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.