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

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

moved that Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), be read the second time and referred to a committee.

[Daniel Petit, Conservative, Parliamentary Secretary to the Minister of Justice]

Mr. Speaker, I am pleased to speak today to Bill C-21, An Act to amend the Criminal Code (sentencing for fraud). This bill was first introduced as Bill C-52 during the previous parliamentary session.

The bill contains a number of measures to toughen penalities for those who commit fraud.

The bill sends a message to all those who think they can manipulate and mislead Canadians who have entrusted them with their hard-earned savings. Those who commit serious fraud have to suffer serious consequences.

This bill is also designed to improve intervention measures in the justice system with regard to victims of fraud. Serious fraud can have enormous, devastating effects on victims. We have to consider those effects and how to best deal with them.

The measures proposed in the bill will contribute substantially to boosting Canadians' confidence in the ability of the justice system to punish financial crime.

Bill C-52, the previous version of this bill, was well received by everyone. It passed second reading without difficulty and was supported by a number of witnesses at the Standing Committee on Justice and Human Rights. Hearings were held for some time on the proposed amendments to the Criminal Code and the committee heard from witnesses, particularly seniors' advocates and groups representing victims and police.

Perhaps it would be helpful to remind the House of the current state of the law on the issue of fraud. The Criminal Code already addresses all known forms of white collar crime, from security-related frauds—such as insider trading and accounting frauds that overstate the value of securities issued to shareholders and investors—to mass marketing fraud, theft, bribery and forgery, to name a few of the offences that may apply to any given set of facts.

The maximum penalties for fraud are already high. In particular, for fraud with a value over $5,000, the maximum term of imprisonment is 14 years. It was increased from 10 years to 14 years about five years ago. This is the highest maximum penalty in the code, short of life imprisonment.

Also, aggravating factors for fraud offences, which can be added to the aggravating factors applicable to all offences, are already in place in the Criminal Code. They require the courts to increase the penalty imposed to reflect certain circumstances, for example, if the value of the fraud exceeds $1 million, if the offence involves a large number of victims or if, in committing the offence, the offender took advantage of the high regard in which he or she was held in the community.

Canadian courts have clearly stated that for large-scale frauds, deterrence and denunciation are the most pressing objectives in the sentencing process. The courts have been clear that a serious penitentiary sentence must be imposed for large-scale fraud. We routinely see sentences in the four to seven year range for large-scale frauds. Most recently, of course, Vincent Lacroix was given a 13-year sentence for the massive security fraud he perpetrated in Quebec just a few years ago.

And of course, we cannot forget the case of Earl Jones, also in Quebec. The major Ponzi scheme he operated for decades in Montreal was uncovered last year and that is one reason the public is so interested in this issue. A few months ago, Earl Jones pleaded guilty; in mid-February, he was sentenced to 11 years in jail for having defrauded his friends and family of $50 million.

When delivering Mr. Jones' sentence, the judge stated that he had not only robbed the victims of their money, he had robbed them of their freedom and self-esteem. She also said that he is responsible for irrevocable changes in all the victims' lives and that this has left them all humiliated.

The courts are taking these frauds seriously, but this government believes that still more can be done to strengthen provisions in the Criminal Code, and that would allow Parliament to have some influence.

Parliament can send a clear message that it agrees with this trend toward tougher sentencing. One way of sending this message is to introduce a new mandatory minimum penalty of two years for large-scale fraud with a value over $1 million. Orchestrating and operating a fraud scheme worth more than $1 million is a serious crime and should carry a minimum two-year prison sentence. However, we know that many frauds cheat Canadians out of significantly more than $1 million. I have already mentioned the example of Earl Jones, who defrauded his family and friends of more than $50 million.

Clearly, the two-year mandatory jail term for fraud of at least $1 million must be considered a floor, not a ceiling. That is already the case, and the government agrees that higher-value fraud will certainly result in even higher sentences. Members will recall that Earl Jones was sentenced to 11 years, which is an appropriate sentence.

The two-year mandatory minimum sentence would not have had an impact in the Jones case because that was an outrageous case of fraud. The government wants to send the message that fraud in excess of $1 million, even though not as great as other cases, must also be treated seriously. Establishing this threshold brings a new perspective to fraud that does not greatly exceed $1 million.

The bill would add several more aggravating factors, such as: first, if the fraud had a particularly significant impact on the victims, taking into account their personal characteristics such as age, financial situation and health; second, if the fraud was significant in its complexity or duration; third, if the offender failed to comply with applicable licensing rules; and fourth, if the offender tried to conceal or destroy documents which recorded the fraud or the disbursements of the proceeds.

These aggravating factors reflect various aspects of fraud that are deeply troubling. The clearer Parliament can be with the courts about what these factors are, the more accurately sentences will reflect the true culpability of the offender and the serious nature of the crime.

The bill also includes a new sentencing measure to limit the possibility that a person convicted of fraud could have access to or control over another person's assets. This prohibition order can be for any duration the court considers appropriate. Violating a prohibition order will be an offence. This measure will help prevent future crime, which is better than just punishing the guilty party after the fact.

This bill also contains measures that address the specific concerns of victims of fraud. Restitution is defined as the return or restoration of some specific thing to its rightful owner. It can be a stand-alone measure in an offender's sentence or part of a prohibition order or a conditional sentence.

Restitution orders are particularly appropriate in the case of fraud offences. That is why Bill C-21 states that the sentencing judge in a fraud case must consider an order of restitution as part of the overall sentence for the offender. The court must inquire of the Crown if reasonable steps have been taken to provide victims with the opportunity to seek restitution. This step will ensure that sentencing cannot happen without victims having had the opportunity to speak to representatives of the Crown and establish their losses.

The bill would also amend the Criminal Code to ensure that the effects of fraud on victims have greater bearing on the sentencing. Addressing the needs and concerns of victims of crime has always been a priority for the government. Victims of fraud suffer major consequences, particularly financial, emotional, psychological and social ones. The sentences handed out by a court ruling on a fraud case must reflect the harm caused by the crime.

The bill contains two sets of measures that focus specifically on victims of fraud, one on community impact statements and one on restitution.

In order for the judges to be able to truly measure the terrible impact fraud has had, not only on each victim, but also on the community, the bill proposes amendments to specifically allow community impact statements to be taken into consideration as part of the sentencing hearing.

The current Criminal Code allows the judge to consider previously submitted victim impact statements during the sentencing hearing. The victims prepare a statement that describes the harm done to or loss suffered by them. The statement must be written but can also be read out before the court by the victim during the sentencing hearing. It may also be presented in any other manner that the judge considers appropriate.

In addition to the victim's official statement, the Criminal Code allows the court to consider any evidence concerning the victim when determining the sentence. Judges have given the term “victim” a broad interpretation, so that people other than the direct victim, including communities, can provide victim impact statements. For example, a victim impact statement was made by a synagogue on behalf of all members of the congregation in an arson case. In other cases, first nations bands have made statements describing the impact of a crime on their community.

I think we can all agree that communities, like individuals, feel the effects of crime. The proposals in the bill will make this more fully recognized in the laws.

We are proposing that when a court is determining the sentence for an offender charged with fraud, it should be able to take into consideration a statement by the community that describes the harm done or the loss suffered. The statement must be in writing, must identify the members of the community, must state that the person may speak on behalf of the community and must be shared with both the Crown and the defence.

Jurisprudence has indicated that victim impact statements serve three purposes. First of all, they provide sentencing judges with information on the impact or effect of the offence. Second, they help educate the offender on the consequences of her or his actions, which may have some rehabilitative effect. Third, they provide a sense of catharsis for victims. The provisions in this bill to create a community impact statement for fraud offences share these three purposes.

A community impact statement will allow a community to express publicly and directly to the offender the loss or harm that has been suffered. It will show that the community disapproves of the offender's behaviour. Having the opportunity to describe the impact of the crime will allow the community to begin a rebuilding and healing process. A community impact statement will also help offenders understand the consequences of their actions, which may help their reintegration process.

I would now like to address the provisions of the bill dealing with restitution.

Restitution is made when the offender pays the victim an amount established by the court. The Criminal Code currently provides for restitution for expenses incurred because of the loss or destruction of property, or damage caused to property, as well as pecuniary damages—in relation to a loss of revenue—for bodily or psychological harm. Furthermore, in the case of bodily harm or threat of bodily harm to someone living with the offender, such as a spouse or child, or other family member, the Criminal Code provides for damages for any reasonable expenses incurred by that person for temporary housing elsewhere.

An order for restitution is established during the sentencing hearing of a convicted offender.

It may consist of a stand-alone measure, or be part of a probation order or conditional sentence. It may only be made when the amount is readily ascertainable, and the offender's ability to pay, although not a determining factor, must be taken into account by the judge. Restitution orders are particularly appropriate in cases of fraud, which often entail significant losses for victims.

Our proposals provide that in cases of fraud the sentencing judge must consider an order of restitution as part of the overall sentence for the offender. The judge must give reasons when such an order is not included. Furthermore, the court shall inquire of the Crown if reasonable steps have been taken to provide victims with the opportunity to seek restitution. This step will ensure that sentencing cannot take place until victims have had an opportunity to speak to the Crown about restitution and establishing their losses.

Our proposals also include the addition to the Criminal Code of an optional form to assist victims in setting out their losses. The losses must be readily ascertainable and victims must provide supporting documents for their claims. The courts may continue to accept other forms of information regarding restitution. The form would not be mandatory. It would simply be available to facilitate the process for victims, the prosecutors and the judges.

These proposals should make restitution for victims a part of all fraud cases. These measures, along with the proposed changes regarding community impact statements, are intended to include the perspective of victims of fraud in the sentencing process in a more exhaustive and efficient manner. In that way, we hope that the proposals will improve the victims' experience and trust in the justice system.

This bill will go a long way toward improving the justice system's current procedures in cases of serious fraud. By creating a mandatory minimum sentence for fraud exceeding $1 million, by providing additional aggravating factors in sentencing, by creating a discretionary prohibition order with regard to sentencing and requiring consideration of restitution for victims, this bill represents comprehensive measures that take into account how serious fraud offences are to communities and individuals.

For that reason, I urge all hon. members to support this bill. It gives hon. members an opportunity to show their unequivocal support to victims of fraud. Victims of crime deserve respect from this House. I urge all hon. members to support this bill and to send it to the Standing Committee on Justice and Human Rights of which I am a member.

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

Mr. Speaker, I want to thank the minister for his explanation of the features of Bill C-21. I did want to make an observation, a comment, about the value of $1 million. I am not sure why the government has picked $1 million as the threshold. I would like to know how MPs will explain that to their constituents who have been the victims of a fraud, perhaps elderly people living in their ridings who have been victims of a fraud of maybe only $30,000. To that person, that could be his or her whole life savings and could have as big a psychological effect as a case where bigger frauds are involved.

Also, are we supposed to now ensure that the frauds continue until they hit $1 million? If we are trying to investigate a ring of fraudsters, do we have to now ensure they get over the $1 million mark so that they get a minimum two-year sentence?

I would like to ask the minister why the government chose the $1 million mark in the first place and whether it would reconsider it and perhaps make it a little lower.

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I thank the NDP member for his question. As I said in my speech, any fraud over $5,000 is already subject to what we call the maximum penalty, one of the harshest penalties, which is 14 years in prison. The only penalty that is harsher would be a life sentence, as we see in other cases.

In the bill we are proposing, even if the fraud is under $1 million, all of the aggravating factors of the fraud are taken into consideration. Let us take my colleague's example: a 62-year-old woman is defrauded of $50,000. This does not fall into the same category as fraud in the amount of $1 million. However, the aggravating factors are the same. The judge will have to consider the possibility of restitution, the age of the victim and all other factors that caused this person to lose everything. A two-year minimum sentence is not enough for an outrageous case of fraud, so the judge may hand down a sentence of four or seven years, as we can see in the existing jurisprudence.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Speaker, my Conservative colleague spoke about penalties for the criminal. He spoke about victims. I would like to know what his government plans on doing about tax havens. Everyone knows that fraudsters put all of the money they swindle from young people and everyone into tax havens.

It is all well and good to sentence fraudsters, but what about the money from the tax havens that could be given back to those who were swindled? What do the Conservatives plan on doing about tax havens?

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, my response to my Bloc colleague is as follows.

She may be referring to recent reports suggesting that some 2,000 Canadians, 1,700 of them Quebeckers, maintain Swiss bank accounts in order to evade taxes. How will Revenu Québec recover this money? How will the Canada Revenue Agency recover this money? International agreements—I am not familiar with them all—have been signed. Tax evasion is actually fraud. When a complaint is filed in Canada about a citizen attempting to evade taxes, whether a Quebecker or a Canadian, restitution may come into play. Sometimes, these people have assets in Canada or Quebec that can be seized to compensate the victims of these crimes.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, in the bill, section 380.3 deals with the innovation regarding possible restitution. I wonder whether the member or the originators of the bill had given any thought to the possible difficulty in setting up this restitution mechanism, which actually involves a victim filling out a form, submitting it and requiring the court, if it does not proceed with a restitution mechanism, to give reasons why it is not.

I see in it the possible loss of managerial control by the prosecutor. The victims will say they are going to file a claim and the judge will make a decision. This will be inserted into a criminal process and not a civil process. It is unclear what the role of the prosecutor is.

Has the hon. member given any thought to the complexities that might be there for the court, for the judge, in a situation such as this where there does not appear to be a controlling mechanism?

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I would first like to thank my colleague who is a fellow member of the Standing Committee on Justice and Human Rights. We work very well together when it comes to fighting white-collar criminals.

I would point out to him that restitution orders already exist. The new element is that victims will have the opportunity to set out or explain their losses. We must not forget that, in some fraud cases, 500 or 600 people have lost money. Thus, they need to be as specific as possible. The judge, as well as the Crown, may use the questionnaire, which will be optional. If it is difficult to quantify the losses, the judge may propose the easiest solution.

What is important is that the judge will be required to state why he or she does not want an order or why there will not be a restitution order.That is the important thing. It is an important change.

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

Mr. Speaker, I want to provide a partial answer to the member for Compton—Stanstead, who got no answer from the government when she asked what the government was doing about tax havens. The fact of the matter is that it is not doing anything.

On the very day that the recent stories appeared about the tax moneys being hidden in Switzerland, the government was trying to implement a free trade deal with Panama, which is a famous tax haven with 350,000 companies hiding money there.

In fact, the government is offering a tax amnesty. Two years ago, when one of the employees of a Liechtenstein bank turned over computer records to the German government, the Canadian government found out that there were 100 Canadians storing money in the Liechtenstein bank. What has it done? It has simply allowed people to declare and pay the taxes voluntarily. Basically, it has given them a tax holiday. It has now found another 2,000. The government got the information from a bank employee. That is where the information came from.

The point is that the government is not actively pursuing money in tax havens.

[Daniel Petit, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I would say to my colleague that when there is tax evasion there is also fraud, in some cases, or intent to commit fraud. Therefore, the Canadian government has the authority to charge these citizens, in Canada or in the provinces, including the Province of Quebec, with fraud. At that point, they will suffer the consequences of their actions, of the fraud they have committed. If they are involved in fraud of more than $5,000 or more than $1 million, they will suffer the consequences set out in the law.

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

Mr. Speaker, I am pleased to rise on this bill today, Bill C-21. I should have thought more clearly this morning when I got up. It seems that every speaker who has risen on this topic is wearing a white collar. I wish I had the good sense of the member for Yukon, who is sporting a lovely burgundy shirt.

I speak as a lawyer, as a member of Parliament, as a Canadian citizen, as a person who has known victims, organizations, and individuals who have been robbed by white collar criminals. White collar crime costs the Canadian economy dearly, and it costs the good, hard-working citizens who fall prey to fraudsters much more than members may know. They are common, everyday occurrences.

Bill C-21 sends the right message. There is no debate here in the House about this : to crack down on white collar crime is the right thing to do, and it sends the right message. This House and we parliamentarians within it are serious about keeping Canadians safe from fraud. That is perhaps where the non-partisan enjoyment and harmony ends. For fraud is not harmless. Nor is it victimless. It disproportionately preys upon the weak in our society and Canadians will not stand for it.

Bill C-21 recognizes the harm that fraud causes to innocent victims. This bill adds aggravating factors to the list of the judge's considerations during sentencing. In addition to the provisions regarding planning crimes and destroying documents, the provisions in this bill allow a judge to consider the personal circumstances of the victims, namely their age, health and financial situation. The bill includes a measure enabling communities to provide victim impact statements that can then be taken into consideration by judges. It is important to leave this to the consideration and discretion of the judges. Impact statements can include a description of how the fraud has devastated the entire community. For example, a church that has had its savings stolen or an after-school program that was defrauded can make its situation known to parishioners or students in the community. These are some of the good things in this bill.

The bill makes mandatory the consideration of an order for restitution, a chance for victims of fraud to recover some of their lost savings, a chance for reparations to be made. It permits a judge to prohibit offenders from taking any employment or volunteering services in any way that provides them access to, or authority over, the property, money, or financial security of others. In that world, there is no re-victimization by the same perpetrator. These are all good measures.

It is why the bill will go to committee for study. We hope that the committee will improve the bill, for these are good measures that will strengthen the Criminal Code and provide some comfort for the cheated and maligned. But, like many bills in the House, we would not want to leave the Canadian public, or those who have been victimized before by fraudsters, with the impressio that the bill will cure all the evils of the past, the present, and the future. It is woefully inadequate in that regard, and it raises some hopes that may not come to fruition.

I have a couple of categories that came up during some of the question and answer sessions. One of these has to do with restitution. It seems like a good step to provide for restitution. There are provisions in the Criminal Code that allow for victim impact statements. There are provisions in various parts of the country being enmeshed in the Criminal Code that give the authority to take over the assets of someone who has performed an economic crime. These things happen. But the provisions in this act do not, as the member for Scarborough—Rouge River mentioned, make it clear whose role it is, who will be driving the prosecution, and whether the prosecution's goal will be getting the wrongdoer to repay the money. It is unclear. We will hear testimony on this; perhaps it is something that can be worked on.

As has also been brought up, there is the continuing and lurking question of tax havens. We live in an Internet age, a digital age, an age where we cannot find addresses. We used to know what an address was. If they did not have an emergency response number on their box, at least we knew it was farmer Joe, next to farmer Bill, next to the fish market, in our case in eastern Canada. But addresses now may be static Internet addresses. They may be people in ether, people who do not really have a place where we can go and knock on their virtual or other door and get the money they have taken from other people. So tax havens follow that digital reality where fraudsters can hide money away, hard-earned money from Canadian citizens that now rests in foreign jurisdictions.

The bill is a step forward. But there is a question that is very much out there: in almost five years, what has the government done, what has this country done, about tax havens, about people who defraud other Canadians of money, packing it away in other jurisdictions from which it cannot be accessed and returned to its rightful owners?

What the bill lacks is a mechanism for prevention. As a country, as a Parliament, as a government, we are all in the same boat with respect to aims. How common is it that we all have the same aim? We want to prevent white-collar crime, prevent fraud perpetrated on the weakest in our society. The churches, the after-school kindergartens, the minor hockey associations, the women's institute groups, the Catholic Women's League, seniors, handicapped people: these groups are defrauded of millions of dollars every year. How can we as a Parliament strike together to prevent this?

There is the penalty phase. But let us be clear: the bill is mostly about the penalty phase. I don't want to strain the analogy, but if we want to stop violence in hockey we might start with the young, the minor groups. We might talk about how it is not the right thing to do. Things are not always effected in the penalty phase. In the criminal justice world, it is the same.

This bill speaks only about the penalty phase of fraud being perpetrated. Are we going to prevent fraud from happening by a shell game of penalties for people who have already socked the money away? In other words, we are going to penalize people from whom we are not likely to get the money.

In this society of ours, we have a hierarchy of offences. It is recognized in the Criminal Code, which sets out crimes against the person, crimes against property, and even crimes against the state. We consider, and rightly so, that crimes against a person are of a higher magnitude than crimes against property. Crimes against property came from the old west days, when stealing a horse meant stealing someone's livelihood, and if they were stealing someone's livelihood, they were hurting a family. Horse thievery was a very important offence. It is right there in the modern Criminal Code. It came down to us from 1892. It is a very high-ranking offence.

However, people do not go around stealing horses as much anymore. Instead, they go around stealing nest eggs, people's lifelong hard-earned savings, through fraudulent means. How are we to give this offence more importance?

We should look at the whole Criminal Code and consider prevention, as we would with any other crime. How do we stop violent crime? We look at early childhood intervention, the social causes of crime, and the socio-economic milieu in which recidivism is rampant.

How do we get at the prevention of economic crimes? It seems to me that people who commit sophisticated economic crimes through fraud are people who are using electronic and social media as well as means of communication controlled by the Government of Canada through agencies.

Why does the government not come forward with modern methods to prevent the use of regulated tools of fraud? This would go a long way towards stopping fraud from happening in the first place.

The fourth general point in my remarks has to do with something I heard a lot about from this side of the House and in the communities across this country. At one time, I was a mayor, and I know what it is like to have a police force doing important work in a community. Police forces across this country are asking for more resources.

What has the government actually done to help the police? I don't mean on paper, in a speech, or on the five o'clock news. What are the police chiefs saying? What is the Canadian Police Association saying about actual boots on the street? They are saying they do not have enough resources. If we prioritize, however, they will take crimes against the person more seriously than economic crimes against the household income.

With more resources, the police who serve our communities will do more than they can now. The blame for failing to confront the growing elements of fraud lies with the government. After five years of talking about making Canada safe, they have done very little about it. Ask any policeperson who has not been bullied into saying nothing by the threat of withdrawing funds from the local force, city, community, region, or MP.

We are here as opposition members to stand up for good, hard-working policemen across this country who tell us they need more resources to combat fraud. That is what we would like to see.

As to Bill C-21, it has been said many times in this House, and by many members of every party, that there is no greater fraud than a promise not kept. This may sound like just another pithy phrase, but it rings true in the hearts of Canadians, and it has been said many times outside this House.

This bill is an example of a promise not kept. The promise was not kept because it had a different number, and we were prorogued and sent home. We could not do our work. The bill that was just the same as this one did not see the light of day, because the Conservatives prorogued Parliament and sent us home.

That is a fraud because it is a promise not kept. The Conservatives said that they would do something about fraud and white collar crime and then they pulled the plug on the bathtub of Parliament and we went home. This bill is not law because the House was prorogued and it died on the order paper. That was last year. We are talking about the bill as if it is something new.

Canadians who have fallen victim to fraud since prorogation should look across the way and ask this question. If the bill was not contentious and if the guys on the other side were going to let it go through, why did the government prorogue? Then maybe their aunt or daughter's hockey team would not have been defrauded of all that money because the bill would have been perfected, approved in committee and passed. It would be law now. That is the biggest fraud so far in the speech today. The Conservatives did not keep their promise. They did not do anything about white collar crime.

There are other aspects of the bill that hopefully will be tightened up in committee. However, there is an overriding element to the bill that surely we have debated this long enough and the government must see that it must question the insertion of mandatory minimums in the bill as well. The bill provides nothing for the prevention of crime, as I said, only punishments after the fact.

No jail sentence or restitution can make up for the sense of betrayal and hurt that follows a fraud perpetrated. No jail sentence or restitution can restore the confidence or livelihood of a Canadian cleaned out by someone the victim has grown to trust, a new parent without a nest egg, a dying grandparent without a bequest. Prevention keeps Canadians safe. Nothing is more important to the livelihoods of Canadians and nothing in the bill even gives a hint about it.

On the question of mandatory minimums, it is an experiment that has failed in the United States and will not have an effect on white collar crime in our country. The bill provides for a mandatory minimum sentence for a commission of a fraud over $1 million.

One of the early criticisms of Bill C-52, the predecessor, and this bill was that it did not hit the financial institutions hard enough. It seemed to be cherry picking over the smaller crimes that were committed on a smaller basis. We all know in our country already, dare I mention Earl Jones in the province of Quebec, that there are large-scale crimes occurring that take people for more than $1 million either individually or cumulatively. It is not clear to us on this side, and we will see in committee, whether this is cumulative, large enough or why the Department of Justice came up with this amount, but we shall see. We do not want to exclude the larger frauds from a bill that is purported to stop white collar crime.

We will do our best on this side to ensure the bill is wider in scope, more effective and pushes the government to key in on aspects of prevention and tax havens. We on this side, by doing so responsibly, will keep a promise that the people on the other side, known now as the government, failed to keep, which has been the biggest fraud committed in the area of white collar crime in the last five years.

[The Acting Speaker, Barry Devolin]

The member's questions and comments will resume when the House returns to this matter.

Statements by members, the hon. member for Saskatoon—Humboldt.

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

Standing Up for Victims of White Collar Crime Act

[The Speaker, Peter Milliken]

When the debate concluded on this matter the last time it was before the House, the hon. member for Moncton—Riverview—Dieppe had the floor and had completed his speech, but there are 10 minutes allotted for questions and comments consequent on his speech.

I therefore call for questions and comments. The hon. member for Elmwood—Transcona.

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

Mr. Speaker, a question came up this morning about what the government is doing to recover money from tax havens around the world. There is no action at all on the part of the government. In fact, the government basically gives an amnesty to people with money in tax shelters who come forward and report their ill-gotten gains. For example, last year a Liechtenstein bank employee turned over tax records to the German government, and 100 Canadian names filtered back to Canada. That is how we found out about it. Just the other day, there was an article in the Globe and Mail in which a Swiss bank employee was reported to have turned over computer discs resulting in about 1,800 Canadian names being forwarded to Canada. Once again, I believe the amnesty applies.

The government is not doing anything concrete to try to shut down the tax havens. In fact, it is negotiating free trade deals with Panama, which is a known tax haven, having over 350,000 foreign companies doing business there. Mexican drug dealers are laundering money through Panama. Meanwhile, we are working on trade deals with the Panamanians, when Conservatives should be doing something to shut down these tax havens and collect from Canadians who have money in them.

[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.

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

Mr. Speaker, it is certainly a very valid point. I want to point out to my colleague from Winnipeg Centre that he should not forget about the Canada pension plan, which is actually the biggest fund in the country currently.

[Pat Martin, NDP, Winnipeg Centre, MB]

It's $140 billion.

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

Mr. Speaker, it is $140 billion. My friend knows the amount.

There is no question. I would hate to think of the labour movement and workers generally as being raving capitalists. They are not. They would be much more prudent if they were doing the advising.

I will take issue with him about the need for bringing people off the floor and letting them make decisions, when we look at some of the fiascos that came out of the most recent financial collapse. These so-called experts got taken in by the asset-backed paper that did not have any assets behind it, by using regulatory assessments of these assets and valuing them, clearly not understanding them.

I sometimes think it might be better if we simply had the honesty and integrity of the average worker making those decisions, maybe having people explain to them how the system works. The common sense we would get from the average worker might go a long way to preventing the kind of abuse we have seen in the last round as stock markets collapsed.

I want to make one more point. There is no question that this hurts people badly. We have seen Nortel workers showing up constantly both here and at Queen's park in Toronto. When one actually talks to them, one hears their pain. It is a two-parter. It is not only the financial loss they have suffered but all of the negative consequences that is going to have, including the loss of health benefits and the impact on their personal health.

I argue with them not to think this way, but I know it happens. I know from having clients over the years who have suffered as victims of these schemes. There is guilt that goes with it. It is unfortunate that is the case, but it is one of the side products of these types of crimes and one that really should push the House even more to make sure preventive and punitive programs are put in place that will put an end to it.

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

Mr. Speaker, the member knows that in the United States the Americans put away more than 100 embezzlers from WorldCom and Enron and Conrad Black. On the other side, the Canadian experience is that we have put away almost nobody in this country. Yet the Americans still had the experience with Bernie Madoff getting away with $65 billion.

At least the U.S. has moved to re-regulate, to reverse the period of deregulation under the Republicans for the last 8 to 10 years. They are at least taking the issue seriously in the United States now and attempting to re-regulate. Even though it had a better system than Canada and was more effective in putting people in jail, it still allowed a lot of abuses. It is time Canada caught up, rather than falling further behind the United States.

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

Mr. Speaker, I certainly agree with his analysis of what happened in the United States both in terms of the U.S. prosecuting much more forcefully than Canada has and, at the same time, allowing the regulatory function, which is really about prevention, to be diminished. They are putting it back in place and we need to be doing the same here in Canada.

We need to get more aggressive. We need to put the units in place that can do the investigation and guarantee that we are going to get convictions in both cases. We heard from the United States and they know how to do it. They just do not have the staffing and resources to carry it out.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, I am pleased to intervene on debate on Bill C-21. I don't think I had the opportunity in the previous session.

What I first thought about the bill, I will be honest, was that the government was approaching the Criminal Code and its need for occasional reform as a kind of a smorgasbord. One time it would take a section over here and fix it up and then take another over there, and by the time we are finished.... I think our order paper shows a number of Criminal Code amendment bills at this time.

I thought it is taking a lot of parliamentary time and it is a lot of procedure. Why did the government, if it wanted to make some Criminal Code amendments, not put them all in one bill? We could have debated it and dealt with it that way.

The government chose not to. I thought it was for political reasons and I still do. However having viewed the process, I see that it actually gives the House an opportunity look at each of the bills more closely. Sometimes that is scary and sometimes that is helpful. At least it gives us extra time to debate. If the government had a Criminal Code amendment bill with 10 or 20 components, most of us would be unable to address most of the components, if we wanted to.

Looking more closely at each of the bills will probably tilt toward a better product. Perhaps a bill with more scrutiny has fewer problems down the road and is less likely to encounter difficulty in the other place, should the Senate pick it apart, and is more likely to be successful in the real world when the police and the courts deal with the new legislation.

This particular bill deals with sentencing for fraud, and it modifies the Criminal Code provisions related to fraud convictions. My party is supporting this in the context that a bill of this nature was probably inevitable over time.

If we look back over recent history, we wonder why something like this had not come forward sooner, but looking at the evolution of fraud crimes we also have to look at the evolution of financial services. If we look back at it, we can see how complex the evolution has been since the second world war.

I was not here then, happily, but before that we had basically cash and cheques, some kind of a postal money order and bank money orders. That was a simple financial world. However since then, this has proliferated. We do not just have cash, cheques and money orders. We have credit cards, debit cards, ABM cards and cash cards that actually hold a cash value and we can spend the cash value. There is a whole area of financial species that a fraudster could focus on.

We also have a whole new world of online Internet financial transactions. We even have online gaming, charities online, fake charities online and shopping online. In the world of securities we have stocks, bonds, GICs, T-bills, life insurance, pension plans and pension plans that are self-administered. All of these are financial envelopes, many of which did not exist 50 years ago, where the bad guy is still out there trying to get a piece of the action.

Even in our own federal financial envelope we have RRSPs, home ownership savings plans, RESPs, RRIFs, savings accounts, chequing accounts and all manner of other investment accounts. The average person might be forgiven for getting lost in this whole area of financial expansion.

In addition, the world of finance has gone global. It is not just bad guys here but it is bad guys internationally. The financial world has expanded in a huge proliferation.

In addition, something that happened somewhat slowly, which we did not notice, was that since the second world war we have all become a lot more wealthy. We in this country take for granted the wealth that we generated. The GDP per person has gone up, if not exponentially, very favourably. Canadians are much wealthier than they used to be.

These trillions of dollars of wealth, financial transactions by individuals, corporations, government and charities, have increased the opportunity for those who would steal from us to go ahead and do it in many different ways.

Fraud is essentially the criminalization of the old tort of deceit. Fraud is when someone intends to enrich himself or herself by taking money from another individual by deceit. That was the simple concept of fraud. However, with the backdrop of this proliferation in financial services and wealth and globalization and inter-con activity enhanced by the Internet, that basic law of fraud has stayed the same.

Although we are proposing an amendment now dealing with the sentencing for fraud, it would not surprise me at all that we would see a further change in how we approach some of the crime in the area of financial services shopping because It is quite likely that the bad guys who are doing this now will continue to do this and will find ways to disrupt and steal from innocent Canadians.

In the bill, there is reference to a restitution procedure. It has been in the code as a sentencing option for some time now. It is not used frequently but it is used. Bill C-21 contains a restitution procedure and some forms that are contained as a schedule to the bill, by which a victim of this type of fraud can ask the court for restitution. I have some concern about this. I am not suggesting that it will not work but it may have some break in problems.

The first issue that I want to flag for the consideration of members both here in the House and on the justice committee is that the reference to restitution in the courts under this bill does not really say who would be in charge of the process. It does not say that the crown prosecutor would be in charge of this process. It just seems to say that if someone wants restitution, he or she will need to fill out the form and send it in.

Our criminal courts are not used to this. I am not saying that this will happen but I have this vision of a criminal court starting to act like a small claims court. The prosecution is complete, there is a conviction and then the judge turns to the clerk and asks whether there are any requests for restitution. The clerk will say, “Your Honour, we have 728 applications for restitution, totalling $1 million.”

Of course the judge has spent his or her career convicting people, not as an accountant. Judges do not have calculators on their desks. They do not have the time to go through 728 restitution applications. So there is an administrative function here. That was the second point.

Third, there is this restitution function and an application form of sorts. It is a fairly brief application. There is nothing wrong with it. It is kind of short and simple. It does raise the expectation of the victim, who may be one of many, that he or she will get restitution because he or she has been invited by somebody to fill out the form and send it in the judge. The judge has the form, the form is filled out and it says that $7,528 is what this guy stole. It raises an expectation that the court will be able to deal with this.

I do not think that criminal court judges would be ready for that, although some of them have handled restitution orders previously, but it will need a kind of a management system. In fairness, the federal government does not manage these courts. It is done by the provinces. Therefore, the provinces will need to generate some system. They will need to hire somebody who will to understand this and manage all of these forms and requests for restitution that come in.

While it is certainly part of the Criminal Code, it will fall to the provinces, the crown attorneys, the court clerks and the judges. I am pretty sure the judges will resist the criminal court becoming a small claims court or the equivalent of it. They will say that if they want to do small claims court stuff in the criminal court, then they should bring in a small claims court judge.

I do not know if that will happen. We will wait and see. I wanted to flag that and the higher expectation that might be there on the part of the victim that he or she would receive restitution simply because he or she followed the rules, filed the form, put in the amount and are hoping the judge will give them an order.

Last, I will deal with the restitution exercise. I hope the Department of Justice will be able to describe at the committee hearings the impact of a bankruptcy or likely bankruptcy on the whole restitution procedure or on the order. Will a concurrent or subsequent bankruptcy mean that the restitution orders are worthless? If they are worthless, it is probably not worth the time to spend a whole lot of administrative hours, court time and the judge's time sorting out the restitution if, in the end, there is a bankruptcy.

At some point, someone administratively will need to identify some assets or an asset that could produce a recovery for the restitution claimants, that issue of the relationship between the restitution order and a concurrent or related bankruptcy.

Also, and this is really a bankruptcy issue, which is federal, but let us say that the crook has transferred some of these assets or the proceeds of the assets into the name of a relative. What jurisdiction does the court or the judge have in relation to those asset transfers or the hiding of those assets in the face of a restitution order?

One of the members spoke earlier about this getting very close to some of the organized crime sentencing procedures and proceeds of crime legislation that already exist on the books.

I do not know whether these aspects have been sorted out or whether the provinces and the crown attorneys who will need to administer it have been consulted on this. I am not objecting to restitution orders but this legislation seems to be importing a fairly conspicuous wholesale procedure. We know that in some of these cases the frauds can go into many millions of dollars with many people being hurt. While the new sentencing provisions are intended to target the big-time fraudster, the million dollar threshold is described in one part of the new law, I think there may be a learning curve here, if I can put it that way, and possibly there may be further legislation needed if the courts are going to get seriously into the restitution procedure.

Another of our colleagues was good enough to mention crime prevention, as my colleague from Moncton—Riverview—Dieppe did. This legislation deals with the crime and the effects of the crime after it has taken place. It is closing the barn door after the horse has left. While there is a role for that, while it is drawing a line in the sand for our society, there is nothing in the statute that appears to reach out and deal with some kind of prevention of crime in the first place. It does not get out in front.

As a society, I think we will need to invest a bit more in crime prevention. If we can cut some of these massive frauds down by half, one-quarter or one-third, that would be worth it, but we need to invest institutionally in methods, which means looking to our securities regulators, bank regulators, chartered accountants, lawyers, real estate brokers and mortgage brokers. Most of these organizations self-regulate and we need to look to them. I am not too sure about the process but somewhere in that administration and regulation of those professions and institutions we will find some ways to spot a big fraud early.

As members know, many of the big frauds do not actually start out as big frauds. Many of the big ones started as quite small and then, once the mistake was made or the money stolen, however small it was, more money is taken to infill and to hide and it grows. It gets to the point where the crook, who may not have set out to be a crook in that sense, ends up robbing Peter to pay Paul and moving all kinds of money around and harming so many people. If our regulatory mechanisms could spot some of this in the early stages, it would go a long way.

I recall in Ontario a very sad case of a guy who was selling fake franchises. Even though that is provincially regulated, a way has not been found to prevent that kind of fraud. However, at the end of the day the principle of caveat emptor must remain. The buyer must beware. We must ensure our citizens are educated, sensitive and wary of these kinds of things. That type of public education is very valuable.

[France Bonsant, Bloc, Compton—Stanstead, QC]

Mr. Speaker, I am pleased to speak today to Bill C-21, An Act to amend the Criminal Code (sentencing for fraud).

Generally speaking, the bill makes five new amendments to the Criminal Code. First, for persons who commit fraud over $1 million, it provides for a minimum sentence of two years. Second, it adds four aggravating factors for various types of offences involving fraud over $1 million. Third, it also creates a new discretionary prohibition against employment. Fourth, it allows judges to order restitution at their discretion. Fifth, it provides for a statement called a “community impact statement” to be considered.

At first glance, all these measures may seem laudable, but that is a mere smokescreen. The content of this bill lacks forethought in spite of the fact that it has been introduced in this House twice. The first time, it died on the order paper when the Conservatives prorogued Parliament at the instigation of the Conservatives. Prorogation, which we roundly criticized, has not produced any improvement in the Conservatives’ bills. If this is the best they can do, it is cause for concern.

For example, take the new two-year minimum sentence to be imposed for general fraud over $1 million. My party and I have spoken at length about this already. Minimum sentences upon minimum sentences are not particularly useful. They have no significant effect on criminals’ behaviour. Moreover, a minimum two-year sentence for fraud over $1 million amounts to reducing the sentences currently being imposed. When we questioned the Minister about this, he was unable to cite a major fraud case where the sentence was for fewer than two years. At this time, sentences are more on the order of six to seven years for major fraud cases. So why would we set a minimum sentence of two years for cases of fraud over $1 million? That is the question.

With respect to the aggravating factors that will supposedly be added once the bill is passed, they are already considered by the courts. The Vincent Lacroix ruling, for example, lists those factors point by point. Sure, putting aggravating factors that already exist down on paper is another way for the Conservatives to look good, but it will not really produce any concrete results. Since the Conservatives came to power, we have got used to this way of doing things.

Like my colleagues, I am going to resign myself to voting for this bill in principle, but only so that the committee can improve it. The Minister has completely missed the mark by tackling economic crime this way. A number of points are not addressed in this bill. For example, release after serving one-sixth of the sentence has not been eliminated. This means that people like Earl Jones and Vincent Lacroix could get out of prison even before serving a reasonable portion of their sentence. Before setting minimum sentences, we need to start by limiting speedy releases for people who deserve harsher sentences.

I would like to take this opportunity to talk about one of my constituents who was the victim of fraud. I will thereby demonstrate the many flaws in Bill C-21. This person sought help from my offices in Compton—Stanstead. They had RRSPs amounting to several tens of thousands of dollars. At a meeting of investors, the person met several financial planners who subsequently advised the person. They had the person withdraw their RRSPs and then invest in various ways. A little while later, the constituent in question could no longer find the money from their RRSPs. The planners had defrauded them. Not only was this person defrauded, but on top of that they owe a significant amount of money in taxes for withdrawing the RRSPs.

This person was retired. And I do mean “was” retired. They now have to go back to work to repay the money owed to the government, while the looters are still at large. The money belonged to this person. It had been saved over several decades of working. How is this bill going to help this person?

This bill would not even apply to their situation. This person has lost several tens of thousands of dollars. That is a long way from the $1 million fraud cases covered by Bill C-21. The kind of situation I have described happens more often than one might think. So why would we limit ourselves to fraud over $1 million? We have to go after the big thieves, but we also have to go after the little ones who have more victims.

To illustrate further, let us say that this person lost $1 million. Will a minimum prison term help this person get their money back? No. However, if the looters can be found someday, then yes, they might get a minimum of two years in prison. But as I said earlier, the sentences currently being imposed are on the order of six or seven years. The same is true for the aggravating factors proposed in the bill: they are already being applied now. This does not change anything at all.

The bill also creates a new discretionary prohibition order against continuing to work. Judges will be able to prohibit fraudsters from seeking or working in a job in which they would have authority over someone else’s money, real property or securities. That does nothing, though, to help people who have been defrauded. In addition, the bill gives judges a great deal of latitude to decide on their own, without any guidelines, how long this employment prohibition should last. Should judges really be given this much discretionary authority? We will have to discuss it in committee.

The bill also does nothing to resolve the restitution issue. Once again, the Conservatives are happy with mere window dressing. The discretionary restitution order is replaced by a requirement that judges “consider making a restitution order”. That is just word play. Once again, the Conservatives are aiming in the right general direction but they are way off the mark because this bill does not really change anything for the victims of economic crime.

Another problem is the bill’s failure to deal with tax havens. Dealing with them would actually be an excellent way to provide restitution to the victims of economic crime. Thanks to tax havens, money belonging to those who were defrauded can disappear without a trace. If we deal with them, we may be able to trace victims' money.

There will always be people, of course, who try to beat the system and take money from small investors. It is up to us to find the best ways to prevent this crime.

I should emphasize that I am entirely in favour of punishing so-called white-collar criminals. But that is not enough. If all we do is put criminals in prison, they will just get out someday and start all over. We need to find better, more far-sighted solutions. We have to prevent these crimes and take measures that will make it much more difficult to defraud Canadian and Quebec taxpayers.

A little more than a year ago, the Bloc Québécois proposed a plan for dealing with economic crimes. It aimed to prevent these crimes and punish fraudsters so that justice could be done. In my opinion, the most important measures are those that help victims because they suffer the worst consequences of fraud.

In addition to eliminating parole for white-collar criminals after one-sixth of the sentence has been served, fraud over $5,000 should be included in the Criminal Code.

As things currently stand, the first paragraph of section 380 of the Criminal Code provides for a maximum sentence of 14 years for fraud over $5,000, but that is all. In contrast to the minister’s bill, which pertains only to economic crimes over $1 million, we need to deal as well with smaller cases of fraud involving small investors. It is all very well to fight cases of fraud exceeding $1 million, but crimes this large are relatively rare. I am sure the minister agrees with me on that.

In fighting economic crime, we should also ensure that banks are required to report irregularities in trust accounts to the competent authorities. People should certainly act responsibly when choosing a financial planner. They should do all that is needed to check things out. It is up to the banks, though, to do their part as well and work together in good faith with the Autorité des marchés financiers.

As I said before, the time has come to deal with tax havens. To do this, why not amend the Income Tax Act to stop the use of them? For far too long, the Conservatives and Liberals have been endorsing practices of this kind. It has to stop, especially as tax havens could be a major source of compensation for the victims of economic crime.

Speaking of victims, it is obvious that the current government does not really care about them at all. Bill C-21 has a short title, the Standing up for Victims of White Collar Crime Act, that is far from a true reflection of what it is really about. Once again, the Conservatives are light-years away from telling the truth. This bill makes a timid effort to deal with fraudsters, but it fails utterly. One thing is sure: it does nothing at all to help the victims of these crimes.

When it comes to economic crimes, we need to focus above all on the victims. It is all very well to put the perpetrators in jail, but that is not enough. We in the Bloc Québécois will put the emphasis on this kind of approach by proposing a provision in the Income Tax Act that would allow victims to deduct the amounts that were stolen instead of treating them as capital losses.

Bill C-21 is clearly inadequate. It contains a few timid, makeshift measures, but it is far wide of the mark. As I said, we will be happy to study it in committee and improve it. We will do our duty by proposing a constructive alternative to the views of the Reform—Conservative government.

In conclusion, I would just like to say that this bill is further proof that the values of the Quebec nation are poles apart from the values of the Conservatives.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I am pleased, as the member of Parliament for Don Valley East, to rise and speak on Bill C-21. This bill is particularly important where I am concerned. As an accountant, as an FCGA, as a fraud investigator, I think it is high time this bill was introduced.

So that people understand what is involved in the bill, we need to give a little background.

The legislation was introduced in response to several high-profile white collar crime cases, including Norbourg Securities and Earl Jones in Quebec, and in the wake of the Bernie Madoff Ponzi scheme and revelations in the U.S., many Canadian investors have grown increasingly concerned about white collar fraud.

Other than the title, this bill is the same as Bill C-52, which was introduced during the previous parliamentary session and died at prorogation while at committee.

Bill C-21 has several components that need to be reviewed and addressed in committee.

It introduces a mandatory minimum sentence of two years for fraud involving more than $1 million, regardless of the number of victims. It specifies aggravating factors to be considered at sentencing, including the psychological and financial impact on victims, the age and health of victims, and the magnitude and duration of the fraud. It requires the court to indicate what mitigating and aggravating factors were considered in relation to the sentence.

It allows the court to prohibit an offender from assuming any position, voluntary or paid, that involves handling other people's money or property. It requires judges to consider restitution where possible and when possible, and it requires judges to consider community impact statements at the time of sentencing.

This bill is very close to home, as I know a number of constituents who were involved or who gave money, their life savings, to this Colgate whitening thief and were told that they would get a 400% return. People think anybody who is involved in a Ponzi scheme or who partakes in it is greedy or does not know what they are doing. I think it is the lack of financial acumen that gets people involved and it is the hype.

It is important that the government realizes that when it prorogued Parliament, Bill C-52 went to bed, and Bill C-21 has been introduced, but in the meantime a lot of people have suffered and this suffering could have been prevented. Vulnerable Canadians, taxpayers, have lost their total savings in this scheme. People have lost their houses. People have lost their jobs. People have become depressed because they lost all their money. It was important when we were studying Bill C-52, which is now Bill C-21, that it should have been there. It should have been in place. It should have been able to help those very vulnerable people.

The impact of white collar crime costs the taxpayers and the treasury a lot of money, because hard-working Canadians have lost their money. The fraudsters are committing fraud against these vulnerable people. Fraud is not victimless. Fraud preys on the weak and the vulnerable in society. We, the Liberals, support sending the bill to committee because we believe it is the right principle.

The principles behind the stricter sentencing rules are very important, but we also know that they are not enough to prevent these frauds from happening. Sentencing is important, but prevention is equally important in white collar crime.

I would like to know why the government does not use this opportunity to do more. The opposition and the public have been calling on the government to end the one-sixth accelerated parole provision for these types of offenders and the government has not acted yet. We hope that by sending it to committee we can have some practical changes.

While we support the bill's focus on stricter sentencing guidelines for white collar criminals, we believe the scope is too narrow to be truly effective in the fight against fraud. We would like to see that when it goes to committee there is a wide consultation with the stakeholders, the people who have been marginalized, the people who have been robbed of their hard-earned dollars. We would like to see that the financial industry is also engaged in this discussion, because they are the ones who probably regulate the financial industry, the people who do our investments, et cetera, and it is important that these people are also held to a very high standard and that there is important legislation to ensure that fraud is not committed by professionals or by any other laymen who would bring about a Ponzi scheme.

The stakeholder reaction to the legislation has been mixed. While victim groups have been lobbying the government to strengthen white collar criminal provisions, some have expressed discontent that this bill falls short, as I mentioned, because it fails to address regulation or the one-sixth accelerated parole review rule.

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

The RCMP has expressed its support for the bill, indicating a mandatory sentence for such crimes has the potential to be a useful deterrent against criminal activity.

If we come to what this bill would really do, many times in the House we have heard that there is no greater fraud than a promise not kept. The bill died on the order paper last year, taking with it the life savings of every Canadian who has fallen victim to fraud since then. However, this bill, as I have reiterated, would not be enough. It is important to send it to committee. It would send the right message, but words without deeds ring hollow to Canadian mothers now finding themselves wondering how they will feed their kids, or to grandparents without anything to leave behind, or to families that have lost their savings and have had to give up their houses, their cars, everything, to put food on their table. The financial security of families has been ruined while this bill died at prorogation.

I hope the government will not delay by doing any more photo ops but will put enough meat on the table and will help the opposition parties in their desire to bring justice to those who are seeking justice.

While the government was doing its press conference, Canadians, as I mentioned, have lost their savings. It is important that the bill move forward at a quick pace and be sent to committee for further study.

The bill provides nothing, for example, for the prevention of crime, only punishment after the fact. No jail sentence and no restitution can make up for the sense of betrayal and hurt that follows fraud. No jail sentence and no restitution can restore the confidence or livelihood of a Canadian cleaned out by someone who the victim had grown to trust, a new parent without a nest egg, or a dying grandparent without a bequest. Prevention keeps Canadians safe. Nothing is more important to the livelihood of Canadians, and nothing in this bill provides a hint towards it.

I have heard a lot of stories from people who have been defrauded. They had been approached by people who they considered friends and trusted and they were taken for a ride. Colgate whitening comes to mind. People sometimes do not know the difference between a fraudster and a genuine investor. We have seen it in people trying to sell electronic Canadian stamps, without realizing that it is the purview of Canada Post.

How do we keep Canadians safe? In order to keep Canadians safe, it is important that the bill be sent for study and that there be a high level of consultation but that Canadians be given an opportunity to be engaged or educated in fiscal management. There should be an opportunity to have transparency and clarity as to what one can feel is a good investment or bad investment. Nobody is asking the government to oversee this. We are asking that the bill have provisions for prevention.

The bill fails to keep Canadians safe because it prefers punishment to prevention. I believe this is in line with the Conservative government's perspective on crime. Crimes are complex. Crimes are best considered by judicial experts, men and women of the bench with entire professional lives dedicated to finding fair and balanced judgments.

I am not sitting as a judge and neither is any member of the House, but as an accountant, financial consultant and fraud investigator in my previous life, I think it is important that people realize that there are ways in which prevention can take place. Everyone says that prevention is better than a cure, and nobody knows it better than those who are victims of fraud.

When I talked about the Canadian Bar Association, it is opposing this bill for a very simple reason. It is keenly aware that what might work in Gander likely does not work in Moose Jaw or Toronto and what is appropriate today might not be appropriate tomorrow. Cases are unique and it is both reckless and irresponsible to assume that we in the House could tell a justice presiding over a case that we are more qualified than he or she to determine the appropriate sentence for a particular crime.

The bill provides for a mandatory minimum sentence for the commission of a fraud exceeding $1 million. While this seems to be reasonable, I believe it is not for us in this place to impose such conditions upon the trained, qualified and professional judges presiding over decisions. There should be guidelines, not minimum sentences, and judicial discretion, not rigid mandates from a place far away. When a crime is committed in, say, Don Valley East or Toronto, I want a judge in Toronto to examine the case on its own merits.

Bill C-21 is worthy of further examination. It sets the right tone. It should be sent to committee for further study.

However, the bill does not do enough to reassure those people taken in by the Earl Jones fraud, the Norbourg security fraud, the Bernie Madoff Ponzi scheme, the Colgate scheme, or the many other schemes that we know of or that have not been reported. It does not assure the wounded victims of past fraud or the hesitant investor that we need now more than ever in this period of economic uncertainty a prevention tool. This is an important first step. I hope that the House will send the bill to committee and that we will have a logical and thorough discussion of the bill so that it may help others avoid such problems.

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

Mr. Speaker, I am very pleased to speak to Bill C-21, An Act to amend the Criminal Code (sentencing for fraud).

Bill C-21 was introduced in the House on May 2, 2010 by the Minister of Justice. In fact, it is identical to Bill C-52 which was introduced during the second session of this Parliament, and did not become law because of prorogation, which we are very familiar with around here, on December 30, 2009.

The intent of the bill is to help crack down on white collar crime and increase justice for victims through measures that include a two-year mandatory minimum sentence for fraud over $1 million, additional specified aggravating factors for the court's consideration in sentencing, a new type of prohibition order, new obligations on the judge with respect to restitution orders, and a new type of impact statement to consider in sentencing.

The fraud provisions of the Criminal Code were most recently amended in 2004 in response to global impact of corporate scandals associated with companies such as Enron, Tyco and WorldCom. These amendments created a new offence of improper insider trading, increased the maximum sentence for the offences of fraud and fraud affecting the market from 10 to 14 years, and established a list of aggravating factors to aid the courts in sentencing.

The federal government also announced it would create a number of integrated market enforcement teams composed of RCMP officers, federal lawyers and other investigators, such as forensic accountants, to deal with capital market fraud cases.

Now the question is, with all of this supposed action on the part of the government, why are we not seeing results? Why are these fraud schemes still being uncovered?

We have to go back a number of years. I think most people have heard of Charles Ponzi and Ponzi schemes, but there are still a lot of people who are not familiar with the concept. A very large percentage of fraud schemes that are uncovered are in fact of this type.

Essentially, it is the use of investors' money that is taken in today to pay off previous investors. What happens is that organizations offer high rates of return and they entice people to give them money. Then, rather than invest the money in proper facilities, they simply use the money to give a promised return to their previous investors. We know that in doing that, eventually things are going to fall apart.

These schemes tend to go along. In some ways they are similar to the chain letter concept that people are familiar with. While the market is expanding, as happened in the 1920s and in the 1990s, these schemes can continue unabated for a number of years before they are found out. Eventually they are all found out because when the market drops, the people who are running the scam do not have the funds available to pay out. It essentially becomes a run on the bank. Everyone wants their money back, and they do not have the liquidity to do it. Basically, they run out of people to invest in their scheme.

In the case of Charles Ponzi, he collected approximately $9.5 million from 10,000 investors by selling promissory notes paying a 50% profit in 45 days. As a matter of interest, Charles Ponzi lived in the United States for a number of years, but there is a Montreal connection. In 1907, Ponzi moved to Montreal and became an assistant teller in a newly opened bank basically servicing new immigrants to the city. The man who owned the bank paid 6% interest on bank deposits, double the going rate at the time.

I emphasize the fact that the success of these schemes is based on people's greed, in that they are offering a very high rate of return. That is something the public should be very aware of. On checking the market and the banks, people will see that the average rate is roughly the same among the banks and institutions. When one institution offers double the rate, then people should be suspicious that something is wrong.

Even today, if one financial institution comes out with an offer that is higher than the others, people should not be lining up to buy that investment. People should be questioning why the institution would offer a higher rate of return. Perhaps it is short of money and may not be able to pay investors back.

In this case, Mr. Ponzi eventually rose to be the manager of that Montreal bank. He found out that the bank was in serious trouble because of bad real estate loans. Does this sound familiar? This was in 1907, in the last century, not in 2007. The bank was funding interest payments not through profit on investments, but by using money deposited in newly opened accounts. The bank eventually failed. The owner ran away to Mexico with a large part of the bank's money. This is how Mr. Ponzi got started. At the end of his career, I believe he died penniless and was not able to hide his ill-gotten gains.

However, that is not the case with the modern versions of the Ponzi scheme, in the sense that the schemes we see now are sophisticated and are planned well enough in advance that the money, as one of the members mentioned earlier, is sent off to tax havens. In 1907, Mr. Ponzi probably did not have the wherewithal to take his ill-gotten gains and get them off to Panama, Switzerland, or other tax havens. Perhaps he even believed that his scheme would never end. Maybe he misunderstood what he was doing.

The same cannot be said for an investor like Bernard Madoff, who essentially stole $65 billion. We are not talking about millions; we are talking about billions, $65 billion. This is a guy who opened the stock exchange on a routine basis. He knew all the players. He was an insider. He was a guy who was approached for advice.

Ten years before Bernie Madoff was arrested, there were attempts to gain the attention of the Securities and Exchange Commission in the United States with information. It was well documented before the House of Representatives in the United States last year when Harry Markopolos detailed the whole sordid history. Ten years prior to that he had worked for Rampart Investment Management in Boston and his boss asked him whether he could duplicate Madoff's strategy. He said that the funds police each other. In the competitive world of business, competitors watch each other. It was not a surprise to other competitors in his field that he could produce returns because it is to be expected that some funds will out-perform others, but to do it on a consistent basis, month after month, year after year, raised red flags.

Somewhere along the line, Bernie Madoff's fund should have had a loss. At least once over a 10 year period, he should have shown a loss. Even the best of funds that go up on a routine basis do not go up forever. If the sector the funds are invested in does well, it will do well for maybe six months or a year, but it will not do well each and every month, year after year. Bernie Madoff's fund raised a red flag.

Harry Markopolos figured this out very quickly. He gave information to the SEC, but it did not listen to him. The SEC on several occasions checked Bernie out. It investigated his funds annually and stated that his returns were on the level. The SEC, the cop that was supposed to police the fund, did not do its job. It did not do a proper report, and this allowed this ponzi scheme to continue unabated year after year. Meanwhile, more people and organizations bought into the fund. This shows that deregulation has created a big problem in the United States.

Members will know that in the 1920s, after the stock market crashed, the president of the day was looking for somebody who could regulate the financial institutions and the stock market on Wall Street. Many members will know that he recruited none other than Joseph P. Kennedy, who had made large amounts of money in the wild and woolly unregulated markets of the 1920s. Justifying his appointment of Mr. Kennedy, the president said something to the effect that it took a thief to catch a thief. A lot of the rules put in place under Mr. Kennedy stayed in place for many years.

The system operated fairly well under those rules until, during the Bush years, Republicans adopted a philosophy of deregulation. The whole idea was to deregulate world markets. All financial institutions had to go global, and the way to do that was to have super financial institutions.

We saw this happen more or less in Canada when the current Conservative government was in opposition and the Liberals were in power. Canadian banks were trying to get the government to deregulate, which would have allowed them to swallow each other up and get bigger.

To the Liberal government's credit, it did not do go this way. That is why the current Conservative government is not in the mess that it could be in right now. I am sure the Liberals were all for deregulation, but had they had their way we could be in as big a mess as Ireland, Iceland, Portugal, or any of the other countries that opted for a deregulated environment.

A big part of the puzzle is to deal with this deregulated environment and try to pull the whole system back under some kind of control. The United States is doing that. It is starting to re-regulate huge sectors of the investment industry, the banking industry, in an effort to combat this type of activity. In spite of that, the American system over the last 10 years had a much better track record than the Canadian system. All we have to do is look at the number of bad guys that the Americans put in prison over the last few years and compare it to how many the Canadian system put in prison. We would have to look long and hard to find anybody who ever went to jail in Canada for white collar crime and fraud. There may be one or two, but that is about it. We are talking about single digits.

In the United States, several hundred people were put in jail for their white collar crimes, including the people who ran WorldCom and the people who ran Enron. Conrad Black, a Canadian who committed his white collar crimes in Canada, was not touched by Canadian authorities. In fact, he was eventually prosecuted and put in jail by the American system, the same system that spawned Bernie Madoff and the Ponzi scheme and the same system that is now attempting to re-regulate itself.

In Canada, a parallel country, we were not very aggressive on enforcement and the prosecution of these white collar criminals, judging by our record, and we are not looking at re-regulating. So I would say we have a long way to go. The government is bringing in this bill, which we will be supporting to get to committee as we did the last time before the bill died after the House was prorogued, but remember that this is just a small part of the whole puzzle that the government should be dealing with. The government should be looking at setting up some sort of task force to look at re-regulation. No doubt it will, in view of what is happening in the United States.

We also have to look at tax havens. We had a very comical situation here last week. We were debating the implementation of a free trade deal with Panama, which is on the tax haven list of the OECD and a list in France indicating that it is a tax haven; 350,000 private companies are hiding money in Panama and the government is talking about getting a free trade deal in place with Panama when even the Americans will not do it because Panama will not sign on to the OECD protocols about exchange of financial and banking information. On the very day that this was happening, The Globe and Mail carried an article about an employee of a Swiss bank who left the bank and went to France with computer disks containing several thousand accounts. But 1,800 Canadians are on that list. The government was somewhat embarrassed, because there were these 1,800 people who, by the way, had to invest a minimum of $500,000 in the Swiss bank.

They were flat-footed because they do not have the answers. They have not done anything on cutting down tax havens and trying to stop tax evasion. They have a moratorium. Two years ago when a similar bank employee from a Liechtenstein bank walked away with computer disks and went to Germany and sold them to the German government, Canada found that there were 100 people from Vancouver on the list. What happened? They were given amnesty.

The Conservatives say that if anybody wants to come in and admit they have money in Panama or someplace they should not have it, they are free to do a voluntary reporting and the government will not do anything to them. It will not even tap them on the wrist. If they pay the back taxes, they are home free. Is this any kind of message to be giving people out there, telling them that they will have an amnesty if we catch them?

Now we have 1,800 people whom we have uncovered, not because of all this police activity, but because of a bank employee.

[The Deputy Speaker, Andrew Scheer]

I will have to stop the hon. member there, as his time has expired, and open the floor for questions and comments. The hon. member for Kitchener Centre.

[Stephen Woodworth, Conservative, Kitchener Centre, ON]

Mr. Speaker, I enjoyed listening to the comments of my colleague across the way. I have some interest in the subject. I am a member of the Standing Committee on Justice and Human Rights, and we have been studying organized crime for quite some time.

Interestingly, we have discovered that white-collar crime, including a whole host of fraudulent schemes, is being carried out by organized crime from within Canada. People have described our existing laws as too lax to deal with this development.

We have also discovered that organized crime, ironically, is committed by organized criminals, sophisticated people who are driven by the profit motive, and who are not just drug-addled unfortunates.

I am wondering if my friend would agree that, when dealing with organized, profit-driven, sophisticated criminals, deterrence is effective, and that we should therefore be increasing the penalties for such crimes.

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

Mr. Speaker, the Manitoba government recently cracked down on the Hell's Angels, a criminal gang in Winnipeg, and seized the clubhouse and their assets under the proceeds of crime laws. Certainly, in the last 20, 25 years we have seen marginal steps by provincial and federal governments to start dealing with the proceeds of crime. We have always argued that taking away the money supply from the criminals, from the drug dealers, removes the incentive to commit crimes. That is the way to do it.

It was not until the RICO laws took effect in the United States that the government started to make real progress against organized crime families. Had the United States not taken the initiative to step up the law enforcement and prosecutions and put these gangsters in jail where they belonged, it would still have the problem it had before.

Some big improvements have been made, and I think the government should be looking at that whole area. It is not just one bill today, dealing with this area. There is a whole bunch of other areas, including re-regulating the whole financial services industry, perhaps in cooperation with the Americans.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, I want to invite my colleague from Winnipeg to talk again about this important issue of the tax evaders, but I want to ask him about a larger subject. It is my premise that we have to change our thinking. The change has to start right in Parliament in the way we deal with these tax evaders. It goes to the underpinnings of our justice system, our rule of law. It goes right to the heart of democracy.

This is the fourth or fifth list of tax evaders we have received. Last week's list named 1,800 tax evaders who had accounts in Switzerland. Basically, they will walk into the nearest CRA office and get amnesty, the same as everyone else did. No one will be charged.

On the other side of the coin, last night a couple of teenagers were caught stealing a carton of cigarettes from a service station, and they will get 18 months in jail. We have to think. What are we doing as a society? The multimillionaires who steal from the taxpayers will be at cocktail parties tonight. There is no sentence. There is nothing at all. Then we get a couple of kids who steal a carton of cigarettes and they each get nine months in jail.

We have to have a discussion about this. I think this crime is just as heinous as most other crimes, but there is no punishment. If they are caught, they report to the CRA office and they get amnesty. Nobody is in jail for setting up these accounts in foreign countries.

I ask my colleague to talk about it from a larger perspective. What does our society think about, and how does it treat these criminals? I will call them criminals as opposed to people who do other things. What is the difference?

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

Mr. Speaker, there clearly is a double standard here. A half a million dollars is the minimum amount of money that one must put into this Swiss bank, so we are not talking about hundreds of thousands of people here. We should not be giving them the signal that they can have amnesty by walking into any Revenue Canada office in the country, volunteer their information and somehow they will be free and clear. How is that giving anybody the right signal here?

If people are rich, they can simply invest their money in Panama, in Barbados, in Liechtenstein or Switzerland and, if they get caught, they can simply walk in to a Revenue Canada office and they get amnesty. That is a terrible way for the government to be approaching the problem.

The government pretends it is tough on crime. I would like to see some of it because it certainly is not being very tough on crime when it comes to these white collar criminals. I would like to see some changes in the way it operates in this area.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Mr. Speaker, I have a relatively easy question for my NDP colleague. I just heard our Conservative and Liberal colleagues act as though it were really important to make some headway in the fight against white collar crime. But we get the impression that both of these parties are dragging their feet on this issue, as they are on others.

Could the member speak to us about that?

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

Mr. Speaker, the bottom line here is that we are dealing with the second reading of a bill that was killed because the House prorogued last year. Suffice it to say that if we have taken it this far, we should at least get the bill into committee and see if we can make some changes to it.

I have been very clear in saying that just passing this bill is not the only answer to the problem. It is a much more complicated area that involves re-regulation, having the regulatory authorities stop hiring their friends in the companies for which they used to work. These regulators are regulating their peers. There should be law enforcement type people running the regulatory authorities with the proper authority to proceed against these white collar criminals.

I mentioned that Conrad Black was not prosecuted and jailed in Canada for his crimes. His deal with CanWest of Winnipeg on the non-competition fees was all a Canadian act. The reality was that it took the Americans to prosecute him on those non-competition fees and put him in jail where he belonged, and should have stayed, by the way.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Mr. Speaker, the member has indicated some tentative support for this legislation. I would like to ask him a question about a specific situation.

A few years ago, we had a case of white collar crime involving the Liberal Party and the former Liberal government. It was known as the sponsorship scandal and it was white collar crime. It was fraud. There were some successful prosecutions but very little consequence.

In the member's view, if this legislation had been in place after that crime was committed, would the number of people held accountable and to the extent to which they were held accountable have been more meaningful than actually was the case with the laws that were in place at that time?

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

Mr. Speaker, that is quite a leading question. I am sure that if we get this bill to committee, the member can ask those questions of the committee members and the experts who will appear at committee as to whether or not, had the law been in place during the sponsorship scandal, the participants would have received harsher sentences than they got at the end of the day.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I am pleased to take part in the debate on Bill C-21, the purpose of which is to impose harsher sentences for economic crimes.

Since I will probably be the last speaker to rise on this bill this evening, I will give a brief overview and remind everyone that the bill contains the following measures: two-year minimum sentences for acts of fraud exceeding $1 million, and the addition of aggravating factors including financial and psychological impact on victims; failure to comply with professional or licence-based rules; and, the scope and complexity of the fraud, including the time and level of planning that went into it.

The bill also sets out a broader definition of victims. The court may entertain a written statement outlining any impact on the community including losses resulting from the fraud. The term "victims" may therefore denote more than any one individual, or individuals, directly affected, and may include an entire community or particular group that has suffered at the hands of fraudsters.

Other measures are also included in the bill: an option for the courts to make an order for the restitution of property and, failing this, an obligation on the court to explain its decision; and, lastly, the option for the courts to prohibit fraudsters from certain activities.

We agree with the principle of this bill. The Bloc Québécois would like to improve the bill in committee and address a number of major shortcomings. Over the next few minutes, I will speak to a number of these shortcomings.

It can be a lot better. In September 2009, we called for the implementation of concrete measures to fight fraud. Americans are not the only ones to be affected by major fraud; it is happening the world over. Unfortunately, we have our own examples of this in Quebec.

During today’s debate on Bill C-21, several members have given examples of cases of fraud that have occurred in almost all corners of the world. There have been financial scandals in Quebec including the Cinar affair, Norbourg— a sadly notorious case—and Earl Jones, whose acts have laid bare weaknesses in the current system’s ability to monitor and fight crime. When we broached the subject, instead of rallying behind us, the Conservatives immediately decided to put forward their own measures. We are of course in favour of some of these measures, but we do not understand why it seems as if the job was botched and done in a panic for the purpose of looking after their own interests, while the victims are simply asking the government to act, and to act quickly.

We will probably never be successful in completely eradicating fraud, which never stops. While listening to the news earlier on Radio-Canada, I heard that the Insurance Bureau of Canada just issued a warning about a fresh wave of fraud affecting auto insurers, and that the IBC decided to warn its insurers. An investigation had shown a spike in the number of completely staged car accidents. People are deliberately having car accidents in order to make fraudulent insurance claims. It is probably not brand new, but there is apparently a wave of this hitting the industry right now.

When I was a journalist, I covered an event based on information obtained by the police. In fact, after noticing that the water level of a lake had risen—it was an abandoned pit—cranes regularly went and dragged out cars from the bottom of that lake. People had pushed their cars in there in order to claim insurance. Thus, there is nothing new under the sun.

It will be tough to completely stop these acts of fraud. At least if we manage to put concrete measures in place—and I believe that some of my colleagues from the Bloc Québécois have referred to such measures here over the course of the day—that that will have a dampening effect on these financial scandals.

On September 2, 2009, the Bloc Québécois introduced a series of measures to improve the system and make crimes harder to commit, easier to detect, and subject to tougher penalties. A comprehensive approach is needed in order to understand, and effectively fight, this type of crime. In response, a couple of days later ,on September 16, the government came up with a bill which was supposed to include minimum sentences, aggravating factors and the option for the courts to make an order for the restitution of property. That was Bill C-52, which is now Bill C-21.

This bill contains very few measures and will be only minimally effective. I will speak a bit later about the measures favoured by the Bloc Québécois. In this the bill in its current form, the Conservative’s primary measures include minimum sentences. They have no deterrent effect, just as in other areas. Acts of fraud over $1 million are rare. The Minister was unable to cite a single case of major fraud for which the sentence handed down was less than the suggested two years. In fact, 6- to 7-year sentences were generally handed down in these cases.

The courts already took into account the aggravating circumstances that have been included here. So this addition does not change much. Almost all, if not all, the aggravating circumstances listed in this bill were included in the Vincent Lacroix decision, which sadly is a well-known example. It makes you wonder whether the Conservatives just copied and pasted the decision because they told themselves that was what they needed to do.

Therefore, the judge in this case had the tools at his disposal. We do not need to reinvent the wheel. We must improve the situation and put an end to such financial scandals instead of redoing what has already been done. It would not change much. A bill that contains the same measures that judges are already using will not help fraud victims.

Restitution orders already exist. They are broader in scope in Bill C-21, but experts have raised concerns about the feasibility of these measures in practice. I am not an expert, but I know that committee members from all of the parties will be able to question these experts about all of the proposed measures.

The part of the bill that restricts the activities of convicted offenders is interesting. But that, too, is at best an existing practice whose scope has been broadened.

Thus, Bill C-21 is missing the most important measure, that is, abolishing parole after only one-sixth of the sentence has been served. We have been calling for that for quite some time. When I say “we”, I mean that is what the people of Quebec want. I am not deaf and blind to what is happening in the rest of Canada, where people have also been calling for that, but especially in Quebec, because of the cases mentioned earlier—Norbourg, Earl Jones, Cinar—people are particularly aware of and angry about the fact that, although the sentence might appear harsh, someone can be released after serving just one-sixth of the sentence. That is the main source of frustration.

Despite Bill C-21, Earl Jones and Vincent Lacroix will be able to benefit from this mechanism to get out of prison before having served a sufficient amount of their sentence. We know that minimum sentences do not solve this problem. We limit any room to manoeuvre for the judge who has to examine all the circumstances of the crime. Just because someone appears before a judge for committing a crime does not mean there are no extenuating circumstances. The judge needs enough room to manoeuvre to give an accused who is eventually found guilty four years in prison for precisely what happened and the role he played. Another person involved in the same crime might end up with 7, 8 or 10 years because the circumstances were not necessarily the same. We have to give the judge this room to manoeuvre so that he or she can use a balanced approach.

When we impose minimum sentences, there is no room for second thoughts. Regardless of the extenuating circumstances, a person who commits a crime and is found guilty will be given two years in prison, while under the current system he might have done a bit better than that. Depending on the case, we might be too strict or not strict enough, especially when minimum sentences are involved.

We are not addressing tax havens either. We heard that a few times in the speech before mine. That is where the fraudsters hide their loot. What point is there in ordering restitution of the hidden money when we are not addressing the issue of tax havens?

The Bloc Québécois has prepared a six-point plan to deal specifically with white-collar crime. They are effective measures. We also want to restore the confidence of victims and citizens in general. This confidence has been clearly undermined for two main reasons. I spoke earlier about release after serving one-sixth of a sentence. There is also the notorious two-for-one credit for time served before sentencing, which makes it possible for someone convicted of a crime to have double the amount of his time spent in preventive custody deducted from his sentence. He will obviously get out more quickly.

On September 2, 2009, to make life difficult for fraudsters and to prevent other investors from losing their life savings, the Bloc Québécois presented a plan to fight white-collar crime. This balanced plan consists of six measures: three of them target crime prevention in particular, two ensure that justice prevails when a guilty verdict is handed down, and one helps victims.

First, we are calling for the complete elimination of release after serving one-sixth of a sentence. If I remember correctly, when this session of parliament began, it was the first thing we asked for because we were right in the middle of the scandal of Vincent Lacroix from Norbourg. We expected all parties in this House to allow us to fast track this legislation. Unfortunately, the Conservatives did not agree.

We are also asking that the Criminal Code provisions on confiscating proceeds of crime be amended to include fraud of more than $5,000.

Next, we are calling for police forces to be reorganized, what concerns us here in the House of Commons and at the federal level being the RCMP, to create multidisciplinary squads specializing in economic crime. At present, the police are extremely competent, but we need to expand the range of skills, including for tax fraud cases, which are now significant and which very often exceed the basic skills of a police force. We have to have experienced accountants and lawyers who are well versed in all the tricks developed by these big fraud artists, particularly given that the fraud is often committed at the international level, using tax havens. The work of a mere investigator is not going to uncover all the ins and outs of these. When fraud artists, criminals, on this scale are discovered, we realize everything they have managed to do with sleight of hand and shell games to defraud thousands of people, often out of millions of dollars. And then we realize that we need to have multidisciplinary squads composed of people with a variety of skills, to be able to explain properly to the investigators exactly how these people have managed to operate. We would not have those people just to uncover things, but also to combat fraud artists who might be tempted to continue in that vein.

We are also calling for banks to have an obligation to report irregularities in trust accounts to the Autorité des marchés financiers and the user’s professional body. We recently had an example of this, and investigators are still trying to wade through this scandal: people used a bank to commit tax fraud, it seems, and to evade taxes, by investing the money in Switzerland. Obviously, we will know more as the investigation progresses.

We are also calling for a review of the amendments that could be made to the Income Tax Act to assist the victims, in particular by introducing a provision to allow victims of fraud to deduct the stolen money from their income, instead of those amounts being considered to be capital losses. Often what we try to do in these situations, as is to be expected, is either to combat the fraud or to arrest the people who committed it. Sometimes, however, we may unfortunately forget the victims. Well, in the measures proposed by the Bloc Québécois, the victims are not being forgotten. And so when we study Bill C-21 in committee, we will ask that we be able to make that amendment to the Income Tax Act.

We are also asking that the Income Tax Act be amended to put an end to the use of tax havens. This practice allows individuals and companies to hide money and avoid paying taxes. Many examples of this have been mentioned here in the House today.

I have a few minutes left to go into detail about my first point. Since 2007, we have been proposing that the chance of parole after serving one-sixth of the sentence be abolished. This idea is not new. It is not that we have just now realized what needs to be fixed. For three years, we have been asking that this measure be abolished as it undermines the credibility of the justice system. Abolishing it would allow us to extend prison sentences for those who commit fraud, even for those who have already been arrested and who are awaiting their criminal trial. It would contribute to restoring—

[An hon. member]

Oh, oh!

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

I was just interrupted by one of my colleagues.

[An hon. member]

A Liberal, at that.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Excuse me, Mr. Speaker. This element would allow us to restore our justice system's reputation.

All too often, convictions, even serious ones, lead to only a couple of months of jail time. That was the case with Vincent Lacroix. Although he was given the maximum sentence under the Quebec Securities Act, the Court of Appeal recently determined that the maximum sentence that can be imposed under the act is five years less a day. Mr. Lacroix was therefore able to leave prison after having served only one-sixth of his sentence. And that is when the justice system's reputation went out the window.

What is regrettable in the current parole system in Canada is that it undercuts the assessment the judge made in determining the sentence and tends to discredit the administration of justice in the eyes of the general public, which thinks, often quite rightly, that most sentences are not tough enough.

The Bloc Québécois therefore introduced a simple bill on September 14 for this sole purpose and with no surprises in it. The goal was to get it fast-tracked and give us some good tools to work with. Unfortunately, although the victims wanted the bill and there was a consensus around it in Quebec, the government explicitly refused to fast-track it, preferring to announce instead that it would introduce a bill at some unspecified date and to some unspecified end. So it is vague intention, a wish. We will see what comes of it, but as of September 14 we could have already fast-tracked legislation on parole after one-sixth of the sentence has been served.

Since June 2007, the Bloc Québécois has also been proposing amendments to the Criminal Code provisions on confiscating the proceeds of crime in order to include measures covering fraud over $5,000. Fraudsters who had been found guilty would be required to prove that their property was legally acquired, failing which proof, it would be seized. This would amount more or less to a reversal of the burden of proof. A measure like that would make life much more difficult for criminals of all kinds.

Third, there is the reorganization of the police.

We have a lot of measures, therefore, that could easily be implemented and that have been discussed for a long time. I think that when Bill C-21 is studied in committee, it would be good to put these measures back on the table to ensure that we have a bill with a bit more substance.

The House resumed from October 4 consideration of the motion that Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), be read the second time and referred to a committee.

Standing up for Victims of White Collar Crime Act

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Madam Speaker, today I will be splitting my time with the hon. member for Newton—North Delta.

I am pleased to speak to Bill C-21, particularly given the importance of white collar crime in this country. Over the last few years we have seen more and more of these cases. The Canadian securities administrators note that at least 5% of adult Canadians have been affected in one way or another by this white collar crime situation and that over one-third of these large numbers of victims of fraud are seniors who have invested money and who have obviously been misled. These people take the money and often it is not recoverable.

We also note with interest that corporations have estimated that between 2% and 6% of their annual profits are affected by white collar crime. Over the last few decades this has totalled billions and billions of dollars, so both the average individual in this country and corporations are affected by the activities of these fraudsters who clearly prey, in many cases as I have indicated, on seniors and the most vulnerable in our society.

We welcome the government's legislation, finally, on this and obviously support it going to committee to be reviewed. This legislation has a minimum mandatory sentence of imprisonment for two years for fraud valued at over $1 million. We could get into the issue of where people stand on mandatory minimums, but the reality is that the courts need to be much tougher on these individuals who prey on the most vulnerable and who clearly take people's life savings.

There have been cases recently where these situations have occurred and have caused great personal trauma for people, the Jones case in Quebec, for example. People believe that the individual before them is a reputable individual who tells them they will be able to invest their hard-earned money in certain investments for their retirement. Yet it turns out that they are victimized, and the penalties are not tough enough.

Not only do we have to look at the penalties but we have to look at prevention. How do we stop the fact that 2% to 6% of corporation profits are lost? How do we stop the fact that 5% of Canadians have been victimized? The committee will have to examine it, but it is not simply about the penalties; it has to be about how we can do better in terms of dealing with these kinds of individuals who are preying on our society.

Prevention is obviously important. The bill does not address the issue of the end of the one-sixth accelerated parole provisions for these offenders, which the opposition has called for and certainly the public has called for. There is absolutely no reason why this provision should still be there, and we hope the committee will deal with that issue. That is one of the shortcomings we see in this proposed legislation.

There is no question that the legislation has been a long time coming. It would have been dealt with earlier by the previous legislation that was introduced before Parliament was prorogued. Now we have new legislation, Bill C-21.

The Earl Jones case in Quebec and the Bernie Madoff Ponzi scheme in the United States are examples of the kind of individuals out there who prey on people and why we need to have tougher legislation. We need to have legislation, in my view, that not only includes the mandatory minimum but also deals with the sentencing issue and the psychological and financial impact on individuals.

The legislation permits victim impact statements after sentencing, but just as it is with an individual who is a victim of a mugging or an offence of that nature, the psychological impacts and the financial impacts in this case are quite significant, which is important. It is important that the courts look at those victim impact statements as well, to see obviously what mitigating factors were involved, but these things have a very long-term effect.

Constituents in my riding of Richmond Hill have been victims of white collar crime, and some of these people are still feeling the effects 10 years later. They should not, but they blame themselves in many cases and ask how they could have been taken in by this individual, how they could have been so gullible. Therefore, they ask what the penalties are, and often it is simply a slap on the wrist, and this is why the mandatory minimum is obviously important. But, it is also important to look at those community impact statements as well.

The Royal Canadian Mounted Police has indicated its support for this. The Canadian Bar Association has concerns about the mandatory minimum issue, but again we need to deal with the reasons for white collar crimes. We need to deal with what the regulations are. One of the issues the House has been dealing with as well is the issue of the securities commissions, the fact that we have 13 across Canada and the issue of a national regulator. When I was parliamentary secretary to two ministers of finance, we promoted the idea of a national regulator. The government is again talking about a national regulator. It is important because, in trying to keep track of investments and the fact that if people overseas are looking at investing in Canada, it does not make a lot of sense that we have 13 bodies. But there are other issues. There are about 50 entities as well that are also involved in the issue of regulations, as well as dealing with the issues of enforcement, investigation, coordination, et cetera. We have a very bureaucratic system, which is often why these kinds of cases slip through the cracks and why these people are able to advance their particular agenda on individuals who unwittingly fall victim to this.

On the issue of recouping of dollars, when people have taken the money how do we get the money back, if any of it is recoupable? How do we get that in terms of where they have put it? Have they put it offshore? Have they simply spent it? What are the tough penalties to deal with individuals who do this?

In my riding there was an elderly lady who had invested $10,000 with someone she thought was a reliable individual, and unfortunately she never recouped that $10,000. When people are elderly and that kind of savings is gone, it has a tremendous impact. The question again is, what are we doing as legislators not only to deal with the proponents who are involved in this kind of white collar crime activity but as well to prevent it? How can we be tougher in terms of the regulations? How can we be tougher in terms of monitoring? Those are the kinds of things that people want to see. The bill deals with part of that, but it does not deal enough on the prevention side. I hope the committee will do more with that.

The victim restitution issue is obviously going to be extremely important because again that is something that at the end result people are most concerned about, in terms of how that impacted on individuals and their families and their community. How do we get the word out of what happens to these people? Some would argue that a minimum of two years is not strong enough, but from the Liberals' standpoint we do believe that there need to be strong provisions put in place, and if we had not prorogued we probably would have had this a lot earlier. But we have to move quickly on a bill of this nature because this addresses an issue in our society, which is becoming more rampant. When we think of 5% of Canadian adults who have been in one way victimized by white collar crime, that is quite significant. I look forward to future deliberations on this.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Madam Speaker, obviously Canadians welcome greater measures in our laws, policies and programs to protect them from shysters, but one area the bill does not address is one of the largest categories of fraud, which impacts on the public market and the public, and that is environmental fraud.

When I worked in Bangladesh, I discovered that in Asia the government regularly brings fraud charges under its criminal code against major polluters. There have been recent serious cases in my own province of industry filing false reports on pollution. This is not a minor blip or technical matter. Our entire environmental regulatory system is based on self-reporting and if companies do not self-report, there can be significant harm to human health and the environment.

I am wondering if the member could speak to whether the bill should cover a much broader area, including environmental crimes, and in that case, who would speak on behalf of the community in the court.

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Madam Speaker, as a former parliamentary secretary to the minister of the environment, I welcome the question. My personal view is that yes, it should be broader. It should deal with those kinds of issues. There are jurisdictions where this in fact takes place. She mentioned Asia, and Japan is another example.

This is a type of fraud, although obviously a different type, one that not only has a major impact on the community but can have significant financial implications as well. Environmental false reporting or fraud is an issue that the committee would certainly have to look at, but there are examples in Japan and Singapore where these in fact are on the books and could be very useful.

Who speaks for the community? That is a good question. Both interest groups in the community at large and we as legislators have to put some teeth into legislation that sends a strong message to companies that we do not want it to occur and if it happens there will be penalties. We have to speak with a very loud voice because, whether the pollution is in rivers or fields, the fact is that it is having health effects. Those are implications that need to be addressed.

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

Madam Speaker, the member talked about a single regulator. With his experience in the previous government with financial matters and being from the centre of the financial universe, the greater metropolitan Toronto area, he would have some experience in giving an answer to this question.

Why is the government behind the United States with respect to the self-regulation of securities, with respect to cracking down on fraudsters, and why does this bill have no response, for instance, to the type of rampant Madoff situations that occur in the United States? Even though the Conservative government emulates the United States in so many ways in its style of politics, why is it so far behind the U.S. regulatory and punitive regime with respect to securities?

[Bryon Wilfert, Liberal, Richmond Hill, ON]

Madam Speaker, it partly comes down to political will. It also comes down to the fact that we seem to always be bogged down in jurisdictional issues. There are not only 13 regulators but 50 other bodies involved in the co-ordination, investigation, et cetera. The fact is that this is one area where Parliament needs to act very strongly because the ability for these things to slip through the cracks is very evident.

I do not know of too many countries, in fact I cannot remember one, where there are so many regulatory bodies dealing with this issue. The United States, Great Britain and France all have a single body, and yet we are still debating regulations and jurisdictions rather than who we are supposed to be serving. It is the public that is the victim because of these 13 bodies and the other 50.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Madam Speaker, first I would like to thank the member for Richmond Hill for sharing his time with me. It is always wonderful to work with him as part of a team.

I rise to speak to Bill C-21. This legislation, after dying on the order paper when the Prime Minister decided to prorogue Parliament last year, is finally being revived by the government. This bill is so important and has such an urgency because of the trail of victims that white collar crime has scattered across North America in recent years.

In the United States the infamous Bernie Madoff, while serving as a stockbroker, an investment adviser and a non-executive chairman of the NASDAQ Stock Market, operated the largest Ponzi scheme in history, ripping off thousands of investors for more than $65 billion.

Canada has also had its share of fraud. The highest profile case came to light last year in Montreal. Earl Jones took more than $50 million from dozens of victims in a 20-year long Ponzi scheme. The victims included his own brother to the tune of $1 million.

For too long white collar criminals have received only slaps on the wrist for their crimes. In 2007 there were 88,286 incidents of fraud in Canada. Of those cases, approximately 11% of those responsible were found guilty for their actions. Of that 11%, only 35% received jail sentences and over 60% received probation or a lesser penalty.

The rate of conviction and record of punishment is unacceptable. Because these individuals do not use a gun or a knife, in the past they have been treated with kid gloves. This is absolutely ridiculous because the impact of these crimes is often far more damaging than a simple assault. We are talking about people whose entire life savings, their long-term plans for retirement, their hopes and dreams for the rest of their lives have been taken away from them.

We are dealing with a class of criminals that have no regard for their victims. If a potential victim has to take a mortgage on his or her house to invest in a sure bet, get-rich quick scheme, no problem. How about a senior who has spent 50 years saving for retirement only to have his or her trust broken by someone who guarantees that the senior will never have to worry about his or her money again. Maybe it is a young couple who have saved for their children's education and who are taken advantage of because of their hope to build a better life for their son or daughter.

These are the kinds of stories that have been emerging from these massive frauds for years. They also represent the people who have watched their fraudsters walk over the justice system without any kind of adequate penalty or restitution.

Bill C-21 is a good start toward correcting these voids in our system. It proposes a minimum two-year jail term for fraud over $1 million, and it proposes additional aggravating factors for sentencing. It proposes consideration for victims' impact statements and requires consideration of imposing restitution for victims. It proposes to allow the court to prohibit an offender from assuming any position, volunteer or paid, that involves handling other people's money or property.

I would like to point out that many of these ideas emerged from this side of the House when a group of Liberal MPs from Quebec met with the Earl Jones victims committee and presented nine immediate action items. The spokesperson for the group stated that the Liberal MPs presented for the first time a concrete plan. From the very beginning the Liberal Party has pledged that we will co-operate with the government on the bill in terms of input and fast passage.

Once again, if the House had not been prorogued by the Prime Minister, we would already have a law in place to protect Canadians. Nonetheless, on this side of the House we are pleased to see that the government chose to reintroduce the legislation this past spring.

I would like to make some clarifications of my support for the bill. I would point out the necessity for the bill in its current form to go to the committee stage for scrutiny. There are some huge holes that must be addressed.

Sentencing is important, but so too are the investigations and preventive measures that can be taken before crimes even occur.

Investigators across the country are under-resourced badly and in spite of calls for more funding, the government has ignored this aspect of tightening things up.

Parole for white collar crimes has not been addressed in any way, leaving it unclear whether the fraudster deserves jail time or should go back into the community.

Finally, the one-sixth accelerated parole provisions are outrageous, as they allow these criminals to serve a fraction of their sentence before being eligible for parole. The government has done nothing to correct this glaring error.

Those are the deficiencies in the bill that demonstrate how much work it needs before it becomes the law of the land.

In closing, this is a bill that is a long time coming and one which the Liberal Party was instrumental in helping to craft. For that reason, we are working with the government to get the legislation passed. That being said, we need to ensure that the bill is correct and airtight when it comes to the methods it prescribes for dealing with white collar crime.

This is why I am supporting sending the bill to committee for fine-tuning and improvement.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Madam Speaker, I know that many people who are watching the debate today will be very concerned about white collar crime and in particular, their own protection against those kinds of criminal activities.

We need only to think about things like Enron or the case of Conrad Black and the prosecutions that happened south of the border, and here in Canada, many seniors were impacted negatively by what happened around Earl Jones. We have a government that is reacting to a huge public outcry. However, it is not good enough for the government just to say, “We are a law and order government, so trust us, our bills will be perfect and they will be the cure for whatever ails us”. It is important to take a very close look at the legislation that is before us.

It strikes me as legislation that was quick to come forward, but is short on innovation and on real teeth. For example, if we look at the provisions about compensation, the bill says “shall consider making a restitution order under section 738 or 739”, but it does not compel offenders to compensate their victims. I think that for people who have been defrauded financially, this legislation would be very inadequate in terms of meeting their needs.

The question I want to ask the member has to do with things that are not even in the bill, in particular, environmental crimes. This is one of the areas that has to be looked at much more closely and ought to be included in the bill. I wonder if the member would agree that those kinds of provisions have to be part of this legislation before it receives third and final reading.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Madam Speaker, I certainly would support those kinds of suggestions. As my Liberal colleague, the hon. member for Richmond Hill stated, on crimes to do with the environment, whether to do with money or substance, they are equally important. That is why we on this side of the House are supporting sending the bill to committee, to let the committee make those changes and make the bill airtight and to take into consideration issues such as the ones the hon. member mentioned.

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

Madam Speaker, I was reading an article on Canadian Business Online from September 24, 2007. The headline was “...Canada's losing war against white-collar crime”. The author was talking about the RCMP's launch of the integrated market enforcement team, IMET, which was an elite squad of investigators who were supposed to work together to crack down on white collar crime, but the results were extremely disappointing.

In the United States, the justice department there racked up more than 1,200 convictions against high-level executives from Enron and other companies like that in the last five years, and the IMET had only managed to get two. There were 1,200 in the United States and only two in Canada, and both of them were against the same person.

It went on to say:

Just ask people on Bay Street who they are afraid of. It’s not the cops, it’s not the [Ontario Securities Commission]. It’s the U.S. Securities and Exchange Commission because they have real teeth.

In spite of all of that, President Obama in the United States is re-regulating because he and the Americans do not feel that their system is adequate, and our system is so much worse than their old system was.

When does the member think Canada is going to get tough on white collar crime?

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

Madam Speaker, Bill C-21 is long overdue, but as I mentioned earlier, it would have been the law of the land today if the Prime Minister had not prorogued Parliament so many times.

The Liberals are willing to support the government to pass this bill and make this a law. Now the bill is on the floor and we on this side of the House are supporting sending the bill to committee and making sure that it takes care of the victims of these frauds.

[The Acting Speaker, Denise Savoie]

Resuming debate.

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Denise Savoie]

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

[Some hon. members]

Agreed.

[The Acting Speaker, Denise Savoie]

Motion agreed to. Consequently, this bill is referred to the Standing Committee on Justice and Human Rights.

(Motion agreed to, bill read the second time and referred to a committee)