Bill S-4 (Historical)

An Act to amend the Criminal Code (identity theft and related misconduct)

This enactment amends the Criminal Code to create offences of identity theft, trafficking in identity information and unlawful possession or trafficking in certain government-issued identity documents, to clarify and expand certain offences related to identity theft and identity fraud, to exempt certain persons from liability for certain forgery offences, and to allow for an order that the offender make restitution to a victim of identity theft or identity fraud for the expenses associated with rehabilitating their identity.

Criminal Code

[The Speaker, Liberal, Peter Milliken]

Is the House ready for the question?

[Some hon. members]

Question.

[The Speaker, Liberal, Peter Milliken]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Speaker, Liberal, Peter Milliken]

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

[Stockwell Day, Conservative, Okanagan—Coquihalla, BC]

moved that Bill S-4, An Act to amend the Criminal Code (identity theft and related misconduct), be read the second time and referred to a committee.

[Rob Moore, Conservative, Parliamentary Secretary to the Minister of Justice]

;

Mr. Speaker, I am pleased to join today's second reading debate on Bill S-4, which would amend the Criminal Code to address the serious and ever growing problem of identity theft.

Although introduced in the Senate, the bill's proposed reforms are familiar to hon. members as its predecessor, Bill C-27, which was virtually the same, was introduced in this chamber in the previous Parliament and had received all party support at second reading.

I hope Bill S-4 can similarly receive all party support now and be quickly passed into law. Canadians urgently need the protection it would provide against identity theft, a problem that the Canadian Council of Better Business Bureaus has estimated cost Canadian consumers, banks, credit card and other businesses more than $2 billion each year and a problem that has enormous personal and psychological impacts on its victims. I should add that oftentimes the victims of identity theft are the most vulnerable Canadians.

Identity crime encompasses the collection, possession, trafficking and use of identity information belonging to another in committing crimes such as personation, fraud or misuse of debit card or credit card data.

For example, it occurs when somebody pretends to be an account holder in a transaction and uses the true account holder's identity to access his or her credit or actual funds. It also occurs when someone acquires and uses the identity of another to carry out otherwise ordinary transactions, such as to rent an apartment or to buy a cellphone, which are then used as part of a broader criminal scheme. In these instances, if the crime is eventually detected, the trail leads back to the identity of the unfortunate innocent person whose identity was stolen. We know that organized crime and terrorism routinely engage in identity crimes to carry out their criminal operations. I doubt that any one of us, within our constituency, cannot name someone who has been the victim of identity theft.

Bill S-4 proposes to create three new offences that will target the preliminary stages of identity crime and will enable police to lay charges, for example, before the crimes of fraud or impersonation are committed.

The first new offence would be called identity theft and would apply to attaining and possessing identity information with the intent to use the information deceptively, dishonestly or fraudulently in the commission of a crime.

The second new offence is trafficking in identity information, an offence that targets those who transfer or sell information to another person with knowledge of or recklessness toward the possible criminal use of the information. This offence targets the middlemen, and that is those who traffic the stolen identity information from one person to another, but who may not otherwise be involved in the fraud or other crimes in which the information is destined to be used. The trafficking of such stolen identity information is often part of organized crime's identity fraud activities.

The third new offence is for unlawfully possessing or trafficking in crucial government-issued identity documents that pertain to other people.

Each of these new offences would carry a maximum penalty of five years imprisonment and would complement existing Criminal Code offences such as fraud, impersonation and forgery that already prohibit the most harmful consequences of identity abuse.

Bill S-4 proposes other new offences that will complement other existing Criminal Code mail and forgery offences. It will create the new offences of fraudulently redirecting or causing redirection of a person's mail, possessing a counterfeit Canada Post mail key and possessing instruments, often referred to as skimming devices, that are used to extract and copy debit and credit card information.

Bill S-4 would also facilitate law enforcement's investigative activities by adding new offences and certain existing offences to the list of offences for which a wiretap order may be obtained.

Importantly the bill would enable sentencing courts to order an offender to pay restitution to a victim of identity theft or fraud where the victim had incurred expenses related to rehabilitating the reputation and credit history.

Bill S-4 also proposes two exemptions to address potential negative impacts on the undercover work of law enforcement. I want to spend a moment on this aspect of the bill, as this issue attracted significant interest in the Senate. It is important that these are clearly understood for what they are and are not.

The exemptions in clauses 7 and 9 have been carefully crafted to permit the police to obtain and use identity documents in a fictitious name to support undercover activities. Concealing the true identities of undercover police officers is a problem akin to a uniformed officer carrying a sidearm. The law exempts police officers from offences that would otherwise by committed by carrying their guns, for example. The proposed exemptions will do the same thing for undercover officers with respect to identity documents.

Some will argue that these exemptions are unnecessary and inappropriate, since it is already a scheme in the Criminal Code that operates as justification for offences committed by the police during a criminal investigation. While it is true that sections 25.1 to 25.4 of the Criminal Code could be used to justify the use of false identity documents by the police, that approach would require each officer to weigh the proportionality of using the documents each and every time he or she relied upon them.

While this is an appropriate test where the police are engaging in conduct that amounts to an offence that has not been specifically authorized by Parliament, it is the government's view that it would be inappropriate to require the police to rely on this scheme for a discreet, pre-defined activity that is clearly in the public interest. It is essential to keep in mind that the proposed exemptions do not give the police the authority to commit identity theft or other fraudulent activities. Any other offences that an officer may be required to commit in the course of a criminal investigation would have to be justified under the scheme contained in the appropriate sections of the Criminal Code.

Lastly, the Senate legal and constitutional affairs committee, which undertook a thorough study of the bill, amended it to provide for a five-year parliamentary review. This would provide us with a welcomed opportunity to assess the impact of the reforms in combatting identity theft.

Bill S-4 would provide much needed new tools for Canadian law enforcement and much needed protection for all Canadians against identity theft. I urge all hon. members to consider the most vulnerable in their constituencies when they consider the bill. As we all know, many members of our communities have been the victims of identity theft and the psychological impact of having one's identity stolen or misused can be quite profound.

I urge all hon. members to support the bill and support its swift passage.

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

Mr. Speaker, I have a few questions. At the Commons justice committee, we did not see this bill in as great an amount of detail as the Senate did. He will know from the changes made to the previous identity theft Commons bill in the last Parliament, some significant and important changes were made. As parliamentary secretary, I would think he would want to say that this shows the Senate justice committee does good work and has provided us a good document from which to work.

Lawful excuse was mentioned as a reason why identity theft might not be charged as either summary conviction or indictable. Besides the police officer exception, what does he envision might make up that lawful excuse?

The interception of private communications in clause 3 is a very good thing. It gives law enforcement officials the tools they need in this electronic age to enforce this law. Why is the government not heeding attorneys general like Wally Oppal from British Columbia who wanted this kind of power extended throughout the code to fight their war on organized crime and the drug industry, which the parliamentary secretary sometimes suggests is the government's war too? Why will there not be more measures for extending the interception of private communications? Why has the government not worked quicker and with more dispatch in this regard?

[Rob Moore, Conservative, Fundy Royal, NB]

Mr. Speaker, I thank the hon. member for his work on the justice committee. As he knows, we had the opportunity in the House to consider the previous bill dealing with identity theft.

The Senate and Senate committee took a very thorough look at this bill, and I want to thank Senate members for the input they provided. We feel this is a strong, appropriate bill.

I will speak to the lawful excuse that has been raised. We have to understand that by and large this bill is about protecting Canadians from identity theft. We know that is a growing problem.

Using the example of undercover police officers, in order to do their work, sometimes they have to have a false driver's licence or identity. This is to protect them in the course of their duties. We do not want them to have to go through the other Criminal Code exemption provisions in order to be able to conduct their undercover work. We feel the police should be provided that exemption within the bill so that undercover officers can use those documents.

The bill is largely about tackling a very serious problem. I feel that our government has been responsible in bringing this bill forward. It is something I am sure the member has heard about from his constituents. I have certainly heard from mine about the serious impact of identity theft.

On the broader issue of organized crime, our government has been targeting the root of the organized crime problem. We have been dealing with the issue of identity theft, gang violence and mandatory penalties for serious gun crimes. We have been dealing with some of the things that fuel organized crime, like the trade in drugs and also auto theft. In fact we have also dealt with the very serious issue of the human trafficking of minors that organized crime participates in.

Step by step we have been taking a very serious and direct approach to organized crime. As the Minister of Justice has said many times in the House, we are just getting started. We will continue with this agenda to make Canada and our communities safer and provide balance with our justice system.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Mr. Speaker, I want to pursue the issue of lawful excuse. When I first looked at this provision, it caused me a good deal of concern as to why we would be doing this for this specific crime. There is the general section in section 25 of the code. Why would we not have amended section 25, if that was necessary, as opposed to creating a new section in this part of the code under identity theft?

If we are doing it with regard to identity theft, in how many more sections of the code are we going to use this specific type of lawful excuse, as opposed to using the more general one with the protections it has against potential abuse? That caused us a great deal of concern when we first passed section 25 with regard to lawful excuse, and it continues to be of great concern to the justice committee.

I am wondering whether we are now going to see a series of amendments to the code in other criminal offences and why would we do that as opposed to simply amending, if necessary--and I have some doubts about whether it is necessary--section 25.

[Rob Moore, Conservative, Fundy Royal, NB]

Mr. Speaker, I thank the hon. member for his work on the justice committee.

Part and parcel of an undercover police officer's role and his or her ability to infiltrate an organization is the use of a false identity. A police officer can obviously not use his or her own identity. This bill recognizes that specifically.

The code does provide for lawful excuse for police officers to be able to conduct undercover activities and to do things that would otherwise be unlawful, for example, in order to infiltrate criminal biker gangs, organized crime. The Criminal Code needs to provide for that because our police need the protection of the law as they conduct their activities.

In the case of identity theft, we feel it is more appropriate to have a specific exemption in place so the police will not have to avail themselves of section 25 every time undercover activities are conducted. That is why that very narrow exemption is in place.

What makes the bill even more workable is that it attempts to target those who prey on the most vulnerable, those who, unbeknownst to a Canadian, would steal his or her identity and rack up charges in that individual's name or use it to conduct organized crime offences.

Canadians want to be protected from identity theft, and this bill would help to do that. It would help to get at the middleman who is in possession of identity theft material. When it comes to identity theft, it would expressly allow the police to do their good undercover work. I think Canadians understand that. It is the right approach and a comprehensive approach to this issue.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I would like to thank the member for commending the Senate justice committee, both this time and two weeks ago, for the great work it is doing.

Is there a role for Internet providers in working with the police to help solve identity theft crimes?

[Rob Moore, Conservative, Fundy Royal, NB]

Mr. Speaker, the problem of identity theft has become more complicated as technology increases.

We, on this side of the House, look for comprehensive approaches to tackling crime. We have been steadfast in our work on the criminal justice file. We have to be able to work with Internet service providers, the police, provincial attorneys general and other investigative bodies to tackle this serious problem.

The member raised the Internet in his question, which has been used to exponentially increase the instances of identity theft. In the past, a driver's licence or other important personal information would have been physically stolen, but that information can now be stolen via the Internet, so we need co-operation from all quarters.

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

Mr. Speaker, it gives me great pleasure to speak to Bill S-4 today.

I have been here for three and a half years or so, and it seems that we deal with issues that are important to Canadians sporadically and cyclically. This is not the first time I have risen to speak on identity theft legislation. It is not the first time we, as a Chamber, have considered it. It just seems to be a shame that after three and a half years Parliament has not tackled identity theft. Prorogation is one thing that comes to mind.

We have to come together, as parliamentarians, to pass legislation that works in making Canada a better place. We do not need lawyers or members of Parliament or professors to tell us that Canadians at the Tim Hortons on St. George Boulevard in Moncton or Quispamsis are concerned about identity fraud, identity theft.

They may not use those terms, but they know what it is if they are offered a free cruise by some company in the United States if they only put $200 on their credit card and then they have their Visa racked up to its limit. They know what that is. That is good old-fashioned hucksterism, old-fashioned theft, which one only admires. They want us to respond in a modern way to a modern problem which, at its roots, is a very old way of just tricking people. This bill is one that we are pleased to recommend.

Again, all too often we do not recognize the good work of the Senate. On the Senate justice committee, we have les éminences grises, many people who have years of constitutional legal experience. Clearly they have brought to bear amendments or changes to this bill that were needed from the previous bill, which was introduced into Parliament in the last session before the pin was pulled. Some of those examples are modernizing our definition of what constitutes an identification card.

The last clause of the bill says that there shall be a five year review of this legislation. Now many of us, and I know the member for Windsor—Tecumseh would agree, think that the Criminal Code in general should go through a comprehensive review. We seem to be adding layer after layer to the code without any real and thoughtful revision or compilation of its true essence.

In this act, and it seems to be a trend in a number of acts, there is the suggestion that every five years there would be a full review of how we are doing with respect to identity theft or identity fraud. As members know, we did a similar thing with respect to anti-terrorism legislation. We think there should be such a mechanism for the designation of organized crime as well.

In its first proposed subsection, this bill has a hybrid offence, which means summary conviction or indictable. There are some offences that will be below a mandatory limit. If we only went with indictable or serious offences, we might lose a lot of the minor offences that happen every day with respect to identity fraud.

This is not a case where we are just going after the big pilfering of accounts. This bill is designed to catch, as I mentioned, the rack up of $200 on somebody's Visa bill. That would be a summary conviction offence. That part is good.

Discretion is a word we use on this side quite a bit. Discretion should be inherent with judges and prosecutors so they can mold the law to the factual situations they see in our communities every day. Hooray that the Conservative government allows discretion in this bill for prosecutors to proceed by way of summary or indictable offence.

The offence itself states that anyone “who, without lawful excuse, procures to be made, possesses, transfers, sells or offers for sale an identity document that relates” to another person is liable for the crime to a term of up to five years in jail.

The identity document is something else that the Senate added to the debate by further specifying what it should be.

Clearly, these are documents that we know of every day. We see them used every day and there is reticence in the minds and hearts of people as to whether they should be handing over their social insurance number, driver's licence or health insurance card. There is a timidity about giving information that identifies a person, particularly to businesses, but also to government. This includes birth certificates. Death certificates were added. One might ask how it could be identity theft if a death certificate is taken because the person does not exist any more. Clearly, it is an issue of identity fraud, where somebody plays on the personage of an estate or of a dead person.

Also included are passports, citizenship documents and employee identity cards. An expansion allowed by the Senate takes into account that employee identity cards sometimes have so much information behind them, either encoded on them but more likely behind them in terms of the application, that they are almost more valuable than a social insurance card or a driver's licence. It is a very modern suggestion to add it to the list.

Before getting into the guts of the bill, I want to talk about the difference between identity fraud and identity theft. The last bill in the Commons took the approach that we should be more concerned with identity fraud rather than just identity theft. To the average person and to the judge interpreting our laws, identity theft might just say that one is stealing somebody's person, who they are legally, for a bad purpose.

Identity fraud dips in and out of the idea of the entire theft of the identity. It suggests a broader definition, which would encompass all of the stages involved in the crime, such as acquiring, collecting and transferring personal information as well as the actual use of the information. It is much like car theft, a bill that we dealt with earlier today. There are typically many players in the stages of identity theft. It is not a situation where someone leaves a Visa card behind at a store and then someone else tries to use that Visa card at another store. That is clearly a case of identity fraud and identity theft for the purpose of the next purchase.

We are talking about wholesalers of information who gather up student ID cards. We have some students as pages. Mr. Speaker, you probably do not recall as well as the pages do about being a young person at Queen's or U of T and nonchalantly giving all of one's information to the registrar. What if that is privatized? What if it is a private group of companies that amass that information, take those partial identities and sell them to Maclean's to sell magazines?

What if that information is intercepted along the way and used for an improper purpose? It would be very difficult to find out how that happened. The young student might say that he or she has only ever given all of that information to Queen's University, so he or she will blame the university, but that may not be the case at all. The person along the way might be an errant secretary, data information analyst or whomever. Anyone involved in the acquiring, collecting or transferring of the information is hooked by this legislation.

Calls for the amendment to the code in this regard have been going on for some time. Papers have been written for some time on the issues of identity theft and identity fraud. One of the best papers talked about the most fraudulent uses of personal information by identity thieves. Initially, until we took it to this level, this law did not deal with the collection, possession and trafficking of the information. We feel that with the additional offences added by this bill, this is now addressed and adequately covered. We are here in 2009 talking about it.

Identity theft is a serious criminal activity. We have reviewed the bill. Between the speech of the parliamentary secretary and my opening comments about the basis of the bill and the documents that are included in the definition, we know that we have a strong bill. People in the community might ask why it is so urgent. Identity theft and identity fraud are a serious and lucrative industry. How do we as lawmakers have any evidence of that?

The Canadian Council of Better Business Bureaus has estimated that identity theft costs Canadian consumers, banks and credit card companies, stores and businesses more than $2 billion annually. Two billion dollars used to be a very meaningful number until deficits were running into the area of $50 billion. Two billion dollars use to be the annual cost of a major national program. As I say, $50 billion has probably diluted the meaning of $2 billion, but we know that this is a very serious set of criminal activities. As I mentioned, it is the unauthorized use, collection or trafficking of information. This is the pitfall.

Mr. Speaker, you are an established person, well known in Canada, and you may think this would never happen to you. The worst thing you could do to prevent that from happening to you is to pretend that it cannot happen to you. It is never too late to learn how to safeguard yourself from this type of fraud.

There may be many people in the Canadian public who may think they are protected, because they use a chartered bank, they have known their bankers forever, they have only had one credit card in their lives, they pay their phone bills at city hall, they do everything they can to keep their transactions as discreet, one to one, even personal. According to Louis Robertson, head of the RCMP's Criminal Intelligence Analytical Unit at the Canadian Anti-Fraud Call Centre, identity theft is now probably the most important problem for Canadian consumers.

In 2006 there were 212,000 Canadians who were victimized by identity theft, and their losses, in the use of identity as well as credit card manipulations, ran over $15 billion. Somewhere, depending on whether one subscribes to what PhoneBusters did on a call-in basis of $2 billion, or the RCMP with the $15 billion figure, is the reality about the figures three years ago.

As far as Canadians feeling that they are gripped by identity theft, there was a survey conducted by the McMaster eBusiness Research Centre, MeRC, on behalf of the Ontario Research Network for Electronic Commerce, ORNEC, which was designed to determine the nature and extent of identity theft and fraud so that lawmakers would know that they had the evidence to bring in a bill like this one.

The survey itself, with over 3,000 valid responses, suggests that 6.5% of Canadian adults, or almost 1.7 million people, were the victims of some kind of identity fraud in the last year. Over 20 million hours and more than $150 million was spent to resolve the problems associated with these frauds.

The issue is that this is costing the economy of Canada more than just the money that is pilfered and taken away from Canadian consumers and taxpayers. The survey also counts the millions of hours spent trying to recover the data that was lost and create new data. Anyone who has ever lost his or her wallet knows that it is a nightmare to replace all of the things in it.

More than half of the frauds that have occurred to the Canadian public involve nothing more than unauthorized purchases made with credit cards. That is certainly something we hear about quite often.

If we eliminate credit card fraud as the most popular or well-known instance of fraud with respect to identity, with the incidence rate and costs quoted above, the number of victims is reduced to 700,000, but they still spent 12 million hours, not the 20 million hours, but 12 million hours and more than $110 million of their own money to resolve the problems.

Most victims, 57%, did not know how their personal information was accessed, but when they did know, the identity fraud was most often associated with a business transaction conducted either in person in 25% of the cases, or online in 15% of the cases. This is exactly consistent with what I said earlier. People who are careful about their identity issues try to keep their business transactions discreet and personal, but it is actually more often the case in personal business conducted, that is 25%, than it is for online purchases. That is an important thing for Canadians to be aware of.

This bill captures anyone along the chain involved in taking personal identification information.

Debit card skimming made up 13% of the fraud incidents. Twenty-five per cent of all cases of identity fraud were committed by someone known to the victim. This survey found that to be the case. They were not known by the victim in 7% of the cases.

Very few of the cases of identity fraud were reported to the police, only 13%, or to credit reporting agencies, 6%, or to PhoneBusters, .5%. This indicates that perhaps there is an embarrassment factor. People also might realize, as many people do, that there are inadequate legal provisions to cover the instance, which is the reason we are enacting this law.

If one were to go to police authorities before this law came into effect, the police authorities might well say that this is a civil matter. How often do Canadian citizens hear from police authorities that the fight over the loss of money between the card holder or bank customer and the bank or credit card company is a civil matter and it will not be investigated? That is why there is such low reporting. We hope with this law that there will be more reporting because, frankly, the police will have a better tool to work toward the elimination or the curbing of identity theft and identity fraud.

In closing, the Canadian consumer can protect his or her personal information from physical theft in a number of ways. The government has been adept in some quarters in publicizing a message, at least outside this House, so I would call on the government to take up this campaign of advising and educating members of the public on how to protect themselves from identity fraud and identity theft. It would be disingenuous to suggest that this law is going to eradicate all identity theft and identity fraud.

This is what Canadian consumers can do. I think that the government should lift provisions from this speech for a public education campaign that could be a companion to this bill. These suggestions are from the survey of 3,000 people, of what are the most effective means of protecting one's identity and what have proven to be effective.

Seventy-nine per cent shred financial documents or important documents all or most of the time. Many use a locked mailbox all of the time, or most of the time. Many keep sensitive information in a secure location, such as a locked box or a drawer, all of the time or most of the time.

Many have eliminated or reduced the number of identity documents that they carry with them. How many people do we know who, because of loyalty programs, credit cards, identity documents needed for almost any club, association, building or job, have two wallets or in some cases a wallet so big that it is the size of a desk? One idea is to get rid of unnecessary identity documents.

Many have stopped receiving mailed account statements or have reduced the number of mailed statements that they receive.

Canadian consumers take the following measures to keep their personal information from prying eyes or unauthorized access. One has to do with securing one's information, and one of them has to do with security at the workplace or at a social event where information may be spied upon.

Never or rarely give information over the phone to people claiming to do surveys or offer promotional goods and services, unless one is a Liberal and is asked by a reputable polling agency what one's view on the next election might be. I highly recommend not doing that.

Make sure no one is watching when using an ATM or debit card machine. The public would be wise not to give credit cards to waiters or gas station attendants in the absence of the card holder himself or herself.

Those are just some of the things that consumers can do.

In summary, this is a good bill. It is a shame we did not get at it earlier. It should give law enforcement officials the tools to fight identity fraud. We should be thinking in terms of identity fraud, not just identity theft. We should put out a public education campaign to make sure people do not do things that put them in jeopardy. We should give the Senate a pat on the back for making this bill better.

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

Mr. Speaker, the member made an excellent presentation.

I would like to ask him a question, but I am not sure that he has the answer. The question has to do with lawyers who are increasingly having problems with clients who present a false identity to get mortgage loans. I would like to know whether or not the mortgage loans aspect is part of the scope of this bill. Does he know the answer?