Evidence of meeting #154 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Grahame Johnson  Managing Director, Funds Management and Banking Department, Bank of Canada
Nicolas Marion  Chief, Capital Markets and International Affairs, Securities Policies Division, Department of Finance
Marie-Josée Lambert  Director, Crown Corporations and Currency, Financial Sector Policy Branch, Department of Finance
Richard Wall  Managing Director, Currency, Bank of Canada
Justin Brown  Director, Financial Stability, Financial Sector Policy Branch, Department of Finance
Léticia Villeneuve  Economist, Trade Rules, International Trade and Finance Branch, Department of Finance
Michèle Govier  Senior Director, Trade Rules, International Trade and Finance Branch, Department of Finance
Annie Moulin  Acting Director, Arctic Science Policy Integration, Department of Indian Affairs and Northern Development
Patrick Barthold  Director, Northern Governance and Partnerships Directorate, Northern Governance Branch, Northern Affairs, Department of Indian Affairs and Northern Development
Christian Sylvain  Director General, Corporate and Government Affairs, Canadian Institutes of Health Research
Jeannine Ritchot  Executive Director, Regulatory Cooperation, Regulatory Affairs Secretariat, Treasury Board Secretariat
Don Parker  Director, Strategic Policy, Communications Security Establishment
Julie Lalonde-Goldenberg  Director General, Partnerships Development and Management Directorate, Department of Employment and Social Development
Andrew Brown  Acting Director General, Employment Insurance Policy, Skills and Employment Branch, Department of Employment and Social Development
Cara Scales  Director, Policy Analysis and Initiatives, Employment and Insurance Policy, Department of Employment and Social Development
Catherine McKinnon  Senior Counsel, Judicial Affairs, Courts and Tribunal Policy, Department of Justice
Anna Dekker  Counsel, Judicial Affairs, Courts and Tribunal Policy, Public Law Sector, Department of Justice
Manuel Dussault  Senior Director, Framework Policy, Financial Sector Policy Branch, Department of Finance
Julien Brazeau  Senior Director, Framework Policy, Financial Sector Policy Branch, Department of Finance
Jeremy Weil  Senior Project Leader, Financial Sector Policy Branch, Department of Finance
Saskia Tolsma  Senior Economist, Sectoral Policy Analysis, Economic Development and Corporate Finance, Department of Finance
David Dewar  Director, Strategic Policy & Government Affairs, Policy & Strategic Direction, Department of Western Economic Diversification
Selena Beattie  Director of Operations, Cabinet Affairs, Legislation and House Planning, Privy Council Office
Marianna Giordano  Director, CPP Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development
Ann Sheppard  Senior Counsel, Criminal Law Policy Section, Department of Justice

9:25 p.m.

Director, CPP Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development

Marianna Giordano

If we look at the participation of young people in the labour market, we see that, when they have a child at age 18, their earnings are generally much lower than when they have a child at age 35. In general, people have a lower income when they are young, but we are also seeing that women are waiting until later in life to have children.

Ultimately, it will depend on each individual's earnings.

9:25 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

I'm simply trying to determine whether or not this system is better.

What do you think?

9:25 p.m.

Director, CPP Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development

Marianna Giordano

I cannot answer that, but I can tell you that the enhancement is structured very differently than the base benefit and that it adapts much better to the situation. The enhancement is based on years of service. We always use the best 40 years to calculate the pension.

When it comes to the base benefit, we are talking about an average of years. If we calculate an average, we take out the low earnings and periods. That does not happen in the case of the enhancement. The enhancement is always based on an accumulation. Rather than including zeros, we are crediting people with earnings. This practice is used in many countries, including Belgium, Sweden, and Japan. Systems that exclude earnings are the exception rather than the rule.

9:25 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Does the system pass the gender-based analysis tests?

9:25 p.m.

Director, CPP Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development

Marianna Giordano

I have to say that most of the enhancements in this bill are directed more at women than men because women are the ones who leave the labour market to take care of children, they are more likely to suffer from disabilities, and they are widowed at a younger age.

9:25 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

You seem to be saying that women who have children at a young age will no doubt be penalized by the measure.

9:25 p.m.

Director, CPP Policy and Legislation, Income Security and Social Development Branch, Department of Employment and Social Development

Marianna Giordano

Depending on their earnings, young women will likely receive lower amounts, but thresholds have been set for parents who have not accumulated sufficient earnings.

9:25 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Okay. Thank you.

9:25 p.m.

Liberal

The Chair Liberal Wayne Easter

Do any of you want to add anything else? Okay.

Thank you for your endurance hanging around with us for three hours this afternoon and evening.

Thank you very much.

The last division is division 20, Criminal Code.

We have Ms. Sheppard from Justice Canada.

Madam Sheppard, the floor is yours.

9:25 p.m.

Ann Sheppard Senior Counsel, Criminal Law Policy Section, Department of Justice

Thank you very much.

Division 20 of part 6 would create a remediation agreement regime in a new part of the Criminal Code. It would be XXII.1.

What is a remediation agreement? A remediation agreement is a made-in-Canada version of what other countries call a deferred prosecution agreement, which is essentially an agreement between a prosecutor and an accused whereby charges are stayed pending successful completion of the terms of an agreement that the parties make between them.

Remediation agreements would be a new tool for prosecutors in Canada to use at their discretion in appropriate circumstances where it's in the public interest to do so. They would be available for use in addressing corporate criminal wrongdoing, so serious economic crimes that are listed in the schedule that a corporation or an organization has been alleged to have committed.

The regime in the Criminal Code has a purpose clause that outlines the importance of making sure that the agreement constitutes an effective, proportionate and dissuasive penalty. Another purpose is to provide for reparation for harms done to victims and it is there intended to reduce the negative consequences to uninvolved third parties.

What the regime does is it sets out factors that the prosecutors are to consider in determining whether a remediation agreement would be appropriate, such as the the gravity of the offence, the degree of involvement of senior management of the corporation, whether the company is willing to identify implicated individuals, that sort of thing. There is an invitation to negotiate that the prosecutor issues to a company and part of the code sets out what that would contain. It would explain that the negotiations must be carried out in good faith. There would be a time limit for accepting the terms, and there's a lot of other procedural detail set out in the draft bill.

There are mandatory contents of remediation agreements so they must all have an agreed statement of facts. The company must admit responsibility for the act or omission that would constitute the offence. They have to co-operate. They have to forfeit any property that they've obtained through the commission of the wrongdoing and they have to pay a penalty. They have to make reparations or explain why that's not viable in the circumstances, if the victim cannot be identified, for example, and they have to pay a victim surcharge. Those are just some of them.

There are also optional conditions that may be included, and that can be anything, but the code would set out three. One of them is an obligation to enhance the compliance measures that the company has in place, such as training of employees. Another is to appoint an independent corporate compliance monitor to monitor the company's compliance with the terms of the agreement, in particular, the enhanced compliance measures, but it could be other....

There are four court processes. One is to approve the agreement; once the company and the prosecutor have negotiated what they considered to be a fair agreement, they go to court. The court will approve it if they are satisfied that the organization has been charged with an offence, that the terms are fair, proportionate, reasonable, and in the interests of justice. They will specifically advert to the victim reparation term.

During the course of the agreement, which could last— it's negotiated between the parties—in other jurisdictions three to five years, typically, the prosecutor may go back to court to vary the terms, typically to extend it to give the company more time to comply. They could go back and terminate it if there's non-compliance and it looks like there's no possibility of compliance. At the end of the process, the prosecutor will go back to the court and seek a declaration of successful completion, and the company can say they've been cleansed, that there are no proceedings hanging over their heads.

For transparency reasons, there is a requirement to publish all the orders as well as the agreement itself. That is for other companies to see the kinds of terms that might be negotiated, if they were in a similar situation.

There's authority to promulgate regulations to deal with compliance monitoring because it's new in the Canadian criminal system, but there's enough detail that it could operate without the regulations.

The offences to which it would apply are set out in a schedule. There are 31 of them right now, but there is a power of the Governor in Council to add or take away offences. The coming into force would be 90 days after royal assent.

In a nutshell, that's what it does.

I'm happy to answer any questions.

9:35 p.m.

Liberal

The Chair Liberal Wayne Easter

I have Mr. Fergus on the list, and then Mr. Albas.

9:35 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

Thank you very much, Ms. Sheppard, for drawing the short straw and being here with us very late.

Actually, I do have some serious questions about this. I have to admit, I did not read this provision before coming here tonight. I got through most of it, but not all of it. Perhaps you can help me out.

What strikes me as being wrong is that these remediation provisions seem to be focused on white-collar crime, or at least limited to white-collar crime. I was just going through sections 404 and 405. Please correct me if I'm wrong and if there are other provisions in the Criminal Code that allow for similar kinds of remediation agreements for non-economic crimes.

9:35 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

First of all, this came from a consultation on economic crime, so it's the result of that. It was a government-wide consultation that was carried out throughout the fall.

It is unique because there are diversion schemes in the Criminal Code for individuals, but there is no possibility of imposing a fine. That's part of the reason that this is a statutory scheme.

It's also aimed at emulating one of the goals in other countries' regimes, which is to encourage companies to come forward and admit to wrongdoing to enhance detection. There is a requirement that the company make reasonable efforts to identify implicated individuals so that they can be prosecuted. That's how it works.

9:35 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

It leaves a bad taste in my mouth in the sense that it seems we're going to let off people who would commit a very serious economic crime, which has very serious effects against those who are not capable of negotiating these agreements in other crimes they might be victims of or are perpetrators of. We seem to be letting off people in white-collar crimes with a little slap on the wrist.

In fact, if we're going to do this kind of remediation, it seems we would want to extend this to other forms of crime, where we would be better off not putting people in jail, or having them face stiffer mandatory penalties. It's just something that strikes me as being a little off here.

I understand the purpose of trying to negotiate with companies to encourage them to come forward, to admit, to not litigate, so that we can make some reparations. Again, though, it seems that we're letting those with the means have an easier time of it than those who don't have the means.

9:35 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

Well, it is true that some of the features, such as compliance monitoring, would not lend themselves to small-value crimes. That's for sure. It would be more likely used for larger-scale offences, and—

9:35 p.m.

Liberal

Greg Fergus Liberal Hull—Aylmer, QC

In a sense, then, if I steal $10, I'm in trouble, but if I steal $10 million, I can work this out—to be crude, sorry.

9:35 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

This regime is applicable only to organizations, which of course can't go to jail anyway. It's not available to natural persons, only to legal persons. Individuals would not be able to avail themselves of this regime.

As far as the types of offences go, it is possible to expand it in the future. What we heard from participants in the consultation was that we should keep it focused at the outset, because certain features of it, like the compliance monitoring, are fairly new in Canadian law. It was felt that it was desirable to keep it focused so we could see how it worked in practice.

9:35 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Albas.

9:35 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Thank you, Mr. Chair.

I appreciate your presence here today, Ms. Sheppard.

In what section of the budget book was this particular proposal?

May 8th, 2018 / 9:35 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

I don't know the exact section, but it was a commitment made in the budget speech.

9:40 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Was there a direct reference?

9:40 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

There was a direct reference to it.

9:40 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Regardless of whether it was in the budget document, I think that this is not a good provision to have as part of an omnibus piece of legislation, especially to have it in the last section. That is no criticism on you. I'm simply pointing out a few things for the record. This is quite a change of approach.

Given the fact that the Governor in Council can add to a schedule and add or delete other crimes, we are giving a tremendous amount of discretion. Considering that, this should be a separate bill or part of one of the other omnibus bills—I think it's C-75—where at least the justice committee could hear this directly and take a look at this to see if this is the right approach.

I have deep concerns. Even the fact that you can have the bribery of a foreign official, to me that is not just an average, everyday, white-collar crime. That is something that someone who is politically connected or at a very high level in business can do. I share many of Mr. Fergus's concerns that some people will view this as a way to remediate your way out of jail if you are connected. I have some deep concerns here. I would really hope that we could talk about separating this out or at least have the justice committee review this, because this is a fundamental departure from the way we handle the Criminal Code.

I'm all for new thinking, but to have this as the last division in an omnibus bill—believe me, I have no issue with having justice as remuneration as part of a budget bill. You need to put it somewhere. To have a stand-alone bill for such a small section on something that is so routine—I get that—but this is not an appropriate use, in my understanding. This does not help the economy. In fact, it may encourage some people to push the envelope.

Mr. Chair, I don't know what to say other than maybe we should probably consider hiving this off and sending it to the justice committee. I'm not sure that's going to do me any good though.

9:40 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you, Dan.

Go ahead, Mr. Dusseault.

9:40 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Thank you, Mr. Chair.

I will not repeat what my colleague just said, but I had the same reaction when I read that section. I wondered how the Standing Committee on Finance would be able to analyze this section and ensure that it is given the necessary attention given the nature of the proposed changes.

That being said, I would like to ask you what motivated this change. Was there a particular case that led you to propose such a change in order to deal with similar situations? Could the amendments that you are proposing today apply to a railway responsible for a derailment that destroys a downtown?