Justice Committee on Dec. 7th, 2009

[The Chair, Conservative, Ed Fast]

Thank you.

Before we let you go, I just want to clarify something Ms. Jennings asked that had to do with the provisions in the Criminal Code that address the whole issue of stock market manipulation and insider trading. I believe it is subsection 380(2).

It's my understanding that subsection 380(1) is actually the general fraud provision. If the elements of the offence were made out under subsection 380(2), which are the stock market provisions, that would still make a case under subsection 380(1). So it would be open for there to be a mandatory minimum sentence if in fact that particular offence were made.

Is that your understanding?

[Commr Stephen White]

Yes, it's not clear; I think it would require a clarification of whether it is only section 380 or whether it is...

Right now I'm assuming it is only section 380--

[The Chair, Conservative, Ed Fast]

It would address subsection 380(1).

[Commr Stephen White]

--the general fraud provision.

But I would assume for any major fraud that's over $1 million, for consistency in application, I think there would be value in considering that.

[The Chair, Conservative, Ed Fast]

And I'm assuming that when you undertake to charge an accused, you would charge them not only under the stock market provisions, you'd probably charge them under the general provisions as well. Is that correct?

[Commr Stephen White]

Yes, that is correct. Almost in all cases there would be a section 380 charge of fraud that would accompany it. So it would be covered in that regard.

[The Chair, Conservative, Ed Fast]

All right. Thank you for that clarification.

Thank you to all three of you for providing testimony. It's very helpful, and it will go a long way in helping us go to clause-by-clause on this bill.

Thank you.

[The Chair, Conservative, Ed Fast]

We'll reconvene this meeting of the Standing Committee on Justice and Human Rights.

We now have with us a number of additional witnesses on Bill C-52. I'll just go through them for the record.

First of all, representing the Government of New Brunswick, we have the Attorney General and Minister of Justice, the Honourable Michael B. Murphy.

Welcome here.

We also have the Canadian Bar Association, represented by Suzanne Costom as well as Gaylene Schellenberg.

Welcome back.

The Department of Finance is represented by David Murchison, Manuel Dussault, and Joan Monahan.

Welcome to the three of you.

By video conference out of Toronto, we have Mr. Al Rosen, representing Accountability Research Corporation.

Welcome to you as well.

We'll begin with the Honourable Michael Murphy.

Each organization has ten minutes to present. Then we'll move to questions from our members.

Mr. Murphy, please.

[Michael B. Murphy, Attorney General, Minister of Justice and Consumer Affairs, Province of New Brunswick, Government of New Brunswick]

Thank you very much, Mr. Chairman.

I am pleased to have the opportunity to speak in favour of Bill C-52 and to provide the committee with some information with regard to our government's position on it.

Before I touch on Bill C-52, I want to give you some background on our government's views with regard to our agenda on these matters and what has led us here today.

Part of my responsibility as Attorney General of New Brunswick is to support efforts that will increase the criminal justice system's efficiency and to promote reforms that will inspire a solid level of confidence in the system. I firmly believe that all law-abiding citizens have the right to live in a safe and secure community. They must be able to count on a criminal justice system that protects them against harm and the fear of harm. It is essential to maintain the public's confidence in our judicial system. They must be wholeheartedly convinced that the system protects them against harm and enables them to live free from the fear of becoming a victim of crime. They must have confidence that the system will deal appropriately with those who break the law.

Since I became Attorney General in June of this year--after three wonderful years as Minister of Health--I have supported many of the measures brought forward by Justice Minister Nicholson here in Ottawa. I believe the laws with regard to our criminal justice system must have meaningful and proportionate consequences for those who offend. There are very serious offences of a violent nature out there, but of course there are very serious offences of a non-violent nature that cause complete disruption to certain lives. Often those crimes are committed against our most vulnerable.

Just to give you some past record, we have in New Brunswick supported Bill C-25 in terms of losing the two-for-one remand. We believe remand lost its purpose with regard to the reason that there was a two-for-one credit.

We supported Bill C-15, with its mandatory minimum sentences for those involved in the production or trafficking of drugs, because it was to protect our most vulnerable, those being our children and those afflicted with drug use. I did see that close up as Minister of Health. That is a very sad picture across the country.

Of course, we're also pleased with Bill C-36, the faint hope clause, and the progress being taken towards passage.

In New Brunswick we have taken some steps to make our communities safer. Last week we partnered with the Child and Youth Advocate in his request that there be a law in New Brunswick for consumer protection. This stems from the report that there ought to be a law protecting children's online privacy in the 21st century. We partnered with them for a working group that includes the Child and Youth Advocate's office and the Department of Justice. We also put on that working group a member of the opposition in New Brunswick, because we do not believe--I am sure members of this committee will agree--that this is in any way, shape, or form a partisan issue.

The working group will come forward with legislation in the spring of 2010. We hope to bring that into the Legislature next fall. We believe this will complement Bill C-58, which, as you know, is the federal bill that will require mandatory reporting by Internet providers when it comes to child pornography.

For that reason, I have asked the officials in my department to form a working group with representatives of the Child and Youth Advocate's Office to study possible amendments to our province's legislation that would allow us to achieve these goals. The working group will be submitting its report to me in the spring of 2010.

With respect to the bill under consideration, Bill C-52, we're pleased that this is a bit of a crackdown on white-collar crime, because white-collar crime is committed most often at the expense of the life savings of our most vulnerable. These victims are, by and large, the elderly, those who sometimes do not have the wherewithal to see some of the red flags that are there, but we know one thing: all of these victims are individuals who worked their entire lives for what savings they have. Those savings may be $15,000, $50,000, $300,000, or possibly $1 million, but it means absolutely everything to them, so I want to make three points with regard to Bill C-52.

First of all, the New Brunswick Securities Commission has been active and effective in taking steps to protect investors from unfair, improper, and fraudulent practices, and I'm confident that Bill C-52 will complement the work of the securities commission in New Brunswick by providing for a minimum two-year sentence for fraud exceeding, cumulatively or in a single instance, $1 million. It will send a very clear message to those who believe they can perpetrate this crime.

On this first point, though, I'd like to say that while there is an inclusion of additional aggravating factors that can be applied in sentencing, I'm going to urge this committee to consider a figure below $1 million, and I will get into a story very shortly. Suffice it to say that $20,000, $30,000, or $50,000 means absolutely everything to a person who's worked all his or her life. The person gets it and starts to use it at the age of 65 and plans to use it very sparingly between ages 65 and 85 to make ends meet. When they lose that money because of a fraud, it is just as devastating to them as the loss of several hundreds of thousands of dollars or a million dollars.

The second point I want to make with regard to Bill C-52 is that the bill will require judges to consider restitution. In New Brunswick we have a provincial proceeds of crime unit that's been very successful, but we are also bringing forward a civil forfeiture act in January that I think will complement Bill C-52 and our proceeds of crime unit. The civil forfeiture bill in January will allow the Department of Justice, through its lawyers, to sue individuals who have used their property--whether it's their home office, their computer, their small office building, their big office building, or whatever--essentially as a tool of crime. They will sue for that property.

We have, in this country and in New Brunswick, seen far too many times someone who was sentenced to six months--or a year and a half, or even two and a half years--go back to the very large home or office building or whatever property the person had that had been used to perpetrate the crime. The civil forfeiture act that we envisage in New Brunswick will be in compliance with the same civil forfeiture act that's been tested before the Supreme Court of Canada and found valid. The civil forfeiture act under a different name in Ontario and British Columbia has been very successful; 99% of the time the defendants walk away, because they don't want to sign an affidavit outlining that they have a $20,000 income and $1 million in assets. They were told, I think it was in Ontario, that they had three years to be self-sufficient, and in fact that was attained after 18 months. As you know, it is on a balance of probabilities, which is somewhat easier in that sense than the “beyond a reasonable doubt” onus.

Lastly, I want to point out that if we are to succeed in the fight against securities fraud, it is crucial to be able to count on sufficient resources to provide the expertise required in the complex fields of investigation and detection. Canada's other orders of government have said that federal assistance is essential for improving their detection and law enforcement capabilities, and I echo their arguments. Increased probability of detection can be a key deterrent to crime.

Look, ten minutes is not a lot of time. It usually takes one of the Murphys ten minutes just to clear our throats.

Suffice it to say, I would think there is no magic in this $1 million figure. I think this Bill C-52 is a very good bill, and I applaud the government for bringing it forward. At the same time, you know, if you have 30 acts against individuals who lost on average $30,000, that can be just as devastating to that family or to many families as a bullet would be to any of those victims.

I think it has been a long time that we have been looking at the rights of the offender. We've certainly considered and we respect the charter, and we respect the principles of the Criminal Code of Canada, but there is no reason why we should not be theming within our federal acts, and our provincial acts, the rights of the victims of crime. I think all of these bills—federal and provincial—should consider that.

It is because we want to set the record straight.

We want to bring the pendulum back so that the people in the communities across this country know those acts are designed to protect them on deterrence and punishment, and on restitution. The restitution aspect can be accomplished in some part by Bill C-52 but also considerably enhanced by a civil forfeiture act's being brought forward in all the provincial legislatures.

I'm asking the committee to consider a figure below $1 million. I'm certainly fine with the two-year minimum sentence, but I do believe we have to consider that there is just no magic in that. There are an awful lot of people who can tell you a story where their lives have been ruined and their extended families' lives have been ruined on figures of $30,000, $40,000, or $100,000.

I'll conclude by saying this. There was a gentleman who came to my office about two months ago, and he had been defrauded of a figure many times smaller than $1 million. He was embarrassed. He was 75 years old. He was crying. He didn't know what to do, and the fact was that all I could tell him was that there would be an investigation by the securities commission with regard to fraudulent practices and that the prosecutors would deal with this and would look at the statute. I would have liked to tell this individual that there was a minimum sentence of two years for something such as that, but I couldn't. I would have liked to tell him that there would be a minimum sentence of two years for the amount he had been defrauded, which was every bit as powerful to his family as a bullet right through any member of his family.

Sometimes it takes the visuals, and sometimes it takes the story and the face of a victim before you to understand the significance of the crime. While we have acts of violence that are looked after by the Criminal Code of Canada, the repercussions of acts of white-collar crime against our vulnerable can be every bit as devastating as the violent act.

Thank you.

[The Chair, Conservative, Ed Fast]

Thank you very much.

By the way, we are going to have some victims here at our next meeting on Wednesday.

We'll move on to the Canadian Bar Association.

Ms. Schellenberg, are you presenting?

[Gaylene Schellenberg, Lawyer, Legislation and Law Reform Directorate, Canadian Bar Association]

I'm beginning.

Thank you for the invitation to present the Canadian Bar Association's views on Bill C-52 to you today. I'm Gaylene Schellenberg, a lawyer with the legislation and law reform department of the CBA. The CBA is a national association of more than 37,000 members, including law students, lawyers, notaries, and academics. An important aspect of our work is seeking improvements to the law and the administration of justice. It's from that perspective that we appear before you today.

With me is Suzanne Costom, an executive member of the CBA's national criminal justice section. The section represents crowns and defence lawyers from every part of the country. Ms. Costom is a defence lawyer from Montreal who also practices in ad hoc prosecutions.

I'll pass it over to her to present the substance of our brief.

[Suzanne Costom, Executive Member, National Criminal Justice Section, Canadian Bar Association]

I want to reiterate the thanks that Gaylene just expressed, both to the chair and to the committee, for allowing the Canadian Bar Association to express its views today on Bill C-52.

I want to start by saying that the Canadian Bar Association certainly understands and supports the thought process and the concerns that went into this bill. Anything that would deter crime and anything that would deter people from being victimized by white-collar crime is certainly something that the Canadian Bar Association wants to support.

As a Montrealer, I can tell you I recently walked into the lobby of my office building and overheard a gentleman telling another gentleman at the elevator that he'd been a victim of Earl Jones. He had lost absolutely everything. He had thought he was going to retire, but it wasn't looking so good for him. I can tell you, both as members of the committee and on a personal level, that these are things we are certainly heartbroken about when we hear them.

The other thing the Canadian Bar Association certainly supports is the concept of making victims whole. If restitution could be effected to victims through our criminal justice system, that would be a phenomenal result.

We recognize legislation that recognizes the particular features of particular victims and recognizes that different victims are heard differently, depending on the nature of the crime and the nature of the offender. All of those sorts of concerns, which we see reflected in this bill, are good concerns.

That being said, you have our brief, and so I'm not going to surprise you when I tell you that the Canadian Bar Association does not believe this bill should be passed into law. I'll tell you why. It's not because we don't sympathize with the concerns that have gone into the drafting of this bill. It is because we feel that the tools already exist in the Criminal Code.

What the bill does is to make more complex an already very complex criminal justice system, and we think it creates a risk with regard to the administration of justice and justice efficiencies at a time when our resources are such that we need to be working towards justice efficiencies and not away from justice efficiencies.

The other thing I'm going to say, which will not be a surprise to those of you who I know have heard submissions from the Canadian Bar Association before, is that we do not support any legislation that would tie the hands of judges. We, the lawyers, the defence lawyers, the crown prosecutors, the academics on the committee, have enormous confidence in the judges who mete out sentences day after day in the various courtrooms across our country. The hallmark of the Canadian justice system is proportionality in sentencing and the individualization of sentences. When we impose mandatory minimums like the ones being proposed in this law, we by definition move away from those principles, and that is something the Canadian Bar Association has consistently advocated against.

If I can be more specific and concrete with reference to how we believe the administration of justice is an issue in this bill, one of the expressions that jumped out at us is the expression in clause 2, which creates the mandatory minimum sentence of two years' imprisonment for a fraud when the subject matter of the fraud is in excess of $1 million. We're concerned about the breadth and scope, and also the ability to define, really, what the subject matter of the fraud is.

I will remind everybody--and I know that you all know this--that the Supreme Court has said since 1978, in the case of Olan, that in order for there to be a fraud there doesn't have to be economic loss. So you have a situation where the subject matter of the fraud may have been $1 million, but there may have been absolutely no economic loss whatsoever by any individual victims or by any communities. It would seem to us, given the sorts of concerns that went into drafting this bill, that we are very far away from what the goal of this legislation is.

Again, given that we've said before that the subject matter of the fraud is the triggering effect here, and given how important that's going to be, particularly to accused who are looking at being subject or not subject to a mandatory minimum sentence of two years' imprisonment, we foresee, from the justice efficiency perspective, that sentencing hearings are going to become much more complicated and much more complex.

There is no longer going to be any sort of admission as to what the subject matter of the fraud, if you will, will be. We're going to have a situation in sentencing hearings where we're going to have to trot every single victim into the courtroom in order for the crown to be able to prove what the exact amount of the fraud may have been, be it a potential risk, a potential loss, or an actual loss.

In the Criminal Code now, you might point out, there already is this concept of $1 million as an aggravating factor, and that's true. It was already in the Criminal Code. But in practice, I can tell you that what happened is that it was used as a signal to prosecutors, to defence lawyers, and ultimately to judges that the more significant the amount of the fraud, the more significant the sentence would be.

In that $1 million mark, the legislators had sent a clear message that this was particularly aggravating. In practice, what that meant was that if the fraud was $900,000, or if the fraud was $1.1 million, it was a big fraud, and that was an aggravating factor, but it didn't really matter that it be quantified very specifically. What's going to happen now, because an offender is facing a potential two years' imprisonment upon this $1 million trigger, is that this amount is going to be very, very important to quantify. So again, we're concerned from a justice efficiency perspective that it's going to create all sorts of blockages.

As an aside, despite the fact that we are not at all in favour of this mandatory minimum or of this triggering of $1 million, I would submit to the committee that if this part of the bill remains intact, this committee may wish to at least consider adding a provision for notice to the offender, which would require the prosecutor to notify the offender that they consider that the subject matter of the fraud is in excess of $1 million and therefore they will be seeking this mandatory minimum term. We think that's a fundamental justice sort of addition to the law that can make the law fairer, so we would ask you to consider that.

In terms of other sorts of administration of justice issues, one of the things we're concerned about, despite being in favour of restitution, is that the restitution mechanisms already exist in the Criminal Code. As we know, it's already one of the options that exist in the sentencing provisions of the Criminal Code. Again, I can tell you as a defence lawyer that when our clients can make restitution, we make it, because we know that is going to be very positively looked upon by the judges and hopefully will yield a less significant and less harsh sentence.

The concerns about restitution that were shared among the criminal justice section of the Canadian Bar Association came, believe it or not, from prosecutors, who were concerned that victims were now going to confuse them as being their lawyers, and not advocates of the public interest, because victims were going to turn to them and expect that they would deliver restitution. There is certainly a renewed emphasis on restitution in this bill in that the judge “shall” make inquiries of the prosecutor and the prosecutor “shall” make inquiries of the victim. I can tell you that in practice it happens all the time, but by spelling it out, the crowns in our committee were concerned that it would put them in a somewhat difficult position.

The other thing that I can tell you as someone who is involved in the criminal justice system as a day-to-day practitioner is that when victims of crime and fraud go to the police to lay a complaint, they are routinely told by police officers that if their goal here is to get their money back, they're in the wrong place, because that's not the goal of the criminal justice system. Again, one of the concerns of this committee is that by emphasizing restitution, and by making it a sort of presumption of restitution, people may start to look at the criminal justice system as a sort of collection agency.

The last point, which flows from what I just said, is on the short title of the bill. The criminal justice committee of the Canadian Bar Association has noticed that we've moved away from neutral short titles of legislation and now have short titles like the one we have here, which talks about “retribution” for victims of crime. We would respectfully submit that we might want to consider going back to more neutral titles for our short titles of bills.

Thank you.

[The Chair, Conservative, Ed Fast]

Thank you very much.

We'll move on now to the Department of Finance, with Mr. Murchison, Monsieur Dussault, and Ms. Monahan.

Please go ahead.

[David Murchison, Director, Securities Policies, Financial Sector Policy Branch, Department of Finance]

Thank you, Mr. Chair, and committee members.

We've given you three sets of documents. One is a statement, two is a short presentation deck that describes the enforcement world today, and the third is an expert panel report. Perhaps I can pick a few bits out of the statement and not read the whole thing. Then I'll be relatively brief.

I guess I'll start by saying that the fact I showed up with three people reflects the fact that we don't actually touch the Criminal Code very much, at least in my division. That may change.

First of all, perhaps I'll say that strengthening the integrity of Canada's capital markets is a key priority, of course, for the government and the Department of Finance. It's critical to both protecting investors and promoting healthy capital markets. It's from that vantage point that we come at this.

It's broadly recognized that capital market integrity requires effective regulation, sound governance, and strong enforcement. In that context it's important to distinguish between actions to improve criminal enforcement and those to improve regulatory enforcement.

You've just heard from the RCMP, and they touched on the criminal side of that.

Regulatory enforcement, on the other hand, is currently conducted by the 13 provincial and territorial securities regulators and supported by a number of self-regulatory organizations, SROs. I'll touch on the regulatory side for a moment to say that the government is taking significant action there. The centrepiece of that initiative is the establishment of the Canadian securities regulator with willing provinces and territories.

The final report of the Expert Panel on Securities Regulation--of which I was the executive director, by the way--released in January 2009, underscored that the Canadian securities regulator will help to improve enforcement by

consolidating enforcement resources and expertise of up to 13 provinces and territories into a single entity; eliminating unnecessary duplication and overlap; supporting greater consistency in investor protection across Canada; and improving cooperation with federal and international criminal enforcement authorities.

There are a couple of other points to make before I close.

The Canadian securities transition office, which was announced in June, is leading and managing the transition to a Canadian securities regulator. Consistent with its government mandate, the transition office is working to ensure that the Canadian securities regulator has legislative powers and appropriate organizational structure to properly enforce compliance with the securities regulatory system.

It is the transition office that's developing the securities act, which is to be completed in spring 2010, as well as the transition plan, with the input of the advisory committee of participating provinces and territories. At this point we have ten participating jurisdictions, which are each representing themselves on that advisory committee. The work of the transition office is expected to culminate in the establishment of the Canadian securities regulator sometime in 2012.

That concludes my opening statement, Mr. Chair.

[The Chair, Conservative, Ed Fast]

Thank you. And thank you for your brevity.

We have one last witness. Appearing by teleconference from Toronto, we have Mr. Al Rosen.

Mr. Rosen, you have up to ten minutes to present.

[L.S., Al) Rosen (Accountability Research Corporation, As an Individual]

Thank you.

My background is in investigating many of the big frauds in Canada. If you went through the list of major situations, I think you'd find we were probably involved in two-thirds of them.

I'm not unsympathetic to the comments from the minister in New Brunswick, but I think we have to get realistic about what it's going to take to prevent many of these Ponzi frauds and pyramid schemes and so on.

I have a handout. For full disclosure, I come from two directions. One is that Accountability Research represents research done for investors, and they are subscribers to our newsletters and so forth. The other is that, having testified in court over 100 times on various types of these issues, it's quite different listening to what I've heard from the previous three speakers versus the actuality of Canada.

I want to give some context to what's happening here. If you go back to the Ponzi schemes of 1910, 1920, and if you look into the stock market and trace through what happened in the 1920s leading to the 1929 stock market crash, the U.S. moved in and put in some fairly interesting and tough legislation at the time, in 1933, 1934, with some in 1935. If you look at what Canada has done over the past 80 years, it's not very much; I think that would be the polite expression.

I want to summarize what I think has to seriously happen if we want to protect the average person.

The first thing we have to do is to have an independent body, a Canadian equivalent of the SEC. It's going to be more than a national regulator--it has to be--to look at the prosecutions, the investigations, and all those aspects. We don't have that in Canada now, and there's no sense pretending that we do. I'm being very blunt about this situation.

About two or three years ago, we sent major packages across Canada showing what the problems were. We got very little in the way of response. This was at our cost. We kept at it. I've been writing for more than ten years, especially in Canadian Business magazine, and done dozens of other articles. So having been involved in these cases, I see the situation far differently from what I've heard this afternoon.

A perfect example of where we have a major problem in this country is something called international financial reporting standards. This has been adopted in Canada without the legislatures debating it. It's been brought in by the auditors of Canada.

I am astounded that it's gotten this far. And yet, in spite of all the material, the speeches and so on, there it is. IFRS is extremely full of holes that are going to make securities regulation just about impossible in Canada. The reason for that is that management has choices. The rules were written for a country other than Canada. We've adopted them here in spite of the U.S. going in its particular direction, which is forcing the U.S. companies to use Canadian accounting and reporting.

We have had enough problems over the years. I've published long lists of the cases in Canada where the prosecutions have not occurred; many of them are civil, and the restitution is essentially zero. I think we have to gather considerable facts—and they are available—before we assume that Canada is safe.

Now, not having an independent body to go to in order to ascertain whether some of the legislation going through the system--Bill 198 in Ontario, for example, or this IFRS material--is devastating. Let me explain why.

In December 1996, the Supreme Court of Canada heard a case called Hercules Management. The arguments from the Canadian Institute of Chartered Accountants and from the particular large auditing firm being sued in this case were that annual audited financial statements were not to be used for investment decisions.

So on that particular basis, you say to yourself, “Well, just a minute. This destroys what's in companies acts, what's in securities acts. Why do we have financial statements if that's the conclusion?”

The Supreme Court agreed with them. I automatically thought that each of the provinces in Canada would come in with legislation that would correct that matter. But it didn't happen.

That's just one issue. But unlike most of the rest of the world, Canada has allowed the auditors to set the accounting and auditing rules. Here they have a declared statement that they are not acting on behalf of shareholders. The whole concept of shareholders' auditors has disappeared.

So we then have a number of cases...and I have and pages and so on that I could show. If you look just at this decade, we've had Bre-X, Nortel, literally hundreds of income trusts that weren't tax problems first and foremost, they were Ponzi frauds. We've seen very little prosecution of those. We've had the asset-backed commercial paper, and now we have this IFRS.

We're not seriously addressing what is causing Canadians to lose money. On that basis, then, how can we possibly de-regulate, which is what's happening with this IFRS? The U.S. has rejected that, and we're living next door to them. If we want to seriously protect the investors across Canada, we need a whole revamping of the system and not some tinkering in a minor bill.

Let me try to look at some aspects that are particularly important on this.

The Hercules decision has devastated the plaintiff lawyers across Canada—I think devastate is the right word—because they will not pursue these types of lawsuits where there's a director, officer, auditor, defendant. If you need names, there are plenty of them around.

In terms of the costs of the class actions, this is a major problem as well. Bill 198, in Ontario, and the changes in the Securities Act are such that the costs of running these cases can be $5 million, $10 million, $40 million. We're just out of context with what's happening.

There's a case in Toronto with huge dollars involved. There's another one in Montreal, Castor Holdings. They've gone on for 20 years.

We've lost the respect of the international community.

That's the nature of what I'm saying. I would assume it's not going over very well to those listening, but that's the reality. I think we have to cease pretending and we have to face the issues.

[The Chair, Conservative, Ed Fast]

Thank you, Mr. Rosen.

You have one minute left. Or are you done?

[L.S. (Al) Rosen]

No, that's fine.

[The Chair, Conservative, Ed Fast]

You're done? All right.

[L.S. (Al) Rosen]

I thought you were warming up to tell me to stop.

[The Chair, Conservative, Ed Fast]

No, no.

We'll open the floor to questions now.

I believe, Mr. Murphy--the other Mr. Murphy--you're going to start.

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

He's the other Mr. Murphy here.

Thank you, Mr. Chair.

Mr. Rosen, I think we all are listening to what you're saying. You may be illustrating that what we have here is a bit of a silo mentality. We're a justice committee, but many of the questions you're talking about should probably be before the industry committee. At some point, we have to break down those silos and those walls and get into more international standards.

I am quite familiar with the case law on Hercules Management and Castor Holdings. In respect of Hercules, if there had been derivative action, I think there might have been some relief. Nonetheless, your point stands that we're not doing a good job of being modern in securities regulation.

I want to turn my attention to the Canadian Bar representatives, whom I thank for coming. We've had the debate on mandatory minimums. We could spend some time on that—we've been at this for three or four years and the debate goes on. But it's not really the gist of this bill.

I have to take you to task, Ms. Costom, for saying that people who look to the criminal justice system to repair financial loss are looking in the wrong place. I think we have to make it more the right place.

You commented that rewriting aspects of restitution that were already in the code might give people a false sense that something is being done about restitution. I don't think anything in this act helps to increase expectations of restitution. It says that the judge “shall” consider making a restitution order. I don't know any judge who wouldn't consider making a restitution order in most serious cases. So I think it's surplus. It gives the wrong impression, and we have to do more, perhaps by amending it at committee.

I'd like to ask my cousin and former law partner of 14 years a tough question. The reason you were here wasn't to compliment the government on all those bills. I asked you to be here to talk about restitution, about civil forfeiture, because I believe that people coming into the criminal justice system looking for restitution are misled by this bill. There's nothing in this bill that helps with restitution.

I would like you to elaborate on what New Brunswick, British Columbia, and Ontario are doing to help people recoup some of their terrible financial losses, which you describe quite dramatically. In these aspects of restitution, there's nothing—there are no teeth. What would you suggest we put in the act to help people get some of their lost money back? Would you agree that people aren't looking at the criminal justice system to get financial reparations, and that they shouldn't be looking at the system as a bill collecting agency?

[Michael B. Murphy]

Thank you, Brian, for that very difficult question; I appreciate it--especially its length.

Look, the Criminal Code of Canada of course is not a collection agency mechanism. Having the element of restitution within the bill arguably creates some redundancy, because the restitution provisions are already there in the Criminal Code and the judge can use them. But I don't think it hurts to have it there as something that a judge can consider. I'm not looking at this as an academic, and I'm not representing the elaborate and well-researched views of the Canadian Bar. I'm looking at this from the point of view of victims' rights in the federal legislation and the Criminal Code.

While we are not doing a full revision of the Criminal Code, all the laws we have—Bill C-52, the Criminal Code, and its various amendments—are supposed to be a codification of community values. We might have to do this piecemeal, failing a full revision of the Criminal Code, with some emphasis on victims' rights.

Having it in there might lend some clarity to a judge's consideration in sentencing. According to my colleague from the Canadian Bar, if they can make restitution, they certainly will. So having it in there may affect the judge's views on sentencing.

I believe that Bill C-52 is a good start, but I also believe that it is an offer of partnership to the provinces. The civil forfeiture act that we envisage enacting in New Brunswick will allow us, where Bill C-52 fails, to go after these tools of crime. Sometimes it's a home; sometimes it's a larger property like an office building. Other tools include the mechanisms that they use, even the bank accounts. Whatever moneys are available could be tools of crime.

So it's a partnership, and I think it's a reasonably good start. It's not perfect, though, and we're doing things piecemeal.

[The Chair, Conservative, Ed Fast]

Thank you.

We're going to move to Monsieur Ménard. We are going to restrict it to three minutes because we're trying to get a question for every party.

[Serge Ménard, Bloc, Marc-Aurèle-Fortin, QC]

I see that many people give great importance to the two-year mandatory minimum. Is anyone here aware of studies done in Canada on the effectiveness of mandatory minimum sentences to reduce crime?