An Act respecting the Law Commission of Canada

This bill was last introduced in the 35th Parliament, 2nd Session, which ended in April 1997.

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(This bill did not become law.)

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February 5th, 2013 / 8:55 a.m.
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Inspector Jean Cormier Officer In Charge Operations Support, Federal Policing Criminal Operations, Royal Canadian Mounted Police

Good morning, Mr. Chair and honourable members of the committee. Thank you for inviting the RCMP to participate in today's meeting.

Good morning, everyone. Thank you for the invitation to participate in your meeting today.

I'm accompanied here today by Sergeant Stephen Corney, who is the national coordinator of the RCMP money laundering program at our headquarters. I am pleased to have this opportunity to say a few words about the RCMP, our involvement relative to the investigation of tax evasion cases, as well as our ongoing relationship with the Canada Revenue Agency.

As you already know, tax evasion is an issue that must be taken seriously, and we believe that efforts to prevent and recover lost revenue are increasingly important given current budgetary austerity. Tax evasion through offshore arrangements is an international crime conducted using advancements in technology, which allow everyone to move money anywhere around the world with speed and ease. This makes it much more difficult for law enforcement to scrutinize and thereby provides individuals and corporations with a new financial avenue to exploit.

As a result, it is important for law enforcement to work collaboratively with domestic and international partners to prevent, detect, and pursue those who engage in such activities. Cooperation between domestic and international partners must be supported by appropriate legislation. In August 2010, Bill C-9 amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, making tax evasion a designated predicate offence for money laundering.

The RCMP is rarely the primary recipient of tax evasion information, as the Canada Revenue Agency is the main recipient of such information and is well equipped to investigate these matters. The RCMP and the Canada Revenue Agency have a close and long-standing working relationship. More recently, the RCMP and the Canada Revenue Agency have been working together to develop an action plan to enhance our working relationship in an effort to leverage not only each other's strengths but also the strength of other partners. The plan is to develop a more holistic approach to addressing tax evasion and the resulting money laundering problem.

Canada's anti-money laundering and anti-terrorist financing regime is a horizontal initiative comprised of both funded and non-funded partners. The RCMP and the Canada Revenue Agency are only two of those partners in the regime. Information sharing between the Canada Revenue Agency and the RCMP as it relates to tax information is mainly from the RCMP to the Canada Revenue Agency. Between 2007 and 2012, for example, the RCMP referred 2,470 cases to the Canada Revenue Agency for assessment. The aim of the regime is to detect and deter money laundering activity and the terrorist financing activities as well as facilitating the investigation and prosecution of money laundering and terrorist financing offences.

Whether occurring domestically or internationally, money laundering has a devastating impact on the financial integrity of a country. It directly impacts individuals, communities, businesses, economies, and international reputations as well, which can't be taken lightly. Proceeds of crime and money laundering investigations are complex and can be difficult to prove. They are time consuming and labour intensive to investigate and prosecute. We've seen investigations that have consumed thousands of person hours, involved millions of documents, and incurred hundreds of thousands of dollars in forensic accounting costs. Our ability to carry out this work is strengthened by our partnership with regulatory and other law enforcement and government agencies within Canada as well as internationally.

The RCMP has 43 resources that specialize in money laundering investigations across the country. These resources are mainly situated in Vancouver, Calgary, Toronto, Ottawa, and Montreal.

When you cannot generate a profit, there is no longer an incentive to commit profit-driven crime. Therefore, one of the main objectives of the RCMP's fight against organized crime is to identify, restrain, and confiscate illicit and unreported wealth accumulated through criminal activity. Across the country, the RCMP also operates in partnership with other law enforcement agencies. Although not every province has specialized money laundering investigators, other investigators are also responsible for investigating those crimes.

Although international cooperation has come a long way in establishing standards to prevent and detect tax evasion, continued efforts must be maintained. Although the Canada Revenue Agency has the main role in the enforcement of tax laws in Canada, the RCMP is the central enforcement agency for the investigation of possession of proceeds of crime and money laundering related to those crimes.

We believe that everyone has a role to play in the detection and deterrence of tax evasion activity. It is our belief that targeting the tax evasion activity suppresses a criminal's ability to profit from his or her illegal activity. Therefore, the legislation that I have mentioned must be combined with strong domestic and international partnerships as tools in the fight against those who exploit these financial avenues.

As the committee is aware, the RCMP has a number of other initiatives as part of our financial crime programs. I would like to point out that the Bank of Canada started to issue more secure polymer bank notes in 2011. The government, however, still has to consider the risk that counterfeiters will either attempt to dispose of older notes or take advantage of the unfamiliarity of Canadians with the new notes.

Budget 2012 provided a three-year investment of $9.6 million to ensure the RCMP continues with the national counterfeit enforcement strategy. First announced in Budget 2006, it provides resources for enforcement, prosecution, and prevention of currency counterfeiting. Since the launch of the strategy, counterfeiting has fallen to 34 parts per million in 2001 from 470 parts per million in 2004—so a substantial decrease.

The RCMP is committed to protecting Canada's economic integrity by continuing to contribute to efforts to detect and deter cases of tax evasion and the use of tax havens that have an impact on Canada.

I would like to thank you and the committee, and I look forward to answering your questions.