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House of Commons Hansard #149 of the 37th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was c-46.

Topics

PetitionsRoutine Proceedings

3:15 p.m.

NDP

Svend Robinson NDP Burnaby—Douglas, BC

Mr. Speaker, I have a petition concerning star wars signed by citizens of Quebec. The petitioners say that Canadians want to build a peaceful world based on human security and that this new weapons system, known as star wars, is destabilizing. The petitioners call upon Parliament to acknowledge that Canada will not participate in a star wars program and strongly condemns George Bush's destabilizing plans, and to say no to star wars.

PetitionsRoutine Proceedings

3:15 p.m.

Liberal

Pat O'Brien Liberal London—Fanshawe, ON

Mr. Speaker, I am in receipt of a petition signed by 25,000 Canadians which is in the process of being vetted. I would like to present the latest 3,000 signatures.

The petitioners call on the House of Commons to reaffirm marriage as the union of one man and one woman to the exclusion of all others. They recall for Parliament that Parliament is on record several times speaking to this matter, including in legislation. They call on the government to live up to its previous commitment to take all necessary steps to uphold the traditional definition of marriage.

PetitionsRoutine Proceedings

3:15 p.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Mr. Speaker, I have two petitions to present today.

The first one is signed by petitioners from Fort St. John, Dawson Creek and Tumbler Ridge in my riding of Prince George--Peace River. They draw the attention of the House to the fact that they believe that the addition of sexual orientation as an explicitly protected category under sections 318 and 319 of the Criminal Code of Canada could lead to individuals being unable to exercise their religious freedom as protected under the Charter of Rights and Freedoms and to express their moral and religious doctrines regarding homosexuality without fear of criminal prosecution.

The petitioners call upon Parliament to protect the rights of Canadians to be free to share their religious beliefs without fear of prosecution.

PetitionsRoutine Proceedings

3:15 p.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Mr. Speaker, the second petition is from residents of Prince George and the smaller communities of Mackenzie and Chetwynd in my riding.

They would like to draw the House's attention to the fact that adoptive parents in Canada often face significant adoption related costs, but out of pocket adoption expenses are not tax deductible under our present laws. They call upon Parliament to pass legislation to provide an income tax deduction for expenses related to the adoption of a child, as contained in private member's Bill C-246 in my name.

PetitionsRoutine Proceedings

3:15 p.m.

Canadian Alliance

Gurmant Grewal Canadian Alliance Surrey Central, BC

Mr. Speaker, I am honoured to rise on behalf of the constituents of Surrey Central to present 12 petitions signed by hundreds of people from the lower mainland.

The petitioners call upon Parliament to immediately hold a renewed debate on the definition of marriage and to reaffirm, as it did in 1999, its commitment to take all necessary steps to preserve marriage as the union of one man and one woman to the exclusion of all others.

PetitionsRoutine Proceedings

3:15 p.m.

Liberal

Lynn Myers Liberal Waterloo—Wellington, ON

Mr. Speaker, I have the privilege to present two petitions today with respect to marriage. In both cases the petitioners request that Parliament consider that the current legal definition of marriage as the voluntary union of a single male and a single female be upheld.

PetitionsRoutine Proceedings

3:15 p.m.

Canadian Alliance

Rob Merrifield Canadian Alliance Yellowhead, AB

Mr. Speaker, I would like to present a petition pursuant to Standing Order 36 on behalf of the people of Yellowhead. The petitioners are very concerned about preserving the definition of marriage as being between one man and one woman.

PetitionsRoutine Proceedings

3:15 p.m.

Canadian Alliance

Myron Thompson Canadian Alliance Wild Rose, AB

Mr. Speaker, I too have one petition from several hundreds of people from the towns of Banff, Canmore, Cochrane, Sundre, Water Valley, Cremona, Bowden and Trochu in Alberta. The petitioners pray that Parliament will pass legislation immediately to recognize the institution of marriage in federal law as being the lifelong union between one man and one woman to the exclusion of all others.

PetitionsRoutine Proceedings

3:15 p.m.

NDP

Libby Davies NDP Vancouver East, BC

Mr. Speaker, I am very proud to rise in the House to present a petition signed by a number of residents from Vancouver who point out that the protection of true family values requires that all families be respected equally and that denying same sex couples the equal right to marry reinforces attitudes of intolerance and discrimination. It is inconsistent with Canadian values of equality, dignity and respect. The petition calls upon the House to pass Bill C-264 from the first session or otherwise enact legislation providing same sex couples with the equal right to marry.

PetitionsRoutine Proceedings

3:20 p.m.

Canadian Alliance

Larry Spencer Canadian Alliance Regina—Lumsden—Lake Centre, SK

Mr. Speaker, I have three petitions here, all of them alike. The petitioners are calling upon Parliament to pass legislation recognizing the institution of marriage as being between one man and one woman and are reminding the House of its commitment to maintain that definition made in 1999.

PetitionsRoutine Proceedings

3:20 p.m.

NDP

Alexa McDonough NDP Halifax, NS

Mr. Speaker, I would like to table further copies of a petition that so far has been signed by thousands of people. I have here many more hundreds of signatures from petitioners calling upon Parliament to declare that Canada objects to the national missile defence program of the United States and calling upon Parliament further to play a leadership role in banning nuclear weapons and missile flight tests.

PetitionsRoutine Proceedings

3:20 p.m.

NDP

Alexa McDonough NDP Halifax, NS

With the House's permission, I have the privilege of tabling a further group of petitions signed by hundreds of Canadians who are very much registering their objection to the fact that the federal government is wasting hundreds of thousands of dollars of taxpayers' money on litigation against equality rights groups like Egale to oppose the right of same sex couples to marry, and objecting to denying same sex couples the equal right to marry, which reinforces attitudes of intolerance and discrimination and is absolutely inconsistent with Canadian values of equality, dignity and respect. It calls upon Parliament to pass Bill C-264 from the first session or otherwise enact legislation providing that same sex couples have the equal right to marry. I am very happy to table those petitions.

Questions on the Order PaperRoutine Proceedings

3:20 p.m.

Halifax West Nova Scotia

Liberal

Geoff Regan LiberalParliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I ask that all questions be allowed to stand.

Questions on the Order PaperRoutine Proceedings

3:20 p.m.

The Speaker

Is that agreed?

Questions on the Order PaperRoutine Proceedings

3:20 p.m.

Some hon. members

Agreed.

The House proceeded to the consideration of Bill C-46, an act to amend the Criminal Code (capital markets fraud and evidence-gathering), as reported (without amendment) from committee.

Criminal CodeGovernment Orders

November 3rd, 2003 / 3:20 p.m.

Outremont Québec

Liberal

Martin Cauchon LiberalMinister of Justice and Attorney General of Canada

moved that the bill be concurred in at report stage.

(Motion agreed to)

Criminal CodeGovernment Orders

3:20 p.m.

The Speaker

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

Criminal CodeGovernment Orders

3:20 p.m.

Some hon. members

Agreed.

Criminal CodeGovernment Orders

3:20 p.m.

Liberal

Martin Cauchon Liberal Outremont, QC

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

Criminal CodeGovernment Orders

3:20 p.m.

Northumberland Ontario

Liberal

Paul MacKlin LiberalParliamentary Secretary to the Minister of Justice and Attorney General of Canada

Mr. Speaker, Bill C-46 on capital markets fraud and evidence gathering has now been returned to us by the Standing Committee on Justice and Human Rights without amendment. I am happy to rise to speak to it on this third reading.

Members are well aware of the crisis in investor confidence in capital markets around the world that resulted from the recent major corporate scandals in the United States. Responding to this crisis has engaged governments at all levels and the stakeholders in those markets in Canada as well as in many other countries.

Bill C-46 addresses one aspect of that response: legislative measures to combat the criminal law dimension of market misconduct. It addresses the federal government's and Parliament's responsibility to ensure that police and prosecution authorities have effective legislative tools and the capacity to use those tools to deter and punish fraud and other criminal behaviour that threatens the integrity of our capital markets and investor confidence in those markets.

Bill C-46 is thus part of a package of enforcement measures that includes the creation of the RCMP led integrated market enforcement teams. As members have heard, these IMET units will focus the combined skills of investigators, lawyers, forensic accounting services and other disciplines on major cases of capital markets fraud. They would be located in our four major financial centres, Toronto, Vancouver, Montreal and Calgary and would add new, dedicated resources to the enforcement of fraud cases that threaten the national interest in the integrity of our capital markets.

Budget 2003 committed the funding required for this federal enforcement effort and also made commitments as to the accompanying elements of the legislative arm of this effort. Bill C-46 fulfilled that second commitment. Those elements comprised four separate areas: first, offences; second, sentencing; third, concurrent federal jurisdiction to prosecute; and fourth, enhanced evidence gathering tools.

Bill C-46 targets capital markets fraud with new offences and sentencing enhancements while at the same time enhancing generally the sentencing of fraud, which is a rapidly expanding and ever more damaging criminal problem, as well as facilitating evidence gathering in regard to all criminal offences.

In the wake of the scandals in the United States and the wide-ranging legislative measures taken in response to them at the federal level in the U.S., known as the Sarbanes-Oxley Act, the federal government conducted a thorough examination of the Criminal Code and consulted with federal and provincial enforcement authorities to see if our offences needed to be strengthened to deal with the same problem.

We found that the responsible authorities agreed that we already had strong and effective criminal laws to deal with capital markets fraud. Both police and prosecution authorities emphasized in particular that there was no need to add more specialized market fraud offences to the Criminal Code and that, rather, this indeed could be counterproductive.

The basic fraud offence in the code, section 380, is the offence most often used in capital markets fraud cases. It is comprehensive, well understood and thoroughly tested and interpreted by the courts. The existing market specific offences are in fact relatively rarely used, although the Criminal Code does have a panoply of such offences, including manipulation of stock market transactions, section 382, and filing a false prospectus, section 400. It also has strong offences covering obstruction of justice and other relevant criminal activity that could threaten the integrity of the capital markets.

Two specific gaps were identified. Bill C-46 addresses both of those gaps. The first of these involves improper insider trading. This misuse of personal advantage and responsibility strikes at the core of investor confidence.

It is already covered by all provincial securities legislation and by the Canada Business Corporations Act, but stakeholders strongly advise that a Criminal Code offence will add an additional and powerful weapon against this damaging activity that threatens the integrity of our capital markets. A criminal offence for serious cases of prohibited insider trading adds the social stigma of the criminal law and more severe penalties for this violation of public trust.

The offence that Bill C-46 will add to the Criminal Code in the proposed new section 382.1 is based on the model found most commonly in provincial securities legislation. It is fashioned to capture only that improper trading conduct that is currently prohibited by the legislation, but with the added mental element required for a Criminal Code offence and a criminal law level of penalty.

The other proposed new offence would seek to encourage employees to report unlawful conduct within their companies and cooperate with law enforcement by prohibiting employment related threats or retaliation against them for so doing.

U.S. and Canadian experience has shown that employees can play an important role in disclosing this conduct to the authorities. It was found that threats and actions aimed at such persons' employment are not adequately covered in the existing offences of intimidation or obstruction of justice. This targeted offence will close this gap. It will address the protection of what is often called whistleblowing in those circumstances where such a deterrent measure is appropriate for a Criminal Code offence, where the threatening or retaliatory action in employment situations is akin to intimidation or obstruction of justice. It will have a broad application to any appropriate case but will be particularly helpful to the enforcement of capital markets fraud cases.

The second component of Bill C-46 is the sentencing enhancements directed at fraud, and in particular, capital markets fraud. The bill will raise the maximum prison term for the primary fraud offence, that is, section 380, from 10 to 14 years. Fraud overall, as noted, is becoming an increasingly more serious criminal problem.

This will address both capital markets fraud and such pernicious fraud cases as major telemarketing frauds. It will also raise the maximum sentence for the market specific offence of fraudulent manipulation of stock exchange transactions from 5 to 10 years. I would note that a maximum term of imprisonment of 14 years, which the bill would apply to the offence most often used in capital markets fraud cases, section 380, is, next to the maximum term of life imprisonment, the highest maximum sentence in our criminal law. In addition, Bill C-46 will add certain aggravating and non-mitigating sentencing factors that will point judges to those cases of fraud that need greater denunciation and deterrence, whether they are cases of capital markets fraud or other major frauds that do great economic and social damage to our society.

Third, Bill C-46 will also give federal authorities a role in prosecuting these fraud cases in addition to the existing provincial prosecutorial role and responsibility in these cases.

This addition to the concurrent jurisdiction of the Attorney General of Canada to prosecute certain cases under the Criminal Code is an initiative that has been much misunderstood. It is not, for a start, a constitutional issue concerning the division of powers.

The authority of Parliament to confer such jurisdiction on federal prosecution authorities under the Criminal Code has been unequivocally confirmed by the Supreme Court of Canada, and Parliament has chosen to do so recently in certain criminal organization offences and all terrorism offences.

As in those cases, the new federal prosecutorial role in regard to capital markets fraud cases will respond to an immediate issue of great national concern.

Nevertheless, the definition of attorney general in section 2 of the Criminal Code reflects the traditional role of the provincial prosecuting authorities in dealing with the prosecution of most crime in their provinces. The federal government respects this traditional role.

The new federal prosecutorial role, created by Bill C-46 would, as noted, focus only on major cases of capital markets fraud that threaten the national interest and integrity of our crucial capital markets.

Moreover, this role would be both complementary and supplementary to the existing provincial prosecutorial role in these cases. The federal government would seek only to add its resources and expertise to help to ensure that these cases could be effectively prosecuted in all provinces.

All government in Canada currently face challenges to prosecutorial capacity. This initiative would help to address those challenges in regard to the national problem of capital markets fraud. To achieve this end, federal authorities have already had productive discussions with provincial prosecution authorities on the core principles of proposed prosecution protocols that would coordinate this partnership effort.

These proposed core principles would affirm the existing and primary role of the provinces in this area and would add federal resources only in a supplementary and a backstop role. These protocols would ensure that there is a coordinated and cooperative approach to the vigorous and effective prosecution of major cases of capital markets fraud.

The fourth and last component of Bill C-46 would facilitate evidence gathering. Federal and provincial law enforcement authorities have long argued for the need of additional production order powers to complement the existing investigative powers under the Criminal Code. Existing search warrant powers under the code allow police officers to search places for evidence, but this judicially authorized production order would add a power to require persons to produce existing relevant information, or to prepare and produce documents based on the existence of relevant information.

This requirement would be directed only at those third parties who are themselves not under investigation and would require the production to the police of relevant information, within a specified period of time, which is under their possession or control whether it is stored inside or outside of Canada.

Bill C-46 would create two levels of production order. First, the general production order would be available in the same circumstances in which a search warrant is now available, with all of the same constitutional and procedural safeguards. Second, the more narrowly targeted specific production order would provide a first step investigative tool. It would be placed on an appropriately lower criminal standard where there would be reasonable grounds to suspect that the information would assist in the investigation of an offence, but it would be limited to specific types of threshold information about which there is a relatively low expectation of privacy.

This would extend only to such general financial information concerning account holders as the name, address, account number, the date an account was opened and its active status. It would not, however, extend to such personal information as the transactions or amounts in those accounts.

While these production order powers would be available in regard to the enforcement of all criminal offences, they would be particularly helpful in the timely and effective gathering of financial information that is the core element in the investigation of capital markets fraud cases.

In conclusion, Bill C-46 has been welcomed and has received the solid overall endorsement of stakeholders in law enforcement, representatives of provincial security regulatory agencies, the securities industry, and from members from all sides of this House.

Together with the commitment of additional enforcement resources through the integrated market enforcement teams, this criminal law enforcement initiative would help to deter and punish fraudulent activity that threatens the integrity of the capital markets that are vital to Canadian economic life. It would help to ensure that those who engage in this socially and economically damaging criminal activity are detected, charged, convicted and appropriately punished.

I would urge all members of the House to support the passage of Bill C-46.

Criminal CodeGovernment Orders

3:35 p.m.

Canadian Alliance

Jay Hill Canadian Alliance Prince George—Peace River, BC

Mr. Speaker, I listened to the remarks of the Parliamentary Secretary to the Minister of Justice and I note after some 10 years now that I have had to endure speeches such as that, it seems to me that the less the government does with a piece of legislation, the more puffed up it becomes in pronouncing all the great good it will do.

Nevertheless, I want to ask the parliamentary secretary questions relating to the changes that would be brought in by Bill C-46. He referred to them during his remarks, such as this new five year maximum prison sentence for those convicted of employment related threats or retaliation against employees, the so-called whistleblower protection. He also mentioned the 10 year maximum for those convicted of insider trading and the maximum sentence for fraud to be raised from 10 to 14 years.

Presumably, these types of initiatives that the government is undertaking with Bill C-46 would be to deter individuals from resorting to those types of activities, at least that would be my assumption. However, I note that all too often in cases involving white collar crime and in indeed even criminal activity, it is not the maximum or anywhere near the maximum sentence that is imposed by the courts. It is quite the opposite.

In fact all too often--ever since the government, back in the mid-1990s, brought in conditional sentencing, which is a guise and a fancy term for house arrest--individuals who should be sent to jail to at least deter others from those types of activities are instead sent home under house arrest or conditional sentencing.

What assurances can the Parliamentary Secretary to the Minister of Justice offer the House and Canadians that by putting in these maximums that they will provide the anticipated deterrents for these types of criminal activity in the corporate world? What assurance can he give that we will not see merely minimum sentences, or in some cases no sentence at all if we consider house arrest a sentence, being imposed for serious white collar crime?

Criminal CodeGovernment Orders

3:40 p.m.

Liberal

Paul MacKlin Liberal Northumberland, ON

Mr. Speaker, when we look at crime and punishment, it is always a question of trying to get the punishment to fit the crime.

I know that each and every member is caught up by the concept of market fraud and the effect on our country. Overall, it is an incredible problem. In effect, it can destroy our underlying economic fabric if it is not protected, if that integrity is not there, and if the public cannot rely upon that as being so.

In terms of looking at sentencing, not only are we sending in this particular bill a message about sentencing that is indicating how severe we view such activity, but we have learned from the United States experience that we had to do other things to gain the evidence that was necessary. In some cases, if we look at the history of prosecuting crimes of this nature, it has been very difficult to collect the evidence that was necessary and it has occasionally led to plea bargaining situations.

What we have initiated is something very special, in particular dealing with the whistleblowing concept. What we have done here is we have given the employees the protection. If they are prepared to go and meet with regulatory authorities or those who are in law enforcement to deal with this crime, and provide the proper evidence that is necessary, there will be a much more effective process in place to allow the evidence to be properly gathered. The evidence would then be brought properly before a judge to avoid the frequent concept of plea bargaining.

Therefore, sending the collective message of protecting those who will bring the evidence, getting that evidence before the courts and demanding from those courts--by suggesting that we view this type of activity as one that we will not accept--a high maximum fine or imprisonment, then, in fact, the message will get through.

It is vitally important for all Canadians that we make the message very clear that this type of activity of corporate market fraud will not be tolerated in this country.

Criminal CodeGovernment Orders

3:40 p.m.

Canadian Alliance

Myron Thompson Canadian Alliance Wild Rose, AB

Mr. Speaker, I have one question. What I find amazing is that the government is willing to battle and get tough on corporate crime and that is good news. There is nothing wrong with that.

However, in the meantime, we are putting up with the Liberal government's abuse of tax dollars left and right. When will the government learn to clean up its own house before it goes after corporate businesses?

Criminal CodeGovernment Orders

3:45 p.m.

Liberal

Paul MacKlin Liberal Northumberland, ON

Mr. Speaker, it is clear that the government is a responsible government. We have taken a number of approaches to that responsibility. We have a bill that has gone through the House dealing with ethics. It is now in the Senate.

Quite frankly, when we look at corporate market issues, we are taking the same approach. We are making corporations stand up and be accounted for, and be reliable in the eyes of the public. In fact, the security of the capital markets is there because in our longer economic term we need to ensure that our economic base is reliable, secure and does have the public confidence.