Finance Committee on May 8th, 2018

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

Bill C-74

Members speaking

Before the committee

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

9:40 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

It can't apply. There's an exclusion for situations where there has been serious bodily harm or death. It cannot apply in those situations.

In answer to your first question, it was not motivated by any particular case, but it's something that is being considered in other countries or has been in place in other countries. It's been in the U.S. since the 1930s, but they've started using it more since the Enron case, when a lot of employees lost their jobs. The U.K. has enacted it. Australia has legislation going through their house right now.

It's something that businesses have said that we should be looking at in Canada. It was part of an economic crime consultation. There were two discussion streams. One was on the regime for procurement debarment. It went forth as an economic crime consultation in that context.

9:45 p.m.

Liberal

The Chair Liberal Wayne Easter

Ms. Sheppard, what I'm hearing to a great extent here is that nobody is arguing against the concept, but there is a huge question of whether this should be in a budget bill. Even I will say that.

Mr. Poilievre, did you want in?

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Yes.

I just want to make sure I understand the provision. Division 20 of part 6 would allow those who are suspected of the crimes of stolen property, fraud, insider trading, and bribery of a foreign public official to avoid prosecution by signing onto a deferred prosecution agreement, obeyance of which would allow them to avoid charges altogether and prevent prosecution from pursuing them on the same offence.

Do I have that right?

9:45 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

Almost, but they would have to be charged for the agreement—

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

They would have to have been charged.

9:45 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

That's why we call them “accused”; we refer to “accused” at the outset.

The prosecutor would have to be convinced that the prosecution threshold had been such that there was a prospect of conviction, that the evidence was there. They could invite them to negotiate the terms, but the agreement itself could not be approved until the court was satisfied that they had been charged. They could be charged years ago or right up until the last minute, but they have to have been charged before the agreement could be approved by the court and take effect.

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

What would you say is the precise difference between this and a guilty plea?

9:45 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

The guilty plea would result in a conviction.

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Right, whereas this would mean that they would have no conviction.

Would there be any penalty?

9:45 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

The penalty would be the terms of the agreement, and as I mentioned, there are mandatory terms. They have to pay a fine, a financial penalty. They have to forfeit any profits that they have obtained and disgorge any benefits they have as a result of their conduct. They would have to make reparations to victims or explain why they can't do that. They would have to pay a victim surcharge. Especially if compliance monitoring is involved, they would have to pay for that, which can be very significant financially. They would have to make a sincere effort to comply.

First of all, it's up to the prosecutor to determine, in their absolute discretion, whether to offer to negotiate. They have to be convinced that it's in the public interest, and the court has to be convinced that it's in the public interest. Also, partway through, either party can withdraw from negotiations, or the prosecutor can apply for termination. If they don't believe the compliance and remediative effect is being achieved, they can terminate and resume the prosecution. There's the threat of that, too, out there until it's finished.

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Are these all offences that are prosecuted by the Director of Public Prosecutions or the Public Prosecution Service of Canada?

9:45 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

Not necessarily. They could be prosecuted by the provincial prosecutors as well.

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Yes, because it's in the Criminal Code.

9:45 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

Unless the Public Prosecution Service of Canada is operating within the—

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Yes, contract prosecution.

9:45 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

Yes. The AG's consent is required as delegated, so it would likely not be private prosecutors but any public prosecutor.

9:45 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

By the AG, you mean that the authority, for example, at a federal level is delegated to the DPP, and at the provincial level is delegated to the crown attorney bureau in their respective province.

For such agreements to occur, would the public prosecutor have to agree that this is an appropriate remedy? Okay, so this would not. If someone were charged with these offences, they would not automatically have recourse to this deferred prosecution agreement. It would only occur if lawyers from the defence and the prosecutors agreed that it was appropriate.

9:50 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

The prosecutor has to be convinced that negotiating the agreement is in the public interest and appropriate in the circumstances, and then there are a series of factors the prosecutor has to consider in determining whether that's the case. There are the circumstances in which the act or omission came to light. Did they disclose proactively or did they hide their conduct? There's the gravity of the omission, whether corruption was rampant throughout the senior ranks, and whether the organization has taken disciplinary measures against the individuals who caused it. There are a whole bunch of factors they would have to take into account in arriving at the determination that it's in the public interest, and they are under no obligation to offer this when it's at their discretion.

9:50 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Did this come from any kind of recommendation from provincial prosecution services? Who asked for this?

9:50 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

It came as a result of a public consultation. It was a Government of Canada consultation, as I mentioned, that had two discussion streams. It was a broad consultation. There were NGOs, accountants, business associations, prosecutors, small and medium-sized enterprises, so there was quite a diversity of views. Individual prosecutors made submissions. It attempts to respond to the feedback that was given by the vast majority, actually.

9:50 p.m.

Conservative

Pierre Poilievre Conservative Carleton, ON

Okay.

9:50 p.m.

Liberal

The Chair Liberal Wayne Easter

Mr. Albas, you have the last question, I believe.

9:50 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Thank you, Mr. Chair.

I'm going to actually ask some questions now.

In regard to this, I would say probably the attorney general of each province would be the one to decide whether or not they would actively use these DPAs. Is that correct?

9:50 p.m.

Senior Counsel, Criminal Law Policy Section, Department of Justice

Ann Sheppard

Do you mean the remediation agreement?

9:50 p.m.

Conservative

Dan Albas Conservative Central Okanagan—Similkameen—Nicola, BC

Yes, the remediation agreements. They would be the ones who decide whether or not they were appropriate to be used in their jurisdiction. Is that correct?