House of Commons Hansard #76 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was restitution.

Topics

Protecting Children from Online Sexual Exploitation Act
Government Orders

12:55 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, the United States has had laws similar to this since 2002 and in the eight years since then, the problem is getting bigger, not smaller. In fact as of 2009, the United States had 49% of the world's sites. The top five countries, that is, the United States, Russia, Canada, Japan and South Korea, have 87% of the sites, with 13% in the other 55 countries. The fact of the matter is that Germany and Sweden are not on the list because they effectively block the sites.

The government is spending even more money. It is putting another $42 million toward police resources to fight a problem that is getting bigger. I really do not see that as the answer.

The answer comes from looking at best practices. Obviously, the best practices are not in the United States, but in Germany and Sweden. I would ask the member whether he would agree with that analysis and that we should ask the government to look at the practices in those two countries.

Protecting Children from Online Sexual Exploitation Act
Government Orders

12:55 p.m.

Liberal

Mario Silva Davenport, ON

Mr. Speaker, my hon. colleague has made a valuable point.

This is just one tool, but an important one, for law enforcement officers to deal with this very important and troubling issue. He is absolutely right that we have to look at best practices in countries such as Germany and Sweden that have a better handle on dealing with this issue. As the member noted, their percentage is nowhere near that of Canada's. Canada is number three, which is very troubling.

Maybe we should be looking not just at resources for policing but also at making sure there is legislation in place that takes account of best practices in dealing with this very important issue. As he mentioned, the U.S. may have similar laws but it has not seen the results that Sweden and Germany have seen. We should be looking at those countries' best practices and implementing them in Canada.

Protecting Children from Online Sexual Exploitation Act
Government Orders

12:55 p.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

Mr. Speaker, I want to ask my colleague a question on the record, given the fact that he is sitting next to me, which is why I am bringing it up.

He touched upon one aspect in his speech about how the private sector and major corporations are involved given the fact that we are talking about major ISPs, Internet service providers. Some of them have gone to great lengths to seek out and quash this material and certainly seek out the people putting this material online and to prosecute them as quickly as possible. Could he touch upon that issue?

The tenor of his speech also illustrated one good point, which is that we tend to be falling behind. How far are we falling back on this issue compared to the international context?

Protecting Children from Online Sexual Exploitation Act
Government Orders

12:55 p.m.

Liberal

Mario Silva Davenport, ON

Mr. Speaker, my hon. colleague made a valuable point. There is no question that Internet service providers have a major role to play and they cannot escape from their obligations. We have to make sure that law enforcement officers have the tools and that we as parliamentarians provide them with the tools to go after Internet service providers and deal with this issue effectively.

Protecting Children from Online Sexual Exploitation Act
Government Orders

12:55 p.m.

Liberal

Derek Lee Scarborough—Rouge River, ON

Mr. Speaker, it is quite possible I may have spoken to this bill in a previous session of Parliament, because it did not move very fast, as we all know, after it was first introduced. I have synthesized my comments down to seven or eight points and I can go through them very quickly.

My party is supporting the bill for passage at second reading, but that should not prevent us from making constructive comments about the bill's form or content.

The first thing I want to mention has to do with the form of the bill, the title of the bill. Certainly the way it is described, an act respecting the mandatory reporting of Internet child pornography, is correct; I do not have a problem with that. However, the government has put forward a bill. It has tried to change the title of the bill a little, because clause 1 says that the short title shall be “Protecting Children from Online Sexual Exploitation Act“. When I first read that short title, I thought it must have something to do with people trying to get children to do something their parents would not otherwise want them to do, but really what the bill is dealing with is child pornography, and if that short title is relied on, there is no indication of that in the short title.

The government in its almost Goebbelsian messaging has tried to squeeze this newspeak title into the bill and it does not describe the bill very well. I hope the committee will take a look at that, because this bill will be a stand-alone bill, as I understand it. It is not an amendment to the Criminal Code. It will stand alone and it will forever be cited as that title, so I think at least we ought to get the title right.

The second thing is that the definition part of the bill refers to an Internet service as:

“Internet service” means Internet access, Internet content hosting or electronic mail.

Internet service therefore means electronic mail, and if one goes to the charging section of the bill, it says that “if a person is advised, in the course of providing an Internet service to the public, of an Internet protocol address”, et cetera, that simply means that if a person is advised in the course of an electronic mail. That seems to involve almost anyone who uses electronic mail, email. I am not so sure that it was the intention to charge every person who uses email with the burdens of reporting set out in the act.

This is either a criminal or quasi-criminal bill. It is not clear on the face of it whether this is intended to be criminal or quasi-criminal, and the penalties reflect that. That is an issue that will have to be discussed at committee. Who knows if this might render the bill weaker than the government intended.

The third thing is that the wording in the bill in the definition section in parentheses is not part of the bill. This is the first time I can recall, and I have been here 22 years, a bill saying that the wording contained in the bill is not part of the bill, that it is only descriptive. That is what the margin of the bill is for. The margin is for the purpose of providing descriptive or helpful comments on the bill. If the bill is adopted in its current form, we will have a bill on the books where some of the words in the bill are not part of the bill. I think that is bad form. I think it is rather dumb. I am not too sure why we have done it, but it seems to be a departure, and that can be explained at committee.

The next thing I want to say, with reference to my second comment about electronic mail, email, is that the bill purports to criminalize or quasi-criminalize Internet service providers or emailers, those who send or receive email.

Not only would it criminalize them for a specific act or omission, but it would criminalize them for an act or omission involving an email or website where child pornography may be available. It is not where it is available, but where it may be available. It criminalizes a class of people who send email. I am just using the words that are in the bill, but it potentially criminalizes a class of people who send or receive emails involving possible knowledge of child pornography where child pornography may be available. I do not for a moment second-guess the objective of the bill, but I do question that particular process.

One could take from my words perhaps a bit of an implicit understanding about why this is not in the Criminal Code. It is quite possible that wording such as this, a description of a criminal act such as this, would not survive in the Criminal Code where we have very strict tests on precision and such. I am flagging that it is in clause 3.

Clause 4 is essentially placing a burden on other people to snitch on other people. Anyone who has knowledge of somebody else who may have knowledge of such a website is obligated under this statute to snitch, to tell the police, and failure to do so would result in liability.

I do not think we have snitch laws in this country, but we are about to get one now if this bill passes in its current form, in my opinion. I know the committee will want to look at that, or maybe get some witnesses in from East Germany, because I know East Germany had a wonderful array of laws that required citizens to snitch on other citizens. We will take a look at that at committee. I know my colleagues will do a good job of that.

The next point is really a jurisdictional one. If this is not to be criminal law, then it has to be based on another federal jurisdiction as opposed to a provincial jurisdiction. That is not set out in the proposed statute. I would like to have that clarified for the record. If it has not been clarified here in debate, and I do not think it has, I would like to see that clarified by the government at committee. The committee should be scrutinizing the precise federal jurisdiction on which this statute is based.

The next thing I want to point out is there are two elements added into clause 11, which are good. I am pleased to see that the drafters of the bill are requiring that for anyone to be convicted of an offence, he or she must have knowingly contravened the act. That is a good thing. We would not want to have people convicted for things they did not know about, especially if one is just sending or receiving an email.

There should be some scrutiny given to the question of the term “knowingly”. Does one have to know about the law? Does one have to know about the alleged child pornography, or does one just have to know about the Internet site? What extent of knowing is required? What threshold of knowing is going to be needed before there is actually an act or omission that constitutes the alleged criminality in this case?

The last thing I want to point out is that the government has the ability to make regulations, and maybe that is the real answer here. Because the government is making regulations, it is obviously not criminal law. We would not allow the cabinet, by making a regulation, to make a criminal law. That would be very rare in our history if we ever did.

There is a regulation section that gives the government six separate regulation-making powers. The last one is a red flag for me. It says that the “Governor in Council may make regulations generally for carrying out the purposes and provisions of this act”.

I ask the question that must be answered before the House finally adopts the bill. Could the government, in making a regulation, create a new element of an offence and thereby make that new regulation an offence under this bill? I say no.

However, I have had some 20 years of experience here on the Standing Joint Committee on Scrutiny of Regulations. I have heard this argument in the House and at committee from the Department of Justice, which feels pressed to make an argument that if the government has the ability in the statute to make a regulation generally for the purpose of carrying out the purposes of the bill, then it has the right to make a regulation that would criminalize certain acts. That has happened before. There has been some push back by the House of Commons and it may be in relatively good balance now.

Categorically, I could never accept a bill that would allow the government to make a regulation which would criminalize or quasi-criminalize the conduct of any Canadian resident. We must keep our eye on the scope of this authorization to make more regulations under this statute to carry out the purposes and provisions of this act, which is a stand-alone act and not in the Criminal Code. It must be scrutinized.

We must get an answer to this. I do not want to be in a position to accept any answer except no, the government, the cabinet, would not, could not use this clause on its own, or make a law or regulation that would create a new criminal or quasi-criminal offence that would be imposed on our electors.

Protecting Children from Online Sexual Exploitation Act
Government Orders

1:10 p.m.

Conservative

The Acting Speaker Barry Devolin

Is the House ready for the question?

Protecting Children from Online Sexual Exploitation Act
Government Orders

1:10 p.m.

Some hon. members

Question.

Protecting Children from Online Sexual Exploitation Act
Government Orders

1:10 p.m.

Conservative

The Acting Speaker Barry Devolin

The question is on the motion. Is it the pleasure of the House to adopt the motion?

Protecting Children from Online Sexual Exploitation Act
Government Orders

1:10 p.m.

Some hon. members

Agreed.

Protecting Children from Online Sexual Exploitation Act
Government Orders

1:10 p.m.

Conservative

The Acting Speaker Barry Devolin

I declare the motion carried. Accordingly the bill stands referred to the Standing Committee on Justice and Human Rights.

(Motion agreed to, bill read the second time and referred to a committee)

Standing up for Victims of White Collar Crime Act
Government Orders

October 4th, 2010 / 1:15 p.m.

Conservative

Gordon O'Connor Carleton—Mississippi Mills, ON

moved that Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), be read the second time and referred to a committee.

Standing up for Victims of White Collar Crime Act
Government Orders

1:15 p.m.

Charlesbourg—Haute-Saint-Charles
Québec

Conservative

Daniel Petit 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.

Standing up for Victims of White Collar Crime Act
Government Orders

1:30 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, I want to thank the minister for his explanation of the features of Bill C-21. I did want to make an observation, a comment, about the value of $1 million. I am not sure why the government has picked $1 million as the threshold. I would like to know how MPs will explain that to their constituents who have been the victims of a fraud, perhaps elderly people living in their ridings who have been victims of a fraud of maybe only $30,000. To that person, that could be his or her whole life savings and could have as big a psychological effect as a case where bigger frauds are involved.

Also, are we supposed to now ensure that the frauds continue until they hit $1 million? If we are trying to investigate a ring of fraudsters, do we have to now ensure they get over the $1 million mark so that they get a minimum two-year sentence?

I would like to ask the minister why the government chose the $1 million mark in the first place and whether it would reconsider it and perhaps make it a little lower.

Standing up for Victims of White Collar Crime Act
Government Orders

1:35 p.m.

Conservative

Daniel Petit Charlesbourg—Haute-Saint-Charles, QC

Mr. Speaker, I thank the NDP member for his question. As I said in my speech, any fraud over $5,000 is already subject to what we call the maximum penalty, one of the harshest penalties, which is 14 years in prison. The only penalty that is harsher would be a life sentence, as we see in other cases.

In the bill we are proposing, even if the fraud is under $1 million, all of the aggravating factors of the fraud are taken into consideration. Let us take my colleague's example: a 62-year-old woman is defrauded of $50,000. This does not fall into the same category as fraud in the amount of $1 million. However, the aggravating factors are the same. The judge will have to consider the possibility of restitution, the age of the victim and all other factors that caused this person to lose everything. A two-year minimum sentence is not enough for an outrageous case of fraud, so the judge may hand down a sentence of four or seven years, as we can see in the existing jurisprudence.

Standing up for Victims of White Collar Crime Act
Government Orders

1:35 p.m.

Bloc

France Bonsant Compton—Stanstead, QC

Mr. Speaker, my Conservative colleague spoke about penalties for the criminal. He spoke about victims. I would like to know what his government plans on doing about tax havens. Everyone knows that fraudsters put all of the money they swindle from young people and everyone into tax havens.

It is all well and good to sentence fraudsters, but what about the money from the tax havens that could be given back to those who were swindled? What do the Conservatives plan on doing about tax havens?