These are interesting, challenging, and even dangerous times, I would say, in the Canadian capital markets. Never in my 30 years of being involved in the enforcement business of securities offences have I seen as much uncertainty as we're facing today.
I'd like to address just two aspects of Bill C-21. The first is the mandatory sentencing provisions for fraud. The second is restitution provisions.
About the mandatory sentencing provisions, I have three observations. First, they are not necessary. Second, they won't do what you hope they will do. Third, they are counterproductive. I say that having a background as a former head of enforcement at the Ontario Securities Commission and also now as a lawyer who represents both victims of fraud and those sometimes accused of fraud.
Second, I'd like to say a word about the restitution provisions. I believe they are a step in the right direction, but, like Mr. Caylor, I don't think they go far enough, and I would ask this committee to consider perhaps going further than is currently proposed in this bill.
Mandatory sentencing provisions for fraud are not necessary, because the cases you have heard about have all resulted in jail sentences far in excess of a two-year minimum. Mr. Jones was convicted in February of 2010 and received a sentence of 11 years. Vincent Lacroix of Norbourg was convicted in 2009 and received, effectively, a sentence of 18 years. In perhaps one of the most well-known and publicized prosecutions in the last decade, Mr. Drabinsky and Mr. Gottlieb, of Cineplex, received sentences of seven years and six years.
I can tell you that my experience is that judges and prosecutors take white-collar fraud very seriously. Although we call this the Standing up for Victims of White Collar Crime Act, I can tell you that every day in my practice prosecutors are doing exactly that, the best they can and with the resources they have.
Second, a mandatory jail sentence will not solve the problem. If we want to improve the protection of investors in Canada, we need to look at provisions and approaches to this problem that are much more comprehensive than those found in Bill C-21.
I'm encouraged by the efforts of Parliament to move forward with a national securities commission, not because I care about the filing of prospectuses or the raising of capital, but because I think we're long overdue for the introduction of a national enforcement agency that is concerned with the successful detection and prosecution of white-collar crime across the country. I hope that a national securities commission will do what IMET has been unable to do, which is to bring to bear specialized resources that will protect Canadian investors.
Thirdly, mandatory minimum sentences are counterproductive. Chief Justice McRuer said 58 years ago that a mandatory sentence “tends to corrupt the administration of justice by creating a will to circumvent it”. The danger you will need to consider as a committee is that the application of mandatory sentences will do exactly the opposite of what you hope to accomplish.
In the United States of America, which is perhaps the genesis of mandatory sentences and approaches to sentencing guidelines, they are moving away, under the Obama administration, from mandatory sentences and moving towards a Canadian style of system, where we attempt to have justice fit the crime, the victim, and the criminal. I would say that a mandatory approach to this problem is not the solution, and indeed, I worry that if you go forward on that basis, you will make it worse rather than better.
Secondly, the restitutionary powers that are being proposed in many respects are simply an adjunct to what is already required under the Criminal Code. When we look at restitution, there is no more important aspect, as Lincoln said, than ensuring that victims of crime are compensated as a result of their losses. We are talking about the hard-earned savings of families and of Canadians who can't afford to have their college fund or retirement fund stolen by white-collar criminals.
The difficulty, of course, is that by the time law enforcement gets there, we often see that the money is long gone. It resides in secrecy havens or resides elsewhere where it will never be found. When we talk about restitution, what we need to be talking about is a much broader approach to looking at how we compensate injured investors. Saying to the criminal that as part of her sentence she is going to have to pay the money back sounds good, but is completely ineffective.
What I think we have to look at, if we're interested in approaching this problem on a more sympathetic and a more effective basis, is how we get self-regulatory agencies and securities commissions, and other deep pockets that may have been involved in authorizing, permitting, or acquiescing in the activities of the criminals, to contribute towards a solution. I would encourage you, when you look at this bill, to ask what really we want to accomplish, and whether or not we get there under Bill C-21.
Finally, for those who might say that this is an approach to the problem that is soft on crime, my answer would be no, it's an approach to the problem that is smart about policing crime.
Thank you very much. I'd be happy to entertain questions.