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

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, members of the government have asked us why we were debating this bill. We are debating this so Canadians can understand that a bill is just not a bill into itself. It has to be read to be understood. Many more pieces have to be looked at to understand the thinking. There may be some deficiencies and we can look at them later.

One speaker recommended reorganizing the police to deal with these types of crime. In other words, banks would be required to report irregular transactions and we would start dealing with tax havens in regard to these types of schemes. There is so much more to do.

It is not in the bill, but there should be a provision dealing with some of these related criminal offences.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I agree. We need to be doing more to stop the tax havens. I mentioned some of the things in my speech. We need to ensure that this legislation would actually stop white collar crimes from happening. I do not think there is enough in here to deter the criminals who plot for weeks and months how they can fleece people for more dollars.

At the end of the day we need to look at who is being affected by white collar crime. It is average Canadians who work day in and day out and put a bit of money away for their golden years. We need to ensure they are the ones who actually have golden years, not some criminal lying on a beach somewhere living a life of luxury because he has millions in the bank.

I would like to see more teeth to this legislation. Members from all parties can work together to ensure that we are protecting Canadians.

The House resumed consideration of the motion that Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), be read the third time and passed.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, it is with pleasure that I put a few words on the record with regard to Bill C-21.

I want to pick up on the point on which the previous speaker concluded his comments. He asked who is being affected when we pass this type of legislation. We need to put it into perspective for those individuals who are affected by Ponzi schemes or things of that nature.

Not that long ago we had an issue in Manitoba, and the member for Elmwood—Transcona would be very familiar with it, where a great number of Manitobans, 33,000 plus, invested in the Crocus share fund. I am not trying to say there were illegal activities, but I would suggest that more transparency through criminal laws such as this could save thousands, hundreds of thousands, and millions of dollars.

I want to reflect on the Crocus fund. Back in the 1990s the government of the day wanted to see more investment coming into the province, so it created this fund and promoted it among individuals living in the province of Manitoba. There were tax breaks and so forth. It went off quite well. When it kicked off, there were hundreds of millions of dollars of investment. There was a great level of interest from average Manitobans. It went along reasonably well until 2000 and 2001. At that point in time, we are not sure exactly what took place. There seemed to be a great deal of secrecy. Where was some of this money being spent? There were a great deal of questions. It became a fairly controversial issue by 2003-04 to the degree that the fund was actually frozen.

I raise this issue because of the number of people it affected. Hundreds of millions of dollars were lost. Over 33,000 Manitobans, many of whom invested retirement funds into that fund, suffered literally thousands and thousands of dollars in losses on an individual basis. I had the opportunity to meet with many of the individuals and heard about the problems those losses incurred. They had believed in good faith that what they were doing was for the right reason.

Indirectly the government was supporting this fund. It was helping in terms of creating jobs. Investment funds at the best of times can be a challenge in some jurisdictions. They felt they were doing the right thing. The problem was there was a need for more transparency.

To what degree legislation of this nature could have had an impact, I am not too sure. I do not really understand the finer details of it, but what I do know is at the end of the day we are talking about trying to protect average Canadians who want to use investments as a way to ensure they will have a better retirement, as one of the possible venues in terms of getting money out.

Whether it is an investment fund like Crocus or these Ponzi schemes, I find it very difficult to understand how some individuals could try to con or fleece, or whatever word one might want to use, money from people. They exploit individuals, many of whom are seniors who have accrued money over the years in order to have a relatively decent lifestyle in their retirement. It is hard to comprehend how some individuals think they have the right to take actions of this nature.

It is one of the reasons it is important that we have legislation such as this to look at ways in which we can minimize the amount of white collar crime. One member mentioned the goal was to eliminate it. I do not believe we will ever be able to eliminate white collar crime but there are things we can do to make a difference.

A member mentioned that we should strive to have the best possible legislation. It interested me because it came from a member of the New Democratic Party. I was not in the committee at the time, but I believe the Liberal Party proposed an amendment which would have made this legislation that much better in terms of its strength. My understanding is it would have added into the legislation market manipulation of stock prices, shares, merchandise or anything that is offered for sale to the public. This would have made the legislation that much better. I do not understand why the government did not see the merit of that amendment.

Quite often governments want it to look as if they are the ones who are taking the action and do not want to act on good ideas that come from the opposition benches. I do not necessarily agree with that, but I can understand why there may be some resistance on the part of governments. They do not want to develop good ideas if they come from the opposition benches. It is unfortunate, but it is the reality.

I am told that the Bloc and the New Democratic Party did not see the merit and did not want to support the Liberal Party's amendment. That surprised me. I do not understand why those parties would oppose something of this nature. Had that amendment passed, it would be here today and the bill would be that much stronger in protecting the interests of victims. It is very important.

I have had the opportunity to have discussions with constituents who have experienced first-hand the loss of considerable sums of money because they had a certain element of faith and confidence in what they were being told. I have had that opportunity on many occasions. People do not take pride in the fact that they made a mistake and as a result lost thousands of dollars. People do not come forward to admit it when issues of this nature occur, but it does happen.

The individuals who have touched me the most in regard to schemes of this nature are those who are on a fixed income, those who had confidence in a system they thought would be there ultimately to protect their interests. At times the system does fail, unfortunately. We need to look at ways in which we can protect those interests. When I talk to seniors I often find that a disproportionate amount of their savings go toward different schemes that come up and are ultimately sold to them. They come in many different forms. It is easy to say that consumers should beware and they should read the fine print and so forth. I appreciate that. When people talk to me about the potential of investments, I am very careful in terms of what I say.

I am not, have never been and will never be a financial adviser but I am able to balance my personal chequebook. However, I will leave it at that and leave it with the professionals. However, I do caution people to be very careful, especially if they are on fixed incomes and going into their retirement years because, the end of the day, we need to do what we can in terms of protecting the funds of those who are on fixed incomes and are not in a position to get involved.

It is very difficult when something is sold to them in such a fashion that it gives the impression it is a no-lose situation, that they cannot go wrong by investing x number of dollars, and they are being sold this by someone who is a fairly smooth talker or coming in from an agency of different sorts. I can appreciate why many of the victims make some of those bad decisions.

What does Bill C-21 actually do? The most significant thing is that it does is it makes mandatory minimum sentences for those who are found guilty of defrauding the system in excess of $1 million. I for one see the value in terms of that. I believe it can be a meaningful way to ensure there is a detriment to committing a crime of this nature. I know that minimum sentences have been somewhat of a controversial issue. It is controversial because of the issue of judicial independence. A lot of the judicial system and the stakeholders affiliated with that love to leave the discretion with our courts. I can appreciate that and I understand why they would say that.

From my perspective and with the dialogue and consultations that I have had with my constituents, I have found that in certain situations there is room for mandatory minimum sentences. In looking at Bill C-21, I believe that is a reasonable component to have in this situation. Hopefully it will be effective in terms discouraging some from entering into this whole area. We will need to wait to see what happens but I do believe there is some value to it.

The bill would also require consideration for restitution for victims. As has been pointed out quite often, all it takes is making some individuals, some of the different stakeholders or individual companies that might have been a recipient of some of the funds, aware that it is a crime to manipulate, extort or get money out of the hands of seniors and others. Quite often, a responsible business or a corporation will make resources available to minimize the impact on victims.

Requiring our courts or our legal system to look at where it is possible for restitution is a positive thing. We have had experience, and going into the future I suspect I will make reference to some of my involvement with youth justice committees, as I already have, that restitution can be an effective tool in all aspects of law. I suspect that it is one of the ways in which we can ensure that the victims themselves are receiving something in return for what they have had to endure.

However, if there are ways in which we can somehow compensate victims through restitution, we need to move in that direction. I would have thought that would have already been in place, and I suspect that it was to a certain degree, but this is a bit better definition to ensure that it occurs. This will make a difference.

The bill would also allow courts to consider the possibility of community impact statements or would encourage the legal system to take them into consideration. I have always been a very strong advocate for restorative justice and this goes even one step further. I believe restorative justice is the most effective way to get victims to the table with the perpetrators to ultimately come up with a resolution that brings all parties a higher sense of justice. Restorative justice would be very difficult to achieve in this situation, but at the very least requiring, where possible, that there be community impact statements is a positive thing and it is something we should be moving toward.

In going through the bill, I noticed that the government did not really address the need for enforcement. We can bring in whatever type of legislation we want but if we are not prepared to enforce it and provide the resources necessary in order to monitor and discourage, it will not be as effective.

If we want to minimize white collar crime, we need to have a stronger presence in that whole area. I am not convinced, given the very nature of this particular crime, that the government has been overwhelmingly supportive of allocating additional resources to combat white collar crime. We can talk about getting tough on white collar crime by passing legislation of this nature, but until we are prepared to acknowledge the need to adequately resource our police services, as an example, we will not achieve what is expected, which is that the government is serious about dealing with white collar crime.

It reminds me of a commitment that was raised during the byelection where the Conservatives had made a commitment to hire additional police officers. I believe it was in excess of 2,000. The additional staff could have been allocated to commercial or white collar crime. If I had a choice, I would suggest that if we have adequate resources at the grassroots level to ensure accountability with legislation or the laws currently in place, that could be just as effective as this particular bill.

I would also suggest that the bill itself will no doubt draw some media attention. The government can issue its press release saying that it is getting tough on white collar crime and will have the legislation it has passed. In fairness, the caveat is that the Liberal Party tried to make it a better bill but the government chose not to support it. In any event, the government can issue its press release making it very clear that it brought in legislation.

However, if the government is not prepared to put in the resources that are necessary to make this bill work, then I would suggest—

[The Acting Speaker, Denise Savoie]

Order, please. I am afraid the hon. member's time has elapsed.

Questions and comments. The hon. member for Algoma—Manitoulin—Kapuskasing.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Madam Speaker, I am glad I was here to hear my newly elected colleague's comments on this bill. I congratulate him on his election.

It is right for Liberals to be standing up on this because if anybody knows about white collar crime, it would be them. We certainly support tougher rules to protect investors, pensioners and business owners from corporate fraud.

Let us just look at the Liberals' take on this when we look at the history: Senator Raymond Lavigne alleged use of Senate resources for personal gain; Benoît Corbeil sentenced in December 2009 to 15 months in jail for his role in producing fake invoices while he served as the director of the Liberal Party of Canada's Quebec office; Gilles André Gosselin, former head of Liberal-friendly ad firm, pled guilty to charges of fraud and forgery totalling $655,276 in the Liberal sponsorship scandal; Jean Brault, the former head of the Liberal-friendly ad firm, plead guilty to five charges of fraud connected to his involvement in the Liberal sponsorship scandal; and Suzan Pawlak, the former treasurer of the federal Liberal riding association in Elgin—Middlesex—London, sentenced to 12 months of house arrest for committing fraud that a high level party official tried to cover up.

When we see that, I can see why the Liberals are such experts on this. With respect to that, maybe the member would like to comment a little bit more about some of the weaknesses in this bill.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I see that hypocrisy within the New Democrats is not just limited to Manitoba.

If we want to look at the people who shafted seniors of their pensions and investment funds, I only need to refer to Gary Doer and the New Democrats in the province of Manitoba who did not stand up for the 33,000 Manitobans who lost $100 million-plus.

If we want to revisit history, let us talk about recent history. It was the New Democratic Party inside this chamber, just recently, that voted against the Liberal Party amendment that would have given more strength to the very bill that we are talking about today. It would have included the market manipulation of stock prices. It was that member and her party who actually voted against it and did not allow it to be a part of this legislation.

We can talk about the New Democrats and the Liberals but the Liberals are far ahead in terms of much higher moral standards and in protecting the seniors in our country, much more so than the New Democrats, especially when they were in power in the province of Manitoba. I can guarantee that much.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I am very impressed with our new colleague from Winnipeg North. He brings a lot of experience and knowledge, even on this bill.

I want to give the member an opportunity to maybe elaborate a little bit more on some of the initiatives that maybe the provinces have done already. In fact, some have said that the provinces have leapfrogged the federal government in terms of these matters of restitution, et cetera, through the property and civil rights laws under the seizure and forfeiture principles, which may be helpful.

The other point I want the member to comment on is with regard to the deterrence principle. I think it is important for the justice system to have a balance between punishment, rehabilitation and reintegration, as well as prevention.

It seems that the deterrence factor of a minimum of two years would not be a deterrence to people who know that if they get caught for a crime of over $1 million, they will go to jail for probably 10 to 14 years, which is the maximum for fraud over $5,000. I doubt very much that people being assured that they will to go to jail for at least two years will scare them off when they know they will probably go to jail for 10 years.

In this case, I am not sure that mandatory minimums are an effective deterrent. In fact, the whole bill is all about mandatory minimums.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the comments and the question from my colleague. He is quite right in his assessment that provinces have moved toward a lot of civil rights law where organizations can be taken to court as a way in which to recover moneys that have been acquired through crimes within communities.

The federal government has really fallen behind in trying to get that form of restitution, especially where there has been gang activity. I think we will find that there are pockets of increased gang activity across Canada. The federal government has really not done very much in terms of being able to equip, or better equip, the provinces to recover merchandise or dollars. We are talking about millions and millions of dollars in regard to things acquired in an illegal fashion.

We should look at what some of the provinces have done. It is something on which the federal government should spend a bit more time. There is so much out there that we can really make a difference in terms of restitution. All it takes is an open mind and a willing government to really make a difference.

As we get to debate more legislation, I look forward to add more on some of the initiatives, both private and public, particularly in the province of Manitoba. I would love the opportunity to share that with the House.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I listened to the member's speech and I want to bring a couple of things to his attention.

We are not against the fact that there is a mandatory minimum on this bill, but we know the government has tried to put mandatory minimums on a lot of bills. I guess that is basically to fill the prisons that it wants to build because there has been a 43% increase in the budget: $230 million in 2009-10 and $329 million in 2010-11. This has been approved by the Liberals.

Paula Mallea, one of my constituents, wrote me and said, “Aside from my personal feelings as a long-time criminal defence lawyer, I have marshalled a lot of facts that contradict the efficacy of the Conservative agenda. I have tried to point out that the agenda will increase crime while vastly increasing the deficit”. Her concern is that, with all these mandatory minimums, we have to be mindful of how much of the cost would be borne by the provinces.

Perhaps my colleague would like to mention the impact on the provinces.

I also want to clarify something. We talk about community impact statements because the bill proposes this. In looking at a crime of this magnitude, whether this is in there or not, a judge will usually order a pre-sentence report and the impact statements from the victims will be taken. I do not know if the member wants to comment on that part of it.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I used to be the justice critic in the province of Manitoba. I had the opportunity to tour our jail facilities. There is no doubt about the fact that there currently is a capacity issue. I anticipate that the more we get into mandatory minimum sentences, it will be an issue in which the federal government will have to sit down with the provinces and tell them to what degree it is prepared to get involved.

Minimum sentences are not necessarily the answer. People really want to see less crime on the street. For the last number of years, the government has talked a great deal about being tough on crime, but at the end of the day, it really has not been effective, even with all the discussion about minimum sentences.

We need only to walk in the streets of Winnipeg north and ask people if crime is any better today than it was five years ago. We might find that 2% or 3% of people will say it is better, if that. I think people want to see results.

The government seems to be more content in delivering a message of tough on crime, but it is not necessarily delivering a message for resolving the crime issue, and I am more interested in doing that.

I look forward to being able to add comments as to how I believe we will ultimately be able to move in the direction of resolving the crime problem.

The House resumed from December 14 consideration of the motion that Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), be read the third time and passed.

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

Madam Speaker, I am pleased to speak to Bill C-21. While it has been a bit of time since we talked about the bill, perhaps I will give an overview.

Bill C-21 has been put together to address the issues of white-collar crime. It behooves us to reflect a little on how white-collar crime has changed since generations of our constituents and, in fact, generations in Parliament.

The nature of white-collar crimes then were equated with the proverbial jokes associated with the door-to-door vacuum salesmen or whatever. I say that in a manner of juxtaposing, not in levity. The nature of Ponzi schemes are quite different. They involve the manipulation of shares and pyramid type sales. They victimize citizens of all ages, in particular those citizens who are not familiar with up-to-date technologies.

I am reminded of this. In my constituency, even as late as yesterday, calls were coming into my office with respect to seniors being met at the door by people who wanted to look at their water heaters. Then they tried to get them to enter into agreements to replace the heaters. Some people signed on the dotted line only to find the scheme dramatically raised their charges. There are legal implications involved and very serious things happen.

We need to look at our constituencies and ensure we have a legislated regime in place that is understandable. They need to know the kinds of technology and the victimization used. Only a few months ago the government brought forward legislation aimed at looking at the kind of technology used and the type and extent of victimization, where seniors, in particular, were robbed of the ownership to their homes. They had been tracked for months through the interception of their mail. Their accounts were skewed and the banks were unfortunately transferring ownership of their properties. They were duped and victimized in a manner that we could never really understand perhaps 20 or 30 years ago. However, with the kind of technology and the criminal insights used, victims of all age categories are subjected to these kinds of things.

With that background, I am pleased to respond to Bill C-21. I will give an overview of the bill and then I will look at perhaps some of the shortcomings where the bill could have been firmed up even a little more. Perhaps in the future it will be.

The bill includes a mandatory minimum sentence of imprisonment for two years for fraud valued at more than $1 million. It provides additional aggravating factors for sentencing. It requires consideration of restitution for victims, allows sentencing courts to consider community impact statements, to issue prohibition orders, preventing convicted persons from transacting property and money of others.

We are in favour of the bill, but it does not go far enough and I will try to elaborate a little on that.

We believe the amendments put forward by our party, which were not accepted by the combined opposition, the government and the other two parties, would have strengthened the legislation. As illustrations of that, the Liberals proposed that mandatory minimum sentences of two years should apply to practices such as market manipulation of shares and Ponzi schemes.

The bill does not do enough to eliminate accelerated parole review for white-collar criminals. Canadians investors, especially seniors, do not deserve to be victimized by white-collar criminals. They deserve better than what the government has presented through this bill.

The principles behind the stricter sentencing rules are important, but they are not enough to prevent frauds from happening. Sentencing is important, but prevention, as has been said many times with respect to the criminal justice system, is equally as important in white-collar crime. We would like the government to consider why it has not used this opportunity, as it has in the past, to do more with respect to prevention.

Finally, although we are glad to see the legislation, we also call on the government to act on white-collar crime, as it has been overdue for years.

I will go through a few of the shortcomings of the bill.

While we support the bill on stricter sentencing guidelines, we are concerned it is too narrow in scope to truly be effective in the full spectrum of fraud with which it attempts to deal. The bill does not limit early parole for those crimes and it does not address the lack of police resources currently allocated for white-collar fraud. As I said before, we put forward amendments that were aimed at strengthening the bill by extending the two-year minimum sentence provisions to practices such as market manipulation of shares and Ponzi schemes. The amendments were rejected by the other parties.

The legislation was introduced in response to high profile white-collar crimes, including Norbourg Financial Group and the Earl Jones issue in Quebec. In the wake of the Madoff Ponzi scheme's revelations in the United States, many Canadian investors have grown increasingly concerned about this type of white-collar fraud.

Other than the title, the bill is the same as Bill C-52, which was introduced during the previous session, but died at prorogation.

What are the major components of the bill?

The bill introduces mandatory minimum sentences of two years for fraud involving over $1 million, regardless of the number of victims. It specifies aggravating factors to be considered at sentencing, including the psychological and financial impacts of victims, the age and health of victims, as well as the magnitude and duration of the fraud. It requires the court to indicate what mitigating and aggravating factors were considered relating to the sentence.

It allows the court to prohibit an offender from assuming any other position, volunteer or paid, that involves handling other people's money. It goes without saying that is highly desirable. It requires the judge to consider the whole manner of restitution, which is the repayment to victims where possible, and it requires judges to consider community impact statements.

Generally speaking, it is interesting to juxtapose a cross-section of stakeholder reaction with respect to this bill. It has been mixed. Victim groups have been lobbying the government to strengthen white collar criminal provisions. Some have expressed the view that the bill falls short because it fails to address the accelerated parole review rule.

The Canadian Bar Association has expressed its opposition to the bill, citing that it would increase pressures on an already taxed criminal justice system and does not improve on what is already available in the Criminal Code. It also opposes the mandatory minimum sentences in favour of judicial discretion at sentencing.

From a policing perspective, however, the RCMP has expressed its support for the bill, indicating a mandatory sentence for such crimes has the potential to be used as a deterrent. In spite of what I said earlier, the RCMP takes that position.

In terms of amendments, as I mentioned rather obliquely before, the Liberal justice critic introduced an amendment in committee that would add market manipulation of stock prices, shares, merchandise, or anything that is offered for sale to the public to the definition of what could be punishable by a two-year minimum sentence. The amendment failed in committee as the government, Bloc and NDP voted against it.

The Liberal justice critic also recommended that an amendment be introduced to modify the Corrections and Conditional Release Act in order to eliminate the one-sixth accelerated parole review rule for white collar criminals. This amendment was ruled out of order by the committee chair and was subsequently upheld on a challenge with the support of the Bloc.

A technical amendment, however, was adopted with support by all the parties. The amendment would require the court to issue an explanation of a restitution order only when a victim seeks restitution and the court decides not to make such an order. The amendment addresses concerns by the Canadian Bar Association to relieve some pressures on an already taxed system.

In my overview of the legislation, I indicated the type of victimization that occurs. I also talked about enforcement and what the government has in place in response to the issue that was raised. In terms of integrated market enforcement teams, these IMETs under the program have been put in place, funded through the RCMP. They are operational in four of Canada's major financial centres and their mandate is to investigate and lay charges for serious Criminal Code offences involving capital markets.

While the legislation does not, in the Liberal Party's view, go far enough with respect to that kind of victimization that takes place under the Criminal Code with respect to shares and Ponzi schemes, there actually is an enforcement regime in place called the IMET program. According to the 2007-08 IMET annual report, the program's total budget increased from $13 million in fiscal 2005 to $18 million in fiscal 2008 and is approximately $30 million today.

The investigations indicate how important it is that we deal with this particular issue.

In 2008-09, 17 individuals were charged with almost 1,000 counts and 5 individuals were convicted. Their sentences ranged from 39 months to 13 years.

According to the RCMP's 2009-10 Report on Plans and Priorities, it is anticipated that annual funding of $30 million will be allocated in the fiscal year to support the investigation and prosecution of fraud offences.

I posit that the investigative processes and the teams are in place.

According to the statistics, a compelling case could be made for focusing additional attention, which the bill does not, on this kind of crime involving shares and Ponzi schemes and so on.

An adult criminal court survey, which collects information on appearances, charges laid and so on with respect to this kind of fraud, found that a prison sentence was imposed in almost 4,000 cases in 2008. In the same year a conditional sentence was imposed in nearly 1,000 cases. Probation was given in 6,000 cases. Fines were levied in 1,200 cases. Restitution was granted in nearly 2,000 cases. Other sentences were imposed.

These statistics do not provide details on the monetary value of the fraud or the type of fraud, which can include securities-related fraud, such as Ponzi schemes, insider trading, accounting frauds that overstate the value of securities, as well as mass marketing fraud, mortgage and real estate fraud and many other deceptive practices.

I only include these statistics to indicate that as the bill was going through committee, the statistics were available and the issue with respect to share manipulation was not addressed and is not addressed in the bill. The bill could have been improved had the opposition's amendments been accepted.

Despite the lack of statistics, in the bill, sentences are imposed on fraud over $1 million. Before and after Parliament's introduction of conditional sentences, a case of large scale fraud by persons in a position of trust have typically resulted in substantial jail sentences. The range has been estimated at between 4 to 15 years for large scale fraud although a sentence of less than two years and conditional sentences have been imposed where there have been important mitigating factors.

Clause 3 of the bill adds four aggravating circumstances which we believe improve the situation that I have referred to. Those circumstances are: the magnitude, complexity, duration and degree of the fraud; the offence had a significant impact on the victims; the offender did not comply with licensing requirements or professional standards; and, the offender concealed or destroyed records related to the fraud or the disbursement of the proceeds of the fraud. That will substantially improve the legislation that presently exists.

For that reason we are in favour of the legislation. We do however rest our case on the fact that an expansion of the bill could have dealt better with share and stock manipulation and the kind of Ponzi schemes that have victimized thousands of people.

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

Madam Speaker, I listened intently to the member's explanation of how the IMETs were supposed to be working. The fact of the matter is that since they were set up in 2003, and there are six IMETs in place, their record is not all that good. They have only had five convictions in all that time.

When we look at the United States, in that same period of time the U.S. has had 1,200 convictions, including Conrad Black. He committed all of his white collar crimes in Canada, yet it was the Americans who caught him and put him in jail. He is one of the 1,200 in the United States.

Clearly, we have to look at the whole regulatory scheme. The regulation in this country seems to be very lax.

A recent interview in Canadian Business Online magazine quoted certain people on Bay Street as to whom they are afraid of. They said that it was not the Canadian cops they were afraid of, nor was it the Ontario Securities Commission, which they should be afraid of, but it was the United States Securities and Exchange Commission because it has real teeth. Obviously the Americans have a better system and it has shown results by virtue of the fact that 1,200 convictions have occurred in the United States and we have had 5.

What is wrong with the system in this country?

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

Madam Speaker, as I indicated, I know that the allocation of the resources is not always linked to the results that we would like. There are too many times that they are not related. However, when we look at the IMET budget in 2007-08, which was around $13 million, and relate that to the statistics the member has quite rightly pointed out in terms of the full spectrum of fraud that exists and the number of charges that are laid, the RCMP itself has found that the resources are not enough. The RCMP has asked for over $30 million in the budget.

The other thing that is a factor with respect to the effectiveness of the application of laws is not only the enforcement, but it is the legislative regime itself. I would think that the member's question begs an answer not only with respect to monitoring the implementation of the bill and the additional allocation of resources, but the number of charges that are in fact going to be laid and acted upon. That will be the litmus test of both the enforcement and the changes in the legislation that provide for the Criminal Code and the justice system to deal with the nature of fraud that the member has pointed out.