Mr. Speaker, I am pleased to rise to speak to Bill C-22.
We should make it clear right off that the bill was introduced by the Minister of Finance. It is surprising from its title, because it could have been introduced by the Minister of Justice or even the Solicitor General of Canada. This bill is entitled an act to facilitate combatting the laundering of proceeds of crime, to establish the financial transactions and reports analysis centre of Canada and to amend and repeal certain acts in consequence.
From the contents of the bill, we can see that the Minister of National Revenue is the minister primarily concerned, since the bill concerns a number of matters relating to income.
The fact that this bill could have been introduced by a variety of ministers is not insignificant. It means that Bill C-22 involves of matter of some scope affecting various facets of our society.
Bill C-22 is in fact a tool to help us fight a scourge, whose impact can be felt on the streets, in the schools, in the vaults of our financial institutions and in our penitentiaries. It is even felt by our farmers, as we saw last fall, and in a number of economic, social and even cultural sectors of our community.
This scourge has a name. It is called organized crime. It comprises many aspects: the bikers, the Italian mafia, the Russian mafia, the Asian triads, street gangs and so on. Each aspect operates in its own way and has its own varied and effective methods of intimidation.
Thus, members will understand that organized crime is an evil poisoning our lives in many ways. And it is precisely because it is organized that this type of crime is so hard to fight.
There is only one way this can be done: we must get organized ourselves. This means that, like crime, justice must be organized. We must also provide adequate funding—I am happy to hear members of other parties in the House say so—to the police to help it organize its efforts. Stiff measures are needed and they must be organized. In a nutshell, it would be better if we started calling the shots or others will keep calling them for us.
But all this is not easy—far from it. Organized crime is not just the occupation of a few influential masterminds. It is no longer the playground of people like Al Capone and the mobsters of the early 1900s.
Organized crime involves many kinds of individuals, some of whom may often bear a strong resemblance to you or me. Most of them are anonymous members of the public who appear to lead their lives in an entirely above-board and ordinary manner. All the players in organized crime do not bear some easily identifiable mark. On the contrary, the people involved in organized crime are often anonymous.
Obviously, there is a more visible type of crime that often makes the news and appears in the headlines. There was the biker war that was splashed all over the media a while back, and which makes a return appearance from time to time. But the whole biker war phenomenon is only the tip of the iceberg.
Members will therefore understand that the phenomenon we are now seeing is extremely complex. It was time that the government suggested some effective responses to one of the most harmful aspects of organized crime, money laundering.
On more than one occasion, the Bloc Quebecois has been critical of the failure of Canadian legislation to prevent money laundering. Even so, the government waited until Canada found itself in the unenviable position of money laundering centre of the world before it decided to take action. It was high time that Canada did something because it has become, in the opinion of many international experts, a real sieve.
What exactly is “money laundering”? It is the process by which revenue from criminal activities is converted into assets that are difficult to trace to their criminal origins. What is involved here is the concealment of the proceeds of crime by making them appear legitimate. The bulk of these assets are related to drug trafficking, and most of the rest to criminal activities such as robbery or cigarette smuggling.
Since, by their very nature, money laundering and the criminal activities it attempts to camouflage are clandestine activities, it is hard to have any clear idea of the scope of money laundering activities. According to experts, however, the annual figure for the laundering of the proceeds of organized crime is about $17 billion.
What weapons did we have, then, against such a huge problem? Far from enough. A brief overview of Canadian legislation would be appropriate here. Hon. members will recall that the federal government passed legislation in 1988 amending the Criminal Code, the Food and Drugs Act, and the Narcotics Act, creating a distinct criminal offence of money laundering and providing for the seizure and forfeiture of the proceeds and property derived from various criminal and drug offences.
Section 462.31(1) of the Criminal Code provides that everyone is guilty of an offence who deals in any way with property or proceeds of property with the intent of concealing or converting them, while knowing or believing that all or part are derived, directly or indirectly, from the commission of either an enterprise crime offence or a designated substance offence.
The Criminal Code includes a list of 35 crimes coming under the definition of enterprise crime offence. We can see that something has been around since 1988, but we have to look at the decisions, the jurisprudence directly concerned with this section to realize it is inadequate, that it is insufficient to effectively fight crime. There is no need to be a great expert in criminal law to recognize this. It is enough to visit the courts to see how easy it is for a defence lawyer to get around these sections.
In 1991, there were other amendments to the Proceeds of Crime (Money Laundering) Act. Legislation was enacted in an extremely important area—financial institutions, real estate brokers, portfolio managers, and so on. It provided that, for any transaction of over $10,000 of a suspicious nature, information was to be taken and kept for five years. However, this was left to the discretion of the institution.
When a client of a financial institution has several million thousand dollars, and his portfolio is managed there, members will understand the reticence of the financial institution to report these sums. There is a problem.
In the last election campaign, the Bloc Quebecois included an approach in its platform to tighten things up, to provide major legislation to fight money laundering. Finally, the government seems to have understood with Bill C-22.
In introducing this bill, the government significantly remedies the situation by establishing three mechanisms to control suspicious transactions. The first is the mechanism of mandatory reporting of suspicious operations, as provided in clauses 5 to 11 of the bill. The second is a mechanism for the reporting of major cross border movements of currency, as provided in clauses 12 to 39. The third is the establishment of the financial transactions and report analysis centre of Canada, as defined in clauses 40 to 72.
Let us examine these mechanisms and the centre. With Bill C-22, the reporting of suspicious operations relating to money laundering, currently voluntary under existing provisions of the law, would become mandatory.
In addition, the obligation to report would extend to non banking financial institutions and certain other companies. Therefore, the reporting requirements would apply to regulated financial institutions, casinos, foreign exchange traders, stock brokers, insurance companies and persons acting as financial intermediaries, such as lawyers and accountants.
These people and institutions would be required to report certain categories of financial transactions and any other transaction regarding which there are reasonable grounds to believe that they are connected with the laundering of money.
Second, when it comes to transborder operations, people who import or export considerable amounts of currency or instruments, such as travellers cheques, will be required to report these sums of money to Canadian customs officers.
If a Canadian travels to the United States and takes $35,000 in travellers cheques for a three day trip or, conversely, if an American comes to Canada with $35,000 in travellers cheques or in cash, we are justified in asking questioning that person if he is only going to be in Canada for two or three days, or even just a few hours.
Failure to comply with this requirement could lead to the seizure of the currency or instruments carried by the individual, unless he gives up the idea of importing or exporting these sums of money. He can decide to go back to his country of origin.
Third, the financial transactions and reports analysis centre of Canada is an independent government agency that will collect and analyse the information provided on financial transactions and transborder movements involving currency.
The centre will also be a central repository for information on money laundering activities. It will analyse and assess the reports submitted and, if necessary, give leads to law enforcement agencies.
As I said earlier, the government opposite should have acted sooner. It should not have waited until Canada had a reputation as a major centre of organized crime before taking action. The government should have been much more proactive. It should have listened to the Bloc Quebecois.
It is odd that Bill C-22 has finally made it to the House a few weeks before a parliamentary committee begins looking at the issue of organized crime. Members will recall that I introduced a motion in the House a while back calling for the creation of a committee to examine this issue and to propose amendments to the legislation, if necessary, or other approaches. The parliamentary committee will study the issue and report to the House on the whole question of organized crime.
A few weeks before they start their deliberations, the government introduces Bill C-22 on money laundering. The government probably did not want to be criticized for having taken no action in this regard, but the usual drill is that every time the government opposite takes action, it is because the Bloc Quebecois has pushed it right to the wall.
It was the Bloc Quebecois that initiated the anti-gang legislation passed just before the last federal election. The Bloc Quebecois had questioned the government, which decided to do something about the problem just before heading into a general election.
It was the Bloc Quebecois that took the initiative with respect to getting the $1,000 bill withdrawn from circulation, and the government listened to us. With respect to Bill C-22 now before us, again it was the Bloc Quebecois, in its first term of office, specifically in its 1997 election platform, which said that the federal parliament should bring in legislation to do something about money laundering.
Finally, the government over there had no other choice, since the Americans have even told it Canada was an all-round champion as far as money laundering is concerned, but to decide to comply with the Bloc Quebecois' demands by introducing the bill we now have before us.
I have already mentioned the $1,000 note. It is extremely important for the government to heed us on this, and withdraw it from circulation as soon as possible. It is used mainly by organized crime, and must therefore be pulled, so that only denominations of $10, $20, $50 and $100 are available. It takes a whole lot fewer $1,000 notes to make $1 million, and is far less unwieldy, than $1 million in $10s, $20s or $50s.
Care must be taken, however, not to see Bill C-22 as a solution to all our problems. We must point out that this bill does give the government considerable regulatory power. Clause 73 of the bill in fact authorizes the Governor in Council, on the recommendation of the Minister, to “make any regulations that the Governor in Council considers necessary for carrying out the purposes and provisions of this Act”.
At first glance, the regulatory power assigned to the minister may seem extremely broad, even too broad, one might say. Although such power could eventually bring about changes in the law without the need to amend it, still, a number of important issues, which should be debated by parliamentarians, will be handed over to officials. That is a bit risky.
Here is an example. The government will set, by regulation, the amount requiring reporting. Under subclause 12(2) as well, regulatory conditions will determine whether individuals may be exempt from the requirement of producing such a report.
Knowing that the required report is the backbone of the mechanisms put in place by Bill C-22, we can see that the government is giving itself vast regulatory powers. With its history, I fear that the government is not too eager to tighten the screw, to require reports, which are difficult to prepare, from offenders, and to be too demanding about the reports people or groups are to do. The public may rest assured, however, that we on this side of the House will be very demanding.
I would be derelict in my duties if I did not mention that Bill C-22 raises significant questions about the protection of certain basic rights covered by the charter.
In a free and democratic society, the legislator may limit certain individual rights, as dictated by the larger interests of the community. However, this limitation must not be exercised outside certain rules. Bill C-22 must comply with certain basic procedural rules. In fact, in the case of seizures and searches, great care must be exercised in the drafting of the bill to prevent effective contest before the courts.
Work in committee will ensure us that these standards are met, before the bill is passed. If parliamentarians fail to examine in minute detail the impact of this bill, lawyers who are well paid by organized crime will review it and arrange to have this law declared illegal and unconstitutional. It is up to us to work properly and effectively on this bill.