Debates of May 10th, 2001

Agriculture

[Brian Fitzpatrick, Canadian Alliance, Prince Albert, SK]

Mr. Speaker, the Minister of Transport's website seems to be more concerned about pet projects in his own backyard, while the interests of western Canadian farmers are in dire straits.

When will the government give western Canadian farmers some meaningful choice by implementing the recommendations of Mr. Justice Estey?

[David Collenette, Liberal, Minister of Transport]

Mr. Speaker, as the hon. member knows, the whole question of western grain transportation is exceedingly complex.

What we did in Bill C-34 was start to move to a more competitive system in the tendering out of contracts by the wheat board. This particular legislation is working. There is an improvement in the transportation of grain.

As the review unfolds in the next year and as we bring forward amendments to the act, the hon. member can address those concerns in a more meaningful way.

St. Lawrence Seaway

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, on October 17, Coroner Laberge recommended that the number of lock workers at the St. Catharines locks be increased from three to four, in order to avoid regrettable accidents such as the one on June 1, 2000, in which a woman in her seventies lost her life.

Will the Minister of Transport confirm in the House that he will require the St. Lawrence Seaway Management Corporation, as he is allowed to do under the management agreement, to review its downsizing and safety policy, the goal of which is to reduce from three to two the number of staff performing control and tying down activities at the 13 locks it operates in Quebec and in Ontario, including the ones in St. Catharines?

[David Collenette, Liberal, Minister of Transport]

Mr. Speaker, this is a question of management by the St. Lawrence Seaway corporation. Transport Canada's responsibility is to review safety and to ensure that we are complying with all the standards.

In this case, there is no reason to question the decision of St. Lawrence Seaway management.

Parliamentary Reform

[Paul MacKlin, Liberal, Northumberland, ON]

Mr. Speaker, there has been a lot of media coverage on parliamentary reform over the last few days.

Could the government House leader tell us what steps the government is taking to make the House of Commons an even better institution for Canadians?

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, since 1993 the government has been working tirelessly in co-operation with all other political parties to modernize the institution of parliament.

We have given greater involvement to members of parliament in the budgetary process. We are sending more bills to committee before second reading. We increased research budgets for all political parties. We modernized the report stage of bills. We have an all party committee working on modernizing the rules of the House, and we have only just begun.

The Environment

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Speaker, it is a wonder he can get out of bed in the morning. The situation at the Sydney tar ponds is critical. Families there have been exposed to high levels of toxins resulting in shocking rates of cancer, birth defects and miscarriages. The health minister's position is about as murky and malodorous as the sludge in Sydney.

Elizabeth May continues her hunger strike outside and demonstrations continue in Nova Scotia protesting the lack of action.

Will the Minister of Health give his government's firm commitment to provide financial resources necessary to permanently relocate those afflicted residents of Whitney Pier, Nova Scotia?

[Allan Rock, Liberal, Minister of Health]

Mr. Speaker, the government has for many years supported a community based approach through the joint advisory group working on this issue in the community itself. That process is continuing.

The Government of Canada has provided money to make sure it succeeds. We stand behind that process with the people of Sydney and the Government of Nova Scotia.

Presence In Gallery

[The Speaker]

I wish to draw the attention of hon. members to the presence in our gallery of His Excellency Nassirou Sabo, the Republic of Niger's minister of foreign affairs, co-operation and African integration.

[Some hon. members]

Hear, hear.

Business Of The House

[Cheryl Gallant, Canadian Alliance, Renfrew—Nipissing—Pembroke, ON]

It being Thursday, I would like to ask the hon. House leader for the government if he has the business for the rest of today, tomorrow and next week.

[Don Boudria, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I believe it is the first opportunity I have had to respond to the hon. member in that capacity. Let me begin by congratulating her on the position she holds.

This afternoon we will continue consideration of Bill S-11, followed by Bill S-16 respecting money laundering. As a matter of fact the debate on Bill S-11 may have collapsed just before question period. That means we will start with Bill S-16 respecting money laundering, followed by Bill C-14, the shipping legislation. Afterward, if there is any time left, we will resume debate on Bill C-10 regarding marine parks.

On Friday we will begin consideration of Bill C-22 respecting income tax amendments at report stage and third reading. We will then return to the list I have just described should we not have completed Bill C-14, Bill C-10 or Bill S-16, for that matter.

On Monday next, if necessary, we will resume consideration of Bill C-22, followed by Bill C-17, the innovation foundation bill, at third reading. We will then return to the list that I described a while ago.

On Tuesday it is my hope that we will be able to commence and hopefully complete the third reading of Bill C-26, the tobacco taxation bill, as well as the second reading of Bill C-15, the criminal code.

Next Wednesday it is my intention to call Bill C-7, the youth justice bill at report stage. We also hope to deal next week with Bill S-3 respecting motor vehicles, Bill C-11, the immigration legislation, if reported, and Bill C-24, organized crime. As well there has been some discussion among political parties and hopefully we can deal with Bill S-24 respecting the aboriginal community of Kanesatake at all stages in the House of Commons, provided that it has been reported to the House from the other place.

[The Speaker]

Order, please. I have the honour to inform the House that a communication has been received as follows:

May 10, 2001

Mr. Speaker:

I have the honour to inform you that the Honourable Ian Binnie, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy of the Governor General, will proceed to the Senate Chamber today, the 10th day of May, 2001, at 4:00 p.m., for the purpose of giving royal assent to certain bills.

Yours sincerely,

Proceeds Of Crime (Money Laundering) Act

[David Collenette, Liberal, for the Minister of Finance]

moved that Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act, be read the second time and referred to a committee.

[Roy Cullen, Liberal, Parliamentary Secretary to Minister of Finance]

Mr. Speaker, I welcome the opportunity to speak today at second reading of Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act. This bill would improve upon its predecessor, Bill C-22, which received royal assent last June. That bill was needed for several reasons.

Allow me to take a moment to review some of the background to that bill.

As hon. members know, money laundering in recent years has become more and more of a problem in Canada. By definition, money laundering is the process by which dirty money from criminal activities is converted into assets that cannot be easily traced back to their illegal origins.

Today's open borders provide criminals with a daily opportunity to launder millions of dollars in illegal profits with the intention of making the profits look legitimate. These activities can undermine the reputation and integrity of financial institutions and distort the operation of financial markets if adequate measures are not in place to deter money laundering.

To illustrate the magnitude of the problem, it is estimated that between $5 billion and $17 billion in criminal proceeds are laundered through Canada each year. A significant portion of this laundered money is linked to profits from drug trafficking.

Money laundering became a crime in Canada back in 1989. Prior to Bill C-22 Canada had many of the building blocks of an anti money laundering program in place within the criminal code and the previous Proceeds of Crime (money laundering) Act. However the government realized that much more needed to be done to combat the problem.

On one hand, the government was being pressured by law enforcement agencies for better enforcement tools. At the same time, on the international front, Canada was subject to scrutiny because of perceived gaps in our anti money laundering arrangements.

In 1997 the 26 member financial action task force on money laundering, the FATF of which Canada is a founding member, found Canada to be lacking in certain key areas and strongly encouraged us to bring our anti money laundering regime in line with international standards.

As a result of pressure here and internationally, the government brought in Bill C-22 in the last parliament. That legislation strengthened the previous statute by adding measures to improve the detection, prevention and deterrence of money laundering in Canada. Bill C-22 contained three distinct components which enabled Canada to live up to its international commitments.

First, the bill provided for the mandatory reporting of suspicious financial transactions.

Second, the legislation required that large cross-border movements of cash or monetary instruments like travellers' cheques be reported to the Canada Customs and Revenue Agency.

Third, Bill C-22 provided for the establishment of the Financial Transactions and Reports Analysis Centre of Canada, FINTRAC, which came into being on July 5, 2000. An independent agency, FINTRAC is set out to receive and analyze reports and to pass on information to law enforcement authorities if it has reasonable grounds to suspect that information would be relevant to a money laundering investigation or prosecution.

I should also mention that there are safeguards in place to ensure that the collection, use and disclosure of information by FINTRAC are strictly controlled. These safeguards are supported by criminal penalties for any unauthorized use or disclosure of personal information under FINTRAC's control.

FINTRAC is also subject to the federal Privacy Act and its protections.

Bill C-22 was welcomed last year by members on all sides of the House for several reasons.

First, it responded to domestic law enforcement communities needs for additional means of fighting organized crime by more effectively targeting the proceeds of crime.

Second, it responded to Canada's need to meet its international responsibilities in the fight against money laundering. It did so while providing safeguards to protect individual privacy.

In spite of these accomplishments, several of our hon. colleagues in the other place believed the act could be strengthened even further and could benefit from additional amendments. The government agreed and the result is Bill S-16, the legislation before us today.

Let me take a moment and provide some background.

When Bill C-22 was studied by the standing Senate committee on banking, trade and commerce last spring, members of the committee indicated that while they supported the bill the legislation would benefit from amendments to certain provisions.

The Secretary of State for International Financial Institutions made a commitment at that time to clarify the act by including several of the changes requested by the committee. The result was Bill S-30 which was introduced last fall and subsequently died on the order paper when the election was called. It was reintroduced in this parliament as Bill S-16.

The amendments in this bill relate to four specific issues. The first deals with the process for claiming solicitor-client privilege during an audit by FINTRAC. The agency is authorized to conduct audits to ensure compliance with the act.

The current legislation contains provisions that apply when FINTRAC conducts a compliance audit of a law office. FINTRAC must provide a reasonable opportunity for a legal counsel to claim solicitor-client privilege on any document it possesses at the time of the audit.

The proposed measure in Bill S-16 pertains to documents in the possession of someone other than a lawyer. It requires that that person be given a reasonable opportunity to contact a lawyer so that the lawyer could make a claim of solicitor-client privilege.

Another measure would ensure that nothing in the act would prevent the federal court from ordering the director of FINTRAC to disclose certain information as required under the Access to Information Act or the Privacy Act.

The amendment would ensure that the recourse of individuals to the federal court would be fully respected. Indeed this was the intent of the original bill, Bill C-22.

The third amendment more precisely would define the kinds of information that could be disclosed to police and other authorities specified in the legislation. It would clarify that the regulations setting out this information could only cover similar identifying information regarding the client, the institution and the transactions involved.

Finally, Bill S-16 would ensure that all reports and information in FINTRAC's possession would be destroyed after specific periods. Information that has not been disclosed to police or other authorities must be destroyed by FINTRAC after five years. Information that has been disclosed must be destroyed after eight years.

Bill C-22 introduced sweeping changes to Canada's anti money laundering regime. First, it introduced new reporting requirements which would result in more reliable, timely and consistent reporting. Second, it introduced centralized reporting through FINTRAC which allowed much needed and much more sophisticated analysis.

Third, successful prosecutions that benefit from analysis by FINTRAC can lead to court ordered forfeiture of the proceeds of criminal activities.

Above all, these benefits would be achieved in a way that respects the privacy of individuals. The additional amendments contained in Bill S-16 would only serve to further strengthen and improve this statute.

Irrespective of party affiliation, I am confident that all hon. members will fully support the bill. I urge members to give the legislation quick and speedy passage so that we may proceed to other items on the government's legislative agenda.

[Maurizio Bevilacqua, Liberal, Vaughan—King—Aurora, ON]

Mr. Speaker, I rise on a point of order to seek unanimous consent to revert to routine proceedings for the purpose of tabling a committee report.

[The Speaker]

Is there unanimous consent of the House to revert to tabling of reports by committees?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[Keith Martin, Canadian Alliance, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, it is a pleasure to speak to Bill S-16. It is long overdue, and deals with one of the most important aspects of crime in the country today.

It is estimated that a majority of crime today relates to organized crime. Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act is one we support.

For a long time the Canadian Alliance has worked hard to influence the government to address in a very reasonable way the large problem that affects every single riding in our country. The extent and depth of the problem of organized crime is extensive.

Organized criminals not only take advantage of the existing laws and working above the law, but also working beneath society and below the law. They hide behind the law when it is advantageous and flaunt it when it serves their benefit.

Historically many people may consider organized crime as the biker on a Harley Davidson, engaging in prostitution, drug abuse and in the buying and selling of drugs. Organized crime is much more than that. It is a national and transnational problem which will require a co-ordinated effort not only within our country but also among nations. Organized crime gangs have formed transnational groups that are capitalizing on the globalized markets in our country.

Organized crime gangs deal not only with the traditional forms of money laundering, drugs, prostitution and the violence that goes with that, they also deal with a considerable amount of white collar crime. That white collar crime involves setting up businesses and engaging in illegal activities.

Organized crime groups set up shell companies that profess to deal with the cleanup of environmentally toxic areas. They offer their services to businesses. They tell them that they will take their waste products and dispose of them sensibly. What they do is take those waste products, charge the company and then dump them illegally, polluting our land, our air and our water.

They also take the moneys from things like prostitution, drugs and weapons. They also take money from trafficking endangered species, which is second in the entire world in the trafficking of illegal products. That money is put it into illegal businesses.

The problem is how do we deal with these organized crime groups? Police officers have told us that we have to go after the money. If we can take away the money underpinnings of international groups then we will crush them.

Here is a case in point. In the United States a crime gang took those moneys and bought a casino. That was followed up and the casino was apprehended. The moneys from the sale of that property went into fighting crime.

The same thing happens in countries like Ireland, South Africa and south of the border. However, to understand why this is so important, we have to look at the impact of organized crime in our society today.

In Canada it is estimated that it costs us $5 billion to $9 billion a year, which includes insurance, cellular phone, credit card and telemarketing fraud, and much more. Between $5 billion and $17 billion a year is laundered in Canada. That is why we are known as a haven for organized crime.

Imagine $5 billion to $17 billion being laundered in our country. That is a huge amount of money. It impacts our civil society in ways of which we are unaware. The cost of this impacts upon all of us. It impacts our insurance costs, because of motor theft. There is also securities fraud. This is not to mention the violence generating effects of the illicit drug trade which has had such a profound and negative impact upon our society. That is why we support this bill.

I came back from Colombia in February. There are enormous effects as a direct result of the illicit drug trade in that part of South America.

Canada is poised for a flood of pure, cheap heroin that will undercut the price of cocaine. This will mean that on the streets there will be a higher number of addicts, a greater number of overdoses and deaths, not to mention the increasing incidence of the transmission of hepatitis B, C and HIV among the drug users. That is why many of us have asked the government to deal with drug use in a more pragmatic and less punitive way by looking at models in Europe which can be employed here. In fact I had put forth a private member's bill to that effect.

Another thing the government could do is employ RICO-like amendments which have been in the United States since 1970. These amendments would allow the government better opportunities to go after and apprehend civil property, civil forfeiture, as well as criminal forfeiture upon conviction of the properties that are used or acquired through illegal uses.

I also want to take a moment to look at the international aspects of organized crime. In many of the hot spots around the world, from Nigeria to Somalia, Central Africa, Sierra Leone, Colombia, Brazil, Paraguay, Bolivia and Venezuela, we can see the impact and the integration of organized crime in society, particularly in societies that are in a very tenuous place.

When the price of oil went down in Nigeria, organized crime insinuated itself into the country. It has become a haven for the trafficking of cocaine, heroin and diamonds.

I have had a chance to visit South Africa some 12 times since 1986. That country made some good changes, but unfortunately has suffered from a breakdown in law and order. Organized crime gangs saw an opportunity to insinuate themselves into a country which was trying to get on its feet. As a result, South Africa has become a haven for organized crime and for the trafficking of contraband, particularly drugs.

This is a very serious problem because it destabilizes these countries. Look in the heart of darkness of Africa where the blood of tens and hundreds of thousands of people has been spilled. We can see how mercenary groups, in conjunction with organized crime groups functioning in a transnational way, have used diamonds to further their ends of making money. However it has also contributed to the deaths of hundreds of thousands of innocent people and the furthering of conflict in these areas.

The point I am making is that while the actions of organized crime are known, they are not only a domestic problem, they are a transnational and international problem. These actions also contribute to the furthering of conflicts in some of the worst parts of the world. Hundreds of thousands of innocent people are killed in areas where democratic rules and the rule of law with respect to human rights are simply absent.

Organized crime groups have no compunction whatsoever in insinuating themselves into conflict that occurs in these areas. They grasp and capitalize on these problems. In many cases we think some of these battles are mostly over religion. We see the issue of Sudan being one of them. However it has more to do with money.

In Somalia it was looked at as a fight between rival clans. In effect, a larger part of it had to do with the trafficking of something called khat, which is a drug. The trafficking, the influence and involvement of organized crime gangs has a profound impact upon these conflicts.

This is a great opportunity for the Minister of Finance, who is the head of G-20 at this point, to try to work with the Bretton Woods institutions and use them as a lever to address the issue of organized crime. The IMF should have built in opportunities to analyze where moneys are going to make sure that organized crime is not benefiting from it. Similarly, the World Bank and the other IFIs need to look at where the money is spent to make sure it is not being channelled into illegal operations.

Russia is a prime case. Billions of dollars of western money has gone into Russia in good faith to try to stabilize the economic situation. Unfortunately, a lot of that money has fallen into the hands of the oligarchs that have ruled a large chunk of that country for far too long. I know Mr. Putin is working hard to deal with that.

I can only encourage the Minister of Finance to work with the international community to implement levers which will ensure that moneys being spent are used for proper monetary and fiscal stability in these countries and are not being siphoned away by individuals who are thugs in business suits.

In closing, I again emphasize that organized crime takes a big bite out of our economy and has many seen and unseen negative effects upon Canada. We support the bill and encourage the government to strengthen it as time goes on, by implementing methods to have criminal and civil forfeiture for individuals who are engaging in crime and by implementing RICO-like amendments in this country. We should work with the international community to ensure that similar laws are implemented so we can have a transnational, multifactorial approach to this scourge among us.

[Ken Epp, Canadian Alliance, Elk Island, AB]

Mr. Speaker, I rise on a point of order. We have our communications straightened out now between the parties and if you would seek it, I think you would now find unanimous consent to revert to daily routine of business, presenting reports from committees, so that the finance committee report could be presented by the member for Vaughan—King—Aurora.

[The Speaker]

Is there unanimous consent to revert to presentation of committee reports?

[Some hon. members]

Agreed.

Committees Of The House

[Maurizio Bevilacqua, Liberal, Vaughan—King—Aurora, ON]

Mr. Speaker, I have the honour to present the seventh report of the Standing Committee on Finance regarding its order of reference of Friday, April 27 in relation to Bill C-26, an act to amend the Customs Act, the Customs Tariff, the Excise Act, the Excise Tax Act and the Income Tax Act in respect of tobacco. The committee has considered Bill C-26 and reports the bill with amendment.

The House resumed consideration of the motion that Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act, be read the second time and referred to a committee.