House of Commons Hansard #76 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was organized.


Motor Vehicle Transport Act
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3:20 p.m.

The Deputy Speaker

All those opposed will please say nay.

Motor Vehicle Transport Act
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3:20 p.m.

Some hon. members


Motor Vehicle Transport Act
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3:20 p.m.

The Deputy Speaker

In my opinion the yeas have it.

And more than five members having risen:

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3:20 p.m.

The Deputy Speaker

Call in the members.

And the bells having rung:

Motor Vehicle Transport Act
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3:20 p.m.

The Deputy Speaker

The recorded division stands deferred until after government orders, later today.

Proceeds Of Crime (Money Laundering) Act
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June 11th, 2001 / 3:20 p.m.



Jim Peterson for the Minister of Finance

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

Mr. Speaker, what we are dealing with here is an amendment to the anti-money laundering legislation that was passed by the House a year ago. These amendments spring from a review of the legislation in great detail by the Senate.

I would like to commend hon. senators for the way in which they gave the bill a great deal of scrutiny but did not hold up the passage. They said they would come back and revisit it but would allow the bill to pass in its original form. I would like to thank them for the scrutiny they have given it and for the way that they have expedited the passage, at the same time achieving a bill that fulfils the purposes and needs.

Money laundering in Canada is anywhere between $5 billion and $17 billion a year. The bill would fight organized crime and the proceeds of crime through a mandatory reporting of suspicious transactions and the reporting of large transfers of money across borders, which would be carried out by the Financial Transactions and Reports Analysis Centre. The institutions would report to it and it will be able to analyze the data. What I think we have achieved, which may be unique in the world, is that we are respecting the privacy of individuals and at the same time fighting crime. That is the balance we have struck and I believe it is a very good balance.

I would like to thank all members of the House for their consideration of the bill and for its speedy passage in the same manner that they gave speedy passage to the main bill itself one year ago.

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3:25 p.m.

Canadian Alliance

Ken Epp Elk Island, AB

Mr. Speaker, I know that the Liberals are always delighted when I rise in debate as one of the first three speakers who, according to the rules, has 40 minutes available.

I did that in debate on Bill S-3, the transportation bill. I hope that my intervention there will actually result in a ball starting to roll that will change the laws of the country. I am hoping for changes to the laws right across the North American continent so that there will be uniformity, so that there will be understanding on what the rules are and so that in obeying them we will save lives. That is the objective.

Now we are speaking about money laundering and the role government has to play in order to prevent criminal activity on the part of members of our society who choose to engage in crime. The motivation of criminal activity is almost always that of earning money in an illicit fashion, so this money somehow has to be brought into the system without it being identifiable.

I know that a lot of people in the country have some concerns about the potential for some day having a cashless society. Actually I am one of them. It has one interesting feature if we stop to think about it. If instead of actually having cash in our wallets, all of us had computer cards that represented cash, it would of course be easy for people to transact business. It would really be equivalent. Instead of withdrawing four $20 bills from a bank machine in order to have $80 in cash, I could simply put my cash card into the machine and ask the machine to transfer $80 from my chequing account or whatever it is to the card. When I wanted to purchase something, instead of tendering $12.38 and then getting change I could simply give my card. The machine would subtract that from the balance on the card and I would walk away.

That could be done anonymously. It would be great. However, it could also be tracked and that in fact is one of the great objections that many Canadians have to that kind of scheme. There is genuine concern that if we ever get to that then the term big brother is watching would take on real meaning. It would mean that even if we stopped to buy a pop and chocolate bar there would be evidence that could be hauled out later. Most Canadians reject that kind of monitoring of our activities, so there are some problems with it. However, it could be legislated that such data could be used only in an investigation of criminal activity.

If we had such a scheme, just look at how difficult it would make it for people who engage in crime. They would somehow, either through a bank account or through a cash card, have to force other people to put money into their account in one form or another. It would be traceable and therefore it would be a lot easier to put a brake on a lot of criminal activity. I sometimes think it would be quite hilarious if someone walked into a bank with a gun, pointed it at the teller and demanded that $30,000 be transferred to an account. It would hardly be an anonymous transaction. A person would not get very far before officials were able to catch up with him and charge him with the appropriate crime.

That is not what we are talking about today. We are talking about some other means of tracking financial transactions that are related to the criminal industry. I have never heard of a criminal who demands payment by cheque when he or she does something illegal, because cheques are in fact traceable. It is called a paper trail.

About 10 years ago when the GST was brought in there was an awful lot of illegal activity, because in order to avoid the GST people said they would do renovations to houses or fix cars for a certain amount provided that they were paid cash and there was no paper trail. Then there was no GST and they did not have to declare it on their income tax. Basically, it was tax free money which meant they could do it for half the price.

I understand that sometimes they charged three-quarters of the price, so they basically split the earnings so to speak, but it was illegal. If Revenue Canada, as it was called at that time, found out about it, then appropriate actions were taken. However this was the lack of the paper trail.

How do we get a paper trail on criminal activity? Obviously these criminals will avoid the paper trail. Bill S-16 is actually the completion of Bill C-22, which was given assent in the previous parliament, if I am not mistaken. I do not know if hon. members will recall, but I believe that was the bill that eliminated the $1,000 bill. It is much more difficult for large amounts of money to be transacted if people literally have to have truckloads of $20 or at the most $100 bills to do the transaction.

That was also the bill that included some of the measures which we are talking about today. As the parliamentary secretary said now there are some refinements being made. I would like to say a few things about them.

First, how long can this information be retained? The bill is amending the new organization called the Financial Transactions and Reports Analysis Centre of Canada, commonly called FINTRAC. If financial organizations transact a large amount of money in cash they are required to report it. Those financial institutions, like banks or credit unions, will report their transactions to FINTRAC.

This raised a number of questions. As I said, how long can the centre retain this information? For example, if I went to my bank and deposit $50,000 in cash, and maybe $50,000 is not very much money to some members but it sure is to me and my friends, people might wonder how I got it. They might wonder if I got it through some illicit operation. However, that would never happen. In case someone else did something like that, the financial institution would report the cash deposit. If I reported it, FINTRAC would then have the obligation to look at it. If it was suspicious it would turn it over to the law enforcement agencies for investigation.

Let us say that I am investigated and there was nothing wrong. The institution would have his information. How long would the centre retain the information it collects? Bill S-16 deals with that. It says that the information reported to them cannot be kept more than five years. If it is transmitted onward to the law enforcement agencies, then the information can be keep for eight years but no longer, in which case that information must be deleted from all computer files and all paper files must be destroyed.

When and how will it dispose of that information? That is also in this particular bill, as I have just indicated. What information may the centre disclose to law enforcement authorities? That is another very important question because the original bill just said similar information and it was left undefined. Similar to what? One thing this bill does is to insert only one word in one of the clauses. It inserts the word identifying information. In other words, a certain amount of information such as name and address can be included. The information which it is entitled to keep and transmit must be identifying information in terms of the suspicion, or the details of the transaction itself or the identification of the individual. It cannot go on a wild goose chase.

Clause 3 of the bill deals with the jurisdiction of the courts. There is always a problem with this. If a government agency has the right to do something and I disagree with it, can I appeal? That was not clear in the original act. This clause in the bill will clarify this and allow courts to have jurisdiction over any disputes.

What happens if an agent from the centre feels that it is information which could lead to a criminal charge? Does he or she give it to the law enforcement agency without any accountability? The fact of the matter is we are dealing with people who may be innocent.

We want to do as much as we can to find evidence against those kinds of individuals, convict those who are guilty and bring them to justice. At the same time, however, we do know if many people are charged with certain activities of which they are not guilty. They should be able to defend themselves.

The issue of the courts is one thing. Another is that any information which is deemed eligible to be reported, cannot be reported without the person first being given the opportunity to contact a lawyer. One may wonder why, if it involves an accountant for example.

At the present time accountants do not have the solicitor-client privilege that pertains to the legal profession. That person could refuse to give information and decide to withhold it as being client privilege. The person now would not be required to give that information without first having the opportunity to contact a lawyer who could look at it, then on behalf of the client say it was client-professional privilege, and he could take it. This is a safeguard which should be included in order to protect those people who are innocent and, to a degree, protect the process so the person who is guilty cannot get off on the technicality that his or her rights were abused. That is a very important clause.

I thought it would be useful for members of the House and for anyone else who happens to be observing the debate today to know a little more detail about Bill S-16. It is a bill which strengthens the money laundering legislation in Canada so those people who are involved in criminal activity can be correctly identified and brought to justice. I support this bill.

Proceeds Of Crime (Money Laundering) Act
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3:35 p.m.


Pierrette Venne Saint-Bruno—Saint-Hubert, QC

Mr. Speaker, I am pleased to have this opportunity to speak today on the third reading of Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act.

On June 29, 2000, Bill C-22, or the Proceeds of Crime (Money Laundering) Act received royal assent. The purpose of this statute is to make it easier to prevent money laundering of the proceeds of crime by creating a financial transactions and reports analysis centre responsible for gathering, managing, analyzing and distributing reports of suspicious operations and any other pertinent information.

In fact, the inauguration of a mechanism for the reporting of suspicious transactions and major transborder capital transfers, as provided for in Bill C-22, was in response to the problems raised by the financial action group against money-laundering.

This would be a good opportunity to point out that the Bloc Quebecois had supported this government initiative, out of a concern to protect the Quebec population from the calamity represented by organized crime. Moreover, in order to make money laundering more inconvenient, the Bloc Quebecois were the ones behind the withdrawal of $1,000 bills and the requirement for banks and other financial institutions to report any suspicious financial transaction involving $10,000 or more in cash.

Before I go further, money laundering may be defined as follows. It is the process by which the proceeds of crime are converted into assets whose origins are difficult to trace. Despite all, we know that 70% of the money laundered in Canada is drug money. The remaining 30% comes from activities as varied as under the table gaming, tobacco and alcohol smuggling, fraud, counterfeiting and petty computer and telecommunications crime.

As we know, money is the sinews of war, and the one waged by the authorities against organized crime is no exception. Internationally, proceeds from crime entering the financial market represents hundreds of billions of dollars. So, considering that the prime motivator behind organized crime is lucre, and here I am speaking of huge sums quickly pocketed, the confiscation of such laundered proceeds hurts a lot more than the usual sanctions of fines and prison terms.

Legitimate or not, every business aims at making a net profit. By way of example, let us look at a business whose activities are on the up and up. Suppose that for some reason or other the business is taken to court and for purposes of discussion, let us imagine that at the end of the trial it is sentenced to pay a fine or to pay damages. Of course, the business will feel it but this comes with the territory.

The same holds true for organized crime. A jail sentence or a fine is among the inherent risks associated with criminal activities. However, by depriving an organization of its most profound motivation, we destroy the directly proportional relation that exists between the risks and the benefits. So, getting our hands on that organization's assets will weaken it from an economical and moral point of view. In other words, we must show that, indeed, crime does not pay.

Even though it does not at all change the substance of the Proceeds of Crime (Money Laundering) Act, Bill S-16 does address some issues raised during the hearings held on Bill C-22 by the Standing Senate Committee on Banking, Trade and Commerce. The four changes included in the bill should address the following issues.

How long will the Financial Transactions and Reports Analysis Centre of Canada keep the information that it collects? When and how will it dispose of the information that it will have gathered? What information can the centre transmit to law enforcement bodies? Will the federal court have the power to order the centre to transmit the file of an individual under the Privacy Act and the Access to Information Act? Finally, who is authorized to make a claim of solicitor-client privilege?

We must ask ourselves if Bill S-16 adequately addresses these concerns, and this is what we are going to do.

First, we can say that clause 1 responds satisfactorily to the first two questions raised before the standing Senate committee. This amendment sets out the circumstances justifying the maximum retention period of eight years for reports and all information.

This retention period shall be enforced when the centre forwards 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.

Moreover, the addition of paragraph ( e ) to section 54 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 paragraph therefore adds certain necessary clarifications regarding the duration of retention and the destruction of information.

Similarly, with the addition of the term identifying information in paragraph 55(7)( e ), the purpose of which is to clarify to what the information is similar, the second clause of Bill S-16 thus responds to the third question. The purpose of this amendment is to clarify that the identifying information in question is that found in paragraphs ( a ) to ( d ).

In our view, this clarification was not needed since paragraph 2(e) is interrelated to the previous ones. But since this is a catch-all paragraph, I guess someone felt the need to make this clarification which does not change anything to the original provision. If this amendment can clarify things for some people, great.

With respect to the fourth question, clause 3 of Bill S-16 was drafted because initially the federal court was not allowed to make an order for disclosure. In fact, such an order could only be made pursuant to subsection 60(4) of the Proceeds of Crime (Money Laundering) Act.

The amendment ensures that no provision in this legislation can prevent the federal court from ordering the director of the centre to disclose information under the Access to Information Act and the Privacy Act. It seems that it was always intended for the federal court to enjoy this authority, which will now be clearly stipulated in clause 3 of Bill S-16.

With this amendment, the Proceeds of Crime (Money Laundering) Act will now give the federal court some judicial control over the disclosure of information.

As for the fourth clause, as we mentioned at second reading, it certainly would have been possible to word it to make it easier to understand. Unfortunately, it was not, and we have to live with it.

In addition, following the explanations we were provided with at the Standing Committee on Finance, we believe that, even if this amendment answers our fifth question about who could invoke the solicitor-client privilege, it seems that it does not deal with the concerns that led to its drafting.

Before the Senate committee, accountants maintained that they have very high standards of confidentiality to meet, just like any lawyer. Consequently, they say that they should also be allowed to claim solicitor-client privilege. However, clause 4 of the bill responds only partially to this demand. An accountant or any other person, other than a lawyer, cannot personally claim solicitor-client privilege.

Indeed, the protection of documents in the possession of a person who is not a lawyer depends on the involvement of such a legal counsel in the matter under investigation. Therefore, the possibility of claiming solicitor-client privilege remains restricted to the lawyer.

How does this work in practical terms? First, the client gives a legal mandate to a lawyer. I must insist on the fact that the nature of the mandate is crucial because a lawyer who would act as business adviser could not claim solicitor-client privilege.

In fulfilling his or her mandate, the lawyer may work jointly with other professionals, such as an accountant for example. Having doubts regarding the legality of the activities conducted by the client, the authorities decide to investigate. The person authorized to conduct the search will not be able to examine the documents handed over to the accountant by the lawyer. Therefore, it is through the lawyer, the only person who can claim solicitor-client privilege, that the documents in the possession of the accountant will remain confidential.

In this context, it would be fair to think that, in order to enjoy absolute protection, money launderers will systematically go to a lawyer first, who will hand the documents over to the appropriate professionals.

Yet the situation is not as simple as it may appear. Even if the solicitor-client confidentiality required of the lawyer at this time provides considerable guarantees of confidentiality, this is not an absolute concept but one subject to a number of conditions and restrictions, which I will not list in the context of today's debate.

When an individual or organization involved in money laundering requires the services of any professional with a view to facilitating the perpetration of a crime, regardless of whether or not a lawyer was involved, the seized documents cannot be protected by solicitor-client privilege.

In short, this amendment adds nothing new to the present situation, in that it merely codifies existing principles which have long been in place under common law. The concept of solicitor-client privilege therefore remains exclusive to the performance of the duties of a lawyer.

This notion can, moreover, be extended to other persons when their services have been retained by a lawyer, in order to enable him or her to meet the obligations of his or her mandate as a lawyer.

Under these circumstances, one might say that the solicitor-client privilege is not a right transmittable to a third party. It is instead a real right involving transmitted documents which, as the bottom line, are the purview of the lawyer.

We believe that the law will meet the objective of this provision, that is to ensure that specialized professionals such as lawyers and accountants cannot act as accomplices to the money laundering mechanism.

As we have already stated, Bill S-16 ought to respond to five very specific questions raised before the Senate committee. Despite the fact that accountants do not really enjoy the same privileges of client confidentiality as lawyers, we still consider that Bill S-16 effectively addresses all these issues.

Obviously, as we supported the Proceeds of Crime (Money Laundering) Act and as the four clauses the present debate addresses are intended simply to clarify the intent of the provisions they amend, we will also vote in favour of Bill S-16.

However, we wish to point out to this House that we are supporting the government today for the same reasons we became involved in the introduction of new coercive measures.

We are satisfied these measures will enable the authorities to more effectively fight organized crime and therefore to ensure the safety of Quebecers.

In addition, it is unfortunate that the people of Quebec must once again put their faith in the goodwill of a federal government, which, more often than not, does what it likes when it comes to resolving problems that, despite their application to Quebec society specifically, fall under the jurisdiction of the federal government because of the distribution of jurisdictions, which gives it exclusive jurisdiction in matters of criminal law.

It is therefore appropriate to mention that this dependency will be eliminated with a sovereign Quebec.

Proceeds Of Crime (Money Laundering) Act
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3:50 p.m.

Progressive Conservative

Peter MacKay Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I commend the hon. member on her remarks. She obviously grasps the importance and the relevance of this issue at this time in Canada.

In response to concerns raised by the Senate banking committee and the important efforts and work it did in that regard, we see Bill S-16, an act to amend the Proceeds of Crime Act, coming forward to legislate in the areas of solicitor-client privilege, the disclosure of information and records retention.

I should indicate at the outset that I had intended to split my time with the hon. member for Kings—Hants. Subject to his arrival I may just carry on.

Money laundering, as we all know and are very aware, is the process by which criminals attempt to conceal profits earned from crime so that the money looks as if it came from very legitimate sources. It is literally an attempt to clean dirty cash. It is also an attempt to hide or cover up the illegal means and sources from which the money originated. Typically it involves vices such as extortion, prostitution, illegal gambling, drugs and other contraband. The particular legislation is aimed at attempting to track the origins of the money and to get at the source itself.

The legislation speaks of abilities to trace the origins of money because the origins themselves are those which are most often concealed and erased. If the money is successfully covered up, it can then be used to buy goods and services the way any other type of cash or exchange takes place.

It is estimated that somewhere between $5 billion and $17 billion in money from nefarious sources is laundered in Canada each year. I do not mean to put too fine a point on it but that sort of vague estimate indicates the size of the black market out there. It is very disturbing. Exact figures are very difficult to come by in that regard.

Obviously the black market is thriving in Canada. It is straight profit that is hidden from Revenue Canada and from government generally. The money is very often shifted between countries, financial institutions and investment brokerages without a paper trace that would allow law enforcement to get to the source or to get to the origins. The more complex and convoluted the trail, the more difficult to trace, eventually prosecute and bring to justice those involved in money laundering.

It is fair to say it is a world problem against which even the world's most powerful nations struggle. For example, Vladimir Putin, the Russian president, just last week held a conference on money laundering in St. Petersburg. He outlined efforts to crack down on the global illegal industry and the expansion of this industry in Russia. Russia is currently a member of the FATF's blacklist of nations because of its money laundering legislation, or lack thereof, which does not meet international standards.

We do not want this to happen in our country. That is why it is encouraging to all that the legislation is before us now. We must ensure our global partners and neighbours, not to mention our citizenry, that we are doing everything in our power to address and confront this problem.

Corruption is a growing problem in Canada and most countries recognize this point. They recognize the fact that it is very diverse and takes many forms just like legitimate industries. Any effort aimed at curtailing this type of underground economy and outsourcing of money from illegal means is where we should be focusing our attention. The magnitude and the reach of this problem are staggering.

Canada has come under heavy criticism in recent years as being an easy place for criminal organizations to launder their money. Our biggest ally, the United States, has sent signals which clearly indicate that we are leaving our neighbours to the south open and more vulnerable to criminal activity respecting money laundering because of a failing security system in our country. The lack of resources contributes to that. The lack of government support whether it be through funding or innovation indicates to members of our law enforcement community that in many instances their government is not behind them.

The response has been legislation such as Bill S-16, albeit late. Bill C-22 originally imposed new reporting and record keeping requirements and created financial transactions in the reports analysis centre of Canada to receive and analyse information. Bill C-22 was the predecessor for the legislation before us. It died on the order paper when the pre-emptive and very opportunistic election was called.

The banks would be required by law to adhere to a new reporting regime that would be put in place over the next year. It would help reorganize and report dubious transactions. It would present banks with the obligation to act upon information of which they might be in possession and report where there is a suspicion of organized crime activity. It is clearly there to try to unveil and unmask efforts by organized crime to use financial institutions such as our major banks and other financial institutions for illegal purposes. A failure to report would result in certain sanctions. Those sanctions include fines of up to $2 million and five years incarceration. Therefore, this reporting scheme does have some teeth.

Concerns have been expressed however about the privacy and the disclosure of certain information. Those were voiced by the privacy commissioner, the Canadian Bar Association and other groups.

The Senate banking committee looked at the bill in June of 2000 and felt that there were numerous flaws and areas where it could have been improved. The government at that time was unwilling to entertain amendments to the legislation because it was late in June and the House of Commons was going to recess. We know that at this time of year ironically we are facing a similar attitude on the part of government.

However, the Secretary of State for International Financial Institutions gave a written undertaking to the committee that certain changes would be made in a new bill to be introduced in the fall. Those changes formed the substance of Bill S-30, introduced in October of 2000. This bill was identical to the bill we see before us and it went beyond those changes agreed to in the letter from the secretary of state.

The Senate banking committee reported the bill with the observation that the government should have given consideration to other amendments that would further ensure that solicitor-client privilege was protected by adding the phrase law office in any clause where the term dwelling house appeared.

Second, the first annual review should be held after three years not after five years as was indicated in the original legislation. We find far too often that we are becoming very slack in our review process that was initially intended to ensure that the bill was living up to the breadth, width and intention.

Third and finally, it would require regulations under the act to be tabled before a committee of each House of parliament. Sadly, this bill does not include those further changes that were recommended by the committee.

The Law Society of Upper Canada has asked for the deference of the worst sections of this legislation. In many legal circles around the country court action against the federal government is not only being discussed but is being planned. This has happened time and time again. It is a given that with legislation such as this, and Bill C-24 is another bill, the lawyers are already writing the briefs, and the games will begin as soon as this law comes into being.

This bill will focus on the following legal aspects of this particular legislation. Solicitor-client privilege is one, which I mentioned previously. Where as Bill C-22 only dealt with instances where there was solicitor-client privilege involving legal counsel, Bill S-16 now clarifies that the officials of the Financial Transactions and Reports Analysis Centre may not examine or copy documents that might be subject to a claim of solicitor-client privilege where the document is in the hands of someone else until a reasonable opportunity has been made for that person to contact legal counsel. This responds to concerns raised by the Certified General Accountants Association of Canada.

It is very much akin to the situation we see with the information commissioner in Canada who would like to examine the Prime Minister's agenda books. He would hold that information in privacy and counsel and determine its relevance to the individuals who have requested disclosure. It follows a longstanding tradition that allows judges to determine relevance and admissibility of certain information. So we support that particular initiative.

Privacy under Bill S-16 will also allow individuals or the privacy commissioner to take the Financial Transactions and Reports Analysis Centre to court if they are denied access by the centre.

This legislation has come under some criticism in the banking committee because the bill creates onerous and very involved new responsibilities. In fact, Margaret Beare, one of Canada's leading experts on organized crime, recently stated that the new legislation requiring banks to report suspicious transactions was contradictory to some of the banks' principles, mainly that they would be making a profit and reacting to customers' wishes.

Proceeds Of Crime (Money Laundering) Act
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4 p.m.

The Acting Speaker (Mr. Bélair)

I am sorry to interrupt the hon. member. It was understood that you would split your time with your colleague. Before going to your colleague, there are five minutes for questions or comments.

Proceeds Of Crime (Money Laundering) Act
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4:05 p.m.

Canadian Alliance

Ken Epp Elk Island, AB

Mr. Speaker, I was listening to the hon. member speak and quite clearly he is not finished his notes. My question is very simple. What else does he have to say?

Proceeds Of Crime (Money Laundering) Act
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4:05 p.m.

Progressive Conservative

Peter MacKay Pictou—Antigonish—Guysborough, NS

Mr. Speaker, I would like to thank my hon. colleague for his intervention. It does allow me to continue just momentarily with my remarks.

There were concerns with respect to the discrepancies over what would constitute a suspicious transaction, which again led to concerns that were expressed by Ms. Beare. There was also indication that certain levels of the banking sector had problems within their computer system or their system of reporting that would also leave them vulnerable by not being able to live up to the expectation of reporting. They would have an inability to monitor the type of monetary transactions that may be taking place on an ongoing basis, that was they could do so perhaps over a sustained period of time. However, as we all know, these transactions often occur in a very short time span.

Ms. Beare expressed a concern that lack of follow-up from police in some instances posed a considerable obstacle.

As is often the case with catching criminals, it is the slip-ups and lack of sophistication on their part that very often leads to the arrest. However the legislation I would suggest moves in the right direction in terms of arming those in the financial sector to combat the very sophisticated and often very complicated and nefarious means by which those who are trying to launder their money will engage. Otherwise those who play the game very well continue to thrive despite our best efforts. We have to obviously strive regardless.

On that note, I will turn over the floor to my colleague from Kings—Hants. I know that as a member of the finance committee he has made significant contributions to this and other bills. I know that all members will be riveted to their seats when the hon. member for Kings—Hants assumes the floor.

Proceeds Of Crime (Money Laundering) Act
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4:05 p.m.

Progressive Conservative

Scott Brison Kings—Hants, NS

Mr. Speaker, I would like to thank my colleague from Pictou—Antigonish—Guysborough for his erudite comments.

The issue of money laundering is one that no Canadian should underestimate. The fact that the estimates range between a $5 billion problem to as high as a $20 billion problem speaks volumes about the degree to which we really do not have a very good handle on the scale of the problem. What we do realize is its impact on facilitating and enabling organized crime in any range of applications, whether it is in particular on the side of the narcotics trade, is significant.

We should also not underestimate the degree to which significant resources are needed to fighting money laundering. In recent years we have seen an exponential increase in the range and complexity of financial vehicles available to criminals.

When we talk about organized crime, we are not talking about underfunded agencies. We are talking about some of the most sophisticated, well funded groups in the world with international linkages and the economies of scale to attract and to invest in the very best technologies. That is why, whatever we do in terms of new agencies and new approaches to money laundering, we have to ensure that the funds are committed to our RCMP and our enforcement capabilities. Otherwise all that will occur is the government will take baby steps in the right direction but really not achieve the goals of reducing the incidents of organized crime and money laundering, which should of course be the goal of the legislation. The government has had a terrible record of underfunding, the RCMP for instance. Clearly while new agencies and new approaches might be helpful, if they are underfunded, it will not achieve the goals that the government has attached to this legislation.

We have some concerns relative to issues of privacy and the member for Pictou—Antigonish—Guysborough articulated some of those concerns. It is important as well to ensure that the new agency's mandate and efforts are separated assiduously from those of the Canada Customs and Revenue Canada Agency. If the customs and revenue agency sees evidence of money laundering, it may be appropriate to refer some cases to this new agency to deal with money laundering.

That being the case, what we want to avoid in those cases where this agency has not found sufficient evidence of money laundering but may find some evidence relative to inappropriate behaviours relative to one's taxes, is the agency to result in a souped-up Revenue Canada to sink its teeth a little deeper into the ankles of Canadian taxpayer.

The issues of enforcement, and particularly the onus being placed on financial institutions, will be one that will be very difficult from an enforcement perspective and from a privacy perspective. We have to be awfully careful in this regard that a significant level of education occurs at the outset and that our financial institutions are prepared on a consistent basis throughout various financial institutions and throughout a branch of networks to carry out the mandate of this legislation. I suggest to the government that this will be a significant challenge and that the government has to be prepared.

The government has to be prepared to invest significantly in technologically driven approaches to deal with money laundering. Again, we are not dealing with amateurs. These are not underfunded agencies and local yokels who are doing a bit of criminal activities and do not really have the resources to carry on their activities. The government is fighting some of the best funded organizations in the world.

I would argue that we need to engage other countries more actively than we are right now in a co-operative effort. Clearly, money laundering and electronic transfers of money do not recognize borders, particularly if one were to consider just for a moment the impact of even the Interac system and its impact on the ability to launder money, to hide transactions and to break really large transactions into a multitude of smaller ones.

I am sure many of us in the House use online banking sometimes and I would suggest all of us probably use our bank cards. However, consider in the wrong hands and with nefarious motives what extraordinarily powerful tools the Interac system and online banking are. These are the simplest consumer available technologies of which we are aware. We are not even considering some of the extraordinarily powerful technologies being used in the mysterious world of arbitrage and currency trading.

If we are not very careful to ensure the necessary resources are committed to this fight, then we are sending this new agency, our RCMP and others into battle with pellet guns which will not be in the long term interest of the effort to reduce the incidence of money laundering and organized crime.

Accountability is of real importance. There is concern about the growing trend toward agencies which the government has pushed in recent years. The Canada Customs and Revenue Agency and the new money laundering agencies are not very accountable.

We must ensure, particularly in areas of privacy, that we do not create agencies that are able to run roughshod over the rights of Canadians. At the same time, however, agencies must have the resources and ability to do their jobs. It is a balancing act. I hope the government has a good understanding of what it will be up against with the new agency.

We must invest properly and make sure the accountability is there to protect ordinary, law-abiding Canadians. However resources must also be committed to ensuring Canadians who do not take the law seriously, who participate in money laundering and globally powerful organized crime networks, are caught and dealt with.

Those are some of our concerns. The legislation, like so much of the government's legislation, represents a baby step in the right direction. However given the power of organized crime globally and the resources available to it, we are taking baby steps in the right direction while the forces we battle are taking gigantic leaps. We are not making the progress we should be making in this place to ensure that money laundering and organized crime are dealt with effectively in Canada.

Proceeds Of Crime (Money Laundering) Act
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4:15 p.m.

Canadian Alliance

Ken Epp Elk Island, AB

Mr. Speaker, today is a special day in the House. We are debating three bills that were introduced in the Senate. Bill S-16 is the third of the Senate originated bills we are debating today. It is also a special debate in the sense that the government side seems not to be participating. It made a token one or two minute speech and said we should get on with it.

Issues like this should be dealt with by giving considerably more attention to detail. I commend the member who just spoke. He was talking, particularly toward the end of his speech, about the government taking timid steps in the right direction but perhaps not doing enough. Would he like to enlarge on some of his ideas with respect to money laundering and the curtailing of criminal activity in Canada?

As precisely as possible, what further and stronger measures would he propose to prevent Canada from becoming a haven for money laundering activities by criminal organizations?

Proceeds Of Crime (Money Laundering) Act
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4:15 p.m.

Progressive Conservative

Scott Brison Kings—Hants, NS

Mr. Speaker, I thank the hon. member for Elk Island, a colleague of mine on the House of Commons finance committee, for his intervention.

First, we should not underestimate the importance of resources. We must make an adequate commitment of resources to our law enforcement agencies in this regard. The task at hand has grown exponentially more complicated and difficult. Yet there has been no commensurate increase in resources to deal with it. In a general sense the resources must be committed. They have not been to date.

Second, in a more specific sense we must work with the very best technologies available to deal with the problem. Clearly these are technologically driven problems. The challenge is to ensure we have the tools to effectively deal with them.

Third, we need greater interaction and engagement with the private sector agencies that will ultimately be acting on the enforcement side. There should be engagement with the Canadian financial services sector. Such engagement should take place while the measures are being put together and not after the fact. It should ensure the sector's commitment is a realistic one, not one imposed by a government with little understanding of the logistics of enforcement at the grassroots financial services sector level.