Madam Speaker, as you said I am resuming debate. In the first half we had a few choice words about the way the government proceeded to bring Bill C-22 to the House and, indeed, the debacle that we have seen in that whole procedure, to the point where we had to shut down debate yesterday.
Let us now turn to the bill itself. I received a research paper from the Library of Parliament which gives a very good explanation of Bill C-22. It received first reading in the House of Commons on December 15, 1999. The broad purpose of the bill is to remedy shortcomings in Canada's anti-money laundering legislation, as identified by the G-7's Financial Action Task Force, FATF, on Money Laundering in its 1997-98 report.
This is a quote from that report:
The only major weakness is the inability to effectively and efficiently respond to requests for assistance in relation to restraint and forfeiture. The use of domestic money laundering proceedings to seize, restrain, (and) forfeit the proceeds of offences committed in other countries is recognized as sometimes ineffective, and legislation to allow Canada to enforce foreign forfeiture requests directly should be introduced.
In addition, the FATF recommended that reporting requirements in Canada be made mandatory, rather than voluntary, as is currently the case, and that a “financial intelligence unit” be established “to deal with the collection, management and analysis and dissemination of suspicious transactions, reports and other relevant intelligence data”.
What does this mean to the ordinary citizen either watching these proceedings on televisions or reading these proceedings in Hansard ? First, this activity is a criminal activity. It basically undermines Canada's financial and social systems by increasing the power and influence of illegal business.
Experts estimate that some $300 billion to $500 billion in criminally derived funds enter the international markets annually. In Canada alone the estimates range from $5 billion to $17 billion. The fact that they range from $5 billion to $17 billion gives me cause for concern. That being such a broad spread, it is very clear that even our law enforcement officials have not really been able to quantify this problem.
There are many ways to launder money, including through financial institutions, foreign exchange dealers, significant cash purchases, brokerage houses, foreign tax havens and cross-border transfers. The methods of laundering money are becoming more and more sophisticated, as I indicated in my remarks before question period. Indeed, many of the transactions are so immensely complex that there is no possible way, other than with the power of the most high powered computer programmed to do this, that we could actually conduct the kind of transactions that are currently being undertaken by criminal activity.
If Canada is viewed, real or otherwise—and I think it is real—as having weak controls, we become a haven for organized crime and money laundering.
In the second reading of this, I drew to the attention of the House the situation with YBM Magnex, which turned out to be a money laundering operation for the Russian mafia, and the fact that there were many prominent Canadians, names people would know, who ended up being sucked into that vortex. Six hundred million dollars disappeared as a result of YBM Magnex being a money laundering operation and getting by the Ontario Securities Commission and other organizations like that.
If we look at the situation of the $6 billion Bre-X debacle and put the YBM Magnex on the back side of that, we can see why people around the world are deeply concerned about the lax attitude that Canada has displayed in this very important area.
As I also indicated prior to question period, it is not just the issue of organized crime. There are also violent street gangs in Toronto and Montreal that are channelling criminal profits to tamil terrorists waging a bloody fight for an independent homeland in Sri Lanka.
According to an RCMP intelligence report that was reported in the Ottawa Citizen on March 27 this year, it said that an extensive probe by the Mounties found strong connections between outlaw gangs and the liberation tigers of tamil eelam, one of the world's most dangerous groups. “There is clear evidence to support the relationship and that the money involved is being funnelled to the LTTE for extremist purposes in Sri Lanka”, says the newly classified report obtained through access to information.
Many people who come Canada as legitimate landed immigrants are here to help us build our great nation. These people come to this country looking at it as being a law-abiding country where they can live in peace and harmony with their neighbours. They come to this country looking at the opportunities that they have to advance the fortunes of their own families. They come to this country as a haven of peace. However, because of the laxity of this government and its slowness to bring either dollar resources or necessary legislation like this piece of legislation into effect, law enforcement is unable to protect those very people who come to this country to help us build this great nation.
Shame on the government, particularly for its delay in bringing this legislation to the House of Commons, if only for that reason.
The RCMP implicate the tamil criminal groups in a staggering variety of activities, including extortion, home invasion, attempted murder, theft, importation and sale of brown heroine, arms trafficking, production and sale of counterfeit passports, migrant smuggling, bank and casino fraud and money laundering. This is from an RCMP security intelligence report.
The report goes on to say that the activity is escalating and will likely become more difficult for police. It also says that there are other armed conflicts and hot spots in the world where there are allegations of smuggling profits that finance military operations.
This is why we, as Canadians, whether we are recently landed immigrants or our families have been here for a long time, should care about this piece of legislation. Money laundering feeds armed conflicts and illegal activities that threaten everything from our families to our society, our national and international economies and perhaps even world peace.
The act establishes a financial transactions and reports analysis centre to receive the reports. Under normal circumstances, as a Canadian Alliance MP, I would be opposed to the enactment of any legislation that would set up yet another analysis centre or another way to have more bureaucrats. However, in this particular instance, the independence of the financial transactions and reports analysis centre is absolutely critical because of the level of expertise to track these transactions that were described earlier.
The level of expertise to analyze the reports as they come out of the data that will be collected is very specialized. However there is the whole problem of personal security, the security all Canadians have from unreasonable search and seizure and big brother overlooking our shoulders.
In this instance what we are doing under this bill is to establish the financial transactions report analysis centre totally apart from our enforcement agencies so that all transactions will end up going through a highly sophisticated microscopic sieve. From that sieve and from the entrails that come out of the money flowing through it, skilled analysis will say that we should be looking at this track of money or that track of money.
The way this will work, as I understand the legislation, is that then there would be a report to law enforcement agencies to say here is something they might want to take a look at. That is it. The idea then is that the law enforcement agencies would say that they already are looking at a particular terrorist group or a particular group of organized crime and that the preliminary information, this heads-up that the financial transactions report analysis centre has given them, fits the mould of what they are already doing.
On the basis of the other police work, together with this heads-up from the centre, they would then have to go to a judge and fulfil all the ordinary obligations that would be required of law enforcement agencies so that they could then undertake other activity that would be outside where they could normally go.
To that extent this centre has to be separate because it has to be highly sophisticated, not only the centre itself but the people manning it. Additionally, the centre not being under the thumb of, answerable to, or under the jurisdiction of any police enforcement body or any military enforcement body gives me some feeling of comfort that it will not be abused and that my civil rights and the civil rights of all people in Canada will not be compromised by the enactment of the legislation.
As I mentioned, the centre would report any suspicious transactions or series of suspicious transactions to the appropriate police force, the Canada Customs and Revenue Agency if the information is relevant to tax or customs duty evasion, CSIS if relevant to threats to the security of Canada, the Department of Citizenship and Immigration and a foreign state if there is an agreement with Canada on money laundering.
Concerns have been raised, as I have mentioned. On behalf of people who have raised them, as the member of parliament responsible for the official opposition I have been very sensitive to any of the testimony that has come before committee and any other research that I have been able to do to arrive at the feeling of comfort that indeed the reports analysis centre will be isolated from being able to easily do anything in terms of infringing on our right to privacy.
I note that criminal defence lawyers and the federal privacy commission warned that the reporting scheme could turn Canada into a nation of snitches. With that in mind I listened to all the testimony very closely. The Canadian Security Intelligence Service said the transaction reporting machine could become a bureaucratic monster. Again, we have taken a look at that. The fact that it has to report back to the government and to parliament is a very important issue, which again is why we feel comfortable with the legislation.
CSIS proposed more selective measures that would target parties known to engage in dubious activities, but it would be my judgment that in all likelihood the centre would end up doing that in any event.
I want to deal specifically with some comments in the March 4, 2000 edition of the National Post by Terence Corcoran who wrote:
If passed, Bill C-22 would give Ottawa fresh authority to trap the innocent, infringe on privacy, collect mountains of information on citizens and put routine money transactions under suspicion. It would also conscript lawyers, banks, accountants and others into a national subculture of informants and snitches.
With due respect to Mr. Corcoran, I think he got a little carried away with his hyperbole. He went on to say:
In a letter to Justice Minister Anne McLellan last December, the Canadian Bar Association listed some of the threats posed by Ottawa's plan to increase its surveillance over money transactions greater than $10,000. It said routine legitimate business transactions could be disrupted and solicitor-client relationships undermined.
Again, I was sensitive to this and other pronouncements by people who have expressed concern about it. I am sorry, but I do not see that as being a problem. I know a member from the Toronto area was as upset as I was when we heard testimony from the Canadian Law Association. It was really very unfortunate. It was like they knew everything, that they were present but should not have been included, that they should have an exemption just because they are lawyers. It was just a tad thick.
Although I am sure there were grains of good information they were giving us, I am sure many of us had to sift through an awful lot of chaff that these lawyers were giving us. I agree with the government that there were no amendments required to give exemptions to the law profession.
I suggested that it would be a hole big enough to drive a truck through. If somebody was intending to try to get around the legislation and find exemptions in it, they could end up getting their transaction through. By making an exemption for the lawyers, anyone interested and possibly engaging in this kind of nefarious activity would naturally choose a lawyer to do the transaction as opposed to choosing an accountant or some other professional. Unfortunately that testimony, although I am sure it was sincere, was not singularly helpful. Mr. Corcoran went on to say:
In the name of fighting organized crime, Ottawa also wants to set up a new bureaucratic agency with big powers. The Financial Transactions and Reports Analysis Centre of Canada would collect information supplied by bank informants and lawyers, and—depending on regulations—could end up with a licence to harass the innocent and legitimate.
I say to Mr. Corcoran and other people who are concerned about this issue that I take their expressions of concern as being serious. In spite of all the missteps we have had in this process, nonetheless there has been fundamental goodwill among members of parliament. We have all been looking very closely to ensure that the concerns brought forward by Mr. Corcoran and others have been answered within the legislation.
One concern all of us should have is that there is an ever increasing encroachment on our ability to be able to relate to each other within society either as business people, as neighbours or even within our own families.
The headline of an April 4 Globe and Mail article read “Mob threat getting worse, RCMP says Top Mountie warns of organized crime's threat to democracy”. That is not a false threat at all. That is not hyperbole. We have seen the tentacles of organized crime reach right into the Chamber. A member of the Bloc Quebecois, his wife and his young child are being threatened by organized crime. This is something that comes to a neighbourhood near us, if not to our own homes. This is something we have to stand on guard against and we have to fight collectively.
As I have said many times, I have been desperately unhappy with the amateur hour we have had in terms of getting the legislation through the House. I maintain a concern because I do not know. Because of this flawed process I maintain a concern that two, three or four years into the legislation we will probably need a massive review of it, probably preceding the five year mandated review for the legislation.
We are faced with a delay created by the government of at least three years to bring the legislation forward. Because of the urgency of the legislation we have to enable the various public servants that will bring the transaction centre into place to get on with the job. This is an important tool to put into the hands of our law enforcement people. Therefore we will support the legislation proceeding through the House, to the Senate and hopefully to royal assent as quickly as possible.
There are things that we can join hands on. We notice that there has been full co-operation, to the best of my knowledge, among all members of the House respecting the bill. Any interventions I have made on behalf of the official opposition have been made in the spirit of having a proper process to bring this urgent legislation to successful completion and of making it as good as we could possibly make it.
