Justice Committee on June 8th, 2009

[Some hon. members]

Agreed.

On division.

[The Chair, Conservative, Ed Fast]

Thank you.

We'll suspend for a few minutes.

[The Chair, Conservative, Ed Fast]

We'll reconvene the committee meeting and continue our review of Bill C-26 on auto theft and trafficking in stolen property.

We have a number of witnesses to help us in our study. Representing the Insurance Bureau of Canada, we have Richard Dubin and Dennis Prouse. Representing the Ontario Sewer and Watermain Construction Association, we have Frank Zechner and George Kleinsteiber. Representing Statistics Canada, we have Lynn Barr-Telford--welcome back--as well as Mia Dauvergne. Finally, representing the Winnipeg Police Association, we have Mike Sutherland, who is appearing by teleconference. Welcome here, Mr. Sutherland.

[Mike Sutherland, President, Winnipeg Police Association]

Thank you very much. It's a pleasure to be here.

[The Chair, Conservative, Ed Fast]

Each one of your organizations has five minutes to present. If you go a little over, it's all right, but we also want to leave some time for questions on this very important bill.

We'll begin with the Insurance Bureau of Canada and Mr. Dubin.

[Richard Dubin, Vice-President, Investigations, Insurance Bureau of Canada]

Thank you, Mr. Chairman, for the opportunity to address the committee.

The Insurance Bureau of Canada is the national trade association representing Canada's home, car, and business insurers.

My name is Rick Dubin, and as vice-president of investigations, I lead and coordinate our industry's fight against auto theft. With me today is Dennis Prouse, director of government relations.

For a number of years, our industry has seen the costs associated with auto theft rise. Our investigative team, in turn, has seen sharply increased implications of organized criminal activity in auto theft. Simply put, the days of the joyride have been replaced with sophisticated criminal rings bent on stealing automobiles, because the current penalties associated with this theft are so lenient and the profits are so attractive. These criminals steal vehicles and chop them up to sell parts. They switch the vehicle identification number to change the identity of the stolen vehicle, which is then sold to an unsuspecting consumer. And they export thousands of high-end vehicles through Canadian ports each year to overseas destinations where they can fetch a much higher price than here at home.

In 2007, almost 150,000 vehicles were stolen in Canada--exactly 146,142, to be precise. That cost auto insurance policyholders approximately $542 million. In that year, every policyholder in Canada paid an average of about $35 of their auto insurance premiums to finance costs incurred by the acts of car thieves.

When we include police, the health care system, and court costs, the cost of auto theft climbs to well over $1 billion each year. Many of these resources are spent precisely because car thieves repeatedly come in and out of the justice system. Under the current Criminal Code provisions, jail time is rarely handed out, and auto theft is viewed as a largely victimless transgression.

Mr. Chairman, I want to tell you that auto theft is far from a victimless crime. A few years ago we witnessed the deaths of two teenagers in a taxi, struck by a stolen vehicle in Ontario. Detective Constable Plunkett, a York Regional Police officer, was killed trying to stop the theft of an airbag. And in 2004 in Nova Scotia, it was the death of Theresa McEvoy at the hands of a repeat auto theft offender that prompted citizen outrage and a call for action.

With the involvement of organized crime so pervasive in the business of auto theft, with profits so lucrative, you will perhaps not be surprised to hear that Canadian and American intelligence authorities suspect that auto theft is a possible means by which terrorist groups may be financing themselves. Canada is an attractive place in that regard.

Recovery rates of stolen vehicles continue to decline. A few short years ago the national recovery rate was 70%. In 2007 that rate dipped to 64%. Montreal has the highest volume of stolen vehicles in Canada, as well as the lowest recovery rate of 31%.

Just recently, in May 2009, two men were criminally charged as part of an alleged auto theft ring operating in Norfolk, Haldimand, and Brant counties in Ontario. According to the Ontario Provincial Police, the operation involved the altering of vehicle identification numbers and the exporting of stolen vehicles.

So you can understand why more and more citizens and governments in this country are asking for action to deal with auto theft. You can understand more fully why we are here.

Fortunately, Bill C-26 addresses the auto theft reoffender involved in organized crime who engages in this dangerous activity purely for profit. It recognizes auto theft as a separate and serious offence under the Criminal Code. And while it proposes mandatory minimum sentences, it only does so for the third and subsequent offences. This is a very reasonable step to deal with the reality of repeat offenders.

Mr. Chairman, Canadians have the right to feel safe in their own communities. The growth of auto theft, however, and its increasingly violent nature, is compromising our safety. The growing presence of organized crime in auto theft is an even more troubling development that further threatens the safety and security of Canadians. On behalf of the Insurance Bureau of Canada, our members' companies, and the policyholders they serve, I urge you to vote in favour of Bill C-26 in its current form.

Canadians count on their parliamentarians to stay on top of changes in our world that impact on our lives. When money laundering by organized crime became a problem, Parliament acted. When issues surrounding privacy and identity theft became a concern for Canadians, Parliament acted. Now that the nature of auto theft has changed with the increased involvement of organized crime, now that it is threatening the safety and security of Canadians, parliamentarians are again taking action in the form of Bill C-26.

Thank you for your time, and we look forward to answering your questions.

[The Chair, Conservative, Ed Fast]

Thank you, Mr. Dubin.

We'll move to either Mr. Zechner or Mr. Kleinsteiber.

[Frank Zechner, Executive Director, Ontario Sewer and Watermain Construction Association]

My name is Frank Zechner. I'm the executive director of the Ontario Sewer and Watermain Construction Association. With me is Mr. George Kleinsteiber, our anti-theft consultant for construction equipment.

I should note that Mr. Kleinsteiber is a former OPP officer, having 32 years on the force. Nineteen of those years were in the auto theft branch of the OPP as a detective constable. He had responsibility for investigation of all auto thefts, including heavy equipment, across Ontario.

The Ontario Sewer and Watermain Construction Association is also a member of the Canadian Construction Association, established in 1918, and it is a federal not-for-profit association representing Canadian construction contractors, suppliers, consultants, and other businesses.

A lot of the equipment of our members--both the Canadian and Ontario associations--is in public road allowances on a 24/7 basis. Consequently, it is a target for thieves. Both the Ontario Sewer and Watermain Construction Association and the Canadian Construction Association have had serious concerns about theft and vandalism of construction equipment, and both associations support the passage of Bill C-26, an act to amend the Criminal Code.

I'd like Mr. George Kleinsteiber now to give you some information on construction.

[George Kleinsteiber, Equipment Theft Consultant, Ontario Sewer and Watermain Construction Association]

I have some general statistics and trends. Construction equipment theft, although not as high as for automobiles or pickup trucks, is still a major concern across Canada. Last fall, as an example, four members of our association lost new-model Caterpillar motor graders. Each one of these was worth a quarter of a million dollars, and you can imagine the number of Honda Civics, in dollar value, you would need to add up to the value of these four stolen machines.

There are challenges associated with the lack of industry standards. VINs on heavy equipment can range from four digits through to 17 digits, whereas automobiles and other vehicles on the road are all regulated and built with a 17-digit mathematically generated VIN. This creates difficulty for law enforcement officers attempting to identify construction equipment.

There are challenges also associated with the lack of industry standards for specific location and methods of fixation for VINs. Again, consumer vehicles such as automobiles all have their VIN attached in a uniform location. Construction equipment has no such guidelines, and this problem weighs heavily on both police officers and Canada customs agents trying to identify suspected stolen equipment. Because there is little or no training on where to find VINs, the recovery of this type of equipment continues to be low.

[Frank Zechner]

Both the Canadian Construction Association and the OSWCA believe that proposed subsections 353.1(1) and (2) provide law enforcement officials with needed assistance in combatting auto and construction equipment theft by making it an offence to partially alter, remove, or obliterate a VIN on a motor vehicle. However, we are concerned about proposed subsection 353.1(3). Both the OSWCA and CCA are concerned that the exceptions are too broad. The specific phrase used for the exemption in subsection 353.1(3) is: “Despite subsection...it is not an offence to”. That particular phrasing is not used in any other provision of the Criminal Code or in any other federal legislation. The novelty of that exemption phrase, as well as its very existence, raises concerns on our part that the courts may interpret the exemption too broadly.

[George Kleinsteiber]

The addition of proposed subsection 351.1(3) is, in our view, likely to provide an unwarranted defence to persons charged in relation to stolen vehicles or parts thereof. Proposed subsection 351.1(3) will give auto thieves a defence by merely giving the excuse that the VIN was removed or altered to repair the vehicle, or, in the case of thieves, to modify or to disassemble the vehicle.

In my 32 years of law enforcement I have never yet seen a reason why regular maintenance would force you to alter, remove, or obliterate a VIN. I've spoken to investigators with the Insurance Bureau of Canada, to the officer in charge of the provincial auto theft team in Ontario, and to auto theft investigators with the Peel Regional Police and York Regional Police, who all share my concerns about the new and unwarranted defences that criminals will have if proposed subsection 353.1(3) becomes law. There are already existing procedures in place through the motor vehicle safety regulations and the Insurance Bureau of Canada with regard to repairs to a vehicle where a VIN is removed, such as after a motor vehicle collision when damaged parts are replaced, at which point the VIN can be reapplied and the new VIN is clearly marked as a replacement VIN so as to combat the rebuilding of a wrecked vehicle with stolen parts.

In summary, the CCA and the OSWCA are very concerned that the addition of proposed subsection 351.1(3) will create a series of new defences for criminals engaged in automotive and construction equipment theft. We urge the committee to delete proposed subsection 351.1(3).

Thank you. We await your questions.

[The Chair, Conservative, Ed Fast]

Thank you.

We're going to go to Mr. Sutherland right now. You have the floor.

[Mike Sutherland]

Thank you very much. I certainly appreciate the opportunity to meet with you today via teleconference. I have to admit that, unfortunately, my ability to prepare for today's session is a little limited, but I'd be more than happy to answer any questions or to correspond, not only today but at a future date.

In terms of the Winnipeg perspective, I think I want to highlight how the situation here is definitely not without significant impact in terms of victimization. By way of background, I can indicate to you that we've had in 2007 and 2008 an individual who was seriously injured as a result of a deliberate attempt by auto thieves to run down joggers in a well-known jogging location. As well, we've had three other traffic fatalities where auto thieves were deliberately operating large vehicles in a menacing manner. There was no police chase. It was simply a smash-up derby on our streets, and three people lost their lives as a result.

I can also indicate to you that in the past three years we've had numerous occasions where officers have been deliberately rammed or attempted to be struck while on foot. These officers were attempting to intervene in stolen vehicle events. In Winnipeg, this is a definitive safety issue, not only for our officers but for public safety overall.

In terms of what's happened as far as combatting auto theft in Winnipeg, there are some particular frustrations that I think this legislation may certainly address. Auto theft is looked at primarily as a property crime, as I'm sure you're aware, equivalent to stealing a similar value of other goods. The difficulty with that, of course, is that with the emphasis on discouraging violent crime, property crime has sort of taken a back seat in that area. In Winnipeg, we found a very egregious example. One particular offender, who, between stealing cars, was being released on bail and in breaching those bail conditions, was arrested no less than 40 times before being incarcerated for auto theft-related offences or offences related to release on bail.

A study was done by our auto theft unit. Fifty of the top auto thieves in Winnipeg were identified and then were tracked with respect to their release conditions or their release status and the number of auto thefts in Winnipeg. I can tell you that when more than 40% of those top 50 offenders were on the streets, auto thefts rose by at least 20% or more. In terms of costs alone, with respect to damage to those vehicles—this is not the cost of medical treatment for those who are injured or the cost of investigation, it is simply the cost of recovery for the damage of those automobiles--in one year it was somewhere in the neighbourhood of $5.5 million.

The difficulty for us was, is, and still remains to this day, because of the consideration of auto theft as a property crime, keeping these top-level offenders incarcerated. As soon as they're out on the streets, that's when auto thefts again begin to rise.

An additional difficulty, of course, is that in many cases auto thieves are merely providing a vehicle for others to commit other crimes. Stolen autos are used in a variety of different offences, such as robberies and other gang retaliation types of occurrences here in Winnipeg. It's very dangerous not only for the public, but for our officers. Winnipeg, I believe, tends to be, perhaps, at the point of a spear here. What we notice now is that our offenders are certainly not immune from providing others the instruction to carry out auto thefts in other jurisdictions.

We feel that given the fact that a very heavy vehicle can be operated at very high speeds, it's not unlike the potential danger of a firearm. What we are asking parliamentarians, and you specifically, to consider is providing significant deterrents so that we can essentially—once we have established individuals as chronic auto thieves—keep them in custody so we can keep these types of crimes and threats to our streets at a minimum.

The difficulty is that in the current atmosphere it becomes almost a revolving door type of scenario. It's frustrating to our officers. It's very intensive to monitor these thieves.

We are asking you to support the proposed legislation to ensure there is significant deterrence and significant custody attached to stealing what is tantamount to a weapon if operated in a menacing fashion.

Thank you very much. I am more than willing to entertain questions.

[The Chair, Conservative, Ed Fast]

Thank you.

For our final witnesses, we'll move to Ms. Barr-Telford and Ms. Mia Dauvergne. You have 10 minutes.

[Lynn Barr-Telford, Director, Canadian Centre for Justice Statistics, Statistics Canada]

Thank you, Mr. Chairman, for the opportunity to present to the committee regarding Bill C-26.

Statistics Canada does not take a position on the proposed amendments. The presentation we have prepared today contains data on motor vehicle thefts that may inform your discussions of the bill. All data sources used are clearly indicated on the slides, as are any pertinent notes. You should have the presentation in front of you to follow. We've also included supplemental information at the end of the deck for the consideration of the committee, and we have distributed to you a copy of our recent Juristat article on motor vehicle theft.

My colleague, Ms. Mia Dauvergne, is here to help answer any questions.

The first several slides provide information on the incidence of police-reported motor vehicle thefts in Canada over time, by province and territory, and by census metropolitan area.

Police-reported motor vehicle thefts are incidents in which a land-based motorized vehicle is taken or attempted to be taken without the owner's authorization. Included are completed thefts and incidents where there was an unsuccessful intent to steal a vehicle, what we call “attempted” thefts.

The graph in this slide shows that Canada's rate of motor vehicle theft peaked in 1996 and has generally been declining since. However, the rate of motor vehicle theft in 2007 was well above the level seen decades earlier. Motor vehicle theft is the fifth most common type of police-reported crime in Canada. In 2007 motor vehicle thefts accounted for 6% of all Criminal Code offences and 13% of all property crimes. In 2007 police reported about 146,000 motor vehicle thefts, averaging about 400 stolen vehicles per day, including both completed and attempted incidents. In addition, there were about 2,500 motor vehicles stolen during the commission of another, more serious offence.

The proportion of incidents classified as “attempted” is higher for motor vehicle thefts than for other Criminal Code offences. In 2007 14% of all motor vehicle thefts were classified by police as attempted, versus 2% for other Criminal Code offences. A little over half of all motor vehicle thefts in 2007 involved cars. Another one-third were trucks, vans, or SUVs. About 4% were motorcycles, and 8% were other types of vehicles.

The next slide shows that the highest rates of motor vehicle theft tend to be in the western provinces and northern Canada. In 2007 Quebec was the only eastern or central province above the national average, and although its rate has declined recently, in 2007 Manitoba had the highest reported motor vehicle theft rate in the country for the eleventh straight year. It's rate was 24% higher than a decade ago.

The next slide shows that in 2007 the highest rates of motor vehicle theft were in western census metropolitan areas: Winnipeg, Abbotsford, Edmonton, and Regina. Winnipeg's rate has been among the highest in Canada for the past 15 years, and it accounts for about 86% of Manitoba's motor vehicle thefts. Montreal reported the highest rate of motor vehicle theft in eastern and central Canada.

Motor vehicle theft is one of the least likely crimes to be solved by police. Of all vehicle thefts in 2007, 11% resulted in an accused person being identified, compared to 22% of all other property-related offences. In 2007 about 16,000 people were accused of motor vehicle theft in Canada.

The next slide shows that, like other property-related offences, motor vehicle theft is a crime often associated with youth. In 2007 police reported motor vehicle theft rates were highest among 15- to 18-year-olds, and youth aged 12 to 17 accounted for three in 10 persons accused of motor vehicle theft in 2007. This is similar to the proportion of youth accused of other property-related offences. In 2007 charges were laid or recommended by police against 59% of youth and 55% of adults accused of motor vehicle theft. This compares to charge rates of 37% for youth and 59% for adults for other property-related offences. Also, about 84% of persons accused of motor vehicle theft in 2007 were male. This compared to 74% of males accused of other property-related offences.

The next slide looks at police-reported motor vehicle theft and organized crime. We do not yet have a reliable, direct way of measuring organized crime involvement, but vehicle recovery status has been used as a proxy measure. In 2007 about four in ten stolen vehicles were not recovered by police, suggesting that these may have been related to organized crime. Vehicle recovery rates were lowest in the province of Quebec and among the highest in Winnipeg.

In the next slide, we turn to the question of court outcomes for charges of motor vehicle theft. It's not possible to identify motor vehicle theft using court administrative records alone. Motor vehicle thefts are currently recorded together with other thefts under section 334 of the Criminal Code. Court records with criminal court outcomes must be linked to police records with offence characteristics in order for us to identify this subset of theft in Canada.

The question of whether or not motor vehicle theft is treated differently from thefts in general by the courts is often asked. We recently linked these administrative files to answer this question for another project.

An unrepresentative sample of court records did show differences in the way in which theft in general and motor vehicle theft were treated by the courts. For example, incarceration was used more frequently for guilty charges of motor vehicle theft, and there were significant differences in the length of custody imposed by the courts for motor vehicle theft compared to other theft. Average sentences were longer for guilty charges of motor vehicle theft for $5,000 or under than for other theft $5,000 or under, and shorter for guilty charges of motor vehicle theft over $5,000 than for all other theft over $5,000.

There are more details on this issue in the supplementary slide at the end of your deck.

The Criminal Code under section 335 describes taking a motor vehicle without consent as an offence “resembling theft”. As seen in the next slide, several thousand of these theft-like charges are heard in Canadian criminal courts each year. The number of these charges heard against youth has been declining since the period introducing the Youth Criminal Justice Act, while the number of these charges heard against adults has been generally increasing over the last decade.

The proportion of charges found guilty for adults and youth tends to be higher for this charge than for charges generally, but is almost identical to the proportion found guilty for theft in general.

In summary, Mr. Chairman, motor vehicle theft continues to be a high-volume offence in Canada, but Canada's police-reported motor vehicle theft rate has been declining since 1996. Motor vehicle theft rates are particularly high in the west, and vehicle recovery rates can serve as a proxy for organized crime involvement. We've seen that recovery rates vary across the country. Stolen vehicles are less often recovered in Quebec than elsewhere in Canada, while in Winnipeg the recovery rate was among the highest.

Thank you, Mr. Chairman. That ends my presentation. There is supplemental information for the committee at the end of the deck.

[The Chair, Conservative, Ed Fast]

Thank you very much.

Thank you to all of our witnesses for that very helpful information.

We'll open the floor to questions.

Mr. Murphy, five minutes, please.

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

Thank you.

I know the solution to auto theft: have a car like Parliamentary Secretary Rob Moore's second family vehicle. No one would dare steal that car.

[Voices]

Oh, oh!

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

I have just very short questions--and, to be considerate of everybody, we could have some short answers--for the IBC.

I'm wondering why there wasn't a little more mention of immobilizers and that program, certainly in the west of Canada. Is it something that you think is cost-effective?

[Richard Dubin]

We've always supported immobilizers. As many know, we were involved in supporting immobilizers, at least in all new cars coming off the assembly line OEM. That has made a difference in helping to reduce the rate of auto theft by 9% between 2006 and 2007. Unfortunately, as I mentioned, the recovery rates across Canada have declined from approximately just over 70% recovery down to 64%. If we go out west, for example, Manitoba has utilized immobilizers. We do support the use of immobilizers on a voluntary basis, at least, at the option of the public for after market.

There is no question that they do have an impact, but when it comes to organized crime, how they get the vehicles is actually quite different. What we're seeing is, sure, they'll get the keys, they'll break in, they'll get a vehicle running. But we're also seeing that they're towing the vehicle; they don't need the key. We're also seeing a definite pattern right now where they're creating fraudulent documents to go to a dealership and obtain a new vehicle. They're also doing it on rental vehicles. With these fraudulent documents, they're obtaining possession of these vehicles and then putting them in containers and exporting them.

So immobilizers have played a role in making it harder to steal. Out west, what we're seeing, because the recovery rates are in the mid-eighties--that's a lot of transportation theft, using the vehicles for commission of other crimes. As you move east, we feel you have the greater involvement of organized crime because of the significant reduction in the recovery of stolen vehicles.

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

It's a perfect segue to go out west to Officer Sutherland.

You have the dubious distinction in Winnipeg of having a few car thefts--I won't give you the title because the mayor might be tuning in or something. You have also had some success I think with the combined use of immobilizers and other programs that are outlined in Juristat. You've had a 33% decrease in auto theft; however, there's been a 32% increase in attempted auto theft. Does it have something to do with immobilizers?

You've heard what the IBC has said generally, which would indicate that there may be more involvement, percentage-wise, of organized crime in the east, particularly in Montreal--I might as well say it--than out west. How concerned are you that organized crime is going to find the intelligent ways that the IBC officials have just talked about, or are they already?

[Mike Sutherland]

I think they are already. There have been examples here where chop shops, essentially, have been set up and the thefts have been much more organized. It's not just your commonplace “break the ignition column”; they're much more intelligently planned.

We're very vulnerable to that here in Winnipeg, as in any scenario where there's organized crime and crime for profit. As well, we have a fairly significant base of offenders who are very willing to steal vehicles and would certainly be a tool to be utilized by organized crime.

Our experience thus far with respect to immobilizers has been that they have made a difference, but I would say to the committee that the investigators in our auto theft strategy unit have found that it's the old adage: 5% of the people are doing 95% of the crime. We did track that, and what we found is that when a great number of our top auto thieves were on the street, auto theft skyrocketed, despite the presence of immobilizers; they just found other targets to go to. When more of them were incarcerated, the rates came back down.

If you talk to any auto theft investigator, they would attribute it to the very, very intense monitoring of those offenders. The difficulty, of course, is that right now they may be doing it for their own purposes, but certainly they would be a willing tool in the hands of, say, more sophisticated types of criminals, who would certainly be engaged in the crime-for-profit aspect. We would be particularly vulnerable here.

We have that dubious distinction. We've also had the dubious distinction of being the murder capital of Canada as well. We are definitely in the trenches and at the point of the spear. We have some very unique insight in that way. I wish we didn't, but we do. I would say, certainly from our perspective, there has to come a point where we need to make sure there's a significant deterrent, or if not a deterrent, then at least incarcerate those offenders so that we do have a chance to catch our breath.

Thank you.

[The Chair, Conservative, Ed Fast]

Thank you, Mr. Sutherland.

I think we share a dubious distinction. I represent Abbotsford, and Abbotsford has been known as the auto theft capital of British Columbia for a number of years. It was also the murder capital one year. So both of us have the same challenges, and hopefully we can make some headway right here at the committee.

We'll move on to Monsieur Ménard. You have five minutes.

[Réal Ménard, Bloc, Hochelaga, QC]

Thank you, Mr. Chair.

My question goes to the Insurance Bureau of Canada representatives. I would like to understand what your concern is. I have paragraph 353.1(3) in front of me. What type of amendment are you looking for? What kind of customers do you have in mind? We understand that this could involve people in garages or mechanics who do regular maintenance and who can alter or obliterate vehicle identification numbers. What other kinds of situations were you thinking of? Specifically, what kind of amendment do you want?

[Dennis Prouse, Director, Federal Government Relations, Insurance Bureau of Canada]

That is not a question for us.