Mr. Speaker, I thought we were debating Bill C-46, not Bill C-20 on child pornography. Consequently, the pace of this debate is a bit surprising. I also marvel at my previous colleague's definition of brief remarks. If he was being brief, I would not want to hear him give a longer speech.
That said, I rise to speak on Bill C-46 with some disappointment as we had supported this bill at second reading and I had spoken in support of it some time ago.
At the time, I expressed the wish, as I did again in committee, that the government would consider possible amendments, including one on a matter I will address later. Unfortunately, the government has been inflexible, perhaps in the belief that it is the keeper of absolute truth and the ruler by divine right. No matter what the reason, the government's rigidity, inflexibility and closed-mindedness mean that today I invite my Bloc colleagues to vote against Bill C-46, which contains, however, numerous important provisions and clauses that we support.
There is, however, one basic provision in this bill which we in the Bloc Quebecois cannot support and on which we cannot agree with the government. It is the reason we will be voting against Bill C-46.
I felt it was important to make this clear right from the start. Given the inflexibility of the government, I will explain why our position has changed.
Bill C-46, which we have before us today, amends the Criminal Code and creates two new offences: prohibited insider trading and threatening or retaliating against employees for disclosing unlawful conduct. It increases the maximum penalties and codifiesaggravating and non-mitigating sentencing factors for fraud and certainrelated offences and provides for concurrent jurisdiction for theAttorney General of Canada to prosecute those offences.
Bill C-46 also creates a new procedural mechanism by which persons will be required to produce documents, data or information in specific circumstances.
Let us place all of this in context. The recent financial scandals in the United States, the Enron affair for instance, have made us all aware of the fragility of our financial system and, unfortunately, of how dependent we are on it.
Although we may think at first that only major investors are affected by a financial crisis, that is not the case. The biggest players on the stock market, in fact, are the pension funds. If a pension fund suffers major losses, therefore, the little investors are the ones who can end up losing their life's savings and watching their retirement plans go up in smoke. That is what is so worrisome.
As well, according to the financial analysts, there has been a trend recently for retirement trust funds to go more for stocks than for fixed income securities. A financial crisis in Canada would have a direct impact on the retirement income of millions of households. Those households are the ones we, as parliamentarians elected to represent the population, have a duty to protect.
Fortunately—and we do not yet know the reason for it—Canadian stock markets have so far been relatively free of wrongdoing, with the exception of Nortel and CINAR. I raised the latter issue again today in oral question period.
We can feel that something is not clear in this CINAR affair, and the Bloc Quebecois is determined to uncover what may be hidden, particularly what may lie behind the CINAR affair.
It is the opinion of the Bloc Quebecois that, while several of the experts we consulted believe that our securities regulatory systems are much more comprehensive than the ones the U.S. had before the financial crisis I referred to earlier, it is important to send the clear message that financial wrongdoing is a serious crime that will not be tolerated in our society.
This is what prompted my hon. colleague from Joliette and myself, in the fall of 2002—more than one year ago—to call for major amendments to the Criminal Code of Canada to provide the appropriate authorities with better tools to fight financial crimes.
Let us take a brief look at these proposed changes to the Criminal Code I put forward back in the fall of 2002. In our press briefing, we proposed adding a section that would make insider trading a criminal offence, in order to send a clear message to company directors that the use of confidential information obtained in the performance of their duties for the purpose of making profits or avoiding losses would not be tolerated. The fact is that making profits or avoiding losses in this manner impacts negatively on other investors who do not have access to the same privileged information.
This provision would have been added after section 382 of the Criminal Code. It would have created an offence of insider trading, which would have carried a maximum sentence of ten years' imprisonment. As we can see, the government accepted our suggestion and included a new offence of insider trading in the bill.
The Bloc Quebecois also proposed that a new offence be created for securities fraud. This offence was patterned on the measure adopted in the United States. We say so freely and without fear. It would carry a ten-year prison sentence and prohibit fraud when selling or buying securities
We had also proposed two amendments to section 397 of the Criminal Code. This section clearly stipulates that fraud is committed by someone who:
(a) destroys, mutilates, alters, falsifies or makes a false entry in, or
(b) omits a material particular from, or alters a material particular in,a book, paper, writing, valuable security or document.
In our opinion, this provision could have applied to falsified financial statements.
Furthermore, subsection 2 of this section makes it a specific offence if documents are falsified with the intent to defraud the creditors.
Currently, both offences carry a five-year prison term. We felt that this sentence was not dissuasive enough. Consequently, we proposed increasing the maximum term of imprisonment to ten years.
Finally, we proposed adding a third subsection to section 397 of the Criminal Code to specifically target the falsification of financial documents with the intent to defraud shareholders. We believe that shareholders are a more vulnerable category since—unlike the majority of creditors—their investments are not guaranteed. Therefore, we do not see why it is an offence to defraud creditors and not shareholders.
In committee, we suggested very specific amendments incorporating the elements that I just listed. Unfortunately, although as always, the Bloc Quebecois put forward these amendments, changes and proposals in a constructive manner, the government rejected them.
I would like to make a small digression to mention, or rather to deplore, the lack of respect the government has shown lately to the members of this House, particularly to those who sit on the Standing Committee on Justice.
Bill after bill comes before us. It is top speed and full steam ahead on the bill to decriminalize marijuana. The committee is also studying soliciting and prostitution. The government, when it sets the schedule for committees or the House, does not pay any attention to the fact that for many of us it is extremely difficult to be here in the House to debate government bills, and at the same time, to sit on committees. Even though, every Christmas, when asked what I want most, I always say I would like the gift of ubiquity, no one ever gives it to me.
So, while we were debating a government bill here in the House and I was scheduled to speak on behalf of my political party, the Standing Committee on Justice was meeting at the same time, and going about its business, despite the fact that several members of that committee were in the House. I could not defend the amendments I had put forward.
I think that is quite deplorable from a government that, probably sensing the end of its regime approaching, wants to get all its bills passed as quickly as possible, and therefore the work is not done well, because the members who follow the issues—on both sides of the House, in fact, because my Liberal colleagues are in the same situation—cannot contribute as much as they should to improving the legislation before them.
The government shows little consideration for its own legislation, its own bills, as seen in the fact that it does not give the members the time they need to properly examine the bills before them, and this will count against it.
When we are talking about such essential things as Bill C-46, commonly called the Westray bill, which is now before the House, or Bill C-20, the child pornography bill, or Bill C-36 on decriminalizing marijuana, in my opinion it is essential to proceed at a pace that allows the members to be here in the House and in committee at the proper times, but also to digest, assimilate, and understand the many suggestions made by the witnesses who come before us.
In fact, why spend thousands of dollars calling witnesses to appear and why ask them to come before the committee to explain their point of view and suggest amendments and improvements if the members opposite cannot digest the information provided.
All this to say that the constructive, intelligent, consistent and non-partisan amendments I moved in committee should have been moved by a member from the other side of the House. I am not questioning the hon. member's competency. I am in no way accusing him of bad faith. However, the fact remains that the amendments could not be moved, debated and defended by the member who sponsored them.
That concludes this essential digression to explain the current environment in which the members are working. Now I want to get back to Bill C-46 itself.
The Criminal Code would create a new offence prohibiting insider trading, with a maximum ten-year prison sentence.
Although insider trading is currently prohibited under provincial legislation regulating the sale of securities within Canada and under the Canada Business Corporations Act, this new offence under the Criminal Code will apply for cases requiring harsher sentencing.
Since this new offence was directly inspired by the proposal my hon. colleague from Joliette and I made over a year ago, we are pleased to see its inclusion in Bill C-46.
Employees who disclose to or assist law enforcement officers investigating capital markets fraud also need protection against intimidation. These employees often have a key role to play in disclosing scandals in companies, but they may be intimidated or threatened, including through measures against their job or their livelihood.
Creation of a new offence of threat or retaliation relating to employment would encourage people with inside information to co-operate with law enforcement officials and would punish those threatening or making use of reprisals. This offence would be punishable with up to five years' imprisonment. The Bloc Quebecois is in favour of this provision.
To strengthen penalties in cases of fraud on financial markets, and to make sure that the punishment fits the crime, the proposed reforms would increase maximum sentences for existing fraud offences, and would establish aggravating circumstances, which the courts should take into consideration in sentencing.
Maximum prison sentences would rise from 10 to 14 years for the present fraud offences under the Criminal Code, and for those affecting the public market. Maximum sentences for market manipulation offences would increase from 5 to 10 years.
The proposed reforms would also include a list of specific aggravating circumstances allowing the courts to impose stiffer sentences for the most serious offences. Factors such as the extent of the economic impact or any negative impact on investor confidence or market stability could lead to increased sentences. Moreover, a person's reputation and standing in the community or work environment, which have always been considered mitigating factors that can reduce penalties, could not apply in such a case. Those guilty of serious market wrongdoing are often able to get away with their crimes precisely because of these factors.
We feel these are interesting proposals, but we regret that the government did not consider our suggestions with respect to increasing the sentences under section 397 of the Criminal Code.
I will conclude by explaining why we are against Bill C-46: the involvement of federal prosecutors. As members know, financial market regulation comes under the jurisdiction of Quebec and the other provinces, as does the administration of justice. Under Bill C-46, the Attorney General of Canada would have concurrent jurisdiction with the provinces and the territories to prosecute certain criminal fraud cases, including the proposed new offence of illegal insider trading.
Federal involvement in this area would supposedly be limited to cases that threaten the national interest in the integrity of capital markets. According to information released by the federal government, the Government of Canada will collaborate—that is always a key word with the Liberals, but we know what it means—with the provinces to ensure proper and efficient concurrent jurisdiction by establishing prosecution protocols.
We absolutely cannot support these new provisions. They all seem to confirm the federal government's desire to infringe upon yet another area of Quebec and provincial jurisdiction, the securities market.
In committee, I proposed an amendment to the bill that was constructive and would deny federal prosecutors the right to prosecute in these cases. The government rejected it.
Knowing the federal government's penchant for interfering in the regulation of securities markets, we are opposed to Bill C-46, because the Bloc Quebecois would never consent to the federal government's meddling, however minimally, in provincial jurisdictions.
Because of the government's inflexibility and desire to intrude in the jurisdictions of Quebec and the provinces, the Bloc Quebecois is voting against Bill C-46.