Bill C-21 (Historical)

Standing up for 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.

Standing Up for Victims of White Collar Crime Act

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

Mr. Speaker, we were talking about tax havens during the debate, but this bill does not have anything to do with tax havens. It would be nice for the government to take action on tax havens, but I am not sure that is the domain of the Criminal Code.

However, the member and other members of his party are absolutely correct and relevant in respect of the lack of prevention measures. Where are the preventive tools to deal with fraud? Surely the government, in other bills that might come before the House, could come up with methods to attack the fraudsters. As the law newsletter from Miller Thomson, a firm I have never been associated with and am not advertising for, says, the three big names in Canadian fraud, along with Earl Jones, would not have been affected by this bill.

Agreeing somewhat with my friend, I ask: when is the government going to tackle fraud in a serious way with all the resources it has at its disposal?

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, prior to question period, my colleague had gone into a great deal of analysis of the difference between general fraud and white collar fraud in terms of the kinds of people who are victimized. People are victimized through their inability to understand the technology. Organizations are defrauded by very unscrupulous and skilled individuals. He also said just now, as he had repeated before, that there is not enough emphasis on prevention.

What I wonder about, and I think the House would be interested, is if those who benefit from the proceeds of crime knew in advance that the full spectrum of law enforcement and the judicial system would come hard on them, whether it is a tax haven or wherever the proceeds were, they would not be able to count that in the future as part of their ownership.

Does this bill come anywhere near to talking about the proceeds of crime, and if it does not, should that be elevated in terms of the committee's understanding and perhaps recommendations brought forward in that respect?

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

Mr. Speaker, if anybody in this chamber knows about community it is this member. He has served as chair of the greater metropolitan area of Toronto. His father was the mayor of York. This man knows community.

Crimes of fraud touch all aspects of age, gender, location, geography, et cetera. What this bill does not do, anymore than the existing law, is crack down specifically on the greatest fraudsters.

I want to answer my friend's question. There is not enough attention paid to specific fraudsters here. In these cases that have been pointed out by law newsletters, regarding Earl Jones, Stan Grmovsek and Vincent Lacroix, the penalties meted out were well in excess of the two-year mandatory minimum that is in this bill. In other words, the existing law gave sentences variously of 14 years for Earl Jones and 39 months for Grmovsek, and led to in that case, under the existing code, the disgorgement or return of $8.5 million.

We ought to be considering what the United States does with respect to the control of assets and the control of money, because at the end of the day, the victims want their day in court. They want to see sentences, but also, and maybe primarily, they would like to have their money back. This bill does nothing towards that, so we ought not to raise false hope in my community or in the member's community that this is a panacea. It is not.

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

Mr. Speaker, while Earl Jones made off with $50 million, Bernie Madoff made off with $65 billion. In fact, it is well documented that as long as 10 years before Madoff was caught, Harry Markopolos was working at the time for Rampart Investment Management in Boston and he was asked by his bosses whether he could duplicate Madoff's strategy, because, of course, they wanted to do the same thing and follow his strategy as to how he could make money consistently.

Markopolos was able to prove within a half hour that this could not be done. There had to be at least one month in a year that a fund would lose money. He just could not make money every year. He reported it to the Securities and Exchange Commission on several occasions over a 10-year period before they took action.

The question here is, where are the regulators? Why do regulators keep hiring people from within the industry who are friendly with people in the industry and are simply regulating their old friends? We have proven that regulation of friends does not work. We need more of an enforcement approach to regulation, a police force type of approach to regulation, as opposed to self-regulation by industry insiders.

I would just ask the member whether he has any comments about that.

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

Mr. Speaker, I agree that the regulators have primary due diligence control over many of the frauds, but not all fraud comes from the markets.

However, the three biggest incidents recently have been Vincent Lacroix, who got 13 years; Earl Jones, who I think got 11 years; and Stan Grmovsek, who got 39 months. The biggest problem with this bill is that they were treated by the law that exists probably no different from the way they would have been if this bill were law.

This law was delayed because of prorogation. Therefore, for the year or two that it has taken to get the bill this far, and by the end it is going to be three years, we have seen about $10 million more fraud committed per year, while the government did nothing.

When I say they did nothing, they brought a bill forward and then prorogued Parliament so it did not become law. That legislation, which was Bill C-52, or this one we are speaking of, Bill C-21, does not do enough either. It perhaps gives people a false hope, if they watch the six o'clock news in Conservative ridings, that the government is doing something about white collar crime. It is not very much.

They might really be just beating up on judges, taking away discretion and making sure they look at things as though they were schoolchildren, and judges are not, when in the history of the three cases I mentioned, the perpetrators, the fraudsters, were treated very severely under the existing law, more severely than this law indicates. As the old saying goes, where is the proof in the pudding of this legislation?

Hopefully we can get it to committee and we can have a broader discussion of what needs to be done to attack white collar crime and get out and address the issue that all parliamentarians care very much about.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I am pleased to speak to Bill C-21. I listened carefully to what my colleague from Moncton—Riverview—Dieppe in New Brunswick was saying, and I totally agree with him: Bill C-21, which was previously Bill C-52, is pure improvisation.

Let me try to dissect this bill in the few minutes I have left. In September 2009, roughly a year and a half ago, there were the Norbourg and Earl Jones cases and other similar cases. The government told us that these were separate and specific cases, that the law would take care of them, and that it would not get involved. Finally, the government intervened on October 21, 2009, by introducing Bill C-52, which, following prorogation of the House, became Bill C-21. If the government had not prorogued the House, this bill likely would already have been studied, amended and brought into force, and white collar criminals might have received longer sentences than those provided for in the act.

This bill imposes a minimum two-year sentence for fraud in excess of $1 million. Something does not add up. The Bloc Québécois will vote in favour of referring this bill to the Standing Committee on Justice and Human Rights. I would advise the government not to push us into passing this bill quickly. We will probably change it considerably to have it reflect reality more than it does right now.

We had already started asking the Minister of Justice questions about this, but he was unable to cite case law with sentences of less than two years for fraud to the tune of $1 million. Something truly does not add up.

Let us explain this to those watching. The government wants to crack down on white collar criminals. Who are these people? They are extremely well-informed criminals who know exactly how the system works and how to set up businesses in order to defraud individuals or take money away from them.

It is much easier to talk about armed robbery. Someone walks into a bank, credit union or convenience store with a loaded or unloaded weapon to commit theft. When the time comes to sentence that individual, the crime is more visible and it is much easier to prove that the crime was committed. White collar criminals on the other hand defraud people by making promises and asking for their money. They might guarantee annual returns of 5%, 10%, 15% or even 20% or more. They have a flair for attracting people. They tend to be smooth talkers. They can create a financial system that borrows money from one person to pay back another, and so on. This leads to cases like that of Earl Jones or Norbourg.

This has to stop and the message must be clear. And a minimum sentence for fraud over $1 million will not solve the problem, because clearly, prison sentences are also given in the case of fraud over $1 million.

Despite extensive research, I do not know of any sentences handed down for fraud over $1 million that did not include jail time. That does not exist. What is needed are prison sentences for criminals who defraud people of $100,000, $200,000 or $500,000. Now that would be a start. But do we need to add that in a bill? This is where I have a problem with the Minister of Justice. I do not know who his advisers are, but I am convinced that those around him forgot to tell him about section 718 of the Criminal Code.

I have a few minutes and I do not want to put anyone to sleep, but this is important. When we are preparing bills of this nature, it is important to know where we are coming from in order to know where we are headed. What does section 718 say? It has to do with guidelines for judges:

The fundamental purpose of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives:

(a) to denounce unlawful conduct;

(b) to deter the offender and other persons from committing offences;

(c) to separate offenders from society, where necessary;

(d) to assist in rehabilitating offenders;

(e) to provide reparations for harm done to victims or to the community;—I will come back to this in a moment— and

(f) to promote a sense of responsibility in offenders, and acknowledgment of the harm done to victims and to the community.

After reading this, we see that it is all right there in the Criminal Code. What does the Bloc Québécois want? It does not want mandatory minimum sentencing. That solves nothing, as we know. We have the proof; it has been settled and everyone knows it. We have studies that prove and confirm that mandatory minimum sentences do not reduce crime.

I will repeat it for the interpreters. I am sure that they interpreted all that very well but I would like my friends opposite to get it completely: mandatory minimum sentencing does not solve the problem of crime. This is not coming from us, but from studies by the Department of Justice, Public Safety Canada and especially U.S. studies. We know that our friends opposite like to boast that they are tough on crime, just like the Americans. However, the Americans are beginning to realize that it solves nothing. It solves nothing in Australia, Great Britain or New Zealand. It has been proven in black and white.

Paragraph 718(e) of the Criminal Code provides for this. I will read it again because there is one small thing they have failed to understand:

(e) to provide reparations for harm done to victims or to the community;

There is nothing in this bill. We will tackle it when the bill goes to committee.

In addition, the bill maintains the infamous provision for parole after serving one-sixth of a sentence. We would have expected the government to immediately remove that from a bill like this.

Right now, we have the perfect example of a man who was convicted. His name is Mr. Lacroix, of Norbourg. He defrauded his victims of $130 million. He received a sentence of 13 years in prison. He is eligible for parole after he serves one-sixth of his sentence, so 13 years divided by six. I can announce that he has already been released. Yes, he is out of prison. He defrauded his victims of $130 million, and his victims are either bankrupt or dead. Yes, some of them have died. And the same thing will happen with Earl Jones. Earl Jones defrauded his victims of $55 million. He just pleaded guilty and was sentenced. He is eligible for parole after serving one-sixth of his sentence. We need to get rid of that. It is urgent.

The problem is not to impose minimum sentences. We have always said that, and we will repeat it, because the members opposite do not seem to understand.

The public no longer has faith in the judicial system. They are not shocked by criminals receiving minimum sentences; they are shocked by the fact that the criminals do not serve those sentences. When someone is sentenced to 13 years in prison, the public expects that this individual will at least spend some time in prison. White collar criminals are eligible for parole after serving one-sixth of their sentence, and they generally do not have a criminal record, as we can see from research statistics. These individuals are not highwaymen; they are well-organized fraudsters.

According to our correctional services, this means they are not dangerous and there is little or no risk of them reoffending. Therefore, they are released after they serve one-sixth of their sentence. That is what shocks the public, and that is what is not in this bill. We would have expected the bill to abolish the principle of granting parole after one-sixth of the sentence has been served. We will have to see if it is possible to include this measure.

What is more, this may send the wrong message. The courts already consider the penalties. We need to stop instructing judges to impose minimum prison sentences. These honourable judges, whether presiding over the initial hearing, the Court of Appeal or the Supreme Court, have always said that they do not necessarily need a guide for imposing minimum prison sentences. Everything is already set out in the Criminal Code. They would rather have us tell them if this crime, because of its severity, deserves not a minimum prison sentence, but a longer one.

The government is not using this bill to deal with the issue of tax havens. My colleague, the member for Hochelaga, who is also the Bloc's finance critic, can come back to that in another plea, if I may use that expression.

Computers have made it easy to transfer money electronically these days. A well-organized fraudster can, with the click of a mouse, transfer tens of millions of dollars to places that our federal government has agreed to recognize as tax havens, such as Barbados or the Cayman Islands. We are just starting to discover that many of them are choosing Switzerland, and if it had not been for the HSBC Bank and, more importantly, an individual who left with more than 100,000 names, we never would have known that thousands of Canadians have accounts in Switzerland.

I do not have a problem with someone having an account in Switzerland. However, you need a minimum deposit of $500,000 to have an account with the HSBC Bank in Switzerland. That is a problem. I am not saying that people do not have the right to do it, just that the individuals that have money in accounts in Switzerland or other tax havens should have to declare it. They are supposed to do it under the Income Tax Act, but they do not. Despite our requests, the government has not intervened. And God knows that we have asked the government to get involved with the issue of tax havens a number of times. Mechanisms absolutely have to be put in place to address these tax haven kingdoms.

We have suggested several ways to combat economic crime. I would like to read what we have proposed.

We strongly suggest abolishing parole after one-sixth of a sentence is served. Also, the Criminal Code measures to confiscate the proceeds of crime need to be amended to include provisions covering fraud over $5,000. I am translating, because it must be explained.

Consider the example of someone guilty of fraud worth hundreds of thousands of dollars. What we are suggesting is that under the Criminal Code, if fraud over $5,000 is committed, authorities could confiscate all proceeds of crime from that individual. So if that individual stole hundreds of thousands of dollars from other people by fraud, we must be able to confiscate that individual's home, country home, cottage, chalet in Switzerland, and so on, in order to pay back the victims. Indeed, that is the goal; there is nothing new here. That is already in the Criminal Code. Section 718 states: “(e) to provide reparations for harm done to victims or to the community”. It is clear in the Criminal Code. It would be pointless to add anything to it. We simply need to ensure, with this bill, that such individuals' property is confiscated.

That is important when fraud of this nature takes place. We do not believe in minimum prison sentences for fraud over $1 million. Harsher sentences are needed, but they are also needed for people who commit fraud under $1 million. One way of doing this is by including provisions to confiscate the proceeds of crime for all fraud over $5,000.

We are also recommending that police forces be reorganized to include multi-disciplinary teams that specialize in economic crimes. We currently have multi-disciplinary teams to go after organized crime, to go after child pornography and to go after drug trafficking. It is high time we had this type of multi-disciplinary team to go after economic crimes.

We are recommending that banks be required to report irregularities in trust accounts to the Autorité des marchés financiers, the relevant professional order and the user. Allow me to explain, because I may have lost a few people. Every professional that must and can hold money for individuals—lawyers, notaries or accountants—has to have a trust account. A lawyer who receives a retainer has to deposit that retainer in a trust account and keep a record of that account. Generally speaking, many withdraw money from that trust account and often the banks realize that something fishy is going on. Money goes in and money goes out, and sometimes too much money goes out. We could start doing something about that.

I see that I am running out of time. I would just like to say that we are suggesting that a number of other changes be made to the Income Tax Act. We will be able say more about that in committee.

We absolutely must do two things. We absolutely must abolish parole after serving one-sixth of a sentence. We have to ensure this bill removes that provision because those who commit economic fraud are generally well organized. We also have to find ways to provide restitution to victims in order to fully respect section 718 and subsequent sections in the Criminal Code.

That is why we will look forward to seeing this bill in committee.

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

Mr. Speaker, regardless of the OECD protocols on sharing financial information, which I do not think have been that successful, the fact is that over the last two years it has been a bank employee of a Liechtenstein bank who has simply taken computer diskettes and sold them to the German government, which has resulted in a lot of taxes being collected by the German government and other European governments and 100 names being submitted to the Canadian government. The Canadian government has chased perhaps 100 people for money.

The government has also given an amnesty that if anyone wants to walk into a Revenue Canada office and avoid any problems they can do it. Evidently people have been doing that.

Just recently we heard of another employee of a Swiss bank who gave out diskettes listing hundreds of people, in this case 1,800 Canadians. This information was just made available now and we hope Revenue Canada is doing something to collect some of the taxes that are owed. As a matter of fact, more Canadians were found in this net than Americans. Even with the population of the United States, only 1,600 Americans were caught in this net.

Why must we rely on disgruntled employees of banks to get this information? Why can the government not do things to get this information that Revenue Canada needs?

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I agree with my colleague, but there is a very important premise: if we want to stop the bleeding, we must first plug the hole where the blood is coming out. In this case, that hole is the tax havens. If we eliminate the tax havens, if we intervene, monitor them, and tell the Canada Revenue Agency that the deductions are over, there will be no more tax havens. If there are no more tax havens, hundreds of millions of dollars will remain in Canada, and will not be transferable.

I agree with my colleague, but this is very important to us. There are banks in Europe, Switzerland, the Cayman Islands and elsewhere. There are tax havens in Monaco and Liechtenstein, and there are many other places like that in the world. Banking secrecy exists. I am not saying that we need to pressure anyone to eliminate it. We can start here, and that is very important. We should start here, clean things up, and prevent people from taking advantage of tax havens. Then we will really be able to hit white collar crime where it hurts.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, I want to address the whole issue of tax evaders. It goes to our basic philosophy of justice and law and what Canadian society should be doing, whether it is socially acceptable or not.

As was disclosed last week, we have 1,800 people who are setting up foreign accounts in Switzerland for the sole purpose of avoiding taxes. In my mind, that is just as heinous as most other crimes but it just seems to be accepted by Canadian society, and especially the government which gives them a general amnesty and life goes on. Tax evaders are not punished, there is no retribution and no sentence. Absolutely nothing goes on.

However, if we hypothetically compare that to two teenagers who were caught last night breaking into a service station and stealing a carton of cigarettes and a small amount of money, what would happen to them? They would go to jail for 18 months or two years. Perhaps they would deserve it but I believe it is a fundamental flaw that the government has in its thinking that these individuals, these very rich billionaires, can get away with what I consider to be a heinous crime with no repercussions at all, no discussion about it and no talk about it.

I would like to get my learned friend's opinion on that whole issue.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I agree to a certain extent with my colleague; however, he has a big problem. I would say this to my honourable colleague. When the Liberals were in power, they did nothing about it. For 12 years, the Bloc has asked the government to monitor and eliminate tax havens.

I agree that as soon as there are allegations about people who evade taxes and use tax havens, we should receive a list. Then we go to those people and tell them that they will be receiving a letter from HSBC Bank. They may have to pay taxes on money they forgot to declare for the past five, six or eight years. However, the fact remains that people still have access to tax havens. Let us eliminate tax havens. My colleague, the member for Hochelaga, will be much clearer on this in his presentation.

We know that these criminals are brilliant. Let us be honest. Those who commit these crimes, these white-collar criminals, are brilliant, superior beings. They know exactly what the ramifications are. They know exactly how to use tax havens. They know exactly how to transfer funds inconspicuously. They cannot transfer $100 million at once. They might transfer $1 million, then $2 million three months later and so forth. That is how it works. The problem is that we are unable to shut them down. The government can monitor money remaining in Canada, which gives it a certain amount of control over fraudsters. However, as soon as the money leaves Canada, the government no longer has control. Canada is losing tens of billions of dollars. That is unacceptable. We absolutely have to do something about tax havens. We have to stop the hemorrhaging. Then we can come back and deal with those who commit these crimes.

[The Acting Speaker, Barry Devolin]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Yukon, Offshore Drilling; the hon. member for Malpeque, Ethics.

Resuming debate, the hon. member for Windsor—Tecumseh.

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

Mr. Speaker, Bill C-21 is a reincarnation of Bill C-52. It is important, in terms of the credibility the government has or maybe, more important, does not have with regard to its so-called “getting tough on crime” agenda, to understand the history of this legislation.

On October 21, 2009, as a result of a number of notorious incidents, the Earl Jones one in Montreal being the more current one at the time, Bill C-52 was introduced into this House. There was a very brief debate on it. There were signals from the opposition parties of a willingness to deal with the issue of white collar crime, which is what it was about.

It went to committee quite rapidly and we had hearings on it in November 2009 and into December 2009. We did not complete it. I would estimate that we heard from 10 to 15 witnesses over that period of time, some giving us a great deal of detail, quite frankly, about the frailty of the legislation but information and evidence that was really necessary for us in our consideration.

We, of course, then had the notorious prorogation. We wonder about the level of integrity at the time that decision was made. The government knew the horror stories and the suffering of individuals and groups in the country. It knew about the need to get serious about dealing with white collar crime.

Without knowing what was going on in the Prime Minister's mind at the time, I would have to say that he probably gave absolutely no consideration to this bill or to that suffering when he made the decision to protect his government from the Afghan detainee issue being continuously raised in this House. He put off the House for an extended period of time beyond what was originally scheduled.

As I think most Canadians now know, when prorogation occurs, the parliamentary agenda is wiped clean. Any bill that is outstanding at that time from the government side is regulated to the dustbin and we have to start all over again, which we did when we finally came back in February 2010.

However, we did not see the bill right away. The new bill, Bill C-21, which we are debating this afternoon, was not presented to this House until May 3 for first reading. It was not put on the order paper for debate at second reading until today. So we lost all of that time through the spring and summer.

It is quite possible that the justice committee may have dealt with it fairly quickly, because of the amount of work we had already done, and had it back to the House for third reading, amended, I can assure members. All opposition parties are quite concerned about how weak the bill is. It is almost useless as it is now. However, we have some real hope, because of what we heard from a number of witnesses and some of our ideas, that it could be strengthened to the degree that it would be worthwhile to pass into law. However, we never got the opportunity to do that until today.

I am certainly signalling, on behalf of my party, as the other opposition parties have, that we will support this going to committee so that we can do something serious about this as opposed to what is contained in Bill C-21.

I have another point to make before I go to the actual particulars of the bill. We have heard that a series of amendments to the legislation are necessary if we are to have any meaningful impact on white collar crime. The government has had all that evidence since December 2009 when it decided to prorogue and knew the bill would go down into the dustbin. It had the better part of 10 months to implement those corrections in Bill C-21 but it did not do anything. Bill C-21 is exactly word for word the same as Bill C-52. There are no changes at all.

We had some very good evidence. I mean that in the sense of people who knew what they were talking about, as opposed to the government on this issue, and who came forward with very specific changes that needed to be made. Some of it was just cleaning up wording. In other cases, it was implementing meaningful amendments that would have a meaningful impact on fighting this type of crime. Did we get any of it? Absolutely nothing, not one change. Bill C-21 is word for word of what we already had in Bill C-52, which was showing, because of that evidence, to be so wanting.

It is important for those who have maybe not followed this issue, and I do not think there is a lot of Canadians who have not, to set the scene. I want to credit this information from a forensic accountant by the name of Mr. Al Rosen, who came before us with a brief presentation in writing and then expanded on it before the committee, both in his verbal presentation and in response to a number of questions from the members of Parliament, who sit on the Standing Committee on Justice and Human Rights.

He set out by saying that we had to understand where we are at, so he went through a series of the events that we had in the early part of the 20th century. He went back a bit into the latter part of the 19th century, but mostly he dealt with the 20th century. He told us to look at what we had done: Bre-X Minerals, that scandal; Nortel Networks, overstated assets, financial statements, he pointed out, restated four times and then watched the stock price collapse; dozens of business income trusts that in effect were pyramid schemes, Ponzi schemes; and the non-bank asset-backed commercial paper and all of the misrepresentations that went on with that.

At the core, if we look at the financial collapse that has occurred around the globe, that collapse is very much as a result of that asset-backed commercial paper that did not have any assets behind it. I have already made reference to the Ponzi schemes such as the one in Quebec with Earl Jones and the major one in Alberta.

He went on to point out at the same period of time the lack of response, both at the provincial and federal levels, around regulatory changes that would have gone some distance to avoid these losses. He was quite critical of governments in that regard.

He also then went on to point out that there had been Supreme Court of Canada decisions that in effect needed to be corrected. It was the permission that was granted. He made reference in particular to the Hercules management case in 1997. In effect, the court said that it was okay if a person misstated on audited statements, even though they were misleading to the public, would lead shareholders to perhaps buy in when in fact if the real truth were there, they would not have done so. He referenced the weakness in our civil courts when people would go for restitution, the length of time it would take and the long trials when it was large sums of money like this. He also mentioned the lack of prosecution in Canada and pointed out the number that went on in the U.S.

I took that with a bit of a grain of salt when we already had reference to the Madoff situation and any number of other collapses in the United States of major corporations. Although the U.S. has a more rigid and forceful approach to prosecuting, it certainly has not had the effect of deterring major crimes there.

We need to look at that. This is the context that we were dealing with when we first dealt with Bill C-52 and now Bill C-21.

The information in the brief from Mr. Rosen is not secret. It is in the public domain. The Justice Department certainly knows about it. I assume at least some members of the government are aware. One would have, and I certainly know I did, the expectation that Bill C-52 and now Bill C-21 would actually address these problems in a meaningful way. It does not. It is as simple as that.

If I can do a quick summary, this is what it would do. It would introduce a mandatory minimum. The be all end all of all solutions of all crime problems in the world, according to the government, is to slap a mandatory minimum at it, punish somebody. Maybe it would be better if we tried to prevent the crime from happening, in the first place. Anyway it would slap a mandatory minimum of two years for any fraud that is committed over $1 million.

When we heard the evidence, we heard about the huge number of Ponzi schemes, other fraud schemes, some of these schemes being mail solicitation, phone solicitation, email over the Internet type of solicitor, all of it completely fraudulent. However, more than half of those are under $1 million. Therefore, that section would not apply. The panacea for everything else will not be applicable for a large number of the white collar crimes that are committed in Canada on a yearly basis.

The Conservatives also have imposed additional burdens on our courts as to how to deal with this. It was quite interesting to see the brief from the Canadian Bar Association. I am sure the Bar Association would be upset if I used the term viciously, but it was a pretty vicious attack on the bill.

I will use this as one of the two or three examples of where the association attacked the bill. It introduced the concept in the sentencing process that if someone were convicted of a crime under this law, there would be a community impact statement. Anyone who practises law in the criminal courts, the first question that will pop out is, what is a community impact statement? We have never had that in the Criminal Code or any other sentencing provisions under provincial legislation. It is a totally new concept.

Maybe the government is being creative here. Unfortunately, it is just about useless because we have no idea what the community is going to be. It does not define that in any way. It does not put any parameters on it, any limits on it. It is not clear if it talks about it in the singular. Could more than one community impact statement be done? We may have different groups that have been impacted by it. It is extremely poorly drafted with regard to this area and a number of others.

I go back to my opening comments about the length of time. The government has had now 10 months when it could have corrected a number of these points, and this is one of them.

I am intrigued with the concept of the community impact statement. I think it is possible that in fact we may be able to develop one that is useful to victims of these types of crimes so the court has a full picture of the impact, not just on individuals but the kind of impact it may have on a community as a whole.

We have seen this a number of times when we have so-called a financial adviser consultant trustee type of person who will swindle money from a significant proportion of small communities, a community that trusts the person, who almost always is a male. It gives him its money on the basis that he will handle it properly. It then has a major impact on that small town or small village because a great deal of money has been taken out of circulation.

We can see where it would make sense to do that. The bill does not make any sense in that regard because it is probably going to end up being fairly useless.

Unless we define more clearly what community groups would be entitled to bring forth that statement, it has the real potential to clog up our courts by making the sentencing process much longer than it might be otherwise if the bill were drafted properly.

One of the other provisions in here, and again it is typical of the government's overreach when dealing with both making up crimes and dealing with them by way of punishment, is for a prohibition order. I have no argument with that, and I think any lawyer who has practised law in the criminal courts would say that, yes, people who commit these kinds of crimes should be prohibited from being able to do that either indefinitely, depending on the size and nature of it, or at least for specified periods of time once they have served time in jail or other punishment.

However, the government did not stop at that. What did was made it impossible. For instance, if I am Bernie Madoff living in Canada and I have stolen $65 billion, I could be prohibited from ever being a financial consultant adviser again. However, under this bill I would be prohibited, given how broad the prohibition order is, even from being a sales clerk in a grocery store or retail outlet because I would be handling somebody else's money. Even though the extent of the money I would be handling may be $50 for a shirt, under this prohibition order I would not be able to take that job.

This is typical of the overreach. The Bar Association, I think without being it, were very effectively sarcastic about how badly drafted this was and how much of an overreach it was.

Another provision in the bill is with regard to restitution orders. Here is where we get into the courts perhaps getting backlogged by additional responsibilities. The bill mandates that it is an absolute must if the judge does not make a restitution order, to give a written reason for not doing so.

There are times when it is obvious why a restitution order will not be made. I will use the example again of Mr. Madoff and the $65 billion. The guy is completely bankrupt. He is ill, or I understand there is some concern with his health. He is quite elderly and he has no opportunity to ever make restitution.

If one is gong to make a restitution order in our courts, there must be some basis for doing it. A judge cannot just say that Mr. Madoff has stolen $65 billion and he has to pay it back. There has to be a basis upon which to show that the judge has looked at the financial circumstances and the ability to earn income in the future and order an amount in a restitution order.

That takes time. It takes the time of police officers because they have to investigate. It takes the time of the prosecutors because they have to present that case. It takes court time as the judge is considering the evidence being put before him or her when it is obvious that a restitution order is meaningless and should not be wasting court time and the time of those professional people in doing it.

Again, this is very badly drafted legislation. There are other parts of the restitution order provisions that simply do not make sense in terms of any quality of legislation that the House or the government should pass, but they have in fact done that.

It is quite clear, mostly because of the Earl Jones case and the pressure for which I will give credit to my colleagues from the Bloc Québécois, my colleague from Outremont, parliamentarians from that province and from the legislature in Quebec City, that something has to be done. Earl Jones was just the epitome of it and we could not just sit on our hands any more.

Rather than deal with it at that point, what did the government do? We could understand that because it was under political pressure, it could come forward with a lousy bill, which we could clean up at the committee. When it got to the committee and we had the evidence and solutions for a number of the issues, what did the government do? Absolutely nothing. It came back to the House and presented the same bill again.

I want to make one more point around the regulatory functions that need to be cleaned up both at the provincial level and at the federal level. There is a lot of preventative work that could be done in this area if the government got at it.

The other thing is with regards to enforcement of our laws. We need much more effective teams of specialists that can fight white collar crime, identify it and prosecute it effectively. We do not have those teams in place at this point. The government should be moving on that.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I am sure the House would agree that the member has a very intimate knowledge of how the Criminal Code works, as a lawyer. I have always taken his experience and have attempted to ask questions that would perhaps allow a layperson to understand better how the Criminal Code works. My question is related to that.

I think the member can appreciate how frustrating it must be to those who are victimized by these white collar bandits who are so skilful in defrauding very innocent people. What compounds that even more is that they get away with it, that they have assets that are hidden, and the fact that in this bill, restitution where possible is required and a judge has to say why he or she is not making a motion for restitution. I am sure the member can feel the frustration on the part of those who have been defrauded.

Is there any way this bill could be strengthened with respect to the proceeds of that type of crime for those who have been successfully prosecuted, so that through a judge's order, the resources are there to exact that money back and repay it to the people who have been defrauded?

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

Mr. Speaker, in fact we were discussing this right at the point when the House adjourned in December of 2009. I do not think we actually got any of this on the record of the justice committee. We were discussing it, the opposition parties in particular, and there was a strong feeling that in looking at the proceeds of crime sections that deal with organized crime, we should expand the definition of organized crime to cover this, because a number of these schemes in fact are organized and should fit into the definition of organized crime. We have not been using those sections, perhaps because the prosecutors are worried that the definition is not broad enough to catch them.

Therefore we should either expand the definition of organized crime to cover white collar crime of this nature or simply allow the proceeds of crime sections to be used in these circumstances, both at the federal level and the provincial level. Quite frankly, the provincial level has been more effective in gathering proceeds of crimes for victims than the federal government has been.

There is one of two ways of doing it, or maybe both, and that is something that needs to be considered. It obviously was not addressed at all when the bill was drafted. There had been some suggestions from some of the witnesses. The government did not pick up on them at all.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I wanted to take a moment to join in this debate. I appreciate the comments from my colleague from Windsor. I too learned a great deal about not only the process through which this bill found its way back again to us but also some of the issues they have been wrestling with at committee, which would in fact perhaps have benefited this bill had the conclusions they came to found their way into the bill.

The point I would like to ask him to expand upon is one that has come to my attention as a labour leader, and that is that more and more often, we have to admit that white collar crime is in fact a blue collar issue. Over 60% of all the trading on the New York Stock Exchange, the TSE and the NASDAQ is actually employee benefit plans, investing and reinvesting workers' money on the stock exchange.

In a funny kind of way, unions' pension plans and benefits plans are the most powerful stock of venture capital or capital or investment in the world. An odd kind of thing has happened. It is like Marxism realized. We have taken over the means of production without a single shot fired. We have bought and paid for it with our own benefit plans. It is a beautiful thing, when we think about, but the vulnerability is there. What I want my colleague to talk about is that perhaps it is going to take a great deal more training for the trustees of these multibillion dollar benefit plans.

My own union is a small union, the carpenters' union. It has a $40 billion pension plan, and the trustees have to be aware of the vagaries of the marketplace, above and beyond, in a way like never before. First of all, there are the fiduciary responsibilities and obligations associated with being a trustee. One cannot just take a guy off the shop floor and put him in charge of a $40 billion pension plan. There is also the vulnerability of it to the new generation of white collar criminal who could eat it away.

That is what I mean by the blue collar side of white collar crime, on which I would like my colleague to expand.