Mr. Speaker, I am pleased to rise today to speak to Bill C-46. For our viewers this evening, let me begin by reading a summary of Bill C-46:
This enactment amends the Criminal Code by creating a new offence of prohibited insider trading and creating a new offence to prohibit threatening or retaliating against employees for disclosing unlawful conduct. The enactment increases the maximum penalties and codifies aggravating and non-mitigating sentencing factors for fraud and certain related offences and provides for concurrent jurisdiction for the Attorney General of Canada to prosecute those offences.
That indeed is a tall order.
The Progressive Conservative Party supports Bill C-46 in principle.
Why have we seen this legislation come into being? Recent major accounting deceptions and other corporate scandals, such as those of Enron and WorldCom in the United States, have resulted in multi-billion dollar losses and have devastated investor confidence. The United States has already responded with the Sarbanes-Oxley Act of 2002 and with increased resources for investigations and prosecutions.
The Canadian government is now acting to increase the resources available for enforcement of existing Canadian laws and to strengthen existing criminal sanctions. What we gather from that statement is the government wants to be seen and perceived as being tougher on crimes, certainly capital market crimes. Yet at the same time we see the government being really soft on criminals. It is easy to say one thing but, as the old saying goes, to walk the talk is something else.
Even in the field of immigration enforcement, Ontario has a total of eight immigration enforcement officers. That is in a province the size of the Ontario. It just does not make any sense.
The Youth Criminal Justice Act has created a lot of problems from coast to coast to coast. Communities are dealing with vandalism and youth crime and their hands are tied. They really do not know how to deal with it. In fact I have spoken to attorneys general of the provinces and they have the same problem. They really question why the new Youth Criminal Justice Act is the way it is. It is actually worse than the Young Offenders Act which it supposedly replaced.
In the field of immigration, which I am very familiar with, I am told that staffing levels are not up to 1994 levels. When the Liberals came into power, they made all those big cuts, like $24 billion in health care. They also did the same thing in immigration even though the work probably tripled or quadrupled from 1993 to today. It is easy for the government to say it will be tough on crime, and now we are looking at a new bill. However to be tough on crime, it has to put in the resources.
Some members spoke today about mandatory sentencing. On my way back to Ottawa, I read in the paper that the attorney general of Manitoba, Gord Mackintosh, was asking the federal government to change the Criminal Code so that no bail would be granted to repeat offenders. It is creating a problem in the field. There is a huge disconnect with what we believe should taking place and what is actually taking place out in the real world.
There are new offences under this act. Insider trading is already illegal under the provincial securities laws and the Canadian Business Corporation Act. In instances that merit a more severe response, Bill C-46 creates the new criminal offence of inside trading with a maximum prison term of 10 years.
Bill C-46 also provides whistleblowing protection for employees who expose wrongdoing under federal or provincial law. A new criminal offence of employee related threats or retaliation would carry a maximum prison term of five years.
Bill C-46 is really about making the private sector and the capital market sector more accountable. Governments and certainly this government should eat their own words. If they really want to be accountable, they should demonstrate that by the way they spend taxpayer money. How accountable are they?
The bill talks about capital market fraud. The Auditor General has criticized the government for keeping the House of Commons in the dark when it comes to the way it has spent the money on the failed gun registry. It is fraudulent how it spends billions of taxpayer dollars. If it wants to tell taxpayers, the citizens of the country, how things should operate, then it should set the example.
When we examine the long gun registry from the fraudulent point of view and the waste of taxpayer money, this is really what we are trying to do here today. Bill C-46 is about the capital market, people's money being used in a fraudulent manner or in misleading investments in the private sector. With the long gun registry, even today the government still has not reported to Parliament what the total cost of the program has been so far. The government still has not reported to Parliament what the total cost will be to implement the firearms program.
The Treasury Board officials finally admitted that even they will not know the total cost of the firearms program until the fall. The government has been hiding the truth from Parliament and the public for seven years and has not been any more forthright in the last five months, over this past summer, or even this fall. Even when we ask questions about the new estimates of the Department of the Solicitor General, the Solicitor General refuses outright to say that there is a new $10 million in his account for the long gun registry.
The government estimates are still grossly under reported because of the justice department's plans and priorities report for 2003-04, which was tabled this past March, has 111 blanks. We are talking about the government's use of taxpayer money.
The government also refuses to reveal the cost of enforcement compliance as recommended by the Auditor General. The government refused to release a cost benefit analysis on the firearms program by declaring it a cabinet secret.
When we talk about accountability, it leaves a lot to be desired in the way the government handles taxpayer dollars.
Bill C-46 is supposed to be tougher on crime with tougher Criminal Code sentences. The current maximum sentence for fraud affecting the public market will rise to 14 years from 10 years and the maximum term for fraudulent manipulation of stock exchange transactions will rise to 10 years from 5 years.
Perhaps we need tougher minimum sentencing. In other words, we need mandatory minimum sentencing for people who are convicted of capital market fraud.
Bill C-46 also adds a list of specific aggravating factors that would result in harsher penalties such as the extent of economic damage caused or the impact on market stability. A person's reputation and status in the community or workplace can no longer be considered as a mitigating factor to lower penalties in cases where those who commit capital market fraud rely on those very factors to carry out their crimes.
In the area of evidence gathering, Bill C-46 introduces production orders as a tool for criminal investigations. Production orders are already part of the Competition Act. They are also less intrusive alternatives to search orders. They would compel a third party to produce pertinent documents within a specific time period. Failure to comply could result in a jail term of up to six months and a fine of up to $250,000.
Regarding concurrent jurisdiction, currently the Criminal Code gives the provinces responsibility for prosecuting cases that involve capital market fraud. With Bill C-46, either the federal or provincial governments may prosecute such cases. The government says that the federal involvement would be limited to a narrow range of cases that threaten the national interest.
As I mentioned earlier, the provinces need to be wary when the feds promise that they will fund prosecution under the federal courts. We have many examples where funding relationships between the federal government and provincial governments on paper appear to be in order. However in practical terms, in real costs, day to day activity, it just does not work out. Health care is a good example. We all know the problems of health care across Canada. As was mentioned, when it was first started, the cost was shared between provincial and federal government, fifty-fifty. Now we are down to about 15¢, I believe.
Another good example is the long gun registry on the prosecution side. Eight provinces have already indicated that they will not prosecute long gun registration offences and that they will let the federal courts deal with the prosecution of people who have breached Bill C-68, those hunters or firearm users who either do not have the gun registered or do not have a possession certificate. Up to today I know probably hundreds of people who have been stopped and caught for that breach, yet no charges have been laid by the federal government.
I know the reason why no charges are being laid. The government is in no way willing to spend millions of dollars prosecuting innocent Canadians who do not have their family heirloom or some rabbit gun their grandfathers passed on to them registered.
In terms of the financial relationship with Bill C-46 provinces have to tread very carefully.
The government is playing catch-up with the United States lawmakers who have already passed legislation, not just to strengthen criminal sanctions but also to reform the way corporations are governed. Boards of directors, auditors and audit committees all have key roles to play in protecting the interests of shareholders. Indeed the scandals that rocked the capital market of 2001-02 are widely seen to be the result of poor corporate governance, lax auditing, accounting standards and oversight and the incentives provided by executive compensation arrangements. In spite of this, the government's background information on Bill C-46 does not once mention the role of good corporate governance legislation.
Shortly after the government tabled Bill C-46, the Senate banking committee completed a year long study of the circumstances that resulted in the American corporate scandals. The committee was particularly interested in whether these circumstances might occur in Canada with similar results and if so, how they might be avoided.
While the committee called for tougher sanctions, whistleblowing protection for those who report financial irregularities and increased resources to investigate wrongdoing, it also recommended legislative measures to: require that a majority of board members be independent; require the development of a code of ethics to be followed by all board members; require audit committee members to be independent and financially literate; limit the non-audit services that auditors can provide to their audit clients; require the chief executive officer and the chief financial officer to certify that the annual financial statements fairly represented the organization's results and financial conditions; and prohibit compensation committee members from being a member of management and require them to have expertise in compensation and human resources.
The challenge will be to separate jurisdiction between the provinces and the federal government. We must be aware that father does not always know best. The Progressive Conservative Party looks forward to the further hearing process at committee level.