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.

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am pleased to participate in the debate on Bill C-25.

A number of members, when they hear money laundering, probably will hearken back to discussions they have had on the subject, whether they be with regard to the underground economy or organized crime. As a matter of fact, I just received a report from the Ontario Construction Secretariat, which calculated that approximately $1.3 billion of federal and provincial government revenue was forgone as a consequence of the underground economic activity within the construction industry.

It is an issue which has been around for some time. A lot of people probably do not know how money laundering works. If someone is paid under the table, the money is received from somewhere but it is not recorded on the books because that money has to be paid out to someone else. It is not reported, nor is a T4 slip issued, nor is any kind of other payment indicated so that paying taxes on it can be avoided.

When 9/11 occurred all of a sudden this entire area, including organized crime, expanded into an enormous consideration. It led to the development of the Anti-terrorism Act. It also led to the creation of a significant variety of jurisdictional bodies and government bodies to look into the aspects of financing terrorists.

I wanted to give credit to the Senate of Canada, which we do not do often enough in this place. In May and June of this year, the Senate conducted a special review and provided an interim report on the subject matter now before us. The report is called, “Stemming the Flow of Illicit Money: A Priority for Canada”. It is a parliamentary review of the proceeds of crime, namely money laundering and the terrorist financing act.

Usually when I look at a report, I look at the beginning and the end of it to find out why the issue was raised, and so what. In looking at the introduction, there was a paragraph which I thought properly characterized the reason we were looking at this. It states:

While witnesses were not able to provide the Committee with consistent or precise estimates of the amount of money that is being laundered each year or the costs of money laundering and terrorist activity financing, we believe that it is probably in the tens of billions of dollars. The human and societal costs associated with money laundering and terrorist activity financing must also be remembered, since the costs are not simply economic. Clearly, the costs are significant, and we must ensure that Canada has the best possible anti-money laundering and anti-terrorist financing regime in place, consistent with the protection of privacy, for the sake of Canadians, the sake of citizens worldwide and the sake of legitimate commerce.

That one introductory paragraph really encapsulates many of the details which hon. members have spoken about in the debate thus far.

I said at the outset that I look at the beginning and the end of a report. I wanted to look quickly also at the conclusion. I can see from the list of witnesses that this touches a broad range of areas. Finance Canada, Justice Canada, and Public Safety and Emergency Preparedness Canada appeared before the committee. The Superintendent of Financial Institutions was involved, as was the Financial Transactions Reports Analysis Centre of Canada, commonly known as FINTRAC. In the speeches on this bill we are going to hear that name. It is an institution which deals with financial transactions and reports. The Royal Canadian Mounted Police were involved, as were the Canada Border Services Agency, the Office of the Privacy Commissioner, the Office of the Information Commissioner of Canada, the Canadian Bankers Association, the Certified General Accountants Association, the Canadian Life and Health Insurance Association, and the Federation of Law Societies of Canada.

Canadians should know that when a study is done in the House or in the Senate, we have the tools to call some of the most important people involved to provide some input. They will be able to tell us not only where we are and how things have evolved, but also how to respond because terrorists and those who finance terrorist activity are like viruses in that they tend to mutate. In order to be resistant, viruses will change into other things. They become moving targets. Terrorists and those who finance terrorist activity also have the tendency to continue to be moving targets. It is vital that we know the techniques and the tendencies that occur within terrorist financing. On behalf of the Parliament of Canada, the Senate has done a very important service by consulting and issuing its report.

I will get to some of the recommendations that were made, but I want to read into the record the Senate's conclusion in this excellent report. Some members may want to include it in their householders. This is a very good report. It lets Canadians know that these are significantly important issues for parliamentarians to deal with on their behalf. It says:

As a global partner in making the world safer and more secure, and as a member of various international fora, Canada's anti-money laundering and anti-terrorist financing regime must meet not only our domestic needs but also reasonable international obligations. Crimes that underlie money laundering and terrorist activity financing--including fraud, embezzlement, drug trafficking, and trade in arms--have harmful human, societal and economic effects, with domestic and international consequences.

The Committee believes that Canada should be an example worldwide--particularly as Canada assumed the presidency of the Financial Action Task Force on Money Laundering in July 2006 and as we undergo a mutual evaluation review by the Task Force in 2007--

It says also:

This regime must respect several principles: the appropriate entities and individuals must be required to report; the appropriate types and values of financial transactions must be reported; and the appropriate balance must continue to exist between providing law enforcement and other agencies with the information they need to do their jobs effectively and efficiently on the one hand, and ensuring that the privacy rights of Canadians are protected on the other hand.

Members have heard this before. When do privacy issues relating to Canadians have to be balanced with our need to deal with problems like terrorist financing? Places have been identified where it can cause some difficulties. The Senate committee made some recommendations in its report to deal with this balancing act that they have to go through. These recommendations are not in the report itself, but are on the website. I will mention some of the key recommendations here.

The first recommendation was the introduction of a reporting requirement for dealers of precious metals, stones and jewellery when transactions are greater than $10,000. The RCMP pointed out that as other avenues become less attractive for money laundering, avenues such as precious metals, stones and jewellery are becoming more attractive. We have always been addressing cash, but other commodities of value are becoming part of this whole activity.

The second recommendation says that there has to be an increase in two-way information sharing. We have heard this often with regard to other areas, even with regard to security on Parliament Hill between the Senate and the House of Commons. In this regard, the committee suggested that FINTRAC should not only be able to disclose more information to government agencies such as the RCMP, but also should provide feedback to the disclosing entities about the usefulness of the information they send to FINTRAC. This was also a recommendation in the 2004 Auditor General's report.

Another recommendation of the Senate committee was that white label ATM machines work with law enforcement and the industry to address the potential money laundering risks associated with white label ATMs, i.e. machines that are not owned or operated by banks. The concerns with these ATMs arise from the possibility for owners or operators to self-load the machine with cash. This is an opportunity for laundering money.

The fourth recommendation was that FINTRAC only disclose Canadians' personal information to authorities in countries which have privacy legislation that is consistent with the Privacy Act in Canada. We are looking at almost like a reciprocity or the same or similar protections in countries that we deal with.

Recommendation 5 was that we increase the ability of Parliament to scrutinize FINTRAC. Currently it is responsible through the Minister of Finance and delivers an annual report in the fall. This is too important to wait for an annual report. We should have the scrutiny process going on more frequently to engage Parliament more fully.

I would think that gives a pretty good idea of the issue we are dealing with. This particular bill actually had its genesis in the last Parliament. The Liberal government started to put this together and now it is before us. Of course, I do not think there is any question in this place that the bill is a significant bill that should get prompt scrutiny by the House of Commons and in the other place so that these laws are in place and we can do the job properly.

In looking at some of the details, I note that Canada's financial intelligence agency reported $5 billion worth of suspected money laundering and financing of terrorist activities last year. That total is more than double what it was a year earlier and $256 million of that was tied to suspected terrorist activities. We have a significant growth. That is why it is important that we deal with this quickly. This is becoming more and more sophisticated. It is a moving target. Our legislation and the tools available to our financial institutions, our government agencies, and the policing authorities and so on, have to be as flexible as possible, again keeping that balance or that respect for the privacy rights of Canadians.

Of the 143 reports FINTRAC made to law enforcement agencies, there have been no convictions. The Auditor General in 2004 suggested that allowing more information to flow to law enforcement authorities would help in investigating these suspicious activities, and the bill before us, Bill C-25, provides those powers. Members probably will be a little concerned to note that there were 143 reports by FINTRAC of suspicious activity and not one conviction.

The bill before us, Bill C-25, has seven broad objectives. I am not going to get a chance to go into all of them, but perhaps I can highlight them.

The first is to enhance client identification and record keeping measures for financial institutions and intermediaries.

The second is the reporting of attempted suspicious transactions. Just to amplify on that, I will note that all reporting entities currently report suspicious transactions, but they would be required to report suspicious attempted transactions. There is a subtle difference, but the experts who were before the committee seem to think that this will give more latitude because it will provide more information.

The third area is the registration regime for money services businesses, referred to as MSBs, and foreign exchange dealers. The proposed amendments would create a federal registration system for individuals and entities engaged in money services businesses or foreign exchange.

The fourth area in the bill is enhancing the information contained in the FINTRAC disclosures. This was recommended in 2004 by the Auditor General. At the urging of law enforcement agencies, the proposed amendments enhance the information FINTRAC can disclose to law enforcement and security agencies on suspicions of money laundering or terrorist financing.

The fifth area relates to creating an administrative and monetary penalties regime. Currently the act only allows for serious criminal penalties if the act is contravened. This was also a recommendation of the Auditor General.

The sixth area relates to reintroducing requirements for legal counsel. The government is working with the legal profession, including notaries in Quebec, to finalize requirements for client identification, record keeping and internal compliance procedures for legal counsel when they act as financial intermediaries. This bill removes the obligation for legal counsel to file suspicious transaction reports or other prescribed transaction reports.

The seventh area relates to expanding the sharing of information between federal departments and agencies, including the Canada Border Services Agency, the RCMP, et cetera.

Having reviewed these, it is the view of those who have prepared the bill and who are speaking today on behalf of the bill that banks and financial institutions should be supportive of this bill. It does not encroach on or somehow provide any significant burden that will not help us all, as vested stakeholders, with the opportunity to protect assets and indeed to protect Canadians. The Liberal caucus certainly will be supporting Bill C-25 when the vote takes place at second reading and hopes that it will receive prompt activity.

I will close by reiterating a couple of points about the concerns Liberals have with regard to the bill, which I believe can be addressed by the committee. The first is whether the scope of the bill should be broadened to include not only cash but other commodities like jewellery, diamonds, et cetera. The bill does not provide that. The Senate committee did, however, recommend this. I believe it probably should be seriously considered by the finance committee when it has the opportunity to address Bill C-25. It should take to heart the testimony before the Senate committee and of course the substance of the recommendation it made in regard to non-cash commodities.

The second issue of concern is that of solicitor-client privilege and whether the invocation of that privilege has not been so strong in the bill that we are not availing ourselves of information that the legal profession has and which could help society track down terrorists and money launderers. This is a very complicated area. It is an area in which I do not have expertise, but as we know, parliamentarians cannot be experts in all things, although we certainly have the tools and resources to bring them forward through expert witnesses in committee, who can advise us on whether these are the kinds of things we can do without compromising the privacy principles we have embraced in our privacy legislation.

Finally, probably the most fundamental item of concern is the balance between, on the one hand, the need to get tough and track down terrorists and money launderers, and, on the other hand, the need to protect the rights of the individual and privacy. I believe the balance has been undone by this bill and that the defence of privacy issues will need to be correspondingly strengthened.

Let me repeat that. It appears that the bill may have sided a little too heavily on getting after terrorist financing, and it may have either inadvertent or unintended consequences where in fact privacy principles may have been pushed to the point where it may be inappropriate. We have to examine that much more carefully. It is an important principle and I hope all hon. members will agree. We have to make sure that this balance is appropriate. We have to make sure that we use all the tools and resources we have and the experts we have to come before the parliamentary committee to give us the information we need so that, in accordance with our prayer, we make good laws and wise decisions.

The House resumed from October 20 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 the second time and referred to a committee.

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, I appreciate the context in which the member makes her point. Part of the reason we are updating and presenting Bill C-25 is to ensure that we take into account the fact that times change, people change, organizations change.

What criminals want to do is ensure they stay one or, as far as criminals are concerned, two steps ahead of the law.

To get directly at the question, the structure of the bill and how those four pillars enhance it pay particular attention to the member's concerns. They enhance what we are already doing. Since 9/11 and the experience we have gone through, it is incumbent upon us, the House of Commons for the country of Canada, to ensure that we continue to update and ensure that we stay ahead of those who want to and who do criminal activities and laundering money in our country.

[Rick Dykstra, Conservative, St. Catharines, ON]

Mr. Speaker, I am honoured to speak today on Bill C-25. The bill will strengthen the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to ensure that Canada continues to be a global leader in combatting organized crime and terrorist financing. This is just another example of Canada taking the threat of terrorism seriously.

Once passed by Parliament, these changes will make Canada's overall regime consistent with international standards. The bill targets either the financial rewards from underlying crimes, such as drug dealing, prostitution and extortion, or by stopping the flow of funds to terrorist groups.

Money laundering and the financing of terrorist activities are serious crimes that affect all Canadians. Criminals are constantly changing their tactics and finding new ways to avoid and evade the law. Therefore, we need to make laws that will keep up with criminals and, in fact, stay ahead of them.

The National Post has reported that Canada has long been a fundraising base for international terrorist groups, from the IRA and Hezbollah to the Iranian MEK. This can simply not continue.

The background on this is that the foundation of this tax regime was originally set out in the Proceeds of Crime (Money Laundering) Act and then adapted to the changing global reality of terrorism. It was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in 2001.

I would like to touch on the government's four key amendments that it has set out to accomplish the updating of what it needs to do.

First, we are enhancing information sharing between the Financial Transactions and Reports Analysis Centre of Canada, more commonly known as FINTRAC, law enforcement and other domestic and international agencies. In fact, this group reports regularly through the House's finance committee and did so just this past month.

Second, we are creating a registry for money service businesses. This really speaks to ensuring we have some accountability within that registry.

Third, we are enabling legislation for enhanced client identification measures. We need to ensure we know who we are dealing with.

Fourth, we are creating an administrative and monetary penalty system to better enforce compliance with the act.

There is a need for why we need to do it. Financial Transactions and Reports Analysis Centre of Canada reported in early October, as I mentioned, to the finance committee that terrorist groups funnelled an estimated $256 million through our country last year. This is up from $180 million the year before and $70 million the year before that. We are starting to identify and the bill enhances what needs to be done.

There are up to 34 terrorist financing networks operating within the country. Another $4.75 billion was laundered by crime groups, which is up from the $2 billion in 2005. Recently there was the case of four Canadians with links to the University of Waterloo accused of funnelling money to the Tamil Tigers. This shows that Canada has a responsibility to its international partners to continue to crack down on terrorist financing. Canada will not be a safe haven for those who support terror.

How did we come to this legislation? As a founding member of the Financial Action Task Force, we are committed to implementing its regulations, including new ones released in 2003, which require this update to be made. Canada has committed to implementing the 40 recommendations of the FATF on money laundering and 9 special recommendations on terrorist financing. The bill brings our standards in line with the Auditor General's recommendations of 2004 and the Treasury Board report of 2004.

Finally, it also fulfills demands of the interim report of the Senate committee on banking to implement tougher measures on money laundering and terrorist financing.

In Canada there is a need to balance increased vigilance and monitoring with the fundamental need to protect the privacy of Canadian citizens. This is an issue we take very seriously in Canada.

As we did with this legislation, we will continue to consult widely with Canadians. In the future, we need to ensure that a better system does not come at a price of a loss of privacy for all of our citizens.

As a prelude to the bill, the Department of Finance issued a consultation paper entitled, “Enhancing Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime” in June 2005. Over 50 submissions from stakeholders were received followed by further face to face consultations.

As a result, the proposed bill contains amendments that seek to address industry concerns and minimize the compliance burden by tailoring wherever possible proposed new requirements to existing business practices.

The proposed legislation serves to meet Canada's international commitments to combat money laundering and terrorist financing while ensuring that our domestic regime remains robust and up to date.

Those who benefit from crime and steal hundreds of millions of dollars should not be allowed to drive armoured vehicles full of money and waltz over to their local banks. That is the last thing Canadians want in their country.

Criminals who are laundering money should do one thing. They should stew in jail about it. The government and its law and order package and its agenda will help prevent organized crime and terrorism from organizing in any of our communities.

Speaking to that, I come from a riding that is very close to three access points on the border. One of the commitments that we have made, both before the election and since we have taken government, is to ensure that security, whether it be RCMP or our security officers at the border, is funded, prepared and supported in order to ensure that Canadians, both in Niagara and across the country, are safe.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I thank my colleague from Winnipeg North for sharing her time with me so I too can enter into the debate on Bill C-25 dealing with money laundering and the funding of terrorists, a very pressing issue.

I am glad Parliament is seized of the issue because it is something my constituents and people I know have raised with me, especially stemming from the recent information we have had. We were horrified to learn that research has recently identified that $256 million worth of illegal funds have flowed through Canada to terrorist groups. That is just what we have been able to identify and that we know about for a fact. No one is disputing those facts either, so we can attest to the veracity of those figures. Something has to be done urgently.

Although my colleague has identified some reservations about the bill, I support aspects of the bill, one detail of which I would like to dwell on somewhat, and that is the issue that the proceeds of crime could be seized from someone who has been convicted of a crime. If someone is part of an illegal organization, whether that is an illegal criminal organization or an illegal terrorist organization, the government should have the right to demand to know if the things that person owns are the proceeds of crime. If that person cannot demonstrate by a reverse onus that those items were purchased with other resources, then the government should be able to seize those proceeds of crime and use that money to further resource the criminal investigation of other criminals and terrorists.

That is a good idea and it is a bold idea. The NDP government in my home province of Manitoba is seeking to introduce the very same concept. Somehow we need to make it abundantly clear that crime does not pay. Law enforcement officers have conceded to the fact that under the current regime crime does pay because the burden of proof on the government, the courts and on the police is very onerous at times. Even though we know that some person is up to no good and has no other visible means of support, it is tough to prove that the luxury home in which the person lives or the luxury cars in the driveway are in fact the proceeds of crime.

I say that we should give more tools to the law enforcement agencies and act on the side of the Canadian people in this case and shift that burden of proof onto the crooks. They should be telling us how they bought that luxury home when they have not had a job in 20 years. If a rich uncle died and left it in his will, then they should show us the will. If they cannot show us any other visible means of support, then we want to know how they are able to live in a mansion with all these luxury cars in the garage. We should seize those assets, send the message that crime does not pay, sell those assets and give them back to the law enforcement agencies so they can go out and bust more criminals. That is a good idea.

I should point out that this would be law in Manitoba today were it not for the two solitary members of the Liberal Party in the Manitoba legislature who blocked and opposed the legislation. I do not know what problem the Liberals have with this. I do not think it is any great infringement on civil rights to ask the legitimate question of where a person received the money to pay for the luxury home. If that simple question cannot be answered, then we should seize it.

I have a few other points to raise and I will do so in a way that I hope does not inflame the passions of the Liberals opposite. This idea of offshore tax havens has a broader context than just wholesale tax avoidance. The same logic that allowed these offshore tax havens to flourish gives licence or gives opportunity for people to funnel ill-gotten gains with less ability to track offshore as well.

In the context of the bill, as we go through Bill C-25 and its goals and objectives of limiting money laundering and trying to curb the financing of terrorist activity, we should be revisiting the tax treaties that have allowed Canadian businesses to avoid taxes on a rampant basis. Whatever tax regime we put in place, let us make it fair, let us make it balanced and let us make it favourable to business if we like, but at least let us make businesses pay their fair share once we have established what that rate of taxation shall be.

It is such a contradiction to hear the Conservative government say that it will cut back on $1 billion worth of social spending, but then show this wilful blindness to $7 billion worth of lost tax revenue by allowing, what I call, tax fugitives to avoid paying their fair share of taxes in our country.

There is a polite term for it, and I know my colleague from the Liberal Party is an economist. The polite term is tax motivated expatriation. The street name for it is sleazy, tax cheating loophole. There is only one place we can still do it and it just happens to be where our former prime minister had his companies, his shell companies, his dummy companies, established so he could avoid paying his fair share of taxes in Canada. It is appalling. A Canadian prime minister should be proud to fly the Canadian flag on his ships and to pay his taxes in our country. I cannot understand the thought process that would lead him to believe otherwise. It is beyond comprehension.

My colleague from the Liberal Party is helping me grope for the words to put some kind of definition to this appalling practice of tax avoidance.

The logic, though, about the proceeds of crime element is that any person convicted of an indictable offence at the direction of or in association with any criminal organization must demonstrate that every item of property owned by that person is not the proceeds of crime. That is just common sense to me. That is a burden with which no one in this room would have any difficulty.

If I were driving a luxury car that cost $100,000 and I had no visible means of support for the last X number of years, it is not unreasonable to ask me where I got that car. If I cannot say that I either inherited the money, or I found the money, or I dug it up in the cabbage patch or whatever story, if I am not believed, if I do not meet the test, that should be seized from me. That sends a profound message throughout the community of those who would break the law for their own personal advantage or those who would break the law in order to fund terrorism, which is even worse, that crime does not pay, at least not in Canada. I do not view that as heavy-handed or an infringement of a person's civil rights whatsoever.

Bill C-25 gives us an opportunity to finish a job that was started in previous parliaments. I should recognize and pay tribute to the work done by my colleague from the Bloc Quebecois, Richard Marceau, who is no longer an MP. He managed to get this concept into the House of Commons in the 38th Parliament through a private member's bill. I believe, even prior to that, a Canadian Alliance member, Mr. Paul Forseth, a former colleague of ours, introduced this notion into the 37th Parliament.

It has taken approximately 10 years for us to mature in our thinking about this concept or to be able to embrace this concept and not be threatened or feel afraid of this very worthwhile idea.

When Bill C-25 deals with the proceeds of crime, it also deals with issues pertaining to the Canada Border Services Agency, which permits the new centre of financial transactions and report analysis, FINTRAC, to exchange compliance related information with its foreign counterpart. That, too, is a necessary and commonplace measure if we are to curb the international activity that does threaten our national security. That as well is a concept that we should be able to embrace and not feel threatened by.

My colleague, the member for Winnipeg North, cited some of the reservations NDP members have about Bill C-25. To summarize our view of it, we have to give law enforcement agencies the tools to do their jobs to make the point that crime does not pay in Canada to fund terrorism or self-enrichment.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Speaker, I thank the House for allowing me to split my time with the member for Winnipeg Centre. I see that some members were in a bit of a quandary as to whom they would rather hear. Given that we are in neighbouring constituencies, we have the common characteristic of speaking vociferously and at length about issues of concern to us.

I am pleased to speak to second reading of Bill C-25. Anyone watching this debate will wonder what the debate is about. We are using a lot of acronyms, short forms and technical language. Really this issue comes down to something that is very important for all of us: money laundering. Often we think of that in terms of criminal activity and organized crime.

I am glad that the Bloc raised another dimension to this whole issue. It is pretty hard to deal with questions of money laundering and money lost to governments and to our revenue source without dealing with tax evasion, without dealing with the presence in our society of tax havens, something that has been a problem throughout the last decade of Liberal rule and now does not seem to be on the agenda of the present Conservatives. That is a matter with which we must deal.

We cannot continue to allow Canadians' hard-earned dollars to leave the country by way of tax loopholes and tax havens. I would hope that the government and the Minister of Finance would be prepared to come back to this chamber with some more definitive answers to questions we have been raising for a long time about why the former prime minister, the member for LaSalle—Émard, closed some tax loopholes and tax havens but he did not close the Barbados. He did not choose to definitively deal with the issue. Instead, he provided apparently avenues for some of his numbered companies to continue transactions through such tax havens. He continued to find a way through his steamship company to change the flags conveniently in order to avoid paying taxes and to avoid fulfilling his obligations according to the standards of this country on the environment, workplace safety and proper compensation and income.

Bill C-25 is an attempt to deal with some very serious flaws in our ability as a country to track and deal with proceeds of crime, money laundering and terrorist financing. This issue has been before us for a long time. The Auditor General has been talking about it for a good period of time, specifically since November 2004 when she put forward a report on implementation of the national initiative to combat money laundering. At that time she said that we were far from being able to deal with this problem effectively and she recommended a number of changes.

It is a big problem. Billions of dollars are involved. We are talking about illegal activities and money that could be used to promote illegal activities in this country and terrorist endeavours around the world. It is something we have to address and we need to do it expeditiously.

The Auditor General's report is a very valuable source for analyzing the bill and for determining whether or not Bill C-25 is truly in line with the Auditor General's recommendations. As a side note, it is important to note that the government says that it has respected the wishes of the Auditor General and followed the recommendations through the introduction of this legislation. We will be doing further study and research to ensure that is the case. During the committee process we will be questioning witnesses along those lines.

In addition to that significant study, we now have the benefit of a major study just completed by the Senate. It put a report out this month entitled “Stemming the Flow of Illicit Money: A Priority for Canada”. The study was coordinated by the Hon. Jerry Grafstein and the Hon. David Angus and it is comprehensive look at the issues of money laundering and terrorist financing. We need to know whether or not this bill actually respects and follows some of the recommendations from this report as well.

I want to note that in the conclusion of this report it states that Canada, as a global partner in making the world safer and more secure, must ensure that our anti-money laundering and anti-terrorist financing regime is in line with international standards and obligations.

The study goes on to say:

Crimes that underlie money laundering and terrorist activity financing--including fraud, embezzlement, drug trafficking and trade in arms – have harmful human, societal and economic effects, with domestic and international consequences.

That really sets the context for what we are hoping to achieve with this legislation and why we need to get this bill to committee. We need to begin that thorough scrutiny and thorough analysis to see whether it is in line with the Auditor General's wishes and whether it reflects some of the recommendations from the Stemming the Flow report.

We are prepared to give support to the bill in principle. It may need some changes as we go through it but we certainly believe in its necessity and that it should be studied at committee.

However, a couple of concerns have been identified and I want to put them on the record. First, let me mention the questions raised by Democracy Watch in a release put out on October 12. This important organization, which has been an incredible watchdog for the integrity of our institutions from a democratic point of view, has called on the federal Minister of Finance to deal with a gap in the bill before us. It wants us to add senior Canadian politicians and government officials to the bank account watch list of the Financial Transactions and Reports Analysis Centre of Canada. It says that this change is recommended by the international standard setting task force, the financial action task force and, therefore, if we are bringing our legislation in line with this task force, then surely we must address this particular aspect.

Democracy Watch also says that it has been recommended by article 52 of the UN Convention Against Corruption. It seems that there might be a flaw in the bill that we need to look at very seriously and determine how to amend the bill to bring it in line with these international obligations.

Specifically, I should probably point out that article 52 of the UN Convention Against Corruption states the following:

...each State Party shall take such measures as may be necessary, in accordance with its domestic law, to require financial institutions within its jurisdiction to...conduct enhanced scrutiny of accounts sought or maintained by or on behalf of individuals who are, or have been, entrusted with prominent public functions and their family members and close associates.

Perhaps the government is leery about going this far, ensuring that actual politicians are included in this part of the legislation.

I would conclude by saying that there are many issues to discuss. I thank the House for its attention to this matter.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, perhaps my colleague from Hull—Aylmer wanted to ensure that I had a good audience for my speech. Then again, perhaps he asked for a quorum call because I was talking about the Liberal Party, which claimed to be the great defender of citizens' interests because of its fight to protect personal information even though it failed at the task when it was in power.

Under that party's mandate, more personal information than ever ended up in foreign hands, largely because Canadian banks were allowed to do business with affiliates in the United States. Laws protecting personal information are not the same in the United States as they are in Canada.

Honest citizens were sometimes harassed by foreign parties trying to sell them all kinds of products, especially banking services. Canadian banks allowed their American affiliates to make personal information available. This all happened on the Liberals' watch. I hope that the member for Hull—Aylmer wanted more people to hear my speech. I hope it was not because of the part where I said how poorly the Liberal government performed when it was in power.

The Bloc Québécois will support Bill C-25 in order to protect personal information and privacy. Quebeckers and Canadians can count on members of the Bloc Québécois to defend and protect their interests in committee by having the Privacy Commissioner and the Access to Information Commissioner appear before the committee to explain what is good about the bill and what should be added in order to protect personal information. It is all very well to take action against money laundering, terrorist activities and organized crime, but we must also protect honest citizens who could end up under investigation for nothing.

I will provide some background, since Bill C-25 did not come out of nowhere. Despite the Conservative government's good faith, it did not invent the wheel. One thing is for certain, the Conservatives did not invent Kyoto. Everyone agrees on that.

Bill C-25 is a successor to Bill C-22, which was introduced by the Liberal government and broadened the coverage of the act. Bill C-25 amends Bill C-22. In other words, Bill C-22 made it mandatory for federally regulated financial institutions, currency exchange businesses, casinos and other intermediaries to report suspicious financial transactions. Suspicious financial transactions are cash deposits exceeding $7,500.

The former government's Bill C-22 applied to financial institutions, currency exchange businesses, casinos and other financial intermediaries. The Conservative government is broadening this coverage and therefore increasing the responsibility of all agencies which, in addition to dealing in securities, also deal in other financial instruments, and of all persons and entities engaged in the business of remitting funds or transmitting funds by any means or through any person, entity or electronic funds transfer network, or of issuing or redeeming money orders, traveller’s cheques or other similar negotiable instruments.

We can offer our congratulations to the Conservative government for having extended monitoring activities to include not only banks and institutions that transfer money regularly, but also to other entities that are often not openly included. This applies to electronic funds transfers and businesses that sell or purchase money orders, travellers' cheques and other negotiable items. Thus, monitoring activities have been extended. We do not want these organizations used for money laundering. I think we can support this.

It also extends to government departments and agents that sell precious metals under regulation. Members of the Bloc Québécois pointed out that there is some degree of illegal trade in diamonds and gold, among others, which are not necessarily liquid assets, but are precious metals that can be used as currency in money laundering.

I believe that the Conservative government listened closely and covered these potential complaints from various stakeholders.

Previously, all the entities targeted by the legislation had to contact the centre, under section 83(1) of the Criminal Code, which sets out the obligation to inform the RCMP or CSIS of any property that belongs to a terrorist group. The new bill adds section 8 of the United Nations Suppression of Terrorism Regulations. Those entities must therefore contact the RCMP and CSIS.

The new bill prohibits all entities from opening an account for an individual if that person's identity cannot be established. Not only is there no obligation, entities are in fact prohibited from opening a bank account. The bank must then contact the RCMP or CSIS directly to launch an investigation.

Furthermore, the bill states that prior to doing business with a politically exposed foreign person—a judge, head of state, minister or other individual who has held a specific office—the institution must obtain the approval of senior management before entering into any transaction with the individual.

Thus, one cannot do business with exposed persons from another country or who would be likely to carry out types of transfers or financing for terrorist activities. They are required to obtain specific authorizations from senior management of banks.

In addition, if a Canadian organization does business with a foreign bank, it is required to take measures to ensure that the foreign bank is not a shell bank, to obtain senior management approval, and to set out in writing all transactions.

In short, there is an obligation not only to know with whom one is doing business but also to scrutinize the banks with which one is doing business. Consequently, when a client wants to conduct transactions with foreign financial institutions, the bank is obliged to verify the credentials and to ensure that the sales, transactions or other operations are not fictitious. Its responsibility has been increased.

In the case of electronic funds transfers, the bank or other business must include the name, address, and the client's account number or other reference number, whether sending or receiving such transfers.

Electronic funds transfers are very popular now. The old bill was implemented in 2001 by the former government, which, once again, did not do its job. The new bill has been introduced for a reason. The Liberal government did nothing for five years. It did not manage to bring a bill into being. Obviously, things have changed since then, and significant numbers of financial transactions take place through electronic funds transfers. That is why the government introduced this new bill, which covers electronic funds transfers.

This new bill follows the United States' lead by requiring entities to establish a program to evaluate their ability to detect transactions that involve laundering the proceeds of crime and financing terrorist activities.

That is what the Bloc Québécois has trouble accepting. If we want to do what the Americans do, we should not only do what they do right, but avoid doing what they do wrong. That is why the Bloc Québécois is being so careful. This is about the ability to detect transactions that involve laundering the proceeds of crime. It would be nice to have that ability and to intervene, but we have to make sure we protect personal information.

Obviously, we will not be investigating. As we saw with the Maher Arar affair, we have to be careful with our investigations. Even with bank investigations, we have to be sure we have a situation that requires it. We cannot investigate just for the fun of it. We would risk arresting honest citizens who might find themselves under the microscope because we want to be just like the Americans, who figure that while they are at it, they might as well investigate a whole bunch of people. We must also avoid American-style mistakes, like casting too wide a net. They often proceed on the basis of race, religion, gender and so on. We are better off using a case-by-case approach and having really good reasons for investigating. Otherwise it is too easy to make mistakes.

The members of the Bloc Québécois will continue to defend the interests of Quebeckers and ensure that the Canadian government does not make the same mistakes as the American government. Any investigations with respect to detection must be justified, not conducted without good reason. Any evaluation of certain bank transactions cannot be done carelessly, because this could lead to honest citizens being investigated without cause.

Furthermore, we must ensure that no information on citizens who should not even have been investigated is shared with the United States, or any other country. In short, we must ensure that the Canadian government does not make the same mistakes as the Americans. Once again, only the Bloc Québécois can guarantee this to Quebeckers.

Bill C-25 subjects Canadian banks' foreign subsidiaries to the same rules as the Canadian banks themselves. It was high time, because the Liberals made the mistake of allowing our Canadian banks with foreign subsidiaries to share information, even though foreign laws often do not have the same respect for privacy. This is true of American laws.

To that end, Revenue Canada agents will now have the authority to give the Financial Transactions and Reports Analysis Centre any information they receive from another agent, under the Charities Registration (Security Information) Act. The aim of this new authority is to better fight against the financing of terrorist groups through charitable organizations and through businesses that perform electronic funds transfers. Once again, I would like to point out that the registration of charities must be carefully monitored, although charities are normally made up of honest citizens.

That is why the Bloc Québécois will fight tooth and nail for privacy and personal information protection. One may be open to the idea of all categories of organizations being monitored for money laundering, but efforts have to be made to ensure that charities, which bring together law-abiding citizens, not be subject, as they are in the United States, to a systematic analysis of their data bases or have their members subjected to money laundering analyses.

The Bloc Québécois will support Bill C-25, as long as honest citizens, honest Quebeckers are free from undue monitoring by government organizations eager to copy the Americans, who seem to think that, while they are at it, they might as well monitor or investigate just about everyone. We do not want that. That is not consistent with the philosophy of life and values that the citizens of Quebec have chosen for themselves. We want the privacy and personal information of honest citizens to be protected. Once again, they can count on the Bloc Québécois.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am pleased to rise on behalf of the Bloc Québécois to address Bill C-25. I would like to reread the title of the bill, so that Quebeckers and Canadians clearly understand what this legislation is about.

This bill is entitled 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. As people may have already figured out, I wish to say from the outset that the Bloc Québécois will support this legislation, because of the importance of the fight against terrorist financing.

We feel that this is a major challenge and that such a bill is necessary, particularly since the fight against organized crime has always been a priority for the Bloc Québécois. Hon. members may remember the work done by our colleague Richard Marceau, the former member of Parliament for Charlesbourg—Jacques-Cartier, who succeeded in having this House pass a private member's bill reversing the burden of proof in the case of the proceeds of crime.

As a result of interventions by the Bloc Québécois in this House, the federal government has decided to amend the Criminal Code so that criminals now must prove that the fruits of their labour or proceeds of crime are acquired otherwise, that is, legally. Previously, the onus was on the Crown and the government to prove that criminals' income or assets were proceeds of crime. Today, the onus is reversed, and the accused must prove that he or she worked to acquire certain assets.

Such situations exist in Quebec, and in my riding, I have seen amazing stories that can often turn out to be terrible stories of crime. Reporters and the media have given nicknames such as “Richie Rich” or “Peter Cash” to some criminals, whose personal possessions and equipment include planes, helicopters, luxury cars and waterfront properties. These people were so nicknamed by the community, because others knew that they were involved in illegal activities and had different sources of income from their own. As well, for safety reasons, neighbours do not dare question how some people have acquired certain assets.

Now, when they are charged, the burden of proof rests on them. This is an initiative of former member Richard Marceau, a lawyer who, as the Bloc Québécois critic, introduced a private member's bill and convinced Parliament to reverse the burden of proof in this case. The Bloc Québécois has always been a staunch defender of the interests of Quebeckers, but it has also always fought against organized crime.

Our colleague from Sainte-Hyacinthe—Bagot openly criticized marijuana producers. He even received anonymous calls threatening his life. During the 2000 election campaign, the leader of the Bloc Québécois had to have RCMP officers with him wherever he went because he had received threats after the Bloc Québécois dared to tackle organized crime.

The men and women of the Bloc Québécois will always rise proudly in this House to speak out for citizens who, all too often, are threatened and find themselves powerless in the face of organized crime, the ramifications of which are especially significant since marijuana growing has become an international business supported not only by organized crime, but also by biker gangs and street gangs.

None of that will make the Bloc Québécois members back off from their role as champions or leading experts in the fight against organized crime. Understandably, Mr. Speaker, we will also be championing Bill C-25; in other words, we will be supporting it.

However, in supporting this kind of bill, which deals with terrorist financing, including, of course,money laundering and organized crime, one definitely must respect the privacy rights of citizens. Therefore, it is important to strike a balance between upholding the public interest and fighting organized crime, terrorism and money laundering, while at the same time respecting the rights of individuals, honest Quebeckers who might come under investigation.

That is why it is essential to ensure that any information that may be requested concerning citizens or individuals not be used for any purpose other than the one for which it was requested.

Again, in fighting and defending themselves against organized crime, Quebeckers can be proud to rely on the Bloc Québécois members to stand up for them and ensure that information concerning their private lives will never be used for any other purpose or made public.

We have seen it happen. Earlier, I heard a Liberal member who was a minister in the Liberal government say that the Liberals have always been staunch defenders of interests and privacy. It was under their watch, though, that banks carrying out information processing through subsidiaries outside—

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 the second time and referred to a committee.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I have a simple question for the parliamentary secretary.

As members know, the Bloc Québécois will support most of Bill C-25, but the way banks and institutions have processed their clients' personal information in the past causes us to worry.

I would like the parliamentary secretary to assure us that the personal information of Quebeckers and Canadians will not be used for purposes other than fighting terrorism. We have seen some banks allow the disclosure of information on individuals to other companies when those banks have entrusted that personal information to U.S. institutions. What can the parliamentary secretary say to assure us that the bill will protect the personal information of the people of Quebec and Canada?

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I congratulate the hon. member on her speech. This bill flows from quite a number of the previous government's initiatives. I want to congratulate her and her government on trying to put together some form of bill to address this egregious problem.

This bill has a number of commendable features, but I want to ask my colleague a couple of questions with respect to some of the holes in the bill.

Recently I returned from Moscow, where I met with some Russian officials and talked about this very matter. The Russian officials told us that they are most concerned about the conversion of money into things like diamonds, platinum and things of that nature, other businesses, so to speak. That is how terrorism was being financed in Russia. Of course, regardless of what we think of the Chechen situation in Russia, the Russians regard it as a terrorist situation. Bill C-25 will not deal with this problem. It leaves a very obvious gap, one through which even a not so well-informed criminal organization could take advantage.

I wonder what comfort the Parliamentary Secretary to the Minister of Finance can give those who are watching that this form of conversion from a financial instrument to other valuable commodities might be addressed.

The second issue I have is with respect to the compromise with the legal profession. As I read this bill, it seems that lawyers will essentially be obligated to disclose financial records only if they know the identity of the client. This seems to me to be something of a low threshold of obligation on the part of the legal profession, which transacts massive sums of money on a daily basis.

I would be interested in the member's comments on both of these issues.

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

Mr. Speaker, I appreciate this opportunity to speak to Bill C-25. This legislation contains needed measures to update Canada's fight against money laundering and terrorist financing activities.

This new government is determined to be on the front lines of the important global fight against money laundering and organized crime, and against terrorist financing activities.

Canada's anti-money laundering and anti-terrorist financing regime must be kept up to date and must adapt to evolving money laundering and terrorist financing schemes. Criminals are constantly changing their tactics and finding new ways to evade the law.

The proposed amendments in the bill before the House today are critical in helping to stay one step ahead of these criminals.

Bill C-25 illustrates that Canada's new government is serious about ensuring that Canada's anti-money laundering and anti-terrorist financing regimes both meet revised international standards in this area and also address the areas of risk here at home.

Before I address the specifics of this bill, I would like to take a few moments to provide some background to this proposed legislation to emphasize the importance of Bill C-25.

First, we ought to remind ourselves what exactly are money laundering and terrorist financing.

Members of the House are well aware that the activities of organized crime, such as drug trafficking and prostitution, generate significant amounts of money, usually in cash. The criminal or group must find a way to spend and invest the funds without attracting attention to the underlying illicit activity, lest it be shut down and they lose their source of revenue.

Money laundering of course is very difficult to quantify. However, the International Monetary Fund makes an educated estimate that the aggregate size of money laundering worldwide is between 2% and 5% of global GDP. That is a very significant amount.

How does money laundering work? How does it take place? Money laundering occurs in three stages. The first is the placement stage. In this stage the launderer introduces the illegal profits into the financial system. This is done in a number of ways. One is breaking up large amounts of cash into less conspicuous smaller sums that are then deposited directly into a bank account. Another is using cash to purchase a series of monetary instruments, cheques, money orders, et cetera, from financial institutions that are then collected and deposited into accounts at other locations.

The second stage is called layering. In this stage the launderer engages in a series of conversions or movements of the funds to distance them from the first place they were deposited. For example, this could be through the purchase or sale of investment instruments such as shares or a series of wire transfers to various bank accounts globally.

Having successfully moved the criminal profits through the first two stages of the money laundering process, the launderer then enters the third stage which is integration. It is at the integration stage that the funds re-enter the legitimate economy. The funds can now be invested or used to purchase luxury assets, real estate, securities or other investments.

Money launderers tend to seek out jurisdictions with weak or ineffective anti-money laundering programs. Canada does not want to be on that list. However, because the objective of money laundering is to get the illegal funds back to the individual who first collected them through criminal activity, launderers usually prefer to move funds through areas of highly developed, stable and sophisticated financial systems, and where the large volume of transactions may diminish the risk of suspicious transactions being detected. That is a country like Canada with a sophisticated and stable financial system.

The other element, terrorist financing, how does that fit into this picture? Terrorist organizations require financial support in order to carry out their evil and destructive activities. A successful terrorist group, like a criminal organization, must be able to build and maintain a steady flow of funds. It must develop sources of money, a means to covertly move that money around, and a way to ensure that the money can be used to obtain the materials needed to commit terrorist acts.

Terrorist financing comes from two primary sources. First, there is state sponsored terrorism, sadly. Financial support is provided for these terrorist activities by states or organizations large enough to collect and then make funds available to the terrorist organization. A variation of this is where a wealthy individual provides funding. For example, Osama bin Laden is thought to have contributed significant amounts of his personal fortune to the establishment and support of the al-Qaeda network.

The second source of terrorist financing is money derived directly from various revenue generating activities. As with organized criminals, a terrorist group's income often comes from crime or other unlawful activities. For example, a terrorist group may engage in large scale smuggling, various types of fraud, robbery and narcotics trafficking.

However, unlike organized crime, terrorism can be financed using legitimate funds such as those collected in the name of charitable causes. These loopholes, often exploited by terrorist groups, need special attention in order for Canada to move effectively to deny terrorists the funds they use for their destructive deeds.

It is this second source of terrorist funds that the measures in the bill are designed to detect.

It is important to remember that this activity has an effect on all Canadians because money laundering, major criminal fraud, and financial crimes have the potential to undermine the Canadian economy by impacting the reputation and integrity of individual financial institutions, not to mention the financial sector as a whole.

Members of the House will appreciate that the integrity of Canada's banking and financial services depends on citizens and investors being able to trust that institutions are well regulated and protected from criminal elements.

By extension, a healthy financial system is absolutely critical to Canada's ability to attract investment, and therefore increase and sustain overall economic growth and productivity.

If funds from criminal activity can be easily processed through a particular institution because proper anti-money laundering controls are not in place, institutions could be drawn into unwitting complicity with criminals. As well, evidence of such abuse will have a damaging effect on the perception of other financial intermediaries, regulatory authorities and Canadians themselves.

The potential costs of money laundering are of course serious. If not addressed, organized crime can infiltrate financial institutions, acquire control of large sectors of the economy through investment, create competitive disadvantages for local businesses, and continue to fund harmful criminal activity such as drug trafficking, human smuggling and prostitution which preys on women.

What has Canada done to prevent and deter money laundering and terrorist financing?

Since 2001 Canada has had an anti-money laundering and anti-terrorist financing regime that is in the top tier of our international partners. This legislation has helped ensure that Canada is not a haven for money laundering and terrorist financing activities.

Indeed, Canada has made significant progress in detecting suspected cases of money laundering and terrorist financing. We continue to work closely with our domestic and international partners to improve the regime.

In 2005-06, reporting entities filed upwards of 30,000 suspicious transaction reports with the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC. In turn, FINTRAC made 168 case disclosures to law enforcement agencies. In addition, 10 new domestic information-sharing agreements were signed with financial sector regulators.

FINTRAC now has 30 information-sharing agreements with foreign counterparts internationally.

Canada's new government has committed to a strong and comprehensive anti-money laundering and anti-terrorism regime that is consistent with international standards. That is what this bill, Bill C-25, is all about. It amends the existing legislation in order to update and enhance the legislation to better combat money laundering and terrorist financing activities.

To begin with, the measures proposed in the bill will update Canada's anti-money laundering and anti-terrorist financing regime to be consistent with international standards set out by the Financial Action Task Force, which is the international standard-setting body on this issue. These standards were revised in 2003 and all task force members have had to update their regimes. Canada is now doing so with this bill.

The proposed amendments will require financial intermediaries to undertake a number of actions such as enhanced client identification and record-keeping measures. They will also be required to undertake enhanced measures with respect to certain clients and activities, for example with respect to foreign politically exposed persons and their banking relationships.

The reporting of suspicious attempted transactions will also be required.

Bill C-25 also establishes a new registration regime for money services businesses that remit funds in and out of Canada and for foreign exchange dealers, within FINTRAC. This new regime will provide FINTRAC with a tool to increase compliance with the requirements under this act for money services businesses and foreign exchange dealers. Coupled with the registration requirement, a new offence will be created for operating an unregistered money services business.

The exclusion of legal counsel from the regime has been identified as a gap by both the Auditor General and law enforcement. Over the last number of years, the government has been negotiating with the legal profession on how best to include it in the regime. Through regulations made under Bill C-25 and consistent with the Financial Action Task Force requirements, legal counsel will now be required to undertake client identification and record-keeping measures when acting as financial intermediaries.

These measures complement the prohibition on the receipt of cash over $7,500 by legal counsel that is currently in place and enforced through provincial law society rules of professional conduct. These measures also respect the Supreme Court of Canada's Lavallee decision.

Bill C-25 also establishes monetary penalties in addition to existing criminal sanctions. This will allow FINTRAC to impose graduated penalties that adequately reflect the nature of the violation. The monetary penalties, for example, will be particularly useful for offences that are less advertent or egregious.

An important part of Bill C-25 relates to information sharing. Specifically, the bill proposes to allow the exchange of information between FINTRAC here in Canada and the Canada Revenue Agency, and with Canadian law enforcement agencies, to better prevent and detect the use of registered charities for financing of terrorism.

Moreover, to increase the usefulness of FINTRAC's disclosures, the range of information disclosed will be expanded, as well as the list of disclosure recipients. This list will now include the Communications Security Establishment and the Canada Border Services Agency. Also, the agency will be allowed to share cross-border currency reporting information internally for the administration of immigration legislation.

Amendments are also proposed in Bill C-25 to allow information sharing of compliance-related information between FINTRAC and its foreign counterparts. As well, information sharing provisions are proposed between the Canada Border Services Agency and its foreign counterparts on the enforcement of the cross-border currency enforcing regime.

It is important to emphasize that Canada's government recognizes how essential it is to protect the privacy rights of Canadians. That is why Bill C-25 includes a number of safeguards to protect those rights. The bill strikes the right balance in meeting the needs of law enforcement while respecting the privacy rights of Canadians.

I want to outline for the House these safeguards. First, there is an arm's length relationship between FINTRAC and law enforcement and other agencies entitled to receive information. Second, there is disclosure of only key information regarding financial institutions and publicly available information to police and other designated entities. Third, there are criminal penalties for any unauthorized use of disclosure of personal information under FINTRAC's control. Fourth, there is a requirement for a court order by law enforcement agencies to obtain any other than very minimal information from FINTRAC.

With the proposals contained in the bill, the anti-money laundering and anti-terrorist financing regime will continue to strike an appropriate balance, on the one hand providing law enforcement and intelligence agencies with the tools they need to effectively fight money laundering and terrorist financing, while on the other hand taking appropriate and strong steps to respect and protect the privacy of Canadians.

The bill is consistent with the Charter of Rights and Freedoms as well as the Privacy Act.

In closing, I would be remiss if I did not acknowledge the excellent work done by the Senate Standing Committee on Banking, Trade and Commerce. Its insightful report calls for tougher measures to deal with money laundering and terrorist financing. This bill responds to the Senate committee recommendations.

Canada needs a robust and up to date anti-money laundering and anti-terrorist financing regime to ensure security for Canadians on a number of fronts.

Canada must also continue to meet its global obligations. For the year starting July 1, 2006, Canada will chair the international Financial Action Task Force, the international standard-setting body on this important issue. Taking on this responsibility, along with the measures proposed in Bill C-25, demonstrates the solid leadership of Canada's new government that we are showing in the global effort against money laundering and terrorist financing.

I therefore urge all hon. members to accord swift passage to this bill.

[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 second time and referred to a committee.

Business of the House

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform]

Mr. Speaker, today we will continue the debate on an opposition motion which gives the government an opportunity to talk about keeping its promise to review our programs to ensure every taxpayer dollar spent is well spent and by reducing the debt by $13.2 billion.

Tomorrow we will begin debate on Bill C-25 , proceeds of crime, followed by Bill C-26, payday lending.

Next week, we will continue with the business from Friday with the addition of Bill C-27, dangerous offenders, Bill S-2, hazardous materials, Bill C-6 aeronautics, and Bill C-28, a second act to implement certain provisions of the budget tabled in Parliament on May 2, 2006.

With respect to my hon. colleague's question on supply day, just like a child waiting for Christmas, he will have to wait a little bit longer. We will get back to him next week.

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

[Rob Nicholson, Conservative, Niagara Falls, ON]

moved for leave to introduce 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.

(Motions deemed adopted, bill read the first time and printed)