Bill C-52 (Historical)

Retribution on Behalf of Victims of White Collar Crime Act

An Act to amend the Criminal Code (sentencing for fraud)

This enactment amends the Criminal Code to
(a) provide a mandatory minimum sentence of imprisonment for a term of two years for fraud with a value that exceeds one million dollars;
(b) provide additional aggravating factors for sentencing;
(c) create a discretionary prohibition order for offenders convicted of fraud to prevent them from having authority over the money or real property of others;
(d) require consideration of restitution for victims of fraud; and
(e) clarify that the sentencing court may consider community impact statements from a community that has been harmed by the fraud.

Retribution on Behalf of Victims of White Collar Crime Act

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, the member summed up the problem and the solution to the problem extremely well in her presentation.

One of the areas we have to look at, particularly in this bill, is the requirement for restitution. We already know that the possibilities of restitution are rather minimal. At the time that these fraudsters are found out, it is usually after a period of time when the market drops. They are unable to pay their bills anymore and they cannot keep the scheme going. In the meantime, they have had ample opportunity to spirit the money away, particularly to tax havens such as the Cayman Islands, Panama and other places like that.

I would ask the member whether she would agree that we should be making an effort in this country to do something about these tax havens so that we can stop the fraudsters from hiding the money.

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

Madam Speaker, I certainly agree with my colleague, the member for Elmwood—Transcona, in his call for efforts to crack down on fraudsters who bilk Canadians of their hard-earned dollars and who make personal gain by the extensive use of tax havens.

My point throughout this whole debate has been that the government needs to do much more than this little effort under Bill C-52, however significant it is. Many of the experts in the country today wonder whether the new legislation would be more effective than the current regime.

Eric Gottardi, a Vancouver criminal lawyer who is part of the Canadian Bar Association's criminal justice section, said:

I don't think it's going to have a significant impact. It's really a codification of existing principles. The reality is, it actually doesn't change much in how the law operates right now.

The experts say that a fraud of more than $1 million already earns a criminal a two year sentence in almost every case, and the newly announced list of factors that judges need to take into account when sentencing fraudsters is already part of the process. The list includes paying attention to the financial and psychological impact of the fraud, whether the offender broke licensing rules and standards, and the complexity of the scheme involved.

Others have said that the government misses the point. "It's pathetic," said Toronto-based forensic accountant Al Rosen. "The main issue is, no one is out there to chase those people in the first place".

That is really why I say the government has to go much beyond this. It must bring in a corporate Canada accountability bill. It must move on white collar crime in all of its aspects. It must ensure that we actually stand up for Canadians who have lost so much in the past and could be victims again unless we bring a comprehensive approach to the table.

[Gérard Asselin, Bloc, Manicouagan, QC]

Madam Speaker, I think the Conservative Party has really missed the mark. If they really wanted to solve the problem with this bill, tax havens and the one-sixth practice also needed to be eliminated. Sentences handed down to these crooks would be served. For instance, Vincent Lacroix would serve 14 years. It would also prevent these crooks from stashing their spoils in tax havens, particularly in Barbados.

When Vincent Lacroix gets out of prison in two years, he will be able to retrieve his spoils, his jackpot. He will be able to live off the money he hid in tax havens.

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

Madam Speaker, I thank the hon. Bloc member for his question. I completely agree.

I will do this in English because it is so complex. The Norbourg scandal that resulted in Quebec's top financial regulator laying 51 security charges against Vincent Lacroix, founder of the investment fund company that bilked over 9,000 people, is a good example of why we need so much more to be done in this field.

The people who were defrauded by Norbourg were luckier than most Canadians. At least they saw some charges laid, but the role of the regulator in this scandal is also being examined. The role of l'Autorité des marchés financiers is part of an ongoing class action suit. Investors are claiming the regulator failed to stop the fraud.

What we are saying today is that it is time for a federal government that takes seriously these issues, that works with the provinces and not against the provinces, and tries to put in place a system with teeth, with legal and judicial changes that are absolutely necessary to effect the kind of change that my colleague is asking for.

[Rick Dykstra, Conservative, Parliamentary Secretary to the Minister of Citizenship and Immigration]

Madam Speaker, I rise in the House today to speak to Bill C-52. It is a very important piece of legislation for my constituents as well as for all members' constituents across our country. Due to modern technology, a farmer in rural Saskatchewan is just as susceptible to fraud as a stock analyst is in Toronto. It is important that we realize this when discussing the bill.

I want to make some technical points about the bill. It contains six measures, all of which are designed in some way to enhance the sentencing process for offenders convicted of fraud.

The first element is a mandatory minimum penalty. Canadians are most concerned about large-scale frauds that wipe out people's life savings and demonstrate extreme greed and indifference to others. To address this concern, the bill includes a mandatory penalty of a minimum of two years in prison for any fraud or combined fraud with a value of over $1 million. The mandatory minimum penalty would act as a floor. A variety of aggravating factors would also be applied to raise the actual sentence well above the two-year range in many cases.

There are currently four statutory aggravating factors for fraud in section 380.1 of the Criminal Code. The bill would add new aggravating factors to that list to set out additional characteristics of fraud which are troubling. The new factors would focus on: first, the impact of the fraud on its victims; second, the complexity and magnitude of the fraud; third, the failure of the offender to comply with applicable rules and regulations; and fourth, any attempt by the offender to conceal records relevant to the fraud.

Another measure will require the sentencing court to state on the record which aggravating and mitigating factors it is applying. This is to ensure transparency in sentencing and to ensure that the statutory rules in section 380.1 which set out aggravating factors and factors that are prohibited from having a mitigating factor are effectively applied.

The bill would also give the courts a new sentencing tool for fraud offenders aimed at preventing the commission of further fraud and victimization. The court would be able to order as part of a sentence that the offender would be prohibited from having work for remuneration or in a volunteer capacity that involves having authority over another person's money, valuable securities, or real property. The order would be discretionary and available for any period up to life.

The two final measures are aimed at improving the responsiveness of the justice system and the sentencing process to the needs of the victims. Data from 2006-07 show that approximately 20% of fraud convictions resulted in a restitution order. In order to encourage a greater use of these orders, sentencing courts would be required to ask the Crown whether reasonable efforts were made to give victims a chance to indicate whether they want restitution. The courts would also be required to consider restitution in all fraud cases and to provide reasons if restitution is not ordered.

Three points of caution are needed. It is important to note that no criminal law reform can change the bottom line, namely that if an offender does not have any adequate assets, restitution itself may be a hollow remedy. It should also be kept in mind that the Crown is responsible for making the sentencing submissions. Victims will not have standing to advance their restitution requests. Finally, we cannot establish a collection mechanism for restitution ordered as a part of the sentence as this would require extensive provincial cooperation and tracking and the cost would be prohibitive.

The last measure in the bill would specifically acknowledge that the courts may consider a statement prepared by a representative of a community or definable group for consideration at sentencing for fraud cases. The courts are already somewhat receptive to considering community impact statements describing the impact of a crime on a community as a whole or in some specific cases. In fraud cases, for example, a large-scale fraud which has many identifiable victims in a small town could have an economic impact on that entire community.

I am confident that the measures in the bill will help send a strong message to the fraudsters out there that their time is finally up. I am also pleased that the bill can act as a springboard for discussion and awareness particularly toward fraud in general.

I hope that all hon. members will support the bill and help to ensure it is passed very quickly into law.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Madam Speaker, I am very fortunate and blessed to come from Mississauga, the safest city in Canada, because of the capable leadership of our mayor, Hazel McCallion, and our police chief.

I would like to ask the parliamentary secretary, why is he and his party delaying the expedition of the bill? He knows that all the opposition parties support both Bill C-52 and Bill C-42. So why not send it directly to committee? Why do we continue to debate it for two days when we are all in agreement?

Will the parliamentary secretary agree to send it directly to committee?

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

Madam Speaker, I appreciate the hon. member's rush to get this to committee. In fact, she may have noticed that I actually did not use my full allocation of time to deliver this speech.

The reason I did that is because I want the bill to get to committee as quickly as possible. Even if the member does not need to ask any questions, it actually saves minutes off the clock, gives us the opportunity to get this to the floor for a vote, and get it to committee.

The member is absolutely right.

[Gérard Asselin, Bloc, Manicouagan, QC]

Madam Speaker, the question I wish to ask will also be very brief, because the member who just spoke is on the government side.

Why has no one questioned the minister, or at least tried to convince him, about the fact that if they really wanted to solve the problem of these crooks who steal from honest people, this bill should have included the elimination of the one-sixth practice, and prohibited the transfer of any fraudulent earnings to tax havens?

Why does this bill set the amount at $1 million? When someone steals $900,000, are they not still a crook? Is that not fraud? Is it only considered fraud if the amount is at least $1 million? There are certain things we do not understand and we would like the member from the government side to explain them to us.

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

Madam Speaker, yes, I would like the opportunity to do that. I will be very quick actually and very brief.

The bill is very specific. The bill is very focused. The bill has a specific purpose. The reason to do that is so that we can, on a very regular basis, ensure that it will actually move through the House much quicker if we are specific about what we are trying to accomplish.

The member brings up the issue of the elimination of the one-sixth sentence. If that is something he would like to bring forward or that it is something he believes this government should work on, should include and should move forward, we are very open to listening to that.

However, let us get this bill through the House and then let us talk about his issue.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Madam Speaker, I know the member for St. John's East raised this issue when he spoke in the House. He talked about Conrad Black. We know that Conrad Black is actually serving time in the United States, whereas many of the crimes were actually committed in Canada.

I would ask the member, are there any plans to put additional resources into the investigation of white collar crime? We know that many of these crimes simply do not get the attention that they need in terms of the investigation resources and the prosecution resources as well.

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

Madam Speaker, my colleague makes a good point.

When we are trying to fight crime in this country and when we are trying to move legislation in this country to make our justice system that much stronger, the organizations, whether it be the RCMP or whether it be investigative units within our regional police establishments, certainly need the personnel power and the finances to very specifically do what they are required to do and what they are asked to do in terms of their investigations.

However, let us be focused here. We have a bill in front of us, a very good bill, a very specific bill, a bill that makes sense, a bill that should have support from all parties in the House. Let us get that through.

I certainly applaud the member's efforts and her comments with respect to investigations and look forward to seeing her support the funding and the legislation that we have moved in previous budgets, which did not have the member's support or her party's support, that specifically allocated money to do some of the things she is talking about.

[Roger Pomerleau, Bloc, Drummond, QC]

Madam Speaker, I am very pleased to speak today to Bill C-52, to impose harsher sentences for economic crimes. However, in our view, this bill does not always take the right approach.

This bill introduced on October 21 includes a minimum sentence of two years for fraud over $1 million, as has been repeatedly pointed out. It provides additional aggravating factors for sentencing such as the financial and psychological impact on victims, the failure to comply with a professional standard or a licensing requirement, and the magnitude, complexity, duration or degree of planning of the fraud. It also includes a broader definition of victim. The court could receive a written statement of the repercussions of a fraud on a given community, describing the losses suffered, for example, by a senior's club, or an entire neighbourhood or club. The bill also enables the courts to order restitution for the loss of property. If they do not, they will have to provide an explanation and justification for their decision. The bill also makes it possible for the courts to prevent fraudsters from engaging in certain activities in the future, once convicted of fraud, of course.

The Bloc Québécois wants to improve this bill in committee, as the Conservative member is asking us to do, and correct the major flaws that we see in the bill. We will therefore vote in favour of this bill at second reading. That is why, as my colleague from the Liberal Party was saying earlier, we have no objection to this bill being referred directly to committee.

In matters of justice, however, the Bloc Québécois strongly believes that the most effective approach is still prevention. We must address the causes of crime. This bill does not go far enough to address the causes of crime and we will look at that in committee and propose a few options. We believe there is a flagrant lack of monitoring over people in this field who manage to defraud others even though they are supposed to be monitored much more closely.

That being said, the Bloc Québécois recognizes that the current justice system needs improvement in many ways and that some laws need to be amended. Parliament and the government are responsible for taking action to ensure that Canadians and Quebeckers feel safe wherever they are in this country. Therefore, on June 15, 2007, which was a while ago, in response to the Conservatives' ideological approach, the Bloc Québécois recommended measures to curb economic crime. Our constructive approach is already working. In the 2008 budget, the Conservative government adopted some of the Bloc Québécois' ideas. It allocated extra resources to the national crime prevention strategy and to Crown prosecutors. As for this particular bill, even though we think the government is missing the mark in many respects, we will still support it at second reading if only to enable the committee to conduct a thorough study so that all members have the opportunity to recommend significant improvements if they want to.

Lately, there have been a lot of financial scandals around the world, in the United States, in Canada and in Quebec, such as Cinar, Norbourg and Earl Jones, and, in the United States, Madoff and Enron. These scandals have focused attention on some of the gaps in our oversight and our battle against economic crimes. That is why, on September 2, 2009, the Bloc Québécois introduced a number of measures to improve the system, making it harder for people to commit these crimes and easier to discover them and punish them more severely. Ours is the kind of comprehensive approach we need if we want to understand this kind of crime and wage an effective war against it.

In response, the government panicked. On September 16, well after our proposal was made public, it announced a bill that would include mandatory minimum jail time and aggravating factors, and enable the courts to order restitution of assets. We have Bill C-52 before us now. In many ways, the government's bill is so much smoke and mirrors. We all know that mandatory minimums are useless. The Bloc Québécois is not alone in saying that. Over and over again, people have said that the United States has the harshest sentences in the world. Their jails are full, yet the crime rate in every category is the highest in the world.

Fraud in excess of $1 million is actually a very rare occurrence. Yesterday, I heard a member of this House give a few examples of frauds in excess of $1 million, perhaps seven or eight instances, but his assertions were totally unsubstantiated. He talked about someone who had been sentenced to 24 months for stealing $1.2 million, but mentioned no name, case or references.

So far, we know of very few specific cases of individuals who have stolen $1 million and have not been sentenced to two years of imprisonment. In those instances where we are told that they did not receive a two-year sentence, most of the time, it might be because they were granted a remission of sentence after serving only one-sixth of their sentence. The fact of the matter is that the usual sentence for such offences is six or seven years of imprisonment.

This could in fact send the wrong message to the courts and result in shorter sentences being handed down. As we know, even with a reduced sentence, Mr. Lacroix was sentenced to more than two years. Had guidelines like the ones proposed been applied to him, he would have almost automatically been sentenced to two years of imprisonment. Instead, he got 14 years. The problem is that he will not be serving the full sentence. It is not that the sentence was wrong. The sentence was the right one, and he should be serving it. That is the problem.

The courts already take into account the prescribed aggravating factors. This bill provides for some, but it is already being done. What is being added here does not make much of a difference. Here is a specific example: almost all, if not all, the aggravating factors listed in the bill were mentioned in the ruling concerning Mr. Lacroix.

Restitution orders are also already in use. Their use may be broader in scope in the bill, but that does not substantially change what already exists.

As for the prohibition orders limiting the activities of convicted offenders, that is something interesting. However, many have suggested that they might be difficult to enforce. This should be looked at much more closely in committee.

What is missing from the bill is the abolition of parole after an offender has served one-sixth of his sentence. This is one of the two most important elements. Earl Jones and Vincent Lacroix will be able to use this mechanism to get out of prison before they have served an appropriate sentence, the one that was imposed on them, which in Mr. Lacroix's case was just over 14 years. With parole after one-sixth of his sentence, Mr. Lacroix will serve two years and a few months, including time already served. This is not nearly enough time for what he did. The solution in the case of Mr. Lacroix and all those who do the same thing is not to sentence them to a minimum of two years, but to require that they serve their full time, without parole after one-sixth of the sentence. The government is not doing anything about this, yet it is a key measure for dealing with this issue.

I listened earlier as a secretary of state told us that the committee would be open to any suggestions we might have. I hope it will be open to this one, because it is one of the key measures we should put in place.

Before imposing minimum sentences, which are inherently unfair, because they force the judge to impose overly harsh sentences on people who deserve less, should we not start by limiting non-judicial decisions? It is not a judge, but a parole board that decides to parole an offender who has served one-sixth of his sentence. This is therefore a non-judicial intervention in a judicial process to reduce a sentence that has already been handed down in accordance with the rules.

The bill also does not deal with tax havens. This is the second key point, and my colleague from Manicouagan was right to speak at length about it. Yesterday, I listened as hon. members spoke with trembling voices about the victims who should be compensated and supported, but the only way the government is proposing to support them is to send the people who defrauded them to jail. The government must also consider the victims and make every effort to compensate them for the losses they have suffered. The way to do that is to ensure that the people who defrauded them can repay the money they stole by preventing them from hiding that money in tax havens. These are the two main elements the Bloc Québécois will raise in committee in order to improve this flawed bill.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, the previous speaker, the parliamentary secretary, was asked by a member of the Bloc to explain why this bill specifies $1 million.

Given that a fraud is a fraud is a fraud, whether it is $100,000 or half a million dollars or $1 million, why would the government arbitrarily pick $1 million? The parliamentary secretary did not even make an attempt to answer the question.

Yesterday this question was brought up a couple of times with no satisfactory answers from the government. In fact one of the questioners yesterday was one of the government backbenchers. One of the government backbenchers asked the government speaker to explain the $1 million provision in the bill, and he could not do it.

Perhaps we are going to have to wait until the bill gets to committee to get these answers. I think that is a valid question. It has been asked many times and there has been no answer. I am sure there are people in the back rooms listening to what we are saying here. One would think they would be able to get some answers down to some of their speakers on this particular question.

[Roger Pomerleau, Bloc, Drummond, QC]

Madam Speaker, my NDP colleague has raised an issue that has been brought up a number of times in the House, and for which there is never a solution. It is a question that has never gotten a response. I do not know the answer to this question, except that the government chose a figure that would be high enough to have an impact on the public, without really having a reason for it.

I remind my colleague that the government is currently trying to impose a minimum sentence for fraud over $1 million, and in doing so, would direct judges and give them a specific obligation. It would take power away from the judges, whom the Prime Minister referred to—I am sure my colleague remembers—as left-wing ideologues.

Perhaps this is an attempt to take power away from the judges by requiring them to do things that they might already be doing in a better way. Mr. Lacroix was given 14 years instead of two mandatory years. The problem is not with the sentence he received. The problem is that the system allows Mr. Lacroix to serve only one-sixth of his sentence. That is the fundamental problem that needs to be fixed.

[Jean Crowder, NDP, Nanaimo—Cowichan, BC]

Madam Speaker, I know the member talked about prevention in his speech.

There was a report from 2007-08 by the Correctional Investigator. He cited the fact that 45% of the women who are in maximum security federal penitentiaries are aboriginal.

I wonder if the member could talk about what he would like to see, not only on white-collar crime but more broadly in terms of tackling crime, and in terms of more preventive measures?