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 bill was last introduced in the 39th Parliament, 1st Session, which ended in October 2007.

Sponsor

Jim Flaherty  Conservative

Status

This bill has received Royal Assent and is now law.

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

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.

Elsewhere

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

March 8th, 2011 / 10:35 a.m.
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Assistant Director, Financial Analysis and Disclosures, Financial Transactions and Reports Analysis Centre of Canada

Denis Meunier

We have an evergreen plan to replace our equipment. And we are constantly updating, for instance, analytical tools. We use charts to describe the links. I could bring a chart that would show you all the connections between the people we're looking at. That takes quite a bit of skill by our analysts. We update this regularly.

We constantly update our systems. Just recently we added, about a year and a half ago, as a result of Bill C-25, some new casino disbursement reports. We had to upgrade our systems to receive these new kinds of reports. We're constantly updating our systems, which probably represent over 60% of our budget.

April 15th, 2010 / 11:45 a.m.
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Deputy Director, Strategic Policy and Public Affairs and Chief Review and Appeals Officer, Financial Transactions and Reports Analysis Centre of Canada

Hélène Goulet

I think I'd have to ask the RCMP for that information. What we do know is that we receive more requests for information from them and we have disclosed more and more to them. We have become more timely. We do our work faster, and with the last piece of legislation that came in, Bill C-25, we can give them a lot more information. So our information is seen as much more valuable than it was in the past. So we know that they follow up on more, and the fact that they ask for something means they're already investigating. When they ask us for information, it means they're already looking at something, so we have to assume that they look at most of what we give them.

March 3rd, 2008 / 3:55 p.m.
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Assistant Director, Macro-Analysis and Integration, Operations Sector, Financial Transactions and Reports Analysis Centre of Canada

Janet DiFrancesco

Right now FINTRAC is implementing a number of changes related to Bill C-25. We still have a number of changes coming into play in terms of new reporting sectors, of new powers under the proposed AMPs regime, as well as in terms of the MSB registry.

So there are a number of things that are still being implemented. At this point in time, it may be too soon to assess what more could be done, but certainly it's something we'll be looking to in the future.

March 3rd, 2008 / 3:55 p.m.
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Assistant Director, Macro-Analysis and Integration, Operations Sector, Financial Transactions and Reports Analysis Centre of Canada

Janet DiFrancesco

What I can tell you is that under Bill C-25 there were some important changes to both what FINTRAC can disclose and to the Income Tax Act.

I don't know whether one of my colleagues from the Department of Finance wants to address that any further. But certainly from our perspective we can disclose, I think, the information CRA needs to further their investigations.

They are providing us with more information, and I think we have a working relationship that is growing.

Tackling Violent Crime ActGovernment Orders

October 26th, 2007 / 10:35 a.m.
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Liberal

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.

March 29th, 2007 / 12:20 p.m.
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Liberal

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

It's just to go over what I'm asking for in the main estimates. That book is fine. Our job is to study just one or two aspects. In this case, we're studying the estimates that the Canadian International Trade Tribunal and FINTRAC are requesting. That's fine, but they have to come before us and give us the details that they gave Treasury Board.

It's not up to Treasury Board to reprint them. They have to provide us with that. I know FINTRAC provides us with a detailed analysis in their annual report. The Canadian tribunal is not as detailed, if I'm not mistaken.

The other thing, too, is that there's a weakness on our part, because we haven't seen your annual report. But we saw FINTRAC's, because when we were studying Bill C-25, we went over the whole system. That's why I didn't pick on you guys, but the next time around, if we haven't seen you in a year, I'm going to.

So that's part of the weakness, but the idea is that when you come before these committees, you should be prepared. At least with FINTRAC we got speaking notes. With the Canadian tribunal, we didn't get any speaking notes.

March 29th, 2007 / 12:15 p.m.
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Acting Deputy Director, Strategies and Partnerships, Department of Finance, Financial Transactions and Reports Analysis Centre of Canada

Mark Potter

It would be more a case of ensuring that some of the provisions in Bill C-25 related to client ID, to knowing your client--due diligence measures--are done. That is a requirement flowing from Bill C-25. That's a new element in the regime, and that's one of the key things they'd be looking at and auditing as law societies, to ensure that this is actually happening.

March 29th, 2007 / 12:05 p.m.
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Acting Deputy Director, Strategies and Partnerships, Department of Finance, Financial Transactions and Reports Analysis Centre of Canada

Mark Potter

Thank you.

I can comment briefly, but I think the best place to pose your questions would be the Department of Finance. They have the policy lead for the regime, and I understand they will be here in the next three or four weeks, so that would be a good opportunity to discuss this matter with them.

I think, as some of you may be aware, through Bill C-25, lawyers will be included. They won't be included in precisely the same way as other reporting entities, because we do have to be sensitive to the solicitor-client privilege aspect. So for example, they will not be filing reports, and there will be a degree of self-regulation by the law societies with respect to the provisions that will be put in place. We will be working with the law societies, along with the Department of Finance, to assure ourselves that they are respecting the provisions in Bill C-25.

March 29th, 2007 / 12:05 p.m.
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Acting Deputy Director, Strategies and Partnerships, Department of Finance, Financial Transactions and Reports Analysis Centre of Canada

Mark Potter

I think we've always been, for some time now, among the world leaders. I think the standards by the international FATF are evolving because the challenge is evolving. So all of us, as an international community, need to adjust to the new standards and put them in place.

I think what Bill C-25 will do is very much keep us among the very leading agencies like ours around the world. We are also going through an evaluation process by the FATF, which is a very comprehensive examination of where we're at, and I think that will also provide some useful guidance to us in Canada as to further areas we need to develop once we come back to Parliament for another five-year review, or changes in advance of that, if required.

So there are a number of processes in place to maintain our leadership.

March 29th, 2007 / 12:05 p.m.
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Conservative

Dean Del Mastro Conservative Peterborough, ON

I have a bit of a supplementary to that. Concerning Bill C-25, which we passed a little while ago, we thought that in passing that bill it would assist Canada in becoming a world leader in tracking money laundering and terrorist financing. Your position, therefore, is that by providing this additional funding, this will assist us in putting FINTRAC as a world leader, or certainly amongst world leaders on this front.

March 29th, 2007 / 11:55 a.m.
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Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Thank you, Mr. Chairman.

I have a few questions for FINTRAC. During consideration of Bill C-25, we met with you to talk about changes to be made to new roles and responsibilities. I asked many questions, and was particularly interested in the mechanism used to protect private information. You gave a very good explanation of how the mechanism works. You analyze statements provided on a voluntary basis, which are then reviewed by a committee. If the committee decides that it is warranted, it sends complementary information to police services who provide intelligence.

I had also asked if there was a verification mechanism. This would be a good protection mechanism. I was told that there was no follow-up as to whether or not it was necessary to review cases and check if the decision to disclose information was a good one or not.

Since then, have you taken any measures to come up with a follow-up mechanism to make sure that past disclosures were carried out properly?

March 29th, 2007 / 11:35 a.m.
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Acting Deputy Director, Strategies and Partnerships, Department of Finance, Financial Transactions and Reports Analysis Centre of Canada

Mark Potter

I'll start briefly by recalling the three broad areas, both for this next fiscal year and as we go forward. The three broad areas are: general increases in workload, the number of reports we've been receiving, the number of cases we've been disclosing, and so on.

The second is the implementation of Bill C-25. As you well know, there are a number of measures there, some fairly big ticket items like an administrative monetary penalty system and an MSB registry, along with a number of others that we'll be in the process of implementing over the next two or three years.

The final one is the contribution to the Egmont Group.

We can certainly give you more detail on those areas, if that's helpful, either now or later.

March 29th, 2007 / 11:10 a.m.
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Mark Potter Acting Deputy Director, Strategies and Partnerships, Department of Finance, Financial Transactions and Reports Analysis Centre of Canada

Thank you very much.

Good morning, Mr. Chairman and committee members. We are pleased to appear before this committee again, to provide an update on FINTRAC's operations and our main estimates.

My name is Mark Potter. I'm the acting deputy director of strategies and partnerships for FINTRAC. Joining me today are my colleagues Alfred Tsang, our assistant director of finance and administration; and Janet Di Francesco, our assistant director of macroanalysis and integration.

I would like to make a brief opening statement.

FINTRAC was created in 2000 to facilitate the detection and deterrence of money laundering and terrorist activity financing in Canada and around the world. FINTRAC is an independent agency reporting to the Minister of Finance, who is accountable to Parliament for the activities of the centre.

We are Canada's financial intelligence unit, or FIU. Our mandate is to receive financial transactions and other information, analyze it, and when appropriate, provide financial intelligence to law enforcement and other investigative agencies, as well as foreign financial intelligence units.

FINTRAC produces financial intelligence that assists the investigation and prosecution of money laundering and terrorist activity financing offences and other threats to the security of Canada. These investigations are carried out by national, provincial, and municipal law enforcement agencies and the Canadian Security Intelligence Service. FINTRAC is an analytic, not an investigative body. FINTRAC sits at the front end of the process, making a contribution of intelligence that assists investigators.

FINTRAC has been very active in the production of case disclosures of financial intelligence, producing 168 such cases in 2005-06, with a total value of just over $5 billion. This financial intelligence is providing value to a growing number of investigations. With each successive year, we have increased our output of these disclosures of suspected money laundering and terrorist activity financing cases.

Our governing legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, places obligations on certain individuals and entities to keep records, identify their clients, and report certain financial transactions to us.

These reporting entities, as we call them, include banks, credit unions, accountants, casinos, money services businesses, foreign exchange dealers, securities dealers, life insurance companies, and real estate brokers and agents.

Recently, as you know, Parliament amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act through Bill C-25. From FINTRAC's perspective, there are three key thrusts to the legislative amendments. Bill C-25 brings additional business sectors under the ambit of the legislation and regulations, such as lawyers and dealers in precious metals and stones. Their inclusion broadens and strengthens Canada's efforts to combat money laundering and terrorist activity financing.

Secondly, the amendments will augment the deterrence component of the regime by creating a registry, requiring money service businesses to register with FINTRAC and establishing a graduated system of administrative monetary penalties. This will greatly strengthen both compliance with the law and the general deterrence of money laundering and terrorist activity financing.

Third, Bill C-25 will make it possible to enrich the intelligence product that FINTRAC can disclose to law enforcement and national security agencies by including some additional information in our disclosures while scrupulously protecting the privacy rights of Canadians. This responds to the needs of law enforcement to make FINTRAC's core product even more useful to them.

Adjusting to these legislative changes and successfully implementing them will remain a focus for FINTRAC for the year ahead and beyond.

I'll now turn to our main estimates. In our main estimates, FINTRAC is requesting $44.9 million for 2007-08. This represents a substantial increase of $13.8 million over last year's main estimates. The increase for the next few years is required primarily for three reasons: workload pressures; the implementation of Bill C-25 changes; and contributions to the Egmont Group.

Our work has steadily increased since we began our operations about six years ago. This is evident in the significant year-over-year growth in transaction reports received, in our output of financial intelligence, and in the demand from law enforcement and CSIS for our product.

Law enforcement agencies in Canada and financial intelligence agencies in other countries are looking to FINTRAC for more and better financial intelligence to augment their work. FINTRAC is responding to this demand with the production of case disclosures of financial intelligence that assists individual investigations, as well as strategic financial intelligence that takes a longer-term view of areas that may have vulnerability to money laundering and terrorist activity financing.

The implementation of Bill C-25 changes will also expand our workload and require the development and implementation of significant new functions, such as a registry of money services businesses, as well as an administrative monetary penalty system. The operation of these two elements is still being defined in greater detail through regulations, based on ongoing research and consultation. We will keep parliamentarians abreast of our progress in implementing these and other elements of Bill C-25 through our regular reporting documents such as our annual report, and through future committee appearances.

Money laundering and terrorist activity financing are transnational phenomena, and cooperation internationally is essential to any successful effort to curb them. The Egmont Group is an international body comprising the financial intelligence units of more than a hundred countries. In 2006, the Egmont Group selected Toronto as the site of its permanent secretariat for its global operations. This is an achievement for Canada, and an opportunity to help lead the global fight against money laundering and terrorist activity financing. It is the funding of this permanent secretariat that is identified in these main estimates for a contribution of $1.8 million in 2007-08.

As for FINTRAC's overall budget, it is relatively straightforward. It largely comprises two main elements: staff costs and other expenditures in support of our operations, which are very technology-intensive.

FINTRAC currently employs 230 staff, located here in Ottawa as well as in three small regional offices--one in Montreal, one in Toronto, and one in Vancouver. That figure is expected to rise to about 270 staff next year. In terms of other expenditures, they are mainly for information technology, security, and accommodation.

We believe FINTRAC has made and will continue to make a significant contribution, along with our partners in law enforcement and national security, to combating money laundering and terrorist activity financing. This investment in FINTRAC is an investment in the safety and security of Canadians.

I will conclude my presentation here, and we will be pleased to answer any questions you may have.

Thank you.

Bank ActGovernment Orders

February 27th, 2007 / 11:50 a.m.
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Liberal

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.

February 20th, 2007 / 7:30 p.m.
See context

Fundy Royal New Brunswick

Conservative

Rob Moore ConservativeParliamentary 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.