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House of Commons Hansard #156 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was offenders.

Topics

Points Of OrderOral Question Period

3 p.m.

The Speaker

I will undertake to review the blues and Hansard but my recollection is that there was a straight withdrawal with no conditions attached. Should that not be the case I will return to the House if it is necessary.

The House resumed consideration of the motion that Bill C-82, an act to amend certain laws relating to financial institutions, be read the third time and passed.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:05 p.m.

Reform

Werner Schmidt Reform Okanagan Centre, BC

Mr. Speaker, it is with pleasure that I continue the debate on Bill C-82, an act to review the legislation regarding certain financial institutions.

Before I get into the other part of my remarks, I wish to reply to certain statements that were made by the Parliamentary Secretary to the Minister of Finance. In particular, he said that the clauses dealing with tied selling would not be proclaimed until September 1998. It was almost a sanctimonious kind of concession that suggested that this is such an important issue that it will be put into the legislation but the government will not proclaim it until September 1998.

This was put under the rubric or in the context of saying that it is in the interests of the consumer and that the government is looking after the interests of the consumer.

I wish to point out as I go through the various remarks that the very amendments dealing with tied selling in the proposed Bill C-82 are not in the interests of the consumer. I will move into that with some dispatch at this point.

First of all, may I draw members attention to it not being in the interests of all categories of consumers. That is the individual consumer, that is the large business corporation, the small business corporation, the partnership, the medium sized corporation. All these people use in various shapes and forms and at various times, in larger or smaller amounts, with different degrees and conditions of repayment and rates of interest the function of the bank as it lends money to these various ventures.

Every Canadian who borrows money is affected by the provisions in proposed Bill C-82. These are loans that can be of short term, of longer term, of flexible interest rates or of fixed interest rates. It has to deal with bridge financing, if that is the instance, or it may deal with lines of credit. It deals with first mortgages and second mortgages, whatever the case might be.

What is the issue in this matter? The issue is that it will give to the banks increased power to do things that otherwise are not available to other financial institutions. How do I come to this conclusion? It comes from the two subclauses that are presented in clause 55 of Bill C-82. They refer to section 459.1 of the Bank Act.

How does this affect the consumer? I wish to read the sections of the bill so that we are each clear on what exactly it is that we are talking about. I want to go on record with this because the day will come, I am convinced, when a lot of Canadians will ask themselves why the government passed this legislation.

In order to put this into the appropriate context, we need to recognize that section 459.1 reads as follows:

459.1 (1) a bank shall not impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the bank and any of its affiliates, as a condition for obtaining a loan from the bank.

Every consumer listening to this would say that is good and I agree. However, the bill does not stop there. It goes on to subclause (2) and (3). It is in subclause (2) that we need to read as follows:

For greater certainty, a bank may offer to make a loan to a person on more favourable terms or conditions than the bank would otherwise offer to a borrower, where the more favourable terms and conditions are offered on the condition that the person obtain another product or service from any particular person.

It is very clear that a preferred rate may be given on the condition that the borrower obtain insurance from a particular person, which could be a subsidiary of the bank or any institution with which the bank has an agreement.

Let us read subclause (3). It is in effect the mirror image of subclause (2) but written in a different way. It begins with the same words:

For greater certainty, a bank or one of its affiliates may offer a product or service to a person on more favourable terms or conditions than the bank or affiliate would otherwise offer, where the more favourable terms and conditions are offered on the condition that the person obtain a loan from the bank.

According to the amendments to Bill C-82, those two clauses are being used to replace the existing section 416 of the Bank Act. Section 416 reads as follows:

(1) A bank shall not undertake the business of insurance except to the extent permitted by this act or the regulations.

(2) A bank shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space at any branch in Canada of the bank to any person engaged in the placing of insurance-

(4) Nothing in this section precludes the bank from

(a)requiring insurance to be placed by a borrower for the security of the bank; or

(b) obtaining group insurance for its employees or the employees of any bodies corporate in which it has a substantial investment pursuant to section 468.

(5) No bank shall exercise pressure on a borrower to place insurance for the security of the bank with any particular insurance company, but a bank may require that an insurance company chosen by a borrower meet with its approval, which shall not be unreasonably withheld.

That is the part that works today and that is what Bill C-82 states shall not longer be the case.

I submit that is operating not in the interest of the consumer but in the direct beneficiary interest of the bank itself.

Having set the context, we need to ask ourselves how this can affect the consumer. First, we need to recognize that in 1992 the four pillars of the financial institutions were collapsed. They do not exist any more. Those four pillars constituted insurance companies, investment dealers, trust companies and banks. They are no longer in existence.

With the destruction or the elimination of the barriers between these four pillars of finance went competition and came the exchange of information between these various aspects. What does this mean in practical terms? It means, and has in practice turned out that way, that banks today may own insurance companies. There is a whole variety of different kinds of insurance companies. They may own life insurance companies. They may own health insurance companies. They may own property and casualty insurance companies, automobile insurance companies or trust companies. The experience now is that 80 per cent of the investment dealer business is done by the banks through its subsidiaries.

Under the umbrella of a single board are contained all four of these that were before distinct and separate financial functions.

Let us take a look at a couple of scenarios on how this would work in the individual case, how it can work and how it has worked. There has been the greater consolidation of information under one umbrella. There are instances where a bank can own a life insurance or a health insurance company. When a life insurance policy or a health policy is issued a lot of very personal information is collected.

Let us take a person who owes $100,000 to the bank. The loan is there. Lo and behold the bank recognizes that a set of claims has been issued against its insurance company by the individual with the loan. The bank may now very easily project forward and ask under what conditions or how favourable is the repayment possibility of the loan.

I presented this example to the finance committee when the bill was up for discussion. The president of the Canadian Bankers Association appeared before the committee. This is not a recollection from my memory but an exact quotation of what Mr. Protti said:

First, our privacy codes do not permit the sharing of information on health issues across subsidiaries. It doesn't happen.

That is very interesting. One bank, a member of the Canadian Bankers Association, sent a policy statement sent to clients of a subsidiary of the bank, an investment dealer subsidiary, which stated:

Its officers and employees must scrupulously observe in letter and spirit all laws governing business and securities activities. Its officers and employees must deal fairly, honestly and in good faith with clients-The confidentiality of client information is a fundamental principle of our firm. No employee may release confidential client information unless required by law or with the client's consent.

I will refer to this point later when we go through the policy statement. It further stated:

The misuse of confidential information or misuse of any inside information not generally disclosed for personal gain or for the benefit of anyone else is prohibited and grounds for immediate dismissal of an employee.

What is the nature of the bank and its relationship with a subsidiary? The subsidiary is a wholly owned subsidiary of the bank and the bank guarantees all the liabilities of the subsidiary.

What about the sharing of private information? The subsidiary may give confidential client information to the bank. This type of information includes a client's name, address, phone number, income, assets, debts, investment objectives and financial plans.

The bank may use this information for the following purposes: to sell its services to the client; and to survey the relationship between its subsidiaries and their clients. It is the beginning of a sharing of information among subsidiaries. It may use it to determine the amount of debt one has outstanding to the subsidiary and to the bank. The comes the catch all phrase. It says:

This information may be used for any other purpose about which the subsidiary will inform you, the client, in writing.

Earlier it stated that the bank would not disclose the information unless it was required to be shared by law or without the consent of the client. Before an account is opened with the subsidiary there is a client consent statement which reads:

By opening an account with this subsidiary you are consenting to the bank's use of this information.

It does not say how. There are no conditions placed on it. It is simply an agreement that the bank may use the information. If a client wants to end the consent written notice must be given to the subsidiary and addressed and delivered to the subsidiary's branch. Notice would be in effect when a written acknowledgement from the subsidiary is received. Should a client wish to close an account,

the subsidiary would give at least 30 days written notice before doing so.

Who is closing the account? The client chooses to close the account. If the client does so or if the client will not give permission to send the information, the subsidiary may close the account without any further consultation with the client. The bank is virtually guaranteeing the information will be made available to other of its subsidiaries and that the client, in order to keep the account, must give consent to the sharing of that information with the various subsidiaries. It is not far fetched that the information could be used by the bank in its decision making process.

Scenario No. 1 depicts a situation where a particular piece of personal information may be used to make a decision against clients or change their financial status.

Let me move on to another scenario. This time it is implicit rather than explicit. We will consider the following. A business has a loan. The bank advises that it is a big loan and asks about it being paid back by the business going public.

We all know what going public means. It means issuing shares which allows the public to buy parts of the business through the purchase of shares. Lo and behold the bank also has a subsidiary which deals in securities. One of the functions of a securities dealer is to underwrite new stock issues, which would be the case in this scenario.

First we had a private company that went to the bank and, in order to pay its loan, went to the public market to sell equity shares. Now the bank suggests to the individual to keep a bit of the loan on which it will give a preferred rate on the condition, according to subsection (2), the underwriting service of its subsidiary is used. On the other hand it says the company can go all the way with the underwriting and will be given a preferred rate but the underwriting has to be done through our subsidiary. The rate will only be given on the condition that if in the future the company needs to borrow money it will borrow it from the bank in question.

One could argue that is good business. However, when a person is in trouble it is tantamount to coercion. It is certainly tantamount to undue pressure. It is not good business. That scenario is not far fetched. It is a very real possibility.

I will outline a third scenario. This one concerns a business which at this point in time is in serious trouble. Under the umbrella provision it has given the bank all its business. The company pension plan, mortgage, personal RRSPs and home mortgage are all with the bank, in one place. The bank has knowledge of the affairs of the business, its proprietor, its family and its members. It knows the business is in trouble and that even if the company pension, the group RRSPs, the individual RRSPs, the house and the other mortgages were liquidated, there would not be enough money to cover the debt.

By consolidating everything under one roof the bank has an unusual power and a coercion possibility that otherwise would not exist. That is dangerous and imprudent. It should not be considered prudent management of financial affairs if all products or services are subsumed under one bank or one financial institution.

Who benefits from all this? It is the bank that benefits. If we take the first scenario, the information is given by the client to the bank and shared with the subsidiary to the advantage of the bank and not of the client.

In the second case the banks underwrite through its subsidiary the share issue. The subsidiary gets the underwriting fees for writing the share issue. Its brokers collect the fees from the distribution of the shares to the general public. It also gets an overriding commission. Then there is the continued trading of that set of securities. The company, which was previously private, now has the additional difficulty of having to meet all obligations a public company has to meet. These are substantial. In all three instances the bank is favoured rather than to the individual.

I will review exactly what we have done so far. Bundling it all together, as the hon. parliamentary secretary said, will somehow be to the benefit of the consumer. By bundling all these products and services we can offer either a preferred rate on the loan or a preferred rate on services or products being purchased.

What is not in the act is important. The act does not require the bank to disclose the prices of these component parts or whether the specifications of the component parts would have been the same before they were bundled together.

There is no protection. It may not even be the same set of products the customer thought he was buying. Tied selling is a very dangerous.

What do other people have to say about this section of the act? Members have heard my interpretation. Let me read what Mr. Yakabuski, director of government relations of the Insurance Bureau of Canada, had to say in his brief to the committee:

If there is an area where the committee may choose to make Bill C-82 an even better piece of legislation, it is with respect to the tied selling provisions proposed under section 459.1 of the Bank Act.

Our view is that subsections 2 and 3 have been worded too broadly and may in fact permit the bundling of certain bank products and other financial services in a way which may not be beneficial to the consumer.

Mr. Yakabuski added to that section of his brief by saying:

With respect to those proposed subsections it seems perfectly absurd to us that the government would decide to put into law definitions regarding some things that might be good for consumers and some things that might not be good for consumers when everyone knows that it is not an exhaustive list. That is precisely why you have proposed section 455.5, which we support, which gives the governor in council the ability to make regulations determining exactly what is and is not beneficial for consumers.

We recognize that some bundling of products can be good for consumers, but why should you want to restrict the regulation making power now?

That is at the heart of the issue. That is what the insurance bureau had to say.

What did insurance brokers have to say? A letter to Mr. Frank Swedlove of the Insurance Brokers of Canada stated:

We believe that there is a cause for concern regarding the proposed amendments to the Bank Act and in particular section 459.1. In our opinion subsections 2 and 3 may limit the regulation making power of the Bank Act. To remove this potential problem it may be preferable to delete subsections 2 and 3. This can be done, if you agree, during the parliamentary review of this legislation which is expected to resume as early as this week.

That did happen but the government chose not to agree with that. Mr. Speaker, I submit to you and to this House that the day will come when we will ask ourselves, and the government will ask itself, why we did not do that? If the people of Canada elect a Reform government then that will be looked after and consumer interests will be preferred. They will be balanced off against the powers of the banking and financial institutions. That is what we need to do.

This same Madam Brown who wrote the original letter that I just read also said this at the committee: "There are other angles to tied selling that I think we overlooked. They are not just simple ones. We can tell you that favourable tied selling clauses that are in proposed subclauses 459.1(2) and (3) will be unenforceable". What do you think of that, Mr. Speaker?

The supervision of these activities will be almost impossible because we go through this ourselves now in the business of tied selling. This is not some amateur making this observation. This is someone who is in the business of insurance brokering. This is someone who understands property and casualty insurance in great depth. She says that it will be unenforceable to do something like this.

Why then does the government insist that this legislation be passed? Last Thursday we presented amendments. This afternoon we voted on those amendments and the government voted them down. What did those amendments say? They said to keep what exists in legislation now and make tied selling illegal.

Why did the government not accept those amendments? Why did the government bring to this House legislation that it has stated will not be proclaimed until September 1998 until the committee has had a chance to study it?

Let the committee study it. Let the issue come forward strongly and clearly and then make the appropriate changes to the legislation as necessary, but do not anticipate what the committee might find, or pass legislation which will not be promulgated until some time in the future. It is absurd.

There is more. This point has to do with some very significant issues. So far we have seen that the proposed amendments invite imprudent consolidation of various aspects of a business. It makes possible the sharing of information that is personal and private. It does not deal with the conflicts of interest between a subsidiary and the lending institution, the bank. It is silent about complete disclosure on price and specifications of elements of products and services that may be bundled together.

I cannot help but read into the record a case where the individuals in question were a hardworking couple in Ottawa. Over many years of hard work and perseverance they took themselves from the proverbial rags to riches. They were diligent about keeping their financial records in order. Their relationship with their bank was top-notch. So sound was their financial record and their relationship with their bank that written in their files were the words "no collateral required". No collateral was required by the bank whenever the couple needed to get a loan.

In keeping with their practice of fiscal responsibility, the couple planned for their retirement by investing in gas and oil stocks, but somewhere along the way a substantial stock certificate went missing. This discovery was made just as the couple was getting ready to retire and turn their family business over to their son.

The wife worried for months over the missing stock certificate she had so carefully placed in her safety deposit box. It was gone. The bank took no responsibility for it and insisted that the couple must have misplaced it. Only because of the diligence of a loyal daughter, often in the face of great adversity which included veiled threats from the bank, did the story begin to come together.

The missing stock certificate was in the possession of the bank during the entire time. This stock certificate had been removed from the couple's safety deposit box without any authorization from the couple, an illegal manoeuvre by the bank.

Despite reporting this to the bank manager, the bank president, the inspector general of banks which today is the of the Office of

the Superintendent of Financial Institutions and the Minister of Finance at the time, nothing was done.

The bank refused to admit that it was at fault, claiming that the stocks had been taken as collateral for a $15,000 loan. These were customers where no collateral had been deemed necessary. They were stocks that the bank had no knowledge of unless it had illegally entered into the couple's safety deposit box.

The result took a grave toll. The father died before the matter was ever resolved. The mutual fund froze the couple's investment, meaning that the mother never saw a dime before she passed away. Because of the bank's refusal to own up to a mistake, this hard working, honest family suffered.

More important, the relationship between this family and the bank has been marred for good, which means that the relationship between the bank and all of us has suffered to some degree. The bank did not live up to its fiduciary responsibility.

Despite an investigation that ruled in favour of the family, the bank has not compensated the family for the value of the stocks, the loss of the retirement funds and the time in personal sacrifice it cost.

To this day, the bank in question refuses to accept full responsibility for its mistake. Small amounts of compensation have been offered which neither reflect the dollar value of the family's financial loss or the value or their personal loss. The amounts, in the form of cheques, are offered on the condition that the family speak not another word of the injustice levelled against them by the bank. Needless to say, the cheques have not been cashed because they refuse to allow themselves to be muzzled this way.

I have been asked to tell this story to warn Canadians that it is unwise to fully trust an institution with such power to always act in their best interest. It is a warning, too, that legislative powers do not necessarily protect the consumer.

In 1979, in 1980 and in 1982, this case was raised again and again in this House. Neither the then Minister of Finance nor the inspector general of banks, now the Superintendent of Financial Institutions, did anything to ensure that the bank took responsibility for its mistake.

Banks in this country are powerful, indeed, more powerful than our elected government. That is precisely the reason why we should not allow clause 55, section 459.1(2) and (3) to stand as is.

Can we be assured that the banks will not unduly pressure or coerce consumers? I submit no, we cannot. That is why we must be diligent in protecting the interests of the consumer and the small business person against the ultimate power exercised by financial institutions. We can never take for granted that the consumer will be protected or the small business person treated fairly. We have heard too many cases where it has not happened.

There is going to be, I am sure, some people saying: "But Mr. Schmidt, that is one case". Yes, that is one case but it is an example of many other cases.

Does this mean that banks deal this way with most customers? Of course not. That is not the point I am making. We ought not to create a situation where it is always a predetermined condition where the bank may do this kind of thing with impunity. That is the issue.

I remember one bank that is proud of itself. In fact, it had a national advertising campaign. One of the characteristics of that advertising campaign was that it said it had become the largest bank in Canada one customer at a time. It is one anecdote at a time that has brought this kind of thing to pass.

As legislators we need to have the interests of the consumer at heart first and foremost. We need stable and solid financial institutions. Our banks are second to none in the world but that does not mean that we have to keep expanding their power. That is the issue.

The point has come where we need to balance the power of all our financial institutions, not just banks. They are not the only institutions that do these kinds of things. There are other groups that do this. Credit unions do this kind of thing. Trust companies do this kind of thing. The insurance companies who are opposing this legislation do some of these kinds of things. The issue is one of fairness. The issue is one of adequacy. The issue is one of justice. That is what I am concerned about. That is what we should all be concerned about. It can be done.

I am sorry the amendments were not passed, but surely to goodness before this legislation is promulgated we will at that time come to a clear understanding that these kinds of provisions cannot be allowed to continue to stand in the Bank Act as it exists in our legislation today.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:40 p.m.

Reform

Chuck Strahl Reform Fraser Valley East, BC

Mr. Speaker, in your usual non-partisan manner you announced that very well. I always enjoy working with you in your new role. I am sorry to see you muzzled, of course, of your former ability to parry and thrust in the debate in the House. Still, you are doing a fine job there and we appreciate your work.

I want to talk for a few minutes today about the financial institutions act, in particular because it is one of the areas that the Reform Party says that the federal government needs to be

involved in very aggressively if Canada is to have that common economic union that will strengthen the nation.

We have suggested that in our vision of what Canada should look like. There are some areas from which the federal government should dissociate itself. For example, the federal government should not be involved in tourism. That should be a provincial jurisdiction. Manpower training should be a provincial jurisdiction and all provinces should have responsibility for that. Municipal affairs is something best left with the provinces and the municipalities. Things such as housing, language and culture should be left with the provinces. The provinces and the municipalities are much closer to the needs in their regions and they will do much better job of managing things than will the federal government.

In our fresh start document we detail the areas that we think should be handed off to lower levels of government. It goes so far as to say that municipalities should be officially recognized as the level of government closest to the people and they should be included in federal-provincial arrangements such as the infrastructure programs that are being announced here on the cusp of the election. Once again, it is the municipalities that are going to have to contribute a third of the money in these infrastructure plans and they getting in on the deal after it is completed.

I can say from the last infrastructure deal, where about 82 to 84 per cent of the money went to ridings controlled by provincial MLAs in the NDP government of British Columbia, there was a lot of dissatisfaction with the fact that municipalities are treated as the weak sisters, or the poor brothers or whatever they can be called, but they do not have the influence on policy that they should have.

All that said, one of the things that should not be weakened in the federal government is regulation of financial institutions. That forms one of the 10 main areas where the Government of Canada should concentrate its efforts.

I should read those areas into the record. They include defence, foreign affairs, monetary policy, regulating financial institutions, the Criminal Code, facilitating national standards, equalization, international trade, domestic trade and reform of national institutions such as Parliament. On the last point I know, Mr. Speaker, as the co-author of a report that talks about reforming the national institution of Parliament, even going so far as recommending that the position that you now have be given to one of the opposition parties, for example, you would be, as many others are as well, in favour of reforming national institutions here in Parliament.

The reason that these 10 areas need to be emphasized is because these are the 10 areas of commonality that I think all Canadians can agree to and that all provinces can agree to, that if we are going to have a nation we need to have these areas under the control of the federal government.

There is no use in the power to regulate domestic trade disputes being held within a province. Obviously one province could say it is looking after its best interests so it will not give in or allow another province to buy supplies or whatever it might be. This cannot be and should not be.

In recent times the Liberal government attempted to put together an internal trade agreement in Canada. Whole sections of the internal trade agreement were left blank, including the section on energy. It is a completely blank page because the provinces cannot agree among themselves.

The federal government needs to step in more aggressively and take control of the 10 areas that I mentioned. The federal government should not acquiesce to any one province. It should aggressively use its constitutional right to regulate financial institutions and internal trade disputes and force them to a conclusion. If one province does not want to sign on, it will have to be pushed a little. One thing that makes a country is a common economic market. By extension we also need a common monetary policy. That is one thing a Reform government would stress. We need the regulation of financial institutions. We also need control of the Criminal Code and issues like international and domestic trade.

It is important for people to realize that a decentralized government or a rebalancing of the powers of the federation does not mean the federal government will not have a lot to do. Our view of what will happen under a Reform Party government is that some $94 billion will be used on program spending. Those kinds of dollars in 10 areas will focus our energies, limit the influence of the federal government and allow it to have a substantial role so that people are competent and know the roles. The provinces including the province of Quebec will see where we are heading, what kind of vision we have and so on.

Today in question period again I was a bit disappointed. The Bloc Quebecois raised the idea of where the country was heading. The Prime Minister was asked about a distinct society and what it means. His response was that Quebecers would stay because we have the best country in the world.

That is what he said during the last referendum campaign. The gist of what he proposed was that no one would want to leave because it was the best country in the world. I agree it is the best country in the world, but it is not a vision for the country just to repeat that ad infinitum. We need something to communicate to the separatists in Quebec, to the federalists who are disenchanted with the status quo and to others indicating that we have something better, a third option.

There is separatism, the status quo and a third option in the middle. Reformers want to tell Quebecers we want them to stay in Canada. They should know up front that the third option includes strengthening some provisions of the federal government to make them solid. It would also make many other things solidly provincial.

When they are concerned about their culture, we could say that by all means culture should be handed off to the provincial governments, lower levels of government, private institutions, individuals, private organizations and so on. There is a lot of support for cultural activities in many provinces, regions, districts and whatnot.

We want to make clear that we will give the provinces plenty of powers which I believe are theirs constitutionally. The federal government will hang on to certain powers. We are not prepared to sell the country by diluting those powers.

The reason the previous speaker spoke about financial institutions in such detail is that a Reform government would continue to regulate financial institutions. That mandate will not reside with the provinces. The provinces need to know that. There would be discussions with finance ministers, interest groups and other parties, but the federal government, led by the Reform Party, would continue to hold the trump card. Financial institutions would not be given away to a lower level of government because they come knocking on the door asking for it. They need to be regulated by the federal government if a a common economic union is to be maintained. That is something we need from coast to coast and we want to emphasize.

I believe the Liberal government would agree with me that it is obvious that a country must regulate the monetary policy of its financial institutions. We are asking the federal government, in the time remaining before the next referendum, not to play games like the Prime Minister did today in question period. He said that everything was good, that it was a wonderful country and that no one would leave.

If we continue to use that argument heading into the next referendum, it will be like going into a battle of wits unarmed. When we say to people who are determined to leave that we know they will not leave because it is a great country, they will say that it is not working the way they want it to. They will ask: "What is your vision of the country?" If the attitude is to stand and say it is a great country and no one will leave, I am fearful we will lose the country.

We need to indicate where we are, where we are going, a step by step plan to take us there, and a vision of the country we can grab hold of. If the Prime Minister could lay out the vision he holds for the country, where he would like to take Quebec and the rest of the country, what he is offering, the division of powers and his constitutional proposals, Quebecers might grab it. If he continues to keep the cards close to his chest, wait until a crisis and hope he has the right card to play at the right time, it is a poker game he will lose.

The separatists know exactly what they want. I do not agree with them in any way, shape or form. The only thing they are countering is more of the same. Brian Mulroney in his speech last night said that we had to go back to offering them what he tried a couple of times. I do not agree. There must be something in the middle, a third option. The Reform Party has one. Maybe they do not like it but at least it is an option.

The Liberals would be wise to come up with an option. They are playing a dangerous game. They are going to court. They are saying those people cannot leave, that it is the greatest country so no one will want to leave. If those are the two arguments they are using in the debate, I fear for the next referendum.

On the other hand the Liberals should say that the regulation of financial institutions is a federal mandate and will remain a federal mandate, and that is the way it will be. Canadians and Quebecers want it that way. They want a common Criminal Code. They want federal control over monetary policy, defence, domestic trade and international trade. If a bunch of this other stuff is given in a third option because the provinces deserve it, they have a vision to sell. They have something to put out there. They cannot say that maybe financial institutions are on the table. They cannot say that maybe it is a provincial matter. Who knows? The liberals do not lay it out. They come to the table with an uncertain list of things they are dabbling with. The people who know what they want play them like a fiddler plays a fiddle. They just play them along and ask what else they will be given.

The end result, as I mentioned earlier, is that we came within a smidgen of going over the cliff in the last referendum. Mr. Bouchard is rubbing his hands in glee at the thought of facing a Prime Minister who does not know where he wants to take the country. Unless he gets out of the mindset he came here with 30 years ago that playing along and hoping to get by will somehow get us through the next set of crises, all it will take is one wrong step or a misstatement at the wrong time and the 40,000 votes on the no side last time will be on the yes side. Then what? Then we will have a real battle on our hands, a real problem.

I am pleased to reconfirm for Canadians that some things under the federal government need to be strengthened and maintained in a federal Parliament. We cannot have a country unless there is a strong central government on some issues.

The people of Quebec need to know that on many other issues there is a party offering a third option. It does not have to stay the

way it is. Quebec does not have to separate. The third option is a clear division of federal and provincial powers. They take what is constitutionally correct to take provincially and the federal government keeps control of the things it needs to control to maintain the country.

If Quebecers hear that option they will embrace it. The federal government would be wise to put forward its vision of the country rather than just say: "I am okay, you are okay, everything is good". If the Liberals put forward their vision of the country maybe Quebecers and the rest of Canada will say in the next election they are willing to take a vote on it.

That is what the Reform Party will be doing. I challenge the Liberals and any other party to come forward with a third option that makes sense for all Canadians and certainly for Quebecers.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

Hillsborough P.E.I.

Liberal

George Proud LiberalParliamentary Secretary to Minister of Labour

Mr. Speaker, I listened to the hon. member over the last few minutes speak on many issues. Sometimes he mentioned the bill we were debating.

However one part of his speech concerned centralization and decentralization. I understood the member to say there were things the federal government should be involved in and some it should not be involved in. We are talking about financial institutions in this debate.

Could the member give his views on what the role the federal government should play when dealing with provinces? What other things should we give to the provinces? What areas should we deal with in the governance of financial and other institutions?

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

Reform

Chuck Strahl Reform Fraser Valley East, BC

Mr. Speaker, I invite the member to check out the literature we will be campaigning on. We go into some detail in the document called "The Fresh Start".

We categorized the items we think the federal government needs to strengthen and maintain. We will focus federal powers in the following areas: defence, foreign affairs, monetary policy, regulating financial institutions, the Criminal Code and facilitating national standards. We have a group of proposals for increased spending on health care, for targeting spending on advanced education and so on. We have a group of items in the national standards list such as equalization, international trade, domestic trade and reform of national institutions such as Parliament.

In the 36th Parliament we will have plenty to do if we look after those 10 areas and if we make the changes I think are starting to be made now in this and in other bills. There is a lot of work to do in those 10 areas, especially when we get into the social policy side which I mentioned in those other areas.

We will eliminate the duplication and jurisdictional overlap between different levels of government by giving those areas-

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

The Acting Speaker (Mr. Milliken)

It being 4 p.m., it is my duty, pursuant to the order adopted on Thursday, April 10, 1997, to interrupt the proceedings and put forthwith all questions necessary to dispose of the third reading stage of the bill now before the House.

The question is on the main motion. Is it the pleasure of the House to adopt the motion?

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

Some hon. members

Agreed.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

Some hon. members

No.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

The Acting Speaker (Mr. Milliken)

All those in favour of the motion will please say yea.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

Some hon. members

Yea.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

The Acting Speaker (Mr. Milliken)

All those opposed will please say nay.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

Some hon. members

Nay.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

The Acting Speaker (Mr. Milliken)

In my opinion the nays have it.

And more than five members having risen:

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

3:55 p.m.

The Acting Speaker (Mr. Milliken)

Call in the members.

(The House divided on the motion, which was agreed to on the following division:)

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

4:25 p.m.

The Deputy Speaker

I declare the motion carried.

(Bill read the third time and passed)

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

4:25 p.m.

Liberal

Paul Zed Liberal Fundy Royal, NB

Mr. Speaker, I think you will find unanimous consent for the House to now proceed to third reading of Bill C-55.

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

4:25 p.m.

The Deputy Speaker

Is there unanimous consent?

An Act To Amend Certain Laws Relating To Financial InstitutionsGovernment Orders

4:25 p.m.

Some hon. members

Agreed.

Criminal CodeGovernment Orders

4:30 p.m.

Papineau—Saint-Michel Québec

Liberal

Pierre Pettigrew Liberalon behalf of the Minister of Justice and Attorney General of Canada

moved that Bill C-55, an act to amend the Criminal Code (high risk offenders), the Corrections and Conditional Release Act, the Criminal Records Act, the Prisons and Reformatories Act and the Department of the Solicitor General Act, be read the third time and passed.

Criminal CodeGovernment Orders

4:30 p.m.

Bloc

François Langlois Bloc Bellechasse, QC

Mr. Speaker, first I want to thank the parliamentary secretary and member for Prince Albert-Churchill River for agreeing to reverse the order during the debate at third reading, since the subcommittee on national security will meet at 4.45 p.m.

When Bill C-55, which amends the Criminal Code and several other acts, was first introduced, the official opposition expressed some reservations, particularly as regards new clause 810.2 of the Criminal Code, as proposed at the time, and the clause dealing with electronic surveillance.

I will get back in a few moments to these two clauses, which seemed to present a problem at the time, to see how these issues were solved.

Bill C-55 provides the Canadian justice system with the tools needed to deal with a new reality, with a new approach towards criminals and with changes to the criminals' behaviour, because the traditional notion of what constitutes a crime has evolved during the last few years and the last few decades in Canada.

Since this bill aims at keeping a closer eye on dangerous criminals, at providing the justice system with the means to act in

order to prevent dangerous offenders from being released, it is a step in the right direction, because it gives us tools we did not have before and without which we could not control, at the end of a sentence, the behaviour of an individual who obviously is going to reoffend.

Bill C-55 allows the government, through the courts, to act in order to control dangerous offenders by giving indeterminate sentences. It also adds a new category of criminals who will be designated as long term offenders and it includes provisions that make the release of some inmates subject to certain conditions, where the inmates will have to report and guarantee that their release will represent the lowest possible risk for society. We can easily agree that we need to get involved in these matters, as we mentioned at second reading.

That left us with the two obvious issues raised by section 810.2 and the provisions concerning electronic monitoring, which were giving up some problems. By the way, these two clauses were considered in detail in committee.

Section 810.2 as it was introduced in this House was totally unacceptable. It meant to give the attorney general the power to use an institution set up, according to our criminal law, to settle the relations between individuals, what is called a "peace bond" in English. This is a procedure created under British common law in which the state or the crown does not interfere. The classic example university students are given is that of a rejected lover who keeps pursuing his old flame, who in turns asks for a court order in order to get some peace, hence the term "peace bond", I guess.

In the original bill that was brought forward, section 810.2 authorized the attorney general to request, on behalf of the state, the issuance of a peace bond requiring the person against whom the peace bond has been issued to comply with strict conditions.

The state was interfering with private relationships in criminal or privacy matters, which seemed unacceptable to us when we studied the bill, and at the second reading stage.

Things have evolved, and our position was strongly supported by most witnesses who addressed section 810.2 specifically before the justice and legal affairs committee. Almost all of them said that the attorney general should not have the authority to request the issuance of a peace bond against someone.

And we can see where the problem lies because we can imagine a situation where a judge, having heard a criminal case, may very well decide to acquit the accused on the basis of reasonable doubt, but in the case of a request by the attorney general for the issuance of a peace bond, the same judge having heard the same evidence may say: "I did acquit you on the basis of reasonable doubt, but on the basis of the preponderance of evidence, I come to the conclusion that you have committed the offence and that measures must be taken to protect society against you".

So there was a risk of having a grey category of people in Canadian society. We would have had people who were guilty, people who were innocent, of course, which is the vast majority of Canadians, but also people against whom a peace bond had been issued at the request of the state and who, having not been convicted of any criminal offence, would have had to account for their time and whereabouts to a probation officer or to the court. We thought it was absolutely unacceptable.

In a free society such as ours where criminal law principles are based on age old values, we cannot tolerate or accept a situation where a person is in legal limbo, not knowing what his or her rights are.

There are innocent people, and every citizen is presumed innocent, and there are some who have been found guilty.

The amendments to section 810.2 mean that, henceforth, under the wording as it now stands at third reading, following pressure from the official opposition, following pressure from witnesses who appeared before the Standing Committee on Justice and Legal Affairs, section 810.2 has a new wording. I thank those who paid attention to the representations made for having taken them into account and given us a wording that now means that the peace bond provided for in 810.2 again becomes an bond between two people, to be used by an ordinary citizen against another person disturbing his peace.

The only requirement that will be made under section 810.2, which is certainly a rather special peace bond given the consequences for anyone who violates it, is that an individual who wishes to avail himself of these provisions must so inform the attorney general.

I think it normal, in an orderly society, that the attorney general responsible for the administration of justice under the provisions of our constitutional laws be aware of what is happening before our courts.

The amendment to 810.2 disposes of our first objection in a positive manner. There goes one obstacle to our supporting Bill C-55. The public's rights are protected, but so are the rights of individuals, primarily the fundamental rights that are the heritage of those who for decades, not to say centuries, helped construct our criminal law, whether in the United Kingdom or in Canada. The values passed down to us are the same.

It would have been unfortunate if a section passed on the sly challenged the very basis of what makes our criminal justice system so rich, that is the presumption of innocence and the clear distinction between the rights of individuals.

Our second concern was about electronic surveillance involving those famous wrist bands to monitor someone without having to put him in jail. Was this appliance appropriate? One can still have concerns about it.

Of course, at present, there is a considerable number of inmates, probably even a critical mass, so to speak, who do not have to be physically detained to be monitored. Those people represent a low to moderate risk. Can we rely on a system whereby a person wearing a wrist band will stay in contact by telephone with a police station in order to allow it to monitor his presence inside a given perimeter?

Our main objection concerned the effectiveness of such a system and our capacity to apply it everywhere in Canada. Such measures would probably be easy to apply in cities like Toronto, Montreal, Quebec or Vancouver. However, in vast areas where communications are uncertain, where distances are so great that police stations that could act as headquarters for the monitoring of a criminal wearing a wrist band are quite far apart, I suggest that it would be difficult to implement such a system. Will inmates have to move to be eligible to the electronic surveillance program? I do not know.

I still have doubts, but some of my concerns were answered in committee by some of the studies. They were answered, but we should keep in mind that witnesses told us that in the United States, for instance, field trials have shown that should the authorities lose contact with an individual, the electronic bracelet could be used-this is not in the bill-to inject a toxic substance causing cramps, diarrhoea or other rather debilitating physical symptoms.

The loss of contact with the monitoring centre might be accidental. One must realize that there are limits. Let us try out the electronic bracelet. This piece of legislation could be revisited in a few months or a few years if problems arise; however, we should be aware that well organised groups, mainly south of the border, especially in the United States, have done research, are ready and have a technology that would make it possible to go much further and take steps that are unacceptable in a free and democratic society.

The reliability of an electronic bracelet system can also be questioned. Will people lose contact with their monitoring centre unexpectedly, by accident, through no fault of their own? False alarms are quite possible in this area. This is probably a chance we have to take, if we want to see how good the system is.

Of course, it will alleviate the problem of overcrowded prisons by not incarcerating a number of people who should not be put in jail and who are a financial burden first for the government, but also in terms of human resources remaining inactive. One should not think that keeping track from afar, by means of an electronic bracelet, of an individual who should be monitored is a panacea, the solution to all that ails us.

But since the evidence presented to the Standing Committee on Justice and Legal Affairs shows that the advantages are greater than the disadvantages, we are ready to give it a chance and support the present wording of Bill C-55, including the clause on electronic surveillance of prisoners, subject to the earliest possible reassessment.

There were some other points, such as accelerating the rehabilitation of prisoners who do not belong in prison, or penitentiary in the case of federal jurisdiction. We can also support these measures.

In the end, after the committee review, our position changed because the bill was amended. Clearly I always come back to section 810.2, which was the main hurdle. Since it has been amended, we no longer have any reason to object to the bill so we will support Bill C-55 at third reading.

Criminal CodeGovernment Orders

4:45 p.m.

Prince Albert—Churchill River Saskatchewan

Liberal

Gordon Kirkby LiberalParliamentary Secretary to Minister of Justice and Attorney General of Canada

Mr. Speaker, I am very pleased to address Bill C-55 as amended by the Standing Committee on Justice and Legal Affairs.

I trust that all members have noted the significant amendment to the judicial restraint order provision, deleting references to electronic monitoring.

I want to emphasize to members the crucial importance of this bill. The Canadian public has told us without equivocation that it wants the government to devote its attention to violent criminals, to spend the criminal justice dollar where it will do the most good.

Bill C-55 responds to that demand by giving the police, prosecutors and judges new tools for controlling violent offenders. It might have been easier for the government to simply amend the Criminal Code so as to lengthen sentences for every kind of offence. For example, if we doubled prison terms for every offence or imposed mandatory minimum sentences for every crime, it undoubtedly would have an impact. Of course the courts would be clogged with trials, are penitentiaries would be bursting at the seams and federal spending on corrections would expand almost endlessly.

I do not believe that Canadians want such sweeping, unselective measures. They have told us they want well targeted laws that get tough with violent offenders.

The public response to Bill C-55 has been very positive. The government supports the new long term offender concept which, in combination with the existing dangerous offender law, gives prosecutors another way to achieve long sentences for sex offenders.

I would like to briefly list the major innovations contained in Bill C-55. Each of these changes improves the criminal justice system's ability to target high risk offenders. Along the way I will

mention three of the amendments contained in the standing committee's report.

Bill C-55 improves the dangerous offender procedure contained in part 24 of the Criminal Code by requiring that a judge impose an indeterminate sentence in each case where a dangerous offender finding is made.

Previously it was possible in exceptional circumstances for the court to impose a limited period of incarceration, although such sentences were rare. In foreclosing that option we are not really limiting the alternatives available to the court. An indeterminate sentence is fully justified when we consider that the prosecution will have proven in a special hearing that the offender has shown a pattern of repetitive behaviour and the likelihood of causing death or injury to other persons or causing severe psychological damage on other persons through failure in the future to restrain his behaviour.

Bill C-55 also changes the date of the initial parole review of a dangerous offender from the third year of incarceration to the seventh year. It is important that offenders be eventually considered for parole. The fact that we are locking these offenders up indefinitely does not remove the need from a legal perspective for having a review of their dangerousness, but there never was any magic in conducting the first parole review after only three years. In fact, experience has shown that dangerous offenders are never released after such a short time.

A review at the seven year point seems more reasonable and more in line with the parole eligibility of violent offenders who otherwise receive long sentences of fixed duration. By the way, Bill C-55 would continue the provision for subsequent parole reviews every two years.

Another innovation created by this bill is the extension of the period during which the crown may bring a dangerous offender application. The proposed section 753(2) will allow the prosecutor to give notice to the offender of a possible intention to make a dangerous offender application within six months. It is quite possible that new victims or witnesses may come forward after trial who will show the true extent of the offender's criminality and whose evidence can fully establish the pattern of past brutality required to meet the dangerous offender standard. This new clause gives the crown the flexibility it needs to put together its case in the aftermath of a trial and sentencing.

A balance has been struck by the drafters of this provision. We have heard proposals to amend the Criminal Code to allow the dangerous offender application at anytime during the sentence or perhaps during the last year of sentence. Quite simply these models would not survive a constitutional challenge, a charter challenge, but this new window of opportunity is workable. It applies for six months beyond the conviction and sentencing.

It is circumscribed by rules that respect the rights of the defendant. For example, the prosecution must show that the new evidence has emerged that was not reasonably available at the time of sentencing and thus the crown has to exercise due diligence in the first place in marshalling evidence. Only when new relevant evidence appears can the delayed dangerous offender application be launched.

Bill C-55 also removes the requirement that two psychiatrists testify at every dangerous offender hearing. A few witnesses before the the standing committee criticized this change in the law as though it somehow impinged on the rights of the defendant or reduced his ability to defend himself. This change does not reduce the ability of the defendant to introduce expert evidence and call evidence. The Criminal Code and the Canada Evidence Act continue to apply. All this amendment does is avoid the requirements for two psychiatrists to appear at every hearing. Unfortunately there is a shortage of qualified available forensic psychiatrists in some parts of Canada. In fact, in many dangerous offender cases both sides end up agreeing that one psychiatrist should testify.

The long term offender sentencing category is at the centre of Bill C-55. This is a new measure. It not only enables the prosecution to seek extended controls over various kinds of serious sex offenders, but the procedure set up by Bill C-55 is linked to the dangerous offender process so that in many cases a long term offender finding may result as an alternative when a dangerous offender application does not succeed. It is worth taking a moment to explain the interaction between the two procedures.

Let us assume that we are dealing with a case of aggravated sexual assault involving an offender with a history of violent offending. Upon conviction for the individual offence of aggravated sexual assault the crown can seek from the court a remand for assessment by experts. This assessment with serve both purposes, either a dangerous offender application or a long term offender application. Hopefully the assessment will invoke the skills of psychiatrists, criminologists and others who can come up with a sophisticated assessment of the risk posed by the offender.

Once the assessment report is filed the prosecution can then decide which kind of application to make, but the crown has flexibility. This is the important point. Even if a dangerous offender application fails, the court can still find the offender to be a long term offender, provided of course that the criteria are met. In effect the court can say that the threshold for a dangerous offender finding is not satisfied but the same evidence supports a long term offender finding.

Alternatively, the court can move quickly to bring a second hearing on top of the long term offender issue and accept more evidence.

I would like to highlight one of the amendments contained in the standing committee's report. The Criminal Code already provides for input by victims of crime in criminal proceedings, either by personal testimony or through victim impact statements. It will certainly be important to hear from victims during the dangerous offender hearing. However, as I mentioned, when a dangerous offender finding is not made the judge may proceed with a second hearing on the long term offender issue. This could impose a hardship on crime victims if they have to testify again at a second hearing. Therefore the amendment explicitly states that any evidence already given by a victim or a victim's family at a dangerous offender hearing is also deemed to have been received at the subsequent long term offender hearing.

The long term offender idea has received broad support. During the standing committee hearings it was supported by the Canadian Police Association, the Canadian Association of Chiefs of Police, the British Columbia Civil Liberties Association, the Canadian Resource Centre for Victims of Crime and the victims rights group CAVEAT, among others.

It targets sex offenders. It essentially goes after that group of offenders just below the dangerous offender level. These are sex offenders who are likely to receive serious prison time but who perhaps do not warrant an indeterminate sentence.

Under Bill C-55 proposals they will indeed get their usual sentence of incarceration but in addition, and when found to be long term offenders, the court will order up to ten years of additional supervision in the community. Only when the offender has completed his penitentiary sentence, including parole, will the long term supervision period begin.

The long term offender criteria requires on the one hand that the court find that there is a substantial risk that the offender will reoffend, on the other that there is a reasonable possibility of eventual control of that risk in the community.

Are we trying to be optimistic and pessimistic at the same time? Let me point out again that the offender will get the usual sentence for imprisonment for his crime. The additional long term supervision period allows the national parole board and the correctional service to control the offender's gradual transition back to community life. The provision is intensive and the long term offender who breaches any of the conditions of the court's order can be pulled back into custody, not to mention charged with the newly created offence of breach of a long term supervision order.

The third pillar of Bill C-55, which is admittedly controversial, is the new judicial restraint order to be added to the Criminal Code as section 810.2. I remind my colleagues of the purpose of this new measure. This restraining order is modelled on the existing section 810.1 which was designed to prevent offences against children.

This new order is designed, somewhat more generally, to prevent serious personal injury offences. Despite the controversy swirling around this measure, its underlying principle has been clear from the beginning. The goal has always been to prevent violent incidents, to establish in a court of law the risk presented by certain individuals and to command those individuals to keep the peace and be of good behaviour; in other words, to meet the standard of conduct that is expected of them as participants in society. Conditions may be attached to these orders in much the same way that conditions are attached to probation orders or to other peace bonds.

A lot of newsprint has been devoted to the question of electronic monitoring in section 810.2. The original bill envisioned electronic monitoring controls being imposed as a condition attached to the judicial restraint order but only where the court thought it would be appropriate and where such programs are available. In case some of my colleagues think that electronic monitoring is an abstract idea or science fiction I invite them to look at the facts. Several Canadian provinces use electronic monitoring in conjunction with supervision to manage probationers and other offenders.

British Columbia, for example, has 350 offenders in its program at any one time. These programs are expanding. Call it what you want, a control mechanism, a monitoring device, a crime prevention tool, electronic monitoring programs have their place.

However, concerns have been expressed about the capacity of the criminal justice system to use the technology appropriately and with sufficient moderation in the context of restraining orders. The most common use of technology has been to ensure that the offender remains in his or her home and only leaves the premises according to a set schedule.

We are all familiar with the concept of electronic bracelets being applied to offenders. The standing committee, after hearing a number of witnesses, concluded that we should be cautious in the use of such technology in situations that are entirely preventive. In other words, electronic monitoring, as presently used by Canadian provinces, curtails liberty to some extent. We should be careful in applying it where the subject is not actually convicted of any offence.

The reprinted bill deletes all explicit references to electronic monitoring in connection with the proposed judicial restraint order and I believe that this significant change should satisfy the critics of the legislation.

To summarize, Bill C-55 as amended, delivers on the government's commitment to strengthen the law to control sex offenders. It is solidly based on three years of work by the federal-provincial

task force. It is supported by the provinces which ultimately have the responsibility of prosecuting these offenders.

Police support this bill. The standing committee supports it and has introduced amendments to improve it. I commend this bill to my colleagues.

I just want to add that the bill presents another significant step forward in the efforts of the government to make our streets and homes safer places to be. The Minister of Justice has introduced significant reforms to criminal justice. As well, the Solicitor General has introduced a number of reforms. More reforms have been introduced to the criminal justice system, more steps have been taken to toughen up the criminal justice system than have ever been taken by any single government in the history of our nation.

This is something of which we can be very proud. This particular effort is the result of collaboration between the federal government, the provinces and hearing submissions from the many interested parties. I wish to thank all those who have been involved in the process.

As a number of commentators have indicated, the bill is the most significant improvement and change in the Criminal Code in dealing with violent offenders that has been introduced in decades. Of that we can be very proud. I commend the Minister of Justice for his efforts, those on the standing committee who have put forward some intelligent, common sense amendments and for all the hard work that has been put into this bill, a lot of people deserve credit. We commend it to the Canadian people.

Criminal CodeGovernment Orders

5:05 p.m.

Reform

Art Hanger Reform Calgary Northeast, AB

Mr. Speaker, if that is the best this government can do, no wonder the country is in trouble. If that is the best bill the justice minister can come up with to deal with violent offenders, no wonder there are so many victims out there. It is going to continue because the bottom line is that violent offenders will still be released back out into the community. The checks and balances are neutral when it comes to dealing with the most violent offenders in our society.

Let us look at some statistics. These are from the parole board. This data from the board deals with violent and serious offenders. It states that only about one-half of a violent offender's sentence is served. I would assume that includes murderers. Attempted murderers, for example, serve an average of 48 months when the courts have really sentenced them to 94 months. That is only one-half of the sentence. The parole board is releasing violent criminals after they have served one-half of their sentence. In the cases of manslaughter, the actual time served by the offenders averaged 44 months when the original court sentence was 84 months.

Finally, with respect to people who have committee aggravated assault or rape, the average offender was released after having served 49 months, 4 years, of a sentence of 79 months. This bill does not address any of that other than the fact that the government insists on releasing the violent offenders back out into the community.

What are the answers? I think there are answers. First, we have to start looking at what is happening in our courts. A sentence given is not served any more, as I have stated. Approximately one-half of the sentence is served. It is high time we went back to truth in sentencing. The rehabilitative model that is touted on the government side has been a dismal failure. Truth in sentencing laws would bring some sort of balance back into the system.

If a rapist received a 10-year sentence, which it is unlikely, he would then serve that sentence. That is what we and the people of this country are looking for and want. People want to have a measure of safety in their communities. Unfortunately many people are not feeling that which will be very evident in the next election.

Just going door to door in my riding I am picking that up at the door. I know that the members across the way are also picking that up. In fact, there are some people in the lobby right now visiting from British Columbia who are picking it up because they have been personally hit by crime as victims. Apart from that, the average person feels very uneasy and unsafe on our streets right now.

We talk about truth in sentencing and about a sentence given should be a sentence served. In other words, life should mean life with no eligibility for parole. Why should a first degree murderer get out on the street at any time? There is no reason for it. Why should a man who has taken another man's or woman's life get out on the street?

If we look at the statistics on first degree murderers we see that out of the 46 who applied for early release up to mid-1995, 11 killed women: their wives, girlfriends or people they knew. They received early release. I would say that a murderer would definitely fall into the classification of a dangerous offender. Yet those who have been convicted of that heinous crime are being released on to the street.

Eight of those 46 killed policemen. That is a deliberate act. No mistake can be made that it was other than the intention of killing the police officer, the person in authority.

Three of those murderers who obtained early release killed children. I am sorry but I do not see this bill addressing any of that. The sentence given by the courts is being chopped by the parole board and by applications for early release. Now other provisions under section 55 allegedly restrain them further but I do not see

where the restraint is. Violent offenders are still getting out on our streets. Bill C-55 does not stop it.

The parliamentary secretary spoke of indeterminate sentencing, that a court will decide whether or not the offender will continue to serve his time. That may be well and good but it is also putting it on the shoulders of the courts. The court's dealings with those types of offenders has not been very good.

I have an individual in my riding by the name of Tocher. I mentioned him the other day. Since 1982, he has been abusing kids. He abused three boys in the last set of offences. Now he is in court and has been given a short sentence again, something like 18 months. He has been doing that since 1982. He has been in and out of the court system five times for similar types of offences. What good are the courts doing? He has never been declared a dangerous offender. That available to the courts at the time. What is going to change? It is just going to be business as usual.

The answer to the alleged crowding problem in our prisons is to release him into the community. I do not see Bill C-55 changing a whole lot.

How can we have a guarantee that the message is going to get to the criminal? What is the guarantee? The criminal has to understand that if he steps across the line that this will happen to him. The sentence, the incarceration and the place where he spends it will not be pleasant because he stepped over the line.

We put an amendment forward on this bill. It was called a two strikes amendment. In other words, if someone commits a violent offence, and serves the majority of the time, the message would be sent to that offender that if he committed a second offence, he would go away for an indefinite period of time. The sentence will be a minimum of 15 years if he commits another violent offence, perhaps even longer, maybe even life.

That message has to be sent to the offender. It is a revolving door in our prisons. It is a well known fact that 70 per cent of those serving time have served time before.

There is no reason why the government could not send that message to a criminal. The criminals are getting arrogant because they know they can get away with too much. They are getting arrogant when they pick on our kids. They do it time and time again because nothing happens to them. They are not treated like criminals. Sure, they are restrained from moving around for a little while but everybody rushes to protect them and support them. Some say that it is society's fault. Unfortunately it is their fault because they are the ones who chose to commit the crime that put them in jail.

I have said these things in public before. There is no reason I should not have said them. I think the majority of people want to see stiffer penalties for prisoners.

I paid a visit to the Bowden Institution, a prison in Alberta. The prisoners heard that I was coming and circulated a petition about my anticipated arrival. Many of those serving time look at me as a threat because I tell them that they should be working for a living. Even if they are behind bars they should be productive. The productivity rate inside our prisons is a dismal shame. If prisoners are not unemployed in prison, the majority of them are underemployed by far. Part of my theme was that they should be working for a living.

Activist prisoners within the prison system circulated a poster that said: "Art Hanger is coming to threaten the inmates of Bowden. Art Hanger wants you to have no temporary absences or parole". They are absolutely right. I do not want them to have a lot of temporary absences or parole. Why should they have? They are serving time for committing the crimes that put them in there. They should be paying society back for their crimes. They should be doing something instead of being out on parole. The parole system is obviously not working.

The poster also said: "Art Hanger wants you to be involved in slave labour". I do want them to work, absolutely. Why should they not work? They call that slave labour. They should be doing all kinds of things. Maybe they should even be earning a wage and a portion of it could go to support the victims they victimized. They could pay for their room and board. Then maybe they could keep some of the money left over as a stake for when they get out.

There is another nonsensical part of the Correctional Service of Canada's policy. Inmates are only allowed to accumulate $80. When they walk out the door of the prison they have no money in their pockets. They have barely enough to survive for a night. They should at least be earning minimum wage but they should be productive. They should be doing something.

The poster goes on to say that I want them to have no recreation. The riot in Millhaven was a result of change in routine. Inmates felt they should have more recreation time. To get their point across they killed a man. They wanted to tell management they were unhappy because they were not getting what they wanted, more recreational time or a return to the old routine. There is something wrong with that mentality.

The poster goes on to indicate that I want them castrated and tortured. I do not want them castrated or tortured. Nor has Reform ever said that in any of its policies. This is their concern. I understand why they may have that concern in that 70 per cent of the inmates in the Bowden Institution are sex offenders.

There is something wrong with the attitude of the offenders in our jails today. It has been nurtured by the corrections policy and supported by government sanctioned rights. There is something wrong.

It went on to say that I wanted them locked up for 24 hours. I want them locked up for 24 hours. In fact I want them locked up until they serve their entire sentences, as do most people in the country do. The violent offender should not get out until he has served his sentence. The violent offender should stay in there and work to pay for his keep.

The poster summed up their list of complaints about me in the following statement: "Art Hanger wants you dead". I do not want them dead. I want them to correct their behaviour and I see that the present system is not helping them do that. It is creating arrogance among the prison population. They know they will not be punished for what they do. They will be detained for a while, but everybody rushes in to protect them, to help them and to counsel them. There is no punishment. from the viewpoint of those inside that is what our system is all about. I might add that is shared by prisoners in other prisons. I have talked to enough prisoners to know.

There is also something wrong on the management side, the policy makers. Along with two other members I had an opportunity to go to Edmonton maximum security in December 1995. There was a lot of snow on the ground. It was much like northern Saskatchewan where the parliamentary secretary to the justice minister lives. The prison houses approximately 400 prisoners. The warden heard we were coming. He wanted to make sure the staff of the prison knew we were coming. He sent out a memo which happened to get into the hands of the press and of the Reform Party. This is what it stated:

The members for Calgary Northwest, Fraser Valley West and the member for Wild Rose will be visiting us on December 1, 1995. These gentlemen are known to be ardent critics of CSC and are quite vocal in expressing their views.

I want to ensure that Edmonton Institution is at its best, giving very little reason for criticism. Therefore this institution will be spotless. Areas needing paint will be painted. Inmates will be visibly at work during their tour (as they should be anyway) and programs will be in full swing. This includes the protective custody unit.

I do not want to see inmates lying around doing nothing (not that this would happen anyway). I have not seen a lot of activity that involves inmates shovelling snow. The walks should not be cleared with snow-blowers. Push shovels are more appropriate. Buy them if you need them.

For what? The message was just because we came to visit them. They wanted to have the appearance that everything was okay and that everyone in the prison was working. There is something wrong with a policy that allows things like that to happen in our prison system.

As a result Bill C-55 is an attempt to sound like something is being done. What is being done? Nothing. There is no punishment in the present correctional system. There is no accountability as there should be. It is a revolving door.

We would like to see accountability. We want to see sentences delivered by our courts fully served, especially those of violent offenders. We want to see two strikes legislation. Why should a person after being released once and committing another violent offence have the same opportunity to serve another short sentence and be back out on the streets to do it for a third time? Why should that happen? No wonder the list of victims and victims groups is growing. It will continue to grow because violent offenders are still being released into society. Their behaviour has not been corrected in spite of all the programs and the case management reports.

I thought of another case management report directed to the killer of a policeman. A fellow, Craig Munro, allowed a police officer to bleed to death after he shot him and held him hostage. Now he is applying for early release. He is a shooter. The man should not even have an opportunity to make application. Yet the government is insisting on leaving that provision in there. It is insisting on turning violent criminals back out on to the street under Bill C-55.

I turn to one of the most significant devastating crimes in this decade and in the ones coming up. I am referring to the area of sex crimes, pedophilia, and crimes against children. It already is extensive. If we talk to the sex crimes and child abuse units in any police department, we find they cannot even handle the number of complaints they get. They have to refer them to social services. The cases they are referring are becoming more and more intense, difficult and substantive. The police cannot keep up.

How will we handle pedophiles? Long term offenders provisions will not do it. The parliamentary secretary to the justice minister should explain how that will happen. It will not going to happen. It will be status quo court decisions and status quo incarceration for very short periods of time.

I just finished relating the story of Mr. Tocher and the number of times he has been in and out of the prison system. He kept going back and forth over the last 15 years. He is victimizing our kids. Is it any wonder parents complain when they see somebody hanging around a playground zone such as happened in Calgary? Parents complained about a adult male hanging persistently around the playground zone. They were frightened and the police could not do anything about it. He had a record as a pedophile and the police could not do anything about it.

I said I would do something about it. They organized and protested in and around the park until the police went in there and laid some charge on him. It is awareness. Parents are concerned about their kids and the long term offender provisions in Bill C-55 will not touch them. Most police officers, most prison staff and even psychiatrists say that pedophiles cannot be cured. What can we do? We should keep them in prison for a long, long time.

It should be on the shoulders of the psychiatrist and whoever else signs the document that releases a pedophile to guarantee he will not reoffend. If he does they should pay the consequence. Somebody has to be held accountable and that is not happening in our present system.

Many provisions in Bill C-55 sound like they are doing the right thing. Pedophilia is inadequately addressed. The Criminal Code should be expanded to address the impact which pedophilia has on kids.

I have not addressed the judicial restraint provision which, as the parliamentary secretary stated, will be in section 810 of the Criminal Code. That provision will be extremely difficult to enforce.

The Reform Party will vote against the bill, in part because the government did not accept the amendments put forward by Reform. Those amendments would have made the bill much stronger.

Criminal CodeGovernment Orders

5:25 p.m.

The Deputy Speaker

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Davenport-the environment; the hon. member for Chicoutimi-social housing.

The House resumed, from April 11, consideration of the motion.