Mr. Speaker, I would like to begin my intervention on Bill C-41, the purpose of which is to amend the Royal Canadian Mint Act and the Currency Act, by stating that my colleagues in the Bloc Quebecois and myself do not disapprove of its ultimate objective, which is to update and enhance the flexibility of the Royal Canadian Mint Act. This is a legitimate objective, and one that is hard to oppose.
We must, however, ensure that amending the act to that end does not create conditions which might bring with them other problems that are far more serious than those we wish to solve. On reading the bill as introduced, one is justified in having concerns about certain proposed amendments to the Royal Canadian Mint Act and the Currency Act.
When we speak of money, whether its issue or its circulation, confidence between the partners is essential. That confidence is born out of the assurance that each partner has of the total honesty of the other.
The very mission of the Royal Canadian Mint requires this institution to have a spotless image and reputation, both in fact and in appearance. That is why the present legislation contains some very clear provisions requiring the administrators of the Royal Canadian Mint not to place themselves in a position of real or apparent conflict of interest.
These strict prohibitions are normal and necessary, because the very image and interests of the Royal Canadian Mint, and of Canada as well, depend on it. They have certainly proven useful, because the Royal Canadian Mint has, until now, always enjoyed a solid reputation for integrity. Unfortunately, I believe most sincerely that, if we do not amend some of the clauses of Bill C-41, we are putting that reputation at risk.
As it now stands, Bill C-41 weakens the legal framework that is in place to prevent any conflict of interest at the Mint. By authorizing the Mint to create subsidiaries, the administrators of which would not be held to the same arm's length requirements, we are allowing it to circumvent the law and we are creating a dangerous opening.
Unless it is amended, the bill is nothing short of an open invitation to patronage and dubious operations. Indeed, clause 2 amends the Royal Canadian Mint Act in a significant way, by allowing the Mint, in carrying out its objects, to procure the incorporation, dissolution or amalgamation of subsidiaries and acquire or dispose of any shares in them; to acquire and dispose of any interest in any entity by any means; and generally do all things that are incidental or conducive to the exercise of its powers with respect to coins of the currency of Canada, coins of the currency of countries other than Canada, gold, silver and other metals, and medals, plaques, tokens and other objects made or partially made of metal.
My colleagues from the Bloc Quebecois and myself support the government's will to modernize the Royal Canadian Mint Act to make this institution more functional. However, it is obvious that some changes must be made to Bill C-41, otherwise its current wording could lead to illicit operations, which is definitely not the objective pursued.
Clause 2 is a fundamental provision of the bill, since it allows the Royal Canadian Mint, in carrying out its objects, to create subsidiaries, to sell any shares in them to anyone, and to buy back such shares from anyone.
Another power the Mint will acquire, still under the heading of carrying out its objectives, is that of buying or selling shares or interests in listed and unlisted companies, anywhere in the world. Finally, this bill will give the Royal Canadian Mint the power to amalgamate its own subsidiaries with each other or with other companies.
Clearly, clause 2 as written is an invitation to patronage and dubious dealings and its scope must be reined in.
The real danger lies in the expression “in carrying out its objects” in clause 4 of the bill, referring to the Mint's power to buy, sell, borrow, lease, store and refine gold, silver and other precious and non-precious metals.
If Bill C-41 is passed, it would mean that each of these operations could be performed by one company, a subsidiary, some, a majority or all of whose shares would not be owned by the Royal Canadian Mint.
Clearly, this government institution would have the power to offload an important part of its responsibilities, to the benefit of a private company over which Canada's elected representatives, and therefore the public, would have no control. The creation of such private subsidiaries, with power to buy, sell and transform assets, presenting a highly speculative dimension that would be very profitable in the wrong hands, makes no sense whatsoever.
The opening provided by Bill C-41 provides too many opportunities for criminals specialized in bribery and patronage, so many that there is no doubt whatsoever, unless clause 2 is modified to limit its scope, that there will be a scandal, sooner or later, which will cast a shadow on the credibility of the Royal Canadian Mint.
If we pass clause 2 of Bill C-41 without adding the necessary limitations, the Parliament of Canada is merely paving the way for certain criminals who specialize in dodgy economic dealings. Let me tell you today that, sooner or later, this government will live to regret it.
There is absolutely no way we can empower the Royal Canadian Mint to hand over to whomever it wishes such important responsibilities as the purchase, sale, borrowing, leasing, storage and refining of gold or other precious metals, because the possibilities of conflict of interest and corruption are so obvious.
Let us take the example of the Mint's frequent mandate of striking gold coinage for other countries.
In carrying out its objects and under clause 2 of Bill C-41, the Royal Mint, required to buy the gold necessary to strike coins ordered by other countries, may incorporate a private subsidiary anywhere in the world to do so.
In all likelihood, this subsidiary would want to find gold at the lowest possible price before making its purchase. It would then strike the coins requested and sell them while the value of the gold market is on the rise and therefore very profitable for the private company and all the more so for the shareholders.
We can continue with this example by imagining that the private subsidiary buys the gold at $200 an ounce in 2001, reselling it transformed into collectors' coins in 2003 when the value of gold has risen to $300 an ounce. The company would therefore record significant profits, thereby increasing the value of the stock of the subsidiary created with the blessing of the Royal Canadian Mint and so much profit for the subsidiary shareholders.
Who would the shareholders be? What private or corporate individuals would benefit from this measure and this manna? The answers to this question are particularly important, since Bill C-41, we must not forget, empowers the mint to sell shares in its subsidiary to those it wishes and at a price of its choosing.
Ultimately, there is nothing to prevent the mint from selling shares in its subsidiary to friends or friends of friends through numbered companies or not. If this is not a path to patronage or other dubious activities, I would like to know what it is.
Far be it from me to suggest that such a door be opened voluntarily. However, consciously or unconsciously, the end is the same. My colleagues will not doubt agree with me that, in this areas as in many others, an ounce of prevention is worth a pound of cure.
Prevention will necessitate limiting the scope of clause 2 of Bill C-41 to prevent conflicts of interest and the unjustified and undue enrichment of individuals in latent or apparent conflict of interest because of the mint's power to create private subsidiaries.
To do so, we must abandon the idea of giving the Royal Mint the power to create private subsidiaries afforded it in Bill C-41. If indeed it were worthwhile for the Royal Canadian Mint to assign some of its responsibilities to its subsidiaries, we should make sure these subsidiaries are above suspicion.
The best way to do this is by amending Bill C-41 to exclude any possibility that a subsidiary be established by private interests. The legislation must provide that any new subsidiary of the Royal Canadian Mint should be a legally incorporated, recognized national or international body such as a chartered bank.
If we want the Royal Canadian Mint to remain highly credible and reputable and prevent its reputation from being tarnished by second-rate subsidiaries, it goes without saying that potential contenders should be subject to certain restrictions.
The probity of the Royal Canadian Mint is beyond price and, in order to preserve it, Bill C-41 must be amended to ensure that the executives of any potential subsidiary care as much about the probity of their own organization.
Following the same logic, it appears essential to me that Bill C-41 be amended to have the provisions dealing with real or apparent conflict of interest for mint directors also apply to the directors of its subsidiaries, which is unfortunately not the case at present.
I will conclude by reminding the House that my colleagues in the Bloc Quebecois and I do not disagree with the objective of modernizing the Royal Canadian Mint Act and making it more functional. But unless the necessary amendments are made to Bill C-41 to remedy a number of obvious flaws mentioned earlier, we will not be able to support it because the loopholes we have identified in the legislation would have far too serious consequences.