Mr. Speaker, I am pleased to participate in today's debate on Bill C-46, an act to amend the Criminal Code dealing with offences related to capital markets fraud. This legislation has been developed in reaction to corporate scandals that have surfaced in the United States and weakened investor confidence in capital markets worldwide. Similar American legislation was passed last July, the Sarbanes-Oxley Act of 2002.
As we have heard from the Parliamentary Secretary to the Minister of Justice, Bill C-46 proposes a number of changes that are intended to strengthen confidence in the markets, and protect investors from fraud and other unlawful conduct.
Under the new legislation we would find a new Criminal Code offence prohibiting insider trading which would carry a maximum penalty of 10 years imprisonment. A second new Criminal Code offence would prohibit employment related threats or retaliation which would protect so-called whistle-blowers, carrying a maximum sentence of 5 years imprisonment. The maximum sentences for existing fraud offences in the Criminal Code would be increased up to 14 years imprisonment from the current 10 years, while the penalty for fraudulent manipulation of stock exchange transactions would be increased to 10 years from 5 years.
The parliamentary secretary indicated that there would be specific aggravating factors for sentencing which would now include the extent of the economic damage done by the offence. Current mitigating factors, as he indicated, such as reputation or status, would be inapplicable to those committing serious capital market frauds if they were to rely on those very factors to commit the offence.
These are the concerns that I have in respect of this bill and they do relate to the sentencing provisions. This is a government that has consistently stated that it will get tough on crime. If we go to the Youth Criminal Justice Act or to the dangerous offenders legislation, there have always been those nice, colourful catch phrases designed to lead people from the truth of what the legislation was all about.
Last week we saw the Supreme Court of Canada correct the former minister of justice, who said he was bringing in legislation to protect Canadians from dangerous offenders. In fact, when the legislation was analyzed, as it was by the courts and confirmed by the Supreme Court of Canada, the legislation that was passed in 1997 made it easier for criminals to avoid staying behind bars. The option of a long term offender status now allows these dangerous offenders to apply under long term offender status and receive community based sentences or a form of parole.
The other point that the government has consistently stated when it talked about getting tough dealt with increasing maximum sentences. However, everyone knows it is not serious about taking steps to prevent crime by putting meaningful consequences in place because in fact what it does is never put minimum sentences in place. Whether a sentence is 10 years or 14 years, we have seen what the courts have done. They have simply applied the other avenues to allow individuals to escape responsibility through the use of conditional sentences, suspended sentences or other types of alternatives to incarceration.
I have seen that happen in the legal profession that I used to be a part of. When I started out in the practice of law, it was not uncommon for lawyers who defrauded clients to receive substantial penitentiary sentences.
Over the last number of years, of course, those lawyers who defrauded individuals, who caused incredible damage to people's savings and to the reputation of the law society, have been receiving conditional sentences. They have been able to avoid going to prison because of the tendency of the courts now, as directed by the legislation, to consider alternatives other than incarceration.
Here we see again the same kind of pattern. We hear the government say it will get tough on people who defraud investors, and yet it puts no minimum sentences in place. What the government is doing is simply winking to the judges and telling them not to worry about what it is saying about tough sentences, they can do whatever they like.
Given the direction that judges are required to follow in other parts of the Criminal Code, we will see the same kind of sentencing patterns and the alternatives to incarceration with Bill C-46. It has happened in the context of dangerous offenders and young offenders. It has happened in virtually every so-called sentencing reform that the government has brought forward. My concern is that if we want to get tough on individuals who defraud investors in the markets, minimum sentences must be put in place.
The parliamentary secretary indicated that additional investigative and prosecutorial resources would be provided in the most serious cases of capital markets fraud, including up to $120 million of federal money over the next five years. That amount is a joke. We have recently seen in the context of the Alberta gang trial where over $20 million was spent just to defend individuals, and the trial ultimately collapsed. The tens of millions of dollars that was spent in that trial is all gone. The sum of $120 million will go absolutely nowhere if we want to be serious about prosecuting this kind of fraud.
I noted the parliamentary secretary stating that the government would make some kind of agreement with the provinces. All I can say to the provinces is to beware. We have seen these kinds of agreements with the federal government before. Let us recall the medicare partnership of fifty-fifty. Now the federal government pays about 15%. Let us recall the deal on legal aid of fifty-fifty partners. Now the federal government is at about 15% or 20%.