far, and by the end it is going to be three years, we have seen about $10 million more fraud committed per year, while the government did nothing.

When I say they did nothing, they brought a bill forward and then prorogued Parliament so it did not become law. That legislation, which was Bill C-52, or this one we are speaking of, Bill C-21, does not do enough either. It perhaps gives people a false hope, if they watch the six o'clock news in Conservative ridings, that the government is doing something about white collar crime. It is not very much.

They might really be just beating up on judges, taking away discretion and making sure they look at things as though they were schoolchildren, and judges are not, when in the history of the three cases I mentioned, the perpetrators, the fraudsters, were treated very severely under the existing law, more severely than this law indicates. As the old saying goes, where is the proof in the pudding of this legislation?

Hopefully we can get it to committee and we can have a broader discussion of what needs to be done to attack white collar crime and get out and address the issue that all parliamentarians care very much about.

Standing up for Victims of White Collar Crime Act

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

Mr. Speaker, I am pleased to rise on this bill today, Bill C-21. I should have thought more clearly this morning when I got up. It seems that every speaker who has risen on this topic is wearing a white collar. I wish I had the good sense of the member for Yukon, who is sporting a lovely burgundy shirt.

I speak as a lawyer, as a member of Parliament, as a Canadian citizen, as a person who has known victims, organizations, and individuals who have been robbed by white collar criminals. White collar crime costs the Canadian economy dearly, and it costs the good, hard-working citizens who fall prey to fraudsters much more than members may know. They are common, everyday occurrences.

Bill C-21 sends the right message. There is no debate here in the House about this : to crack down on white collar crime is the right thing to do, and it sends the right message. This House and we parliamentarians within it are serious about keeping Canadians safe from fraud. That is perhaps where the non-partisan enjoyment and harmony ends. For fraud is not harmless. Nor is it victimless. It disproportionately preys upon the weak in our society and Canadians will not stand for it.

Bill C-21 recognizes the harm that fraud causes to innocent victims. This bill adds aggravating factors to the list of the judge's considerations during sentencing. In addition to the provisions regarding planning crimes and destroying documents, the provisions in this bill allow a judge to consider the personal circumstances of the victims, namely their age, health and financial situation. The bill includes a measure enabling communities to provide victim impact statements that can then be taken into consideration by judges. It is important to leave this to the consideration and discretion of the judges. Impact statements can include a description of how the fraud has devastated the entire community. For example, a church that has had its savings stolen or an after-school program that was defrauded can make its situation known to parishioners or students in the community. These are some of the good things in this bill.

The bill makes mandatory the consideration of an order for restitution, a chance for victims of fraud to recover some of their lost savings, a chance for reparations to be made. It permits a judge to prohibit offenders from taking any employment or volunteering services in any way that provides them access to, or authority over, the property, money, or financial security of others. In that world, there is no re-victimization by the same perpetrator. These are all good measures.

It is why the bill will go to committee for study. We hope that the committee will improve the bill, for these are good measures that will strengthen the Criminal Code and provide some comfort for the cheated and maligned. But, like many bills in the House, we would not want to leave the Canadian public, or those who have been victimized before by fraudsters, with the impressio that the bill will cure all the evils of the past, the present, and the future. It is woefully inadequate in that regard, and it raises some hopes that may not come to fruition.

I have a couple of categories that came up during some of the question and answer sessions. One of these has to do with restitution. It seems like a good step to provide for restitution. There are provisions in the Criminal Code that allow for victim impact statements. There are provisions in various parts of the country being enmeshed in the Criminal Code that give the authority to take over the assets of someone who has performed an economic crime. These things happen. But the provisions in this act do not, as the member for Scarborough—Rouge River mentioned, make it clear whose role it is, who will be driving the prosecution, and whether the prosecution's goal will be getting the wrongdoer to repay the money. It is unclear. We will hear testimony on this; perhaps it is something that can be worked on.

As has also been brought up, there is the continuing and lurking question of tax havens. We live in an Internet age, a digital age, an age where we cannot find addresses. We used to know what an address was. If they did not have an emergency response number on their box, at least we knew it was farmer Joe, next to farmer Bill, next to the fish market, in our case in eastern Canada. But addresses now may be static Internet addresses. They may be people in ether, people who do not really have a place where we can go and knock on their virtual or other door and get the money they have taken from other people. So tax havens follow that digital reality where fraudsters can hide money away, hard-earned money from Canadian citizens that now rests in foreign jurisdictions.

The bill is a step forward. But there is a question that is very much out there: in almost five years, what has the government done, what has this country done, about tax havens, about people who defraud other Canadians of money, packing it away in other jurisdictions from which it cannot be accessed and returned to its rightful owners?

What the bill lacks is a mechanism for prevention. As a country, as a Parliament, as a government, we are all in the same boat with respect to aims. How common is it that we all have the same aim? We want to prevent white-collar crime, prevent fraud perpetrated on the weakest in our society. The churches, the after-school kindergartens, the minor hockey associations, the women's institute groups, the Catholic Women's League, seniors, handicapped people: these groups are defrauded of millions of dollars every year. How can we as a Parliament strike together to prevent this?

There is the penalty phase. But let us be clear: the bill is mostly about the penalty phase. I don't want to strain the analogy, but if we want to stop violence in hockey we might start with the young, the minor groups. We might talk about how it is not the right thing to do. Things are not always effected in the penalty phase. In the criminal justice world, it is the same.

This bill speaks only about the penalty phase of fraud being perpetrated. Are we going to prevent fraud from happening by a shell game of penalties for people who have already socked the money away? In other words, we are going to penalize people from whom we are not likely to get the money.

In this society of ours, we have a hierarchy of offences. It is recognized in the Criminal Code, which sets out crimes against the person, crimes against property, and even crimes against the state. We consider, and rightly so, that crimes against a person are of a higher magnitude than crimes against property. Crimes against property came from the old west days, when stealing a horse meant stealing someone's livelihood, and if they were stealing someone's livelihood, they were hurting a family. Horse thievery was a very important offence. It is right there in the modern Criminal Code. It came down to us from 1892. It is a very high-ranking offence.

However, people do not go around stealing horses as much anymore. Instead, they go around stealing nest eggs, people's lifelong hard-earned savings, through fraudulent means. How are we to give this offence more importance?

We should look at the whole Criminal Code and consider prevention, as we would with any other crime. How do we stop violent crime? We look at early childhood intervention, the social causes of crime, and the socio-economic milieu in which recidivism is rampant.

How do we get at the prevention of economic crimes? It seems to me that people who commit sophisticated economic crimes through fraud are people who are using electronic and social media as well as means of communication controlled by the Government of Canada through agencies.

Why does the government not come forward with modern methods to prevent the use of regulated tools of fraud? This would go a long way towards stopping fraud from happening in the first place.

The fourth general point in my remarks has to do with something I heard a lot about from this side of the House and in the communities across this country. At one time, I was a mayor, and I know what it is like to have a police force doing important work in a community. Police forces across this country are asking for more resources.

What has the government actually done to help the police? I don't mean on paper, in a speech, or on the five o'clock news. What are the police chiefs saying? What is the Canadian Police Association saying about actual boots on the street? They are saying they do not have enough resources. If we prioritize, however, they will take crimes against the person more seriously than economic crimes against the household income.

With more resources, the police who serve our communities will do more than they can now. The blame for failing to confront the growing elements of fraud lies with the government. After five years of talking about making Canada safe, they have done very little about it. Ask any policeperson who has not been bullied into saying nothing by the threat of withdrawing funds from the local force, city, community, region, or MP.

We are here as opposition members to stand up for good, hard-working policemen across this country who tell us they need more resources to combat fraud. That is what we would like to see.

As to Bill C-21, it has been said many times in this House, and by many members of every party, that there is no greater fraud than a promise not kept. This may sound like just another pithy phrase, but it rings true in the hearts of Canadians, and it has been said many times outside this House.

This bill is an example of a promise not kept. The promise was not kept because it had a different number, and we were prorogued and sent home. We could not do our work. The bill that was just the same as this one did not see the light of day, because the Conservatives prorogued Parliament and sent us home.

That is a fraud because it is a promise not kept. The Conservatives said that they would do something about fraud and white collar crime and then they pulled the plug on the bathtub of Parliament and we went home. This bill is not law because the House was prorogued and it died on the order paper. That was last year. We are talking about the bill as if it is something new.

Canadians who have fallen victim to fraud since prorogation should look across the way and ask this question. If the bill was not contentious and if the guys on the other side were going to let it go through, why did the government prorogue? Then maybe their aunt or daughter's hockey team would not have been defrauded of all that money because the bill would have been perfected, approved in committee and passed. It would be law now. That is the biggest fraud so far in the speech today. The Conservatives did not keep their promise. They did not do anything about white collar crime.

There are other aspects of the bill that hopefully will be tightened up in committee. However, there is an overriding element to the bill that surely we have debated this long enough and the government must see that it must question the insertion of mandatory minimums in the bill as well. The bill provides nothing for the prevention of crime, as I said, only punishments after the fact.

No jail sentence or restitution can make up for the sense of betrayal and hurt that follows a fraud perpetrated. No jail sentence or restitution can restore the confidence or livelihood of a Canadian cleaned out by someone the victim has grown to trust, a new parent without a nest egg, a dying grandparent without a bequest. Prevention keeps Canadians safe. Nothing is more important to the livelihoods of Canadians and nothing in the bill even gives a hint about it.

On the question of mandatory minimums, it is an experiment that has failed in the United States and will not have an effect on white collar crime in our country. The bill provides for a mandatory minimum sentence for a commission of a fraud over $1 million.

One of the early criticisms of Bill C-52, the predecessor, and this bill was that it did not hit the financial institutions hard enough. It seemed to be cherry picking over the smaller crimes that were committed on a smaller basis. We all know in our country already, dare I mention Earl Jones in the province of Quebec, that there are large-scale crimes occurring that take people for more than $1 million either individually or cumulatively. It is not clear to us on this side, and we will see in committee, whether this is cumulative, large enough or why the Department of Justice came up with this amount, but we shall see. We do not want to exclude the larger frauds from a bill that is purported to stop white collar crime.

We will do our best on this side to ensure the bill is wider in scope, more effective and pushes the government to key in on aspects of prevention and tax havens. We on this side, by doing so responsibly, will keep a promise that the people on the other side, known now as the government, failed to keep, which has been the biggest fraud committed in the area of white collar crime in the last five years.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Joey Davis, Earl Jones Victims Organizing Committee]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thank you.

[Larry Elford]

Thank you, Mr. Chairman.

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

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

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

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

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

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

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

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

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

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

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

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

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

Thank you for your time.

[Larry Elford, As an Individual]

Thank you.

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

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

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

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

[Melanie Johannink, As an Individual]

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

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

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

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

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

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

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

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

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

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

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

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

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

[Mike Miles, As an Individual]

Good afternoon. Bon après-midi.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thank you very kindly for the opportunity to be here.

[The Chair, Conservative, Ed Fast]

I call the meeting to order.

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

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

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

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

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

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

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

Ms. Watson, if you would, please start.

[Michael B. Murphy]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thank you.

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

I'm beginning.

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

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

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

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

Thank you very much, Mr. Chairman.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

It is because we want to set the record straight.

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

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

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

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

Thank you.

[The Chair, Conservative, Ed Fast]

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

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

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

Welcome here.

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

Welcome back.

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

Welcome to the three of you.

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

Welcome to you as well.

We'll begin with the Honourable Michael Murphy.

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

Mr. Murphy, please.

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

Thank you, Mr. Chair.

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

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

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

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

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

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

Thank you.

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

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

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

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

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

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

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

Thank you very much, Mr. Chair.

Thank you for your presentation.

I listened very carefully to the presentation and read earlier the written copy. I don't seem to see anywhere in your presentation where you make a statement--positive, negative, neutral--about Bill C-52.

What is the RCMP's view of Bill C-52?

[The Chair, Conservative, Ed Fast]

I call the meeting to order. This is meeting 52 of the Standing Committee on Justice and Human Rights. Today is Monday, December 7, 2009.

You have before you the agenda for today. We're considering Bill C-52, An Act to amend the Criminal Code (sentencing for fraud).

We've divided today's meeting into two panels. First, we have a panel that includes witnesses from the RCMP. This is their third attempt to appear before us on this bill. We apologize for the inconvenience that we've put them through.

I know that you people have done your best to be here on time, but owing to a number of unforeseen circumstances we weren't able to accommodate you. We're eager to hear what you have to say today, so thank you for attending.

During the second hour of review, we'll be hearing additional witnesses on Bill C-52.

If there's any time left at the end, we can move to consider any committee business that members may want to raise. We have a budget for travel that we need to consider.

I wanted to note that this meeting is being televised and to remind you to turn off your BlackBerrys and take any phone calls outside the room.

Thank you.

Who's going to start for the RCMP?

[Rob Nicholson, Conservative, Niagara Falls, ON]

Thank you very much, Mr. Chair.

I'm pleased to be here before the members of the standing committee to answer questions or hear comments concerning supplementary estimates (B) for the Department of Justice.

As you know, Mr. Chairman, our government was elected on a promise to tackle crime, and we're unwavering in our commitment to fighting crime and protecting Canadians so that our communities are safe places for people to live, raise their families, and do business. To help us fulfill that commitment, I've relied on the advice and the tireless efforts of the employees of the Department of Justice, and I deeply appreciate their support as our government moves forward with its crime agenda.

Our government firmly believes that the protection of society must remain the first priority of our criminal justice system and that sentences should reflect the severity of the crime. To that effect, we've succeeded in implementing legislation to ensure adequate sentences, such as our comprehensive Tackling Violent Crime Act, which legislated tougher jail time for serious gun crimes, increased the age of protection from 14 to 16 years to better protect our youth from adult sexual predators, and provided strong penalties for alcohol-impaired driving. In addition, we've also increased penalties for those convicted of street racing, ended conditional sentences for serious personal injury offences, and passed legislation to combat illegal copying of films in movie theatres.

In our fight against identity theft, we have succeeded in adding three new offences to the Criminal Code through Bill S-4, targeting the early stages of identity-related crime and giving the police the tools they had been lacking to move against this ever growing problem before the damage is done.

With regard to gangs and organized crime, we have passed Bill C-14, which will increase penalties for murders and reckless shootings connected to these activities. Once it comes into force, any murder connected to organized crime activity will automatically be considered first degree and subject to a mandatory sentence of life imprisonment without eligibility for parole for 25 years.

On October 22, our government succeeded in eliminating two-for-one credit for time spent in jail while waiting for trial, a practice that disproportionately reduced prison sentences for some violent offenders. Police associations, victim groups, and indeed all provinces and territories expressed their support for that bill.

Mr. Chairman, our government has made great strides, but there is more that we can be doing to protect Canadians. For example, in recent months I have spoken to victims of various fraud schemes and white collar crime, and they clearly attested to the gravity of those crimes. Fraud can have a devastating impact on the lives of its victims, not only as it affects their financial security but also through feelings of humiliation for having been deceived and voluntarily handing over their life savings. These schemes can be every bit as devastating as a physical assault.

The determination of these victims to call for action on fraud in the face of their emotional turmoil reaffirmed the need to act quickly and effectively against this type of crime. That's why I recently introduced Bill C-52, which cracks down on white collar crime and fraud and increases justice for victims.

These measures will allow victims to be heard and their concerns to be taken seriously by the courts.

We've also taken extremely seriously the many instances of child sexual exploitation facilitated by the Internet. The worldwide web provides new and easier means for offenders to make, view, and distribute child pornography, resulting in a significant increase not only in the availability and volume of pornography but also in the level of violence perpetrated against children.

Our government recently proposed a mandatory reporting regime across Canada that will require suppliers of Internet services to report certain information about Internet child pornography. This is one more step in our efforts to better protect children from sexual predators and help police rescue these young victims and prosecute the criminals responsible.

Our government has shown its concern for the victims of multiple murderers and their families. We firmly believe that the families of murder victims should not be made to feel that the life of their loved one doesn't count. This is why I tabled Bill C-36, which will permit judges to impose consecutive periods of parole ineligibility for multiple murderers.

While there can only be one life sentence for an offender who commits more than one murder, the parole ineligibility period, 25 years in the case of a first-degree murderer, could be imposed consecutively for each subsequent murder. In addition, we continue to seek elimination of the “faint hope” clause of the Criminal Code. By saying no to early parole for murderers, our government hopes to spare families the pain of attending repeated parole eligibility hearings and having to re-live these unspeakable losses over and over again.

Both of these pieces of legislation would acknowledge the value of every life taken by this most serious of crimes. It would ensure the criminals responsible serve a sentence that more adequately reflects the gravity of their crimes.

Mr. Chair, protecting people is a priority, not an afterthought. Our government remains committed to improving our justice system in order to properly address the problem of drug producers and traffickers.

Last spring I was in Vancouver to announce, alongside senior law enforcement officials, that our government was seeking to amend the Controlled Drugs and Substances Act by introducing Bill C-15.

This legislation would impose mandatory sentences on drug producers and traffickers, especially targeting the criminal enterprise of gangs and other violent criminal organizations, because we know that drugs are the currency of organized crime.

Having this legislation passed as quickly as possible would better protect our communities and send a clear message that if you produce and traffic in marijuana, if you're into the grow op business in residential neighbourhoods, if you threaten the safety of Canada's communities, you will serve jail time.

It's been six months since that bill was referred to the Senate. It's still not out of committee. I certainly urge all members of Parliament to do whatever we can to ensure and promote and push to get that important piece of legislation passed.

We are doing many things at the department. One of the things we are doing is investing some $10 million in the guns, gangs, and drugs initiative, which funds community-based programs that seek to help youth resist the lure of gang involvement and illicit drug use.

The Department of Justice is also committed to continuing to play a leadership role in strengthening the justice system through non-legislative means. The department has requested some $3 million in the main estimates for grants and contributions under the justice partnership and innovation program. This program contributes to policy development to ensure that justice remains accessible, efficient, effective, and that it reflects Canadian values.

We're also committed to helping victims better navigate and deal with the criminal justice and correctional systems. To that end, we have increased allocations to the victims fund to, among other things, provide greater financial assistance to those victims who wish to attend national parole board hearings, assist Canadians victimized abroad, provide additional funding to provincial and territorial governments to enhance or develop new services for underserviced victims of crime, and provide resources to the territories to directly assist victims with emergency costs.

In total, we have increased the funding for the federal victim strategy by $52 million over four years. We've also created the independent federal ombudsman for victims of crime to ensure that the federal government lives up to its commitments and obligations to victims of crime and to give victims a strong and effective voice in the criminal justice system.

We also recognize that aboriginal people enter our justice system in disproportionate numbers. As a result, we have renewed our commitment to the aboriginal justice strategy until 2012. We will make an additional investment of $40 million, for a total of $85 million over five years.

The strategy funds programs that provide justice services to more than 400 aboriginal communities across Canada, helping to hold offenders accountable for their actions, increase awareness of victims issues, and promote greater youth connection with aboriginal culture and traditions.

Mr. Chairman, ours is a busy agenda. I think we are doing important work. It's an important component of what we are here to do as members of Parliament.

I thank this committee for its work in moving forward on these justice initiatives. I look forward to more cooperation from this committee. Thank you again.

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

Mr. Chair, I was wondering if we could postpone our clause-by-clause study of Bill C-52 until we come back on January 25. Is there an urgent need for us to proceed with the clause-by-clause study on December 9? That would mean that if we wanted to propose amendments to the bill, we would have to table them tomorrow. We cannot work miracles. It becomes very difficult. Is there an urgent need? Can we put the study of to January 25?

[The Chair, Conservative, Ed Fast]

Thank you.

That will bring to an end our session. Unfortunately we're out of time. We have to go to vote.

I want to thank all of our witnesses for appearing. Your testimony is now part of the public record. We'll consider it as we move forward in our consideration of Bill C-52.

Again, thank you.

We are adjourned.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Dubin, I'm a bit concerned about--I always take shots at the insurance bureaus--and I really have to question your analysis. Why would you be pushing the use of this bill as opposed to using the organized crime sections in the code for the kind of crime that you see with the fraudulent auto accidents?

It's clearly organized, it's clearly quite sophisticated, and it seems to me that the sections of the code dealing with organized crime groups would be much more appropriate than the contents of Bill C-52.

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

First, I have to apologize. I had to go to Parliament to speak to another justice bill, Bill C-58. I said, and it will be noted: it is a very good bill, one that is very worthwhile and will be debated here by the committee in the near future.

However, I find it more difficult to accept Bill C-52. I don't know what your opinion is, I didn't hear you. So I am going to listen to you and ask you just one question. I practised criminal law for many years and I know of no case where someone committed a fraud, a theft, because I call it theft, of over $1 million and got a sentence of less than two years. So I wonder whether it is really necessary to impose a minimum prison term.

As well, I would like to talk about the obligation to make restitution. I think section 741 of the Criminal Code is not really used, which provides that the court may order restitution to victims, and this automatically becomes a civil judgment that the thief will be required to pay.

There are some things I don't understand. Minimum sentences of imprisonment are not a problem for me. The problem is that we don't go far enough and the risk is that we send the message that this isn't serious, that it is just a $1 million fraud, and the thief gets off with two years or less, or maybe more. That is a bad message. I don't know what you think, I didn't hear you, but I would like to hear your thoughts.

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

Thank you. I appreciate your testimony and you patience with the committee's work. I have some questions for Mr. Kube and Mr. Roy. Unfortunately, Mr. Nichol, I did not hear your presentation, and that is why I will not be asking you any questions.

Bill C-52, in its present form, applies only to crimes of fraud, in general. As you said, that doesn't cover cases like Bre-X. A fraudulent prospectus was issued by a company. It also doesn't apply to insider trading, and so on.

Do you think the bill should be amended so that it applies to other fraudulent acts that are already regarded as criminal, to ensure equality, if I can use that expression?

Mr. Roy, you said it might be wise to create an exception for accomplices to fraud, given that the evidence often shows, beyond a reasonable doubt, obviously, that their role was minimal. In your opinion, how could we be sure, in terms of the drafting, that an accomplice who did play a relatively major role in the case was dealt with? Could there be aggravating factors that would determine whether the person should be subject to a mandatory minimum sentence?

You also talked about prohibitions on someone convicted of fraud handling other people's affairs. If the bill is amended to give a judge the power to impose such a prohibition, will other sections of the Criminal Code have to be amended to be sure that this makes sense? What I want to talk about here is what you said earlier, probation, monitoring a person who is subject to the prohibition.

Thank you.

Was that short enough?

[William Nichol, Chief Executive Officer, Canadian Justice Review Board]

Thank you, Mr. Chairman, and members of the committee.

On behalf of the directors of the Canadian Justice Review Board, I wish to thank the committee members for providing the opportunity to appear here this afternoon. I've provided the committee clerk with a brief that highlights our concerns in more detail, and I understand you have received copies of it electronically.

The key point that I would like to emphasize is that Bill C-52 deals only with the sentencing aspect of an otherwise very lengthy process, and by its nature, it already provides many opportunities to avoid sentencing in the long run.

The brief contains a list of some of the many possible escape routes. I hope you will review and consider those in terms of the content of this legislation. My friend here has alluded to some of those escape routes.

Yesterday's Ottawa Citizen carried an opinion piece from Mr. James Morton, entitled “We need 21st-century law”. Mr. Morton is, among other things, an adjunct professor at Osgoode Hall. In my opinion, a key passage in his article touched on the matters being considered here today. Mr. Morton asks, “Is crime really best dealt with by prisons?” He answers the question by saying that in some cases—white-collar crime—probably yes, but in other cases, as with most drug-related crime, probably not. But here we're dealing with white-collar crime. Bill C-52 seeks to address white-collar crime and it does so in the general context of the criminal justice system's goal of preventing crime.

Fraud has a legal definition in the Criminal Code, but fraud can be very difficult to prove. If the goal is to prevent damage to society, and more specifically financial damage, then perhaps it's time to define in the Criminal Code some of the other undesirable white-collar activities—for example, creative accounting. In my opinion, this bill would be considerably improved if it did that.

If we were speaking of fraud alone, then the Canadian Justice Review Board submits that a two-year prison term is not an effective deterrent, especially given our current parole board policies. We ask that you, as legislators, consider a mandatory five-year sentence.

Ms. Hazel Magnussen, who is a colleague of mine operating in Victoria, British Columbia, who is also the secretary of the Canadian Justice Review Board, specializes in victims' rights issues. Over the past two years or more, she has been conferring with the Federal Ombudsman for Victims of Crime, Mr. Steve Sullivan, and also with our own board member Professor Ted DeCoste. As a result, they designed a curriculum that Ted DeCoste was able to introduce for law students at the University of Alberta that raises awareness of victims' rights.

Since Mr. Sullivan may also be appearing in front of this committee, I don't want to steal any of his thunder, but I would like to point out that the Canadian Justice Review Board agrees with sentiments he expressed in a November press release. He said:

I am pleased to see the federal government moving forward on important victims’ issues like financial crime and restitution...I am however concerned that the restitution piece of this new legislation applies only to victims of fraud. We need to ensure that we are supporting all victims who may have been devastated financially as a result of a crime.

If I may, I'd like to return quickly to the comments I made a few moments ago and reiterate that this legislation would be greatly improved if it brought within the ambit of the Criminal Code some of these other socially unacceptable practices often associated with what we might call the financial industry, and also legislated significant penalties for those behaviours, including restitution.

Fraud is not the only problem. I believe it's very upsetting, or depressing, for the general public to hear or read about major financial swindles and then learn that even those fraudsters who admit guilt receive what many consider to be laughable sentences, such as house arrest or early six-month parole.

What Bill C-52 should be doing is restoring public confidence in the justice system by giving society a legal framework that applies to the 21st century's financial world.

In closing, I would like to thank the committee again for the invitation to appear. I trust that you will give some consideration as to the recommendations we've made.

Thank you.

[Arthur Kube, President, National Office, National Pensioners and Senior Citizens Federation]

Thank you, Mr. Chairman.

I'll tell you a bit about our organization. It's been in existence for 57 years. It started largely in the province of Saskatchewan and it has grown to where we now have 380 organizations affiliated to our federation, with an approximate total membership in excess of a million individual seniors.

What has been happening in the last few years is that more and more of our members are depending upon their individual investments for their retirement income. As you know, the number of people who are covered by a pension plan has been declining for some time, and therefore a good number of our members have to operate in the market.

We appreciate that Parliament is moving on Bill C-52, and I think it's a step in the right direction. However, I want to assure the committee members and the chair that it's not quite sufficient for our members. Let me give you an example.

In the Bre-X case, you had a situation where it was a publicly sold security. Let me tell you that the president of Bre-X had an exit strategy all along. How are you going to get hold of the president of Bre-X who is now, I understand, living either in the Turks and Caicos Islands or somewhere, beyond the Canadian jurisdiction? To a certain extent, with that bill, unless you have an extradition agreement, really nothing will happen.

The other thing is that when seniors are defrauded, quite often they're ashamed to report it. To a certain extent, they're leery of the rest of the family because they feel they should have consulted the family. But we then find out that somebody does goes ahead and lay a complaint and the person is prosecuted.

You know, there's nothing in the legislation that says, if a person is found guilty of fraud, they're not only found guilty of the fraud perpetrated on the person who complained...but there should be compensation and restitution for all of the people who got defrauded by that particular person. I think to a certain extent the bill falls short.

We passed a resolution at our convention, which emphasizes the direction we seniors would like to go in. I'd like to read that resolution:

Whereas the federal government, in the January 27, 2009, budget set out the plan for regulatory reform of Canada's capital markets; and whereas the expert panel on securities regulation that reported in the Hawkin Report, published January 2, 2009, recommends reform of the multiple and provincial Canadian securities regulatory schemes to a single Canadian securities regulator; and whereas the Canadian capital markets need efficient, effective, and shareholder-friendly regulatory protection; and whereas a change in the Canadian securities regulatory schemes has the support of the majority of the provinces; and whereas a single securities regulator will enhance the detection and prosecution of serious capital market crimes, where the current fragmented system of provincial securities regulations has shown that it cannot prevent such crimes; and whereas the current financial crisis has provided the motivation and optimism that such a reform to a single Canadian securities regulator will work and be supported by most provinces; therefore it be resolved that the National Pensioners and Senior Citizens Federation lobby the federal government and opposition parties to establish a national securities regulator through legislation that enhances the right of investments.

The reason it's so important for seniors to have a regulatory framework is that, to us, prevention is really the answer to stopping crimes. If you have a strong regulatory system, where, for instance, we could separate people who either sell or advise in the security field into different parts, that would be a beginning. If we could license them properly and bond them properly, that would be another help. We think the answer to white-collar crime, especially as far as seniors are concerned, rests more on the side of regulation than really punishment, because, as I said, these crooks are pretty smart. They always have an exit strategy. We know it's awfully hard to recuperate these fraudulent gains.

Quite often they ship it out of the country, they transfer it to the rest of the family and so on, and it makes it very difficult. And for an average senior to have access to the judicial system, it's very hard. We're saying prevention is the answer to white-collar crime, especially when it comes to the question of seniors.

Thank you very much, Mr. Chairman.

[Richard Dubin, Vice-President, Investigative Services, Insurance Bureau of Canada]

Thank you, Mr. Chairman.

The Insurance Bureau of Canada is the national trade association that represents Canada's home, car, and business insurers. As a national trade association, we have an investigative services division that has a staff of 59, of which I am the head. Our team includes a number of seasoned former police veterans who spend their days investigating organized insurance crimes involving staged auto collisions and auto theft. This is a very busy job for our people due to the growth in Canada of organized crime.

Insurance fraud is a big business in Canada. In just home, business, and auto insurance, it is estimated to be a $3-billion-a-year business. On average, 10% to 15% of all claims have an element of fraud. Consider for a moment that our industry paid out $25 billion in claims in 2008 and you'll see the scope of the problem. Let's be clear as to where that money has to come from; it comes from individual Canadians in the form of higher premiums.

Organized crime long ago saw an opportunity in insurance fraud. Why? Because it is a low-risk, high-profit business. The penalties are minor, and jail time is rarely handed out, even for cases involving substantial fraud. In the brief time I have here, I want to tell you about just one type of highly organized insurance fraud: staged auto collisions.

Phoney car crashes are a big business in the Greater Toronto Area, which is considered the staged auto-collision capital of Canada. These complex schemes frequently involve organized criminals linked with tow-truck operators, body shops, paralegals, and registered health care providers. I also refer to them as rehab centres or rehab clinics. In one particular investigation, which is ongoing right now, 41 staged auto collisions are alleged to have taken place involving fraudulent auto physical damage and fraudulent accident benefit claims. Further investigation suggests a possible 116 additional alleged staged collisions involving this criminal organization.

Altogether, we estimate that this one project alone could cost insurers and their customers between $20 million and $25 million in potential fraud. To date, over 200 charges have been laid against 38 individuals.

Staged collisions involve not only those intentionally causing the collision but also the innocent drivers who are placed at great risk of serious injury or death. Particularly dangerous is the “swoop and squat”, in which two cars intentionally box in the innocent driver. A third car quickly passes in front and then jams on the brakes, forcing the innocent driver to rear-end the vehicle ahead. The vehicle struck in the rear is usually carrying several passengers who paid for their seats so that they can claim to be injured. They submit fraudulent accident benefit claims, which are supported by rehab clinics.

In more elaborate schemes, a runner recruits drivers and passengers to play roles in a carefully scripted, choreographed, controlled crash. Bogus witnesses are positioned near the staged collision to support the criminals' account and to contradict the innocent driver's testimony.

IBC's investigative services investigates, on average, over 30 such projects a year. Unfortunately, those convicted and sentenced usually receive conditional sentences, and restitution is rarely ordered. In keeping up with organized crime, however, designated investigative bodies, like ours, and police and prosecutors need more tools. A strengthened Criminal Code to get tough on these types of crimes is a top priority, and we were pleased to see that the House of Commons has already passed Bill C-26 in regard to auto theft.

This legislation, Bill C-52, is another positive step that takes direct aim at the kind of organized criminals our industry battles every day. Tougher penalties for fraudsters will send a clear message that Canadians will no longer tolerate having their savings targeted by criminals.

It is time for the fraudsters' free ride to end, and Bill C-52 makes strong steps in that direction. We urge parliamentarians to pass this legislation.

Thank you. We would be pleased to answer any questions committee members may have.

[Yves Lessard, Bloc, Chambly—Borduas, QC]

Thank you, Mr. Chair.

I would like to thank our guest and the other guests for being here today. I will be very brief because we have only a little time.

As you understand Bill C-52, would you be able to tell us whether the sentences for similar frauds will be applied cumulatively for multiple frauds of the same nature? For example, if a person commits 12 frauds, the minimum sentence would be 12 times two years.

[Lucie Joncas]

Thank you very much for the accommodation. I'm sorry, but obviously I thought I was starting at 3:30.

To begin with, the Association québécoise des avocats et avocates de la défense would like to thank the committee for this opportunity to talk to you about our concerns regarding Bill C-52.

The AQAAD is composed of more than 600 members who practise mainly criminal law, and each region is represented on our board of directors. The needs of the regions are very diverse, and when we present submissions we try to consider the needs of both northern communities and urban communities.

The AQAAD is aware of recent problems involving frauds that caused substantial losses for many members of the public. Quebec has been particularly affected by the embezzling of funds invested by individuals, but we do not believe that the judicial system has responded to this situation adequately. The AQAAD has always taken the position, in principle, of favouring judicial discretion, so is inevitably opposed to mandatory minimum prison terms.

In recent years, we have seen a significant erosion of judges' discretionary authority, and we deplore that situation. Repeated attacks undermine the credibility of the system and jeopardize its ability to operate. Bill C-52 provides for a two-year mandatory minimum sentence. The Quebec Court of Appeal put us on notice several years ago when it refused to impose conditional sentences of imprisonment for substantial frauds. We will recall the guilty pleas or verdicts in certain cases that affected Parliament more directly, and the Court of Appeal definitely put us on notice that firm prison terms should be handed down. So we recognize that principle and we respect it.

However, I think we have to recognize that there are exceptional cases and that major injustices could result. The amendments proposed to subsection 1.1 of section 380 refer to "the total value of the subject-matter of the offences", or,in the French version, "la valeur totale de l'objet des infractions en cause". We have to remember that under section 21 of the Criminal Code there are various ways of being a party to an offence that might involve a very significant total sum, but where an individual who played a very minimal or secondary role would fall within the provisions you are proposing. So I think the specific role should be taken into consideration, and the need to individualize sentencing is not being respected when this kind of minimum sentence is imposed.

I also think we have to remember that the Criminal Code provides for a maximum term of 14 years for any fraud over $5,000. So judges have all the latitude they need, lots of elbow room, to impose sentences well over what is proposed, in appropriate cases.

There is also another clause that concerns us. We see that you want to impose the condition that a person not work in places that could result in more offences being committed, but the Criminal Code already provides for this possibility. Paragraph 732.1(3)(h) provides that when a probation is made, the court may prescribe that the offender

(h) comply with such other reasonable conditions as the court considers desirable, subject to any regulations ... for protecting society and for facilitating the offender’s successful reintegration into the community.

So the Criminal Code already provides for this possibility in probation orders. We must remember that the people who sit on parole boards, both provincially and federally, have complete authority to impose exactly these kinds of conditions. And believe me, they do their jobs well and they regularly impose all sorts of conditions for protecting society.

So our position, in principle, as representatives of the Association québécoise des avocats de la défense, is that we have to stop usurping the discretion of the courts. I think this bill does not meet any legal need and can only be a response to a political need. This is what concerns us: that there will be a constant erosion of judicial discretion.

Thank you.

[The Chair, Conservative, Ed Fast]

I call the meeting to order.

This is meeting 50 of the Standing Committee on Justice and Human Rights. Today is Wednesday, November 25, 2009.

Once again, I will reminder all those present to turn off their BlackBerrys, or at least switch them to vibrate. If you're going to take a call, please take it outside of this room. Thank you.

You have the agenda before you for today. We're continuing our review of Bill C-52, and we have a number of witnesses with us.

Mr. Comartin, we left off at our last meeting with your point of privilege. Are you intending to raise that again?

Criminal Code

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

Madam Speaker, in my career as a criminal lawyer, my most important client was always the one in front of me, whom I had to defend before the court. It is worth repeating: justice issues are very important. I do not mean to denigrate the work of other members, because I respect what they do, but this work is very important because it gives people their freedom. We must give this the attention it deserves.

As a parliamentarian and a lawyer, when someone forgets—I was going to use another word, but I will avoid it so as to avoid a point of order—deliberately or not, to hand over documents or to give us the information we need to make decisions, I take exception to that. In fact, I think I should take exception more often.

Bills C-52, C-42, C-36, C-31 and C-32 need to be studied immediately. Should they be studied quickly? No, we will take our time and give them the careful consideration they deserve, as we should and as we are expected to do. Then we will see.

For now, the issue that concerns me is Bill C-36. In my opinion, we must take time to give it the consideration it deserves. The Conservatives must stop forgetting to give us the documents needed to study this bill.

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

Under those circumstances, whatever legislation we pass, this useless Bill C-52 that we have before us, for example, we will get nowhere until we do away with tax havens. The problem is that we are not able to follow the money. White collar criminals do not bury their money in their gardens. They generally bury it on some island in the sun, in the Caribbean, or some other tax haven.

Do we agree on that?

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

Thank you. I just have one question, and then I'll pass it to my colleague Madame Mendes, who also has one.

My reading of Bill C-52 leads me to believe that it would only create a minimum mandatory for someone who's convicted of a general offence of fraud. It does not create a minimum mandatory for someone who's convicted of fraud affecting the market—fraudulent manipulation of stock exchange transactions, insider trading, or false prospectives, as in the case of Bre-X—regardless of whether the total amount of the fraud was $10 million, $20 million, $30 million, or $40 million. So I'd like to know if you believe that the minimum mandatory that's being proposed for general fraud should also apply to these other offences, many of which were brought into the Criminal Code in 2004.

Go ahead with your question, so that you get it in.

[Gary Logan, Detective Sergeant, Retired, Toronto Police Fraud Squad, As an Individual]

First, I read through Bill C-52 and I'm very pleased with what I read, because in the years I've been investigating and dealing with corporate fraud with the Toronto Police Service, I've certainly seen a lot of change with respect to the way this is being managed. I'm very pleased, particularly with the sentencing, because, I don't care what anyone says, if somebody at the end of the day is convicted and there's the reality of their going to jail--and I think we've all witnessed this through comments and through people we've seen in the newspaper moving outside of or attempting to get back into Canada--jail certainly works. It's a definite deterrent. I've heard this from other people in dealing with people who have committed these crimes.

One thing I am concerned about--maybe not so much concerned, maybe that's a poor choice of words--is the restitution. It has been my experience, in all the years I've been dealing with this, that the restitution orders issued by the courts are really only in effect for the period of probation. At the end of the probation, if the restitution is not made, where does this leave the victim? The enforcement component of the restitution and the period of probation is very rarely ever enforced by the law after that.

The court also has the authority to issue what is referred to as a compensation order. A compensation order can be applied through the crown to the court as long as the victim is in court, at which time the judge, based on the facts and circumstances, can issue what is referred to as a compensation order. In my experience, that has always been a more favourable choice and direction to go in. Restitution I've always been a little leery of, because that only runs for the period of probation and nobody is monitoring that period of probation to ensure that victims are being compensated properly. At the end of the day, probation is over, there is no restitution, and the victims are back at square one.

So that may be something you want to consider, or at least think about, to ensure that this issue is looked at. Other than that, I'm very pleased with everything else I've looked at with respect to the changes forthcoming in the bill.

The other thing I want to speak to today, and Diane touched on it, is securities crime. I probably spent the better part of 16 or 17 years investigating corporate fraud. Over those years I've had many years of dealing within the securities industry in particular and the market where fraud and allegations of fraud have occurred.

In years gone by, there was a set procedure, a set format, whereby an intake process was set in place for all crimes relating to fraud. Victims would attend or at least deal with the police. At that stage there would be an intake process, an assessment or triage of what had occurred. Based on that, the police would make a determination, based on the facts and the evidence readily available, whether to proceed to the next step, take on the case, and conduct the investigation. That worked very well for all types of crimes, particularly fraud.

Since about 2003 there has been a change in that, a shift in who would be looking at the investigations occurring within the securities industry. From that time forward, from where I've sat and from what I've seen, to me, all that has done is increase the state of confusion for the victims and for our officers. What I mean by that is that there is uncertainty as to who really will be taking the lead in conducting the investigations. There's the uncertainty as to where the victims are able to introduce their complaints into a police environment. The way it stands now, the first person many of these victims who go to police services are going to meet will not, for the most part...and it's no fault of the officers. Officers have a very difficult time understanding fraud at the low level. This is why it's critical to have the appropriate people in place within police services who understand all the components of fraud and criminal laws that pertain to them.

So I'm proposing we set up a securities crime unit composed of 22 officers and one executive assistant. Quebec recently brought in 22 police officers plus three special crowns to deal with fraud, at a budget of $6 million. I've worked this out, and the way it stands nationally, with 22 plus one executive assistant, it can be done for $5 million.

It's a very effective system, a very effective unit. It works on the basis that they are very motivated and highly skilled officers who have the ability to understand and determine what is and what is not fraud. They have the ability to understand, manage, and control evidence. They're able to meet with victims and understand exactly the nature of their complaints. They can very quickly determine what is fraud, what is not, and what can be investigated. They have the ability to very quickly understand the jurisdictional authority and determine which police service has the ability to investigate the alleged crime. It may involve more than one police service.

Once it is determined that an offence has taken place, the securities crime unit prepare a package based on the documentation provided by the victim. They ensure that the package is prepared in a format that can be received by any police service in Canada, at the introduction level, on the basis that a criminal offence has taken place. Once that is done, an investigator is assigned and the investigation moves ahead.

There is always a point of reference with the securities crime unit to the police service engaged in that investigative process, and they work directly with the public. The nice thing about it is that it's a stand-alone operation.

Something that has always been criticized and has created a lot of problems and grey areas occurs when you engage a police officer in a relationship that is too close--by design or perception--to a regulator or any other person or group that has specific authorities under specific acts, and things can be piggybacked for criminal purposes on a provincial statute under that authority and used to further a criminal investigation. Whether or not that actually occurs, any time that moves forward into a criminal environment there's always the risk that the case will be finished due to concerns about compromise and movement and migration of authorities and evidence.

That perception has occurred on many occasions. In some cases certain document flows have moved from one side to the other and have affected relatively good criminal investigations. The investigations were ruined, and they were not able to move forward from that point.

This unit is completely stand-alone. There's a hierarchy that's audible as you get into it. There's public accountability on the entire system from all levels of government. It falls under a police services board. There's everything under the federal public minister. There's reporting to the Standing Committee on Public Safety and National Security. So it's completely open and transparent and is reportable through all levels of government above it.

It also works with all police services. In this day and age, I don't know why we are not engaging all of the resources currently available to us. Most police services have a fraud component within them. I know for a fact that they are very good, competent, and skilled investigators. I've worked with a number of them. I've known a number of them for years and I know their abilities. I'll tell you right now that in this country the fraud investigators across Canada are probably some of the top investigators on the continent. So when I hear stories about people saying that the police do not have the ability to understand these sophisticated types of crimes, I do not buy that for a moment.

We have to be able to get outside of the box from where we are now. The securities crime unit will engage all the resources of all the police services--including the RCMP--and get them actively involved in investigating these frauds that occur within their jurisdictions.

It's set up to work with all police services--provincial, regional, municipal, and federal. Based on that, it's a good system and it's a working system. It has worked for a number of years at different levels in police services and in policing for the basic fundamental intake assessment and investigation of crimes. All I'm doing now is looking at it on a larger scale, increasing the level, and specializing the core functions of people who take on this role in their ability to work with the public directly, prepare packages, refer to the police, work with the police, and move from that point forward.

When a complainant walks into a police division district today to talk to an officer, nine times out of ten there is a great deal of confusion as to who will conduct the investigation. Unfortunately, after 2003 most police services believed that if anything had to do with securities, the victim was automatically referred to IMET for the purposes of that investigation. That has created a lot of public frustration at the end of the day as to how these are managed.

I'll wrap it up at that point. That's basically what I am proposing and what I've put together.

Thank you.

[The Chair, Conservative, Ed Fast]

I call the meeting to order. This is meeting 49 of the Standing Committee on Justice and Human Rights. Today is Monday, November 23, 2009.

You have before you the agenda for today. We're continuing our review of Bill C-52 and have with us a number of witnesses in two different panels.

Mr. Comartin, you sent me notice about a possible point of privilege. Did you want to raise that now or at the end of the meeting?

[The Honourable Rob Nicholson, Conservative, Rob Nicholson]

Thank you very much, Mr. Chair.

The short title of this was just pointed out to me. You can refer to it as the Retribution on Behalf of Victims of White Collar Crime Act. It's also known as Bill C-52. This enhances the sentencing provisions for fraud, in particular white collar crime.

The Criminal Code already criminalizes a vast array of what could be called white collar crime, such as bribery, credit card fraud, and forgery, and with the passage of Bill S-4, identity theft, Mr. Chairman. I'm glad to get that one passed. That's an important contribution in this area.

The offence of fraud is the most important offence in our arsenal against white collar crime. Fraud consists of two elements: deception or dishonesty, coupled with an actual loss of money or other items of economic value or merely the risk of such loss. So you can see the breadth and flexibility of this offence is adequate to capture security-related frauds like accounting frauds that overstate the value of securities issuers to shareholders and investors, misstatements about the state of the company, or Ponzi schemes of this sort, which has attracted so much attention recently in the United States and Canada.

The fraud offence is also an effective weapon against other kinds of fraud, such as mass-marketing fraud, real estate or title fraud, home renovation fraud, health care fraud, or other kinds of insurance fraud, tax evasion, and old scams now perpetrated with new technologies.

For too long I believe our justice system has not focused enough on the scam artists who take advantage of the trust of others. With the global economic downturn, as I indicated, massive Ponzi schemes have been revealed. I think that underlines the point we've made here and in the House of Commons and to the public at large that we must send a new, stronger message in this area.

The government has a comprehensive plan for sending that message. As members of the committee, you are all aware that the key aspect of the government's response is Bill C-53, which eliminates accelerated parole under the Corrections and Conditional Release Act. This is the responsibility of the Minister of Public Safety, but of course it is a legislative initiative I strongly support.

Another piece of our plan is Bill C-42, which will put an end to conditional sentences for fraudsters, among others.

Let me return to Bill C-52, the Retribution on Behalf of Victims of White Collar Crime Act. To improve the law quickly the government wanted this piece of legislation to be entirely focused. For this reason, the various sentencing measures in this bill are targeted at fraud offenders specifically. The current maximum penalty is 14 years imprisonment, the highest maximum in the code short of life. The maximum sentence is adequate, but we believe that more can be done to ensure that sentences reflect the devastation caused by fraud.

The first amendment in Bill C-52 is a mandatory penalty for fraud in excess of $1 million. Fraud over $1 million is currently a statutory aggravating factor. This bill will convert that aggravating factor into a circumstance that results automatically in a mandatory penalty of at least two years in prison. Any fraud or series of frauds that result in the loss of more than $1 million must necessarily have been the result of a complex, well-organized, well-planned scheme and quite likely supported by additional crimes, like forgery. Any fraud that rises to this level of loss must be considered serious.

Many frauds, as we know, are larger than this, so it's important to be clear that two years is the floor, not the ceiling. The actual sentence imposed for a larger fraud will obviously reflect all the additional blame for the elements of that fraud, many of which are captured by existing aggravating factors under section 380.1 of the code. This bill will supplement those aggravating factors with new ones if the duration, complexity, magnitude, or degree of the planning was significant; if the offence had a significant impact on the victim, given their personal circumstances; if the offender failed to comply with applicable regulatory or licensing regimes; or if the offender concealed or destroyed relevant records.

All of these factors highlight, in one way or another, conduct or results that are completely unacceptable to Canadians. The new aggravating factors, in conjunction with the existing ones, will be applied by sentencing courts to arrive at a just sentence on the particular facts of each case.

Another new measure is the introduction of a prohibition order that can be part of the sentence. The Criminal Code has several prohibition orders in place that are designed to help prevent offenders from reoffending. One such example is the order that is often made against a person convicted of a number of child sexual offences. The order, for instance, could prohibit them from, among other things, working in schools or other places where they would be in a position of trust or authority over young people.

Along the same lines, this bill will enable the court to order that the convicted offender be prohibited from having control over or authority over another person's money or real or valuable securities--up to life. Breaching this prohibition order will itself be an offence.

Other aspects of Bill C-52 focus on improving the responsiveness of the justice system to the needs of victims. It 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, among other things as a result of the loss of property caused by a crime. Bill C-52 would require judges to consider restitution in all cases in which an offender is found guilty of fraud. If a judge decides not to make a restitution order, he or she would have to give reasons for declining to do so.

The bill would require a judge, before imposing a sentence on an offender, to inquire of the crown whether reasonable steps had been taken to provide victims with an opportunity to indicate whether they are seeking restitution. This 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, as well as allow time for victims to establish their monetary losses.

The bill 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 the loss suffered by a victim of the offence. Canadian courts have already in previous cases considered impact statements made on behalf of a community.

This bill would explicitly allow courts to consider a statement by a person on a community's behalf describing the harm done to or the losses suffered by the community when imposing a sentence on an offender found guilty of fraud. A community impact statement would allow a community to express publicly, and to the offender directly, the loss or harm that has been suffered in order to allow the community to begin a rebuilding and healing process.

Mr. Chairman, those are the major elements of this bill. I look forward to the speedy passage of this important piece of legislation.

Thank you.

[The Chair, Conservative, Ed Fast]

I call the meeting to order.

Today is meeting number 48 of the Standing Committee on Justice and Human Rights. It's Wednesday, November 19, 2009, and I note that today's meeting with the minister is being televised.

You have before you the agenda for today. First, we have the Honourable Rob Nicholson with us to open our review of Bill C-52. During the second hour, we have with us Shirish P. Chotalia, the government's order-in-council appointee as chair of the Canadian Human Rights Tribunal.

At the end of today's meeting we'll leave a little time for an in camera meeting to discuss adoption of a steering committee report for our work plan going forward.

Once again, a reminder to turn off your BlackBerrys or switch them to vibrate, and if you do have to take calls, please take them outside of this room. Thank you.

By order of reference, we are now considering Bill C-52, an act to amend the Criminal Code on sentencing for fraud. To help us with our review of this bill, we have with us the Honourable Rob Nicholson.

Welcome back, Minister. I understand you have some support with you: Catherine Kane--welcome back--as well as Joanne Klineberg.

Minister, you have ten minutes for presentation, and then we'll open the floor to questions.

Fairness for the Self-Employed Act

[John Cannis, Liberal, Scarborough Centre, ON]

Mr. Speaker, it is very simple. If the government were a compassionate government, it would have kept the promise that we were told about by the member for Edmonton—Sherwood Park three years ago. If the government really felt for Canadians, it would not be increasing the EI premiums, which is in its books, to the tune of $15.5 billion. It is on record. If the government were compassionate, it would work with the rest of us, but every time we go into committee, for example, there is always an obstacle here and an obstacle there, some kind of stumbling block.

When it comes to the well-being of Canadians and the nation, earlier today we spoke about our veterans, past and present. There was one united voice and all parties spoke from the heart. That is how we have to approach this type of legislation, for the good of the country. Bill C-52 and the Conservatives' initiative on these areas is pure politicking right now.

[John Cannis, Liberal, Scarborough Centre, ON]

I will tell him that too, absolutely.

Mr. Speaker, I do not mind being harassed. The problem is, when they hear the facts, they cannot take it. The fact is that the member for Edmonton—Sherwood Park, who was asked a similar question, was intellectually dishonest with his response. I know I can use that word. Why? The member for Cape Breton—Canso and the member for Mississauga South asked him a very simple question. Were the EI premiums, under Liberal administration, ever increased? In those 13 years that we served in government, did they go, as the member for Cape Breton—Canso clearly stated, from $3.18 per $100 to the $1.72 per $100 that it is today, saving employers and employees just over $14 billion?

Why could he not be honest enough and say, yes, they did go down? The Liberal member, and I have to stress, the good Liberal member for Cape Breton—Canso, simply asked a question. Where did the money go? Why did the parliamentary secretary mislead this House? If this Reform, now called Conservative, Party wants us to co-operate, the least thing they could do is be honest with us.

For example, the other day, the Minister of Human Resources and Skills Development was on television being asked questions about Bill C-52 and she really could not give answers. All she said was, “We will see” or “We do not know”.

It reminds me of what Kim Campbell said before the 1993 election. She said to reporters that she was not going to answer the questions then, she would answer them after the election.

No, Canadians are not stupid. Canadians want to know now, before they make decisions. That is why we are asking these questions.

The member for Edmonton—Sherwood Park talked about entrepreneurs and independent business people, the self-employed. An independent entrepreneur, an independent business person does not become a self-employed independent because he wants to become unemployed. He is an independent entrepreneur because he wants to continue earning a good living to support his family and his surroundings.

An independent business person, a self-employed person, does not become self-employed because he wants to become unemployed to collect EI.

My father, God rest his soul, told me a story as I was growing up. He said that when he went out looking for work he did not ask how much the job paid. He simply wanted to work. He was not concerned about how much EI would pay, he was concerned about whether there was work.

A self-employed person does not become self-employed because he plans to be unemployed. He plans to be gainfully employed for as long as he can.

Catherine Swift of the Canadian Federation of Independent Business said that the bill makes it voluntary for self-employed Canadians who want to opt in and it fixes a “glaring gap” in the program.

The government cannot give us statistics such as who, how many, what the uptake is going to be, what the cost is going to be, et cetera.

I do not know what the gap is all about that Ms. Swift is talking about, because what is going to happen is that the people who are working are going to be taxed. We know that because hidden in the government's budget--

Introduction of Bills--Speaker's Ruling

[The Speaker, Liberal, Peter Milliken]

I am now prepared to make a couple of rulings that I know members are dying to hear.

I am now prepared to rule on the question of privilege raised on October 27, 2009, by the hon. member for Joliette alleging the premature disclosure of the content of a government bill to the media prior to the bill’s introduction in the House.

I would like to thank the hon. member for Joliette for having raised this matter, as well as the hon. Parliamentary Secretary to the Leader of the Government in the House of Commons, the hon. Minister of Public Safety, the hon. member for Wascana, the hon. member for Vancouver East, the hon. member for Beauséjour, and the hon. member for Scarborough—Rouge River for their comments.

In raising his question of privilege, the hon. member for Joliette claimed that a breach of the privileges of the House had occurred as a result of the public disclosure of the content of Bill C-53, An Act to amend the Corrections and Conditional Release Act (accelerated parole review) and to make consequential amendments to other Acts.

The member argued that the Minister of Public Safety in a press conference and through a press release and backgrounder on the bill had disclosed its essence and content to the public and media before it was introduced in the House on October 26, 2009, and that this amounted to a contempt of the House. It was his contention that, “The issue is not the quantity of details but the quality of details—”. He pointed to the importance of the confidentiality of bills prior to their introduction, saying that he always advises colleagues to hold press conferences on their bills only after their introduction.

Likening this situation to the question of privilege he raised on October 22, 2009, concerning the disclosure of details of Bill C-52, An Act to amend the Criminal Code (sentencing for fraud), prior to its introduction, the hon. member for Joliette wondered if there was no longer any reason for him to apply the rule of confidentiality of bills on notice so strictly.

During the interventions of the hon. member for Wascana, the hon. member for Vancouver East and the hon. member for Beauséjour, the seriousness of this issue was raised. The chair was urged to consider whether this was becoming a pattern and to give clear direction to the House on the rules that apply in this respect.

Following question period on October 27, the Minister of Public Safety rose to address the issue of whether the contents of Bill C-53 had been improperly disclosed prior to its introduction in the House. The minister noted that the rule prohibiting disclosure of the content of bills prior to their introduction arises out of a 2001 Speaker's ruling. The minister noted that the ruling limited the time period in question to the time between the bill being put on notice and its actual introduction in the House. He argued that the underlying principle is that the text of the bill should be made available first to members of Parliament.

Citing the 2001 case, in which the justice minister had actually circulated to the media a copy of the text of the bill and provided comment on it, the Minister of Public Safety acknowledged that the text of a bill cannot be disclosed to a select group ahead of parliamentarians seeing it. He then went on to accuse the opposition of looking to expand this rule significantly, effectively prohibiting the government from ever discussing any policy that might, in the future, be the subject matter of a bill before the House.

In his comments, the minister argued that the purpose of the rule is not to stifle discussion or debate or an exploration of policy issues but to restrict the actual disclosure of the text of a bill. That is only partly correct. The purpose of the convention is also to ensure that members are not impeded in their work by being denied information that others have been given.

The minister also noted that the time period in question is limited only to the time between a bill being put on notice and its actual introduction, and in this he is correct. Prior to giving notice of a bill, a minister or a private member developing a legislative initiative is of course free to discuss the proposal with anyone, but the House has the right to have first access to the text of the bill once it has been placed on notice. The specifics of a bill, once it has been placed on notice, should remain confidential until the bill is introduced.

In the case before us, the Minister of Public Safety differentiated between his own conduct and prohibited actions, stating that he did not disclose the contents of Bill C-53 but rather discussed an existing policy problem and the intention of the government to solve it. He provided neither a specific explanation of the government's solution nor an indication of what the text of government legislation in this regard would be.

As members have indicated, it has been a long-standing practice that the content of all bills on notice is confidential until they are introduced in the House. As I mentioned in my ruling of March 19, 2001, referred to by the Minister of Public Safety, at page 1,840 of the Debates:

The convention of the confidentiality of bills on notice is necessary, not only so that members themselves may be well informed, but also because of the pre-eminent role which the House plays and must play in the legislative affairs of the nation.

I went on to say that:

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

In the 2001 case, the Chair ruled the matter to be, prima facie, a case of privilege, and it was ultimately referred to the Standing Committee on Procedure and House Affairs.

In the committee's report on the matter, presented to the House on May 9, 2001, this important principle was reiterated. Following a commitment by the then Minister of Justice to establish protocol governing the processes for bills prior to their introduction, the report stated, in part:

The Committee believes that the protocol of the Department of Justice whereby no briefings or briefing materials should be provided with respect to a bill on notice until its introduction in the House of Commons should be adopted as a standard policy by all government departments. We believe that such a policy is respectful of the House of Commons and its members. It recognizes the legislative role of Parliament, and is consistent with parliamentary privilege and the conventions of Parliament.

While an attempt has been made to liken the situation surrounding Bill C-53, the case before us today, to the disclosure of the details of Bill C-52, clearly the circumstances of these two situations are not identical.

In the case of Bill C-52, specific details of the bill were released to the media and the public. On October 26 and 27, respectively, the Minister of Justice and then the Minister of Public Works and Government Services apologized to the House and made commitments to ensure that their actions concerning Bill C-52 would not be repeated. Their apologies put an end to the matter, as I indicated at the time. However, the House—and in particular ministers—should note that had it not been for the apologies of the ministers, the case might well have had a different outcome.

However, in the case of Bill C-53, the Minister of Public Safety categorically assured the House that, “none of the provisions, none of the potential mechanisms, none of the solutions, let alone the specific text” were divulged prior to the bill's introduction in the House.

While, by his own admission, he discussed in broad terms the policy initiative contained in the bill, the Chair is satisfied that the Minister of Public Safety did not disclose the details of the measures being proposed in the bill. The Chair is also satisfied that there has been no contempt of the House as a collectivity nor of any member individually as members were not denied information they need to perform their duties as parliamentarians.

Accordingly, the Chair finds no grounds for declaring a prima facie question of privilege in this case.

I wish to thank the House for its attention to this ruling on a matter of considerable importance to us all.

[The Chair, Conservative, Ed Fast]

No, because we have the minister coming on Bill C-52 on the 16th of November. That's the difficulty here. Had we known--

[The Chair, Conservative, Ed Fast]

We also have the minister coming on the 16th on Bill C-52, and my guess is it's going to take some time. We have at least four, if not five, amendments, government amendments on Bill C-36. So for me to add him, I'm going to need specific direction from the committee.

[Rob Moore, Conservative, Fundy Royal, NB]

Yes, thanks, Chair.

The motion is pretty easy to understand. We would complete clause-by-clause on Bill C-36 on Wednesday. You've mentioned Bill C-52. We have another bill before our committee and other work we'd like to get moving on. I think today's our third day of testimony on Bill C-36. That's why I would like to see us with a concrete plan to complete Bill C-36. The nature of my motion would be to give us a definitive date on which we're going to wrap up Bill C-36, and that date, in my view, should be Wednesday.

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

Unless I am mistaken, we will begin our study of Bill C-52 on November 16.

[The Chair, Conservative, Ed Fast]

There are two other items. We're moving on to a review of Bill C-52. It's tentatively scheduled for November 16, which is the first meeting after the break. I want to make sure everybody knows we need a list of witnesses on Bill C-52. You have your formal notice. Please submit to us the list of witnesses you'd like to hear on Bill C-52, which is the white collar crime legislation.

Since we'll be moving to clause-by-clause on Bill C-36 some time in the very near future, depending on the outcome of the motion, we'd like to have your amendments as soon as possible.

It's the same thing for Bill C-232. We want to move toward clause-by-clause on that as well, so if you have amendments to that bill please get them to the clerk as soon as possible.

Business of the House

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

Mr. Speaker, in relation to what day the House will be doing its annual tributes to the sacrifices of our veterans and those in the Canadian Forces currently serving, that will be under negotiation. I suspect that is something that will be discussed among all House leaders in the days ahead. We will decide, obviously, collectively and co-operatively on the appropriate time to make that important tribute.

In regard to our ongoing justice program, obviously we are going to continue along, as we have last week and this week, for the remainder of the week with our justice legislation. I would note that since my last statement, we introduced Bill C-53, Protecting Canadians by Ending Early Release for Criminals Act, and Bill C-54, Protecting Canadians by Ending Sentence Discounts for Multiple Murders Act. Both of those additional bills are a key part of our ongoing efforts to reform the justice system in our country.

We sent to committee this week Bill C-42, Ending Conditional Sentences for Property and other Serious Crimes Act; Bill C-52, Retribution on Behalf of Victims of White Collar Crime Act; Bill C-46, Investigative Powers for the 21st Century Act; and Bill C-47, Technical Assistance for Law Enforcement in the 21st Century Act.

By the day's end, we hope to conclude debate on Bill C-43, Strengthening Canada's Corrections System Act. If we do that, I intend to call Bill C-31, the modernizing criminal procedure bill, and Bill C-19, the anti-terrorism bill.

Tomorrow we will continue with yet another justice bill, Bill C-35, Justice for Victims of Terrorism Act, followed by the remainder of the justice bills that I noted if they have not been completed.

Next week I intend to call Bill C-50, the employment insurance for long tenured workers' bill, which is at report stage, having had it returned from committee.

Following Bill C-50, we will call for debate the report and third reading stage of Bill C-27, Electronic Commerce Protection Act, and second reading of Bill C-44, An Act to amend the Canada Post Corporation Act,

Finally, Wednesday, November 4, will be an allotted day.

Introduction of Bills

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, first, I appreciate the apology by the Minister of Justice and the Minister of Public Works concerning Bill C-52. However, as I said this morning, I have the impression that the message has not been adequately understood on the government side. It seems to me, with respect to Bill C-53 which was made public at a press conference by the Minister of Public Safety, that we had the same problem as with Bill C-52. The Minister of Public Works also took part in that media event.

Essentially, the Minister of Public Safety is telling us two things: first, when he held the press conference, the bill was on notice. What I contended in my point of privilege on Thursday, if I recall correctly, is precisely that when a bill is on notice on the order paper it must not be disclosed publicly until it has been given first reading in this House. As a result, his argument completely fails to address the argument I made. I had referred to a number of decisions and quotations, some of which came from your decisions, Mr. Speaker. I am still wondering about that initial aspect, that is, that it seems to me that a press conference should not disclose the content of a bill before the bill has received first reading. That is his first argument.

His second argument is that the press conference did not give explicit details of the content of the bill. However, Mr. Speaker, I would still like to refer you to a document that I sent you this morning, entitled “Backgrounder—Government of Canada to Fix the Problem of Early Parole for Criminals”. It contains some very short phrases that give the essence of the bill, “Changes to the Corrections and Conditional Release Act… towards the abolition of statutory release”.

They are announcing that, essentially, the bill will deal with that. When we read Bill C-53 we can see that, in fact, the purpose of the proposed amendments is to eliminate accelerated parole review in the Corrections Act. The issue is not the quantity of details but the quality of the details provided in that backgrounder. In the news release, which I have not had a chance to read as carefully, the Minister may have stuck to the ins and outs of the environment in which the bill is being introduced. However, in the technical information sheet that accompanied the news release, it is very clear that the essence of Bill C-53 is being disclosed to the public and the media before being disclosed through first reading in this House. I believe that is contempt of the House.

I defer to your decision, Mr. Speaker.

[Christian Paradis, Conservative, Minister of Public Works and Government Services]

Mr. Speaker, regarding the question of privilege raised by the member for Joliette concerning Bill C-52 and the press conference I held with my colleague, the Minister of Justice, I offer my sincerest apologies to the House.

I fully support what the Minister of Justice has said about this issue in this House. The details about Bill C-52 were disclosed when it was placed on the order paper, before being read the first time. It was a mistake that should not happen again. That is what I wanted to say about Bill C-52.

With respect to Bill C-53, I heard the comments made by the Minister of Public Safety, and I also agree with his argument that the details of this bill were not disclosed at the press conference yesterday. I am also in agreement with his comments on Bill C-53.

[Peter Van Loan, Conservative, Minister of Public Safety]

Mr. Speaker, I want to address an issue that was raised by the House leader of the Bloc Québécois. This is with regard to whether Bill C-53 was improperly prematurely disclosed in advance by me. I want to speak to that.

The rule in the case that we are talking about is not one that one will find referenced in Marleau and Montpetit. One will not find any reference to it in Erskine May or in Beauchesne's. In fact, Mr. Speaker, the rule essentially comes entirely in one single finding of contempt that you yourself made in 2001 with regard to an action of my predecessor, the first public safety minister, who was the Minister of Justice at that time.

What your ruling clearly indicated and what those circumstances produced is an indication that the rule about disclosing or discussing a bill in advance is a very circumscribed rule. The restrictions are fairly simple. First, the time period in question is limited only to the time between a bill being put on notice and its actual introduction. That is the period in question. Of course, the principle is that the first availability of the text of a bill should be to members of Parliament.

The approach that I adopted in the particular circumstance was not to disclose the contents of the bill. Rather, it was simply to discuss a policy problem that existed and discuss the intention of the government to fix it. It was not a specific explanation of what those fixes were nor an indication of what the text of the bill was going to be. None of those things occurred.

Second, in the case in 2001, the justice minister's actions must be looked at. What occurred specifically was that the justice minister held a briefing with the media. This was after a bill was put on notice and before it was introduced in the House. The justice minister circulated an actual copy of the text of that bill to the media and provided comment on it. Mr. Speaker, that was the basis on which you made a ruling. Your ruling was that was a prima facie contempt of the House.

The test that arises from that case is that one cannot disclose the text of a bill to a select group ahead of parliamentarians seeing it. In your words, Mr. Speaker, “with respect to material to be placed before Parliament”, that is, the bill itself, “the House must take precedence”.

In the arguments before you, the opposition is looking to significantly expand this rule, both in the case of the issues they raised with my colleague the Minister of Justice on Bill C-52 and me and the Minister of Public Works on Bill C-53. They would wish to ask you to expand that rule to effectively prohibit the government from ever discussing any policy that might in the future be the subject matter of a bill before the House.

Obviously, that is not the purpose of the rule. The purpose of the rule is not to stifle discussion or debate, or an exploration of policy issues. That would offend the privileges of members of the House. That would offend our freedom of expression. In fact, if that were to be the rule, it would effectively stifle any public debate of policy, including what we do in question period, what we do in debates on allotted days, what we do in committees all the time and what we do in election campaigns.

That is clearly not the intent of the rule. Clearly, the intent of the rule is restricted to the actual disclosure of the text of a bill. Mr. Speaker, as I said, it is a rule that has emanated entirely from a ruling made by you in 2001.

To address specifically the approach that I adopted with regard to any discussion of the introduction of Bill C-53 in advance of it, I took great care. As a former House leader, I was sensitive and cognizant of the issues that existed there. I was well encouraged by our current House leader to exercise due care.

The best way of examining whether any such contempt occurred is simply to look at the words of my availability to the media and what was discussed. I will read them.

Currently, many criminals get out of jail early through a process called accelerated parole review. First-time criminals who have committed non-violent offences can access day parole at one-sixth of their sentence and are granted almost automatically full parole at one-third of their sentence.

“Currently, many criminals get out of jail early through a process called accelerated parole review. It is the law now. First-time criminals who have committed non-violent offences can access day parole at one-sixth of their sentence and are granted almost automatically full parole at one-third of their sentence”. That is simply a description of the law as it exists today. There is nothing inappropriate with that kind of discussion.

Unless the National Parole Board has reasonable grounds to believe that offenders will commit a violent offence once released, it must automatically grant their release into the community.

“Canadians are surprised to learn that unless the National Parole Board has reasonable grounds to believe these offenders will commit a violent offence, not another offence, but a violent offence once released, they must automatically release those prisoners into the community”.

This means, believe it or not, that in some cases, a fraudster, a thief or a drug dealer, for example, could be back on the streets early. Such a criminal could be sentenced to 12 years but would actually be released into the community on day parole in just 2 years, and, notwithstanding having a 12 year sentence, could be fully paroled in 4 years, and the Parole Board would have no choice but to make that order.

Again, it is a description of the existing law. Nothing inappropriate there.

It goes on to state that ”the status quo gives the Parole Board no discretion in dealing with these cases. The test is simple, whether or not the offenders is likely to commit a violent offence. Well as you can imagine, with someone who has never committed a violent offence in the past, the ability to pass that test to be held there longer is a pretty tough one. As a result, even if the Parole Board believes the offender is likely to go out and commit another fraud, another theft or another drug offence, the Parole Board has no choice. They must, under the present law, release that offender into the community. We think that is a problem”.

Again, that is a statement of the law that, in my view as Minister of Public Safety, is a problem. There is nothing inappropriate about doing that. It is a wholly legitimate discussion of policy.

In a number of cases, criminals who received a sentence that seemed appropriate can leave prison and be back on our streets shortly after their crime makes the headlines. This situation upsets Canadians' sense of justice and undermines their trust in the justice system and the correctional system.

It goes on to read, ”This offends Canadians' sense of justice, it undermines their faith in our justice system and our correctional system. Canadians want change and that is what our government intends to deliver”.

Again, that is a very simple, very broad statement of disapproval of the current law and a desire to change it. There is no disclosure of the contents of any bill.

I continue, “This morning, I'm pleased to announce our commitment to reforming the parole system in this country. Our government is committed to fixing the problem of early parole for criminals”.

The commitment I am announcing today is another step toward a system of earned parole where early release is a privilege granted to offenders who have proven that they have truly made an effort in their rehabilitation, rather than a right available to all criminals.

I go on to say, “The commitment I'm announcing today will move us one step closer to a system of earned parole in which early release is a privilege granted only to those who have shown they are committed to rehabilitation rather than a right granted to every criminal. Earlier this year, I introduced legislation that would make the protection of society paramount in all decisions in the correction process. It includes reforms that would hold criminals more accountable for their actions and rehabilitation more effective. Today's commitment will build on these proposed reforms”.

Again, I have not in any place tendered on the table a draft of the bill, as happened in the case of the justice minister in that situation in 2001 where the Speaker found contempt. I did not even discuss the contents of what a solution would be. I simply said, “Here we have a policy problem. We as a government intend to fix that problem. We are going to take action to fix it”.

We could do that in any number of ways. We could do that by changing the one-sixth day parole eligibility to perhaps one-fifth or one-third or one-quarter. I did not in any way disclose at that point in time what that solution would be. We could have changed the full eligibility parole from one-third to one-half to one-quarter. I have not disclosed that.

We could simply change the test from an automatic one to one where we shift the burden to a prisoner to prove why he or she should be released or to one that would create a presumption that could be dissuaded perhaps by victims. We did not discuss what particular solution there would be, We also could simply do away with the whole system of accelerated parole, which is what we did ultimately, but nowhere in this announcement did I ever state which of those many myriad of solutions could have been the ones approached.

Certainly it falls far short of the test that is established in the 2001 decision of yourself, Mr. Speaker, which relates to the actual disclosure of the text of a bill in advance, to a limited audience of not parliamentarians. That is the real test. It is over here. I am in fact fa away from that, simply dealing in a policy discussion, indicating that we have a problem in our society that we need to fix.

For the opposition members, who have been complaining a lot about the fact that we go out and talk about what we are doing, what we think needs to be done and what we want to fix, and who do not like to have us communicating with Canadians, I can understand why they want that rule expanded to stifle any discussion of policy or of problems that we intend to fix in this country, including in the justice area.

However, that is not what the rule stands for in the decision that was taken in March 2001 that established this principle that it would be a contempt on Parliament to circulate and disclose in advance the text of a bill. In fact, in my case we do not even come anywhere close to that: none of the provisions, none of the potential mechanisms, none of the solutions, let alone the specific text, which is what the principle stands for.

Mr. Speaker, I submit to you that you should dispense with the request from the leader of the Bloc Québécois in the House of Commons, supported by the other parties in this matter, because it simply falls far short of the test that would constitute any contempt of Parliament.

I have been very careful in this matter, as was my colleague, the public works minister, in the exact same availability to the media, in addressing these issues in a cautious fashion that respected, to the utmost, the principles of respecting the supremacy of Parliament, that the content of a bill should be, once put on notice, submitted to this Parliament first before it is submitted to any other group, and that is exactly what was done in this case.

Therefore, to expand that rule significantly to stifle any discussion of policy would be a highly inappropriate approach.

Investigative Powers for the 21st Century Act

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

Mr. Speaker, I am pleased to rise here today to speak to Bill C-46. We will probably study Bill C-47 either later today or tomorrow. Bills C-46 and C-47 are very closely related to each other and, for those watching us, have to do with cybercrime.

It appears that the Canadian government has finally entered the 21st century and wants to address the very serious problem of cybercrime. Before going into the details, I would like to give some background. There was a convention, if we can call it that, known as the convention on cybercrime. That convention was the subject of many meetings. In fact, there were 27 different versions of the convention on cybercrime before the final version was drafted and signed by many countries, including Canada, the United States, Japan, South Africa, and even the Council of Europe. All the countries that signed the convention undertook to introduce one or more bills to implement the convention on cybercrime. That is precisely what the government is doing here today.

We can examine the technical details of the bill in committee. Yes, the Bloc Québécois agrees that Bill C-46 should move forward and be referred to the Standing Committee on Public Safety and National Security. This will also probably be true for Bill C-47.

Bill C-46 should allow police forces to adapt their investigative techniques to modern technologies like cellphones, iPods, the Internet, as well as social networking sites like Facebook and Twitter that link today's online world. This bill will give police forces access to such technologies.

When a bill like this is introduced there is one thing the government and parliamentarians must not forget: the bill must not infringe on basic rights even though we are trying to properly equip our police forces to deal with crime. All of this is being done in response to what happened in 2001. Even though we know that work on cybercrime began in 1995, the events of September 2001 had a substantial impact. That is when governments realized they did not have the means to intercept certain communications. Before and after 1995, and even before and after 2001, surveillance was used. It was very easy to realize you were being followed. We are not talking about a James Bond movie here. We are not nearly as sophisticated as the show 24, where the characters are totally equipped to deal with crimes of this nature. We needed to find tools to help deal with cybercrime and make them available to our police forces.

Cybercrime is very subtle and very insidious. It is everywhere today. The members opposite, especially those from the Conservative Party, talk about the luring of children or what some people attempt to do with computers, namely slowly but surely approach children to have sexual encounters.

It is much more than that. I am not saying that the luring of children is not a serious crime, far from it. This is an extremely serious crime. There are also other crimes that are much more subtle, including identity theft and the planning of major crimes. Just look at the London subway bombings. They were planned right here in Canada. Somewhere near Toronto, attacks were being planned with global targets. Here in Canada, the police thanked an individual whose assistance was instrumental in foiling a crime about to unfold in Great Britain.

Cybercrime has become a global phenomenon. Today, we cannot simply say that cybercrime only occurs in Canada, Quebec, or Ottawa and the surrounding region. Cybercrime is a global phenomenon and it has to be addressed globally. That is the purpose of Bill C-46 and Bill C-47, which we will study in the coming days.

There is something worrying me. We will have to carefully study the intrusion into the personal life of an individual. I hesitate to say this because the line between the intrusion into the rights of an individual versus the protection of society is increasingly blurred. We will have to keep a very close eye on this as we study the bill. We must ensure that citizens do not run the risk of being more vulnerable to an intrusion into their private lives. I do not think that anyone in this House is against adapting legislation to the new realities in technology and crime.

I believe that it is abundantly clear that criminals, especially those working on the Web, are brilliant for the most part. Anyone who can use such tools as Facebook or Twitter and the whole Internet is intelligent enough to hatch a good plan for a crime.

We are very close to that reality when we see someone using their cell phone, sending coded messages and providing information over the Internet. We have to follow this up. I will give the example of the transfer of “illegal” funds to tax havens. I spoke about this when debating Bill C-42 and Bill C-52. Today, criminals who use computer technology are increasingly smart. Thus, police forces must be equipped to deal with them. That is the objective of Bill C-46.

Technologies do not just benefit criminals and are also available to police. The Bloc Québécois believes that it is important and rather urgent for police to be equipped to detect not just crimes that have been committed, not just those about to be committed, but those that are being planned. We have to be one step ahead of the criminal planning a crime and able to intervene before an offence is committed. That is the objective of Bill C-46.

However, we must avoid allowing the police to use their investigative tools to gain access to a very large amount of information—it goes that far—but we must also monitor some peoples' activities on the Internet to learn more about their private lives. It goes far beyond listening to telephone conversations. This bill goes much further than that.

However, we must find a balance between the fundamental rights to privacy and safety. That is what this is all about. Is the right to privacy more important that the right to safety? That line is easily crossed by police officers or unscrupulous individuals.

We must remember that some police offers were convicted of having used the computer system of the Société de l'assurance automobile du Québec to monitor a spouse's new friend and watch over the movements of that individual. Those police officers were convicted because they had taken private information.

We must be very careful, and this will probably be the most important debate over the next few months. The Ligue des droits et libertés has raised some concerns. We must be careful, we must be prudent, we must be aware, and we must realize that there could be some slip-ups. When it comes to truly addressing security concerns, is protecting the rights of individuals less important than protecting society? That is a debate that will have to be held when the time comes to examine the bill in committee.

It is clear, and I would like to share a little about what the Ligue des droits et libertés has said. According to the Ligue, the bill constitutes an unprecedented invasion of privacy. It has brought up the following points. The government is presenting its bills as a way to make the necessary changes to traditional investigative powers for electronic surveillance to adapt to new communication technologies. But there is no comparison between the information transmitted through a telephone conversation and information that circulates freely.

Moreover, unlike telephone conversations, which leave no trace unless they are recorded, modern communications leave a trail in computer memories that can be detected long after the fact. That is a very important point, and I hope that nobody in this Parliament or in Canada or Quebec believes that once an email has been sent, it is over and done with. Unfortunately for them, I have bad news, because when people send an email using their computer or even their BlackBerry, there is always a trail. Their hard drives retain information about every email ever sent, and that information can be retrieved. That is where we find ourselves in a grey area.

But the Ligue des droits et libertés adds that everything we do in our everyday lives could come under police investigation. They will have access to lists of the websites we visit, emails we send and receive, credit card purchases, purchases of all kinds—clothing, books, winter gear—our outings, our movements abroad and in Canada, gas purchases, on-line and ATM banking transactions and medical information. Naturally, the list might get even longer.

We have to be prudent. I do not necessarily share all of the concerns expressed by the Ligue des droits et libertés, but they are urging us to be prudent. As parliamentarians, we have to use our judgment. We have to tell police forces—the RCMP, the Sûreté du Québec, the Ontario Provincial Police and other police services in large municipalities—that there are lines that must not be crossed once Bill C-46 is passed.

I firmly believe that one thing is for sure: police forces must have the tools they need to deal with crime in the 21st century. Yes, armed robberies and bank heists are still happening, although less frequently according to the latest statistics. We still hear about corner store hold-ups and all kinds of other assaults. But there is now a new kind of crime called cybercrime. We have been looking for ways to fight it since 1995. We have to make sure we have the tools to do that.

I listened closely to what the Ligue des droits et libertés said, and I feel that we have to be careful. The Ligue says that the bill provides little or no protection against unreasonable seizures without a warrant. The authorities will be able to obtain subscriber data even though the Personal Information Protection and Electronic Documents Act recognizes that this information is private. This is provided for in Bill C-47, but the authorities could still obtain this information. Without a warrant and on the basis of a suspicion, an officer will be able to ask a service provider to keep the contents of all your communications. It is like asking the post office to photocopy all your mail in case something should happen. I feel that people may go a bit too far sometimes, but this serves as a reminder that we must be cautious. I do not necessarily share the views of the Ligue des droits et libertés, but as politicians, we have to listen to both sides of the story.

The Ligue des droits et libertés also says that with a warrant obtained on the basis of a mere suspicion, an agent will easily be able to compel the service provider to turn over all its lists and so on. I believe that this is a bit dangerous, and we will have to address it when this bill is studied in committee. The Ligue added that with a warrant, which can be obtained on the basis of reasonable grounds to believe—less stringent conditions than for wiretapping—the content of your communications could be intercepted.

Certainly, what the Ligue des droits et libertés is saying is important. It is calling on parliamentarians to be careful when we print and pass legislation, but especially when we apply it. Once the law is passed, it may be too late to amend it. I will say one thing right now: police forces must be equipped to deal with cybercrime and 21st century crime. It is clear that crime prevention is one promising solution. The police will need to be able to prevent such crimes, and that takes equipment.

Obviously, the authorities have to try to uncover a plot before it is carried out. Once a crime has been committed, it is a little late to intervene, even if the criminals are brought to justice. In closing, if the authorities can thwart the crime before it is committed, I believe that this bill is a step in the right direction.

Introduction of Bills

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Speaker, once again, I would like to second the member for Joliette's remarks.

The parliamentary secretary referred to regret that any information in advance of a bill being tabled became public.

I would like to urge you, Mr. Speaker, when you review this matter, to look at a pattern. With Bill C-52, the Minister of Justice acknowledged that it was inappropriate. You said that you considered the matter closed, and probably at exactly the same time, the Minister of Public Safety was preparing to release details of another bill.

This is not an accident by an overenthusiastic communications assistant in a minister's office, it is a pattern involving many, many bills, particularly in recent weeks. I would urge you, Mr. Speaker, whatever ruling you ultimately decide on, to make clear the rules surrounding this kind of information, and not simply to accept that somebody comes in and apologizes while a colleague at the same time is doing exactly the same thing. There seems to be a communication confusion in the cabinet. Mr. Speaker, and you are the best person to clarify that for everybody.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I just want the Parliamentary Secretary to the Leader of the Government in the House of Commons to know that I have a problem not only with the fact that the Minister of Public Works and Government Services did not apologize for the Bill C-52 incident as the Minister of Justice did, but also with the fact that, yesterday, both the Minister of Public Safety and, once again, the Minister of Public Works and Government Services did exactly the same thing with Bill C-53. I offer as proof the press release that I provided to you as well as the backgrounder that goes into great detail about Bill C-53.

Once again, I believe that there has been a breach of parliamentary privilege. I hope that you will consider this fact if you believe it to be relevant.

[Ralph Goodale, Liberal, Wascana, SK]

Mr. Speaker, I would just ask the House for a bit of clarification.

The parliamentary secretary has referred to the incident in respect to Bill C-52, regarding which the Minister of Justice has acknowledged that an error was made. As the parliamentary secretary indicated, the minister also indicated that he would be advising ministers generally that the practice of calling premature news conferences should not continue.

However, I took it from the remarks of the representative for the Bloc Québécois that his concern related not only to Bill C-52 but also to the incident that occurred yesterday with respect to Bill C-53, as the practice that was complained about was indeed repeated, with the holding of a premature news conference about a subsequent bill having to do with justice matters.

It is important to have confirmation from the government that it not only acknowledges the mistake in respect of Bill C-52 but also acknowledges that exactly the same mistake was made with respect to Bill C-53, and that the commitment undertaking by the Minister of Justice that this practice will stop is in fact going to apply to each and every minister on each and every bill so that we will not have this ongoing succession of premature news conferences that do in fact encroach upon the privileges of members of this House.

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

Mr. Speaker, the Minister of Justice yesterday expressed regret and his most sincere apologies to the House for releasing any information on Bill C-52 in advance of the bill being tabled.

As we know, once a bill has been put on notice, it is inappropriate to speak to the bill until such time as it has been tabled. The Minister of Justice indicated that he would be advising all of his cabinet colleagues as well of the inappropriateness of this type of action, and he offered his most sincere apologies on behalf of the government for any inadvertent release of information, which should not have happened.

Mr. Speaker, you indicated in your ruling yesterday that you accepted the apology and considered the matter to be closed. I can assure you, on behalf of the government, that this type of early release, if you will, will not be forthcoming again any time in the future.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, yesterday, after the apology made by the Minister of Justice regarding the question of privilege I raised last Thursday, you said that, unless you heard further, you considered this matter closed. But this morning, I have more to add.

I would first like to say that although my question of privilege had to do with two ministers, only the Minister of Justice apologized. But the Minister of Public Works and Government Services also disclosed critical information about Bill C-52 before it was introduced in the House.

However, the main reason I have brought the issue up again today is that we are still very concerned about government ministers publicly disclosing information about bills before their first reading in this House. Despite the apology from the Minister of Justice, we fear that the government did not fully learn its lesson.

Although the Minister of Justice apologized in this House for disclosing information about Bill C-52 before it was introduced in the House, the Minister of Public Safety and the Minister of Public Works and Government Services, yet again, held a press conference on Bill C-53, which was on notice but had not yet received first reading in the House. In a press release and a backgrounder that were made public before first reading of the bill, it is clearly indicated that the government intends to eliminate accelerated parole review from the Corrections and Conditional Release Act. Moreover, I sent you these documents with my letter.

Having read Bill C-53, I can say that this is exactly what it does. It eliminates accelerated parole review and makes some consequential amendments. Once again, the government disclosed the content of a bill before it was introduced in the House.

As the Bloc Québécois House leader, I am often called on to advise my colleagues on the legislative process and private members' business. If there is one thing I stress, it is that bills that Bloc Québécois members want to introduce must remain confidential before they are introduced in the House. I always advise my colleagues to hold their press conferences after their bill has received first reading.

So, Mr. Speaker, if there is no longer any reason to strictly apply the rule of confidentiality of bills on notice, I would just like to know so that I can give my colleagues different advice.

Consequently, Mr. Speaker, I ask you again to consider the question of privilege I raised last Thursday and the new information I have brought to your attention this morning concerning Bill C-53.

I repeat that if you find that there is a prima facie question of privilege, I am prepared to move the appropriate motion.

The House resumed from October 23 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.

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

Mr. Speaker, this is my first opportunity to rise in the chamber to address the matter that was raised on Thursday by the member for Joliette concerning the introduction of Bill C-52.

It was correctly pointed out to the House that details of that bill were released prior to the actual tabling of the bill while the bill was on notice. Members have the right and the duty to see the bill first.

One of the things I share with you, Mr. Speaker, is a deep respect for the House, its traditions and its rules. The release of those details was a mistake, and for that I apologize to the House without reservation. I have indicated to my colleagues, and I will be indicating to them, that this should never happen again.

As for myself, it is my sincere hope to introduce many more bills in the House, and I can assure you, Mr. Speaker, and the House that this will never happen again.

Retribution on Behalf of Victims of White Collar Crime Act

[Roger Pomerleau, Bloc, Drummond, QC]

Madam Speaker, I think we already have institutions in place governing the matter before us today, namely, Bill C-52, but perhaps they are not being properly enforced, that is, they have not been given enough teeth.

I cannot believe that Mr. Lacroix did everything he did with anyone keeping a close eye on him. I think that someone, somewhere, was not watching him closely enough. Although it happened in Quebec, it is all the same. Mr. Lacroix was not watched closely enough, otherwise, he would not have been able to do what he did. It is appalling to think that our current institutions do not have enough teeth, nor the regulations, financial resources and other means needed to ensure that things are done properly and to prevent crimes before they are committed.

[Roger Pomerleau, Bloc, Drummond, QC]

Madam Speaker, I am very pleased to speak today to Bill C-52, to impose harsher sentences for economic crimes. However, in our view, this bill does not always take the right approach.

This bill introduced on October 21 includes a minimum sentence of two years for fraud over $1 million, as has been repeatedly pointed out. It provides additional aggravating factors for sentencing such as the financial and psychological impact on victims, the failure to comply with a professional standard or a licensing requirement, and the magnitude, complexity, duration or degree of planning of the fraud. It also includes a broader definition of victim. The court could receive a written statement of the repercussions of a fraud on a given community, describing the losses suffered, for example, by a senior's club, or an entire neighbourhood or club. The bill also enables the courts to order restitution for the loss of property. If they do not, they will have to provide an explanation and justification for their decision. The bill also makes it possible for the courts to prevent fraudsters from engaging in certain activities in the future, once convicted of fraud, of course.

The Bloc Québécois wants to improve this bill in committee, as the Conservative member is asking us to do, and correct the major flaws that we see in the bill. We will therefore vote in favour of this bill at second reading. That is why, as my colleague from the Liberal Party was saying earlier, we have no objection to this bill being referred directly to committee.

In matters of justice, however, the Bloc Québécois strongly believes that the most effective approach is still prevention. We must address the causes of crime. This bill does not go far enough to address the causes of crime and we will look at that in committee and propose a few options. We believe there is a flagrant lack of monitoring over people in this field who manage to defraud others even though they are supposed to be monitored much more closely.

That being said, the Bloc Québécois recognizes that the current justice system needs improvement in many ways and that some laws need to be amended. Parliament and the government are responsible for taking action to ensure that Canadians and Quebeckers feel safe wherever they are in this country. Therefore, on June 15, 2007, which was a while ago, in response to the Conservatives' ideological approach, the Bloc Québécois recommended measures to curb economic crime. Our constructive approach is already working. In the 2008 budget, the Conservative government adopted some of the Bloc Québécois' ideas. It allocated extra resources to the national crime prevention strategy and to Crown prosecutors. As for this particular bill, even though we think the government is missing the mark in many respects, we will still support it at second reading if only to enable the committee to conduct a thorough study so that all members have the opportunity to recommend significant improvements if they want to.

Lately, there have been a lot of financial scandals around the world, in the United States, in Canada and in Quebec, such as Cinar, Norbourg and Earl Jones, and, in the United States, Madoff and Enron. These scandals have focused attention on some of the gaps in our oversight and our battle against economic crimes. That is why, on September 2, 2009, the Bloc Québécois introduced a number of measures to improve the system, making it harder for people to commit these crimes and easier to discover them and punish them more severely. Ours is the kind of comprehensive approach we need if we want to understand this kind of crime and wage an effective war against it.

In response, the government panicked. On September 16, well after our proposal was made public, it announced a bill that would include mandatory minimum jail time and aggravating factors, and enable the courts to order restitution of assets. We have Bill C-52 before us now. In many ways, the government's bill is so much smoke and mirrors. We all know that mandatory minimums are useless. The Bloc Québécois is not alone in saying that. Over and over again, people have said that the United States has the harshest sentences in the world. Their jails are full, yet the crime rate in every category is the highest in the world.

Fraud in excess of $1 million is actually a very rare occurrence. Yesterday, I heard a member of this House give a few examples of frauds in excess of $1 million, perhaps seven or eight instances, but his assertions were totally unsubstantiated. He talked about someone who had been sentenced to 24 months for stealing $1.2 million, but mentioned no name, case or references.

So far, we know of very few specific cases of individuals who have stolen $1 million and have not been sentenced to two years of imprisonment. In those instances where we are told that they did not receive a two-year sentence, most of the time, it might be because they were granted a remission of sentence after serving only one-sixth of their sentence. The fact of the matter is that the usual sentence for such offences is six or seven years of imprisonment.

This could in fact send the wrong message to the courts and result in shorter sentences being handed down. As we know, even with a reduced sentence, Mr. Lacroix was sentenced to more than two years. Had guidelines like the ones proposed been applied to him, he would have almost automatically been sentenced to two years of imprisonment. Instead, he got 14 years. The problem is that he will not be serving the full sentence. It is not that the sentence was wrong. The sentence was the right one, and he should be serving it. That is the problem.

The courts already take into account the prescribed aggravating factors. This bill provides for some, but it is already being done. What is being added here does not make much of a difference. Here is a specific example: almost all, if not all, the aggravating factors listed in the bill were mentioned in the ruling concerning Mr. Lacroix.

Restitution orders are also already in use. Their use may be broader in scope in the bill, but that does not substantially change what already exists.

As for the prohibition orders limiting the activities of convicted offenders, that is something interesting. However, many have suggested that they might be difficult to enforce. This should be looked at much more closely in committee.

What is missing from the bill is the abolition of parole after an offender has served one-sixth of his sentence. This is one of the two most important elements. Earl Jones and Vincent Lacroix will be able to use this mechanism to get out of prison before they have served an appropriate sentence, the one that was imposed on them, which in Mr. Lacroix's case was just over 14 years. With parole after one-sixth of his sentence, Mr. Lacroix will serve two years and a few months, including time already served. This is not nearly enough time for what he did. The solution in the case of Mr. Lacroix and all those who do the same thing is not to sentence them to a minimum of two years, but to require that they serve their full time, without parole after one-sixth of the sentence. The government is not doing anything about this, yet it is a key measure for dealing with this issue.

I listened earlier as a secretary of state told us that the committee would be open to any suggestions we might have. I hope it will be open to this one, because it is one of the key measures we should put in place.

Before imposing minimum sentences, which are inherently unfair, because they force the judge to impose overly harsh sentences on people who deserve less, should we not start by limiting non-judicial decisions? It is not a judge, but a parole board that decides to parole an offender who has served one-sixth of his sentence. This is therefore a non-judicial intervention in a judicial process to reduce a sentence that has already been handed down in accordance with the rules.

The bill also does not deal with tax havens. This is the second key point, and my colleague from Manicouagan was right to speak at length about it. Yesterday, I listened as hon. members spoke with trembling voices about the victims who should be compensated and supported, but the only way the government is proposing to support them is to send the people who defrauded them to jail. The government must also consider the victims and make every effort to compensate them for the losses they have suffered. The way to do that is to ensure that the people who defrauded them can repay the money they stole by preventing them from hiding that money in tax havens. These are the two main elements the Bloc Québécois will raise in committee in order to improve this flawed bill.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Madam Speaker, I am very fortunate and blessed to come from Mississauga, the safest city in Canada, because of the capable leadership of our mayor, Hazel McCallion, and our police chief.

I would like to ask the parliamentary secretary, why is he and his party delaying the expedition of the bill? He knows that all the opposition parties support both Bill C-52 and Bill C-42. So why not send it directly to committee? Why do we continue to debate it for two days when we are all in agreement?

Will the parliamentary secretary agree to send it directly to committee?

[Rick Dykstra, Conservative, Parliamentary Secretary to the Minister of Citizenship and Immigration]

Madam Speaker, I rise in the House today to speak to Bill C-52. It is a very important piece of legislation for my constituents as well as for all members' constituents across our country. Due to modern technology, a farmer in rural Saskatchewan is just as susceptible to fraud as a stock analyst is in Toronto. It is important that we realize this when discussing the bill.

I want to make some technical points about the bill. It contains six measures, all of which are designed in some way to enhance the sentencing process for offenders convicted of fraud.

The first element is a mandatory minimum penalty. 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 penalty of a minimum of two years in prison for any fraud or combined fraud with a value of over $1 million. The mandatory minimum penalty would act as a floor. A variety of aggravating factors would also be applied to raise the actual sentence well above the two-year range in many cases.

There are currently four statutory aggravating factors for fraud in section 380.1 of the Criminal Code. The bill would add new aggravating factors to that list to set out additional characteristics of fraud which are troubling. The new factors would focus on: first, the impact of the fraud on its victims; second, the complexity and magnitude of the fraud; third, the failure of the offender to comply with applicable rules and regulations; and fourth, any attempt by the offender to conceal records relevant to the fraud.

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

The bill would also give the courts a new sentencing tool for fraud offenders aimed at preventing the commission of further fraud and victimization. The court would be able to order as part of a sentence that the offender would be prohibited from having work for remuneration or in a volunteer capacity that involves having authority over another person's money, valuable securities, or real property. The order would be discretionary and 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. Data from 2006-07 show that approximately 20% of fraud convictions resulted in a restitution order. In order to encourage a greater use of these orders, sentencing courts would be required to ask the Crown whether reasonable efforts were made to give victims a chance to indicate whether they want restitution. The courts would also be required to consider restitution in all fraud cases and to provide reasons if restitution is not ordered.

Three points of caution are needed. It is important to note that no criminal law reform can change the bottom line, namely that if an offender does not have any adequate assets, restitution itself 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 requests. Finally, we cannot establish a collection mechanism for restitution ordered as a part of the sentence as this would require extensive provincial cooperation and tracking and the cost would be prohibitive.

The last measure in the bill would specifically acknowledge that the courts may consider a statement prepared by a representative of a community or definable group for consideration at sentencing for fraud cases. The courts are already somewhat receptive to considering community impact statements describing the impact of a crime on a community as a whole or in some specific 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 entire community.

I am confident that the measures in the bill will help send a strong message to the fraudsters out there that their time is finally up. I am also pleased that the bill can act as a springboard for discussion and awareness particularly toward fraud in general.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

I would also like to note the reforms regarding restitution.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That is how the story of this bill began.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our proposals provide that in the case of fraud, the sentencing judge must consider an order of restitution as part of the overall sentence for the offender.

The court must inquire of the Crown if reasonable steps have been taken to provide victims with the opportunity to indicate whether they are seeking restitution. This step will ensure that sentencing cannot happen without victims having had the opportunity to speak to the Crown and establish their losses.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That is what this bill is about and that--

[Alice Wong, Conservative, Richmond, BC]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[Alice Wong, Conservative, Parliamentary Secretary for Multiculturalism]

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

[Pierre Paquette, Bloc, Joliette, QC]

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

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

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

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

[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.

[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)