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.

The House proceeded to the consideration of Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), as reported (with amendment) from the committee.

Standing up for Victims of White Collar Crime Act

[The Acting Speaker, Denise Savoie]

There being no motions at report stage, the House will now proceed without debate to the putting of the question on the motion to concur in the bill at report stage.

[Rob Nicholson, Conservative, Minister of Justice and Attorney General of Canada]

moved that the bill be concurred in.

(Motion agreed to)

[Rob Nicholson, Conservative, Niagara Falls, ON]

moved that the bill be read the third time and passed.

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

Mr. Speaker, I am pleased to participate in this debate at third reading of Bill C-21. The provisions of this bill would amend the Criminal Code to strengthen sentences in cases of fraud.

In our entire legislative arsenal to combat white collar crime, the charge of fraud is the most important weapon. It criminalizes a wide range of acts of deception. That said, there are two very general elements that characterize fraud, and the general nature of these elements is what makes the charge of fraud the most effective tool to combat white collar crimes.

The first element is deception or some other form of dishonest conduct, which can exist in all kinds of situations and take on many different forms. The second element is a financial loss, which includes not only the actual loss of money or other valuables, but also the risk of such a loss.

The combination of these two elements constitutes a case of fraud. Essentially, fraud exists when someone uses deception to get another person to hand over their money. Theft involves taking someone's property without permission, while fraud exists when a thief is cunning or smooth enough to convince the victim to voluntarily hand over their property. This deception exacerbates the financial loss since the victims feel ashamed and humiliated because they feel as though they contributed to their own misfortune.

The broad and flexible definition of fraud can also apply to securities fraud, such as accounting fraud based on overestimating the value of securities to shareholders and investors, incorrect declarations regarding a company's financial situation and Ponzi schemes, which we have seen recently in Canada and the United States.

Fraud charges are also an effective tool to combat other types of fraud dealing with mass marketing, mortgages, property titles, home renovation, health care and other types of insurance, and also taxes, not to mention the scams recently found on the Internet, for example, on eBay, where an article for sale is never sent to the purchaser even after it has been paid for.

The various measures contained in Bill C-21 for determining sentences for fraudsters aim to ensure that the crimes they commit are taken seriously. Currently, the maximum prison sentence for fraud is 14 years. This is the second highest maximum penalty in the Criminal Code, after life imprisonment. In that sense, it is a satisfactory maximum. However, it is possible to do more so that sentences correspond better to the devastating effects that fraud can have on its victims.

To begin, Bill C-21 establishes a mandatory minimum sentence for fraud over $1 million. Currently, the value of the fraud is considered to be an aggravating factor, which means that the sentence should be increased according to existing maximum sentences. As a result of Bill C-21, this aggravating factor will automatically lead—yes, automatically—to a mandatory sentence of at least two years. Whether it was a single fraud or a series of them, only a complex, well-orchestrated and well-executed scheme results in more than $1 million in losses, and it has likely included other types of crime, such as falsifying documents.

Fraud resulting in such significant losses must be considered a serious crime. The proposed two-year mandatory sentence is simply a starting point—yes, a starting point—that allows for the appropriate sentence to be determined. In fact, sentences for major fraud will also take into account all the other objectionable aspects of the offence, many of which are considered to be aggravating circumstances under section 380.1 of the Criminal Code.

Bill C-21 would add these new aggravating circumstances: the magnitude, complexity, duration or degree of planning of the fraud committed was significant; the fact that the offence had a significant impact on the victims, given their personal circumstances; the fact that the offender did not comply with rules or licensing requirements; and the fact that the offender concealed or destroyed relevant records.

In addition to the aggravating circumstances already set out under section 380.1 of the Criminal Code and the general circumstances set out in section 718.2, sentencing courts will take these new aggravating circumstances into consideration in order to determine a sentence that reflects the specific facts of each case.

Bill C-21 would also create a new prohibition order to prevent individuals convicted of fraud from reoffending. Specifically, it would allow the courts, when sentencing an offender convicted of fraud, to prohibit him from having authority over the real property, money or valuable security of others. That makes good sense.

The court would set what it considers an appropriate prohibition period. It would be an offence to violate such an order. The Criminal Code already provides for a prohibition order to prevent recidivism among individuals convicted of designated sexual offences involving children and child abduction offences. The proposed new prohibition order would offer the same protection, and the judge would have discretionary authority to make such an order. The judge would not make the order before the prosecution and the defence had the opportunity to comment on the impact such an order could have on the offender's ability to earn a living and other relevant considerations. In addition, the offender or the Crown could ask the court to vary the order.

Bill C-21 would also improve how the justice system meets the needs of fraud victims, with provisions on restitution and community impact statements.

At present, under the Criminal Code, the judge can order an offender to compensate victims when the situation warrants in order to offset losses, especially financial ones, suffered as a result of the crime. Bill C-21 goes further by requiring that the judge consider making a restitution order whenever an offender is convicted of fraud. Moreover, the judge would have to ask the Crown whether reasonable steps had been taken to provide the victims with an opportunity to indicate whether they are seeking restitution. The purpose of this measure is to avoid situations where the sentence is handed down before the victims have a chance to indicate that they would like restitution from the offender and to set the amount of their losses.

If the judge were to decide not to make a restitution order, he would have to give reasons for his decision. This should prevent the court from inadvertently disregarding the issue of restitution. What is more, the victims would be able to understand why the judge decided not to order restitution, where applicable.

In its original version, Bill C-21 required that the judge give reasons for his decision every time he decided not to make a restitution order.

For instance, if the victim has not made a request for restitution, the judge could simply indicate that reason in his or her justification. However, in the version amended by the House of Commons' Standing Committee on Justice and Human Rights that we currently have before us, Bill C-21 now only requires a judge to provide reasons for not ordering restitution where the victim has made an application for it. While this may seem logical and inconsequential, it does somewhat diminish the bill’s goal of ensuring that restitution is always considered in fraud cases, even in the rare situation where a victim does not seek restitution, but when restitution could and should be ordered by the judge. However, in order to get this bill passed, we are pleased that the provisions pertaining to restitution can remain in effect despite this minor change.

Bill C-21 also urges judges to consider the impact that fraud can have, not only on individuals, but also on groups and the community. The Criminal Code currently requires courts, when sentencing an offender, to consider victim impact statements describing the harm done to or loss suffered by the victims. In some cases, the courts allow such statements to be submitted on behalf of a community. Bill C-21 would explicitly allow courts to consider a statement made on a community's behalf describing the harm done to or losses suffered by the community when imposing a sentence on an offender found guilty of fraud.

Bill C-21 is but one aspect of this government's wider initiative to improve the criminal justice system's response to major fraud cases. I therefore urge all members here today to support the expeditious passage of Bill C-21.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, on the issue of the restitution and whether or not the judge must give reasons for a decision, I found it interesting that it is the only amendment that was made at committee.

It would appear to me that if the clause were left alone, the court would always have to give a reason why the judge was not going to make a restitution order. By putting the amendment in, it means that we need two things, first of all that the victim does not seek restitution or does not give that indication. It would be an interesting argument. I would have left it alone.

However I understand that the reason the change was made, which the parliamentary secretary did not reveal to the House, was that the amendment was prompted by an intervention of the Canadian Bar Association for the reason that the courts were overtaxed and that it was going to be too much for a judge to be able to write orders for not giving restitution on all cases.

It then raises this question, and this is the reason I am rising. Why is it that the government is not even prepared to recognize that the courts have been overtaxed because of the inability to get the resources from the federal government to respect and enforce the laws of Canada? We make the laws. The government pays the bills.

I wonder if the parliamentary secretary would like to explain why he did not refer to the CBA intervention that forced this one and only change.

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

Madam Speaker, the hon. member is talking about two very extraordinary things. I have been a lawyer for exactly 37 years and I still work in the courts when I am not acting as a parliamentary secretary. I therefore know that all the courts across Canada, no matter what the province, have been overtaxed for 37 years. Is this because of a lack of resources? Is it because the Criminal Code is different? We could ask ourselves plenty of questions, but this problem is not new. We have had problems in the Quebec City district for 37 years. Over the years, the cases accumulate and nothing works. In certain instances, the victims and the offenders have to wait for their cases to be heard by the court.

With regard to the hon. member's second question, the committee, in its wisdom, decided upon this amendment when examining the issue of restitution orders. The Standing Committee on Justice and Human Rights works exactly the same way as the House does. The opposition is in the majority while the government is in the minority. Committee members came to an agreement that judges should write restitution orders. I would like to reread an excerpt from my speech so that it is clear.

However, in the version amended by the House of Commons' Standing Committee on Justice and Human Rights that we currently have before us, Bill C-21 now only—this word is important—requires a judge to provide reasons for not ordering restitution where the victim has made an application for it. While this may seem logical and inconsequential, it does somewhat diminish the bill’s goal of ensuring that restitution is always considered in fraud cases, even in the rare situation where a victim does not seek restitution.

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

Madam Speaker, in the course of the hearings in the justice committee on Bill C-21, we had witnesses come forward who were basically saying that this was going to do little, if anything, to give our prosecutors and police the tools to effectively fight white collar crime.

Witnesses pointed to a recent story out of Toronto in particular. An individual had been accused of a Ponzi scheme, taking somewhere between $23 million and $27 million. About three weeks ago, the prosecutors in Toronto opted to withdraw all of the charges in spite of the fact that all of this money had gone missing from almost 100 people.

The committee heard that that was not a unique set of circumstances. The point was that we can pass all the laws we want, but we need to give our police and prosecutors the tools to prosecute these individuals. When the prosecutors have to decide between prosecuting these kinds of individuals and somebody who has committed a semi-violent crime, they are always going to opt to spend their time on that rather than on these because of the length of time it takes to prosecute.

I wonder if the member agrees with me that that is a good summary of the evidence. Is his government going to do anything about providing additional resources to our police and prosecutors in order to be able to effectively prosecute?

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

Madam Speaker, I want to thank my colleague, who is also a member of the Standing Committee on Justice and Human Rights.

He asked a two-part question. He mentioned cases in his province of Ontario. I would point out to him that in Quebec, we have had our own share of problems. We had the Norbourg and Earl Jones cases. In the Norbourg case, people had, or seemed to have, documents allowing them to sell certain products, but 9,800 people were nonetheless defrauded by a man by the name of Vincent Lacroix. As far as Earl Jones is concerned, he apparently was not licensed to sell a host of products involved in a Ponzi scheme in which he made off with about $150 million.

The problem is that criminals are becoming more and more sophisticated, so in addition to needing financial resources, we also need intellectual resources. In future, some lawyers might also have to be forensic accountants in order to understand the dynamics of these crimes. Fraud is so sophisticated that it can take some time to understand the entire system that was set up. In the Vincent Lacroix case, Caisse de dépôt et placement sold the products to a company called Norbourg, and the government itself issued all the licences. Nevertheless, 9,800 people were defrauded out of $115 million or $150 million.

We need resources, but we also need to invest in law schools in order to provide lawyers with training in forensic accounting to help them understand the system and how fraudsters operate.

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, I want to commend my colleague from Quebec for his articulate explanation of the bill, which goes after white collar criminals. He also does great work at the justice committee. He is my colleague there. He is the Parliamentary Secretary to the Minister of Justice.

I would ask him to go just a little bit further and explain to the House, first, the kinds of cases that the bill intends to address and, second, his understanding of why the opposition parties continue to criticize this important bill that is so necessary for protecting Canadians.

[The Acting Speaker, Denise Savoie]

The hon. parliamentary secretary has one minute to respond.

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

Madam Speaker, that is not a very long time.

In summary, in the Criminal Code, we have what we call the fraud provisions, which have been in place since 1872. Now, we have set out a different way of doing things. From now on, when faced with a fraudulent scheme designed to steal pensions from poor people, we will have specific provisions under which minimum sentences can be imposed. This will send a clear message that stealing from our retirees will not be tolerated.

In Quebec, 9,800 retirees lost money because of an individual named Vincent Lacroix, who was sold a company by my own government's Caisse de dépôt et placement. It is unbelievable.

The purpose of our bill is to prevent these people from doing what they are currently doing and to put them in prison for good. The bill also proposes ways to provide restitution for victims because it is difficult for them.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Madam Speaker, this bill is long overdue. The government introduced this bill in the previous session of the 40th Parliament and played political games with it. The government killed this bill with prorogation. Basically, the Prime Minister decided that prorogation would be good for his party and his government.

After the throne speech was read on March 3 and the House resumed sitting, the government waited 60 days before reintroducing the same bill. It was identical to the bill that came before the House in the second session of the 40th Parliament. Not one comma was changed. Every dot on every i was the same. Not a single letter or word was changed. It was identical. This Conservative government nevertheless waited about 60 days after the throne speech before reintroducing the bill. The Conservatives finally reintroduced it at first reading. Those familiar with the House rules know that only the government can introduce a bill at second reading. Neither the official opposition, nor the Bloc Québécois, nor the NDP can do so. Only the government can. So how long did it take the government to propose debate at second reading of Bill C-21on white collar crime? The government boasts that it alone looks after the victims, believes that victims' needs are important, and is working on criminal justice.

The government left Bill C-21 at first reading for over 200 days. During that time, who was asking, praying, urging and begging the government to move debate at second reading? The victims. The official opposition. The Bloc Québécois. The NDP.

I have not heard a single Conservative member publicly ask his or her government to stop dragging its feet with Bill C-21 at first reading and to move forward with a debate at second reading. I have not heard one single Conservative member publicly demand that, but I heard the opposition demand it. I heard the Bloc members calling for it. I heard NDP members calling for it. I also heard many victims wondering why this Conservative government, which claims that victims and Bill C-21 are important, was not following through.

The Minister of Justice used every possible opportunity this weekend to say that there were criminal justice bills that absolutely had to be passed in the House and that he urged the opposition to stop opposing these bills. We just heard the same things from the chair of the Standing Committee on Justice and Human Rights, who rose to ask a question of the Parliamentary Secretary to the Minister of Justice. He asked the parliamentary secretary to explain why the opposition was opposed to this bill. That is not true. The opposition has always supported the government's desire to act quickly and effectively with respect to white collar crime and fraud. During the other session of the 40th Parliament, we tried to work with this government to ensure that this bill would pass.

However, the government and the Prime Minister decided to kill this bill by proroguing the House and Parliament. Then, when the House resumed, they waited some 60 days before reintroducing it. And once it was introduced, they waited more than 200 days to move debate at second reading.

How many days did the House spend debating Bill C-21 at second reading after having waited more than 200 days to debate it at second reading? The House took only two days to debate this bill because the opposition parties, notably the official opposition, want this bill to become law in our country. The opposition does not oppose this bill, and none of the three opposition parties slowed down the process of passing this bill. It was the government.

I believe it is important to remind the members of these facts because I am not making this up. Anyone who has a calendar can figure this out based on the date that the government prorogued the House in December 2009. The prorogation lasted nearly two and a half months, and the House resumed its work on March 3, 2010, with the Speech from the Throne. But it was not until about 60 days later that the government reintroduced its bill. Then the government waited more than 200 days to debate it at second reading—if my memory serves me correctly, it was 216 days. I know that it was more than 200 days; I am quite certain about that.

And now for the content of the bill. The bill establishes mandatory minimum sentences for those found guilty of fraud. That is what victims were calling for. Victims called for other things as well, but the government, in its wisdom, decided not to include them in this bill.

The victims were asking for two things. One, they wanted to see stiffer sentencing for white collar criminals; and the government, with its mandatory minimum sentencing of two years for criminal offences that are what we would deem white collar crime, responds to the victims' request.

However, the victims had a second request. The victims wanted the government to eliminate accelerated parole review for white collar criminals. The bill does not address that at all. This is something that opposition parties have been asking for, for several years now, and the government has not addressed it. It does not address it in the bill.

Liberals attempted to bring an amendment to the bill that would have amended the Corrections and Conditional Release Act in order to eliminate the accelerated parole review for the criminal offences that are dealt with in Bill C-21. The chair of the committee ruled it out of order because nothing in Bill C-21 dealt with the conditional sentencing and parole legislation.

I challenged the chair's ruling. However, I have to admit that his ruling was correct because my amendment, which would have eliminated the one-sixth accelerated parole review for the offences contained in this particular legislation, was in fact beyond the scope of the bill.

The chair ruled my amendment out of order. I challenged the chair, and unfortunately the Conservatives, the Bloc and the NDP upheld the chair's ruling.

There is a piece of legislation in front of the public safety committee of the House of Commons that deals with the issue of accelerated parole review. However, that as well is a bill that the government has been playing political games with and has been holding up, not moving second debate reading and letting it sit on the order paper at first reading for days and days.

We believe the government must act to respond to the request of victims, and not just the victims but of a variety of civil shareholders, that the one-sixth accelerated parole be removed, be eliminated, and not just for the white collar criminal offences but for virtually every offence, if not indeed all offences. In fact, one could describe it as being an offence to the sensibilities of Canadians and of our criminal justice system.

There is another point of white collar crime that the bill does not address. That is the issue that it does not in any way, shape or form attach these criminal offences to institutions.

I would like to read an article by Darcy Henton that was published in the Edmonton Journal on May 5, 2010, headlined “Alberta wary of white-crime bill”. It states:

A white-collar crime bill reintroduced by the federal Conservatives this week received a lukewarm reception Tuesday in Alberta from both a financial crime crusader and a fraud victim.

The justice bill, which had to be reintroduced after it died on the order paper when the prime minister prorogued Parliament last winter, sets a mandatory minimum two-year sentence for frauds over $1 million.

The bill also requires judges to look at several aggravating factors that could increase the sentence and to consider victim impact statements and restitution.

Retired investment broker Larry Elford, who advocates on behalf of investors, said the new bill still appears to contain a loophole that exempts it from being applied to investment institutions.

“It's a wonderful gift to the investment industry,” he said. “It would exempt the largest fraudsters in Canada. I can't understand why they would reintroduce the law with the same loophole.”

Elford said the law wouldn't apply to corporations like Goldman Sachs which is currently the subject of a civil fraud suit brought on by the Securities and Exchange Commission, the national securities regulatory authority in the U.S.

“Any Bay Street operator could sell any product in any fraudulent and misleading manner and this bill would not apply,” Elford said.

Edmontonian Jason Cowan has been pressing for tougher white-collar crime laws since he and a partner were allegedly defrauded of more than $2 million in 1996.

“I think it's absolutely necessary that there are some checks and balances,” he said. “These white-collar criminals are getting off all the time.”

[The federal justice minister] said the legislation will make jail mandatory for fraudsters who bilk their victims out of more than $1 million.

“Our government is standing up for victims of white-collar crime,” he said when the bill was reintroduced Monday.

The justice minister then waited over 200 days before moving second reading debate. That is really what I would call standing up for victims of crime: using their misery, using their hardship as a political ball game. It is shameful.

The official opposition supports this bill. We have from the outset. We have never hidden that. Every single member of the Conservative Party and every single member of that Conservative government knows that the official opposition supports the bill. We supported it in the last session of the 40th Parliament. We made it clear. We were very public about our support. So for any member of the Conservative Party to rise in this House, or outside of the House, and claim that the opposition is opposing this bill or holding up this bill is simply an untruth. Pure and simple, it is an untruth, and no Canadian should believe that Conservative MP who rises in this House, or outside of the House, to claim that the official opposition does not support and has not supported Bill C-21, the white-collar crime bill.

Canadians should then ask themselves, if a Conservative, a member of Parliament, is willing to tell an untruth on something that is so clearly not true and easily refuted, what else are they telling untruths about? What other issues are they not telling the truth about? What other issues are they spreading untruths about? Canadians should ask themselves that question, because why would someone tell an untruth on the issue of claiming that the opposition, the official opposition, is opposing or has opposed this bill or attempted to hold up this bill when the facts clearly show that the government has held up its own bill in order to play political games with victims of crimes? That is despicable. It is scurrilous. It is deplorable.

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, I rise on a point of order.

Madam Speaker, you know that it is unparliamentary for a member of this House to accuse another member of lying. The word “untruth” that has been repeated on numerous occasions by this member is the same as the word “lie”, and I would ask you to take her to task for this. That is unparliamentary language.

I know this member is better than that. I work with her at committee on a regular basis and this is something that is beneath her.

So I would ask you, Madam Chair, to rule on that.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Madam Speaker, on the same point of order, the use of the term “untruth” is not unparliamentary. It is very factual. I did not accuse that member of lying. Had I done so, that would have been unparliamentary.

What I did say is that the member and any member of the Conservative Party and government who claims, in this House or outside of this House, that the official opposition has in any way opposed, in the past or today, Bill C-21, or in any way delayed Bill C-21, is saying an untruth.

[The Acting Speaker, Denise Savoie]

I thank the hon. members for their comments on this issue. I think indeed the word is getting very close to the line and I would ask all hon. members to be a little more judicious in their use of words in terms of what constitutes parliamentary language in this House.

The hon. member has one minute to conclude, so I would sincerely hope that she will be more judicious in her use of language.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Madam Speaker, I take note of your statement. I also take note of the fact that you did not declare it to be unparliamentary. You stated that it comes close to the line, but you did not make a statement that using the term untruth, with regard to a member, is unparliamentary. I take note of that.

I will simply conclude my speech on Bill C-21 by stating again that the official opposition supported it. We demanded, asked, requested and begged the government to bring it forward in the last session of the 40th Parliament. We attempted to work with the government to get it through the House of Commons quickly. The government and the Prime Minister, in their wisdom, decided to kill the bill through prorogation. They waited, after the throne speech, over 60 days before reintroducing the exact bill, now under the label of Bill C-21, and then let the bill sit at first reading for over 200 days before finally proposing second reading debate.

It is clear. The official opposition supports this bill. We will be voting in favour of this bill.

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, I want to put it on the record here, without apology, that we believe that the Liberal Party is opposing or delaying this legislation for partisan purposes.

In fact, she as much as admitted that she challenged the ruling of the chair at committee, when she knew that the ruling of the chair was correct. I cannot think of a better example of delay than introducing amendments that she knew were out of order, then challenging the chair when he correctly ruled that the amendment was out of order. This has been the process at committee.

I also refer back to the discussions at committee on Bill C-4, where essentially the Liberal Party, in regard to the Youth Criminal Justice Act, where we are trying to introduce the protection of the public as a key and primary sentencing principle, is using the tactic of death by witness.They stack the witness lists and keep introducing witnesses in order to delay and obstruct the legislation.

I want to challenge her. Why is it that today in this House, when she and her party were given the opportunity to allow this bill to pass immediately--

[Paul Szabo, Liberal, Mississauga South, ON]

When?

[Ed Fast, Conservative, Abbotsford, BC]

--they said, no, we want to put up more speakers; we support the legislation but we want to go on and bash the government for a few hours today.

That is my question for the member.

[The Acting Speaker, Denise Savoie]

Order, please. I would ask all hon. members to speak once they have been recognized. That applies to all members in this House.

The hon. member for Notre-Dame-de-Grâce—Lachine.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Madam Speaker, the member is creating fantasies. Yes, I challenged his ruling in committee at clause by clause, and it took literally between 30 seconds and 90 seconds to dispose of it.

Compare that Liberal delay to the Prime Minister proroguing Parliament, and suspending and paralyzing all of the work of Parliament for two and a half months.

It is laughable. It is risible that the member would get up and use that as an example of Liberals delaying this bill, with 30 to 90 seconds compared to two and a half months of prorogation, over 60 days before reintroducing the bill and then over 200 days before moving second reading debate.

I rest my case.

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

Madam Speaker, I asked the parliamentary secretary this but did not get an answer.

Although all parties are supporting the bill, and I will go into that in my speech as to why, I think there are concerns in terms of honesty and truthfulness. Would my colleague from the justice committee agree with me that the evidence we received at the committee was that the bill in its application would be applied in very narrow circumstances and that a great deal of the white collar crime we have identified will not be dealt with by this legislation? Would she agree that the portrayal of this legislation that it is the be all and end all, which is the role the Conservatives are trying to place on the bill, is not accurate, that the Canadian people are being misled if they were to understand the bill would do a lot to combat white collar crime when, in fact, it is not. I just ask if she agrees with that analysis.

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Madam Speaker, I agree with my colleague, the justice critic for the New Democratic Party.

My colleague from Windsor—Tecumseh is entirely right. The bill addresses a very small, teeny-weeny aspect of white collar crime.

Witness after witness came before the committee and said that in order for the government to really tackle white collar crime, it has to work with the provinces in order to establish real, coordinated, integrated teams with proper resources. As long as our court system and our prosecutorial core is overtaxed and overburdened because of a lack of financial resources and human resources, then they will continue to be put in a difficult position, as were the prosecutors in Ontario, in Toronto, with that major fraud case recently where they dropped the criminal charges against alleged fraudster because they said they simply do not have the resources. They had some major rape cases and they had to make the choice, either they prosecute the alleged offender, the perpetrator of the rape, or they go after the alleged fraudster. They had no choice but to put their resources behind the rape case at trial.

That is untenable. We do not hear Conservative members of Parliament speaking up and calling on their government to bring new resources to our court system, to the prosecutorial core. We are not hearing that.

When we look at what the government has done in terms of victims, the government, with the House, adopted a budget. In the budget there was $10 million annually for programs and services to be given directly to victims of crime. The government did not spend all of the money. I believe it was $4.9 million or $5.9 million that the government actually spent in services and programs given to victims. It turned the rest of the money back to the consolidated revenue fund, but then turned around and spent over $6 million, I think it was maybe $10 million or something, more money on advertising that victims matter. How cynical is that?

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Madam Speaker, I was amazed earlier to hear some of the comments from across the way about how dare someone delay the proceedings by challenging the chair juxtaposed to that two and a half to three month break that we were under. I remember one of the Conservative MPs saying, we need to shut down the House, take all the bills over the side because we need to focus on the Olympics. I have no doubt in my mind that the four-man bobsleigh were warmed and tickled to death that their MP was at home cheering them on. My goodness, and they get paid $156,000 for that.

Maybe Conservative members should debate a bit more. Maybe they should challenge the chair more often. I am tired of being in the House, as my hon. colleague from the NDP from Manitoba would also agree with me, in that in every debate that we engage in here I seldom hear from the government side. Members must raise the bar, push this debate beyond what it is in the public discourse, beyond the ads, beyond the newsletter. They should come into the House and make their money and actually say something that they believe in.

My hon. colleague actually did that and here is the point. She wants to make the bill tougher. She wants to make this right by making it tougher, and instead all we get is, “You are just delaying”. Maybe the Conservatives should answer this question. Criminal offences of institutions exempt the larger offender. That is a very valid point. Would the member please comment on that?

[Marlene Jennings, Liberal, Notre-Dame-de-Grâce—Lachine, QC]

Madam Speaker, clearly there is a loophole. There is an issue that the bill does not address and we have not heard from the government as to whether or not it intends to bring forth legislation that would address the issue and that is of financial institutions that commit fraud, that clearly, intentionally develop products and services with the intent to defraud individuals of their hard-earned and hard saved money. The bill does not deal with that.

That is the point that was raised by the retired investment broker in the article that I read out where he talked about how there is a loophole. In the United States there is the case of Goldman Sachs, which is currently being sued by the U.S. national securities regulatory body. Here in Canada the criminal offences would not cover any of that.

My question for the government would be why is it not bringing--

[The Acting Speaker, Denise Savoie]

I regret to interrupt, but the hon. member's time has lapsed.

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

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

Madam Speaker, the bill is going to pass. It is going to have support from all parties.

However, this debate is important because of the usual manner in which the government, in a more partisan manner than the Conservative Party, is presenting this bill to the Canadian public. When we look at the bill, we can ask whether it accomplishes what the Conservatives would like the Canadian people to believe it accomplishes. The answer to that is an absolute no.

This is a very narrow bill in its ability to fight white collar crime because of the different natures of white collar crime. One might ask: If that is the case, why are the opposition parties supporting it? It is because it does a little. The more important question would be: Why are the Conservatives so reluctant to go after white collar criminals when they do not seem to have any problem going after criminals of any other nature?

We have heard this comparison. In one of my questions earlier today I mentioned the Ponzi scheme in Toronto, Ontario that occurred in the period of 2007-08. Just a few weeks ago, prosecutors in the justice ministry in Ontario decided not to proceed with the charges that they had laid. The amount of money taken in that Ponzi scheme was somewhere between $23 million and $27 million and they opted not to proceed.

At the same time, if we look at any number of other cases, such as a corner store being robbed or an elderly woman having her purse ripped off on the street, those charges would be proceeded with. In both cases, the amounts of money that would be taken would be minimal by comparison to the $23 million to $27 million. However, those charges would be proceeded with and, if either one of those involved violence or a weapon, the people who committed those crimes would certainly be incarcerated and, in some cases, especially if it were a repeat offence, for lengthy periods of time.

If we take that same elderly woman who had her purse stolen and lost $100 or $200 and she, instead, had been ripped off by a fraud artist for hundreds of thousands of dollars, all too often that person would get away with it. The charges that were withdrawn in that Ponzi scheme was not an isolated case.

This is part of the delay that the Conservatives accused the opposition of, but we heard evidence from lawyers who acted for those victims. In the situation where charges are not proceeded with, in some cases charges not even being laid, people will complain that they have just been ripped off for hundreds of thousands or millions of dollars. Sometimes they are individuals and sometimes they are corporations. They will go to the police and talk to prosecutors and be told that is more of a civil case and that they will not even investigate. That is quite common, not just in Ontario but right across the country. The reason is that these cases are complex. They require a good deal of attention by investigators, the front-line police, who do this work and there are very lengthy trials in most cases, unless the individual pleads guilty.

That is the situation in the country and this bill would not address those problems at all. It would not make it easier, for instance, for the prosecutor to lay charges and get convictions. It would not make it at all easier for the investigators, the police, the forensic accountants and all the rest. There is no provision in this bill that would make their job easier.

Therefore, we have the same problem, in what is arguably the vast majority of cases, in white collar crime. If they are at all complex, we will continue to see this embarrassing process of victims not being cared for by our criminal justice system. They will be told that the crime will not be investigated or, if it is investigated, that charges may not be laid and that if charges are laid that they may be withdrawn because the prosecution cannot afford a one month, two month or three month trial.

The prosecutor estimated that the Ponzi scheme in Toronto, which I mentioned earlier, would take somewhere between three to six months. The prosecutor opted to spend the money on other crimes. This bill would do nothing about that. We are being dishonest with the Canadian people if we lead them to believe otherwise.

This goes back to begging the question: Why are we supporting the bill? This bill would do a couple of things that are worth moving forward on. Perhaps, if we start down this road, the Conservatives will see their way at some point to introducing more meaningful amendments to the code and to other legislation.

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

Get tough on crime.

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

As my colleague from Manitoba suggested, they might seriously get tough on crime. It is worth starting down this path.

I want to spend more of my time on what we should be doing as opposed to what the bill would do.

The bill introduces a mandatory minimum sentence. However, the committee did some research on this and a mandatory minimum sentence would be under some circumstances. Fraud, for example, would have to be more than $1 million. There are also provisions for aggravating factors.

We had our researchers pull recent cases and it was found that the mandatory minimum sentence of two years has been, in the last three to five years, generally applied already, even though under the existing Criminal Code sections there is no mandatory minimum for this type of crime.

However, our judges have been imposing harsher sentences and, in most cases, sentences of more than two years. I acknowledge that there have been exceptions to that, and we will probably hear that from members on the other side, but if we do an analysis of the cases that have come down in the last three to five years, we would find that a significant majority of them have had sentences imposed of more than two years.

Members of the House know that I am far from being a supporter of mandatory minimums. They do work in very narrow cases and white collar crime is one of the areas where they do have some impact. To understand the reason that they have some impact, we would need to go back and analyze the nature of the crime.

I am losing my voice because I have spoken so much in the last 10 days on crime bills in order to meet the agenda that the Conservatives have set. I will use that as an excuse to move away from what I was going to say on this bill and argue that I would use my voice less and we would have less debate in this House if the Conservatives simply used omnibus bills rather than introducing a bill for every section of the Criminal Code.

I will now get back to the point of this bill. With regard to the mandatory minimums and the nature of white collar crime, it is not a spontaneous crime. It is planned, generally speaking, over a lengthy period of time. Much like the senior level of organized crime, the majority of individuals who commit these crimes do know the potential penalties. They know at this point that we do not have mandatory minimums with regard to fraud charges in this country, in the white collar area in particular. I am convinced that it is one of the few areas where it may have a beneficial impact on reducing white collar crime. I am not a big proponent of it but it is worth trying if it will have even a minor impact.

The other provisions in the bill that we support would provide some additional guidelines and authority for our judges to take into account aggravating factors. Those are important in terms of the judges' being able to exercise discretion in determining aggravating factors, and we actually list those for them. It is hard to say that most judges would not see them there but it now formally authorizes them, which is a worthwhile step in terms of giving the judges greater jurisdiction.

I must admit that I had mixed feelings about having introduced, for the first time in the Criminal Code, the concept of a community being able to come forward and say that, overall, as a community, it has been a victim of this particular white collar crime. Up until this point, the only provisions for victims' statements were those from individuals. That could be a corporation but an individual corporation.

This would allow a whole group of people to have a representative speak on their behalf. I do have some concerns about this section because it is the first time we have tried it. The provisions within the bill, in terms of how this will be conducted, for instance , will more than one representative be allowed to speak for the community that has been so negatively impacted by this type of crime, are not clear. That will be left to the judges to sort out. The bill does not define, in any way adequately, what a community of interest is, and I think that will pose some problems for our judges.

Having said that, I am still supportive of experimenting with this but I thought it would have been much better for the government to have come forward with clearer guidelines for our judiciary when they are allowing community statements to come forward. I cannot forecast whether this will be a worthwhile experiment and a successful one or whether it will not be used.

What is certain, and this goes back again to resources, is that it would make trials longer on the sentencing side. I do not think there is any doubt that would produce some additional hours, if not days, added on to these trials. If the individual is convicted, the sentencing process will be much more extensive. That is a worthwhile risk to take because, if it works, it would allow victims to have meaningful representation. I have heard this from my clients when I was practising and I have certainly heard it from victims' groups that game before committee at various times, that the criminal justice system is intimating to them as individuals.

If they can afford to hire their own counsel, and the vast majority of them cannot, especially since they have suffered large wealth losses in these cases, this process would make it easier for them to have a representative for both themselves and the rest of the group that has been affected. It would also allow the judge to hear better evidence of how extensive the fraud was and how damaging it was.

There would be better evidence going in than we get at the present time because individuals would do this or a prosecutor, who is way overburdened, would need to attempt to get that kind of evidence in front of a judge in order for the judge to understand just how severe the impact was of the white collar crime.

For those reasons, I think this is a very worthwhile step to take. Hopefully it will work and hopefully this government will see its way. As opposed to spending billions of dollars on prisons, it would put more money into the transfer of dollars from the federal government to the provinces so that the numbers of our prosecutors, police and judges could be expanded to deal with this problem. So we would not have the situations we do now.

In the majority of cases of white collar crime, there are significant complexities and charges are being dropped or plea bargaining done so that the penalties are either minimal or certainly not in keeping with the severity of the crime itself. Resources have to be put in place. Rather than spending an estimated $9 billion or $11 billion over the next few years for expanding our prisons, we need to be using a good deal of that money to transfer to the provinces to give them the opportunity to have more judges appointed, more prosecutors in place and certainly more investigators, so that these cases can be effectively prosecuted.

It is very clear that if we are going to combat any type of crime, the individuals who are contemplating committing those crimes will have second thoughts. We know this, and all of the evidence we have tells us this. It is almost a certainty that if they think they are going to get caught, they have second thoughts about committing the crime.

We need to show that we have a meaningful system in place to fight white collar crime: investigate, prosecute, convict and sentence. That message needs to be out there for the perpetrators, who are generally fairly sophisticated people. If they understand that system is in place, that they will be caught, prosecuted and receive harsh penalties for the crimes they have committed, the amount of white collar crime will be reduced. I firmly believe that. However, we do not have that system in place now, and this bill does not do anything to put it in place.

I would also like to raise some of the alternatives. As I have said repeatedly, this bill does not go far enough. Some of the evidence we got in committee, called by the opposition parties and not by the government, showed other legislative mechanisms that we could put in place. I will point to one that we heard on the final day of evidence before we went clause by clause on this bill.

We had two lawyers come before us. One was a former prosecutor for the Ontario Securities Commission and the other was a lawyer who, for almost his entire practice at a large Toronto firm, worked with victims of a variety of natures of white collar crime.

The prosecutor, who had spent a good deal of his professional career working for the Ontario Securities Commission, pointed to one of the things that was occurring in the United States that they had found to be fairly effective. This was on the stereotypical Ponzi scheme.

The way a Ponzi scheme works is that those people who first buy into it tend to get paid with money from the subsequent victims of the scheme. The initial so-called victims of the scheme, in a lot of cases, make a lot of money. The rates of return are not the 1% or 2% that we currently get at banks and financial institutions. They get returns of 40%, 50%, 100% to 200% in the first few years of the scheme. Of course, the people coming in at the end, before the Ponzi scheme is identified and the person is caught, so it stops, end up losing all of their money.

A number of states, New York being the leading one, have begun to lift the veil on all of those transactions. They go back to the initial “victims” who have, in many cases, made huge profits as part of the Ponzi scheme, even if they did not know it was a Ponzi scheme; or they might have known. They are required to put the money back into a central pool and whatever money is left is distributed throughout.

We need to put in place regulations that would allow us to do the same thing in Canada.

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, I want to thank my colleague on the justice committee for his intervention. I do appreciate the thoughtful manner in which he articulates his views at the committee, although we often profoundly disagree, the NDP emphasis of course being on the rights of offenders, whereas our Conservative government focuses on the voices of victims and protecting the public against crime.

That said, as he knows, the Liberal Party has made it very clear that it wants to continue debate on this bill, even though on the face of it, it says that it supports it, but it wants to continue debate and continue to delay.

I would ask my colleague from the NDP whether he and his party would be prepared to pass this bill now so that we can move on to some of the other bills that are awaiting debate in this House. As he knows, our government does not want to delay criminal justice bills. We want to get them passed to ensure that the safety of Canadians is protected.

My question for him is this. Would he be prepared to co-operate with us, move this bill into the other place so that we can get it passed, give it royal assent and put the protection of Canadians at the forefront?

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

Madam Speaker, I was really hoping that somebody from that side was going to ask me this question. I have two answers.

First, on the NDP's role in protecting victims, I always remember the session we had with Gord Mackintosh, who was the attorney general at that time for Manitoba. We were having a debate on how we deal with crime, and in particular the victims, and he said that there is not a political movement or political party in this country that has greater claim to protecting members of society, in all of the work that it has done, not just in crime areas but in all areas. That is our responsibility in the crime area, in the criminal justice system area, as it is in protecting people, to see that they have adequate housing, that our foreign affairs protect them, and we could just go down the list. That has been a guiding principle for me since I have had that discussion with him, because it is true. As a political movement and as a political party, as social democrats, our primary responsibility has always been to take care of people in our constituency base.

I want to answer the question about whether we want more debate on this by responding with a question. Did the member, did the Minister of Justice and the parliamentary secretaries for justice and public safety go to the Prime Minister and say to him, “How come you keep proroguing? How come you keep having elections when you promised to work at fixed dates?"

Did those members on that side, who claim to be concerned about victims, say to the Prime Minister, “We have had Bill C-52. That was the predecessor to Bill C-21. It sat on the order paper. It got knocked off the order paper because you prorogued. How can you keep doing this? We have 15 or 16 crime bills, public safety bills”.

Did they go to the Prime Minister and say, “Stop doing this. If you are really concerned about victims of crime in this country, and we believe that these bills are going to make a difference, why do you keep putting them off?”

[Larry Bagnell, Liberal, Yukon, YT]

Madam Speaker, you are doing an excellent job as always.

Of course there are always thoughtful interventions by the member, with his deep knowledge in this area, but I have to say that I disagree with him, as do some of my colleagues actually, on the point he made about suggesting that all these Conservative justice initiatives, albeit that is all they have, should go into an omnibus bill, because then they could pass a number of bad initiatives all at once.

As he knows, the justice agenda of the Conservatives has been basically a disaster. That is evidenced of course by the fact that they are going to have to build more prisons because they have not dealt with the things that reduce crime, the root causes of crime, which are rehabilitation and alternative sentencing, all things that are proven to reduce crime. They have been a failure at that.

However with the bills they have brought forward, as the member also knows, being on the justice committee, not only has the government stalled them by proroguing and calling illegal elections, but the bills have had to have many amendments because they are so poorly written, because they did not accept the advice of the justice department, the experts. It bulldozed ahead and brought forward bills that are totally contrary to what the experts said would reduce crime and that need a whole bunch of improvements.

Why would we want to pass all these bills quickly, this poor legislation, in an omnibus bill without taking the time to at least correct them and make them better legislation?

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

Madam Speaker, I did not say I was going to support passing the omnibus bill. I would do my job as the justice critic and expect other members of the committee to do the same. In a minority government situation, we would have chosen those parts of the omnibus bill that in fact had meaningful effective mechanisms to fight crime of whatever nature.

Other than that, we would have deleted parts of the omnibus bill that were meaningless and all for show. I am not saying we could have done this all in one bill. However, I have done some analysis of this. Of the 50 to 60 bills that we have had, some of which are before public safety and national security and some in front of justice, if we divided them up we probably could have done it in a total of about 5 or 6 omnibus bills.

Then when they were in front of the committee, we would have meaningful representation from witnesses, including victims, so that we had a very clear picture of what we were going to come out with. Then we would do our job as opposition members to take out those sections that were not of any use and to put in additional sections that make the laws more effective, which we have done with a number of bills, including one of the amendments that we did to this one.

What I am saying is that the omnibus bill process is actually shorter because, as opposed to calling the same type of witnesses and in some cases the same witness over and over again, when they appeared they would be able to speak to perhaps four or five parts of the omnibus bill as opposed to having to come back four or five times to deal with separate bills.

Therefore it actually would have sped up the process for the amendments that are necessary for the code to try to get the code into the 21st century. It is a much more meaningful and useful process in a minority government situation. It would have allowed the opposition parties in effect to have a meaningful and I think much more effective role to play.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Madam Speaker, I note that this is a government bill and the government says it is very concerned about victims. However it seems to me, as I look at the bill, that there are some problems with the scope of it. One is that it does not cover all white collar crimes. I think that is a real problem.

The second thing that jumps out at me is that the offenders are not compelled to compensate their victims.

Those seem to be perhaps a couple of weaknesses of the bill, and I wonder if the member would like to speak on that.

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

Madam Speaker, there is no question that this is a very narrowly focused bill with the way the government is defining fraud.

We never got any satisfactory answer from the government. There were specific suggestions made to the Minister of Justice when he was in front of the committee about areas it was not covering. He admitted that, but gave no explanation as to why the government did not broaden it.

I have my own reasons. I think the government just wanted to run a bill through here as quickly as possible, drag out victims and say it has done something. A more complex bill would have taken longer to draft, although the government had two shots at it, so we would think it could have still done it in that period of time.

On the other point of the whole issue of restitution, the bill addresses the issue of restitution but it really does not expand in any way beyond what we already have.

The point that I made earlier in my speech about going after the people who have received benefit, who are not the perpetrators of the crime but received benefit from it, would be a very good area for getting additional dollars of restitution to all of the victims of the fraud scheme.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

Madam Speaker, I would like to begin by saying that we are going to vote for this bill, albeit somewhat reluctantly, as the bill has clearly been cobbled together and is deeply flawed. Still, it is true that Parliament must give the impression that it is doing something about major fraud of the sort that has made the headlines in recent years, especially in the financial sector.

We will vote for this bill, even though it provides for a minimum sentence. I am confident that the sentence will likely never be imposed, for the good reason that frauds over $500,000 or $1 million have always led to much longer sentences than two years, which is what the government wants to add.

Nevertheless, it is disturbing because, as usual, when the government sets minimum sentences, it is thinking of the worst criminals. The government tends to forget that minimum sentences do not apply just to the worst criminals, but also to minor accomplices to crime.

I get the feeling, though, that this law is so complicated that no one will dare apply it to people who have played a lesser role in frauds of $1 million, such as the telephone operator for a business or a secretary in an office.

The government is forgetting that the definition of “accomplice”, which the Criminal Code calls “parties to offence” or “participants à une infraction” in the poor French that is a direct translation of the English, applies only if there is abetment. Subsection 21(1) states:

Every one is a party to an offence who

(a) actually commits it;

(b) does or omits to do anything for the purpose of aiding any person to commit it; or

(c) abets any person in committing it.

Paragraph (b) is the most significant.

This has to be coupled with the doctrine of wilful blindness. The doctrine of wilful blindness means that an individual has to know something in order to commit an offence. Knowledge is therefore a key element. In the case of a company that begins systematically defrauding its clients, as Vincent Lacroix's companies did, when some people begin to suspect that activities or money collected for clients are being used to defraud people, they cannot use the excuse that they did not know because, in fact, they had suspicions but may not have wanted to ask any questions.

This doctrine may apply to the employees of a company that has every appearance of legality at first or the employees of a brokerage firm that misuses funds and where people play minor roles, such as a young bond seller who did not initially think the money he was collecting would be used for that purpose.

This brings me to the clerical staff, who at some point begin to wonder if the business is in fact seriously involved in fraud worth millions of dollars. I do not think anyone would even consider sentencing these people to two years in prison. However, they are accomplices if they decide to stay, given that, by continuing to perform their duties, they are encouraging the company to continue committing fraud.

Wilful blindness is important because clearly, the secretary, junior salesperson or telephone operator is going to realize sooner or later that the company is not a regular investment firm, but rather has a criminal purpose. At some point, they will say they had their doubts, but that they were just secretaries after all. Consider the example of the Canadian woman who was caught in Mexico around six months or a year ago, who said exactly that about some frauds that had been committed.

When someone suspects that something may have an illegal purpose, but refuses to ask any questions because they do not want to know the answer, that is known as wilful blindness. Wilful blindness is the same as knowing. That theory is beginning to be widely accepted in drug-related cases. Looking at a real case, someone is asked to bring back some scuba diving tanks. He decides to do it for someone he has met only once, who offers to pay him well for doing so—more in fact, than the actual value of the tanks. He does not know what is inside, and does not want to know. When he is arrested, he will be very surprised to learn that the tanks were full of drugs. This is an example of wilful blindness regarding what was in the tanks. Accordingly, he would be guilty of importing the drugs that were in the tanks.

This also applies to fraudulent businesses that appear to be legitimate. They hire people who, in the beginning, believe that they are working for a perfectly reputable company; however, at some point, they realize that the business is fraudulent. A young single mother with two or three children to care for would want to keep her employment. From now on, she will be guilty of a crime with a minimum sentence of two years in prison. When we bring this type of case to the attention of the Conservatives, they say that the police or a prosecutor would never lay charges in such cases. In all likelihood, this is true, but what does that say about this legislation, which is not serious enough for the police to use or for crown attorneys to prosecute? In my opinion, this is bad legislation that must be amended to cover specific cases.

We previously proposed that, with this bill and others, we follow the example of other Commonwealth countries that also fell into the trap of imposing minimum sentences for everything but, at a certain point, felt they needed to implement safeguard clauses. In some circumstances, when a judge finds that, given the role the accused played and the few benefits they obtained from the crime, the minimum sentence is really unfair to the accused, the judge could have recourse to these provisions and justify, either orally or in writing, why he was not imposing the minimum sentence.

The Conservatives hate judges so much and have so little trust in them that they would rather trust the police. They tell us that the police or prosecutors would not lay charges in these cases. They do not want to give this discretion to a judge who has experience hearing such cases and who would render a decision after hearing from both parties. Instead, they would rather have the police or crown attorneys act as judges and decide not to prosecute before the issue goes before the courts. This is a major flaw.

Then there are provisions for ordering the restitution of the proceeds of fraud. Once again, that is very good and it is being done already. It is already provided for in the Criminal Code, although it is not a requirement. There are many instances when it is not practical. Furthermore, a criminal court cannot easily intervene in civil matters. Quite often, fraud on this scale is not committed by just one person, but by many. Although they are all guilty of the same offence, their participation must differentiated.

The accountants, secretaries and junior salespeople just hired by the company must be treated on a case-by-case basis by the judges. When it comes to the restitution order, the court must suddenly transform into a civil court and determine that one party will be responsible for 50%, but that the accountant is responsible for 20%. As for the young salespeople who sold the first, legal securities, but who then allowed the fraud to continue in order to pay back the funds, they have a lesser responsibility.

If 15 people are involved, the judge will have to determine the order of restitution. In civil law, this is not really a problem because everyone shares the responsibility for the entire amount. However, in criminal law, the share of responsibility must be established. If a judge sentences one individual to repay 50% and another to repay 3%, what happens to the person who does not repay his 50% compared to the person who, according to the judge, is responsible for 3%? In any event, this will give rise to many problems.

Other problems have been pointed out by two Toronto lawyers with rather extensive experience. I believe that one of them has even served as the chair of the Ontario Securities Commission, the equivalent of our Autorité des marchés financiers in Quebec. They too said that it would complicate trials considerably. That makes me think of something I often say: bad laws make good lawyers wealthy. I know something about that; I can attest to it. More complicated trials, and minimum sentences that may one day be applied to cases that do not warrant it, will result in pre-trial negotiations and the prospect of a great deal of work for lawyers.

Among the restrictions the judge will have to consider, one is very intriguing and it involves real estate activities. Really. I remember a judge who was convicted of money laundering. His fall was total. He was never able to practice law again. He ended up working as a building caretaker. Under this bill, he would not be able to do that any more because being a caretaker involves real estate activities. He could no longer collect rent, wash the stairs or make repairs to apartments because all that involves real estate. We see that the government still wants to take away discretionary power from judges. Would it not be better to leave it to judges to apply conditions to sentences, as they currently do? I have not heard any complaints about the way judges exercise the very broad powers they have for imposing conditions on parole and on this punishment, because quite often, it is imprisonment with a probation period during which certain conditions have to be respected.

By leaving them this discretionary power, we will have conditions that are perfectly suited to each specific case. Here the government is introducing a great deal of rigidity. In fact, the Conservatives lacked imagination when they established the various conditions available to a judge during sentencing. It is as though they copied the ruling in the Vincent Lacroix case and pasted it into the legislation. Obviously, the Vincent Lacroix ruling was perfectly suited to that case. We can expect that future conditions will probably differ from those in the Vincent Lacroix case, even if they are equally deplorable and significant.

The other thing that strikes me is this constant desire to show that they are tough and their attempt to apply that to very objective criteria such as sums of money. That is truly very important. In practice, fraud involving small amounts of money can be much more heinous than fraud involving banks or major financial institutions. I remember seeing some rather remarkable examples.

I was retained as one of the lawyers who had to help a judge determine which of the offenders known as habitual criminals met the new definition in this part of the Criminal Code when the part entitled “habitual criminals” was removed from the Criminal Code and redefined as “dangerous offenders”. The term “dangerous” implied a risk of violence. The government therefore appointed a judge. I think there was even a commission headed by a single judge who was directed to examine, one by one, all cases where there had been no violence and where the people had been declared to be habitual criminals but were not violent.

Anyone sentenced as a habitual criminal was sentenced to an indeterminate sentence. Ordinarily, the end of a sentence is always known, but in this case, the sentence served was indeterminate and it was reviewed every two years to see whether the person was still a so-called habitual criminal.

In the section, we had several examples of con men. In fact, the way they operated was sometimes quite funny. One case I remember was a con man who operated on a regular basis. I have to point out that this was really several years ago. At the time, there were more women at home than today, because a lot of women work during the day now and are not at home. This con man would generally arrive at a woman’s home with packages that bore a resemblance to Canadian Tire packages, and tell the woman that her husband had ordered some tools. He handed her the tools and asked to be paid in cash. The women had not heard anything about it. So he collected $10 or $15 or $20, amounts that seem negligible today, but that were significant at the time because people earned less than $100 a week. It seems that his success rate was about one out of five.

What the police officer who had arrested him and put together the evidence for him to be declared a habitual criminal rightly observed was that he was taking money from disadvantaged and somewhat naive people, and it was a very serious thing for them.

Another con man used this trick: he would go to someone’s home and tell them he had been sent by the landlord to repair something that was not working. Is the heating system not working? Right, he would check it out. And then he looked at it, he took the pieces of the furnace apart, and he said he absolutely had to go and get an essential part at the store. Then, since he unfortunately had no money on him, he asked the victim to lend him $40 so he could buy the missing part. I do not know whether that con man’s success rate was one out of 12 or one out of five, but it was still a very substantial rate.

These are not major frauds, and the technique was actually quite crude, but what is important is that they often succeeded. It was more serious than some bank frauds, because money was being taken from people who genuinely needed it, people who were already in need. It amounted to taking advantage of their naivety.

At the time, these people were considered to be dangerous enough to be declared habitual criminals and left in prison for an indeterminate period.

In the case of fraud, there are many different things to consider, beyond the amount. For example, jurisprudence exists for fraud committed by someone in a position of trust and for specific types of fraud, for example, if the individual took advantage of seniors or naive individuals. Jurisprudence also exists for the impact of fraud on victims. All of these elements are regularly taken into consideration.

We must give judges the discretion they need to deal with each case individually. I am not saying that the Conservatives have taken that away here, but they have made it very strict.

I have only one minute left, so I will conclude by saying that this bill does not do any harm. However, this is far from the major reform we would have liked to have seen and that should have applied the six points. I am sure that my colleagues will talk about the plan presented by the Bloc Québécois over a year ago.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I very much appreciate the member's input into the bill. He has also informed the House and Canadians of a number of other aspects of the bill well beyond mandatory minimums.

In listening to the debate so far, it would appear that the most significant disclosure and the most challenging problem for Parliament is to determine how we will deal with a serious Ponzi scheme in the tens of millions of dollars. If it is thrown out with no restitution to anyone because there is no case, we have to make a choice. Do we do the rape case or do we do the Ponzi scheme? It is very telling.

The other telling point is this. The reason underlying this is that the federal government makes the laws, but the provinces must enforce them. However, without the resources to enforce those laws, how can anyone argue that we are tough on crime when those new laws and provisions of the Criminal Code cannot be enforced simply because the federal government has not decided to support the enforcement of the laws at the provincial level?

Would the member like to give us his thoughts and words of wisdom on how we deal responsibly with justice bills that try to be tough on crime?

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

Mr. Speaker, our colleague raises a very important point. Ponzi schemes are pyramid schemes, which are already an offence under the Criminal Code. People invest a certain amount of money and that enables them to recruit ten other people who also invest a certain amount. Each gives a percentage of his earnings to the person who recruited him, who then gives a percentage to the person who recruited him, and so forth. It is a lot like a pyramid scheme, except that the people inside the pyramid do not benefit. In a pyramid scheme, everyone inside the pyramid benefits. To pay off the most recent investments, everyone on earth could be involved and there still would not be enough.

It would be very difficult for a judge to redistribute the money in a fair and just way to the people who were defrauded in a pyramid scheme like this. One thing is clear: there is no easy answer.

In addition, it is the provinces that are responsible. When it comes to fraud, the RCMP also gets involved. In view of these new kinds of fraud, we think that multidisciplinary teams based on the Carcajou squad should be created. In this approach, accountants share their expertise with the police.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I noticed that my colleague, who is on the justice committee, gave guarded support to the bill. One of the reasons was he felt there was much more that could be done to protect victims of crime, especially in the area of fraud. I would not disagree with him. There is so much more we can do to protect Canadians against shysters and fraudsters who prey on the vulnerable.

Perhaps he could help us pass some of those 20 bills that are still stalled in the House and at committee. Our government is very intent on getting these criminal justice bills passed on an expedited basis, and I ask him for that support.

Could he also expand on the kinds of criminal justice initiatives our government could still bring forward that would protect the vulnerable, such as seniors, against fraud? Some of the areas the bill does not extend to yet are issues such as securities fraud and other related types of crimes. Would the member expand on how we can go even further in protecting Canadians against these kinds of crime?

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

Mr. Speaker, I want to start by pointing out, as others have done, that we are not responsible for the delays. These are bills that the Conservatives allowed to die on the order paper. Another of the main reasons why these crime bills have been delayed is all the prorogations. Surely that has been said often enough.

We had a six-point plan: first, completely eliminate parole after one-sixth of the sentence has been served—Vincent Lacroix was released after serving one-sixth of his five-year prison term, although he was subsequently sentenced again; amend the provisions in the Criminal Code on the confiscation of the proceeds of crime to include language covering fraud over $5,000, and not just over $500,000 or $1 million; reorganize the police, especially the RCMP, to create multidisciplinary teams specializing in economic crime; require banks to report irregularities in trust accounts to the Autorité des marchés financiers—that is what should have been done in the case of Vincent Lacroix and Earl Jones because the banks suspected fraud but did not report it; amend the Income Tax Act to help victims, especially through a new provision allowing fraud victims to deduct the amount that was stolen from their income, instead of treating it as a capital loss—the way things stand now, people have to pay taxes on illusory profits declared by their fraudulent brokers; and amend the Income Tax Act to prevent the use of tax havens, as endorsed by the Liberals and Conservatives, which enable individuals and companies to hide money away and evade taxes.

We already presented this six-point plan, but very little has been done so far.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I know that the hon. member has just made several references to this effect, but I am interested to hear his comments on the government's hypocrisy, both in terms of this bill and in general. For example, he is trying to say that the opposition parties are against the government's program, but we have heard here several times that the opposition parties support measures that are tough on the type of crime we are discussing today. In fact, the government's decision to prorogue Parliament and the delays the Conservatives themselves created are the reasons why we are in this position today. I would like to hear his comments on the hypocrisy of the Conservative government.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

Mr. Speaker, the member who spoke before me chose her words well and she is absolutely right. The only thing the Conservatives care about when presenting their strategy on crime is looking like they are tough on crime, as though that could reduce the crime rate.

I never hear them talk about how their measures will reduce crime. Their approach has been tested: apparently Saudi Arabia is also very tough on crime. The United States is a great example. In one generation, that country's incarceration rate, which was once on par with ours, exploded to 763 individuals for every 100,000 inhabitants. We are still at about 130 individuals for every 100,000 inhabitants here in Canada. We fall somewhere in the middle in comparison to Europe because incarceration rates in western European countries are lower than ours. Our rates are comparable to those of Scotland and England. That type of approach does not work.

And that is probably why the government has so many short bills. It talks about victims. But what has it done for victims? The only thing it has given victims is the satisfaction of seeing that the criminals who made them suffer will suffer a little bit more. I do not think that this is any consolation to the vast majority of victims. They would rather have help.

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

Mr. Speaker, it is my pleasure to rise in the House to speak to Bill C-21. Following on the remarkable comments of my friend and colleague from the justice committee and the Bloc member's comments, it is a good theme to continue.

Much of the Conservatives' anti-crime agenda purports to help victims. It purports to take victims' rights over those of offenders, over those of politicians, over those of many other groups in the community. However, much of what they actually do in terms of the legislation has little positive impact on the victims at all.

I think in the area of white collar crime more than anything where what was taken away, in terms of assets or wealth, is sought to be restored, this is the most apt example of how not seizing on the goal of anti-white collar crime, which is the restoration, restitution, recovery of wealth lost, the government is doing a disservice.

In other forms of crimes, I suppose one could argue very cogently that that which was taken away, whether it was life, liberty, or sense of security, cannot be easily returned. They are not things that are in the marketplace. It is very difficult in the case of a violent crime to return the victim's sense of security. It is not a market commodity.

In this case, however, we are talking about the victims of white collar crime whose wealth, nest eggs and futures have been stolen through deceitful and fraudulent means by someone else. It would seem to me that in addition to increasing penalties, which is really all this bill would do, the government, which has now been in power for five years, even administratively without having to come to this place, which it really does not like to do very often anyway as its record on prorogation shows, might have administratively notched up its game on the recovery of assets.

Instead, as I will show in my speech, it has been left to the devices of the provinces with respect to their powers under property and civil rights.

I want to apologize in advance if my speech seems a little familiar, but there is a recurring theme on these bills in justice. I sit on the committee; I have for five years. All the time we see bills, and this case is no different, that seem to the other side to be strong electorally and politically, but not so strong on policy.

We have seen bills on auto theft, on the reporting of child Internet pornography, and now this one on white collar crime, all of which have pithy and exciting titles which, on a quick reading of the short title, would lead people to believe that the problem is solved, that we have a cure and there will be no more white collar crime, no more child pornography, no more auto theft.

That is not at all the case. The government's steps are baby steps toward those evils in our community and, as with all Conservative government agendas, the sound bite of the short title is more important than the pith and substance of the legislative tool.

The government's publicity machine will go to work and tell everyone that Bill C-21 emphasizes standing up for the victims of white collar crime and that Canadians will feel a lot safer about their nest eggs.

Electorally it is a gamble. There is the saying that one can fool all of the people some of the time, or one can fool some of the people all the time, but the message to the government today on these legislative bills toward crime with their very sexy short titles is that the government cannot fool all of the people all of the time.

It has been five years. We have to start thinking in the Parliament of Canada that the Conservatives have driven the government's legislative agenda for five years. I would love to see a survey as to whether people feel safer in all areas, but let us concentrate on white collar crime. I would love to know whether people feel they are less likely to be made the victims of losing their nest eggs and fortunes than five years ago when many of the tools that the Conservatives possess as government could have been used.

Let us take a quick look at the history. It has been a very prolific period these last five years for embezzlers and fraudsters. Today, Madoff and Earl Jones are household names, but they were not 5 or 10 years ago. There has been a real run on fraud, Ponzi schemes, investment schemes, direct mailing and direct investment schemes. These have taken a lot of wealth out of communities in Canada, largely from people who have saved all their lives for retirement, which in some cases now they cannot afford.

If we look at the title of this bill, it is obvious the bill falls short of the expectations. It does not make Canadians safer. The Earl Joneses and Vincent Lacroixs of this world are still around. Last month, in fact, Carole Morinville was arrested in Montreal in another Ponzi scheme investigation. These investigations are not carried out solely by the Conservative Party or the government; they are all conducted by police forces.

What do we hear from police forces? They are under-resourced. What do we hear from the government? The government says that it has added 1,000 more RCMP members. It has not. It is a shell game. The government does not deliver on what it promises with respect to manning police forces across the country. Ask any police force that question.

Ask the people of Moncton—Riverview—Dieppe whether they are happy that the government has not moved on giving the 10% subsidy it gives to every other RCMP force in Canada, except the one in Moncton—Riverview—Dieppe. That is the same as saying that one out of ten crimes will not be investigated or prosecuted. That may be okay for the nine cases where the criminals are prosecuted, but what about that other case? There will never be the chance to have an investigation and prosecution in that other case because the government will not stand up for its principles with respect to prosecuting criminals.

The government has been in power for five years and gives lip service with short titles and publicity bills. It is not enough. Over five years, as I have mentioned, serious things have happened. White collar crime is far more serious than it was when I was first elected.

White collar crimes and tax fraud are very serious problems. These crimes wreak havoc on the lives of victims. People can lose an entire lifetime's worth of savings overnight. When people lose their entire life savings, they lose faith in the idea that if they are doing their part, if they work, they will get their fair share.

This nation-wide loss of faith is dangerous because it can be passed on from one person to the next. The government is thus called upon to take action to protect the victims of these financial crimes and to protect people's faith in the integrity of the financial system. We all saw the damage that a pyramid scheme or Ponzi scheme can cause to the victims and to a country's reputation when Bernard Madoff was caught in the United States. We cannot allow such a thing to happen again.

We cannot stand by idly. The bill simply does not follow up on its promise to protect victims of white collar crime entirely. What does a mandatory minimum sentence of two years do for the victims of Earl Jones when he is already in jail under sentence for 11 years?

The lessons of the Madoff affair in the United States tell us that the damage to the victims would have been far less if the financial authorities had been better empowered by regulation and better equipped in resources and staff to apprehend and stop the carnage.

Why is the government peddling its minimum sentences into this area? Is this comforting to the victims of Earl Jones? He is in jail for 11 years. There may be a requirement to reconsider a restitution order, but the money is usually gone. The money is gone and the person is usually locked away for more time than the mandatory minimum set out in the bill.

I really think the government should take the next step outside of an amendment to the Criminal Code and review the financial regulatory system and the funding of our financial regulation enforcement, because it is what Canadians need to protect their investments.

The response from the finance minister might be that the Conservatives have a financial regulation overhaul, review and reform under way, that they are proposing a single regulatory agency, which will be voluntary, and will be located in Toronto. I assume that is the plan; it is where the finance minister is from. I have not heard a lot of people against that in the government, but if it was suggested it be moved to Moncton, they might have a different song to sing. I have nothing against Toronto. There is no question that the TSX is the largest index in the country.

It is an issue of provincial regulation. We have seen the government step into areas of provincial domain on many occasions before. Occasionally it takes a first ministers conference on these issues to decide what are the real ills in society with respect to white collar crime and what are the tools best suited to combat them.

People whose life savings have been taken away by a scheme will not be comforted by a Criminal Code amendment. They might be comforted by a federal-provincial announcement that a joint task force, which applies throughout the country, will concentrate on cracking down on Ponzi schemes and fraud in the general sense. They might, at that press conference, say that they are quite comfortable with the Criminal Code and with what has existed before.

If the justice minister had a TV show, it might be called “PJ”, pure justice. The Conservatives march in here before the evening news with a bill to protect Canadians from white collar crime, and the government indicates that is the cure. What Canadians will not know, and maybe it is our job to let them know, is that part X of the Criminal Code between sections 380 and 432, and on pages 280 to 304 of the short version of the code, those 25 pages in the compact pocket Criminal Code cover fraud.

So on the idea that someone looking at a newscast would think the government is enacting new legislation, legislation that did not exist before, that is just misleading.

We ought to say, yes, there are some amendments here that we can certainly stand behind, no question. But our response is three-fold.

First, these are minor amendments to the Criminal Code. The Criminal Code already has provisions in place to combat fraud.

Secondly, there is so much more that the government could have done in five years in office, working with the provinces to surgically crack down on the sources of fraud through the regulatory reforms that might be proposed.

Finally, if the government really cared about moving legislation along, especially legislation such as this that is not going to be opposed, why did it prorogue? Why did the government limit debate? Why did it shut down Parliament if it really wanted bills passed?

It is a good question, but we have never heard a real good answer. We did hear the word “recalibration”. Tell that to the victims of white collar crime. We could tell them that we are waiting to crack down on white collar crime, so could they recalibrate their losses? That one would not really fly.

There were fake fears about the governance of the country. People who have lost their savings want a government that will respond.

They might be shocked to know that, five years after the government took power, there was a bill that moved the yardsticks a little bit, a bill that no one would really object to, that could have been passed a long time ago, but the Prime Minister and his gang decided to pull the plug on Parliament, so it could not be passed. People should know that every time the plug is pulled on Parliament by prorogation, bills that are on the order paper, bills such as this, are killed. Prorogation stops everything.

This bill had a previous incarnation, called Bill C-52. It never became law because it was stopped in its tracks, and here we are, debating Bill C-21.

Ironically, sometimes the new incarnation is better. Because they have let it go so long, there are changes in the communities and in law enforcement techniques that have been incorporated into the new bills. So the argument that it is exactly the same bill and we are just bringing it back in every case does not fly. We want to hear the evidence to date about what is going on, in order to get the best bill on the books to combat white collar crime.

What was the reason for prorogation? Did the government think opposition parties were for white collar crime? Has anyone ever seen in a pamphlet, on the news, on the airwaves, in the blogisphere, in Twitter, Facebook or otherwise, that any Liberal, NDP or Bloc member is for white collar crime? Has anybody ever stood up and said that? I do not think so. It is preposterous. So why did the government not come forward earlier with this legislation?

The chairman of the justice committee asks, why do we not fast-track the 80 bills, or whatever number there are now? Why can we not get the job done? Why do we not stand up for Canada? It is a tired speech. The Conservatives are the ones who pulled the plug on their own bills, cutting off their nose to spite their face, and when they do come forward with legislation, it only effects change in the most minor of ways.

Carole Morinville is the case that I mentioned a minute ago. She was an unlicensed security adviser who was arrested for what financial authorities believed to be another Ponzi scheme. That case might have been better dealt with by a task force, by people knowledgeable in the financial regulation industry. It might have been something that the government would oversee and help with, rather than saying that opposition parties are against bills with Criminal Code amendments that really do not affect what is going on out there.

I have gone on at some length about the government attitude of not really helping victims. The provinces have really leap-frogged the federal government. We have seen it with respect to auto theft and many other areas, such as white collar crime.

Since the government came to office, a number of provinces have ratcheted up the provisions they have under the property and civil rights sections of the Constitution to enhance their powers of seizure and forfeiture for crimes committed, and not just in the white collar crime area. The provinces did that pretty much on their own, because they were not getting a lot of legislative resources through funding of policing or joint task force help from the federal government.

Then the other end of it is, what could the government have done with respect to the proceeds of white collar crime? It does not all just disappear into ether; it does not just disappear into thin air.

There is no way Bernie Madoff could have spent all the money he took, nor Earl Jones, so it went somewhere. The usual suspects are the international banking community. What has the government done with respect to international banking reform?

When we bring up the government and the international stage, we could be here for days talking about how it has embarrassed Canada, whether it is a seat on the United Nations, whether it is Copenhagen, whether it is the environment, and so on. But what has it done with respect to reforming the international banking system? What pronouncement has come forward from the Minister of Finance, the Minister of Justice, the Minister of Foreign Affairs and others with respect to saying, “We want to crack down on white collar crime because we know where some of this money may be going; we have looked into it; we are doing our job; we are getting the job done”? They are not getting the job done. We have heard of no serious reforms in this regard.

What Canada needs, much as every other country, is an overarching national scheme of financial regulation with international components. We cannot wait for these crimes to happen and then say that we will be tough on crime with mandatory minimums. This approach is proven not to work. It will not keep Ponzi schemes from happening and it will not bring the money back to our church programs, our school programs, the family nest eggs and investment funds and community funds in general that have disappeared. We need to stop these funds from being defrauded in the first place, before it is too late.

The case I come back to in conclusion is that of Carole Morinville, who was not even an accredited investor. She should never have got her hands on the honest citizens' investments. At the very least there should have been officials with some authority tracking her activity to stop her before it was too late.

What it comes down to is resources and support beyond tinkering with the Criminal Code. The government has not shown its trust in police officials by funding them adequately. It has not shown its co-operation with provincial and territorial partners by having adequate and frequent meetings on this topic. It has not stuck its head out of the foxhole of its own parochialism on the international stage to be even a follower, let alone a leader, on reforming the international banking system to find the money that has left so many Canadians destitute and without hope.

As parliamentarians, we must restore hope in the system. I hope the government will get to work on these needed reforms.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, the member does good work on the justice committee and I have appreciated his thoughtful approach to these issues. Of course, I profoundly disagree with him and certainly disagree with his characterization of the bill.

He has suggested that the bill essentially does not make Canadians safe at all. He refers to us peddling in mandatory minimum sentences and talks about tinkering with the Criminal Code.

If the bill is so bad, I disagree with him on that but he said nothing positive about the bill, why is he supporting it? Why would he stand up in his place, here in the House of Commons, as a Liberal and mislead Canadians into thinking that he supports our criminal justice initiatives when in fact he himself has admitted that he believes this legislation would do nothing to protect the safety of Canadians? I find that to be quite disingenuous.

On our side of the House, we as the Conservative government believe this is a very significant step in the right direction in protecting Canadians against fraud, especially in protecting vulnerable Canadians such as seniors against fraud.

I ask the member, why would he suggest that the bill does nothing to protect the safety of Canadians and then suggest that he will still get up and vote in favour of this legislation?

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

Mr. Speaker, I think my friend, as the neutral arbiter as chair of the committee, does not get enough occasions to be raucous as he just was and I will let it slip like water off my back the fact that I was disingenuous or that I am misleading Canadians.

We support the bill. I said that at the beginning. It is too little and too late. Sorry for the criticism, but the member should get used to it.

His community of Abbotsford has not been at the bottom of crime statistics in Canada. Whether it was auto theft or murder, it has been at the top. So I would think he has a very deep interest in doing something more quickly than five years to get to a white collar crime bill that does very little.

I said that very clearly. It does very little about getting money back to victims of white collar crime, about resourcing police officials to detect white collar crime; and how about dealing with federal prosecutors who are under contract and cannot get enough money to staff the courts? How about that to fight white collar crime?

The parts that are good in the bill talk about section 380.1, which allow more sentencing principles that already exist but give a very clear direction to the judges that they should take into account the amount and degree of trust, fiduciary-wise, that an investor, or an embezzler or a fraudster has, when sentencing

As I said, it is mild and it is good, and we can support it. We are voting for it wholeheartedly. We would have voted for Bill C-52 had the government not prorogued. I just wish the member would not say that I was disingenuous. I have always been too blunt for my own good.

[Shawn Murphy, Liberal, Charlottetown, PE]

Mr. Speaker, talking about the victims of white collar crime, I submit that the biggest victim of white collar crime is me, it is you, and it is every other Canadian taxpayer.

We have a situation in Canada now where there are thousands upon thousands of rich Canadians who are taking their money offshore for the sole purpose of not paying Canadian income tax and there is absolutely no mechanism to go after these rich individuals. In fact, if or when they are caught, there is total immunity granted to them. All they have to do is walk into the nearest CRA office, their income for the last three years is assessed, there are a few penalties, a bit of interest, and they go to their next cocktail party. There is total immunity, and as a result, you and I and every other Canadian taxpayer pay more taxes.

Therefore, my question for my friend whether he is as disturbed about this issue as I am.

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

Mr. Speaker, I am disturbed by the issue. I am disturbed more by the inaction of the government, as I said in my speech, towards the culprits and the whereabouts of the money.

This is a very interesting justice debate because there is an ability to offer restitution, to restore a person almost in the civil litigation sense or the civil sense to where he or she was before. With so many other crimes, that is impossible.

Why is the government not cracking down, with the provinces, because there is a division of powers in the Constitution, to do something provincially, territorially, nationally, and as my friend said, internationally with respect to getting the money back to the people from whom it has been taken?

That is the objective here. We would all agree with that. Can the government come up with better measures to do so? We hope so.

Mr. Speaker, 2011 is a whole new year. Many people are asking for various things under the Christmas tree this year. I am hoping that the government comes up with effective legislation in the new year.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the speeches today have dwelt on what this bill does not do. It is pretty clear from the objective input that members have had that this is a sentencing bill that is going to deal with fraud cases of over $1 million, but it is a mandatory minimum sentence. In fact, the name of the bill says that it is “An Act to amend the Criminal Code (sentencing for fraud)”.

The real fraud in the bill is the short title, which says this is “Standing up for Victims of White Collar Crime”, but the evidence is that it deals with only a small portion of white collar crime. The bill does not deal with fraud of $900,000. It does not deal with fraud under $1 million. That is already in the legislation. This is a bill about sentencing.

So I am asking the hon. member, why is it that the short title does not reflect what the legislation in fact does?

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

Mr. Speaker, the short title of the bill is the “Standing up for Victims of White Collar Crime Act”. I suppose it more accurately should be “Standing up for Some Victims in Some Cases of White Collar Crime”.

I think we should pick the right battle to confront the Conservatives with respect to how they are short-titling everything. It is clear that they are very short on substance, and they are confusing the public, because in this case, the long title of the bill is accurate. It says, “An Act to amend the Criminal Code (sentencing for fraud)”. It alludes to the fact that there are other sections in the code that deal with fraud, and we are amending it. We are going to vote for it, so we are amending it to buttress that.

That should be enough for us. Justice issues should not be showboat items for the six o'clock news. We should be quietly and efficiently doing our work at justice committees and in this House to modernize the Criminal Code, to make the laws more effective.

What it really comes down to is that the Conservatives would stand up for victims of white collar crime a whole lot more outside the short or long title of this act if they resourced police officers, if they co-operated with their provincial and territorial partners and if they got out on the international scene, and in an effective way, instead of embarrassing Canada as they have on other fronts, this is a chance for them to be real leaders with respect to money laundering, the opening of bank accounts at offshore sites, and doing what is best in terms of restitution for the victims of white collar crime who are without their savings this Christmas.

For example, there are the people who have been the victims of Earl Jones. I have read many stories about how they have moved from large houses to little apartments. They probably do not have anything but a lump of coal to put under their Christmas tree. How would you feel, Mr. Speaker, if it were you who was denuded of your savings and I told you we were making four or five amendments after five years to the Criminal Code that really will not affect that? I do not think you would feel very good.

[Brent Rathgeber, Conservative, Edmonton—St. Albert, AB]

Mr. Speaker, does my hon. friend agree with the member from Mississauga South that the real fraud in this act is the title? Why does he not agree that Canadians want this legislation passed and are tired of quibbling over semantics and the titles of these bills?

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

Mr. Speaker, semantics, that is rich coming from the Conservatives. A lot of them do not know what the word means, but my friend over there does. I am a little shocked that he would say that we are all about battling semantics over here. The Conservatives are the ones who bring semantics up by using silly titles for bills.

I do not have a huge objection to titling a bill so Canadians can understand it. However, I think the member insults Canadians by suggesting that they would not understand a bill that says, “an act to amend the Criminal Code, sentencing for fraud”. I think they would get the idea.

As I said earlier, we can fool some of the people some of the time, but not all of the people all of the time. The people on the other side think they can fool all the people all of the time. They think that if they get on the six o'clock news and say, “standing up for victims of white collar crime”, that people in Canada think, eureka, it is done.

The people of Canada are smart enough to know that they have been denuded of their savings and that this bill to amend the Criminal Code, the proper title, “sentencing for fraud”, is a step along the way, but it is not the cure.

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

Mr. Speaker, I am pleased to speak to Bill C-21. I believe I was fortunate enough to speak to it earlier and I do not think I had enough time.

I want to point out for my friends across the way that this is our job. We are not trying to hijack the process. We are doing our job in opposition. A lot of the time we will suggest the glass is half empty and the government members will suggest it is completely full, but that is okay. We still have a job to do and we want the record to show our concerns and misgivings. No bill is perfect. Every bill will get criticized usually in some way. That is my job and that is what I will do today.

Reflecting on some of the earlier comments, there is an air of pretense surrounding the bill. There is a sense that the bill will do a whole lot more than it really does. One of my colleagues said that this was just a sentencing bill, that it did nothing to stop crime. The sentencing occurs after a conviction. The conviction occurs after the criminal act. It has done nothing to deter or prevent that particular criminal act. By pretending a bill that has a whole lot to do with sentencing will have a whole lot to do with crime prevention is pretentious and we in the opposition have spotted that pretense. Whether or not the pretense is on the six o'clock news, as my colleague from Moncton just suggested, or whether it is in the short title of the bill, it is our job to identify it as pretense, which allows me to speak about the short title of the bill.

For the last couple of years, the government has consistently hijacked the short title of these bills. Not everyone knows the short title is section 1 of the bill, which tries to describe what the bill is about, but the government has hijacked that for a commercial. Conservatives want to spin what is in the bill. In fact, some of the time, as has been pointed out, they are spinning something that is not even in the bill. Therefore, members of the House have taken objection to some of the bills that go to committee.

The member opposite asked why were we concerned about semantics. It is not about just semantics; it is about hijacking the bill for a political purpose. We did not fire the first shot on this. It was whatever clever bird in the backroom that helped to prepare the bill decided to hijack the title and put something really different and sexy in the short title of the bill. It will get attention and every time people refer to the bill they will repeat this politically torqued short description. Most of my colleagues in the House, not on the government side, are saying no, that we will not do that. If the government wants to have a short title, put it in. Let it describe what is in the bill and do not torque the thing for the six o'clock news.

Also, by dealing with sentencing, I really do not think it will provide a lot of deterrence for future crime: denunciation, yes. However, by standing in this place and talking about the badness associated with any number of criminal acts, by telling the courts that when they process these crimes, when they attempt to address the needs of victims, it will be done in a certain way, shows a very reasonable level of societal denunciation with respect to the crime. I cannot imagine anyone would not be in favour of that. Putting a crime on the front page of the newspaper pretty much does the same thing. Denunciation is there, but deterrence is not.

My experience in this field over the last 20 years, not as a criminal but as a member of the justice committee, has always led me to believe that criminals who commit this type of offence and many other types of offences are not deterred by what is in the Criminal Code. It does not matter what the sentence is, they do not think they will be caught.

Torquing the sentencing in some of these areas, yes, because it reflects increased denunciation. It is like saying that we are really mad at people who commit criminal acts. That is okay, but it will not deter the person because that person does not think he or she will be caught.

In relation to white collar crime, at which this bill is said to be targeted, a lot of those perpetrators really do not think they will be caught. They think they have a really neat scam. Usually these things start small in the beginning and then they become bigger and a lot of people are hurt.

The objective, from a public policy point of view, really ought to be to get out in front with some kind of crime prevention, some early warning system that can intervene and protect the people who are about to be hurt. In almost all of these scams, once the money is in, it is gone. It is down the road somewhere. It is in lifestyle, gambling, whatever.

In some cases, these white collar crimes started off all right. There was an investment in real estate. Maybe the real estate investment was a little wonky, but it was still an investment in real estate. It could be swamp land, but it starts off with something tangible. Then things go sideways. The money gets diverted. The fraud and deceit begin. People are lied to. After a year or two or three, whether it is a Ponzi scheme or something else, the people are hurt, the investment is seen to be bad and lost.

This bill is almost like a fairy tale. It suggests that we will deal with the loss of the money. We will step in and make the court deal with restitution. That sounds great, but so do fairy tales. If restitution had been possible, the bozo who began the scam would have been able to pay back all or most of the money in the first place.

It is because the money is gone. I suppose there might be one case in hundred where the person who is convicted has a restitution order made against him or her may go back to work, or may go back into business, if the individual gets out of jail, and start to work to pay some of those restitution orders.

I wanted to reflect on the pretense, the fairy tale involved in this type of legislation. I do not, for a moment, want to suggest that I am not favour of victims getting restitution. That is the concept, that is the fairy tale and that is the hope.

I suppose we could say that if in one case out of hundred victims received restitution, it was worth it. I would have to agree with that. I just do not want the record to accept the pretense that this legislative solution will solve all of the problems, and there are a lot. Fraud is a very old section of the Criminal Code. It is based on the common law tort of deceit, and it is a criminal offence. It always has been.

However, since the Second World War there has been a huge increase in community interconnectivity in terms of money. We are not just moving dollar bills around. We have credit cards, cheques, money orders, debit cards, ABM cards and cash cards. There is no end to the money or money's worth in all the vehicles we have for spreading it around. We have chequing accounts, savings accounts, RRSPs, home ownership savings plans, RESPs, RIFFs, stocks and bonds, treasury bills, GICs, life insurance and pension plans, some of which are self-administered. However, with all of that financial interconnectivity, there is huge potential for money going sideways or being stolen.

I often think about how lucky we are that with all the billions and trillions of dollars moving around there is not more of it that goes sideways. It is probably because we in Canada and a lot of the rest of the world have at least some financial infrastructure that works. I am reasonably assured that the money I put into my bank I will be able to get back and I can transfer money safely.

There is certainly a whole lot more potential for fraud. Individuals who make one mistake in the beginning when handling people's money, which then leads to a second mistake, and then it escalates. All of this multiplies 1,000-fold when we put it all on the Internet. It can happen with collective amounts. I have to accept that there is a need to update our law on fraud in the Criminal Code provisions.

I want to look at the process in this bill that governs restitution. I had a question that was never answered throughout the process. I wanted to know what would happen if there were a conviction. The court must ask, under the provision, whether victims have had an opportunity to indicate if they would like a restitution order. It does not mean they get one, but the judge must ask if they have had that opportunity. The prosecutor will then respond yes, no or maybe and there is a form that victims can use. That is a step up. It is more like something in a small claims court but there is a form victims can fill out to describe their losses. That is not a bad thing.

The part that caused me to raise the question is in subclause 380.3(5). This is after there has been a request by a prosecutor or victim for a restitution order. It states:

If...the court decides not to make a restitution order, it shall give reasons for its decision and shall cause those reasons to be stated in the record.

That is in a case where the judge says that for particular reasons, he or she will not give a restitution order because it would be useless. I cannot imagine all of the circumstances that could be involved but the judge has that capacity to make a decision. What I am curious about is what happens if the court does not make a decision. It does not really say that the court has to make a decision. There could be a scenario where the court does not decide yes or no and no reasons are given.

After reading through the section, I got the impression that there was a gap. We have the situation where a judge decides to make a restitution order and the situation where the judge decides not to make a restitution order and those two situations are covered off in the bill. However, there is a third scenario where a decision is not made. The process that is outlined in the bill leaves it rather unclear and that usually causes problems down the road for judges, lawyers, victims or those who are accused.

Quite naturally, the government wants to pretend that this is a great bill but there is no place in this bill to discuss what happens with such things as the impact of a bankruptcy. As well, there may be some who will resist the obvious policy position of the government that, where there has been a theft or a fraud, a criminal court would be turned into a small claims court. I do not think the two fit. The work of a criminal court has a lot of bad stuff reflected in it. It is not the kind of environment where one would think there would be much positive coming out of small claims court atmosphere, which is being imposed in part by this bill.

However, we will see how it works out. If some victims, even a few, are happier to have had the chance to put their loss on the record and a chance, however small it might be, of some restitution, then I am happy about that and I do not want to carp about it. This could be a good change.

I suppose we could look at this from a public policy point of view. For example, let us say that we did have a criminal conviction but that there was no restitution order made for the victim. Let us say that the amount involved was manageable, not one of these $20 million scams, but about $10,000 or $20,000. If there was no restitution order and the person convicted serves a one or two year sentence, whatever it is, the victim in that case would probably need to go to civil court to recover those moneys. This provision would pre-empt that and put them together. The citizen who had been defrauded would not need to go to the civil courts. He or she has the court order and it is good for the sheriff. It is good to go if there are assets that can be seized to pay the debt.

I want to draw attention to another area. Franchise sales are accepted to be a provincial jurisdiction. It is a commercial transaction but it involves someone who has a business concept and he, she or it, as a corporation, will then sell a franchise right to a purchaser. This is a common happening. Many of the large franchise grantors are known and it is a very successful commercial vehicle for a small or medium-sized investor. However, over the last few years I have been made aware of problems in the franchising industry. I represent a riding in Toronto, Ontario and the provincial legislation just was not up to snuff. However, if one can get evidence of fraud, it looks like this legislation would cover it.

We may be solving more problems here than the government has actually advertised. It may be possible to rectify what has been a sad situation involving the sale of weak, non-existent or fake franchises to people who put up the first deposit, and the second deposit might be up to $100,000 or more, just to find out that there is nothing there. The guy who sold it to them could be living in Halifax, Calgary, Moose Jaw or Toronto.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I thank the member for his good work on the justice committee and for his intervention on the bill. He referred to the bill as being a fairy tale bill but then he went on to talk about some of the good aspects of the bill. I hope his support of the bill is because of its substance. I would hope that the Liberal Party would not be on record as voting in favour of fairy tale bills.

However, to get to the substance of the member's comments, he referred to the issues of denunciation and deterrence, which are some of the principles of sentencing that our courts apply. He attacked the bill because of its mandatory minimum sentence of two years and said that it would do nothing to deter crime.

The one principle of sentencing that he did not refer to, hopefully not deliberately, was the whole issue of incapacitation, in other words, the prophylactic effect of mandatory minimum sentences on criminals. In other words, taking serious criminals out of society for longer periods of time so that during their period of incarceration they do not continue to commit those crimes and hopefully get some help.

I would invite the member's comments on the whole issue of incapacitation and the impact that mandatory minimum sentences have on ensuring that serious criminals are taken out of society in order to protect society against their ongoing crimes.

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

Mr. Speaker, the member has quite properly raised a whole lot of issues and has managed to cover them fairly quickly. I am not so sure I can do it so quickly.

The bill would create what the member calls a prophylactic effect, but the bill has a procedure where if someone were convicted, he or she would be prohibited from doing certain things and maybe a lot of things in the commercial environment. Those prohibition orders can go a long way to keeping someone who has been convicted from engaging in that type of fraudulent activity. Therefore, there would be fewer victims. It is true that bill would do that. I am not saying that the bill does nothing. I am saying that the bill does a whole lot less than it is being held out as doing.

The deterrence does not do anything as far as I can see. The denunciation has some value. The prevention of people from continuing to engage in crime is real, but before that even happens the guys must get caught. There needs to be a criminal act and then an investigation, which is very expensive stuff, and then the conviction and the sentencing. I think we get way more bang for our buck public policy-wise if we were to look for ways to get out in front of some of this stuff.

I will accept the member's comment as a good one. The bill, while not as much as it is held out to be, does have some positive contributions.

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

Mr. Speaker, I am pleased to hear the member talk about the whole area of franchises. I did some work on this about 20 years ago and I found that conservative Alberta was the only province in the country to have actual franchise legislation. It was excellent legislation. I believe it was brought in during Peter Lougheed's time but, unfortunately, it was removed under Ralph Klein. I believe there is still no franchise legislation in any provinces other than what we saw in Alberta at the time.

The beauty of that legislation was that it required, among other things, that all deposits had to be in trust until promises were kept by the franchisors. Let us say that the franchisors promised advertising. An Ontario company would promise advertising in Saskatchewan if people signed up. However, when people signed up, the franchisors would not provide the advertising. The rule in Alberta was that if franchisors promised something like advertising, that unless and until they delivered, they were not to transfer those fees. I think that is a burgeoning area of interest right now.

Does the member think this bill might impact that franchise area? Does he not think there is room in the federal government for franchise legislation, at least with regard to federally registered companies? I know the provinces hold jurisdiction over provincial franchises, provincially regulated companies, but there are many federally regulated franchisors out there and I wonder whether they could be picked up by federal franchise legislation. In addition, I would like the member to expand on how he sees this bill being applicable to franchises.

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

Mr. Speaker, the answer to the last question is that this bill is related to franchises. A fraud is a fraud is a fraud. The problem is getting in on a franchise scenario after the thing goes bad, getting the evidence of the deceit, of the fraud.

The biggest reason why I think we do not have provincial legislation governing franchises is the big boys. We all know who the big boys are: huge multi-billion dollar enterprises that properly use franchises in food service, restaurants, retailing, doughnuts. I will not mention any names. The big boys say please do not over-regulate this business area, because it would clog the thing and give rise to all kinds of problems and it would be worse off after the governments legislate. The provinces have said that they would leave it there. The problem is that the little guy is getting hurt and defrauded from time to time.

The federal government would have difficulty legislating in relation to franchises, because I think it is pretty much accepted to be a provincial jurisdiction, but in the meantime, there are smaller investors who are getting hurt. It is really sad when we see it. Then we look back with 20:20 hindsight and ask how they could be so dumb to leave $100,000 with this guy when they never got to see what their real estate location looked like. They might say that it was their brother-in-law or somebody who knew somebody else and they came from their home town. It is really sad, and there is an incapacity of government on a public policy basis to provide solutions to that. It is an unresolved issue, as my friend points out.

[Francis Scarpaleggia, Liberal, Lac-Saint-Louis, QC]

Mr. Speaker, I would like to ask my hon. colleague two questions. One is about restitution and the other is about tax issues facing victims of financial fraud.

On restitution, is there a way that the bill could be made stronger, such that restitution would be mandatory?

Second, does the bill make it easier in some way, perhaps through a reverse onus, for the government to garnish the assets of the white collar criminal. In other words, does the bill say that the criminal has to prove that his or her assets were not proceeds of crime?

On the tax issue, I have many victims of Earl Jones in my riding. One of the most crushing issues facing them is that they have to repay taxes that they have paid on income that was not really income, but their capital that had been recycled as interest or dividends.

I am just wondering, given that he is an experienced tax lawyer, if the member could give us some insight on how these victims could recuperate the taxes they paid or at the very least, not have to pay more taxes.

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

Mr. Speaker, that is a very legitimate question. Certainly the Canada Revenue Agency can go back a few years, but some of these frauds take place over five and ten years and individuals will have paid tax on income from investments that, in some way, were fake. In other words, the income they were told they had never came.

However, being told they did have income, they were good people and they paid income tax on it. Certainly limited adjustment of tax paid going back some years is possible, but individuals have to be able to convince the CRA that the income they thought they had was fake.

These people are unfortunate. In the case referred to by my friend, there actually was an ongoing enterprise. There actually was money moving around, and therefore it is very difficult to dissociate the income that they were advised of from the enterprise that produced the income. A proportion of the income they were told they had was fake, maybe all of it, but because they cannot get at the records, it is very difficult.

My friend also asked about mandatory restitution. I do not believe that helps at all. If there are viable assets or the hope of assets, then a restitution order is an appropriate public policy disposition.

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

Mr. Speaker, I am very pleased to rise today to speak to this bill. Once again at the outset I have to say that we support the bill, as do all of the parties in the House, I believe. I think the bill will eventually achieve success.

To deal with some of the issues as to what the bill actually does and, further than that, what the bill should actually do and what the government should be doing to help with the problem gets the debate expanded a little bit.

The intent of the bill is to 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 at 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 at sentencing.

Those are the nuts and bolts of what this bill does. On that basis, for that purpose, we all support this bill. It has gone through committee at this point.

The problem is that the bill does not do some of the things we would like it to do, and will not put as big a dent in the area of fraud as the government pretends it will. It is really not going to solve a huge part of the problem.

For example, the fraud provisions of the Criminal Code were most recently amended in 2004 in response to the global impact of corporate scandals associated with such companies 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, which were the IMET teams, composed of Royal Canadian Mounted Police officers, federal lawyers and other investigators such as forensic accountants to deal with capital market fraud cases.

Now, that initiative was a positive initiative. That is sort of part of what best practices, as least best practices of the United States, would indicate that we should be doing. Those cases that I referred to, Enron, Tyco and WorldCom, were all American cases. We know that the Americans successfully charged, convicted and put in jail, I believe it was, 1,200 white collar fraudsters, including the executives of these three companies.

We were attempting in 2003, under the previous government, I gather, to come to grips with what would happen if such an experience as Tyco or Enron were to happen here. We had similar cases in Canada, such as Bre-X. I think members are familiar with the Bre-X situation. We adopted what I would think would be a positive initiative in that year, 2003.

The Government of Canada created the IMET program and funded it through the RCMP. Ten IMET operations were set up in four of Canada's major financial centres, and the mandate was to investigate and lay charges for serious criminal activity involving capital markets.

According to the 2007-08 IMET annual report, the program's total budget increased from $13.2 million in 2005 to $18.9 million in 2008, and then the budget decreased to $16.1 million in 2008-09. From December 2003, when the program began, until March 2008, 5 investigations led to 9 individuals being charged with a total of 29 Criminal Code offences.

In fiscal year 2008-09, however, 17 individuals were charged with 979 counts. A total of 5 individuals have been convicted since the IMET program was established, with sentences ranging from 39 months to 13 years.

The issue really becomes why and how the Americans can put away 1,200 white collar criminals in the last 5 years and Canada manages to convict only 5. Clearly it is an issue of resources, an issue of commitment on the part of the government to pursue these sorts of activities in this country.

The fact of the matter is that Conrad Black, while he committed his crimes right here in Canada, which involved the non-competition fees when he sold his newspapers to Izzy Asper and the Canwest organization, was able to pocket $20 million or $40 million in non-competition fees. While common in business, those fees were supposed to go to Hollinger, his company. When the Hollinger shareholders discovered that those fees had been diverted and that Conrad Black and his cohorts had pocketed the fees and made off, they of course went to the authorities to try to get restitution. It was the American system, as imperfect as it is, that actually got results and Conrad Black did get put in jail. I think he is out now, a bit too early, but at least he got put in there.

That to me is the difference between the American system and the Canadian system, in that it actually can show some results against white collar crime, whereas in Canada we have almost no good news on that front.

I gave the most recent IMET results, but I have a quote here from 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 IMET, the integrated market enforcement team that I spoke about, an elite squad of investigators who are supposed to work together to crack down on white collar crime, but the results are very disappointing. The United States justice department racked up 1,200 convictions against high-level executives, from Enron and other companies in the last 5 years, and at that time, in 2007, the IMET had only managed to get 2 charges and both of those charges were against the same person.

However what is interesting is that the author of the article 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].

That is what they should be afraid of or concerned about.

It's the U.S. Securities and Exchange Commission because they have real teeth.

Is that not an irony, that on Bay Street, Toronto, the financial hub of Canada, the players are not the least bit worried about Canadian police? They are not worried about the Ontario Securities Commission. It is a regulator. They are not concerned about that regulator, but it is the U.S. Securities and Exchange Commission that has some real teeth and they are concerned about it.

Clearly we have to upgrade our system to be on par with the American system, and we all know that the Americans are not exactly happy with their system. They are making some changes to their system as well, because there was a lot of abuse during the last five years in the United States. It is just that they seem to be able to catch a lot more of it and they have managed to get results when they take action, as opposed to us.

I feel that part of the problem here, and it is also a problem in the United States, is that there is too cozy a relationship between the regulatory authorities and the people they are regulating. Rather than hire police-oriented people and enforcement-oriented people into these regulatory bodies, what they tend to be is a retirement ground for people from the industry. So if someone works in the insurance business or investment business for a number of years and then a job opening comes up in the Securities and Exchange Commission, they apply, they get the job, and now they are regulating the very company they were just working for the week before.

And so, it presents itself as an extremely cozy relationship when we have the regulators and the regulated companies attending the same Christmas parties, golfing together at golf tournaments, and it is no surprise that when something happens, they do not move quickly enough to deal with the problem.

I want to talk about Harry Markopolos because his is a very interesting case, too, in the United States, because when these schemes, Ponzi schemes and others in the United States, are uncovered, it is often discovered that in fact there is somebody who knew about the scheme, who blew the whistle on the scheme as much as 5 years to 10 years before the scheme actually fell apart.

That was the case with Bernie Madoff's Ponzi scheme. A number of years before, I believe as far back as 10 years before, Harry Markopolos discovered what was going on with Bernie Madoff. He, at the time, was working in the same type of investments that Madoff was. His company, Rampart Investment Management, in Boston, Massachusetts, came to Harry and said, “We have a competitor out there by the name of Madoff”, of whom not that many people were aware at the time although he had been around for many years, “and we have trouble understanding how he is managing to get consistent gains on a month-by-month basis”.

That is one of the red flags for irregularities and Ponzi schemes, when a fund someone has invested in is giving a positive return month after month when any fund manager, no matter how good he or she is, will have some months where they make a decent return because of selling off some of the assets and buying others. They are going to have some months where they make 20% and they will have some months where they may lose 2% or 3%.

However, in this case, Madoff was showing a positive return consistently, month after month, year after year.

Harry's boss asked him to check into this situation to see how Bernie did it, his thought being, “Whatever Bernie is doing, maybe we should be doing the same thing. We have to learn from what he is doing and follow his pattern”.

It only took Markopolos a half hour to prove that this strategy was not possible, on behalf of Madoff, and he reported it to the Securities and Exchange Commission on several occasions over a 10-year period. He documented his files and sent them in to the investigators and found that the investigators would say, “This man has been around a long time. Nobody else is complaining. You are the only person finding fault with him. Not only that, but you are a competitor, right? So we should not listen to you because you have an axe to grind. You want to find out what his secrets are so you can simply employ them as well”.

The sad part of all of this is that I think perhaps $65 billion has gone missing because of the Bernie Madoff situation.

Yes, he has been put in prison for 150 years and there is some type of restitution taking place but very little.

The fact of the matter is that these types of schemes are not all big ones like the Bernie Madoff scheme. We have them in Manitoba on a much smaller scale of $50,000 to $100,000 being stolen by investment fund people, investors and so on. This is a common problem.

What we will see is during good times these schemes tend to take off, they are very robust and tend to expand during good economic times. It is when the economy turns, whether a sector turns or whether the whole economy turns, flat lines, and drops a bit, particularly in a recession or depression, that these things are exposed

Essentially what happens is a Ponzi scheme is a type of scheme whereby the money that is brought in from the initial investors is paid out to the old investors to keep them in the scheme and no money is actually invested in the market.

There are all sorts of different types of schemes. The Ponzi scheme was developed by Charles Ponzi who has a very storied history in the United States and actually a connection to Montreal. I spoke about that one other time in a previous speech. He had involvement and some training in what later became the Ponzi scheme concept in Canada, in Montreal.

We have other types of frauds that are very common and actually very close to home. We have mortgage frauds. One such mortgage fraud is defrauding essentially the bank. The bank turns the responsibility over to CMHC, so in fact it becomes a CMHC responsibility for most of this. There is one being uncovered right now in Alberta. As a matter of fact, one of the members of the government has been mentioned as having some connection to it. We are talking about millions of dollars that are being defrauded from the mortgage companies.

We had one in Manitoba in 1995. A gentleman came into my office with a box of files and gave us a lot of information on a scheme involving mortgage fraud. Essentially what it boils down to is an individual buys houses. He uses straw buyers, usually people who are just recently out of prison or first-time buyers who are sort of naive. He gives them a couple of thousand dollars cash and buys them some appliances and has them put the cash in the bank to get a receipt that the money is in the bank. That is in order to obtain a mortgage on a house that he has previously bought and now he is selling to them at a much higher price.

Perhaps he bought the house, in today's numbers, for $100,000 and practically the same week he turns around and gets the straw buyer to buy that house from him for $150,000 and he gets an appraiser to give him an appraisal for that amount.

It has to involve a real estate agent, appraisal, a lawyer and so on. In the Winnipeg situation with the RCMP we spent a lot of money uncovering this whole mess. At the end of the day what really happened? The guy that perpetrated the whole thing is still in a business, the window and door business now. I do not know whether anyone was really seriously disciplined, the lawyers, the real estate brokers, the appraisers, and whether anyone lost their jobs. It certainly got a few headlines at the time. However, there are many variations. It is not all just Ponzi schemes.

In the United States, and I know I am running out of time, so I may be able to deal with this issue in questions and comments, but my colleague, the member for Windsor—Tecumseh had some answers to this--

[The Deputy Speaker, Andrew Scheer]

We will move on to questions and comments. The hon. member for Mississauga South.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, this bill covers a fair range of activity covered in the Criminal Code and it may be difficult to see all of the other pieces.

One of the situations that I was a little concerned about was with regard to restitution. Victims have to fill out a form and I am wondering what happens when victims can demonstrate that they have real losses, but they have lost everything and do not have the resources to prepare the restitution statement. I believe it is argued by the Crown, but there are probably some expenses involved. It concerns me that it may be a fruitless exercise if there is no way to access any resources. There is no certitude there.

I would question whether it is necessary for the court in all cases to give reasons for its decision that it would not make a restitution order. That concerns me.

The other thing that concerns me is probably the most important aspect. It has become clear from virtually all of the speakers that the absence of resources at the provincial level to enforce the laws means that even very serious Ponzi or pyramid-type schemes will never be dealt with in the courts and people will get away with it simply because a rape case comes before a Ponzi scheme, which is the situation in Ontario. Perhaps the member would like to comment.

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

Mr. Speaker, restitution is a very important part of this bill. Community impact statements are also a very positive part of this bill.

What happened in the Southern Baptist Ponzi scheme and a similar type of scheme in the northern United States is when the house of cards fell down, as my friend, the member for Windsor—Tecumseh points out, is that the early investors got big returns from what they invested and were forced to pay back their gains even though they were innocents in the scheme.

In the Southern Baptist situation, the victims recouped 40% to 50% of what they lost in the scheme only because the authorities were able to go back to all of the participants and demand repayment. People who benefited as part of the scheme were forced to return their ill-gotten gains and they were happy to do it. They distributed the gains among the people who lost money in the end and the victims were reasonably happy. They still lost half of what they put in but at least they got something back. That is why the American system, in one way, is a better system than we have.

[John Rafferty, NDP, Thunder Bay—Rainy River, ON]

Mr. Speaker, one thing that is very clear from what the hon. member said and what I have heard throughout this morning is that this bill lacks teeth and it lacks teeth in a couple of areas. The first is that it does not include all white collar crimes, which is a failing of this bill. There has been lots of talk about restitution. The second failing in the bill is that the people who commit the crimes are not compelled to pay back victims. I find this difficult to understand, particularly because it is a government bill and the government is always talking about victims and victims' rights. It seems to me that this bill fails in that particular area.

I wonder if the hon. member would like to comment on that.

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

Mr. Speaker, the big exposure here for the government and the country as a whole is the lack of a proper regulatory system with teeth. The government's answer to this problem is to have a national securities regulator, as if that would solve the problem. We need people in the securities commission in Toronto or wherever it is located with an enforcement mentality. We do not want people with a retired investment executive mentality who would approach this as a retirement job, who would attend the same Christmas parties and play golf with the people they are supposed to regulate.

Whether it is the IMET system or any system, we need people who are interested in doing the job. We need people who are interested in investigating, in regulating. We need people who are interested in getting results. We do not want people who are prepared to turn a blind eye and let the system continue on its merry way.

There is really nothing wrong with this legislation. It is good legislation, but it would not stop any Ponzi scheme from occurring. It would not stop any mortgage fraud scheme from happening. That is the problem. The government needs a more comprehensive approach to white collar crime.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, the Conservatives have a dumb down approach to crime. Whatever the crime is, their only solution is a mandatory minimum sentence. I think of the idiocy of suggesting that a mandatory minimum sentence will address Ponzi schemes, massive corporate fraud, the kind of shenanigans that we have seen over the last number of years with international financiers. Those people do not think they are going to get caught. They do not think they will have to do two years.

These international financiers are taking money from investors, ordinary citizens, and moving it offshore. Bernie Madoff stuck around too long. If he had his way, he probably would have headed off to the Cayman Islands. Earl Jones would have been laughing had he gone to the Cayman Islands. The Conservatives will not touch the Cayman Islands or any offshore bank accounts. They could have followed the money through Panama. It is the number one money laundering country in the world, yet the Conservatives are trying to sign a free trade agreement with that country.

Why does the government come up with fairly useless solutions such as mandatory minimum sentences, when they turn a blind eye to the massive corporate crime that is going on in terms of moving money offshore and being unaccountable to Canadians?

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

Mr. Speaker, we just have to think back to February when the Government of France increased taxes on any companies that were doing business in the tax haven of Panama. Guess what happened? Within months, Panama signed a tax treaty with France. If the Government of France can get tough on tax havens like Panama and get tax compliance in a matter of a few months, then why not Canada?

Canada is negotiating a free trade deal with Panama but we are not one of the countries with a tax treaty with Panama. One hand of the government does not know what the other hand is doing.

Why does the government not follow France's example and then see how quickly the Panamanians respond in that situation?

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the bill deals with cases of fraud in excess of $1 million in aggregate. Does the member think that someone who defrauds a group of people for an aggregate of $900,000 should not be covered by this legislation? Is the $1 million a true benchmark of what is really a serious financial crime?

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

Mr. Speaker, we have had that question before. That is very true. For one person $50,000 could be his or her life savings, whereas for a billionaire, $1 million is probably small change. The government has an explanation as to why it chose $1 million, and the member should know that.

I agree with my colleague that a fraud is a fraud is a fraud. Taking $50,000 from a senior in my riding if that is all the money he or she has means everything.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, over the last three or four years, this has become a large issue. We have seen the reports on all the major television networks in North America. Bernie Madoff in the United States was sentenced to 150 years in prison, which gives us an idea of just how serious this has become. It also shows how one particular judge decided to engage the public to find out where the fever was on this. For the general public it is an incredibly large issue. It is beyond imagination. We do not realize how many people have been victims of this type of fraud and scam that has been perpetrated by people of despicable means and measure.

In this country we had the case of Earl Jones. It was so visceral to watch the coverage on television where as he was leaving the court and approaching his vehicle, he was attacked by the masses. I had never seen that before.

It gives us an idea of the heightened intensity about this issue. There are so many people involved and so many stories to be told that we would be amazed at some of the issues. There are people who come to me from my riding in Newfoundland and Labrador to talk about how destitute they are as victims of fraud. They are embarrassed at having lost their life savings. They do not want to bring up the situation with their children and other people in the community because they do not want to be embarrassed.

There are people out there, culprits who prey upon the weakest and most vulnerable of society. They know where they are and they know how to get them.

Bill C-21 goes a way to catching up with that. Perhaps it needs to go a bit further. The bill has been reported back to the House, and I think we are looking at one amendment.

Nonetheless, we will look at this and move on. This is something that we are going to be talking about again and again as the situation becomes more prevalent. In my own personal situation, people, primarily seniors, come to my office and talk about the sheer embarrassment of it. They tried to invest what little money they have to better themselves, and not so much themselves but their family, children and grandchildren.

It is incumbent upon us to have a serious debate about this. I appreciate everybody who is debating this in this House.

Bill C-21, An Act to amend the Criminal Code (sentencing for fraud), includes a mandatory minimum sentence, which is an expression we have used a lot in this House. It includes imprisonment for two years for fraud valued at more than $1 million, and provides additional aggravating factors for sentencing, which I will touch on in a few moments.

It requires consideration of restitution for victims, which is a highly contentious issue as we have seen from all the media coverage not just in Canada but also in the United States. In dealing with the seriousness of this issue, my colleague from Lac-Saint-Louis mentioned that it is such a big issue in his riding. He has fought so well for this issue, and I want to thank him personally.

I do want to move on to the situation we find ourselves in right now regarding Bill C-21. For this side of the House, we proposed earlier that the mandatory minimum sentence of two years should apply to practices such as market manipulation of shares and of course the Ponzi schemes.

Conservative, Bloc and NDP members, in my opinion, need to explain why they refuse to stand up for all the victims of white collar crime. There are some discrepancies within this that I would like to see addressed. However, we are moving in the right direction as the House of Commons is addressing the legislation today and will soon pass it.

Principles behind the stricter sentencing rules are very important, but we also know that they are not enough to prevent frauds from happening, which is why we also have to seriously consider working on the public campaign. That is where we are falling down on the job. We need to do more to improve the way we deal with the situation and public learning of this type of fraud.

Certainly when it comes to enforcement and how our law officials enforce this will be a contentious issue as we move forward with this type of legislation. It is one thing to put these sentences into place, but the enforcement is going to be a tricky situation as we have witnessed in the past. We are compelled in the House to call upon the government to provide those extra resources upon which it can exercise the principles of the bill, which are to bring people to account, people who are the lowest form of life, if I can use that term, and I will use it because I think I am very apt in that description.

We should consider this from two perspectives. On one hand, we have to alert the people of what this fraud is and how they can protect themselves from this type of offence. On the other hand, we have to provide the resources as a government to allow the officials to enforce this and make sure people are brought to account. That is what we have been talking about in the bill right from second reading through committee and now at third reading.

We are glad to finally see legislation on the issue. We have called on the government to act on white collar crime for many years now. We have had this discussion for quite some time. This legislation is going forward and it is good that it is. We have seen the anger heighten dramatically because of people like Bernie Madoff, Earl Jones and what we see in the media regarding Ponzi schemes and the originator of them, Mr. Charles Ponzi himself.

I would like to turn to some of the research that has been provided to us as legislators in the legislative summary from the Library of Parliament. I would like to thank Cynthia Kirkby and Dominique Valiquette, both from the Legal and Legislative Affairs Division, Parliamentary Information and Resource Services.

The background on this goes back for quite some time. We have seen prior amendments to the fraud provisions. 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. I certainly think that provides an ample guide for judges to allow a sentencing situation to take place. When it comes to sentencing, the enforcement is one area we may be falling down on.

Let us look at the integrated market enforcement teams. In 2003, the Government of Canada created the IMET program. Its funding is through the RCMP. Ten IMETs are operational in four of Canada's major financial centres. Their mandate is to investigate and lay charges for serious Criminal Code offences involving capital markets. At that point the enforcement was happening. We need to take that one step further. It was a good start with the IMET teams in the financial centres. The IMETs, continue to this day. From December 2003, when the program began, to March 2008, five investigations led to nine individuals being charged with a total of 29 Criminal Code offences. In fiscal year 2008-09, however, 17 individuals were charged with 979 counts.

There in itself we see a perfect illustration of the criminal intent that permeates throughout the system. These people get into the system and it shows how hard it is to bring these people to law and how important enforcement must be in order for these rules and measures to have some effect on all these people.

As I mentioned, 17 individuals were charged with 979 counts. A total of five individuals have been convicted since the IMET program was established and sentences range from 39 months to 13 years.

Going back on the history alone, members will see some of the statistics from C-21. This gives us a good glimpse of the situation. In 2007, 88,286 incidents of fraud took place in our country. About 10,001 cases of people were found guilty in the years 2006-2007. To break down those 10,001 cases, these are the following statistics: prison sentences, 3,580, resulting in 35.8%; conditional sentences being brought down on those people, only 8.7%; probation was the biggest at 60.3%; receiving fines, 12.1%; and restitution at that stage, 18.9%. Other sentences that were handed down included absolute conditional discharge, community service orders and prohibition orders as well.

Returning to the legislation at hand, let us take a look clause 2.1, which is the minimum sentence for fraud. This is the one that is probably getting most of the attention right now. Currently a person convicted of the general offence of fraud is liable under subsection 380(1) of the Criminal Code to a maximum term of imprisonment of 14 years where the value of the subject matter of the offence exceeds $5,000, or two years where the value of the subject matter of the offence does not exceed $5,000 and no minimum sentence is specified.

Clause 2 of the bill introduces a minimum sentence of two years imprisonment in case of fraud over $1 million. My colleague from Ontario brought up a good point earlier. When we try to come up with these numbers, in this case two years imprisonment minimum on a $1 million case, what if someone achieved $900,000? That is a pot of money. I know people who were working on $100,000 as their nest egg. What if they had been defrauded of $100,000? How do we address that in the situation where we make the cutoff at $1 million?

On the other hand, the minimum sentence applies solely to a person convicted of the general offence of fraud, again subsection 380(1) of the code. It does not seem to apply to other related offences, such as fraud affecting the market, fraudulent manipulation of stock markets, insider trading or the publication of a false prospectus. In the latter three cases, however, where the value of the subject matter exceeds $1 million, this remains merely an aggravating circumstance.

[The Deputy Speaker, Andrew Scheer]

The hon. member will have seven minutes left to conclude his remarks after question period. We will now we move on to statements by members.

The hon. member for Saint John.

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

[The Speaker, Peter Milliken]

When the matter was last before the House, the hon. member for Bonavista—Gander—Grand Falls—Windsor had the floor, and there are seven minutes remaining in the time allotted for his remarks.

I therefore call upon the hon. member for Bonavista—Gander—Grand Falls—Windsor.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I want to pick up where I left off and in the meantime one thing I wanted to bring to this debate, which I did not have a chance to do, is to note that even today we had the crown prosecution in Newfoundland and Labrador recommending a businessman involved in a 2006 spending scandal in Newfoundland and Labrador's legislature be given a three-year prison sentence and be ordered to repay $450,000.

That was coming from the situation we had in the province where some elected members of the day as well as some administrative members had defrauded the House of Assembly of Newfoundland and Labrador, which in turn defrauded the population of the province of several sums of money well in excess of $1 million. People were charged and brought to court for that and sentenced. Many of the sentences have been served, but nonetheless today we see one of the people involved in that case and the extent to which this can go to.

Picking up on Bill C-21 once more, I want to go through some of the notes that I discussed earlier talking about minimum sentences applying solely to a person convicted of the general offence of fraud, subsection 380(1). It does not seem to apply to other related offences and that is what I want to pick up on, that it is one of the reasons why we need to make this a much stronger piece of legislation. These are some of the loopholes that we brought up earlier as well, and I would like to touch on some of this such as fraudulent manipulation of stock markets, insider trading, fraud affecting publication.

In these three cases, however, where the value of the subject matter exceeds $1 million, that would remain an aggravating circumstance and therein lies the strengthening that needs to come back to this piece of legislation. Nonetheless, when we talk about criminal offences to institutions, that was also brought up by one of my colleagues. The institutions exempt are the larger offenders. In this situation it becomes a milder offence for the few that are charged even though they do receive extensive charges.

Clause 3 of the bill adds four aggravating circumstances to the list. That would be the magnitude, complexity, duration or degree of planning of the fraud committed was significant. In the form of sentencing this is a very key aggravating factor. The offence had a significant impact on the victims given their personal circumstances including their age, health and financial situation.

The third aggravating factor: The offender did not comply with a licensing requirement or professional standard that is normally applicable to the activity or conduct that forms the subject matter of the offence. Finally, the fourth one contained within clause 3 is: The offender concealed or destroyed records relating to the fraud or to the disbursement of the proceeds of the fraud, which are prominent in many of the recent cases, which I will not go into because there are far too many to mention.

In addition to these specific aggravating circumstances, the general aggravating circumstances contemplated in paragraph 718.2 of the code will continue to apply. That includes the abuse of a position of trust or evidence that the offence was committed in association with a criminal organization. Moreover, the court shall cause to be stated in the record the aggravating and mitigating circumstances they took into account when determining the sentence. That is contained in 2.2 and that is the aggravating circumstances one must consider when talking about sentencing, which I agree with in this case.

With respect to restitution order 2.4, under the existing provisions a judge passing sentence for any offence under the code may order the offender to make restitution to the victim for damage to property or for bodily or psychological harm. That is very important. The court must give priority to restitution before imposing a fine on the offender. A restitution order is discretionary however, meaning that the judge may decide not even to grant it.

The bill states, “the court shall inquire of the prosecutor if reasonable steps have been taken to provide the victims with an opportunity to indicate whether they are seeking restitution for their losses”.

That is a new subsection within this legislation. In addition, “If the court decides not to make a restitution order, it shall give reasons for its decision and shall cause those reasons to be stated in the record”.

In the few minutes I have left, I would like to talk about one of the issues that came up in this particular legislation, and in other pieces of legislation, which is the victim impact statements. I have always ascribed this to be a very important element when it comes to the sentencing of people convicted of crimes. In this particular bill, clause 4 talks about that.

The code currently provides for a victim impact statement to be filed at the sentencing stage. For the purpose of determining the sentence to be imposed for any offence under the code, the court is required to consider any victim impact statement describing the harm done to, or loss suffered by, the victim arising from the commission of the offence.

Each and every time these frauds take place, we see in the evening news, in all the newspapers, that the impact of this is absolutely immense. So much of this occurs. Thousands and thousands of cases are reported. I would say the vast majority in this House know people, family members, maybe their own parents and children, who were victims of fraud. It is excruciating to go through and it could last for quite some time for those people defrauded of their life savings, their nest eggs, hundreds of thousands of dollars. Of course, in this particular case, we focus on the $1 million mark.

For the purpose of the code, “victim” means a person to whom harm was done or who suffered physical or emotional loss as a result of the commission of the offence. To me, that seems to be a very valid and important part of this legislation.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I would like to focus on what my colleague was speaking about in the last remnants of his presentation. He was talking about the victims.

The victims are the individuals who unfortunately seem to get overlooked. I do not think we see this bill going far enough. I can only refer to my own riding of Sudbury. Most of these victims are seniors who have invested their life savings. They have worked 30, 40 and sometimes even 50 years and put their savings and trust into these individuals who create Ponzi schemes. Unfortunately, when they come to retire they find out that the individual has taken their money, disappeared and has gone somewhere lush and lucrative. They never get the opportunity to live the life they wanted to in their golden retirement years.

While we are supportive of this bill, we would like to see this legislation go a little further to protect individuals and victims of these crimes. I would like to hear the hon. member talk a little more about how he would like to see this legislation protect victims of white collar crime.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Madam Speaker, I will pick up on some of the comments that my colleague from Ontario brought up earlier on the cut-off of $1 million.

What makes $900,000 below the mark, not as important as $1 million? That is a significant amount of money. As I said earlier, I know of people, who I will not bring up here for reasons of privacy, but they were seniors defrauded of close to $100,000. It was absolutely devastating. The rest of the family now has to carry these people through the rest of their years. How embarrassing is that for someone who has been a victim of fraud? Those who are at the extreme low level of the pool of morality, if I could use that term, victimized these people.

Is it strong enough? No, it is not, and that is one of the issues, plus the fact that this needs to be publicized. We also need to put strong enforcement measures in place.

We talk about statistics all the time, but sometimes we have to put a face to this and look at ways to make changes, amendments, to further this legislation into the future. Down the road as the circumstances change, when it comes to the fraudulent behaviour of some people, the legislation has to be flexible and nimble enough to take care of this.

Talking about statistics, for example, 10,001 cases were found guilty in 2006-07. There were 88,286 incidents of fraud reported. That is a big number. Behind those numbers are families and individuals, absolutely devastated.

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

Madam Speaker, the member knows that all parties in Parliament are supporting this bill. It is at third reading and has been through committee. It is essentially a good bill, particularly with the addition of the restitution orders and community impact statements.

The fact of the matter is that the problem is much broader than what this bill addresses. The previous government set up the IMET program through the RCMP back in 2003, and after five years there had been a mere five convictions on white collar fraud. Meanwhile, in the United States under similar circumstances there are 1,200 convictions under its laws.

Clearly, we have to go beyond what this little piece of legislation is going to do for us and not give the Conservatives the satisfaction of being able to campaign and say they solved the problem of white collar crime, because that is not being done with this piece of legislation. It is a good bill, but we need to do more than what this bill indicates.

I have a further question for the member if there is time.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Madam Speaker, I would love to promise him that I will not be so verbose as to not provide him time at the end, but I cannot since I make a living speaking, though I will see what I can do.

The two points he brought up earlier are very valid. Restitution orders and community impact statements are certainly profound measures within the bill that go a step in the right direction. For the very reason that we are all in the House trying to support this legislation, I have the same concerns he does, definitely.

I looked at some of the evidence that was put forward through the IMET back in 2005 and, for example, in 2008-09 17 individuals were charged with 979 counts. A total of five individuals have been convicted, as he pointed out, since the IMET program was established. It is a valid point that he brings up because, again, let me repeat the numbers, a total of five individuals have been convicted since the IMET program.

I mentioned some of the statistics earlier. More than 10,000 people were charged, more than 80,000 were reported, 88,286 incidents of fraud in 2007 alone. Yes, there is a discrepancy that we need to address, and I hope that in the future we will be able to do that. For these reasons of restitution orders and community impact statements, we need to pass this legislation immediately, but we need the broader discussion to take place.

That is why in the future, community impact statements will be very important, because we have seen the absolute devastation, which fraudulent behaviour creates, played out on the news each and every night, especially with seniors, as my hon. colleague from Sudbury pointed out. The average age in my riding is the mid 50s. Do the people committing the frauds know this? Darned right that they know this and they take advantage of it every day.

It is hard enough to educate people on the fraudulent behaviour that is out there, but there are people like Earl Jones and Madoff conducting these Ponzi schemes. They are cleverly crafted, incredibly well thought out and they can fool the smartest of people, as evidence has shown in Ponzi situations especially.

The devastation is no less severe because someone considers him or herself to be smart in all areas of finance. Therefore, it falls upon us to become the protecting agent, especially of those who are most vulnerable. If the most shrewd in our society and those who are incredibly smart in the financial ways of the world are getting fooled, what does that say about the average seniors who know very little about financial securities, other than the fact that they balance their chequebooks? That is the only financial responsibility that a lot of seniors have participated in for the past 30 or 40 years.

This is where this legislation needs to be more proactive, and I agree with the broader aspect of what my colleague is saying.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, Bill C-21, An Act to amend the Criminal Code (sentencing for fraud) is a bill we have seen before.

In fact it was with us in the last session of Parliament as Bill C-52. We went through some process on it, but as members are probably aware the House was prorogued. When prorogation occurs, all the bills die and have to start again unless the government chooses to reinstate them at the same position they were when prorogation took place.

As a consequence to that prorogation we have this bill. It is an interesting bill. It has an interesting short title, Standing up for Victims of White Collar Crime Act. If people heard that, they would have an image of what they think this bill might do, but in fact this particular bill does not deal with all white collar crimes. It deals with fraud over $1 million, and whether or not there is going to be a mandatory minimum sentence. It is somewhat misnamed. I will comment more on the short title later.

When the bill came back in the current session, it took another 60 days before the government brought it forward for second reading. Second reading occurred on October 4 and 5. I had a look at the debate. It was the same bill and pretty well the same speeches as were given in the last session.

It then went to committee and it was another 60 days before the committee got around to it. That is an indication of another problem, and it is that the justice committee is a very busy committee. There are an awful lot of justice bills, which arguably could have been combined with other bills and put in an omnibus bill. There are going to be the same witnesses if we are dealing with the Criminal Code or sentencing provisions. Chances are it is going to be the same interveners, the same witnesses and the same government officials.

The government has this thought that possibly if it takes every little change that it wants to make to the Criminal Code and gives it its very own bill, and the number of bills gets up high, people will say “My goodness, look at all the wonderful criminal justice bills we have here. Are we not tough on crime?”

I think someone actually did a little analysis and found out that 15 of the bills could have been handled in 3 bills alone. It gives the idea that there might be something to look at here, and maybe not to be too quick to judge a bill as to its scope or the ambit that it covers because it is a mirage.

The committee finished on November 30, and now a couple of weeks later we have third reading. Now we are going through this. The first thing that happens is that the government gets up and says that all the parties are supporting it, so why do we not just forget debating; we will just vote and pass the bill. It says we are delaying it and we should not be delaying the bill.

If we look back at the prorogation, the recalibration of the government, it was kind of an interesting excuse for doing things. If the truth be known, if the government wanted to say the truth, it was on its heels and in great difficulty, and the only way it could get out of it was to shut this place down, let things cool down and have some thinking time so we could come back and have a better start. I do not want to be too cynical about it, but the evidence sure does speak for itself.

The bill itself, as I indicated, has to do with sentencing for fraud. This is what this bill is about. It has a few elements, and they are included in the summary. It says that:

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;

This is only relevant to fraud where the aggregate value exceeds $1 million. Obviously that is not all white collar crime. There are certainly some big name cases.

Part (b) of the summary says that the bill would:

provide additional aggravating factors for sentencing;

Although there is a proposed mandatory minimum, the sentencing for fraud at this level is usually significantly more than two years. But the number of years, which I think could go up to 14 years, is actually the longest term of sentencing currently, second only to life imprisonment. This already has penalties as high as one can get. That is a ceiling. We are talking about a floor in this bill.

The next part says it would:

(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;

That makes some sense and there are some provisions here.

It also would:

(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.

In a number of cases, there are some very interesting people who are involved and they hurt a lot of people. The victims were in fact their friends and family.

When this bill went to committee, and this is a bill that the members of the justice committee are well familiar with, they reviewed it and the bill had to be reprinted as a consequence of their work. But the only change they made was to add the words “a victim seeks restitution and”. Those are the words that are added to this bill that was originally tabled at second reading.

To put that in context, this has to do with restitution. The full section, subsection 380.3(5), will read in total now, in this amended bill from the committee:

If a victim seeks restitution and the court decides not to make a restitution order, it shall give reasons for its decision and shall cause those reasons to be stated in the record.

Earlier today I asked a question about this and it actually revealed something really interesting to me. I am not a member of the committee, but I followed the debate very closely.

This basically says that if a victim wants restitution and the court decides not to do a restitution order, the court has to give reasons. I asked, why should the court not give reasons in all cases of fraud as to why it is not ordering a restitution order?

It would make some sense to me that people have to know why the courts do what they do and why they have made certain decisions. It may mean that it is very clear that there are no assets, but the fact that a victim has decided for whatever reason that he or she is not going to seek it does not mean that he or she is not entitled to it and should not get it. In this particular case, it is simply a matter that if the court is going to decide that it is not going to make a restitution order, I thought in all cases it should give reasons for its decision.

I raise this because the chairman of the justice committee spoke earlier, and has asked a number of questions, basically encouraging people to stop talking and just vote and pass this bill because we are delaying it, after the Conservatives wasted over a year with all their shenanigans and here we are finally getting a chance to talk about this bill.

It was one of those moments when somebody says that there is a reason it is there. I had to find out and I went and asked somebody.

The parliamentary secretary did not indicate, but as it turns out, the reason this is here is that one of the intervenors was the Canadian Bar Association, which said we needed to put this in. Effectively what this does is relieve the courts from a requirement to do a restitution order and to write up the reasons for its decision if the victim seeks restitution.

Now we are talking about money. We are talking about the Canadian Bar Association saying this will bog down the system if all of a sudden the courts have to explain their decisions in cases where they said it would not affect the victim so they would just move forward.

It does raise the point, and I know a number of members have raised it in debate already, that we have cases where the Government of Canada, the federal government, passes legislation and then it gets promulgated, it becomes part of the law, part of the Criminal Code or other legislation, and then it is up to other jurisdictions to enforce the laws. We have cases now where even the smallest thing about saving some time for the courts, so they do not have to write up reasons for decisions on restitution orders, will save them money and it is worth doing and it is worth changing the bill to make sure that they can save a little bit of money. That pales in comparison to what is happening out there in the real world.

We have heard a lot about Ponzi schemes, basically pyramid schemes of a sort, and about Bernie Madoff. It is in the news every day and I do not have to say anything more there. Earl Jones is another one, where 150 clients were defrauded of some $50 million; he was sentenced in February of this year to 11 years.

One person who has not been mentioned is a Canadian case, Tzvi Erez, who is a very renowned pianist. He got involved in a so-called Ponzi scheme and he defrauded 76 investors out of $27 million. This is not insignificant and this is precisely what the bill is supposed to deal with, right? Wrong. The charges were dropped in this Ponzi scheme of $27 million, the reason being that the police made the argument that either we want them to deal with the rape case or the homicide case or we want them to deal with the Ponzi case. We made the decision that it was more important for us to deal with a rape or a homicide. It would take far too long. It was a very complicated scheme. It would take years to do and would be very costly. It would drain the courts and so many cases would not be dealt with. Does that not tell us something?

The Canadian Bar Association says it does not want the courts to have to give reasons for a decision, because it will save them a little bit of money. The police in Ontario and Attorney General Chris Bentley are basically saying they do not have the resources to deal with someone who defrauds Canadians of $27 million.

How can we say that we are being tough on crime and those criminals when, within the system, in a case such as that, the magnitude of that, the charges will not be pursued?

I am not sure that the people who were defrauded are very happy about that. I am not sure of their personal economic circumstances, but obviously there are only 76 of them representing $27 million, so they are significant investors. But we do not discriminate against people in their financial situation. People who are in good shape versus those who are living from paycheque to paycheque are covered by the law equally and things should be done, but the fact is that this was a matter of the courts in the provinces not having the resources to be able to enforce the law. How is that possible? How is it possible that we get to those situations?

We have now in the Criminal Code that fraud over $5,000 is actually subject to a maximum term of 14 years. But in this case, Bill C-21, the only difference between that and dealing with it under existing law is that Bill C-21 provides for a mandatory minimum of two years. If that is the only difference and we have cases that are being thrown out because the provincial courts cannot enforce the law, how can government members say this is their bill, Bill C-21, and they are very proud of it?

The short title, which happens to be much longer than the actual title, is the “Standing up for Victims of White Collar Crime Act”. It is not. In fact, it is a sentencing bill and it amends the sentencing.

It says that if it is over $1 million in terms of aggregate value of which people were defrauded, a mandatory minimum may be applicable. But time after time, members of the justice committee got up and said that the penalties being given out in the courts now when those cases are heard are well over two years and that this mandatory minimum is really not going to achieve very much. So how can they boast that they are taking care of victims of white collar crime when this bill, with all the work and all the time and all the complaints about delay, in fact does very little and is going to affect very few cases? Even if there is not a mandatory minimum, using the court's discretion they can get up to 14 years anyway.

People should be a little disappointed that the government doth protest too much about delay of this bill, because any delay that has occurred in this bill has been the government's doing by various things such as prorogation and by stacking up bills, and I want to talk a bit about that.

As I said, someone did an analysis and found out that 15 justice bills could have been done in three omnibus bills, because bills that relate to the same sections of the Criminal Code or other justice matters can be combined, when they have the same or similar elements and we are going to be dealing with the same witnesses, the same intervenors and public interventions as well.

If that is the case and if the government really wants to show that it has the public interest at heart and that people who commit wrongdoings, who commit serious fraud, are going to be dealt with on a timely basis, it would say that will be shown when legislation actually passes. But we have not had very many of these bills even pass, because of all the delays and the lumpiness of the parliamentary calendar. We just seem to have these breaks, and now there are rumours of a spring election and maybe most of these bills are going to die. There will be another Parliament and these will be back again with the same slogan: “We are getting tough on crime”.

They cannot be tough on crime if they cannot pass legislation that is going to be effective. They cannot be tough on crime if the provinces that are responsible for enforcing it do not have the resources to apply the law and they allow people to get away because they cannot lay those charges.

If one is not part of the solution, one must be part of the problem, and what I heard today from a number of members was that we need a strategy.

I thought one of them was fairly comprehensive. I am not going to repeat it, but one of the critical elements of a strategy is to have these kinds of cases dealt with by a joint task force such as the RCMP and other agencies that have experience and expertise in dealing with serious fraud and complicated schemes. To go through the regular process has been a problem and that is where the money goes, but if we have an efficient system of processing and we have this expertise built up, these laws can be enforced. But we need to work with the provinces and other jurisdictions that are involved, because there is no point in passing laws that will never be enforced or in fact never passed because a government is really only interested in recycling them for the same purpose of having a political slogan about being tough on crime.

It is not honest to tell Canadians that, and if Canadians would look at the transcript of the debate today, they would see significant examples and testimonials from members of Parliament that in fact the government has been using these bills for political purposes rather than for the best interest of Canadians.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, the member talked about organizations like the RCMP that are doing a great job in tracking down these criminals and bringing them forward to the courts.

In Ontario, we have an excellent organization based out of North Bay called PhoneBusters done by the OPP. It has been an active organization in trying to protect our seniors from many of these things that relate to white collar crime.

One of the things that we want to see strengthened in this bill is the way that individuals who have been taken to the cleaners, so to speak, by Ponzi schemes or these organizations that are phoning and taking advantage of these individuals, are compensated. We want to ensure that under section 738 or section 739 there is adequate compensation for victims.

We believe that when someone takes something from an individual there should be compensation. We believe that this part of the legislation should be strengthened. I would like the hon. member to comment on whether he agrees that we should see this part strengthened in the bill.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, generally speaking, the law is based on the fact that if a crime is committed, the victim should be, to the greatest extent possible, put back in the position he or she would have been in had the crime not occurred. That is a principle of law that is there. Clearly, that is our wish as a society and our value statement.

The bill does include a restitution statement. It has a form here in which various things have to be described, for example, what victims were defrauded of, the amount of the loss, the evidence, et cetera. However, it is still up the court. If this was a lifestyle thing where somebody defrauded $1 million from someone, spent it or gave it away and there was nothing to take back, then it becomes: How do we get something out of nothing? In the Madoff case, there was argument that victims could go to other family members who were beneficiaries of some of the largess.

What about the people at the top end of the Ponzi scheme who got in early, like in a pyramid scheme? They would have received usurious returns on their investments. They may not have received their capital back but they may have received even more than the value of the capital. Would they not in fact be accomplices in the Ponzi scheme knowing that they were getting usurious returns and should they not be held accountable for not reporting?

I understand another value of the law is that if we become aware of a criminal violation, we have a duty to report it to those who can figure out whether there was in fact a breach. That is not covered here either, not explicitly, but I would hope that in the courts it would be taken into account that there may be many accomplices to some of these frauds.

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

Madam Speaker, the member just touched on an important difference between Canada and the United States.

There are several cases in the U.S. but I will talk about the case of the Southern Baptist Council where there were millions and millions of dollars involved in a Ponzi scheme there. What happened is that the early investors who received these enormous returns had to, at the end of the day, give all the money back. The result was that the investors overall were able to recoup, I think, 40¢ to 50¢ on the dollar. They were not entirely happy about that but at least they got something back. That happens and has happened many times in the States.

Fundamentally, it is all about regulations and the regulatory bodies. The regulatory body here in Canada has been asleep for years. I want to quote from an article from Canadian Business Online dated September 27, 2007. It reads, “Canada's losing war against white-collar crime”.

The author was talking about the RCMP's launch of the integrated market enforcement team, which I talked about earlier, that was started under the previous government in 2003. It had only five convictions in five years and yet in the United States 1,200 convicts are in jail because of its laws.

He goes on to say:

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

Is that not sweet? The Canadian Bay Street investment community is not afraid of the cops in Canada and not afraid of the Ontario Securities Commission but it is afraid of the United States Security and Exchange Commission which has real teeth.

Regulation is the problem. We keep appointing people to the regulatory bodies who golf and go to Christmas parties with the people they are supposed to be regulating.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, that is very interesting. I do not have any information to add to that nor do I have a comment.

However, I would say that there are other circumstances that concern me about the bill and I will take the opportunity to give one now.

The bill would provide mandatory minimums of two years, not only for the person who perpetrated the fraud but for any accomplices. What would happen if there was an office where the Ponzi scheme was being operated out of and there happened to be an employee who was a single mom with three kids and somebody said that she knew or ought to have known that this was not legal and that she was being charged as well? There would be no restitution for that mom. This legislation would put that mom in jail for a minimum of two years and maybe more. I am not sure whether that has been taken care of.

When we put in a mandatory minimum and we deal with names of seniors and so on, we are talking about human beings where there may be exacerbating circumstances or mitigating circumstances. This legislation would not provide for that. It is unfortunate but most people who have spoken to the bill have basically said this is not a very substantive bill. It is tinkering with sentencing.

However, I hope the judicial system will have sufficient discretion to ensure that people who are somehow drawn into this, either coerced or otherwise, unwittingly do not have to suffer two year mandatory minimum sentences through no fault of their own. It is a dynamic and it is one of the reasons that I have some difficulty with mandatory minimums.

The courts have always had the discretion but the government does not trust the courts. As a consequence, it believes that the solution to all problems is mandatory minimums and fill up the jails with unreported criminals.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, white collar crime is a serious issue, both in my riding of Sudbury and across Canada. It is a shame that the government has presented us with a weak bill to try and tackle this problem. We believe the government could have sat down with all three opposition parties and brought forward world-leading legislation to deal with the real problems facing Canada.

That does not mean that I will not support the bill. I believe that this legislation is an improvement over the status quo, but it does not remove the need for a debate like this. The public needs to know that we understand the shortcomings of this bill and that there are parliamentarians who are saying that this is a start but that alone it is not enough. The government needs to know that even though we will support this legislation we expect more.

This bill is actually the reintroduction of a bill in the last session of Parliament that was killed when the government decided to prorogue last winter. At that time, the government knew that this bill had support from all parties. Then, when the House was finally allowed to resume, the government brought forward other bills, other crime bills, which could not get through the House, as this bill will.

Too often, white collar crime is portrayed as a victimless crime. This simply is not the case. I remember when the previous version of this bill was debated in the House, my colleague from St. John's East, in answer to a question I asked, told us of a case in his riding where a funeral director in his riding took the money people had given him for their funerals and used it to fund his own lavish lifestyle. Unfortunately, as shocking as that story is, it is not an isolated incident.

I have heard from far too many seniors in my riding who had invested their money with someone they thought could be trusted to manage their investment only to find out, once it was too late, that they had been scammed.

An unfortunate example of this occurred in my riding in Sudbury about 10 years ago from the Montpellier Group. Pierre Montpellier was fortunately found guilty after he was extradited from the U.K. However, there were many seniors and families whose lives had been turned upside down by the loss of hundreds of thousands of dollars and, in some cases, less than that. Although it was not the million dollars that we talked about earlier, it still had a huge impact on their lives.

White collar crime all too often targets those who have very little. Those investing large sums of money have the money and the time to protect their investments. However, those who have worked hard their whole life to save a modest amount for their retirement or to ensure they would not be a burden to their family once they passed away, simply do not have that luxury.

It is no wonder then that Canadians are worried about white collar crime. There are questions we need ask ourselves when we try to tackle white collar crime. First, will the legislation stop white collar crime from taking place either by providing safeguards for people when they invest or by deterring people from committing such crimes? Second, will the legislation help the victims of white collar crime?

In regard to prevention, we believe this bill is weak. The prime ticket that the government is pushing this bill on is the mandatory two year sentence for all criminals who commit white collar crime valued at over $1 million.This plays well in the media but does it actually do anything to deter criminals?

The problem is that the government is happy to make this type of bold statement about mandatory sentencing because it knows that without extra funding and support for investigating and prosecuting white collar crime, this law will make very little difference.

My colleague from Windsor—Tecumseh pointed to a case earlier today, in a question for the Parliamentary Secretary to the Minister of Justice, of the investigation into a Ponzi scheme in Toronto where between $23 million and $27 million were stolen from almost 100 people and that three weeks ago the prosecutors withdrew all the charges.

The fact is that we can make all the changes in sentencing we would like but,with limited funds and time, prosecutors are always going to choose to pursue other types of criminals where the trials take less time and are far less complex.

More than that, this mandatory sentencing certainly will not deter the small-time criminal who steals $2,000 from seniors. The fact is the consequences of that type of crime are as severe, if not more so, than someone who steals $1 million from a $1 billion corporation.

If the government contends that this mandatory sentence would deter criminals, which is a very wide-ranging conversation, and if we accept the government's position for argument sake, then why are we only deterring crime against the rich and big corporations? Regardless of whether this works, this type of provision sends a message that the government is more concerned about protecting their friends on Bay Street than hard-working families from this type of crime.

What should the bill have done in this regard? The best way to have created a deterrent to white collar crime would be to have made it easier to prosecute such crimes. The real threat of any jail time would have been far more likely to deter would-be criminals than the threat of longer jail times that many feel they will never serve if they do not plead guilty. For this to take place, we need to streamline the method of prosecuting white collar crimes and invest in resources like forensic accounting and extra training for judges on the specifics of presiding over cases of white collar crime.

White collar crime is not a spontaneous crime. It takes a lot of planning to carry out such illegal activities and the people who carry out these crimes are very aware of the possible penalties as well as the chances of avoiding them. Increasing the penalties to these people, while keeping the probability of them being enforced, does not deter people as much as we could by increasing the likelihood of persecution.

Let me tackle the second part of my own question. Does this bill provide help or support, either emotional or monetary, to the victims of white collar crime? There are two provisions at first glance which would appear to fit this criteria. The first is the provision for a community victim impact statement and the second is in regard to monetary restitution to the victims of white collar crimes. However, neither of these provisions, in my opinion, go far enough.

Let us look first at the community victim impact statement. This is almost unheard of in criminal convictions. Previously only individuals, be they people or individual corporations, made victim statements. However, this provision allows a whole group of people to come together and have a single representative explain how they as a community have been affected by a crime.

Many individuals feel or can feel very daunted by the legal system. Having the ability to speak as a group should mitigate some of these concerns and therefore allow people to have means to address their emotional distress without causing more distress. I know from consultations with my constituents that many victims have asked for this type of provision before, so there are definitely many positives in this.

However, as this is the very first time that a provision like this has been used in the Canadian Criminal Code, I am disappointed that there are not more guidelines on how this would work.

In many ways, this is a judicial experiment, so we cannot say how this will work in the future, but there is no explanation of who can represent the community or if more than one community representative will be able to present to the court. All these questions are left to judges to work out for themselves. This could actually make it more difficult for judges presiding over already complicated cases, which is certainly not something anyone but the criminals would desire.

As I have already alluded to, lack of resources is already a problem in these cases and we do not want to add to the problem. There is also a question of cost for the victims in appointing representatives. Many people have lost their life savings, so we need to ensure this does not become a tool for only the rich to have their voices heard in criminal proceedings.

Second, with regard to restitution, the provision in this bill states that courts “shall consider making a restitution order under section 738 or 739”. There is therefore nothing in the bill to compel offenders to compensate their victims. In fact, this provision does nothing new because judges already have the option to order restitution under these sections of the Criminal Code. These judges have been practising and studying the law for years. It seems bizarre to remind them that they are able to use sections 738 and 739 in this way.

What the government could have done, rather than referring back to existing methods of restitution, was to have used the bill to compel judges to seek restitution for the victims of white collar crime. These victims have been wronged and it is only right that the court seeks to address this loss. The way the provision is written now changes nothing for victims. It appears to be only in the bill for political reasons rather than good policy.

There are some good provisions in the bill with which I have no problem. For example, the proposed bill also allows judges to take aggravating factors into account when sentencing white collar crimes. Yes, most judges have already been able to determine when aggravating factors are important in a case, but by formally laying these out in the Criminal Code, we will remove any grey areas and formerly authorize judges to take those factors into account.

However, as I have laid out in this speech, many of the provisions in the bill are simply not strong as they should or could be. This is not to say that they are bad provisions, but when we bring forward legislation like this, we should strive to pass the best legislation we possibly can.

I hope we can pass this legislation and at least take the first small steps to deal with white collar crime. It is my real hope that the government will work with the opposition parties and bring forward new legislation in the near future that deals with the problems I have highlighted today.

[James Rajotte, Conservative, Edmonton—Leduc, AB]

Madam Speaker, I appreciate the comments of my colleague from Sudbury and his support for the bill.

I want to touch upon the community impact statements and the restitution argument. In terms of community impact statements, the bill includes provisions to permit the court to receive a community impact statement that describes the losses suffered as the result of a fraud by a particular community, such as a neighbourhood, a senior centre or a club.

Perhaps the member could expand on what more detail he would want or perhaps his suggestion in terms of how the government would proceed in terms of specifically ensuring that these community impact statements are both received and acted upon.

In terms of restitution, which is the second point I want to raise, requiring judges to consider restitution from the offender in all cases of fraud involving an identified victim with ascertainable losses, judges would also be required to provide reasons if restitution is not ordered. I think this addresses the concern the member has raised. It allows judges some discretion, but then they have to provide reasons if restitution is not provided for.

Could the member comment on those two items and add more specificity to his critiques?

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, relating to the first piece with the community impact statements, we agree that this is a positive step in the legislation. However, we were asking for a little more criteria to be provided to the judges. If the judges are presiding over a case, that there is a little more instruction for them to have a better understanding as to whether they have a community group of people and whether they are allowing more than one person to speak on behalf of the community.

We understand that people are allowed to come forward and feel confident to address the court. Some people do not have that confidence. The community impact statement allows for that, but we would like to see more guidelines in place to provide the judge with the necessary criteria to explain those to the community impact statement.

When it comes to restitution, the point the member brings forward is something I would like to look further into before I can comment on it. He brought up a valid point and I would like to read a little more of it.

[Justin Trudeau, Liberal, Papineau, QC]

Madam Speaker, it seems that every time the Conservative government tries to bring in a tough on crime bill, it jumps immediately to mandatory minimum sentences. The member made some strong comments about why mandatory minimum sentences would not be particularly effective in this case. I would like him to repeat them. It is important that we emphasize just how tough on crime, according to the government, is not really smart on crime.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, my hon. colleague from Windsor—Tecumseh, our critic on justice issues, said this morning that mandatory minimum sentences in this case would be beneficial because of the $1 million penalty.

For clarification, this morning we were talking about this in debate and we are in favour of mandatory minimums for this type of crime.

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

Madam Speaker, both in my speech and in the speech of the member for Windsor—Tecumseh we talked about the need for us to look at the U.S. practice, particularly as it applied to Ponzi schemes and in reference to the southern Baptist fellowship and the millions of dollars that it lost.

The American practice is to go after those initial investors, who made good money on a Ponzi scheme, and get them to return the money. In the case of the southern Baptists and another case that involved a northeast organization, they were only too happy to return the money once they realized they were involved in a scheme. They had no knowledge of a Ponzi scheme going on until it was broken. We are looking for best practices and where we see best practices, we should be supporting them.

The regulators are the problem. Canadian regulators are pretty much non-existent. When we get to the point where people on Bay Street are not afraid of the Canadian cops, are not afraid of the Ontario Securities Commission but are afraid of the United States Securities and Exchange Commission, it means the U.S. has a much tougher regulatory regime than we do. The U.S. is able to catch these schemes before they develop into disasters.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, my colleague's intervention relates to a few things about which we have been talking.

Part of the legislation talks about mandatory minimum sentences if a crime is over $1 million. What do we do about seniors who have lost $100,000 of their life savings because of a Ponzi scheme? Does that crime not require severe punishment? Have their lives not been turned upside down?

When we talk about tougher legislation, we would like to see it become more difficult for people to take part in this kind of crime. When these criminals plot these cases, they do not think a senior will give them $100,000 after a telephone call. They actually put a lot of thought into this.

Our police forces, including the RCMP and great organizations like OPP PhoneBusters, do great work. We need to ensure that when law enforcement officers catch criminals who are fleecing dollars from our seniors and investors, that resources are available to prosecute these people. We have to ensure people have the necessary training to preside over a case so these criminals can be put behind bars to serve their time.

Our colleague from Windsor—Tecumseh and my colleague from Mississauga South told us about a case where $23 million to $27 million was taken from approximately 100 people. The prosecutors had to drop the case. We need to start looking at where we can put those resources to better serve Canadians.

[Paul Szabo, Liberal, Mississauga South, ON]

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

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

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

[Glenn Thibeault, NDP, Sudbury, ON]

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

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

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

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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[The Acting Speaker, Denise Savoie]

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

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

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

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

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

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

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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

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

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

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

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

[Paul Szabo, Liberal, Mississauga South, ON]

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

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

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

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

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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

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

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

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

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

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

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

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

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

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

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

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What are the major components of the bill?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What is wrong with the system in this country?

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

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

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

[Rodger Cuzner, Liberal, Cape Breton—Canso, NS]

Madam Speaker, it is always a pleasure to sit in on the debates when the member for York South—Weston gives his presentation. I know all in the chamber certainly have a great deal of respect for his interventions, yourself included, Madam Speaker.

The issue of mandatory minimums has been discussed and debated in this House a great number of times. I think we all have reservation, and the impact they have on reducing crime has proven to be minimal. Certainly if time in jail were any indication of a reduction in crime, there would not be any crime in the United States because the United States' answer to pretty much any social problems and to crime is to lock up people. I know that both Texas and California are rethinking their approach to mandatory minimums. California for the most part is bankrupt because of what it has done with its penal system.

That being said, I know there are some concerns about this bill. Some of the victims groups liked where the Liberal Party amendments were going. As well, the Canadian Bar Association is not totally enamoured with this bill. However, the RCMP has come out in support of the bill and believes it should be a deterrent to these types of crime. I am inclined, and some of my colleagues whom I have talked to about this are as well. It is not a crime of passion or revenge; it is not an emotional crime. This is a very pre-determined crime. It is an organized crime.

I would like my colleague's comments on that. Does this stand apart from other crimes with regard to whether or not mandatory minimums might have an impact on this type of crime?

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

Madam Speaker, I appreciate the member's question and his comments with respect to the House listening to the overview that I have given. That is greatly appreciated.

I think the House really appreciates the nature, culture and difference of the scheming that goes on with respect to this type of fraud. It is hard to compare mandatory minimums in other issue areas to this particular type of crime. I would reference that the minimum sentence proposal in this bill will apply when the value of subject matter of a number of fraud offences totals over $1 million, but let us look at the manner in which it would be applied.

For example, if a person is convicted of 10 fraud offences of $125,000, the judge must impose a sentence of at least two years. On the other hand, the minimum sentence applies solely to a person convicted of the general offence of fraud under the subsection.

The bottom line is that, in this case, the mandatory minimum is an attempt through the criminal justice system to give a signal that it does not matter the huge magnitude of the scheming, and so on, but it is the nature with respect to restitution that may be sought and ordered by the judge to pay back the victim, as well as to dispel the idea that one can get away with this. Even if it is a $125,000 fraud, the mandatory minimum will kick in.

So in its attempt to dissuade, to prevent, to put the emphasis on prevention to some extent, I would not suggest that it goes the whole way, but to answer the member's question, with this type of crime, this is the type of amendment to the criminal justice system in terms of the application of mandatory minimums that hopefully will be more effective in prevention.

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

Madam Speaker, even with their 1,200 convictions in the last five years for crimes, versus our five, the Americans are still not satisfied with their system, because under the U.S. Securities and Exchange Commission, which is the regulatory body, they still have had to deal with these issues, such as the Southern Baptist Convention Ponzi scheme, Bernie Madoff and others.

All the evidence seems to point to the fact that there is a coziness that develops between the regulators and the people they are supposed to regulate. They keep hiring people from the companies that they are regulating. They attend the same Christmas parties and go to the same golf tournaments, and that seems to be part of the problem.

If they could appoint or hire people who have a law enforcement type of approach, I think we would all be better off. We would be able to catch these schemes earlier on.

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

Madam Speaker, I certainly do not put myself forward as an expert with respect to the kind of situation that exists in the United States. However, I do identify with the victims and the nature of victimization to which the member has made reference.

On the proposition that we have a single regulator, the role of the single regulator and the issues with respect to the Bank Act and the responsibility of accessory after the kind of crime that occurs, we can recall that when we had seniors victimized, where they actually lost their property, there was not even any concern with respect to the banks asking the appropriate questions for detail or law firms being brought into the equation with respect to accountability.

To answer the question, I think the review of the regulatory regime should encompass the kind of questions that had been asked, the kind of—

[The Acting Speaker, Denise Savoie]

Order. I must interrupt the hon. member. His time has lapsed.

Resuming debate, the hon. member for Newton—North Delta.

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

Madam Speaker, I will be sharing my time with the hon. member for Richmond Hill, who is my good friend and always has very positive contributions to the House. I would also like to thank the member for York South—Weston, who spoke earlier with passion. This legislation is very important to me.

In British Columbia, we go out to the neighbourhoods and crime is one of the key issues we are facing in our communities. I would like to brief Canadians today on Bill C-21. This legislation includes a mandatory minimum sentence of imprisonment for two years for fraud valued at more than $1 million, it provides additional aggravating factors for sentencing that requires the consideration of restitution for victims, it allows sentencing courts to consider community impact statements, and it allows courts to issue prohibition orders preventing convicted persons from contacting the property and money of others.

This past week in Vancouver, there was a terrible incident of gang violence in the heart of a residential neighbourhood. There were 10 people shot and residents were left fearful for their safety. With this type of terrible violence, much like the case of Ephraim Brown, an 11-year-old gunfire victim in Toronto who was caught in the crossfire of gang violence, it is easy to place all of the emphasis on this kind of crime. But we cannot forget about the impact of white collar crime, where families, seniors and the most vulnerable of society can be completely destroyed as a result of criminal acts of fraud.

Just last year we learned about Earl Jones, who took over $50 million from dozens of victims in a 20-year-long Ponzi scheme run out of Montreal. Some of those victims included his own family members. These crimes are often overlooked in terms of the way our justice system responds. These criminals face a slap on the wrist, and more often than not, receive minimal jail time.

Fraud across Canada is reaching epidemic proportions. The latest figures available for 2007 show that there were 88,286 reported incidents of fraud in Canada. What was the conviction rate of these crimes? It was very low, a pathetic 11%. Of that 11%, only 35% received jail sentences, with over 60% receiving probation or a lesser penalty.

This is why it is so frustrating that both the NDP and the Conservatives have voted against a Liberal amendment to Bill C-21 that would have ensured a two-year mandatory minimum prison sentence for criminals who defraud the public through things such as Ponzi schemes.

The amendment would have done two things. Not only would these criminals have faced stiffer mandatory sentencing, but it would have also increased the time served before a white collar criminal could receive parole. There is absolutely no justification for the positions of both the NDP and the Conservatives that were taken in the committee meetings.

Victim groups and those who have had their life savings taken from them testified in front of the justice committee last year to ask for the very measures that this Liberal amendment would have provided. The changes suggested by the Liberal Party came directly as a result of listening to the people.

It is very important for us to go into the communities and listen to the people who have sent us to Ottawa to represent them, instead of listening to the leader of the Conservative Party, the Prime Minister, and take the message back to the communities. That is why my constituents, other Canadians and I would like to know from the members of these two parties, the NDP and the Conservatives, how they can possibly justify their vote to squash such measures.

The government talks a lot about being tough on crime and making criminals take responsibility for their actions. Yet when it comes to white collar crime, as usual, they play politics and vote down amendments that were in the best interest of all Canadians. Similarly, the NDP often plays a champion of victims' rights and protecting average Canadian families and seniors against schemes that take advantage of others. Yet in both cases, their rhetoric does not match up to their actions.

We are talking about people having their entire life savings, their long-term plans for retirement, and their hopes and dreams for the rest of their lives taken away from them. These white collar criminals have no regard for their victims, and just because they are not using a weapon such as a knife or a gun does not mean that they deserve a free ride on the backs of innocent victims of white collar crime.

Lives have been ruined as a result of these individuals. Seniors who have saved their entire lives to enjoy retirement have been forced back to work because they were robbed of their nest egg. Families trying to build a future for their children have been forced to take out loans to fund their children's education. Young couples looking to make an investment to build their future have been destroyed, and many marriages have broken up as a result.

The societal costs of these kinds of crimes are unimaginable. We as members of Parliament, regardless of what party we belong to, have an obligation to protect our constituents. Fraud and Ponzi schemes know no boundaries when it comes to region, race or financial background. Within society, the rate of these crimes has been increasing rapidly because our justice system has done little or nothing to deter those types of crimes. The reward far outweighs the risk at the moment.

The will of the House was to send Bill C-21 to the committee stage to listen to interest groups representing victims and to craft the best piece of legislation possible to really crack down on white collar crime. Yet after hearing from these victims groups, the NDP and the Conservative government chose not to listen to their requests. The scope of this bill in its current form is far too narrow when it comes to defining fraud, and it does little to provide a foundation to fight it.

There is no mention of increasing resources to police departments across the country to properly tackle these criminals. As I mentioned, there are no provisions for longer periods before parole eligibility; and it attaches a dollar figure to mandatory minimum sentencing when the act of Ponzi schemes such as the one in Montreal should not be punishable simply by the threshold of a single figure.

[The Acting Speaker, Denise Savoie]

It being 5:53 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The hon. member will have his period of questions and comments when this comes back on the orders of the day.

(Bill C-21. On the Order: Government Orders:)

December 14, 2010--Third reading of Bill C-21, An Act to amend the Criminal Code (sentencing for fraud)--Minister of Justice.

(Bill read the third time and passed)

(Bill S-5. On the Order: Government Orders:)

December 10, 2010--Minister of Transport, Infrastructure and Communities--Consideration at report stage of Bill S-5, An Act to amend the Motor Vehicle Safety Act and the Canadian Environmental Protection Act, 1999.

(Bill concurred in at report stage)

The House resumed from October 29 consideration of the motion that Bill S-211, An Act respecting World Autism Awareness Day, be read the second time and referred to a committee.