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

Questions on the Order Paper
Routine Proceedings

3:35 p.m.

Some hon. members

Agreed.

Premature Disclosure of a Private Member's Bill--Speaker's Ruling
Privilege
Routine Proceedings

3:35 p.m.

Liberal

The Speaker Peter Milliken

Before we proceed to orders of the day, I would like to take a minute to respond to the question of privilege raised on September 30, 2010 by the Parliamentary Secretary to the Leader of the Government in the House of Commons regarding the premature disclosure of a private member's bill sponsored by the hon. member for St. Paul's.

I would like to thank the parliamentary secretary for having raised this matter, since any time that this happens, it is, as he said, a very serious matter, particularly when it involves the privileges of members.

It is indisputable that it is a well-established practice and accepted convention that this House has the right of first access to the text of bills that it will consider.

In response, on the same day, the hon. member for St. Paul's rose in the House and apologized for having inadvertently posted the bill in question on her website in advance of the House having been privy to its contents. In fact, she stated that she would “never do anything purposely to go against the rules of this place”.

As it is also a long-standing practice in this House for the Chair to accept the word of hon. members and indeed their apologies, I now consider this matter to be closed and disposed of.

Motion to concur in seventh report of industry, science and technology committee
Points of Order
Routine Proceedings

3:35 p.m.

NDP

Joe Comartin Windsor—Tecumseh, ON

Mr. Speaker, I rise in response to a point of order that was raised by the Parliamentary Secretary to the Leader of the Government in the House of Commons last Thursday regarding two motions that were before the House last week. One was a concurrence motion by my colleague from Windsor West on a report from industry committee; the second was a supply day motion by the official opposition. The parliamentary secretary's argument was that the rule of anticipation applied to these two motions.

Although we had started the concurrence motion, we had not completed it. In fact, we still had a little better than an hour and a half to go before the debate would have been completed and the motion put to a vote. The parliamentary secretary argued that it should be ruled out of order because the same issue had been dealt with in the official opposition's supply day motion. That is the factual situation.

I was a bit disturbed by the parliamentary secretary's argument. He quoted selectively from O'Brien and Bosc, leaving the clear impression, at least to me, that the rule of anticipation was a standing rule of the House.

The reality is that it never has been a rule of the House, and this can be found on page 560 of O'Brien and Bosc. It is a rule in Westminster, but it has never been one here. When attempts were made to apply it in the past, at least in one circumstance, it was determined that it did not apply, as O'Brien and Bosc specifically state. In the other times, its application was inconclusive.

A debate was going on when the rule was applied initially. Questions were being asked in anticipation of a supply bill that was to come later in the day. Initially the Speaker ruled the questions out of order because debate was anticipated later in the day.

As a result of a 1997 ruling that was surprising to a number of members of the House, the issue was referred to the Standing Committee on Procedure and House Affairs. Mr. Marleau was asked to attend and he made certain representations to committee. As a result of those representations, a report went back to the House, and subsequently the Speaker ruled that questions of that nature were applicable, and that the rule of anticipation was not. And so it was allowed to go ahead.

We are not dealing with the same factual situation here. We are dealing with two separate motions, one being a concurrence motion from a committee.

In that regard, Mr. Speaker, it is important that you take into account that in 2004 changes were made to the Standing Orders of the House. The change with regard to this particular motion makes it clear that a concurrence motion is one on which the House is guaranteed a vote. The rule provides for that. It applies to the factual situation we have here. It carries more weight than what is really a nonexistent rule.

One might be able to argue that the rule of anticipation could have some application in the House, because we often draw on precedent from other Parliaments, Westminster in particular. But when we have a specific rule, as we do here, that guarantees the House the right to vote on a concurrence motion on the work done in a committee, our rules govern and they are clear.

My argument, Mr. Speaker, is that, if you have to choose between the Standing Order with regard to concurrence reports, including the right to vote on them, and a rule of anticipation that arguably does not exist, except in one area, I believe you should apply the Standing Order that allows us to have the debate and the vote on a concurrence motion.

In summary, the position we are putting forward to the House today is this. We have already had the ruling that questions in the House are not barred by the rule of anticipation. We believe that if you make the ruling we are proposing, that motions, whether they originate from private members or the government, are not precluded by the rule of anticipation.

However, in our view, if two pieces of legislation are identical or very similar, they should not be allowed on the order paper at the same time. We believe that the rule of anticipation should in fact apply to that situation. Otherwise, we would have extended debates, perhaps repeatedly. A bill could be put forward, defeated, and then brought forward again and again. The House could end up being tied up forever on it. There are good arguments for applying the rule of anticipation to bills but not to questions or motions.

Motion to concur in seventh report of industry, science and technology committee
Points of Order
Routine Proceedings

3:40 p.m.

Liberal

The Speaker Peter Milliken

I thank the hon. member for Windsor—Tecumseh for his remarks. I will take them under advisement as I have with the parliamentary secretary's submissions on this point and get back to the House as quickly as I can, given the urgency of this matter.

The House resumed consideration of the motion 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

3:40 p.m.

Liberal

The Speaker Peter Milliken

When the debate concluded on this matter the last time it was before the House, the hon. member for Moncton—Riverview—Dieppe had the floor and had completed his speech, but there are 10 minutes allotted for questions and comments consequent on his speech.

I therefore call for questions and comments. The hon. member for Elmwood—Transcona.

Standing Up for Victims of White Collar Crime Act
Government Orders

3:40 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, a question came up this morning about what the government is doing to recover money from tax havens around the world. There is no action at all on the part of the government. In fact, the government basically gives an amnesty to people with money in tax shelters who come forward and report their ill-gotten gains. For example, last year a Liechtenstein bank employee turned over tax records to the German government, and 100 Canadian names filtered back to Canada. That is how we found out about it. Just the other day, there was an article in the Globe and Mail in which a Swiss bank employee was reported to have turned over computer discs resulting in about 1,800 Canadian names being forwarded to Canada. Once again, I believe the amnesty applies.

The government is not doing anything concrete to try to shut down the tax havens. In fact, it is negotiating free trade deals with Panama, which is a known tax haven, having over 350,000 foreign companies doing business there. Mexican drug dealers are laundering money through Panama. Meanwhile, we are working on trade deals with the Panamanians, when Conservatives should be doing something to shut down these tax havens and collect from Canadians who have money in them.

Standing Up for Victims of White Collar Crime Act
Government Orders

3:45 p.m.

Liberal

Brian Murphy Moncton—Riverview—Dieppe, NB

Mr. Speaker, we were talking about tax havens during the debate, but this bill does not have anything to do with tax havens. It would be nice for the government to take action on tax havens, but I am not sure that is the domain of the Criminal Code.

However, the member and other members of his party are absolutely correct and relevant in respect of the lack of prevention measures. Where are the preventive tools to deal with fraud? Surely the government, in other bills that might come before the House, could come up with methods to attack the fraudsters. As the law newsletter from Miller Thomson, a firm I have never been associated with and am not advertising for, says, the three big names in Canadian fraud, along with Earl Jones, would not have been affected by this bill.

Agreeing somewhat with my friend, I ask: when is the government going to tackle fraud in a serious way with all the resources it has at its disposal?

Standing Up for Victims of White Collar Crime Act
Government Orders

3:45 p.m.

Liberal

Alan Tonks York South—Weston, ON

Mr. Speaker, prior to question period, my colleague had gone into a great deal of analysis of the difference between general fraud and white collar fraud in terms of the kinds of people who are victimized. People are victimized through their inability to understand the technology. Organizations are defrauded by very unscrupulous and skilled individuals. He also said just now, as he had repeated before, that there is not enough emphasis on prevention.

What I wonder about, and I think the House would be interested, is if those who benefit from the proceeds of crime knew in advance that the full spectrum of law enforcement and the judicial system would come hard on them, whether it is a tax haven or wherever the proceeds were, they would not be able to count that in the future as part of their ownership.

Does this bill come anywhere near to talking about the proceeds of crime, and if it does not, should that be elevated in terms of the committee's understanding and perhaps recommendations brought forward in that respect?

Standing Up for Victims of White Collar Crime Act
Government Orders

3:45 p.m.

Liberal

Brian Murphy Moncton—Riverview—Dieppe, NB

Mr. Speaker, if anybody in this chamber knows about community it is this member. He has served as chair of the greater metropolitan area of Toronto. His father was the mayor of York. This man knows community.

Crimes of fraud touch all aspects of age, gender, location, geography, et cetera. What this bill does not do, anymore than the existing law, is crack down specifically on the greatest fraudsters.

I want to answer my friend's question. There is not enough attention paid to specific fraudsters here. In these cases that have been pointed out by law newsletters, regarding Earl Jones, Stan Grmovsek and Vincent Lacroix, the penalties meted out were well in excess of the two-year mandatory minimum that is in this bill. In other words, the existing law gave sentences variously of 14 years for Earl Jones and 39 months for Grmovsek, and led to in that case, under the existing code, the disgorgement or return of $8.5 million.

We ought to be considering what the United States does with respect to the control of assets and the control of money, because at the end of the day, the victims want their day in court. They want to see sentences, but also, and maybe primarily, they would like to have their money back. This bill does nothing towards that, so we ought not to raise false hope in my community or in the member's community that this is a panacea. It is not.

Standing Up for Victims of White Collar Crime Act
Government Orders

3:50 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, while Earl Jones made off with $50 million, Bernie Madoff made off with $65 billion. In fact, it is well documented that as long as 10 years before Madoff was caught, Harry Markopolos was working at the time for Rampart Investment Management in Boston and he was asked by his bosses whether he could duplicate Madoff's strategy, because, of course, they wanted to do the same thing and follow his strategy as to how he could make money consistently.

Markopolos was able to prove within a half hour that this could not be done. There had to be at least one month in a year that a fund would lose money. He just could not make money every year. He reported it to the Securities and Exchange Commission on several occasions over a 10-year period before they took action.

The question here is, where are the regulators? Why do regulators keep hiring people from within the industry who are friendly with people in the industry and are simply regulating their old friends? We have proven that regulation of friends does not work. We need more of an enforcement approach to regulation, a police force type of approach to regulation, as opposed to self-regulation by industry insiders.

I would just ask the member whether he has any comments about that.

Standing Up for Victims of White Collar Crime Act
Government Orders

3:50 p.m.

Liberal

Brian Murphy 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
Government Orders

3:50 p.m.

Bloc

Marc Lemay 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.

Standing Up for Victims of White Collar Crime Act
Government Orders

4:10 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, regardless of the OECD protocols on sharing financial information, which I do not think have been that successful, the fact is that over the last two years it has been a bank employee of a Liechtenstein bank who has simply taken computer diskettes and sold them to the German government, which has resulted in a lot of taxes being collected by the German government and other European governments and 100 names being submitted to the Canadian government. The Canadian government has chased perhaps 100 people for money.

The government has also given an amnesty that if anyone wants to walk into a Revenue Canada office and avoid any problems they can do it. Evidently people have been doing that.

Just recently we heard of another employee of a Swiss bank who gave out diskettes listing hundreds of people, in this case 1,800 Canadians. This information was just made available now and we hope Revenue Canada is doing something to collect some of the taxes that are owed. As a matter of fact, more Canadians were found in this net than Americans. Even with the population of the United States, only 1,600 Americans were caught in this net.

Why must we rely on disgruntled employees of banks to get this information? Why can the government not do things to get this information that Revenue Canada needs?

Standing Up for Victims of White Collar Crime Act
Government Orders

4:15 p.m.

Bloc

Marc Lemay Abitibi—Témiscamingue, QC

Mr. Speaker, I agree with my colleague, but there is a very important premise: if we want to stop the bleeding, we must first plug the hole where the blood is coming out. In this case, that hole is the tax havens. If we eliminate the tax havens, if we intervene, monitor them, and tell the Canada Revenue Agency that the deductions are over, there will be no more tax havens. If there are no more tax havens, hundreds of millions of dollars will remain in Canada, and will not be transferable.

I agree with my colleague, but this is very important to us. There are banks in Europe, Switzerland, the Cayman Islands and elsewhere. There are tax havens in Monaco and Liechtenstein, and there are many other places like that in the world. Banking secrecy exists. I am not saying that we need to pressure anyone to eliminate it. We can start here, and that is very important. We should start here, clean things up, and prevent people from taking advantage of tax havens. Then we will really be able to hit white collar crime where it hurts.