Income Tax Amendments Act, 2000

An Act to amend the Income Tax Act, the Income Tax Application Rules, certain Acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another Act related to the Excise Tax Act

This bill was last introduced in the 37th Parliament, 1st Session, which ended in September 2002.


Paul Martin  Liberal


This bill has received Royal Assent and is now law.


All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Technical Tax Amendments Act, 2012Government Orders

February 15th, 2013 / 10:25 a.m.
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Rosane Doré Lefebvre NDP Alfred-Pellan, QC

Mr. Speaker, before I begin, I want to say that I will be sharing my time with the hon. member for Montmorency—Charlevoix—Haute-Côte-Nord.

I am rising in this House today to speak to Bill C-48, An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation. This bill affects many pieces of legislation.

We in the NDP believe that this bill will have a positive impact on revenues and will generally discourage tax avoidance. Frankly, a technical tax bill was overdue. I am pleased to see that Parts 2 and 3 of Bill C-48 deal with the taxation of Canadian multinational corporations with foreign affiliates. These changes reflect the proposals made in the budgets of 2007, December 2009, February 2010, August 2010 and August 2011, and I am pleased to see that they seek to ensure the integrity of the tax system and discourage tax avoidance.

The NDP is in favour of cracking down on tax evasion and tax avoidance. That is why my colleagues at the Standing Committee on Finance have been pushing the committee to complete its study on this.

As an aside, I want to thank our official opposition finance critics: the senior critic, the hon. member for Parkdale—High Park, and the deputy critic, the hon. member for Rimouski-Neigette—Témiscouata—Les Basques. Over the past few months, they have done tremendous work on finance bills, including the omnibus budget bills and the current omnibus tax bill. I thank them. Their work is much appreciated, and it helps us to better understand the bills that are being introduced.

I am also pleased to see that this bill makes changes in order to reduce tax evasion. What is more, it seems that the committee will continue its study on the matter this year.

It is quite something to think that it has been 11 years since a bill like this has been passed. Tax practitioners have said time and again that Canada is very far behind because this government has taken too long to legislate these technical changes.

In a report released in 2009, Auditor General Sheila Fraser noted that:

If proposed technical changes are not tabled regularly, the volume of amendments becomes difficult for taxpayers, tax practitioners, and parliamentarians to absorb when they are grouped into a large package.

We could also see that the Department of Finance Canada had at least 400 technical amendments that, unfortunately, had not been enacted. I believe it is crucial that this type of delay does not happen again.

I also agree with the Certified General Accountants Association of Canada, which, during prebudget consultations, proposed to the Standing Committee on Finance that Canada's tax system be modernized to make it simpler, more transparent and more efficient. The association also proposed that a technical tax bill be introduced and passed to deal with unlegislated tax proposals. Finally it suggested that a sunset provision be implemented to prevent further legislative backlogs.

It is also true that the complexity of tax legislation makes this task extremely difficult. Our seniors, our youth and those who do not consider French or English as their first language would obviously prefer a simpler system that is easier to understand. Being a responsible, honest Canadian should not be so complicated.

This huge bill makes things even more complex. We know that this government is a great believer in omnibus bills, as it has demonstrated over the past year with Bills C-38 and C-45. Luckily, this time, I can see that the bill proposes technical amendments to a small number of closely related laws and not laws in other areas. The other two bills, on the other hand, amended laws related to environmental protection, government accountability, immigration, employment insurance and so on.

I still find it ironic that this government is introducing a bill that is so long when it did not hesitate to denounce such a practice before.

During the debate on Bill C-22, Income Tax Amendments Act, 2000, in the 37th Parliament in 2001, my colleague from Calgary Southeast, who is now the Minister of Citizenship, Immigration and Multiculturalism, had this to say:

Let me say at the outset that the bill before us is a classic example of what has gone wrong with parliamentary oversight of legislation, particularly with respect to taxation. The bill before us has some 513 pages of technical amendments. I can say with a fair degree certainty that not a single member of this place, let alone the parliamentary secretary who just spoke or the minister he represents, has read or will read. It is a bill that exercises enormous power over the lives of Canadians through the Income Tax Act which in itself has coercive powers delegated to it by this parliament. The some 500 pages of amendments in the bill are amendments to a tax act which runs over 1,300 pages long.

I think the same observations apply to Bill C-48, especially since it is twice as long as Bill C-22.

I believe that Canadians deserve to be represented by parliamentarians who make sensible decisions when it comes to taxes and spending. Canadians want accountability, and rightly so.

When we see things like the Parliamentary Budget Officer having to take the government to court to get information about how tax dollars are being spent and what cuts are being made to the services Canadians need, I think the public is entitled to ask some questions and to admit that they have lost confidence in this government.

Out of respect for Canadians, a government should be accountable and transparent. Frankly, that should be the very least they can expect.

Since I was first elected, not a day goes by without someone from my riding of Alfred-Pellan contacting me to share their concerns about this government. They are worried about how transparent it is, and if you ask me, they are right to be worried.

In closing, I am thrilled that this bill has been introduced, even though it took a while, because it implements over a decade's worth of highly technical changes to Canada's tax system.

Before I finish, I want to reiterate that the people of Alfred-Pellan contact me often about the omnibus bills. I recently received letters from some of them that I would like to share in the House so that everyone can understand that the public does follow what is going on in Parliament and that it is important to listen to them.

I will quote some of my constituents from Alfred-Pellan. First, Mr. Nadeau said that the Conservative Party is running the country with its own members in mind, and Mr. Nadeau is against the massive bills introduced by the Conservatives. According to him, they are using these bills to try to push through all of their ideas en masse, and it is very sad to see these bills being introduced.

Mr. Prejent said that it is impossible, or at least very difficult, to meaningfully challenge a particular issue. It is becoming clear that this approach allows the government to pull a fast one on the opposition, and by extension the Canadian public.

To Mr. Prejent, I would say that the Canadian public is not affected by extension. This affects the Canadian public directly and the opposition by extension. We see these kinds of things every day.

One of my other constituents, Mr. Jetté, is not happy about these omnibus bills. He said that the Conservatives should talk with the opposition before bringing in such bills, and that it is arrogant and a bit too self-serving not to. He apologized for saying such things, but it is what it is.

I also heard from Mr. Bergeron, who said it was unbelievable that in 2012, the government forgets and fails to listen to the Canadian people.

People are not happy that such bills are being introduced, and I understand. I know how important these amendments can be, especially when things have dragged on and on with this government and also with the Liberals in the past. So it is important to deal with these issues, but we must be cautious. We must also ensure that these laws are useful to the public, because it is extremely complicated to make so many changes in one fell swoop. We must be cautious about the complexity of the law, especially when it comes to taxes.

I think that everyone, in all ridings, just wants to be able to properly fill out their tax returns. We need to give them the right tools. We must make their lives easier and make things as simple as possible.

As parliamentarians, we have a duty to ensure that Canadians trust their government and trust that it is transparent when it manages taxpayer money. Unfortunately that is not always the case with the current government. But I am happy to be part of a team that, in 2015, will show that it is possible to have a government that works fairly, efficiently and transparently.

Health Care SpendingPrivate Members' Business

May 8th, 2002 / 6 p.m.
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Réal Ménard Bloc Hochelaga—Maisonneuve, QC

Mr. Speaker, I assure you I have no cell phone, and some members of my party fault me for that. You can see, however, that it might help us continue the debate.

I congratulate the hon. member from Halifax for her pertinent motion. I cannot resist pointing out, however, that since this is private members' business, we are in an extremely problematical situation. We have to remember that the government has made use of its majority to deeply undermine parliamentary democracy—this we know—by defeating a private member's bill that was deemed votable.

I plan to remind hon. members of this every time I rise, in support of a colleague who has made use of this vehicle in order to do our work as legislators, when it comes down to it.

Basically, we have no problem with the motion. I understand that there are four million Canadians who suffer to varying degrees from some form of arthritis.

Arthritis is a sneaky disease. One day, a person can be severely affected, and the next quite fine. People with this disease have no way of predicting what their condition will be next. There is one thing about arthritis that differentiates it from other things like diabetes or heart disease. There is a shortage of rheumatologists. This will hold true for the next few years. We are faced with the challenge of proper manpower planning in the health field.

As we know, this is National Nursing Week. I will therefore take this opportunity to thank them. I have met in my office with nurses and their official spokespersons. They have reminded me—perhaps something we have a tendency to lose sight of—that in the health system nurses perform 75% of billable services that are delivered by health professionals.

They deserve our recognition. Nurses play a vital and central role in our health system. They fulfill that role under difficult conditions, because all governments have slashed health budgets. As we have said and keep on saying: the federal government has cut $25 billion in transfer payments.

It is easy to imagine what that means. In Quebec alone, it means an annual shortfall of $2.5 billion in health care funding because of the federal government's cutbacks.

In a federal system, it is impossible to think that what one government does will not affect the other. The situation is even more iunbelievable in view of the absolutely huge surpluses.

Yes, it is true that a little must go to Radio-Canada. A little must go to a number of other crown corporations. However, we certainly have an obligation to ensure the provinces can assume their responsibilities.

Arthritis is a disease affecting four million Canadians of all ages, but particularly those who are getting older. It can reduce one's dexterity and mobility. It is without a doubt an extremely painful disease.

The member from Halifax spoke of arthritis and the fact that so many Canadians suffer from it to remind us of which principles should guide us, as legislators, in our approach to health care.

Through her motion, the member from Halifax is asking us, as parliamentarians, to recognize that each patient has the right to a timely diagnosis. I understand her point. In the case of arthritis, as for any other disease, it is easy to understand that early diagnosis is best.

The parliamentary secretary will agree with me, given that he is a former gastroenterologist—if I am not mistaken—which means he treated disorders of the colon and small intestine, basically of the entire digestive system.

The Parliamentary Secretary will agree that the earlier the diagnosis, the easier it is to take measures, find a cure or the appropriate medication.

This is what the member for Halifax is calling for, and we wholeheartedly support the first paragraph of her motion.

She also refers to medications. This is interesting, since, as health critic, I have read in numerous studies about the pressure that is being felt in the different components of the health care system.

Allow me to quote a figure. Together, the provinces and the federal government spent $56 billion last year. This is nothing to sneeze at. It is a considerably large share of our collective wealth.

In the next ten years, which is not very far off, we will need to invest between $80 and $90 billion in the health care system. Why? If in 2003, the Government of Quebec wants to provide the same services, without adding any new services, without acquiring any new medical technologies, it will have to allocate another 5% of its budget to health care. Imagine that. No government can maintain this rate of increased spending.

Which brings us to the motion moved by the memberffrom Halifax. We need to think about the cost of drugs. Right now, the largest expense, the single greatest factor contributing to increasing costs in our health care system is drug costs. We need to think about what we want to do about this.

For example, many new drugs are introduced. The Patented Medicine Prices Review Board was established by the Tories. We must acknowledge that they had the forethought to look in depth into the whole issue of intellectual property. If memory serves me well, it was Bill C-22, which then became Bill C-91.

Obviously a country such as Canada, like other countries around the world, needs an extremely active research sector in biotechnology.

At the same time, it must be recognized that about twenty new drugs are introduced every year. This creates pressure because our fellow citizens are informed. The Patented Medicine Prices Review Board has a mandate to look at whether the cost of drugs is higher than inflation. This is then averaged with the most developed countries, countries in the G-8. It is true that the drug costs in Canada are not higher than elsewhere but, at the same time, because many new drugs are introduced, consumers and patients press for access to them.

It has been established that drugs are the costliest for the health system in the two years following their introduction. For example, I have learned that big pharmaceutical companies, brand name companies, which do research, are lobbying members of parliament so that drugs can be advertised on television like in the United States.

I saw an advertisement for Viagra. You will tell me, Mr. Speaker, that Viagra is a dangling affair. However, if one lived in a society where most drugs were advertised, can one imagine the pressure on the system? We have to resist this lobby.

In conclusion, we support the New Democratic Party motion and we urge the government to restore transfer payments to their 1993-94 level, with indexation. If the provinces have the means, there can be more research on drugs. With more research and greater means, there can be more drugs covered, and that will contribute to the well-being of people with arthritis.

Public Safety Act, 2002Government Orders

May 2nd, 2002 / 11:20 a.m.
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Canadian Alliance

Kevin Sorenson Canadian Alliance Crowfoot, AB

Madam Speaker, I thank the member for the excellent opportunity. I appreciate it.

I want to go back to some of the concerns about money laundering here in Canada. One report referred to the scheme as black peso money laundering. I will explain the system. I wrote down some points and I was hoping I would have time to talk about it.

This is part of what happens with terrorism and organized crime. Drug traffickers require pesos to pay for their lavish lifestyles in Colombia but most of their money is in United States dollars. They sell their United States dollars usually for 20% or 30% less than the exchange rate to Colombian based companies in exchange for local currency. The companies in turn buy commodities that are then sold in their stores. They have received the currency exchange. The companies have stocked their shelves with commodities and the laundering continues.

The black peso system is but one new cat and mouse game of money laundering that is played between criminals and law enforcement officials. It is next to impossible to enforce.

An investigative researcher claims that as a result of Bill C-22, criminals will become more violent and intimidating when trying to coerce individuals. This expert stated with regard to the Mafia:

Before C-22, you had guys taking big bags of money to a friendly corrupted bank manager, who would get a percentage for facilitating the transaction. But now the risk and the penalties are so great that fewer people will be willing to co-operate, so the criminals will either take control of some financial institutions or resort to strong arm tactics.

Furthermore, given that Bill C-22 requires any cash transactions of $10,000 or more be reported to the Financial Transactions and Reports Analysis Centre, there will be the introduction of what I previously mentioned as smurfing within Canada.This is the practice where the elderly fall prey within our country. It is going on right now.

I would suggest that Canada does not have the resources or the expertise to deal with the extent of the raising of dollars for terrorism or organized crime. There is a lack of resources in CSIS and the RCMP.

There is really no opposition to part 16 of Bill C-55 which amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to allow for greater sharing of information. However we do remain opposed to the bill because we believe it has inadequate measures to deal with the onslaught of terrorism that we see coming.

On the question that was posed by my colleague, I want to quickly say that we have no problems with some parts of the bill, parts that would help the RCMP and CSIS to locate and to enforce the measures that are already here in Canada. We want to see more dollars available for the RCMP.

The Canadian Security Intelligence Service has gone from 2,700 and some employees down to 2,100. Why has it downsized? Why are we losing so many individuals out of our intelligence gathering agency? It is because the government has shown a lack of commitment through the years. That lack of commitment is now causing our country and even other parts of the world to be at great risk.

The Senate reports and other reports suggest that there are 50 terrorist groups in Canada. The response from the government is it comes out with Bill C-55, a bill that does not answer the concerns of the RCMP and CSIS.

Public Safety Act, 2002Government Orders

May 2nd, 2002 / 11:10 a.m.
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Canadian Alliance

Kevin Sorenson Canadian Alliance Crowfoot, AB

Madam Speaker, it is a pleasure to rise and participate in the debate on Bill C-55. As has already been mentioned, Bill C-55 amends 19 different acts of parliament and would enact or enforce an international treaty.

What are the goals of the legislation? We need to draw to the attention of Canadians and to the House that this is another one of those omnibus pieces of legislation. It is a mixture of good, bad and ugly. Some parts of Bill C-55 are good but it is mainly made up of the bad and ugly.

The legislation proposes to make air rage an offence and to strengthen security at restricted areas in airports. It would require transportation companies to provide information on the passengers who will be travelling on their modes of transportation. It would criminalize terrorist hoaxes. It would provide for more control over explosive and sensitive exports. It would provide the name of controlled access military zones and would implement the biological and toxin weapons convention.

In the opinion of the official opposition, it is inadequate legislation inasmuch as it would enact half measures and would undemocratically empower cabinet ministers without any regard to the checks and balances offered by parliamentary review and scrutiny.

Bill C-55, like its predecessor Bill C-42, retains government rule by executive orders, a method of ruling that the government finds comfortable. The only difference is that the new bill would require cabinet ministers to have their decisions reviewed by cabinet within 45 days as opposed to the 90 days that Bill C-42 proposed.

Within 15 days parliament would be informed, not consulted and not questioned, of the decision that would already have been made by cabinet or a minister. Effectively the provision negates parliamentary or judicial scrutiny, a necessary procedure to safeguarding civil liberties and the rights that Canadians enjoy.

These powers are indicative of the Liberal Party, a government that has little respect for openness and transparency.

We have already talked to some degree about the 1985 Emergencies Act. In my opinion, not necessarily the opinion of all here, the Emergencies Act lends sufficient means to combat terrorism while effectively balancing safety concerns with freedoms. It grants the government the power to declare emergencies and to take the steps it deems appropriate but only for a limited period of time, steps that are, I might add, subject to a full parliamentary review.

Despite the cosmetic changes, we remain opposed to these interim orders which, in the view of the opposition, is nothing more than a power grab.

The amendments in part 4 of Bill C-55 are a little different because this is omnibus legislation. Part 4 amends the criminal code by making hoaxes regarding terrorist activity an offence. This section is completely unnecessary inasmuch as it does absolutely nothing to deter terrorist activities or to enhance public safety, which is supposed to be the thrust of the legislation. Any hoax, whether it is in regard to a bomb threat, to organized criminal activity, to a terrorist activity that endangers or threatens public safety or heightens public anxiety or causes the public to be frightened or concerned about a hoax, should be deemed an offence and the criminal code should be amended to make sure that is covered.

In my opinion the criminal code amendment is more about political correctiveness than it is about criminal behaviour. We are talking about hoaxes. It is more about being politically correct. It is more about the government looking like it is doing something when in fact it is doing next to nothing to combat terrorism and thwart terrorist operatives from using this country as a staging ground for terrorism.

These particular amendments in the public safety act, 2002 do nothing to prevent terrorist attacks or to protect Canadians, which the government professes that the bill should do. This is particularly disturbing given the recent warnings of the head of the Canadian Security Intelligence Service, CSIS.

On Monday of this week, CSIS director, Ward Elcock, warned participants at a terrorism and technology conference in British Columbia that Osama bin Laden's al-Qaeda network has trained enough terrorists to pose a threat for years. He stated:

Given what we know about the number of individuals who have gone through bin Laden/al-Qaeda terrorist training camps, and the fact that many are now entrenched around the world, even though their capacity has been degraded or disrupted, it will take some time, perhaps years, to deal with those elements and assure ourselves that the threat has been defeated.

Mr. Elcock also warned:

Canada has moved beyond being used strictly for logistical or support activities by terrorist organizations and there is now a demonstrated willingness by certain groups to use Canada as a staging ground for terrorist attacks.

These are attacks that can be launched without detection or deterrence because of technological enhanced abilities.

The head of CSIS said that Canada must establish new partnerships with industry in order to come up with new technology that is going to help track terrorism and terrorist activity. The bill does little to accomplish that end.

This is also true with regard to money laundering, and the bill deals a bit with money laundering. An international forensic accountant stated that “as law enforcers get wise to money laundering, criminals are finding ever more ingenious ways to hide their dealings”.

In essence what these two experts are saying is that we must devise new ways and means to stay ahead of criminals, particularly organized criminals and those involved in criminal activity that are there to support terrorism.

For years Canada was considered one of the best places in the world to launder money because we have the largest unprotected border in the world, which makes it easy for dirty money to pass from the United States into Canada and vice versa. Because Canada was one of the last industrialized countries to establish adequate measures to combat money laundering, it is encouraged to a certain degree by those of terrorist affiliation.

According to the solicitor general, between $5 billion and $17 billion is laundered in Canada each year. The international monetary fund estimates that worldwide money laundering ranges from $590 billion to $1.5 trillion annually, or between 2% and 5% of the entire global gross domestic product, GDP.

Optimistically, the situation was to change somewhat in Canada after October 2000 when Bill C-22's regulations came into effect. However, Wayne Blackburn, a former superintendent of the RCMP's Ontario economic crime branch and proceeds of crime experts, said that as criminals figure out that the police can now generally follow money from a drug deal and freeze and seize it if it is in a financial institution, they have come up with another way to clean money up: by using it to purchase commodities.

Money laundering is a huge concern in Canada. Drug traffickers around the world launder money. They get American dollars and transfer them into companies. They exchange them for commodities. They change dollars to pesos so they can use the currency of the country that they are involved in.

Bill C-22 requires that any cash transactions of $10,000 or more be reported to financial institutions. However, terrorists and people involved in organized crime are using the elderly to bring in and despoit money into banks in Canada. It is called “smurfing” in Canada. They are using the elderly to depost dollars into their account, what we may call dirty money, and then they take the money out and put it into terrorist activities.

There is a problem. CSIS has lost so many analysts. CSIS has lost so many investigative reporters. The number 35 has been mentioned. The bill does not adequately deal with the concerns that CSIS and others have with regard to terrorism and it should go back.

SupplyGovernment Orders

September 18th, 2001 / 4:45 p.m.
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John Bryden Liberal Ancaster—Dundas—Flamborough—Aldershot, ON

Mr. Speaker, I was very disappointed in Bill C-22, the money laundering act that has now since passed the Senate. I felt that the same rules that pertained to money laundering at casinos should be applied to charities. Therein there is the same requirement for scrutiny and disclosure and reporting of transfers of large sums from charities because huge sums can now be transferred.

On the point regarding bin Laden, I have before me a newspaper clipping of some years ago which tells the story of a member of a large charitable organization who was caught crossing the border from the United States into Canada with over $1 million in cash in his trunk and under the carpet of his car. There are many ways for organizations, be they charitable, legal or criminal, to move money around.

Message From The SenateThe Royal Assent

June 14th, 2001 / 5 p.m.
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The Deputy Speaker

I have the honour to inform the House that when the House went up to the Senate chamber the Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill C-12, an act to amend the Judges Act and to amend another act in consequence—Chapter No. 7.

Bill S-24, an act to implement an agreement between the Mohawks of Kanesatake and Her Majesty in right of Canada respecting governance of certain lands by the Mohawks of Kanesatake and to amend an act in consequence—Chapter No. 8.

Bill C-8, an act to establish the Financial Consumer Agency of Canada and to amend certain acts in relation to financial institutions—Chapter No. 9.

Bill S-17, an act to amend the Patent Act—Chapter No. 10.

Bill C-17, an act to amend the Budget Implementation Act, 1997 and the Financial Administration Act—Chapter No. 11.

Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act—Chapter No. 12.

Bill S-3, an act to amend the Motor Vehicle Transport Act, 1987 and to make consequential amendments to other acts—Chapter No. 13.

Bill S-11, an act to amend the Canada Business Corporations Act and the Canada Cooperatives Act and to amend other acts in consequence—Chapter No. 14.

Bill C-13, an act to amend the Excise Tax Act—Chapter No. 15.

Bill C-26, an act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco—Chapter No. 16.

Bill C-22, an act to amend the Income Tax Act, the Income Tax Application Rules, certain acts related to the Income Tax Act, the Canada Pension Plan, the Customs Act, the Excise Tax Act, the Modernization of Benefits and Obligations Act and another act related to the Excise Tax Act—Chapter No. 17.

Bill C-3, an act to amend the Eldorado Nuclear Limited Reorganization and Divestiture Act and the Petro-Canada Public Participation Act—Chapter No. 18.

Bill C-18, an act to amend the Federal-Provincial Fiscal Arrangements Act—Chapter No. 19.

Bill C-28, an act to amend the Parliament of Canada Act, the Members of Parliament Retiring Allowances Act and the Salaries Act—Chapter No. 20.

Bill C-9, an act to amend the Canada Elections Act and the Electoral Boundaries Readjustment Act—Chapter No. 21.

Bill C-25, an act to amend the Farm Credit Corporation Act and to make consequential amendments to other acts—Chapter No. 22.

Bill C-4, an act to establish a foundation to fund sustainable development technology—Chapter No. 23.

Bill C-29, an act for granting to Her Majesty certain sums of money for the public service of Canada for the financial year ending March 31, 2002—Chapter No. 24.

Bill S-25, an act to amend the Act of Incorporation of the Conference of Mennonites in Canada.

Bill S-27, an act to authorize The Imperial Life Assurance Company of Canada to apply to be continued as a company under the laws of the Province of Quebec.

Bill S-28, an act to authorize Certas Direct Insurance Company to apply to be continued as a company under the laws of the Province of Quebec.

Pursuant to order made on Wednesday, June 13, the House stands adjourned until Monday, September 17, at 11 a.m. pursuant to Standing Orders 28 and 24.

(The House adjourned at 5.26 p.m.)

Proceeds Of Crime (Money Laundering) ActGovernment Orders

June 11th, 2001 / 3:50 p.m.
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Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I commend the hon. member on her remarks. She obviously grasps the importance and the relevance of this issue at this time in Canada.

In response to concerns raised by the Senate banking committee and the important efforts and work it did in that regard, we see Bill S-16, an act to amend the Proceeds of Crime Act, coming forward to legislate in the areas of solicitor-client privilege, the disclosure of information and records retention.

I should indicate at the outset that I had intended to split my time with the hon. member for Kings—Hants. Subject to his arrival I may just carry on.

Money laundering, as we all know and are very aware, is the process by which criminals attempt to conceal profits earned from crime so that the money looks as if it came from very legitimate sources. It is literally an attempt to clean dirty cash. It is also an attempt to hide or cover up the illegal means and sources from which the money originated. Typically it involves vices such as extortion, prostitution, illegal gambling, drugs and other contraband. The particular legislation is aimed at attempting to track the origins of the money and to get at the source itself.

The legislation speaks of abilities to trace the origins of money because the origins themselves are those which are most often concealed and erased. If the money is successfully covered up, it can then be used to buy goods and services the way any other type of cash or exchange takes place.

It is estimated that somewhere between $5 billion and $17 billion in money from nefarious sources is laundered in Canada each year. I do not mean to put too fine a point on it but that sort of vague estimate indicates the size of the black market out there. It is very disturbing. Exact figures are very difficult to come by in that regard.

Obviously the black market is thriving in Canada. It is straight profit that is hidden from Revenue Canada and from government generally. The money is very often shifted between countries, financial institutions and investment brokerages without a paper trace that would allow law enforcement to get to the source or to get to the origins. The more complex and convoluted the trail, the more difficult to trace, eventually prosecute and bring to justice those involved in money laundering.

It is fair to say it is a world problem against which even the world's most powerful nations struggle. For example, Vladimir Putin, the Russian president, just last week held a conference on money laundering in St. Petersburg. He outlined efforts to crack down on the global illegal industry and the expansion of this industry in Russia. Russia is currently a member of the FATF's blacklist of nations because of its money laundering legislation, or lack thereof, which does not meet international standards.

We do not want this to happen in our country. That is why it is encouraging to all that the legislation is before us now. We must ensure our global partners and neighbours, not to mention our citizenry, that we are doing everything in our power to address and confront this problem.

Corruption is a growing problem in Canada and most countries recognize this point. They recognize the fact that it is very diverse and takes many forms just like legitimate industries. Any effort aimed at curtailing this type of underground economy and outsourcing of money from illegal means is where we should be focusing our attention. The magnitude and the reach of this problem are staggering.

Canada has come under heavy criticism in recent years as being an easy place for criminal organizations to launder their money. Our biggest ally, the United States, has sent signals which clearly indicate that we are leaving our neighbours to the south open and more vulnerable to criminal activity respecting money laundering because of a failing security system in our country. The lack of resources contributes to that. The lack of government support whether it be through funding or innovation indicates to members of our law enforcement community that in many instances their government is not behind them.

The response has been legislation such as Bill S-16, albeit late. Bill C-22 originally imposed new reporting and record keeping requirements and created financial transactions in the reports analysis centre of Canada to receive and analyse information. Bill C-22 was the predecessor for the legislation before us. It died on the order paper when the pre-emptive and very opportunistic election was called.

The banks would be required by law to adhere to a new reporting regime that would be put in place over the next year. It would help reorganize and report dubious transactions. It would present banks with the obligation to act upon information of which they might be in possession and report where there is a suspicion of organized crime activity. It is clearly there to try to unveil and unmask efforts by organized crime to use financial institutions such as our major banks and other financial institutions for illegal purposes. A failure to report would result in certain sanctions. Those sanctions include fines of up to $2 million and five years incarceration. Therefore, this reporting scheme does have some teeth.

Concerns have been expressed however about the privacy and the disclosure of certain information. Those were voiced by the privacy commissioner, the Canadian Bar Association and other groups.

The Senate banking committee looked at the bill in June of 2000 and felt that there were numerous flaws and areas where it could have been improved. The government at that time was unwilling to entertain amendments to the legislation because it was late in June and the House of Commons was going to recess. We know that at this time of year ironically we are facing a similar attitude on the part of government.

However, the Secretary of State for International Financial Institutions gave a written undertaking to the committee that certain changes would be made in a new bill to be introduced in the fall. Those changes formed the substance of Bill S-30, introduced in October of 2000. This bill was identical to the bill we see before us and it went beyond those changes agreed to in the letter from the secretary of state.

The Senate banking committee reported the bill with the observation that the government should have given consideration to other amendments that would further ensure that solicitor-client privilege was protected by adding the phrase law office in any clause where the term dwelling house appeared.

Second, the first annual review should be held after three years not after five years as was indicated in the original legislation. We find far too often that we are becoming very slack in our review process that was initially intended to ensure that the bill was living up to the breadth, width and intention.

Third and finally, it would require regulations under the act to be tabled before a committee of each House of parliament. Sadly, this bill does not include those further changes that were recommended by the committee.

The Law Society of Upper Canada has asked for the deference of the worst sections of this legislation. In many legal circles around the country court action against the federal government is not only being discussed but is being planned. This has happened time and time again. It is a given that with legislation such as this, and Bill C-24 is another bill, the lawyers are already writing the briefs, and the games will begin as soon as this law comes into being.

This bill will focus on the following legal aspects of this particular legislation. Solicitor-client privilege is one, which I mentioned previously. Where as Bill C-22 only dealt with instances where there was solicitor-client privilege involving legal counsel, Bill S-16 now clarifies that the officials of the Financial Transactions and Reports Analysis Centre may not examine or copy documents that might be subject to a claim of solicitor-client privilege where the document is in the hands of someone else until a reasonable opportunity has been made for that person to contact legal counsel. This responds to concerns raised by the Certified General Accountants Association of Canada.

It is very much akin to the situation we see with the information commissioner in Canada who would like to examine the Prime Minister's agenda books. He would hold that information in privacy and counsel and determine its relevance to the individuals who have requested disclosure. It follows a longstanding tradition that allows judges to determine relevance and admissibility of certain information. So we support that particular initiative.

Privacy under Bill S-16 will also allow individuals or the privacy commissioner to take the Financial Transactions and Reports Analysis Centre to court if they are denied access by the centre.

This legislation has come under some criticism in the banking committee because the bill creates onerous and very involved new responsibilities. In fact, Margaret Beare, one of Canada's leading experts on organized crime, recently stated that the new legislation requiring banks to report suspicious transactions was contradictory to some of the banks' principles, mainly that they would be making a profit and reacting to customers' wishes.

Proceeds Of Crime (Money Laundering) ActGovernment Orders

June 11th, 2001 / 3:35 p.m.
See context


Pierrette Venne Bloc Saint-Bruno—Saint-Hubert, QC

Mr. Speaker, I am pleased to have this opportunity to speak today on the third reading of Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act.

On June 29, 2000, Bill C-22, or the Proceeds of Crime (Money Laundering) Act received royal assent. The purpose of this statute is to make it easier to prevent money laundering of the proceeds of crime by creating a financial transactions and reports analysis centre responsible for gathering, managing, analyzing and distributing reports of suspicious operations and any other pertinent information.

In fact, the inauguration of a mechanism for the reporting of suspicious transactions and major transborder capital transfers, as provided for in Bill C-22, was in response to the problems raised by the financial action group against money-laundering.

This would be a good opportunity to point out that the Bloc Quebecois had supported this government initiative, out of a concern to protect the Quebec population from the calamity represented by organized crime. Moreover, in order to make money laundering more inconvenient, the Bloc Quebecois were the ones behind the withdrawal of $1,000 bills and the requirement for banks and other financial institutions to report any suspicious financial transaction involving $10,000 or more in cash.

Before I go further, money laundering may be defined as follows. It is the process by which the proceeds of crime are converted into assets whose origins are difficult to trace. Despite all, we know that 70% of the money laundered in Canada is drug money. The remaining 30% comes from activities as varied as under the table gaming, tobacco and alcohol smuggling, fraud, counterfeiting and petty computer and telecommunications crime.

As we know, money is the sinews of war, and the one waged by the authorities against organized crime is no exception. Internationally, proceeds from crime entering the financial market represents hundreds of billions of dollars. So, considering that the prime motivator behind organized crime is lucre, and here I am speaking of huge sums quickly pocketed, the confiscation of such laundered proceeds hurts a lot more than the usual sanctions of fines and prison terms.

Legitimate or not, every business aims at making a net profit. By way of example, let us look at a business whose activities are on the up and up. Suppose that for some reason or other the business is taken to court and for purposes of discussion, let us imagine that at the end of the trial it is sentenced to pay a fine or to pay damages. Of course, the business will feel it but this comes with the territory.

The same holds true for organized crime. A jail sentence or a fine is among the inherent risks associated with criminal activities. However, by depriving an organization of its most profound motivation, we destroy the directly proportional relation that exists between the risks and the benefits. So, getting our hands on that organization's assets will weaken it from an economical and moral point of view. In other words, we must show that, indeed, crime does not pay.

Even though it does not at all change the substance of the Proceeds of Crime (Money Laundering) Act, Bill S-16 does address some issues raised during the hearings held on Bill C-22 by the Standing Senate Committee on Banking, Trade and Commerce. The four changes included in the bill should address the following issues.

How long will the Financial Transactions and Reports Analysis Centre of Canada keep the information that it collects? When and how will it dispose of the information that it will have gathered? What information can the centre transmit to law enforcement bodies? Will the federal court have the power to order the centre to transmit the file of an individual under the Privacy Act and the Access to Information Act? Finally, who is authorized to make a claim of solicitor-client privilege?

We must ask ourselves if Bill S-16 adequately addresses these concerns, and this is what we are going to do.

First, we can say that clause 1 responds satisfactorily to the first two questions raised before the standing Senate committee. This amendment sets out the circumstances justifying the maximum retention period of eight years for reports and all information.

This retention period shall be enforced when the centre forwards information either to law enforcement authorities or to the Canada Customs and Revenue Agency, the Canadian Security and Intelligence Service, the Department of Citizenship and Immigration, an agency in a foreign state or an international organization with a mandate similar to the centre's.

Moreover, the addition of paragraph ( e ) to section 54 of the Proceeds of Crime (Money Laundering) Act provides that each report received and all information received or collected shall be destroyed on the expiry of the applicable period. This paragraph therefore adds certain necessary clarifications regarding the duration of retention and the destruction of information.

Similarly, with the addition of the term identifying information in paragraph 55(7)( e ), the purpose of which is to clarify to what the information is similar, the second clause of Bill S-16 thus responds to the third question. The purpose of this amendment is to clarify that the identifying information in question is that found in paragraphs ( a ) to ( d ).

In our view, this clarification was not needed since paragraph 2(e) is interrelated to the previous ones. But since this is a catch-all paragraph, I guess someone felt the need to make this clarification which does not change anything to the original provision. If this amendment can clarify things for some people, great.

With respect to the fourth question, clause 3 of Bill S-16 was drafted because initially the federal court was not allowed to make an order for disclosure. In fact, such an order could only be made pursuant to subsection 60(4) of the Proceeds of Crime (Money Laundering) Act.

The amendment ensures that no provision in this legislation can prevent the federal court from ordering the director of the centre to disclose information under the Access to Information Act and the Privacy Act. It seems that it was always intended for the federal court to enjoy this authority, which will now be clearly stipulated in clause 3 of Bill S-16.

With this amendment, the Proceeds of Crime (Money Laundering) Act will now give the federal court some judicial control over the disclosure of information.

As for the fourth clause, as we mentioned at second reading, it certainly would have been possible to word it to make it easier to understand. Unfortunately, it was not, and we have to live with it.

In addition, following the explanations we were provided with at the Standing Committee on Finance, we believe that, even if this amendment answers our fifth question about who could invoke the solicitor-client privilege, it seems that it does not deal with the concerns that led to its drafting.

Before the Senate committee, accountants maintained that they have very high standards of confidentiality to meet, just like any lawyer. Consequently, they say that they should also be allowed to claim solicitor-client privilege. However, clause 4 of the bill responds only partially to this demand. An accountant or any other person, other than a lawyer, cannot personally claim solicitor-client privilege.

Indeed, the protection of documents in the possession of a person who is not a lawyer depends on the involvement of such a legal counsel in the matter under investigation. Therefore, the possibility of claiming solicitor-client privilege remains restricted to the lawyer.

How does this work in practical terms? First, the client gives a legal mandate to a lawyer. I must insist on the fact that the nature of the mandate is crucial because a lawyer who would act as business adviser could not claim solicitor-client privilege.

In fulfilling his or her mandate, the lawyer may work jointly with other professionals, such as an accountant for example. Having doubts regarding the legality of the activities conducted by the client, the authorities decide to investigate. The person authorized to conduct the search will not be able to examine the documents handed over to the accountant by the lawyer. Therefore, it is through the lawyer, the only person who can claim solicitor-client privilege, that the documents in the possession of the accountant will remain confidential.

In this context, it would be fair to think that, in order to enjoy absolute protection, money launderers will systematically go to a lawyer first, who will hand the documents over to the appropriate professionals.

Yet the situation is not as simple as it may appear. Even if the solicitor-client confidentiality required of the lawyer at this time provides considerable guarantees of confidentiality, this is not an absolute concept but one subject to a number of conditions and restrictions, which I will not list in the context of today's debate.

When an individual or organization involved in money laundering requires the services of any professional with a view to facilitating the perpetration of a crime, regardless of whether or not a lawyer was involved, the seized documents cannot be protected by solicitor-client privilege.

In short, this amendment adds nothing new to the present situation, in that it merely codifies existing principles which have long been in place under common law. The concept of solicitor-client privilege therefore remains exclusive to the performance of the duties of a lawyer.

This notion can, moreover, be extended to other persons when their services have been retained by a lawyer, in order to enable him or her to meet the obligations of his or her mandate as a lawyer.

Under these circumstances, one might say that the solicitor-client privilege is not a right transmittable to a third party. It is instead a real right involving transmitted documents which, as the bottom line, are the purview of the lawyer.

We believe that the law will meet the objective of this provision, that is to ensure that specialized professionals such as lawyers and accountants cannot act as accomplices to the money laundering mechanism.

As we have already stated, Bill S-16 ought to respond to five very specific questions raised before the Senate committee. Despite the fact that accountants do not really enjoy the same privileges of client confidentiality as lawyers, we still consider that Bill S-16 effectively addresses all these issues.

Obviously, as we supported the Proceeds of Crime (Money Laundering) Act and as the four clauses the present debate addresses are intended simply to clarify the intent of the provisions they amend, we will also vote in favour of Bill S-16.

However, we wish to point out to this House that we are supporting the government today for the same reasons we became involved in the introduction of new coercive measures.

We are satisfied these measures will enable the authorities to more effectively fight organized crime and therefore to ensure the safety of Quebecers.

In addition, it is unfortunate that the people of Quebec must once again put their faith in the goodwill of a federal government, which, more often than not, does what it likes when it comes to resolving problems that, despite their application to Quebec society specifically, fall under the jurisdiction of the federal government because of the distribution of jurisdictions, which gives it exclusive jurisdiction in matters of criminal law.

It is therefore appropriate to mention that this dependency will be eliminated with a sovereign Quebec.

Proceeds Of Crime (Money Laundering) ActGovernment Orders

June 11th, 2001 / 3:25 p.m.
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Canadian Alliance

Ken Epp Canadian Alliance Elk Island, AB

Mr. Speaker, I know that the Liberals are always delighted when I rise in debate as one of the first three speakers who, according to the rules, has 40 minutes available.

I did that in debate on Bill S-3, the transportation bill. I hope that my intervention there will actually result in a ball starting to roll that will change the laws of the country. I am hoping for changes to the laws right across the North American continent so that there will be uniformity, so that there will be understanding on what the rules are and so that in obeying them we will save lives. That is the objective.

Now we are speaking about money laundering and the role government has to play in order to prevent criminal activity on the part of members of our society who choose to engage in crime. The motivation of criminal activity is almost always that of earning money in an illicit fashion, so this money somehow has to be brought into the system without it being identifiable.

I know that a lot of people in the country have some concerns about the potential for some day having a cashless society. Actually I am one of them. It has one interesting feature if we stop to think about it. If instead of actually having cash in our wallets, all of us had computer cards that represented cash, it would of course be easy for people to transact business. It would really be equivalent. Instead of withdrawing four $20 bills from a bank machine in order to have $80 in cash, I could simply put my cash card into the machine and ask the machine to transfer $80 from my chequing account or whatever it is to the card. When I wanted to purchase something, instead of tendering $12.38 and then getting change I could simply give my card. The machine would subtract that from the balance on the card and I would walk away.

That could be done anonymously. It would be great. However, it could also be tracked and that in fact is one of the great objections that many Canadians have to that kind of scheme. There is genuine concern that if we ever get to that then the term big brother is watching would take on real meaning. It would mean that even if we stopped to buy a pop and chocolate bar there would be evidence that could be hauled out later. Most Canadians reject that kind of monitoring of our activities, so there are some problems with it. However, it could be legislated that such data could be used only in an investigation of criminal activity.

If we had such a scheme, just look at how difficult it would make it for people who engage in crime. They would somehow, either through a bank account or through a cash card, have to force other people to put money into their account in one form or another. It would be traceable and therefore it would be a lot easier to put a brake on a lot of criminal activity. I sometimes think it would be quite hilarious if someone walked into a bank with a gun, pointed it at the teller and demanded that $30,000 be transferred to an account. It would hardly be an anonymous transaction. A person would not get very far before officials were able to catch up with him and charge him with the appropriate crime.

That is not what we are talking about today. We are talking about some other means of tracking financial transactions that are related to the criminal industry. I have never heard of a criminal who demands payment by cheque when he or she does something illegal, because cheques are in fact traceable. It is called a paper trail.

About 10 years ago when the GST was brought in there was an awful lot of illegal activity, because in order to avoid the GST people said they would do renovations to houses or fix cars for a certain amount provided that they were paid cash and there was no paper trail. Then there was no GST and they did not have to declare it on their income tax. Basically, it was tax free money which meant they could do it for half the price.

I understand that sometimes they charged three-quarters of the price, so they basically split the earnings so to speak, but it was illegal. If Revenue Canada, as it was called at that time, found out about it, then appropriate actions were taken. However this was the lack of the paper trail.

How do we get a paper trail on criminal activity? Obviously these criminals will avoid the paper trail. Bill S-16 is actually the completion of Bill C-22, which was given assent in the previous parliament, if I am not mistaken. I do not know if hon. members will recall, but I believe that was the bill that eliminated the $1,000 bill. It is much more difficult for large amounts of money to be transacted if people literally have to have truckloads of $20 or at the most $100 bills to do the transaction.

That was also the bill that included some of the measures which we are talking about today. As the parliamentary secretary said now there are some refinements being made. I would like to say a few things about them.

First, how long can this information be retained? The bill is amending the new organization called the Financial Transactions and Reports Analysis Centre of Canada, commonly called FINTRAC. If financial organizations transact a large amount of money in cash they are required to report it. Those financial institutions, like banks or credit unions, will report their transactions to FINTRAC.

This raised a number of questions. As I said, how long can the centre retain this information? For example, if I went to my bank and deposit $50,000 in cash, and maybe $50,000 is not very much money to some members but it sure is to me and my friends, people might wonder how I got it. They might wonder if I got it through some illicit operation. However, that would never happen. In case someone else did something like that, the financial institution would report the cash deposit. If I reported it, FINTRAC would then have the obligation to look at it. If it was suspicious it would turn it over to the law enforcement agencies for investigation.

Let us say that I am investigated and there was nothing wrong. The institution would have his information. How long would the centre retain the information it collects? Bill S-16 deals with that. It says that the information reported to them cannot be kept more than five years. If it is transmitted onward to the law enforcement agencies, then the information can be keep for eight years but no longer, in which case that information must be deleted from all computer files and all paper files must be destroyed.

When and how will it dispose of that information? That is also in this particular bill, as I have just indicated. What information may the centre disclose to law enforcement authorities? That is another very important question because the original bill just said similar information and it was left undefined. Similar to what? One thing this bill does is to insert only one word in one of the clauses. It inserts the word identifying information. In other words, a certain amount of information such as name and address can be included. The information which it is entitled to keep and transmit must be identifying information in terms of the suspicion, or the details of the transaction itself or the identification of the individual. It cannot go on a wild goose chase.

Clause 3 of the bill deals with the jurisdiction of the courts. There is always a problem with this. If a government agency has the right to do something and I disagree with it, can I appeal? That was not clear in the original act. This clause in the bill will clarify this and allow courts to have jurisdiction over any disputes.

What happens if an agent from the centre feels that it is information which could lead to a criminal charge? Does he or she give it to the law enforcement agency without any accountability? The fact of the matter is we are dealing with people who may be innocent.

We want to do as much as we can to find evidence against those kinds of individuals, convict those who are guilty and bring them to justice. At the same time, however, we do know if many people are charged with certain activities of which they are not guilty. They should be able to defend themselves.

The issue of the courts is one thing. Another is that any information which is deemed eligible to be reported, cannot be reported without the person first being given the opportunity to contact a lawyer. One may wonder why, if it involves an accountant for example.

At the present time accountants do not have the solicitor-client privilege that pertains to the legal profession. That person could refuse to give information and decide to withhold it as being client privilege. The person now would not be required to give that information without first having the opportunity to contact a lawyer who could look at it, then on behalf of the client say it was client-professional privilege, and he could take it. This is a safeguard which should be included in order to protect those people who are innocent and, to a degree, protect the process so the person who is guilty cannot get off on the technicality that his or her rights were abused. That is a very important clause.

I thought it would be useful for members of the House and for anyone else who happens to be observing the debate today to know a little more detail about Bill S-16. It is a bill which strengthens the money laundering legislation in Canada so those people who are involved in criminal activity can be correctly identified and brought to justice. I support this bill.

Patent ActGovernment Orders

June 7th, 2001 / 11:25 a.m.
See context

Progressive Conservative

Greg Thompson Progressive Conservative New Brunswick Southwest, NB

Mr. Speaker, for the sake of the House and those interested in the process and in patent law, I will go through some of the technical reasons the bill is before the House. It is a bill that our party is supporting, much to the surprise I suppose of many across the way. It is not often that we stand in this place and support a bill brought in by the government.

Following a recent World Trade Organization ruling, the bill was introduced to bring Canada's patent laws into conformity with our trade obligations. Under the bill, all patents would last 20 years beyond the date applications are filed. Currently patents filed prior to October 1, 1989, under the old act, expire 17 years after the date they were granted. We are talking about a three year extension of the Patent Act.

Bill S-17 would not apply to patents that have already lapsed so the arguments we have heard in the House regarding that do not apply. As well, in cases where the old rule provides a longer period of protection than the new rule, the old rule would still apply. This would happen in cases where more than three years have passed between the time a patent application was filed and the time it was granted.

Bill S-17 would repeal subsection 55.2(2) of the Patent Act which has allowed for stockpiling of a product prior to the expiry of the patent.

When we talk about patent protection, what are we talking about? We are talking about copyright laws that would apply, for example, to writers, other artists, inventors and so on. Patents give their holders time to benefit from their research and ideas and from the money they have spent in developing them. In other words, they give them time to profit from their work, in many cases good work.

In this case we are talking about patent drug laws. We are talking about sometimes hundreds of millions of dollars being invested by drug companies to develop new drugs to help combat disease and prevent death. They do that at great expense. By refusing to invest here until we modernized our patent laws, these companies were sending a signal to Canada that they would not build factories and research facilities here unless they had patent protection to prevent others from copying what they do.

Research communities in Montreal, Toronto, Vancouver and other parts of Canada, not just in big cities but in smaller areas, were being denied the benefits of that type of research and the jobs and prosperity it brings.

The opposition parties in 1987, the major opposition party at the time being of course the Liberal Party, raged against the legislation we brought in, Bill C-22, the first act we brought in to protect patents.

In 1992 we did the same thing again and made further changes to improve the intellectual property protection given to pharmaceutical companies while strengthening the powers of the Patented Medicine Prices Review Board Canada. The argument that the Liberal Party and the NDP waged at the time was that it would increase drug prices.

In a very basic sense, the Liberals asked us why we would provide drug companies with patent protection which would not allow generic companies to copy their products and which would outlaw copycat drugs for 20 years. They said that it would not help or enhance the health care system but that it would hurt and harm it. They said that it was the wrong thing to do.

The Liberals at the time, including the present Minister of Industry, who is now spearheading the bill through the House, argued that it would be wrong and railed against it. We have had many quotes in the House over the last number of days. Some of the quotes come from famous statements the present minister then made in committee and on the floor of the House railing against the very bill he now supports.

The truth is that what we did then, although some might disagree, and I know that even some government members disagree with the present bill, was the right thing. We created thousands of jobs in the pharmaceutical research industry in Canada. The evidence is there. Members opposite will tell us that the goal of the bill was exceeded in terms of jobs and investment in Canada.

We often talk about the brain drain, and there are a number of reasons for it. Obviously one of them is our tax regime. Unless we bring our tax regime in line with our partner to the south we will always have people leaving Canada to go where they will be rewarded for their work and not taxed to death. To a degree that argument is true, although there are other things that hold people in Canada simply because of our style of life. Considering the health care and other benefits we have in Canada, not everyone is attracted by high wages and low taxes.

We are losing a lot of top notch people to the south who go to work for pharmaceutical and research companies in the United States. The bill we introduced in 1987, Bill C-22 at the time, followed by Bill C-91 in 1992, completely stopped the transfer of talent from Canada to the United States. They worked.

The strengthening of the Patented Medicines Prices Review Board Canada also worked. As evidence of that, in the United States today there is a raging debate about drug prices and the high cost of patent medicines. Why are they so much higher in the United States than in Canada?

Patent ActGovernment Orders

June 5th, 2001 / 12:45 p.m.
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Judy Wasylycia-Leis NDP Winnipeg North Centre, MB

Mr. Speaker, I want to come back to the issue around the Conservative policy and also address the issue that the member for Pictou—Antigonish—Guysborough refuses to comment on. That is the very negative impact on health care in Canada today and the prices of drugs as a result of the Mulroney government's decision to dismantle what was then considered to be one of the best drug laws and best patent protection systems around, which ensured that not only were Canadian companies competitive internationally, but were able to provide reasonable access to Canadians.

The facts are very clear with regard to Bill C-22 and Bill C-91, that Mulroney government really jettisoned legislation that ensured competition between foreign and domestic drug companies, served most Canadians well. The only thing that has gone up since the Mulroney legislation is the prices and the profit margins for the big corporations.

Would the member account for that kind of failed policy and indicate whether he is now prepared to get with it and support us in opposing this bill?

Patent ActGovernment Orders

June 5th, 2001 / 12:20 p.m.
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Progressive Conservative

Peter MacKay Progressive Conservative Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I have listened with interest to much of the debate by previous members who have made a very compelling case and bring a great deal of passion to this particular debate. This is understandable when we are talking about drugs, whether they be generic or manufactured, in the first instance, from a pharmaceutical company. We know those drugs are often the lifesaving instrument for many individuals.

However, when we talk about consistency and the business elements of this issue, one has to agree that the WTO, although it has not set an arbitrary length of time, it has set 20 years for the life of a patent. Canada is presently not fitting within that guideline.

A ruling has given rise to Bill S-17, the legislation that is before us, and there is an effort on the part of the Canadian government and this parliament, through the legislation, to be consistent and in line with what the WTO has said.

When applied to drug development and production, the whole notion of intellectual property and property protection becomes a very divisive issue. It is an issue that in many ways pits certain sectors of this industry against one another. Patent protection and commercial opportunities for Canadians and Canadian pharmaceutical companies are on one side of the coin, while on the other side we hear and are certainly cognizant of the need for cost effective access to these new drugs and these technologies. Therefore there is no question that there is an element of competing interest here.

It is important to recognize that without a high degree of investment in research and development there would never be this particular dilemma that we have before us. Pharmaceutical companies do require an incentive just like any other business. It therefore stands to reason that they would want to be the beneficiaries of their efforts. They want the ability to profit from their toil and their labour in the same manner afforded other industries. This type of protection is such that it allows companies to receive that reward. In a global economy, it also encourages companies to come to Canada to avail themselves of that particular protection.

I speak with some personal knowledge. I have a colleague in the House from New Brunswick who has been the recipient of drugs aimed at the treatment of cancer. There are other very serious illnesses, such as AIDS, which these types of drugs are aimed specifically at. Some of these drugs can alleviate the symptoms or even put the disease in remission. The member from New Brunswick tells me that the environment created through this type of legislation allows companies to come to Canada. The rationale behind the original legislation in the 1990s was to allow pharmaceutical companies that come to Canada to be open to the same type of protection found in other countries.

Like many other pieces of legislation, this legislation has been put forward to ensure that Canadian companies can be competitive in the world market, not just in North America and not just with companies here but to see that there is a level of consistency and an invitation to companies to come here and allow them to have the patent protection that they would find in the United States, the United Kingdom or other countries.

The ruling handed down has significant implications. If Canada does not choose to follow the ruling or if it somehow lags behind, there are grave implications. This is the rationale behind encouraging companies to come here and do their research and development. To be the beneficiary of this, we need to have a parity with other countries.

Pharmaceutical companies that are doing research and development, the scientific background and the leg work that leads to the invention of drugs, which later become the subject of generic drugs, must to be encouraged to come to Canada. That is not to suggest that there are not occasions when generic drugs cannot play a significant role. However there is a level of patent benefit that should flow, whether it be for 10, 15 or 20 years.

The continuing argument of the Progressive Conservative Party has been that we need to be consistent. Canada has to be in line with what the WTO has said about the issue. We have to ensure that availability and access is achieved. Our efforts must be placed on lobbying in terms of making a case for access and availability of these very important drugs.

With respect to this issue and with respecting the credibility of where the government is coming from on this particular issue, there is some inconsistency that bears some mentioning.

The government took a very different stand during the initial debate in the 1990s and in particular in 1999 when the matter first came before parliament. It is fair to say that the Minister of Industry himself perhaps set a whole new standard for hypocrisy and probably raised the bar to a whole new level, such that it would make the most blatant hypocrite blush when looking at the record.

The inclusion of the current provisions in the bill were very similar and very consistent with the original position taken by the Progressive Conservatives in the 1980s. We have already heard other members mention this, but let me state what the Minister of Industry had to say initially about this particular issue. In Hansard on April 7, 1987, the current Minister of Industry said:

It is inconceivable to me that Parliament finds it necessary yet again to deal with yet another measure proposed by the Government because it is bound and chained by some ideological dictate which says this kind of Patent Act is necessary.

He went on to expound upon the evils of the direction that the government of day was headed in. He said:

The citizens will need more than generic drugs to recover from the festering wounds which are about to be inflicted on the exposed ankles of Canada's poorest citizens when the Minister sinks his teeth in, past the bone, into the marrow and sucks the life's blood out of Canada's poorest citizens with Bill C-22.

Bill C-22 was of course the forerunner to this.

Income Tax Amendments Act, 2000Government Orders

May 14th, 2001 / 7 p.m.
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The Speaker

The House will now proceed to the taking of the deferred recorded division of the motion at third reading stage of Bill C-22.

Business Of The HouseGovernment Orders

May 14th, 2001 / 6:50 p.m.
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Canadian Alliance

John Reynolds Canadian Alliance West Vancouver—Sunshine Coast, BC

Mr. Speaker, I was just in discussions with the government House leader and my party has decided to withdraw its amendments to Bill C-22 and Bill C-17. I think if you were to seek consent you would find agreement for that.

We will be voting on the main motion to both those bills.

Tobacco Tax Amendments Act, 2001Government Orders

May 14th, 2001 / 5:25 p.m.
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Canadian Alliance

Philip Mayfield Canadian Alliance Cariboo—Chilcotin, BC

Mr. Speaker, we are here today to debate Bill C-26. The bill has some good qualities and our party agrees with some aspects of the bill.

However, I would like to suggest that the government look to the Senate to study a bill that addresses the real problems of tobacco use, particularly with children. Bill S-15 has gone before committee and may soon come before this House. Although Bill C-26 has some good qualities, I believe the bill from the other place really would be more appropriate. It targets youth and suggests a model for accountability of the delivery of government services. I believe, despite our support for Bill C-26, that Bill S-15 deserves more careful scrutiny.

Earlier in the day we debated Bill C-22 and Bill C-17. We talked about the complexity of the imposition of taxes and the tax act. Taxes in this instance are also extremely complex with some 40 pages of legislation and another 50 pages of explanations. My goodness, why does it always have to be so difficult for people to understand the government's intentions?

One of the main difficulties in increasing taxes, particularly for constituents who have service stations and corner stores, and those who are rural merchants, are that their businesses have been so caught up in the economic decline of the country, particularly where I come from, that the loss of this income in tobacco sales is a real difficulty.

Should the bill go forward, I would suggest that there be a commensurate reduction of tax on other economic activities that are sensitive to price changes. A reduction of taxes in other areas for people who are hit with these increases would be appropriate.

While it may seem equitable to some that the big, bad tobacco industry take this on, taxes are not necessarily borne by those who have the responsibility to pay those taxes.

I do not think I need to lecture adults about cigarettes and all the associated health risks but I do want to talk about why I am supporting the bill even though there is much about it with which I disagree.

We all know the facts. What needs to be addressed in the bill is the central reason for this bill coming into existence. We can argue over the wording of the bill. Some may call it a tobacco recovery levy and some may call it a tax. What we cannot argue about is the fact that the tobacco companies target children. These are the smokers of the future who the tobacco industry will depend on for their future income and profits.

Young people are the most important target for smoking prevention activities. Since most smokers in Canada begin to smoke in their adolescence, a major challenge for smoking prevention is to counteract the influences of the tobacco companies. Tobacco use among young Canadians must be reduced.

What does the data say? What are the numbers? There are close to 6.7 million smokers in Canada. Smoking among adolescents aged 15 to 19 has risen from 21% to 29% over the past 10 years, and females make up a large percentage of this group.

Smoking accounts for about 30% of cancers in Canada and 80% of those who suffer from lung cancer are smokers. Cigarette related deaths account for 40,000 deaths in Canada every year. These facts speak for themselves. We must do everything possible to stop children from getting involved with this killing habit. The bill is one step in the right direction.

Some may argue that tobacco farmers would suffer enormous economic hardship. However during the 1980s the number of tobacco farmers declined by about 50%. These farmers began to grow other crops and have benefited from assistance programs. There are others in the retail end of smoking who suffer as well. There must be compensation for those who suffer. There must be an ability for them to continue on but smoking is evil. It is wrong for us to poison our young people and have them sacrifice their lives. This has to be the bottom line.

In 1991 consumers spent over $10.1 billion on tobacco products. Of that amount about $6.6 billion went to the federal, provincial and territorial governments. There is no denying that this is a substantial amount of money but it amounts to less than 2% of federal and provincial revenues. Considering that tobacco taxes make up less than 2% of the federal revenue, there is even more incentive to reduce the number of children who want to smoke.

I want to compare the 2% of federal revenue to the health care costs in our public health care system. With over 40,000 deaths directly related to tobacco, the strain on our overburdened health care system is enormous. Those suffering from lung cancer as a result of years of tobacco use costs billions of dollars in health care costs. By reducing the number of children smoking, we not only save their lives but we can help save billions of dollars in health care at the same time.

These are very important reasons to help stop tobacco use among our children. When people stop smoking completely, the country saves money. In 1993 the societal costs attributed to smoking were estimated to be $11 billion, which is far higher than the income from tobacco.

The Canadian Cancer Society surveyed thousands of smokers and over 85% indicated that they wanted to quit and that they only smoked because they were addicted and could not get out of the habit. In 1994 almost 75% of Canadian smokers reported having tried to quit at least once.

What is needed from the government is leadership on the issue. The Minister of Health has taken some small steps to address the crisis of smoking among youth but small steps in the past have not been enough. The government needs to put the health of young children ahead of partisan politics and show some determination. We all must recognize the enormous health risks of tobacco and the true costs of allowing this habit to continue.

Children are one of the most vulnerable groups in our society and that is why aspects of the bill are so important. The bill would create an educational fund.

Bill C-26 would put a levy on tobacco and put the health of children ahead of everything else. By reducing tobacco caused illnesses and death through prevention, we are helping society as a whole.

Some argue that non-smokers should impose their views on smokers. Perhaps there is some merit in that. However I am arguing for the vulnerable children. Adults are responsible for the protection of children from this kind of harmful activity. The government is the watchdog and the guardian over that which would harm our children. The societal costs of smoking are tremendous.

We cannot forget that children need our protection from harm. They are vulnerable and impressionable. This is why elements of the bill are worth examining. Children are the future and the reason I am supporting the bill. Let us give them a fighting chance.