Debates of May 10th, 2001

Proceeds Of Crime (Money Laundering) Act

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, it is a pleasure to rise today to speak to Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act.

First, let me remind the House that proceeds of crime covers anything seized that was, in the court's opinion, used to commit an offence or gained as a result of the offence.

This is just one piece of legislation among many others that were passed. Our society is now facing a major problem that has grown in scope in the last few years, with organized crime becoming a complex, international and ever changing industry that goes beyond traditional crime.

We now have technology based crime and international crime. For instance, drug traffic is run just like any other business, except for the fact that what is being traded is illegal, and of course new technologies are also used to commit crime.

As citizens, we often feel helpless. On the news, we hear about events, about people who are accused and about crimes, and we are not quite sure about the cause. The whole community wants governments to address this problem.

We in the Bloc Quebecois can be proud of the courage shown by our leader and our team, particularly during the last election campaign. We have made proposals and prodded the government into finally taking action. I think the leader of the Bloc Quebecois deserves credit for that, as well as those members who work on justice issues, including the member for Berthier—Montcalm, the member for Saint-Bruno—Saint-Hubert and the member for Hochelaga—Maisonneuve. They lead initiatives aimed at fighting organized crime, directly or indirectly, and its consequences.

Organized crime has an impact on poverty. People who are most vulnerable make easier targets. They are more easily used. We must be aware of the fact that the related social and economic costs for our society are considerable.

The bill before us amends the Proceeds of Crime (Money Laundering) Act. The act it is based on needs certain adjustments, which are contained in this bill. We hope they will enable us to fight organized crime more effectively.

Clause 1 of the bill says that reports and all information will be retained for five years, which is what the current act says, but then it sets out the circumstances under which three years will be added to that period.

The retention period will thus be eight years, when the Financial Transactions and Reports Analysis Centre of Canada passes information either to law enforcement authorities or to the Canada Customs and Revenue Agency, the Canadian Security and Intelligence Service, the Department of Citizenship and Immigration, an agency in a foreign state or an international organization with a mandate similar to the centre's.

In other words, adding three more years will make documents available for a longer period of time. They will be retained longer.

In the case of crimes requiring time consuming investigations or the retrieval of evidence that might have been seized in the course of a previous investigation, this gives an added opportunity to do so.

Moreover, the addition to section 54(1) of the Proceeds of Crime (Money Laundering) Act provides that each report received and all information received or collected shall be destroyed on the expiry of the applicable period.

This clause clarifies certain provisions regarding the retention and destruction of information. This does not raise any particular issue, but it is important to note that such is the intent of the lawmakers that we are, and that this type of amendment was necessary to make the act more efficient in the fight against organized crime.

Clause 3 came about as the result of the realization that under the current act the federal court had no jurisdiction in this matter. With this amendment, no provision of the act will prevent the federal court from ordering the head of the centre to disclose information in accordance with the Access to Information Act and the Privacy Act, thus making the act easier to enforce.

This clause is yet another one to make enforcement of the act easier and more effective. We are also told that the spirit of the act already allowed the federal court to play its role in that regard.

Now, by amending the text, we are making sure that not only the spirit but also the letter of the act allows that. This may prove very useful when dealing with organized crime, since those who are charged often have very good defence lawyers. Of course, it is the role of these lawyers to make sure that their clients are properly defended, but we must make sure that it is not possible, through some flaw, to miss the main issue when taking someone to court or preparing evidence. This is also the purpose of that clause.

Then there is a clause dealing with the whole issue of solicitor-client privilege. We have a problem with that clause because any interpretation of the said clause, in its current wording, would be pure speculation. This provision is very vague. It does not specify its objective. We were told that it was included because of the concerns expressed by accountants, who wanted a privilege similar to the solicitor-client privilege granted to lawyers.

This clause will have to be reworded to make it easier to understand. Some work will have to be done in that regard, probably in committee, to come up with useful amendments.

In conclusion, the first three clauses of the bill include amendments designed to clarify the intent of the provisions they amend, and these amendments do not change the substance of the Proceeds of Crime (Money Laundering) Act.

However, as I just mentioned, there is a problem with clause 4. We simply cannot figure out this provision. It is very vague. I think we would be better off with no provision than one that is worded like this one.

Still, the best option might be to rewrite the clause so that we can see if it is an amendment that can be used in the fight against money laundering.

Obviously, we in the Bloc Quebecois were in favour of the Proceeds of Crime (Money Laundering) Act, and in particular we were behind the elimination of the $1,000 bill. This was called for, supported, debated and in the end successfully defended by the hon. member for Charlesbourg—Jacques-Cartier. The government finally moved on this.

In my opinion, the Bloc Quebecois record is impeccable. We have proposed several concrete measures to improve the situation, to ensure that the state is properly equipped to fight organized crime. We hope there are still other tools to be laid on the table in order to ensure that we end up with everything required to do away with this scourge, to eliminate this situation, and to ensure that within this society there is less and less of a parallel universe and a parallel economy, which penalizes our entire society by the way it operates.

For all these reasons, we are going to vote in favour of Bill S-16, on condition that clause 4 is clarified for the reasons I have already given.

I therefore invite the House to support this bill which will, as soon as possible, enable the departmental staff concerned to do their job more diligently and with more appropriate tools, so that results can be attained. This is but one of the tools necessary to fight organized crime, but it is a useful one.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to rise today to contribute to the debate on Bill S-16. The New Democratic Party supported Bill C-22 in the previous parliament, which was approved and received royal assent. We voiced a number of concerns as it went through committee stage and amendments. We are glad to see that some of those concerns are being addressed in Bill S-16.

Members of the NDP like other members of the House are extremely concerned about the impact of organized crime on our local communities and across the country. There is no question that it is something that is very sophisticated. It is very pervasive and has a huge impact on many people's lives.

Personally, as well as in terms of financial institutions and various businesses, we are all very familiar with cases that do come to public light. They give us a glimpse of the kind of operation that exists outside the law in terms of money laundering, the profits from organized crime and how they are dealt with.

For most people it is a fairly frightening glimpse when we look at a system that is so complex. As in previous legislation the attempts in this legislation to deal with that sophistication and to find the appropriate mechanisms to track where money is flowing, where the proceeds of organized crime are coming from, is very important.

The NDP put forward some concerns about the original bill. In any legislation there has to be a balance between a reasonable right and invasion of privacy. There must be an understanding that the power of the state is not absolute. When a new agency is created with far reaching powers we have to be very careful about how it is set up.

For example, before Bill C-22 was approved we and a number of witnesses who came forward to debate the bill expressed concerns about whether or not there was potential for charter of rights violations, that the guarantees of reasonable search and seizure appeared to be at risk.

We were also very concerned about the possible pressures there would be on consumers. Needless to say, there would probably be a significant cost in setting up any sort of regime to track and communicate suspicious transactions. I do not know if that has been spelled out, but it seems to me that it would be enormous in terms of what the responsibilities would be for financial institutions and how that would get passed on to law abiding consumers.

Members of the NDP were also very concerned about the fact that the bill did not address what is often referred to as white collar crimes or technology based crimes. Unfortunately this is a huge area that is booming. We are all very familiar that the growth of the Internet and computers in general, credit card fraud, telephone fraud, stock market manipulation and computer break-ins are all things that can be characterized as technology based crimes or white collar crimes. There is no question that there is a very serious element within that which is perpetrated by organized crime. It seems to us that the original bill did not and the legislation before us today does not adequately address the concerns that surely must be addressed in terms of technology based crimes.

In the debate today I heard a number of members talk about different elements of organized crime and the impact they have. The member for Esquimalt—Juan de Fuca spoke about the drug trade and its human impact. I will spend a couple of minutes speaking about that as well because it strikes me that there is a contradiction.

On the one hand, as we should, we go to great lengths to deal with a legal apparatus and the setting up of a new agency, FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada, as it is called, and what a mouthful that is. We go to great lengths to set up a very elaborate system for tracking suspicious transactions, trying to trace what has happened and making sure that there is adequate reporting.

On the other side of that coin in terms of organized crime and the billions of dollars that are generated illegally through drug trafficking and drug use and the profits that are made, we do not pay enough attention to the human costs that are very clearly evident on our streets, in urban centres and even in smaller communities across Canada. I have only to look at my own riding of Vancouver East to see the devastation that happens in an environment where illegal drug activity is a huge underground economy.

I believe, and I certainly would echo the comments from the member for Esquimalt—Juan de Fuca, that we have to pay attention to that human side. We have to recognize that in some respects it is the illegality of those substances, heroin or crack cocaine or other substances, that drives this underground market and in effect criminalizes addicts when they are on the street with very few resources. We end up with a community where people are literally dying on the streets from overdoses.

It strikes me as a horrible irony that while on the one hand we can somehow relate to this issue from a legislative point of view by setting up this centre, on the other we cannot relate to this issue from a human point of view and take the actions that are necessary to actually reduce the harm of what is happening on our streets because of these illegal substances.

I would also add that we need a saner, more humane approach to drug use in Canada and we need to be seriously willing to reform Canada's drug laws, which have not been reformed for decades. We have had Senate hearings. We have had debates in the past where some of these issues have been debated very seriously, but not in recent times. If we took the time to do that I believe we would go a long way toward dealing with some of the causes of the devastation we see on our streets. We could in fact look at the issue of how organized crime is being driven by this very lucrative business of drug use.

We could look to the experience of what is happening in Europe, where the approach has been to medicalize drug use and addiction instead of criminalizing people. The approach has been to try to remove the harm from buying drugs on the street. Not only has there been a huge financial saving in health care costs and judicial costs, but lives have been saved as well.

I wanted to make that point because it seems to me that we are missing the boat unless we look at the total picture. We cannot just say that all this money is coming from organized crime and a lot of it is coming from drugs unless we are willing to examine Canada's drug policies and recognize that they need to be seriously reformed.

For example, even with marijuana we see the stories about grow operations in the papers all the time. In east Vancouver there are media reports of various grow busts taking place. We are talking about multimillion dollar operations. It seems to me that if we had the courage to examine our drug policy laws and to seriously look at reform of those laws we would be going a long way in terms of removing the incentive and the huge opening that exists for organized crime to become a part of the underground economy. That is a very important aspect of the debate.

In regard to the bill before us today, I did want to say that the NDP certainly supports the amendments that are contained in the bill as a result of the previous bill, Bill C-22. We support them in principle. Important questions were raised as a result of Bill C-22. It is notable that there has been a sort of second look based on the issues raised previously, for example, knowing how long this new centre would be able to retain the information it collects and whether there are issues in terms of the balance between the right to retain information or dispose of it.

Another question was about when and how that information would be disposed of. If an agency is created, for how long does it have a right to have that information and in which manner can it be disposed of? If information is to be disclosed to law enforcement authorities, how should that be done? Those issues needed to be more clearly spelled out and we certainly feel that the present legislation goes some distance to addressing those concerns put forward by witnesses and by different parties in the House.

In conclusion, at this time we in the NDP are pleased to continue our support in principle. We think it is an important bill. It has obviously had strong support within the House. It is always good to have a second look based on evidence from witnesses to make sure that the bill is fine tuned to address concerns put forward.

I hope as the debate continues that the government will pay attention to the concerns that are still being expressed. It seems to me that there is strong general support but some areas still need to be looked at.

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

Mr. Speaker, I appreciate the opportunity to speak to the bill. This is a very important piece of legislation and I commend the previous speakers, including my colleague from the New Democratic Party. It is interesting to note that many members have picked up on the fact that those in the other place have served a very useful purpose in reviewing the legislation and improving upon the legislation, as is often their wont.

I should indicate at the outset that I will be splitting my time with the hon. member for Kings—Hants.

Bill S-16 essentially deals with a response to concerns that were raised by the Senate banking committee. Bill S-16 amends the Proceeds of Crime (Money Laundering) Act and particularly focuses on areas of solicitor-client privilege, the disclosure of information and records retention. This is, of course, information that is critical in tracing the origins and whereabouts of potential assets linked to criminal activity. The money laundering that takes place in Canada is of great concern to our citizenry and certainly to our law enforcement community.

Money laundering, as the Speaker would know, is a process by which criminals attempt to conceal profits earned from crime so that the money appears as if it comes from legitimate sources. When all traces of the money's criminal origins are erased, the money can safely be used to buy goods and services.

It is shocking to think that between $5 billion and $17 billion is laundered in Canada. Of course it is difficult to accurately assess just how much because the proper authorities are not able to determine this amount, but it is estimated to be in that range.

There were shortcomings in the original legislation which Bill S-16 attempts to correct. Money that is laundered is often shifted among countries, financial institutions and investments without a paper trail so that it cannot be traced back to its origins. With the advancing sophistication of technology, competent and sophisticated criminals are able to access and utilize these now boundless abilities to transfer money through cyberspace, leaving no tangible evidence as to its origins.

Obviously much of this money is obtained by very nefarious means such as fraud or intimidation. This is the type of money that is very often directly linked to criminal organizations in Canada and has been the focus of a number of pieces of legislation and the focus of considerable debate in recent months and years. Canada has come under heavy criticism in recent years for being a nation where criminal organizations are able quite easily to launder their proceeds of crime. For that reason and that reason alone, it is incumbent upon us as elected officials and as part of the federal legislative branch to respond. That is what this legislation is intended to do, to enhance the existing proceeds of crime legislation.

The response last spring came in the form of government Bill C-22, the Proceeds of Crime (Money Laundering) Act, which was passed. Bill C-22 imposed new reporting and record keeping requirements and created the Financial Transactions and Reports Analysis Centre of Canada to receive and analyze information so there would be a focal point, a centre in Canada where those working in this location would be specifically tasked to assist law enforcement communities in locating and tracing proceeds of crime.

Concerns were expressed at that time about the bill by the privacy commissioner, the Canadian Bar Association and other groups that appeared before a parliamentary committee. The Senate banking committee looked into the bill in June 2000 and, to be quite blunt, was not impressed. The committee felt that the legislation was considerably flawed and had a number of shortcomings which it had hoped to remedy. The government indicated at that time that it was unwilling to entertain amendments to the legislation because it was too late in June and the House of Commons had to deal with other bills and indicated that therefore the Senate might make changes in the future.

Coming forward from that point in June 2000, we know that the Secretary of State for International Financial Institutions did give a written undertaking to the committee that certain changes would be contemplated and would occur in a new bill to be introduced in the fall. Those changes formed the substance of Bill S-30 which was introduced in October. Bill S-30 is identical to Bill S-16 which is currently before us.

As the Speaker and Canadians well know, the entire process in October was pre-empted by the legacy lust of the Prime Minister in his decision to put this piece of legislation and other very useful pieces of legislation aside and toss them in the dustbin in order to seize his political advantage and call an election.

Beyond the changes that were agreed to in the letter from the secretary of state to the Senate banking committee, the bill was then reported with the observation that the government should consider other amendments. Those amendments would include, first, further insurance that solicitor-client privilege would be protected by adding the phrase law office in any place in clause 63 where the term dwelling house appears. This simply expanded the physical premises that would attach under the legislation.

Second, the government would hold the first review of the act after three years, not five years, with a five year review to be held after that. This is essentially an opportunity in the first instance to look at the fallout from this legislation at an earlier date and assess the implications after three years.

Finally, the government would require regulations under the act to be tabled before the committee in the House each year. The Progressive Conservative Party is very supportive of all attempts to bring about transparency, both for the public and for parliament, and to access information that is rightfully to be placed before Canadians.

This is important in the broader context of trying to rebuild lost confidence in the process and in this institution. It is clear that the bill does not include all the changes recommended by the committee, but it goes a long way to improving the legislation.

The bill will focus on the following legal issues. The first is solicitor-client privilege, which is an attempt by individuals to prevent private information they share with a solicitor from being made public or in any way disclosed. Bill C-22 only dealt with instances of solicitor-client privilege involving legal counsel.

Bill S-16 clarifies that officials of the Financial Transactions and Reports Analysis Centre of Canada may not examine or copy documents subject to solicitor-client privilege where the documents are, and this is the important part, in the hands of someone else until a reasonable opportunity has been made for the person to contact legal counsel. The bill would put in place a safeguard to allow an individual to speak to a lawyer before documents are seized.

This responds to concerns raised by the Certified General Accountants Association of Canada. Privacy is something we can never take lightly. We must always strive to ensure individuals are protected in their privacy rights and in their business transactions. However all that must be balanced with the recognition that there are those who rely upon nefarious means and complicated schemes to steal from others, rip people off and engage in blatant activities to take away a person's wealth.

To that end a balance is struck in the legislation. It contains safeguards and methods for review that allow for a weighing of evidence to determine whose interests are best being served.

Bill S-16 would allow individuals or the privacy commissioner to take the Financial Transactions and Reports Analysis Centre of Canada to court if they are denied access to their files. There is therefore a chance for judicial review if there is denial of access.

Next is disclosure of information. Bill S-16 narrows the range of information that may be disclosed by the Financial Transactions and Reports Analysis Centre of Canada to the Canada Customs and Revenue Agency, the police, and citizenship and immigration officials.

After listing the types of documents that could be disclosed Bill C-22 gave the centre broad power to disclose any information so designated. The amendment would replace that power with the power to disclose similar information relating to identification.

Finally, there is record retention. Records not disclosed by the centre are to be destroyed five years after they are received or collected. Those which have been disclosed are to be destroyed eight years after they are received or collected. These are further safeguards. It may be called fine tuning but it is important fine tuning nonetheless. The sober second thought of the Senate has been usefully exercised here.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, I credit my colleague from Pictou—Antigonish—Guysborough for the comprehensive nature of his discourse. There simply could be no questions after such a detailed and articulate speech.

It is with pleasure today that I rise to speak to Bill S-16. The money laundering issue is of huge importance to Canada. Earlier today I spoke in the House on corporate governance issues. It is extraordinarily important to put in place procedures, agencies and structures to deal with corporate governance and money laundering issues, issues which are increasingly global and are forcing governments to be vigilant if they wish to maintain international credibility.

The estimates of money laundering are difficult to get a handle on. In Canada some estimates are as low as $5 billion per year and some are as high as $20 billion per year. That variance alone speaks to the nature of the problem. We do not know the full depth and breadth of the issue in Canada but we know we had better get a handle on it soon. We hope this initiative will help us do that.

I have spoken of previous incarnations of the legislation and of my concerns with them. I still have not seen a commitment by the government to provide the resources to enable the agency to do its work. I am very concerned about that.

The member for Pictou—Antigonish—Guysborough, our justice critic, has spoken about the urgent situation of underfunding and the resource starved RCMP. With the money laundering agency we could see the same types of issues.

Organized crime networks today use sophisticated technologies and have almost unlimited global resources. We must provide the new agency the resources to be successful in the fight against money laundering. I have significant concerns in that regard, particularly given the sophistication of financial instruments today. There was a time when derivatives were considered sophisticated financial instruments but we have gone far beyond that.

A message was delivered by the Usher of the Black Rod as follows:

Mr. Speaker, The Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.

Accordingly, the Speaker with the House went up to the Senate chamber.

And being returned:

[The Deputy Speaker]

I have the honour to inform the House that when the House went up to the Senate chamber, Her Excellency the Governor General was pleased to give, in Her Majesty's name, the royal assent to the following bills:

Bill S-5, an act to amend the Blue Water Bridge Authority Act—Chapter No. 3.

Bill S-4, an act No. 1 to harmonize federal law with the civil law of the Province of Quebec and to amend certain Acts in order to ensure that each language version takes into account the common law and the civil law—Chapter No. 4.

Bill C-2, an act to amend the Employment Insurance Act and the Employment Insurance (Fishing) Regulations—Chapter No. 5.

Bill S-2, an act respecting marine liability and to validate certain by-laws and regulations—Chapter No. 6.

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.

[Scott Brison, Progressive Conservative, Kings—Hants, NS]

Mr. Speaker, I have caused a stir with a couple of my remarks but I have never had that level of dramatic response. It has been another great day for democracy and a moment in which I take great pleasure in having participated. My time in the Senate was all too brief, I may add.

The issues in Bill S-16 of critical importance to me and to our party pertain to whether the new agency has the resources necessary to deal with the increasing challenges and the great level of complexity in the nature of money laundering, the sophistication of financial instruments, and the almost unlimited resources of international organized crime. We have to ensure that we do not simply create an agency with a tremendous level of responsibility but with very little resources to do what has to be done.

A bad job is one with lots of responsibility and no authority. I would suggest that to ask the agency to take on such a mammoth task and not provide it with the appropriate level of resources would be typical of what the government has done in a number of areas, but it would not be an appropriate way to proceed.

A concern that I have had in the past and still have is the accountability of the agency, particularly in terms of the criteria required to meet the conditions that the agency share information with other agencies, for example, the Canada Customs and Revenue Agency.

It would be appropriate that any information attained by the Canada Customs and Revenue Agency indicating money laundering activity would be shared with the money laundering agency.

That type of sharing of information back and forth could be constructive. However I would be very concerned if, for instance, the individuals involved in the new money laundering agency were to identify no evidence of money laundering but some evidence of potential money laundering which could indicate some tax evasion or something similar. I would be concerned if the agency were to share that information with Revenue Canada.

While I agree that we need a much stronger approach to money laundering, Canadians would not feel comfortable with a resulting beefed up Revenue Canada agency. We have to be careful there are clear criteria and conditions that have to be met before it is deemed appropriate for the money laundering agency to share information with Canada Customs and Revenue Agency.

I have another concern that the arm's length nature of these agencies tends in an institutional way to reduce the amount of accountability to parliament. I understand some of the arguments, particularly from the government, in favour of achieving greater levels of flexibility for compensatory arrangements with the workers and offering a more flexible approach to provide these public services to arm's length agencies.

However much of this could be achieved within the context of more direct departmental agencies as opposed to these arm's length agencies. I have a significant concern about what seems to be a secular decline in the level of accountability to parliament that the government seems to be very comfortable with. Again, these arm's length agencies are all part of that greater reduction in accountability to parliament.

The Progressive Conservative Party supports the legislation and the amendment which would improve accountability of the new agency. The agency in the legislation is a step in the right direction. Canada needs to do less following of what is happening in other countries and what our trading partners in the G-8 and OECD are doing. We should try to be more proactive in leading on some of these issues whether it be on money laundering or in corporate governance issues.

It always seems that we are just a step slower than a lot of our international partners. I would hope the government of a country like Canada, which in the past under the previous government was an international leader in many ways, would try to copy some of the initiatives of that previous government. It has on other issues. The government should provide some level of international leadership on some of these issues as opposed to being followers. That is my wish in closing my remarks today.

[The Deputy Speaker]

Before I call for the resumption of debate I address myself to the member for Kings—Hants who probably thinks that all this activity took place to assist him in marking his very special day, his birthday.

I would never make mention of a member's age, but I understand the member was what we might commonly refer to as a centennial year baby.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

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

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare the motion carried. Accordingly the bill stands referred to the Standing Committee on Finance.

(Motion agreed to, bill read the second time and referred to a committee)

[The Deputy Speaker]

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Burnaby—Douglas, Trade.

The House proceeded to the consideration of Bill C-14, an act respecting shipping and navigation and to amend the Shipping Conferences Exemption Act, 1987 and other acts, as reported (with amendment) from the committee.

Canada Shipping Act, 2001

[Ronald J. Duhamel, Liberal, for the Minister of Transport]

moved that the bill be concurred in.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

(Motion agreed to)

[The Deputy Speaker]

When shall the bill be read a third time? By leave, now?

[Some hon. members]

Agreed.

[Ronald J. Duhamel, Liberal, for Minister of Transport]

moved that the bill be read the third time and passed.

Mr. Speaker, I thank my colleagues for their patience. I am anxious to do this because I do not get this opportunity nearly as often as I used to in the past. It is indeed a great pleasure to be able to speak to members about Bill C-14, the Canada Shipping Act, at third reading debate.

Before I discuss the bill I acknowledge the important role that members of the House and the standing committee played during the examination of the proposed legislation. Changes to Bill C-14 would not have been possible without the dedicated efforts of industry. I also acknowledge the quality of their submissions to the committee.

This bill deals mainly with the safety and promotion of a safe environment. These are major priorities for Canadians. The challenge is to maintain safety and protect the environment against a number of threats while still promoting the health and viability of the shipping industry.

Officials from the Department of Transport and the Department of Fisheries and Oceans worked closely with all interested parties to ensure that the legislation's pollution prevention provisions are modern and consistent with other domestic and international standards. The departments have also worked together to ensure that the penalties for non-compliance would be effective and reflect those imposed in other legislation.

Let me point out to the House that when ship source pollution is detected in the marine environment, Transport Canada investigates in close co-operation with Environment Canada and the Canadian Coast Guard. It is clear that industry supports the departments as they move toward a brand new Canada Shipping Act. This legislation shows that this government is committed to deliver a new statute that will benefit the marine sector.

We have also heard an outline on the provisions of this bill, the compelling reasons for it and its many strengths. Transport Canada is very proud of the consultative process that has made the legislation possible.

While industry for the most part spoke in favour of the proposed bill, several remained in opposition to the enforcement scheme. It is to this scheme that I would now like to focus members' attention.

Bill C-14 would establish a streamlined administrative enforcement scheme. It would use modern, cost-effective means to secure compliance with regulatory requirements. The Department of Transport is committed to work with its partner agencies to ensure a consistent application of the enforcement measures contained in this bill.

The administrative penalty scheme would ensure that Transport Canada has a firm statistical base by which to assess the effectiveness of its regulations and help focus its enforcement activities.

Judicial fines have also been set at amounts high enough to deter unsafe and environmentally irresponsible practices. These amounts reflect the potential harm that can result from these practices. They would ensure that penalties would not be regarded as simply the cost of doing business.

This bill is a conscious effort to hold those responsible for non-compliance liable for the consequences of their actions, including corporation heads.

Nobody should be able to avoid personal liability by hiding behind a corporation.

The proposed system contained in this bill is fair. It would provide for a more efficient and less costly alternative to the courts. It would provide for an alternative to financial sanctions through the use of assurances of compliance.

This system would be based on the successful program of administrative penalties developed in the Aeronautics Act, the Agriculture and Agri-Food Administrative Monetary Penalties Act, and the Competition Act.

This House will recall that during second reading some concerns were raised about the government's ability to protect Canada from foreign vessels that failed to comply with international standards. I want to point out that in section 227 vessels that contravene international conventions relating to safety and the environment can be denied access to Canadian waters.

I will now speak about Part 15 of the bill, which deals with amendments to the Shipping Conferences Exemption Act. Part 15 of Bill C-14 contains several pro-competitive amendments. These amendments would encourage greater competition within shipping conferences.

The amendments strike a balance between the interests of shippers and conference shipping lines and are the result of an extensive consultation period with all stakeholders.

The amendments are aimed at streamlining the implementation of the act.

In response to shippers' concerns, a motion to amend the proposed legislation on service contracts was introduced. Modifications were made to clarify the level of confidentiality in regard to the service contracts shippers negotiate and sign with individual conference lines.

The government realizes that in order to protect various Canadian interests a balanced approach is needed with regard to the legislation on conferences.

It is in Canada's interest to continue to attract foreign shipping lines while at the same time encourage affordable ocean transportation and an adequate and reliable level of service for shippers.

By adopting the amendments to SCEA, Canadian legislation pertaining to shipping conferences would be maintained on par with our trading partners.

The bill before us would bring about much needed change in Canada's marine law. It would usher in a new era in marine safety and environmental protection.

Transport Canada has consulted widely. It listened to stakeholders and made changes to accommodate their concerns. We have a bill before us that responds to many of their concerns without jeopardizing the effectiveness of the legislation.

The bill is fair, thorough and effective. It would give Canada's marine industry the legislative framework it needs to operate successfully in the 21st century.

I urge the hon. members to support Bill C-14.

[Andy Burton, Canadian Alliance, Skeena, BC]

Mr. Speaker, I am pleased to rise today to speak to Bill C-14 on behalf of my party. Bill C-14 is an act respecting shipping and navigation and to amend the Shipping Conferences Exemption Act, 1987 and other Acts.

For the benefit of those Canadians watching television, I will summarize the purpose of the bill.

This quote is taken directly from the bill. It states:

This enactment overhauls and replaces the Canada Shipping Act, other than the portions that concern liability, with modernized legislation that will promote the safety and economic performance of the commercial marine industry as well as ensure the safety of those who use pleasure craft. Key changes to the existing legislation include improvements to provisions to protect and support efficient crews, ensure passenger and vessel safety and protect the environment. A new administrative penalties scheme provides an alternative means for dealing with certain contraventions.

The enactment clarifies the marine responsibilities between the Department of Transport and the Department of Fisheries and Oceans. The enactment organizes the contents, updates the terminology and streamlines substantive requirements to make the law much clearer and easier to understand.

The enactment amends the Shipping Conferences Exemption Act, 1987 to inject greater competition within shipping conferences, to streamline the administration of the Act and to ensure that Canadian legislation covering international liner shipping conferences remains in harmony with that of Canada's major trading partners.

On this side of the House, we feel that these are all good and supportable directions for the legislation to take. As the quote outlines, Bill C-14 is a significant piece of legislation. I am told the departmental officials have worked on this for some time in an attempt to perfect it.

As the members in the House know the bill was originally introduced in the House as Bill C-35, which died on the order paper in the 36th parliament when the election was called. Bill C-35 did not go so far as to include the Shipping Conferences Exemption Act amendments. It only dealt with the regulatory changes affecting the industry.

This bill contains some 334 clauses and is just under 200 pages long. I reiterate that obviously the department officials have worked on this for some time. We would have appreciated more time to go through it in a little more detail and perhaps absorb it a little better, however we were not allowed that time.

Bill C-14 was introduced at first reading on March 1. It went to second reading the following week and was sent to committee shortly thereafter. As I said earlier, it was a very speedy process and I would have to wonder why.

The committee stage for this bill was a journey in itself. We heard the departmental officials give testimony and briefings regarding the bill and heard from witnesses in the industry as well. Some members may also have been visited by lobbyists from the shipping conferences exemption side of the bill urging support for the bill without amendment.

All of this happened in short order and the bill moved along the process quite smoothly until it came to the clause by clause examination. The opposition, and even some Liberal members of the committee, were not too impressed at the lack of organization by the department when presenting amendments.

We entertained 27 separate amendments at committee. This may not seem excessive but when they are dumped on your lap at the beginning of a meeting it certainly is a handful. We certainly did not appreciate such short notice nor did we appreciate not having the opportunity to review these amendments beforehand.

As many members know, clause by clause can be a rather tedious venture at the best of times, but with many last minute amendments of a detailed nature to a bill which deals mainly with regulations, it makes the process all the more taxing.

Up until that time, we thought highly of the officials for undertaking such a monumental task as to redraft such a large and detailed act. However being so disorganized as to drop those changes in the committee's lap at the last minute suggested either that the bill was possibly not ready for the floor of the House when it was first introduced or the drafters of the bill did not take the time to check their work.

Either way, as the government official put it, 27 minor amendments were put to committee and frustrated the entire process. The amendments were so poorly written that the parliamentary secretary had to verbally amend an amendment on the fly.

This is not acceptable. For members of parliament to truly have input in the process of making laws in the country, we need to ensure that the process is properly seen to.

We are now at third reading where amendments can be made to the bill at hand. We see today that there are no further amendments of the bill. At least right now it appears that way. However I would not be surprised, if the process allowed for it, if we were presented with last minute amendments.

I know the Speaker made a recent ruling preventing frivolous amendments, but I say to the hon. members in this Chamber today, does that mean that committee now becomes a mockery? I hope not.

This may be a phenomenon that only occurs with the transport department. I do not know. However I do know that I did not care for it and I do not think other members of the committee cared for it either.

With regard to the bill, at present the official opposition supports the bill in its current form. As I said earlier, we did have some concerns about the speed of the process, but overall the general direction of the bill is positive and it needed to be done.

I thank you, Mr. Speaker, for allowing me the leeway to express my frustrations with the process. I would urge the members opposite, and should departmental officials be watching today, that to have good law making in Canada we have to get down to the business of drafting both in committee and in the House and at report stage, to ensure that such abuses of the process which occurred in this committee no longer happen.

In closing, overall we support the general direction and the long overdue overhaul of the legislation. We have some real concerns over the need to fast track this lengthy bill and would have preferred more time to analyze it in detail.

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

Mr. Speaker, the Bloc Quebecois will be supporting Bill C-14, because the development of the Canadian shipping industry should have been reviewed decades ago. This legislation has been long awaited by the public, shippers and receivers of goods and also part of the industry.

Again, we will never say it often enough, this bill should have been passed in the last parliament. It did not happen because the government called an election for no better reason than to please some politicians. Because of that early election, bills like Bill C-14 are once again before the House.

Was the wait worth it? That is the big question that we and the people of Quebec and the rest of Canada who are listening should be asking ourselves. As I was saying, Bill C-14 was introduced in that last parliament but was not passed because the government called an early election. Did the government use the delay to go over the bill and ensure that the industry would be totally happy with the proposed changes to the Canada Shipping Act? I am afraid not.

In a press release dated March 1, 2000, the Minister of Transport stated that this legislation, as introduced, was aimed at promoting the economic growth of the shipping industry. That is what the Minister of Transport said on March 1 regarding the introduction of Bill C-14. All those who are concerned about the future of shipping in Quebec and in Canada expected the government to seize the opportunity, being just a few months into its mandate, to introduce a stronger bill that would have really helped the shipping industry, as mentioned by the minister in his statement.

I repeat that he said in that statement that the bill's intent was to promote the economic growth of the shipping industry. It so happens that the Bloc Quebecois had mentioned on several occasions that the only way to promote the economic growth of the shipping industry was to establish a real federal shipbuilding policy.

We had no choice but to recognize that the bill that was introduced at the beginning of this parliament is a carbon copy of the previous one, except for some 27 amendments dealing mostly with periods, commas and legal technicalities. We sadly realized that the government had not taken this opportunity to establish, through this shipping bill, a true federal shipbuilding policy.

Even though the minister received a report in early April from the committee, the national partnership project committee on shipbuilding, he has still not announced what he plans to do about it.

Advantage could have been taken of it to introduce a real change, not just piecemeal amendments. This was a new bill, even if it was drafted already for passage during the last parliament. Since a committee was struck, as I have said, the national partnership committee on shipbuilding, which has submitted its report to the minister, we could have taken advantage of it as a good responsible government to introduce a whole new chapter on shipbuilding in Canada, but as hon. members will have realized, this was not done.

The Bloc Quebecois, and myself in particular, want to see the entire matter of shipbuilding revisited. As we speak, the shipyards are only at about 25% capacity. In Quebec there is an obvious decline, when total job numbers are looked at, in Lévis, Île aux Coudres and Les Méchins, and the situation is the same everywhere, in Vancouver and in Halifax. In the past it has given work to some 12,000 people, but as we speak the figure is scarcely 2,750.

This is hard to understand. We MPs wage battles for our constituents. The Bloc Quebecois has fought for them on shipbuilding, on the number of jobs in this sector. We began the battle. The government struck an independent special committee, which was to produce a report.

When the bill that preceded Bill C-14 was introduced in the previous parliament, the government could argue that it could not add a chapter on shipbuilding because it was waiting for the committee to table its report. The committee has now submitted its report, but the minister has yet to decide what he will do with it.

In order to promote the industry's economic growth, it might have been very interesting, as the minister said, to add a whole new chapter on the recovery of Canada's shipbuilding industry. Why? Because the Canadian workforce is qualified and it costs less than that of most of our competitors. We have an edge on all the other countries.

The majority of Canadian shipyards use very modern equipment and advanced technology. Two of them hold ISO 9001 quality certification, while four have ISO 9002. Shipyard managers and other stakeholders in the marine industry feel that they were abandoned by the federal government at least ten years ago. They feel left out compared to other industries such as, to name but one, the aerospace industry. The shipbuilding industry deserved to be listened to in a serious and independent fashion.

With direct access to three oceans and to the world's longest inland waterway, shipbuilders and shipowners wonder why Canada chose to let their industry down.

These are issues that were raised by the Bloc Quebecois and that the government decided to deal with by setting up a special committee. However, it did not see fit to include a whole chapter in the new Bill C-14 to deal with the industry.

Shipping is the most economical means of transportation and the one that is most respectful of the environment. A number of shipyards are surviving at the present time because of provincial government intervention, although this is an area of federal jurisdiction.

We talk about all kinds of jurisdictions. Today or yesterday the Prime Minister announced the creation of a task force on urban issues that will be travelling across Canada. That is an area of provincial jurisdiction, one that is the sole and exclusive jurisdiction of Quebec. The government should leave it to the provinces, but it is apparently very hard to understand.

Quebec has tax measures, including a tax credit. Nova Scotia has a specific program of financial guarantees. British Columbia has encouraged the acceleration of its aluminum ferry program. Canada's shipbuilding industry is at a disadvantage compared to its Asian competitors, who receive government subsidies of up to 30% of the amount of their contracts, the Europeans, who receive about 9%, and the Americans, who benefit from protectionist measures. Yet Canada has neither subsidies nor protectionist measures. We have missed the boat.

I would like to commend my colleague from the Bloc Quebecois, the hon. member for Lévis-et-Chutes-de-la-Chaudière, who introduced, on October 14, 1999, a private member's bill, Bill C-213, on shipbuilding. His bill was intended to promote shipbuilding in Canada and to enhance the competitive capacity of Canadian shipyards.

Obviously our fine Liberal government decided to not make this bill a votable item. Still, I congratulate my colleague on his effort, because he had three very ingenious and significant ideas arising from the discussions he had with the industry. That is why there were three parts to his bill.

The first part concerned the establishment of a program of loans and guarantees to indicate to the shipbuilding industry in Canada that there was a program providing that 87.5% of the amount of a loan for the purchase of a ship could be guaranteed by the federal government.

There was therefore, initially, a loan guarantee, and then a rate of interest comparable to that available for loans from financial institutions to large and financially strong corporations.

It would have been possible to provide a loan guarantee with competitive interest rates and a repayment schedule comparable to that offered by financial institutions to large corporations. The method of repayment would suit obligations and be appropriate for a business that could become very prosperous.

The second part concerned the exclusion of new vessels from the application of the lend lease regulations. Because of their complexity, lend leases effectively eliminated the purchase of ships in Canada by lend lease. The new lend leases include repayment conditions, which harm the industry. New ships were excluded from the lend lease regulations.

The third innovation was to establish a refundable tax credit. In 1997 the government of Quebec announced tax incentives to stimulate the shipping industry. These incentives were based on a tax credit. The Quebec government raised the refundable tax credit for shipbuilding from 40% to 50%. The federal government could have offered the same kind of tax credits to businesses in the shipbuilding industry to breathe new life into this industry.

It did not happen. Once again, the Liberal government missed a golden opportunity in a very interesting bill that was supposed to be a life saving measure for the shipping industry, according to the minister himself. I repeat that he said in a statement on March 1 that the bill's intent was to promote the economic growth of the shipping industry.

Why did he not heed the recommendations presented to him in April by the committee that he himself established? Why did he not take advantage of this new expertise and these new recommendations to include in the very interesting shipping bill a whole chapter on shipbuilding in Canada?

It would have solved the problem and would have given momentum to an industry which, I repeat, is only operating at 25% of its capacity today.

The present number of workers is 2,750. It used to be 12,000. These men and women, these Quebecers and Canadians, expect that when the time comes to bring in a bill the government will table one that they want. I repeat, we had one that was votable at the end of the last parliament, which was interrupted when the government decided to call an election to satisfy the wishes of certain politicians.

However, the government again brings in an identical bill, when it would have had a great opportunity after being presented with a most interesting committee report to bring in a real bill that would have got the shipping industry back on its feet, with a whole chapter devoted to shipbuilding and to getting this important industry back on its feet, since it is operating at only 25% capacity. We have the brains and the skills necessary, and we are capable of competing with all other industries in the world.

Once again the Liberal government, the Government of Canada, has not listened to the recommendations by taxpayers, by representatives of the industry, and by the Bloc Quebecois. The Bloc Quebecois has staunchly defended, not for partisan reasons but for human ones, the skilled men and women who are getting on in years but would still like to use their experience for this fine country. They cannot, because there is no work at this time.

The government has again missed a golden opportunity to include in this Bill C-14 a whole chapter on shipbuilding, which could have revived the industry in a number of our regions that are experiencing major blips. We could have had an opportunity to revive this entire industrial sector, which involves a number of regions on the coasts of both Quebec and Canada. This would have been an excellent opportunity, one once again missed out on by a government that is too arrogant, that governs alone without heeding good recommendations from those who are anxious to pass them on.

[Norman E. Doyle, Progressive Conservative, St. John's East, NL]

Mr. Speaker, I want to say a few words on Bill C-14, the Canada Shipping Act and amendments to the Shipping Conferences Exemption Act.

When the bill was tabled, the minister's press release stated that it would update, modernize and streamline Canada's marine law and that it would delineate new roles for the Department of Transport and the Department of Fisheries and Oceans.

The minister also indicated that the bill would allow the entire marine community to operate in a manner that is safer, more efficient, environmentally sound and responsive to the needs of Canadians in a global community and a global economy. These are laudable aims that we in this party can support.

The proposed amendments to the Shipping Conferences Exemption Act are purported to generally streamline the administration of the act and to promote greater competition in the marine shipping industry.

Shipping conferences of course are groupings of shipping lines that are essentially cartels. The word cartel brings to mind OPEC, an organization dedicated to fixing the volume and price of oil on world markets. Similarly, shipping conferences collude on prices and services and claim to prevent wild fluctuations in same as regards the marine shipment of goods. The conferences claim that the benefit to our importers and exporters is stability in the shipping industry.

In general, most stakeholder witnesses at the transport committee felt that Bill C-14 was generally an improvement over the current situation. However, just about every group of witnesses had one or two complaints about one clause or another. As an opposition critic and a layman in the field, one is faced with saying yea or nay to a complicated piece of legislation where the average witness says that he or she is in favour of 95% of the bill but that he or she is strongly opposed to clause x or y.

One major change that the bill brings in is to put all commercial vessels under the jurisdiction of the Department of Transport and all pleasure craft under the Department of Fisheries and Oceans.

The Department of Transport will now have to create an automated small vessel registry as small commercial vessels under 12 metres in length used to be handled by DFO. One hopes that this will not result in a bureaucratic nightmare for small commercial vessels.

One concern that has come up is that the boats are not always pleasure craft or commercial vessels, depending on usage. In many rural areas of Canada, the family pleasure craft is sometimes rented out to say a sports fishing or outfitting company if there is a large increase in clients. The vessel that met the pleasure craft standards yesterday may not meet the Department of Transport rules for commercial vessels tomorrow. This will preclude rural people from making a few extra dollars if the transport department rules are strongly enforced. There are implications down the road for ordinary people that may not be evident at first glance.

One witness asked the committee “What if a pleasure craft gets into an accident with a small water taxi?” Whose jurisdiction is it to straighten out that mess, the Department of Transport or DFO?

There are millions of pleasure craft in Canada and this bill would allow the minister to make regulations on standards of construction and equipment carried on boats. A number of witnesses expressed concern that the government may require pleasure craft to be upgraded in order to be licensed. This could lead to financial hardship for many small boat owners, especially pleasure craft owners, whose boats were bought many years ago when standards were different or not as high as they are today. Are we going to run into a situation that sees people being refused a licence unless considerable money is spent on a small boat?

I am given to understand that federal legislation requires that a boat with an engine larger than 9.9 horsepower be licensed, and that includes many boats in Canada. At present we have a paper only licensing system where a form is filled out that goes into a file cabinet and nowhere else. If a boat is licensed, carries a number and gets lost or stolen, how do police trace it? At present they cannot look it up on their computers because the only copy of the licence is in a file cabinet in some government office halfway across the country. As a result, thousands of small boats in the country are not licensed at all, and because the boat may be at a lake near a cottage, no one in authority really knows it exists.

The solution of course is a computerized licensing system, but I wonder if the general public out there is ready or willing to get into a new bureaucratic system on boats that has been taken for granted for years. I realize that boat traffic in some of the lakes and waterways in the mainland of Canada can be very dense during the summer months and tighter controls are necessary. In rural Canada, however, such a new intrusion into peoples' lives may not be welcome. My problem of course is that the bill raises more questions than it probably answers.

Bill C-14 claims to be progressive in that enforcement mechanisms would allow for administrative penalties in addition to the usual court proceedings. In theory, this would allow the minister to take action against lesser infractions without dragging someone into court and maybe giving him or her a criminal record. That could be very good.

However, in court one must be found guilty beyond a reasonable doubt and one has the protection of the charter of rights. In an administrative penalty, the onus on the minister to prove guilt is far less onerous. Just about all the witnesses commented that they disagreed with the administrative penalties because one would not have full access to due process as one would have in a court of law. I do not know if that is good or bad. I guess we will have to wait and see.

At the beginning of my remarks, I mentioned that the amendments to the Shipping Conferences Exemption Act were purported to encourage more competition in the shipping industry. The exemption in the act's title refers to exemption from Canada's competition laws which would normally outlaw cartel activities. In particular, the Minister of Transport claimed that the bill would bring our legislation more in line with our American trading partners. The shipping conferences generally agreed but people with goods to ship, the Canadian Shipping Council for instance, did not. We will wait to see where that leads as well.

Shippers want to be able to enter into confidential contracts with individual shipping lines so as to get the lowest price for shipping their goods. This bill would allow them to do so, but there is no clause requiring the owner of the ship to keep the details of such a contract secret from other shipowners in the conference.

In the United States a shipper can enter into such a confidential contract but in the U.S. the owners of the ship and the members of the conference are expressly forbidden to share the details of the contract with fellow conference members. The change in our rules would be a step toward the American rules but falls a bit short of them.

The shippers wanted a dispute settling mechanism in the legislation but were also disappointed. As well, they wanted a sunset clause ultimately phasing out the cartels over a number of years, and they lost that battle as well.

All told, the shipping conference legislation changes little that would help our exporters and importers. The bill merely makes some administrative improvements to the status quo.

I am given to understand that changes to Canada's shipping laws have been in the works for many years and there have been extensive consultations with many stakeholders. I am reluctant to vote against the bill if there has been that kind of wide consultation. However, I have grave reservations about the implications for small pleasure and commercial vessels. I fear that in due course the public may be in for more bureaucratic entanglements than they currently expect or want.

[The Deputy Speaker]

Is the House ready for the question?