Finance Committee on May 23rd, 2018

[The Chair, Liberal, Wayne Easter]

We're on amendment CPC-10, which is proposing a new clause, clause 198.1.

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, I will simply ask for a recorded vote, and ask reasonable minds to support a reasonable measure.

Thank you.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I would like to ask a question about amendment CPC-10, which says that the coming into force will be after the publication of the report on the coming into force of section 271.

I would like to know if the witnesses think it would be possible to bring the act into force after the tabling of the annual report which, according to the bill, will be tabled on the second anniversary of the act. It isn't clear to me how such a process could be implemented.

[The Chair, Liberal, Wayne Easter]

Do any of the witnesses have anything to add?

Mr. Mercille.

[Pierre Mercille]

I can't really speak to the specifics of this, but this is also something I asked myself when I read this amendment.

I wondered how that could be done. The act provides for a report, but it would be issued before the act comes into force. In chronological terms, this isn't very typical.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Exactly.

We're told that this act will come into force once the report is tabled, but how can a report be tabled if the act isn't in force?

[Pierre Mercille]

Exactly.

[The Chair, Liberal, Wayne Easter]

Mr. Moffet, do you want to add something else?

[John Moffet]

There's another issue. The trigger established in new clause 198.1 is a report that would have been required pursuant to an amendment that was defeated. That report is not going to be produced, so there will be no trigger here.

[The Chair, Liberal, Wayne Easter]

We will vote on it, as to whether to rule it out of order.

(Amendment negatived [See Minutes of Proceedings])

We'll go through some routine motions, and I believe there's an amendment to schedule 6.

Shall the short title carry?

[Some hon. members]

Agreed.

[An hon. member]

On division.

[The Chair, Liberal, Wayne Easter]

Shall schedules 1 to 5 inclusive carry?

(Schedules 1 to 5 inclusive agreed to on division)

(On schedule 6)

There's an amendment to schedule 6 that was proposed earlier.

Ms. O'Connell.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Mr. Chair, again, I think this is for everybody. It's a technical amendment.

[The Chair, Liberal, Wayne Easter]

Ms. O'Connell, I believe there's a witness coming forward.

Thank you, gentlemen, for coming forward, for waiting while we voted, and for answering any questions we had.

From Justice, we have Ms. Sheppard at the table.

Ms. O'Connell, the floor is yours.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

It reads that Bill C-74, in section 1 of the schedule to part XXII.1 in schedule 6 on page 556, be amended by adding the following after paragraph (z.3):

(z.4) section 462.31 (laundering proceeds of crime).

This is simply in the list of offences, including laundering of the proceeds of crime.

[The Chair, Liberal, Wayne Easter]

Mr. Dusseault first, and then Mr. Albas.

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

My question is for the representative from the Department of Justice.

What mechanism or process was used to create the list of offences in Schedule 6?

We know that one offence was omitted, but were there any other omissions that we should know about before adopting Schedule 6?

[Ann Sheppard]

Thank you very much for the question. The offences that are included in the schedule are all of the nature of what we would call serious economic crimes, such as frauds and bribery, under the Criminal Code and also under the Corruption of Foreign Public Officials Act, foreign bribery and the “books and records offence”.

Money laundering is of that nature. Some of the regimes have it in there. It was felt initially that it wasn't necessary to have it on the list, because the idea is to start with a focused list and then possibly, over time, add offences to it. The reason it was not considered to be absolutely essential at the outset was that the underlying conduct would be covered. Money laundering would be in respect of an underlying offence that would likely be in the list if it fell within the scope of economic crime. There was a concern that money laundering sometimes may be associated with organized crime; that concern was in the public consultation that we did. That was not considered by most participants to be the kind of thing that this regime should be used for.

However, there is a provision that makes it clear that it would not be appropriate to use this regime for any situation that involves organized crime and other things such as serious bodily harm resulting from a conduct. It is of the nature that could be included in the list. If the underlying conduct involved organized crime, it wouldn't be appropriate. That concern has been addressed elsewhere. It could be included; it is of the nature of economic crime offences that is intended to be covered according to what participants to the consultation favoured.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

I'm not sure I understood whether the participants in the public consultation were in favour of adding money laundering to the list or were opposed it.

If the majority were in favour of this idea, why was this offence not included in the original document that was provided to us? Why, then, was an amendment tabled?

[Ann Sheppard]

They did not opine specifically on money laundering. The majority view was that the list of offences should be limited to serious economic crimes. Money laundering where a predicate offence is a bribery or a fraud would be part of that. At the same time, there also were some concerns about using this regime for situations that could involve organized crime, so it was at that point not included. However, the problem has been addressed through another subsection.

It is the kind of thing that could be added. As you may note in the regime, offences can be added to it by order in council; however, it's more transparent to do it this way, while it's going through parliamentary scrutiny.

[The Chair, Liberal, Wayne Easter]

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Mr. Chair, as I said prior to this, in all of our discussions on division 20 in the bill.... This is certainly not because of anything Ms. Sheppard has done. She's a fine public servant, and I appreciate her presence here. But again, this is the wrong body to be examining this. The justice committee could have called witnesses, academic, legal, and other concerned stakeholder groups, to give this the full scrutiny it deserves.

What I find even more offensive in the amendment that has been put forward by Ms. O'Connell is directly this. In a five-year statutorily required review, we are studying Canada's money-laundering laws. We have yet to make any recommendations to the Government of Canada in regard to that. Here we are, a finance committee, putting such a serious economic crime as money laundering into a schedule that will apply and that will give the rough equivalent of a “get out of jail” card for those who agree to a deferred prosecution agreement.

We have not studied division 20 in depth. We've had no witnesses, save Ms. Sheppard. In my view, we are not the body, despite the fact that we have some very distinguished members here—I hold them all in quite good stead—that should be studying this departure from the criminal justice system. There's irony in our making recommendations on whether or not money laundering should be included as part of this new regime when we have yet to even conclude, or even hear any evidence, that this regime should be put in place for dealing with a serious economic crime like money laundering.

I would hope that government members would see that as being not a proper process. We are going to be travelling internationally to find out what other countries are doing, and here we are including that in a deferred prosecution agreement without having heard any single person beyond someone from the Department of Justice on the rationale as to why it should be included.

Again, I hate to be that stick in the mud, Mr. Chair, but I guess I'll be that stick in the mud and say that this is the wrong body and that this is at the wrong time. If we were to make such a judgment, it should be after our including it in our money-laundering review on the regime we have in Canada.