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

[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.

[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.

[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, Calgary Nose Hill, AB]

Mr. Speaker, I appreciate my hon. colleague's remarks. I think we can be proud that, no matter what stripe of government we have had in this country, this issue has been taken very seriously and strong measures have been put into place as a priority. I know that the hon. member has much to offer from his recent travels and I look forward to talking to him more about them.

The hon. member will be happy to know that this bill in fact does expand the number of reporting entities, including operators who deal in gemstones and precious metals, so some of the issues he raises will in fact now be included in this regime. We are also having discussions with the Home Builders' Association, because increasingly, investment in real estate now is being used by criminal organizations and terrorist organizations and we want to draw them in.

With respect to the lawyers, this bill represents a step forward in including this important body, which often deals with numbers of issues and entities. They will now be able to have the information that might be required at their fingertips should they be asked for it, under the strict guidelines set out by the Supreme Court in the Lavallee decision. The issue the hon. member raises is being dealt with in the bill in what I think is a balanced way, one that has, generally speaking, garnered the support of the broad base of the legal profession.

[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?

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

Mr. Speaker, we commend Bloc members on their engagement on this important issue. Also, the member raises a very important issue. Privacy of Canadians and ensuring that it is protected is a high priority for the government and for all members of the House.

The bill provides that financial institutions report directly to FINTRAC. They are not to be giving information to any other entity. That information would only be provided by FINTRAC and FINTRAC provides only very minimal information about any individual, information basically that would be available on the Internet.

If further information is required, a judge must examine and decide that, yes, further information is required. If information is shared outside the country with our international partners, that will only occur if there is a memorandum of understanding with the partner and if a strict protocol followed. The minister must look at each of those requests and personally approve them. We are anxious to ensure that privacy rights are protected.

We have met with the Privacy Commissioner of Canada on this issue and will hold further meetings to ensure that we understand any concerns on privacy and meet them as strongly as possible.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the Ontario Construction Secretariat is jointly funded by the construction industry, the province of Ontario and the Government of Canada, HRDC. The parliamentary secretary will know that undocumented workers in the construction industry, particularly in Ontario, is a very big problem. Indeed, it has been computed that the cost to governments, both provincial and federal, is about $1.3 billion a year as a consequence of these undocumented or illegal workers within the construction industry.

For those areas within the economy which have known abuses and links directly to money laundering and under the table or underground economy activity, could the parliamentary secretary assure the House that attention will be appropriately spent in these areas under the bill, or at least under existing legislation?

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

Mr. Speaker, as the member well knows, this was been a difficult issue for his party when it was in government and it continues to be one which needs to be monitored closely. The bill is not the appropriate place, however, to deal with the issue of undocumented workers.

We are discussing with the Canadian Home Builders Association whether it might play a role in ensuring that there are no loopholes for conversion of criminal proceeds into investment instruments or real estate. That is under the purview of the bill. The issue the member raises is not.

However, we continue to be engaged in this issue and in this whole area, particularly to ensure that Canada's economy is not unduly vulnerable to problems that the bill is addresses.

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

Mr. Speaker, the Liberal Party supports the principle underlying this bill. This is not surprising, since we essentially created this bill following the events of September 11, 2001.

I would like to emphasize that my colleague, the member for Willowdale, brought the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) into being. After a certain period of time, we have to amend it. Generally, the amendments proposed in this bill make sense.

I think everyone in the House would agree that while money is not everything, money is a lot, and one of the best ways to choke off terrorism and money launderers is to remove them from their source of money. Essentially, that is the purpose of FINTRAC. The purpose of the bill is to strengthen our ability to act in this area and to bring FINTRAC up to the international norms in terms of money laundering and terrorist financing. However, it is also important that we look at the other side of the coin, and that is privacy concerns and individual rights.

While the pursuit of choking off the sources of funds for money launderers and terrorists is extremely important, at the same time the bill has to safeguard the privacy rights of individuals and prevent a situation in which totally innocent people suffer as a consequence of this bill. I will come back to that point in a few minutes.

Overall, Liberals think the bill is a move in the right direction. We have a number of concerns that we will raise in committee and possibly propose amendments, but we will certainly support the bill for second reading.

The bill proposes to make some necessary changes to the previous government's bill in 2001, Bill C-36, the Anti-terrorism Act. I think changes like this will likely be required every few years as money launderers become more sophisticated and police need new powers to combat them. This is essentially the nature of money laundering and why it is so difficult to combat.

Technological changes occur and money launderers make a few steps ahead. It is always important for the government to react to that so we can be ahead of them, rather than they ahead of us. In that general sense, we fully support the intentions and actions of the bill.

There are three concerns I would like to highlight today. Two of them have been raised by my colleague, the member for Scarborough—Guildwood.

The first of these is that money laundering does not necessarily involve just money. It might involve precious jewels, diamonds and even real estate, as the parliamentary secretary indicated. Therefore, if we are to be comprehensive and effective in our pursuit of terrorist financing and money laundering, then we have to broaden the scope of the act beyond pure cash.

Much of what I am saying, I should point out, has come from a very good report entitled “Stemming the Flow of Illicit Money”, which was presented by fine colleagues from the other place. As they reported, the RCMP believes:

--[a]s stricter regulations are imposed on businesses in the financial services industry, criminals are seeking alternative methods of laundering the money accumulated from criminal activity. Various characteristics of the (precious metals, stones and jewellery) industry make it highly vulnerable to criminal activity.

The RCMP has identified these businesses as likely places for criminals to launder their money. Therefore, there is a good case that the bill require members of this industry to report suspicious transactions in the same way that banks and other financial institutions are required to do. This point was reinforced by my colleague in his conversations with people in Russia.

I know the parliamentary secretary has suggested that in some respects the bill may respond to these concerns, but from my initial knowledge of the bill, it is not at all obvious to me that the bill provides an adequate response to these concerns. This will certainly be one of the areas that the Liberal Party will want to explore when the bill goes to committee.

This as well was mentioned by my colleague from Scarborough. It is the issue of solicitor-client privilege and the need to balance that principle with the need for the government and for Canadian society to get tough and serious with terrorist financing and money laundering.

I am not sure that the compromise that has been reached with the legal profession is the perfect compromise. There may be other means to tighten that up, so the government, the security agencies and FINTRAC can get better information from the legal profession.

I was chatting with my colleague, the member for Vancouver Quadra. He is a lawyer and he has some ideas in this regard. I am sure when the bill gets to committee, the question of solicitor-client privilege and how best to deal with it and whether the law adequately deals with will certainly be one of the areas where my party will want to ask questions and possibly propose amendments.

The third and final concern is that the bill may not adequately address privacy concerns. When the initial law was written, I believe a lot of work was done to create the appropriate balance between on the one hand the need for FINTRAC to share information with law enforcement agencies and on the other hand privacy concerns and the right to protect individuals.

The Auditor General in her 2003 report also commented on this. She said:

The government should assess the level of review and reporting to Parliament for security and intelligence agencies to ensure that agencies exercising intrusive powers are subject to levels of external review and disclosure proportionate to the level of intrusion.

The bill allows FINTRAC to share more information than had been the case before with law enforcement agencies. If we are to preserve the balance, then maybe, in going further in the direction of giving more information to law enforcement agencies, the bill should offer a greater measure of protection due to privacy concerns and a greater level of review, as suggested by the Auditor General, than was in the earlier law.

I know, for example, CSIS and it is also true for CSE, because I dealt with it when I was defence minister, have important civilian review functions. This is designed to monitor the agencies to ensure that nothing unfair or inappropriate is done and to safeguard the rights of individuals and their right to privacy. It may be that some further steps should be taken. I do not know yet what those might be. This will be another issue for the committee.

Of course, the Maher Arar case has brought home to Canadians the importance of this area. I think it could be important as well in the area of money laundering and terrorist financing.

We support the bill in principle, but we have significant concerns in those three areas that I have mentioned. We will want to consider further in committee whether amendments would best be provided to the law. Again, those areas are as follows.

The first is whether the scope of the bill should be broadened to include not only cash, but in a meaningful and strong way also jewels, diamonds and other forms of wealth that can be used as a substitute for cash in money laundering and terrorist financing.

Second, is the issue 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 could help society track down terrorist financiers and money launderers.

Finally, and perhaps most fundamentally, I have some concerns with the whole issue of the balance between, on the one hand, our need to get tough and track down terrorist finances and money launderers, and on the other hand, the need to protect the rights of the individual and privacy. I believe that balance has been undone by the bill and that the defence of privacy issues will need to be correspondingly strengthened.

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

Mr. Speaker, I am pleased that my Liberal colleague is finally showing some interest in protecting personal information and privacy. When his government was in power and he was a minister, banks were allowed to exchange personal information via processing centres in the United States. And his government did nothing about it.

My question for him is simple. Is he prepared to support the Bloc Québécois in its effort to protect the personal information and privacy of Quebeckers and Canadians?

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

Mr. Speaker, I think the issue of protecting individuals and privacy has always been a major concern for our party, both in power and in opposition. That is why I emphasized the importance of that point.

When we were in power, we emphasized its importance and acted accordingly. I would add that we will continue to do so.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I congratulate my hon. colleague for his excellent speech and for all the hard work he did while he was minister of revenue.

I would ask him to articulate later in the House on some of the things he did while he was in cabinet because a lot of them were repeated by the parliamentary secretary. We notice that the government likes to trot out things that it claims it has done but they are really regurgitations of things that the previous government did. The Pacific Gateway strategy is just one of the more recent examples.

Getting to the root of the issues, one of the issues concerns trafficking. We know that more than 60% of the funds coming through organized crime gangs are funds driven by the illegal trafficking in drugs. We also know the current government does not have a plan to deal with drug policy other than to engage in what is called the war on drugs, which has proven to be an abysmal failure.

I have two questions for my colleague. First, could he again articulate the solution that he championed well in Parliament and on which he did a tremendous amount of work to gain control over the money laundering in our country? Second, could he give us some of his views on the importance of a rational drug policy that works to reduce harm, reduce use and to ultimately reduce the amount of money that is going through organized crime gangs?

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

Mr. Speaker, perhaps I was being unduly kind to the Conservative minority government today. It is true that we had done before all of this before. The bill was entrained long before the Conservatives arrived on the scene, so they just plucked the fruits of it, as it were.

Perhaps I was being kind to them today because they had such a terrible day yesterday in terms of the introduction of that environment bill, which was panned by all environmental groups and all opposition parties in the land. They also had the little incident regarding the canine species. Perhaps I was being overly kind in giving them a little more credit than perhaps I ought to have but they are the government and it is appropriate that it be presented clearly. As I said, we do support it in principle.

I agree with the hon. member in terms of drug trafficking and money laundering. We really need to be very serious. I do not know if I have more to add than what I said in my speech but we do need to engage the lawyers to provide the help where they can. Solicitor-client privilege is important but it does not trump all other considerations. That is one way we could be tougher. Getting tougher on diamonds and other non-cash sources of wealth is also crucial.

I believe the bill could be strengthened in a number of ways that would achieve the objectives which the hon. member, myself and, no doubt, all Canadians share.

[Gary Goodyear, Conservative, Cambridge, ON]

Mr. Speaker, we heard the hon. member earlier espousing to all the good things the Liberal Party, I guess wanted to do because in 13 years it never got it done.

Here we are, eight months into the game, and we are absolutely getting it done with a very fine bill. The parliamentary secretary should be proud and we are cleaning up this money laundering thing.

I was here through the entire debate and I failed to hear whether or not the new bill would take care of the money laundering issue that was associated with the Liberal Party during the sponsorship scandal. Could the hon. member tell us if it will or will not close that loophole?

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

Mr. Speaker, I think the question is a little silly and does not really merit an answer.

I refer to the hon. member's preamble when he talks about 13 years. The impetus for this came following the tragic events of 2001. That was not 13 years ago. It was approximately five years ago.

He is talking about action. The Liberal government acted immediately after the events of September 11 and produced the bill within months to set up FINTRAC which has the powers to take strong action and has taken action to deal with money laundering and terrorist financing.

He talks about 13 years but it has nothing to do with 13 years. Within months of the events of September 11, 2001, FINTRAC was up and running owing to the hard work, the commitment and the sense of urgency of the Liberal government following the events of September 11, 2001.

Now there is a little housekeeping being done and the Conservatives are claiming massive credit for minimal action.