Bill C-25 (Historical)

An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act

This enactment amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to enhance the client identification, record-keeping and reporting measures applicable to financial institutions and intermediaries. It establishes a registration regime for money services businesses and foreign exchange dealers and creates a new offence for not registering.
It allows the Financial Transactions and Reports Analysis Centre of Canada to disclose additional information to law enforcement and intelligence agencies, and to make disclosures to additional agencies.
It permits the Centre to exchange compliance-related information with its foreign counterparts and permits the Canada Border Services Agency to share information about the application of the cross-border currency reporting regime with its foreign counterparts. It also includes a consequential amendment to the Canada Border Services Agency Act.
It creates an administrative monetary penalty regime.
It amends the Income Tax Act to allow the Canada Revenue Agency to disclose to the Centre, the Royal Canadian Mounted Police and the Canadian Security Intelligence Service information about charities suspected of being involved in terrorist financing activities.

Tackling Violent Crime Act

[Brian Murphy, Liberal, Moncton—Riverview—Dieppe, NB]

Mr. Speaker, on Bill C-2 and justice issues in general, I heard just recently in the House the term “a revolving door”. The only revolving door is the justice minister and officials in the Conservative Party going in and out of press conferences announcing and reannouncing the same bills on which they pulled the plug.

With respect to Bill C-2, I have reviewed all the material. I sat in on all the committee hearings. What I have recently discovered, through obtaining a bill briefing, is a note from the Prime Minister about Bill C-2, in that it regurgitates all the bills we dealt with in the last Parliament. The message from the Prime Minister is that he is sorry that he pulled the plug on Parliament and flushed all the good work of the justice committee down the drain.

That is what happened. All these bills were well on their way. They were going through the due process of Parliament, which followed the rules of parliaments before, and they were on the way to being in effect.

The reason we are here today is that the Prime Minister prorogued Parliament and those bills were killed in their tracks. It is not true that perhaps that is why the Prime Minister prorogued Parliament but I think it is. In fact, I think that is why we have a new session.

I may be new and I may be in the back row but I read the papers and I know what is going on. Parliament was prorogued and all legislation was stopped in its tracks.

What is important to remind ourselves, and the Canadian public will want to know, is that there were 13 bills in the justice dossier and 7 of them were passed and are now the law of Canada.

As a member of the justice committee, I would expect all parties to tell all members of the justice committee that it was a job well done, that seven out of thirteen justice bills that affect the citizens of Canada are now law. Five of those bills are currently the subject of Bill C-2, which I will turn to, and one, mysteriously, of the thirteen bills, the criminal procedure act, which all parties agreed to unanimously, was a creature of a previous Parliament and which all prosecutors are waiting intently for. These prosecutors are the people who are on the front lines, as well as the police officers, in the criminal justice system. I suppose they are wondering why, despite the offer to fast track the bill by this party and despite the unanimous support by the justice committee, Bill C-23 has not been moved up. Perhaps in the government's haste and the revolving door of the press circle and the press club, it forgot to bring along an important bill.

Overall, the 13 bills, the 7 passed and the 1 dropped by an incompetent justice minister and the parliamentary secretary for forgetting that, and the 5 we are about to discuss, all of these bills need to be enforced. Each police officer, prosecutor, probation officer and corrections official, all those people in the system need to know that if there are 13 new laws, 12 because 1 was dropped by the incompetent ministry, but if there are 12 new bills we need to know we have the resources to put them into effect.

It is urgent for the public to know that despite a promise by the government, the law and order government, the tough on crime government, it is toothless without following up on the promise of 2,500 new police officers and the false promise in the Speech from the Throne for 1,000 new RCMP officers when the RCMP cannot recruit 1,000 officers. It is behind in its recruitment. It is a meaningless, toothless promise to the people of Canada but, even worse, it takes away the hope of the Canadian Police Association, the Canadian Association of Police Chiefs, the prosecutors and the probation officers, all the people who must put into effect, on a daily basis, the laws of the justice system.

I want to emphasize that the party on this side of the House is not so fickle. We support our justice system. We support our judges, our prosecutors, and all of the police officers who are responsible for protecting Canadians.

Over the past 18 months, the Liberal Party has undertaken a thorough review of the legislation pertaining to crime while the Conservatives have been busy playing political games. The Prime Minister put an end to this Parliament's activities and committee work, thereby throwing out the amendments that this bill sought to make to five acts. It is his fault that these five acts have not yet been amended.

We on this side of the House have faith in our justice system and are convinced that it will keep the peace in our communities.

I say that because it should be a non-partisan issue that we all believe in a safe community. We are all here as parliamentarians, surely, to ensure that we have a safe community. We may differ on the avenue to get there, but how much did we, the Liberal Party of Canada and its members on the justice committee, really differ from the plan of the Conservative Party in general and, more importantly, in the organic process which is called the development of criminal law through amendments to the Criminal Code?

I say to the House and to the public: not much.

There were 13 bills proposed. Seven passed and there are five in Bill C-2 that we are substantially in agreement on because they would have been law by now had Parliament not been prorogued, and I must say for the record that there is one that has been dropped by the government and that we are also in favour of.

So how is it that we, in trying to keep the community safe, are against the elements in Bill C-2 and the elements in these bills? I will repeat them: Bill C-9, on conditional sentences; Bill C-18, on DNA identification; Bill C-19, on street racing; Bill C-25, on proceeds of crime; Bill C-26, on criminal rate of interest; and just to add two others that were not part of Bill C-2, Bill C-48, on the implementation of a UN convention against corruption, and Bill C-59, on the unauthorized recording of a movie. These have all been supported.

But there is more. I hear members on the opposite side talk about 13 years of inaction with respect to criminal justice and I think the Canadian public would be interested to know that these laws, while continuing on the evolution of our criminal law and making our community safer, are but part of the Criminal Code of Canada.

On the Criminal Code of Canada, I might say this in a moment of non-partisanship and to congratulate a Conservative politician, albeit a dead one.When Prime Minister John Thompson, a Conservative prime minister, was minister of justice he essentially created and adapted the criminal law of Canada into a code that we would follow in this country. I want to get credit for giving plaudits to a Conservative in this place.

A principal part of the Criminal Code of Canada, which we have been talking about since I have been in Parliament, is sentencing. What is sentencing? The purpose and principles of sentencing are set out in section 718. I hear very often in this place and at the revolving door of the press conference centre for the Conservative Party of Canada that there is but one principle in sentencing, that is, to put the bad guys away.

I know this is a novel concept for those who are directing the Conservative justice agenda, but why do we not refer to what the law says about the purpose and principles of sentencing? They are set out in section 718. I am not going to read this word for word because it tends to be bogged down in particularness and assuredness and literal things that, again, the Conservative justice team really knows nothing about, having adopted and written such sloppy legislation that it had to be sent to committee to be fixed.

However, in general, there are six important factors or principles in sentencing. It is the reason we have sentences for people who have committed crimes. One principle is to denounce unlawful conduct. That is the one I hear about most often from the Conservative justice team. That is a valid principle, but it is one of six.

What are the others? One is to deter the offender from doing it again. That is another one I hear a lot about. The point over here is that those two of the six are very important. We are not shirking the importance of those. The law does not say that any one is more important than the other. It is a guidepost to judges who make our law pursuant to what they read here. It is a guidepost to say that we will denounce unlawful conduct. Yes, we will, by bringing in this sentence. We will deter the person or any person in the public from doing it again. They are two very important objectives.

However, that is where the Conservative justice team stops most of the time. The Conservatives forget that they must separate offenders from society when necessary and that they must assist in rehabilitating offenders. This is not to mean that the criminal gets more justice than the victim. What it means is that if there is a chance to rehabilitate an offender before that offender is reintegrated into society, or after, we ought to take that chance. Society is not safer, and let us remember that this safety is the principal goal of all parliamentarians here, by sending a more dangerous person back into the community after his or her sentence is served. It is a very important principle, as important as deterrence and as important as denouncing unlawful conduct.

The fifth aspect is to provide reparations for harm done to victims. That is very key. I will get into speaking about Bill C-9, which was a failed bill and flawed until it was amended at committee by all parties. One of the key aspects of Bill C-9 was to amend it to allow some white collar criminals, for lack of a better term, who had done a very denunciatory offence, which should be deterred, such as acts of stealing money through a breach of trust from someone, say, the option of a conditional sentence. It was to allow them to make reparations and restitution during the term of their sentence when it might mean the difference between an aged person with a stolen RRSP account getting that money back or not.

It gave back discretion to the judge, which he or she had in the first place, and it was a very necessary amendment to a flawed and hasty bill to make sure that this principle of sentencing, that is, to provide reparation for harm done to victims, was put in place. It was made better law by the intervention of the committee.

The final principle is to promote a sense of responsibility in offenders, an acknowledgement of the harm done to victims and to the community. What that is about is making sure that these offenders are not so divorced from the community in which they live, so that they know when they have done wrong that they have a responsibility to that community to be remorseful, to make amends and, I think very importantly, to reintegrate into that community if possible. We should never forget that.

The overall principle, and it is written as the fundamental principle in section 718.1 of the code, is that of the proportionality, of the gravity of the offence and the degree of responsibility of the offender. This is a very important principle, which judges rely on all the time.

I hear members speak about 13 years of Liberal inactivity. Actually I was not here for any of those 13 years. I was on the outside looking at all of the criminal justice bills that had been brought in during that time. I remember that it was a Liberal minister of justice who brought in the whole concept of mandatory minimums, which at the revolving door of the Conservatives' press circle was as if it was invented by them. I wonder if they invented the laws of gravity and found the North American continent. I suspect not, Mr. Speaker, and I do not suppose you could answer objectively if they say they have somewhere else, but I am not sure that they would not stand here and say that they have.

They did not invent mandatory minimums. The other sentencing principles in section 718.2 were brought in, in successive Liberal governments, by amendments in 1995, 1997, 2000, 2001 and 2005. All of those amendments in section 718.2 were brought in to recognize the changing nature of our society and to allow judges for the first time in the history of the Criminal Code to take into account these factors when sentencing, either in increasing or in decreasing the sentences, and I am very proud of that.

These factors include evidence that the offence was motivated by bias, prejudice or hate. It is the first time that it was codified that a judge should take into account hate crimes when sentencing. For any crimes committed based on someone's ethnic origin, language, colour, religion, sex, age, mental or physical disability, sexual orientation and other factors, is it not correct, right and fair in this society that those sentences were brought in and that judges should be told to take into account those factors in section 718.2, or whether the violence was against a spouse or common law partner?

Is it not important, for instance, that a judge be given that discretion to increase a sentence if the crime was against a spouse or a common law partner, or if the crime was done to a person of tender years under the age of 18? Is it not important that this be taken into account?

Is it not important, as it says in subparagraph 718.2(a)(iii), whether or not the person who committed the crime “abused a position of trust or authority”, or also whether the person was a member of a criminal organization, or that the offence was a terrorism offence?

All of these factors were in judges' hands before 2005. These were not invented by the Newtons over there in the last 18 months. They were there, it was Liberal legislation, and I presume it had all party support because it makes such sense.

Finally, in the principles of sentencing categories, paragraph 718.2(e) has the all important factor of recognizing that if an offender is of aboriginal origin or from a first nations community special circumstances should be put in place. We found during much of the deliberation at committee that this sentencing principle was often ignored.

I look at the amendments in place with respect to Bill C-10 and Bill C-9. It is a particular affront to this established sentencing principle, and it seems to have been completely forgotten by the Conservative government, that these two important sections of the code had existed before the Conservative government took place and certainly will exist when it moves on into the sunset.

About the laws in Bill C-2 and why it is so easy on this side for us to say we support the bill, it is important to remember that we on this side, and the members of the justice committee from the New Democratic Party and the Bloc Québécois will vouch for this, and the members of the justice committee had made Bill C-10 and the mandatory minimum aspect a better bill when it left committee. Arrogantly, and without respect for the work of the all party committee, the Conservative justice team, coming yet again from the revolving door of the press club, suggested that it would put in at report stage the entire bill as it was before.

However, over the summer I think the Conservatives had blueberry festivals and strawberry festivals and must have eaten some humble pie at some festival, as they decided that they would accept the amendments as they came from the committee, reintroducing Bill C-2 with the Bill C-10 amendments to make our community a better place and enlarge upon the mandatory minimums that were already in place under the Liberal justice program before the Conservatives took office.

The other bill that needs clarification on why it is an acceptable bill now, and why it was never acceptable when the amateur Conservative justice team brought the topic up before, is Bill C-22, the age of consent bill.

I have heard well-meaning, honest and forthright members of the House, such as the member for Wild Rose, say that he and his colleagues could never get an age of consent or age of protection bill through the Commons. I was disturbed by that. I asked why we would not protect our young persons. Why would we not get in line with many of the communities around the world which recognize that consent may not be freely given by a 14 year old when the world has become smaller and the age of the predator is upon us?

I looked into it. There were two very fundamental flaws with all bills that were presented as part of a justice package by an opposition entitled the Conservative opposition. They are as follows.

There was absolutely no close in age exemption. This bill, Bill C-22, contains a close in age exemption, making it flexible enough to recognize that not every relationship that is separated by a number of years is a relationship between an innocent young child and a sexual predator.

Finally, as I wrap up, age of consent as presented previously would have criminalized normal adolescent sexual activity which, whether the Conservatives like it or not, is out there, and 14 year olds and 15 year olds having relations are protected by this. It does prevent sexual predators from preying on the young. It is good legislation.

In summary, the five bills in Bill C-2 are good law because the committee made them so. I encourage the Conservative justice team, the Prime Minister and all Conservatives out there to watch what they write, to watch what they present to Parliament, and to not keep going through that revolving door called the press circle to give press releases without having done their homework to ensure that they are passing good laws which will make Canada safer.

Bank Act

[John McCallum, Liberal, Markham—Unionville, ON]

--it also leaves me with some concerns about the government's broader agenda.

On the one hand, I am glad to see that the Conservatives have decided to model their bill closely on the Liberal proposals. This bill really is 100% proposals from the previous Liberal government. Naturally, therefore, we do not hesitate very much to support it, but I do have some serious concerns about the government's ability to conceive of any truly new legislation.

Canada's alleged new government is actually starting to look an awful like Canada's used government. If we look beyond the Bank Act to some of the other pieces of legislation put forward by the government, it is hard to see anything that the Conservatives have conceived of themselves. The Conservatives may have promised new government, but they have only delivered borrowed government.

For instance, the EnerGuide retrofit program for homes was once thought a wasteful program by the Conservatives before they looked at the polls on environment. We remember that just three months ago the Conservatives thought spending any money on a clean environment was wasteful. Now they have brought back the old Liberal plan.

However, instead of bringing back the full program, they have eliminated portions of it, particularly the money for energy audits. What will this do? Effectively this will help ensure that low income Canadians are unlikely to be able to afford making use of the program, but low income Canadians are not the base of the Conservative Party so the Conservatives do not really care about that.

This is a shameful act, because I remember very clearly from the time when I was natural resources minister that low income people are particularly hard hit by high energy prices. Low income Canadians pay out 25% of their low incomes on energy, but how has the Conservative government amended and altered our EnerGuide program? It has cut out the audit part, the part that is essential to allow those low income Canadians to access the program.

The Conservatives have deprived these people who are most subject to difficulties from higher energy prices. They have effectively excluded those people from this program. I think it is typical of their behaviour because they do not regard low income Canadians as part of their constituency, so if those people are excluded, that is fine.

If only the government could swallow its pride and reinstate the full EnerGuide program, which I am confident is useful; I am not so confident the Conservatives see it as useful, but that is what is in my speech. Meanwhile, at least they have brought back part of the program, but they have excluded that most critical part, which is the part that is essential to help lower income Canadians.

Another example is Bill C-25, An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which we passed last fall. Much like the Bank Act before us today, nearly all of the bill was drawn from proposals drafted by the previous Liberal government. It was a sensible bill, but because of near complete inaction on the part of the Conservatives, Bill C-25 had to be rushed through the House and the Senate in order to make sure it received royal assent in time to be compliant with our international partners.

Today we find the same thing. Once again, we are rushing to get Bill C-37 through both chambers. The Financial Institutions Act was scheduled to sunset this past October, which is why the previous Liberal government began the consultation process over two years ago, but the Conservatives delayed. They dithered. They delayed the release of the white paper and gazed at their navels until they had to ask the House to extend the act by six months, which we of course did. Now we are forced to get this legislation through both chambers in the next 50 days in order to beat the April 24 sunset clause.

So on the one hand, I am impressed that the Conservatives have been, generally speaking, willing to implement the majority of Liberal policies that were waiting for them when they came to power last year. On the other hand, I am a little concerned that they are willing to implement some of them in such a piecemeal and rushed fashion and they seem to have so few ideas of their own in the legislative cooker.

Worse still, and this is perhaps the most important point, when the Conservatives do manage to dig an idea out of their own caucus, it is almost universally panned by everyone else. I do not think it would be a stretch to say that their so-called clean air act was a complete failure, and their reverse onus legislation has been called unconstitutional by the legal community.

Thank goodness for our financial institutions and the millions of Canadians who rely on them that this used Conservative government has decided to stick with Liberal policy on Bill C-37.

Let us hope that when the upcoming budget rolls around next month the Conservatives will remember a few other Liberal programs that they have ruthlessly cut. I am talking about literacy programs. I am talking about funding for Canada's struggling museums. I am talking about the GST visitor rebate program, without which our tourism industry will be at a competitive disadvantage with the rest of the world.

It is truly amazing that the Conservatives cut that visitor rebate program, making Canada the only OECD country that does not have such a program, depriving Canada of the convention business and of foreigners who come to this country as a consequence of that program. Experts have indicated that the government will lose more tax revenue by ending this program than it gained by cutting the program, and it has done so at a time when it is swimming in money. There was no need to cut that program, just as there was no need to cut literacy or status of women programs or museums.

The government is swimming in money but nevertheless has struck out and cut the programs that have provided assistance to Canada's most vulnerable. The Conservative government also struck out and foolishly cut programs like the visitor rebate program, which makes absolutely no sense. I remember this, because when I was doing expenditure review in the previous government the bureaucracy suggested that we cut the visitor rebate program, so I know where the recommendation came from. The Liberal government had the good sense to say no to the bureaucracy. The Conservative government simply followed what the bureaucracy recommended. That turned out to be an extraordinarily foolish and counterproductive move.

Returning now to the white paper that the Liberals commissioned in preparation for the five year review of the Bank Act, one of the most exciting things the Liberals were exploring in that paper was writing electronic cheque imaging into law. The bill states that banks will be required to use new technologies to better serve the needs of Canadians.

As it stands right now, the maximum hold period on a deposited cheque is 10 business days. That can be an excessively long time for some Canadians, especially low income Canadians who need access to those funds much more quickly in order to pay their bills and buy their basic needs. Bill C-37 will immediately lower this hold period to seven days, allowing Canadians faster access to their own money.

This can be done even faster. I am speaking specifically to electronic cheque imaging, which Canada's banks have already begun to implement. By adopting electronic cheque imaging, banks will no longer need to physically exchange copies of cashed cheques with other institutions. Instead, a captured electronic image of the cheque can be sent instantaneously to another financial institution.

Better still, when all of Canada's financial institutions have installed electronic imaging equipment in the next couple of years, the maximum hold on cheques will be reduced from seven days to a mere four days. Furthermore, I hope that as the technology advances we will be able to further reduce the maximum period.

A second aspect of this bill that I approve of is a provision for an increased disclosure regime that will provide Canadian consumers and businesses alike with the information they need in order to make the most informed investment decisions possible. Bill C-37 will ensure that the savings product disclosure regime is just as effective for the millions of online bankers as it is for branch customers. Strong competition and information disclosure are two of the best tools available to ensure that Canadian consumers' needs are being served well by our financial institutions.

As I have said, the official opposition will be supporting this bill. My colleague will expand on my remarks in terms of some other items contained in the bill. But I do hope that Canada's alleged new government will continue to use our ideas to their fullest and can refrain from returning to the dangerous incompetence of the previous Conservative government that was so damaging to Canada's economic well-being.

Perhaps I should expand briefly in my remaining time on that last comment. What do I mean by Canada's last Conservative government being damaging? There is a pattern here, in that Conservatives create deficits and leave those deficits for Liberals to clean up. The most glaring example in our recent economic history was the Mulroney government, which bequeathed to the Liberal government a $42 billion deficit. It took some time to clean that up.

Indeed, the Mulroney government received a credit downgrade in 1992. Since 1951, Canada had consistently had an AAA rating. Then, after a series of deficits that had us, according to the IMF, headed for third world status, the credit rating was downgraded in 1992. It took 10 years of the Liberal government cleaning up the Conservative mess to restore that credit rating to its AAA status.

It is not as if that is an isolated example. Looking south of the border, we saw Bill Clinton running surpluses. Who has been running the huge deficits? George W. Bush and, before him, Ronald Reagan. Or we can look to Ontario. The pattern is always the same. It was the Mike Harris-Ernie Eves government that ran on a campaign of a balanced budget, but when that government lost and the auditors came in, what did it show? It was a $5.8 billion deficit. That is of some relevance here, because three of our most senior ministers were senior members of that government.

Conservatives, whether we are talking about Ronald Reagan or George Bush in the United States, or Brian Mulroney or Mike Harris in Canada, historically have run huge deficits. They have left those deficits for successive Liberal governments to clean up.

What has happened to this Conservative government? It has been bequeathed the largest surpluses in Canadian history. That is why it is particularly incumbent on the government to use that money wisely, but it has not.

As I said, the Conservatives have done the opposite of what Canada needs for a strong economy to take on the 21st century. They have raised income taxes. They have slashed research. They have slashed learning. They have slashed programs for Canada's most vulnerable, the literacy programs, women's programs and the museum programs, and they have done all that at a moment when they have been literally drowning in the hard-earned cash of hard-working Canadians.

That is where I will conclude my speech, by saying that I hope this new government will continue to use our ideas to their fullest and can refrain from returning to the dangerous incompetence of the previous Conservative government that was so damaging to Canada's well-being.

[Rob Moore, Conservative, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, the Government of Canada recognizes that organized crime, including gang activity, continues to pose a threat to the safety of our streets and communities. The government is taking both legislative and non-legislative steps to counter it.

For example, with Bill C-10, the government is proposing to toughen minimum penalties for serious repeat firearms offences, tailored in a manner that targets the specific problem that currently exists with respect to guns and gangs.

With Bill C-35, the government is proposing to create a reverse onus for bail for those charged with certain serious firearms offences.

With Bill C-27, we are targeting serious dangerous offenders.

I should point out also that Bill C-25 received royal assent on December 14 and ensures that Canada's anti-money laundering regime more fully complies with international best practices.

The Department of Justice officials are currently undertaking a review of our criminal laws to ensure that Canada's legislative measures appropriately respond to threats posed by organized crime.

Of course, strong laws are not by themselves enough to fully combat the threats posed by organized crime. That is why the government has invested in a range of measures designed to prevent crime before it happens.

For example, we committed nearly $200 million to enhance the ability of our national police force, the RCMP, to combat crime and to keep our communities safe.

We have also invested in crime prevention activities, specifically targeted at youth at risk, and focusing on gangs, guns and drugs.

There are several important reasons why society should be concerned with youth involved in gang activity. Gang members commit a disproportionate number of offences, and commit serious and violent offences at a rate several times higher than youth who are not involved in gangs.

In the 2006 federal budget, the government announced resources in the amount of $10 million per year to prevent youth crime, with a focus again on guns, gangs and drugs.

Last October, federal officials signalled to the provincial and territorial counterparts that resources were available for communities in need.

To date, several proposals have been received and a number of pilot projects that provide programming for youth involved in or at risk of gang involvement have been funded.

Before closing, I would be remiss not to highlight everything Bill C-10 proposes to do to tackle the specific serious threats that repeat firearms offenders pose to our society.

As members know, in spite of a general decrease in gun crimes, the situation across Canada is not looking all that bright and there is a major cause for concern. Serious gun crimes, such as firearm homicides, gang-related homicides, and the proportion of handgun robberies have increased in a number of our larger cities.

The guns and gangs problem is not a concern only in large urban centres of Canada, it is also a concern in some of the rural and other areas across our country. So, this is something that we, as parliamentarians, have to take very seriously.

I should mention what the opposition has done with the government's bill, Bill C-10, that would have had escalating penalties for individuals who commit offences, gang-related offences, and offences with prohibited or restricted firearms. The legislation would have taken a more serious approach with offenders and had escalating penalties for those who were repeat offenders. Unfortunately, the opposition rejected the government's proposal to provide higher minimum penalties for firearms, traffickers and smugglers.

Tax Conventions Implementation Act, 2006

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I wish to speak on Bill S-5. Some of the points that I am going to speak about were already addressed by my colleague from the Conservative Party, but I want to speak today on the Liberal point of view.

Bill S-5 is an act to implement conventions and protocols concluded between Canada, Finland, Mexico and Korea, all separate tax treaties from what I understand, for the avoidance of double taxation and the prevention of fiscal evasion with respect to income taxes. It is also known as the 2006 tax convention implementation bill.

While international tax law does not always make for the most exciting of debates, its importance is indisputable, especially as we move toward greater globalization and greater free movement of labour and capital across international borders.

This bill seeks to obtain tax treaties between Canada and, as I said, three other countries, those being Mexico, Korea and Finland. We have had tax treaties in place with these countries for many years. As with most laws, there comes a time when they need to be amended in order to reflect changing times.

Consequently, the bill presents some routine amendments that I believe will help ensure Canada remains a leading participant in the global economy.

Our party will support the updates contained in the bill.

There are two primary areas with which the bill occupies itself. The first is to help combat tax avoidance between signatory countries. The second is to avoid the double taxation of nationals working abroad in these other countries.

I will begin with the issue of international tax avoidance. As an accountant, I can tell the House that combating tax evasion is not an easy task, but it is an urgent one. It is also a task that Canada cannot fight on its own. As the former chair of the finance committee during the last parliamentary session, I can say that this is why our committee looked at how Canada can increase its battle in curbing the increase of tax evasion.

With the call of the election by the opposition parties, our work was never completed, but during this session the finance committee, forced to conduct a parliamentary review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, has hopefully given FINTRAC more tools to help combat tax evasion, through Bill C-25.

Stemming international tax evasion is something that requires the efforts of all countries among which capital and people flow back and forth, and they are perhaps flowing more freely now than at any other point in history. It is therefore not only advantageous for us to close tax avoidance loopholes in order to protect our own tax base, but it also speaks about our commitment to the international community. We have to show our partners, allies and competitors that Canada takes its international responsibilities seriously. We have to be willing to exchange information and work with foreign revenue authorities to help stem the tide.

I will now move on to the second part of the bill, the avoidance of double taxation. We are living in a highly globalized economy. Without international tax treaties such as this one, a Canadian working abroad would likely be taxed twice on the same income, once by the Canadian government and then again by the country in which that income is earned.

There are several ways to ensure that double taxation does not occur when the citizen of one country works in a foreign country.

A tax treaty can ensure that worker's income is taxed solely in the country where the work is done. Conversely, a treaty can also ensure that only the country of which the worker is a citizen taxes that person. Or again, finally, a tax treaty can see both countries tax a worker but at lesser rates, to ensure that the taxpayer who pays in one country will receive a tax credit in the other country in which he or she files his or her income tax return based on global income, to avoid double taxation.

The treaties in Bill S-5 cap the tax rate at 15% on portfolio dividends paid to investors who do not reside in Canada. In the case of dividends paid by subsidiaries to their parent companies, the maximum withholding tax rate is reduced to 5%. The withholding rate reductions also apply to royalty, interest and pension payments.

Each treaty in Bill S-5 caps the withholding tax rate on interest and royalty payments at 10%, which is in line with current trends in this area and current Canadian tax policies.

At this point what does concern me are the recent rumblings by the present government that seem to indicate it would like to rip apart many of the 90 tax treaties that were signed by the previous Liberal government in order to prevent the double taxation of Canadian dual citizens who work outside of Canada.

It was a little over a month ago when the Minister of Foreign Affairs told the Senate committee that the government was considering imposing a tax on Canadians living abroad under a second nationality. This would not only violate our bilateral treaty obligations with dozens of other countries, but it would also go against the fundamental value of what it means to be a Canadian at home and in the world.

Furthermore, it would also represent a complete U-turn from what Bill S-5 attempts to do. Bilateral tax treaties signed between Canada and other countries, such as the one we are discussing today, allow for dual nationals to live and work in one country without having to pay income tax in their country of citizenship. In a world of increasing international movement, these tax treaties have become more and more vital. As such, Canada has been hard at work to extend its tax treaty network for decades.

International arrangements such as these allow for relatively free movement of people and capital across borders, contributing greatly to the rich multicultural nature of our country. Imposing an income tax on dual citizen Canadians living abroad would not only violate these treaties, it would seriously reduce our domestic tax base by opening up the likelihood that foreign dual nationals here would face double taxation from their country of citizenship.

While I am happy to support the bill, which will ensure there is no double taxation between Canada and either Finland, Mexico or Korea, I am very concerned about the government's commitment to respecting the bill over the long term. I am also concerned about what that says about the government's commitment to making Canada internationally competitive in terms of taxing its citizens working abroad and potentially foreigners coming to Canada to work.

There is another aspect of what international tax treaties such as Bill S-5 achieve. It is just as important as avoiding double taxation or stemming tax avoidance. That aspect has certainty. With so much investment, goods, services and labour flowing across international boundaries, it is important for the people involved to hold a fair degree of certainty that the tax situation that exists today will more than likely exist tomorrow.

In short, it is a commitment that the rate of taxation will not change on the whim of a government. It is kind of guarantee to the international community and to Canadians that the government will not, for instance, suddenly decide to tax its dual citizen nationals living abroad like the present government decided to do by taxing income tax after promising not to do so in the last election. I have no idea why the government wanted to erode that confidence by musing about taxing its dual citizens living abroad.

Finally, I am also concerned that the government is not moving important legislation through Parliament as fast as it should. I am told that the bill needs to receive royal assent by January 1, 2007. Fortunately, it is a Senate bill and it has already passed in that place in a very speedy manner, which is why it is before us in the House.

The bill arrived in the House just two short weeks ago. It has taken the agreement of all opposition parties to fast track the bill through second and third readings. In short, it took the three opposition parties to ensure the bill, a bill that may not be tremendously exciting but is nonetheless important to Canada's competitiveness, was passed on time.

That being said, we on this side of the House are happy to support the bill at all stages.

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

[The Acting Speaker, Royal Galipeau]

Pursuant to order made on Thursday, November 9, Bill C-25, An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act, is deemed to have been read a third time and passed.

(Motion agreed to, bill read the third time and passed)

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank my colleague from Timmins—James Bay and I thank his ancestors who were founders and leaders in the credit union movement, doing us all a service.

We need to keep in mind that our charter banks were given the exclusive monopoly on certain very lucrative financial transactions, such as credit card transactions, in exchange for providing basic services to all Canadians wherever they are in the country and even sometimes when it is not the most profitable thing to do.

Nobody needs to have a tag day for the banks. They are making record profits every quarter and yet they are abandoning rural Canada and the inner cities, such as this flight of capital, this vote of non-confidence. Fifteen bank branches from the five charter banks have closed in my riding in the last five years and, in the riding of my colleague from Winnipeg North, which borders my riding of Winnipeg Centre, another dozen. That is 27 bank branches.

Who is backfilling that need for financial services? It is the payday lenders, the Money Marts, the Paymax, the scourge on society. I have seen the face of evil and it is the payday loan industry in Canada and in my riding.

The only people who can actually backfill and meet the needs of Canadians is the credit union movement. However, a person needs a fair amount of economic stability to even form a credit union or join a credit union. People should know their banking rights and they should know that the charter banks have abandoned Canadians.

The reason we got onto credit unions, and to get back to relevancy, is that the Credit Union Central of Canada made a very passionate submission to the committee citing its reservations about Bill C-25. It stated that it may be handicapped and hog-tied with this added financial burden of meeting the terms and conditions of Bill C-25 in terms of money laundering and tracking every transaction to monitor for illegal activity.

We all want to do what we can to defeat money laundering and illegal transactions by illegal terrorist groups but let us not put the added burden on the credit unions that may hog-tie their ability to serve the needs of Canadians.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I am pleased to enter into the debate today on Bill C-25 on behalf of the NDP caucus.

I am going to draw on some of the comments made by previous NDP members in this debate earlier and during other stages of the bill. I note many of the thoughtful comments made by our justice critic, the member for Windsor—Tecumseh and our finance critic, the member for Winnipeg North, who analyzed the bill and added some helpful comments that I will try and summarize here.

I should note by way of introduction that the bill comes to us as one of a flurry of bills dealing with justice issues. There has been an entire suite of legislation in recent months, some of it good and some not so good. In the NDP's point of view, we believe that some of the bills go too far and some not far enough. I hope I will have time to develop this somewhat.

We believe that aspects of Bill C-25 do not go far enough given the worthwhile goals and objectives stated in the bill. This is one of those situations where the government of the day could have exercised even more authority to solve some of these issues.

Let me start with that one point that I have introduced to explain. Should the bill pass, this would be one of the few places in the Criminal Code where the reverse onus would be contemplated and allowed. This has been controversial in other aspects. For instance, we just finished debating Bill C-9 yesterday that introduced an element of reverse onus. Should individuals be convicted for a third time of an offence from a list of serious offences, the reverse onus would be put on them to prove why they should not be designated as dangerous offenders and locked up for life.

There were howls of derision in the House because the NDP had the temerity to raise the caution that we should only venture into this notion of reverse onus with our eyes open and with due diligence. We think we were justified in that respect and we are taking political heat as a result of it.

It was not a pleasant sight yesterday when we were debating Bill C-9. I was not proud at all of the tone of the debate that took place just because the NDP had the temerity to question the idea of “three strikes and you're out” and the idea of putting the reverse onus on individuals who are convicted to prove they are not dangerous offenders.

Bill C-25, the bill we are addressing today, deals with a reverse onus as well. This is one case where I think the Conservative government has gone soft on crime. I cannot understand why it did not go farther. Even though those members hurled abuse at the NDP for being soft on crime yesterday because we raised a question, in a more respectful way I ask them why they could not have gone tougher on crime in this bill. I will explain what I mean.

In the context of this flurry of crime and justice bills that we are dealing with, we have to establish the notion that crime does not pay. I would hope this would be one way to deter criminals from activities that we are trying to discourage. The prevailing wisdom and the common knowledge out there is that crime does pay.

An awful lot of bad people are getting away with an awful lot of things and living a very good life right under the noses of our police officers and law enforcement officers whose hands are tied. They may have darn good reason to believe that somebody is enjoying these luxury goods from ill-gotten gains from the proceeds of crime, but because the burden of proof is so onerous on our police officers and on our criminal justice system, it is rare that the proceeds of crime are actually seized.

Bill C-25 does suggest that in the event of money laundering and fundraising for terrorist activities or belonging to an illegal organization, the government can in fact seize bank accounts and cash assets from individuals and apply the reverse onus. I think that is laudable.

I would point out, though, that we could have expanded this notion to include more things than just the bank accounts. In the province of Manitoba we introduced legislation. It was defeated narrowly by the two Liberal members of the Manitoba legislature who would not allow it to pass, but we introduced legislation that was very broad and very sweeping. If a person was a member of a criminal organization and was convicted of a crime, the crown prosecutor could go to a judge who could then assess the material possessions of the criminal.

Let us say the person was a member of an illegal organization like the Hell's Angels and the guy was living in a $750,000 mansion with a tricked out Escalade in the driveway, two boats and a Sea-Doo, and all the tools and jewellery et cetera, the trappings of ill-gotten gains and crime. If that individual could not prove to the judge that the toys were purchased by earnings or by some legally obtained wealth, then we in fact could seize the property. The assets would be liquidated and the proceeds would in fact be dedicated directly to law enforcement, so that we can go out and bust more criminals. I thought that was a great bill and I thought that in the bill before us we could have explored some of those notions.

I note that the private member's bill from the Bloc Québécois in the last Parliament proceeded quite a way down the road before Parliament ended and the bill died on the order paper. I think Richard Marceau was the name of the Bloc member who is no longer a member so I can use his name and give him credit. That garnered a lot of support in the House. We thought it was a good idea.

This notion of reverse onus is not foreign to the NDP nor do we oppose it out of hand, but there was derision heaped on us yesterday for raising the idea that we did not believe reverse onus should be used in Bill C-27, the “three strikes and you're out” bill. We opposed it yesterday, but that does not mean that we oppose it all the time.

Some of the legitimate concerns about Bill C-25 that were raised above and beyond that observation from my own point of view were that it would put a burden on financial institutions to monitor, track, and take note of suspicious transactions or even overt exchanges of money that may indicate illegal activity. I think this is a necessary aspect of the bill. We have to rely on the cooperation of the financial institutions to alert us when these suspicious transactions take place.

However, the burden on smaller financial institutions may be quite onerous. I have an email from the director of the largest credit union on Vancouver Island, Mr. Bob Smits. Mr. Smits noticed that we were raising issues about the bill in the House of Commons and was monitoring it carefully.

He raised a concern that in a smaller financial institution like his, the current regulations, even as they exist today regarding tracking, the FINTRAC legislation, and the financial transactions and report analysis legislation have required his small credit union to hire an enforcement officer. He estimates that the cost of compliance with the current law to be over $100,000 a year.

If we compound that burden even further and make the obligation more onerous, we have to accommodate somehow these smaller institutions who want to comply with the law, but who have served notice that they are legitimately concerned that the burden will be passed on to them. They are asking that the government pay attention to the submission made by the credit unions at committee.

I am not sure how the submission was received in committee but I did not notice any substantial amendment in that regard. The only amendment I could find in my research for my speech today was a committee stage amendment put forward by the member for Markham—Unionville. The amendment stated that SIRC, the Security Intelligence Review Committee, established by section 31, “...shall undertake a review of the operations of the centre in each financial year and shall, within three months after the end of each financial year, submit the annual report to Parliament on those operations”.

That is just a mandatory review process, which is not unusual when we are introducing a bill of this nature. I am not sure we took into consideration the legitimate concerns of the Credit Union Central of Canada in its submission to the bill. I want to recognize today that the NDP did take note of CUCC's concerns and we tried to represent its concerns at every stage of the debate on the bill.

One of the points I highlighted in its submission is where CUCC states that “in the absence of compelling evidence of need, Credit Union Central is concerned that the proposed legislation is largely driven by the perceived need to make Canada's AML-ATF regime formally consistent with the new international financial action task force standards, rather than in response to any substantive threat arising from loopholes in Canada's current AML-ATF regime”.

I suppose CUCC is questioning whether better enforcement in support of the existing regime may have been adequate to plug the loopholes. These are the practitioners in the field who do not want us to pass legislation unnecessarily unless we can have a demonstrated need proven to them. They also point out, and we should take note of this, that they do not necessarily accept that the need is commensurate with the level of activity contemplated in the bill.

The one thing that I do take note of and support in the bill is that the bill does include the foreign currency exchange shops. I think this is a logical extension in terms of financial institutions.

I would also note that a lot of questionable activity can be shielded in the completely unregulated financial sector of the payday loan companies, many of which, in fact, offer this foreign exchange and foreign delivery of currency.

As we know, a lot of money leaves Canada every year, expatriated by people who are working in Canada and sending money to other countries. When the completely unregulated payday loan sector started to explode into our communities and started sprouting up like mushrooms on every street corner, we were very concerned. However, one of the things we have not given too much thought to is that one of the services offered by these payday loan outfits is, quite often, wiring money to other countries.

The wiring of money was normally done in a fairly regulated setting until these shops started popping up in every strip mall across the country, sometimes three, four and five of them in the same strip mall. I think we will need to pay better attention to the activity involved in that because questionable people have entered into that industry sector. When people can get 1,000% rate of return on their money, a lot of people are taking note and it is no wonder these little shops are sprouting up.

In one sting case done by the crown prosecutor for the province of Manitoba, they found that 10,000% interest was being charged by one of these outfits. I believe that is a better rate of return than a person can get selling cocaine. There is no other activity in the country where we can get 10,000% return on an investment, other than these payday loan shops, so it is attracting all the wrong kinds of people. I would suggest that might be one place that officials may want to really look for money laundering, illegal transactions, and bring these payday lenders under tight scrutiny and tight regulation.

I do acknowledge that payday loan legislation is pending in this 39th Parliament, and I welcome that.

This bill deals with the legislation governing money laundering as it exists today and tries to strengthen and improve the performance of the Financial Transactions and Reports Analysis Centre, or FINTRAC as it is known to the practitioners in the field.

FINTRAC, being an independent agency, does report to the Minister of Finance. It places obligations on certain individuals and entities to keep records, to identify their clients and to report certain financial transactions.

The second concern brought to our attention by the Credit Union Central of Canada is the obligation to report activity. First, the onerous burden that may be compounded by this legislation to track activity looking for suspect transactions, but also the obligation to turn in the names of member clients, otherwise seemingly innocent transactions may cross some line where a red flag pops up on a file, the institution would have no choice other than to report that individual. It could be someone who has been a member of that credit union for 20 years. We all know that credit unions are a lot more community driven than are some of the bigger banking institutions. It could put the manager of a credit union, who is a member of the community and who might be the coach of the local hockey team, in the difficult situation of having to turn in one of the parents of the children on that hockey team because of a transaction that was possibly innocent but set off a little red flag.

There are the privacy elements here that we must take into consideration and there is the awkwardness associated with that.

Bill C-25 seeks to improve and strengthen the performance of the Financial Transactions and Reports Analysis Centre. I come back to the point made by Credit Union Central that perhaps all that is needed is a more robust administration of the existing FINTRAC regime.

It would be irresponsible to speak to this bill without taking into consideration the projected costs.

As I see I have only two minutes left, I will restate two of the compelling arguments brought to our attention by people we trust, about Bill C-25, the Credit Union Central of Canada.

The budget for FINTRAC, as contemplated currently, is $64 million. It may be that more resources will be necessary to offset the impact of the costs of administering the further obligations under Bill C-25 for these smaller institutions. As a former activist in the credit union movement, I try to advocate on their behalf. Let us not put this added financial burden on struggling organizations that are trying to meet the financial needs of individuals in places where the banks have abandoned them.

Quite often, the credit union stuck with the tough work of providing basic financial services that the banks should have been providing if they were living up to their obligations under their charters. They have abandoned the inner cities. Credit unions have fallen in to take their place and this bill might add an unnecessary financial burden on them.

[The Acting Speaker, Royal Galipeau]

The last time the House debated Bill C-25, the hon. member for Jeanne-Le Ber had 14 minutes remaining.

Resuming debate. The hon. member for Jeanne-Le Ber.

The House resumed consideration of the motion that Bill C-25, An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act, be read for the third time and passed.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Speaker, the government did no such thing. I am sorry that partisanship must always rear its ugly head. All members of Parliament are very concerned about ensuring that the privacy of Canadians and the accountable operation of these kinds of activities are jealously protected.

There was a proposal for oversight that simply was not workable. It would have substantially changed the operations of some of the organizations that do important work on behalf of Canadians in protecting their security. However, the Minister of Finance put a proposal forward for oversight, through the office of the Information Commissioner, a proposal that had also been brought to my attention by the members of the Bloc Québécois. We were able to achieve consensus behind that area of oversight.

As I emphasized, all members of Parliament and certainly the government are very committed to oversight, which is why we introduced the federal accountability act, an act that would broaden, to an unprecedented degree, oversight of all operations of government.

We are very grateful that there has been consensus behind this important measure in Bill C-25.

[Diane Ablonczy, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, today we are at third and final reading of Bill C-25. The bill is entitled Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The bill proposes amendments to the existing act against money laundering and terrorist financing. These amendments will toughen Canada's existing anti-money laundering and anti-terrorist financing legislation.

We are aware and we applaud the fact that we are more and more a global economy, that all countries interact together to do what they do best in the global marketplace, and that open borders provide these kinds of opportunities for Canadian businesses to thrive internationally.

However, every upside has certain downsides. This kind of openness in commerce, trade and financial transactions around the world also provides criminals with opportunities. Criminals use these opportunities to launder millions of dollars in illegal cash. The intention of criminal and terrorist elements, of course, is to make these proceeds look legitimate, so they can use them without attracting the unwelcome attention of law enforcement agencies. The funds are also increasingly used to fund terrorist activities. We want to put a stop to this.

Criminal activities, I do not have to remind the House, undermine the reputation and integrity of financial institutions. They distort the operation of financial markets and adequate measures must be put in place to deter this kind of activity.

I want to remind all members, although we have spoken about this issue before, that the proposed legislation is extremely important to our country. I want to take a few minutes to explain briefly what money laundering and terrorist financing is, how it operates, and especially how it can affect our Canadian economy.

Money laundering is the process used by criminals to disguise the source of money and assets derived from criminal activity. This kind of criminal activity is very broad. It runs from drug trafficking, prostitution, smuggling, fraud, extortion, corruption, to criminal activity of all kinds. Most of this activity generates large quantities of cash, untraceable cash, but cash nevertheless, that can raise suspicions of law enforcement agencies. Criminals turn to money laundering and they have to use legitimate financial institutions and systems to do this. This can compromise the integrity of these institutions. It can also facilitate corruption in a country. It can destabilize economies. It is a serious threat to any country.

This kind of criminal activity is nothing new. It has been around for a long time in one form or another. However, there has been a change recently. Money laundering has become an increasingly global phenomenon. This is because of technological advances in e-commerce and the global diversification of financial markets. Because of this, criminals now use very sophisticated techniques to carry out these money laundering activities. These techniques can lead to further opportunities to launder illegal profit and obscure the money trail leading back to underlying crime.

Methods for laundering funds vary considerably and are often highly sophisticated and intricate. However, there are generally three basic stages to the process. I mentioned this before to the House, but some members may not have heard it so I will just repeat it quickly.

First, there is the placement stage. This involves placing the proceeds of crime, usually in small amounts at a time, into the financial system.

Placement is followed by layering. At this second stage, the dirty money is converted into another form through complex layers of financial transactions that disguise the audit trail and disguise the source and ownership of funds. This, for example, can be by buying and selling stocks or by buying and selling commodities or properties. These are some common vehicles for layering.

Finally, there is the integration stage and in this stage the laundered proceeds are placed back into the economy, hidden under a veil of legitimate business activity.

Terrorist financing has an extra wrinkle to all of this because it can involve funds that have been raised from legitimate sources. Unlike organized crime, terrorists can raise funds through legitimate sources such as personal donations, profits from business, or through charitable organizations.

Terrorist financing can also come from funds that have been through the money laundering process that I have just described, that is, it could come from criminal sources such as the drug trade, smuggling weapons and other goods, fraud, kidnapping, extortion, all of these criminal activities in addition to legitimate activities.

Terrorists, like criminal organizations, use sophisticated money laundering techniques to evade the attention of authorities. However, to make the money harder to follow, financial transactions associated with terrorist financing tend to be in smaller amounts than in the case with money laundering by criminal organizations. When terrorists raise funds from legitimate sources, members of the House can appreciate that the detection and tracking of those particular funds becomes very difficult.

To move their funds out of our country or another country, terrorists often use informal money transfer systems such as Hawalas. These exist and operate outside of, or parallel to, what we normally think of as traditional banking or financial channels.

In Canada, in an effort to conceal the final destination of laundered money, FINTRAC is finding that funds suspected of being used for financing terrorist activities are increasingly being moved out of the country through traditional banking centres to countries with major financial hubs.

How big is this money laundering and terrorist financing problem? What are we dealing with? What do we need to be aware of? Because this is hidden activity, it is pretty hard to put an actual dollar figure on it. We do know that this activity involves significant amounts of money. The International Monetary Fund, through its expert sources, has estimated that worldwide the aggregate size of money laundering is between 2% and 5% of the entire global GDP. That is very significant by any standard.

What can we do about it? The bottom line is that criminal and terrorist activity requires money. One of the best ways to put these individuals out of business is to starve them of funds. That is why we are here today with Bill C-25. The bill would improve Canada's ability to act decisively and shut down these criminal operations when they are detected.

We have already taken some steps in this direction. Members will recall that in the recent spring budget there was extra funding for key partners in combating this kind of activity of money laundering and terrorist financing. There is $64 million in additional funding over the next two years for the RCMP, the Department of Justice, the Canada Border Services Agency and FINTRAC.

Just a reminder for those who are wondering, FINTRAC is Canada's financial intelligence unit. It is an integral part of our country's commitment to fight money laundering and terrorist activity financing. FINTRAC gathers information about financial transactions, analyzes it and if it sees something suspicious alerts our security forces to take further action.

As the finance minister said when he introduced this bill that is before us today, “Canada's new Government will continue to be relentless in its battle against money laundering and terrorism financing”.

To build on the measures in the budget to increase funding for these kinds of security activities by the RCMP and CSIS, Bill C-25 will help ensure that Canada continues to be a global leader in combating organized crime and terrorist financing.

It will do that by making our financing regime consistent with new standards that were recently adopted by the financial action task force. Members will know that the FATF is an international standard setting body for developing and promoting national and international policies to combat money laundering and terrorist financing.

We are proud of the fact that Canada was a founding member of this organization. I commend the previous government for the leadership that Canada took in this area.

Canada is committed to implementing the 40 new recommendations of the FATF on money laundering and nine special recommendations on terrorist financing. Canada's response to those revised recommendations have been put into law in the bill we are debating today.

The bill also responds to the Auditor General. In 2004 the Auditor General made some recommendations about how to strengthen our regime. We want to respond positively to her recommendations. In 2004 there was a Treasury Board evaluation of our regime. Treasury Board made some recommendations which we want to put into place as well.

Recently, the Auditor General appeared before the House of Commons Standing Committee on Finance. The Auditor General has confirmed to the committee, and I would like to let the House know, that this bill in the Auditor General's opinion appears to deal with the key findings in the report from the Auditor General's Office in November 2004.

Not only that, we have recently received a report from the Senate Standing Committee on Banking, Trade and Commerce. The Senate committee undertook an extensive study of this whole area of money laundering and terrorist financing. The report called for a number of tougher measures to deal with these activities.

Those of us in the House want to thank the Senate committee members for the insights that they have provided on this issue. They are satisfied and pleased I believe, although they will be examining this bill in some detail in the days to come, that their proposed recommendations have been enshrined in this legislation and in related regulations.

The following are the key proposals in this legislation. First, there is something new in the area of information sharing. Right now, FINTRAC shares information with law enforcement and other domestic and international agencies. This bill would enhance that information sharing in ways that were recommended by the Auditor General and also requested by law enforcement agencies.

Specifically, this would enhance the information FINTRAC can disclose to law enforcement and security agencies on suspicious and money laundering terrorist financing. It is not much good for FINTRAC to have this information if it cannot alert those who could actually investigate it further and do something about it.

Second, the bill deals with the registration system. It proposes to create a system to register money service businesses and foreign exchange dealers. Previously, these entities were not registered and, because they also have been conduits for money laundering, they will now be brought into the system.

With a federal registration system in place for individuals and entities engaged in money service businesses of foreign exchange, FINTRAC would act as registrar and would maintain a public list of registered money service businesses and foreign exchange dealers.

Third, the bill deals with enhanced client identification measures. It would include requirements for reporting entities, banks, insurance companies, securities dealers and money services businesses to undertake enhanced monitoring of high risk situations. In other words, we are heightening the level of vigilance in our country. This would include the monitoring of transactions of foreign nationals who hold prominent public positions.

The current legislation only allows for serious criminal penalties if the act is contravened. In order to take a more balanced and gradual approach to compliance, the bill would allow FINTRAC to levy fines to deal with lesser contraventions or inadvertent breaches of the act. It would also provide FINTRAC with the ability to create an administrative and monetary penalty system whereby fines can be applied for non-compliance. This would better help FINTRAC to do its work.

For those who have made inquiries about this, the regulations for this bill would also include other reporting entities, such as gemstone and precious metals dealers they deal with, and compliance measures that are appropriate to legal practitioners. Discussions are underway with the building industry.

Not only the government but the entire House is very serious about winning the battle against money laundering and terrorist financing. I would like to commend all members of the House from all parties for their united determination to get behind these measures. There has been a very good level of cooperation from all parties in bringing the bill forward and that will benefit all Canadians. Canadians should commend all parties for this cooperation. As Mr. Speaker knows, that does not always happen in the House but, on important issues, members of Parliament can act in a united way.

For the first time ever, the House should know that Canada has assumed the presidency of the FATF. We are very pleased about the leadership role we will have in this area. Our presidency of the FATF is another example of our commitment to national and international security, to collaborative solutions to global threats and to meeting the need for international cooperation and international institutions to deal with this area.

The bill would make Canada's overall regime consistent with international standards. It would continue to help us keep one step ahead of those who would abuse our system to fund criminal and international terrorist activities.

We appreciate the fact that we have all party support for this. I would tell Canadians that they can be reassured that the government, the House of Commons and Canada's Parliament are dealing with this important issue in an expeditious and effective manner.

[Lawrence Cannon, Conservative, Pontiac, QC]

moved that Bill C-25, An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act, be read the third time and passed.

Bill C-25--Proceeds of Crime (Money Laundering) and Terrorist Financing Act

[Rob Nicholson, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, as I said earlier, I have a motion regarding Bill C-25, for which I believe you will find consent. I move:

That, notwithstanding the Standing Orders or usual practices of the House, Bill C-25 be amended as follows: Clause 38 be replaced with the following:

“38. Section 72 of the Act is replaced by the following:

72. (1) Every five years beginning on the day on which this section comes into force, the administration and operation of this Act shall be reviewed by the committee of the House of Commons, of the Senate or of both Houses that is designated or established for that purpose.

(2) Every two years beginning on the day on which this section comes into force, the Privacy Commissioner, appointed under section 53 of the Privacy Act, shall review the measures taken by the Centre to protect information it receives or collects under this Act and shall, within three months after the review, submit a report on those measures to the Speaker of the Senate and the Speaker of the House of Commons, who shall each table the report in the House over which he or she presides without delay after receiving it or, if that House is not then sitting, on any of the first 15 days on which that House is sitting after the Speaker receives it.” and

the motion to concur in the report stage shall be deemed put and adopted; and

when Bill C-25 is called for debate on Friday, November 10, 2006 after no more than one speaker from each of the recognized parties have spoken at the third reading stage, the bill be deemed read a third time and passed; and that after Bill C-25 has been adopted at third reading and provided that routine proceedings has already taken place, the House proceed immediately to private members' business.

Business of the House

[Rob Nicholson, Conservative, Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, we will be calling that debate that the hon. member just mentioned in due course.

Today, we will continue the debate on Bill C-27, the dangerous offenders act.

There is an agreement to complete Bill C-25, proceeds of crime, tomorrow. In a few moments I will be asking the approval of the House for a special order in that regard.

When the House returns from the Remembrance Day break, we intend to call for debate a motion in response to the much anticipated message from the Senate regarding Bill C-2, the accountability act. As well, we hope to complete the report and third reading stages of Bill C-24, the softwood lumber act.

Thursday, November 23 will be an allotted day

I want to inform the House that it is the intention of the government to refer Bill C-30, the clean air act, to a legislative committee before second reading.

Finance

[Brian Pallister, Conservative, Portage—Lisgar, MB]

Mr. Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Committee on Finance respecting Bill C-25, An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act.