Debates of Sept. 28th, 2005

Criminal Code

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Madam Speaker, it gives me great pleasure to rise today and address Bill C-53, an act to amend the Criminal Code, proceeds of crime, and the Controlled Drugs and Substances Act.

Let me begin by congratulating the Minister of Justice on this small but important step forward in the effort to reform our failing criminal justice system. Placing the reverse onus on the criminal to prove that his seized assets were not obtained through criminal activity is long overdue. As members of the House are well aware, the provisions contained in the bill are a long-standing plank in our Conservative Party platform.

A cynic might suggest that the only reason the bill is moving forward under the Liberals is because of the very precarious situation in which the government finds itself. It needs to fulfill a legislative calendar with legislation that is unlikely to result in its defeat. However, I prefer to believe that the Minister of Justice is listening to the common sense policies that our policy is promoting and is simply doing what is right.

The bottom line is Parliament needs to send a message that crime does not pay.

Unfortunately, our criminal justice system is in such a shambles right now after 12 years of Liberal rule, that many people are getting exactly the opposite message. I cannot help but be reminded of the case of Paul Coffin who was recently convicted for defrauding this very government of $1.5 million. While he repaid much of the money, he received no jail time and kept about $500,000. The message in that case for many Canadians is that crime does pay.

Nevertheless, Bill C-53 would ensure that those who are engaged in serious criminal enterprise, especially the illegal drug trade, would never profit from their crimes. Currently, those involved in this illicit trade in my part of Canada clearly see their crime as a profitable enterprise even when caught and convicted.

Apart from the potential stigma of a criminal conviction, those who run the marijuana grow houses in B.C. really do make a good profit. Even upon conviction there is rarely any jail time and the fines are a fraction of the income received from this illegal activity. They see the fines as simply the cost of doing business. My hope is that Bill C-53 is a first small step in a movement to suppress the grow houses, the smuggling of marijuana and cocaine over our borders and related violence that accompanies the drug trade.

With that in mind, I would like to focus on a couple of aspects of the bill that the minister and the justice committee may want to examine in greater detail as Bill C-53 moves through Parliament.

First is the 10 year limitation on seeking forfeiture. Currently clause 6.1 of the bill says that the court may impose forfeiture only if it is convinced that:

within 10 years before the proceedings were commenced in respect of the offence for which the offender is being sentenced, the offender engaged in a pattern of criminal activity for the purpose of directly or indirectly receiving a material benefit, including a financial benefit;

I believe we may want to reconsider limiting forfeiture in this way. It is important to remember that the individuals involved with most crime families and criminal organizations have been involved in criminal activity their whole lives. Yet, according to the bill, if such a criminal were to be prosecuted for organized crimes that took place more than 10 years before being charged, they apparently would be legally entitled to keep the proceeds of their crimes. Admittedly, such circumstances would be uncommon, yet I do not believe we would want to allow a free pass to such criminals.

Consider the case of a mobster who has lived his whole life off the avails of crime, who is finally ratted out by an informant for murders he committed earlier in his criminal career, yet there is no evidence of criminal activity for the past decade. The police finally have the evidence they need to put the don behind bars. However, even with the conviction and jail sentence, the mobster and his family keep the ill-gotten millions he amassed over his criminal career.

The second area the minister and the committee might want to examine further is the sheltering of ill-gotten gains in someone else's name. This problem was brought to my attention recently through round table meetings I have been holding across Canada as part of our party's task force on safe streets and healthy communities.

The leader of the official opposition asked me and Jim Flaherty, a former attorney general of Ontario and Conservative candidate, to head up this task force as we seek solutions to the problem of violent, drug related crime in Canadian society, the same crimes that Bill C-53 helps to address in part.

Police officers have related to me their frustration at attempting seizure of criminally derived assets from a spouse or a family member who are given title to a car, house or other property. Yes, the bill allows for fines in lieu of seizure where assets are inextricably comingled or found to be beyond the direct reach of authorities. However, I suspect that this obvious loophole for sheltering criminal assets could be tightened significantly.

The third area the minister and the justice committee may want to consider is the sheltering of assets overseas by such criminals. Again, the bill allows for fines in lieu of seizure where assets appear to be beyond the direct reach of Canadian authorities, yet fines may never be paid while criminal assets continue to exist beyond the reach of Her Majesty's government. Indeed, even if this new legislation is effective domestically, then we can well anticipate that the smarter and wealthier criminals will seek to deposit and invest their funds offshore.

According to the International Monetary Fund, estimates of money laundering worldwide amount to anywhere from $590 billion to $1.5 trillion.

According to the most recent Criminal Intelligence Service of Canada report:

—recent law enforcement projects in B.C. have discovered organized crime groups capable of laundering proceeds of crime derived from the cross-border smuggling of cocaine and marijuana, totaling approximately C$200 million.

That is just in B.C.

The Financial Action Task Force on Money Laundering, an international-based organization, has recently identified the following worldwide trends in money laundering typologies also evident in Canada: these include the use of wire transfers, and organized crime’s utilization of gatekeepers, as they act as intermediaries with financial institutions in addition to providing an appearance of legitimacy. In addition, casinos, including on-line casinos, white-label Automated Teller Machines (ATMs), and money service businesses, such as currency exchanges are increasingly employed by organized crime groups to launder their money in Canada.

While organized crime groups based in Canada are laundering money here and abroad, Canada is also used by foreign-based groups for the purposes of laundering the proceeds of crime due to the stability of the economy and the soundness of its financial sector. There are individual facilitators and criminal organizations who specialize in providing money laundering services to a number of other organized crime groups.These individuals and criminal groups are not necessarily involved in other types of criminal activity but they do provide an essential component to the successful operation of criminal networks even though they may not be core members of the organization. Some marihuana brokers, for instance, have tasked individuals outside of their criminal organizations with converting the U.S. cash into Canadian currency through currency exchanges on their behalf.

While Parliament is considering the very subject of seizing criminal assets, it is a most appropriate time to be examining how we might strengthen our efforts to reduce the laundering of funds and to repatriate criminal assets from foreign jurisdictions.

Some questions that need answers include the following.

Is there more that can be done domestically to track the flow of funds overseas?

What is needed domestically to help these efforts?

Do we need to impose an anti-money laundering regime on money service businesses and currency exchanges?

Do we need more resources for police or for FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada?

Should we be looking at new treaties with certain offshore banking havens?

Alternatively, are there any jurisdictions that have become extremely problematic for Canada in our fight against organized crime for which the application of limited sanctions may be appropriate?

If the Minister of Justice is serious about forfeiture, then these questions also must be addressed more fully. While legislation alone cannot answer all of these questions, they must be answered all the same.

As I conclude my comments on Bill C-53, I leave members with some thoughts based on what I have been hearing from Canadians as I have travelled across Canada these past weeks as co-chairman of our party's task force on safe streets and healthy communities. Several themes have been repeated at these meetings, including dismay at the toothlessness of the Youth Criminal Justice Act, light or non-existent jail time for serious violent crimes and lax immigration rules that allow criminals to exploit the system. In addition, illegal drugs were fingered as a common denominator in most crimes, while unstable family environments were identified as the starting point for many career criminals.

There is much work to be done to reform the criminal justice system as my task force as reconfirmed. Again, I congratulate the Minister of Justice for adopting this important Conservative policy. I encourage all members to support this bill at second reading.

[Peter Adams, Liberal, Parliamentary Secretary to the Minister of Human Resources and Skills Development and Minister responsible for Democratic Renewal]

Madam Speaker, I enjoyed what my colleague had to say. I know he has been following the debate and he would have heard earlier one of his colleagues talk about the matter of where the money went. When property or whatever is forfeit and the money comes to the court, and I guess that is the way we put it because I am not a lawyer, it goes some way into the federal treasury? Then, commonly, in each province there are agreements as to how the money would be used.

Does the member had any personal thoughts as to what should be done with funds which are retrieved?

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Madam Speaker, as I have criss-crossed the country with this task force we have heard a number of times, police officers in particular, raising the question of what happens to all the money? When they raid a place and pour enormous resources and efforts into a criminal investigation, that comes out of their budget. Yet the thousands or millions of dollars in equipment or in clear cash is sent off to Ottawa. The police certainly wish that that money would come back to their particular office or location to reimburse them for those expenses.

My colleague is absolutely right, the federal government stashes that money. Then, based on some agreement, sends it back to the province which sometimes finds its way to the municipality, but often times does not.

The committee should actively investigate the possibility of rewarding the local police detachment with a greater portion of the proceeds of crime. The local police are the ones who have borne the cost during the investigation.

These are not cheap operations to function. There are huge expenses involved, yet the work has to get done. It does not seem to be appropriate, at least from my perspective, that the money gets taken away and brought to Ottawa and then some of it trickles down.

I would like to see more of it get back to the officers in question.

[Stockwell Day, Conservative, Okanagan—Coquihalla, BC]

Madam Speaker, in general we are supportive of this measure.

When my colleague was giving his overviews of the legislation he brought out something that was very interesting. He used a term “ratted out”. One of the main ways in which peace officers are able to apprehend those who have committed crimes is because thieves rat out on other thieves. They only do it under certain conditions.

In consultation with senior officers in the United States, who work with our own agencies, they that the great deficiency in the Canadian system was that there was no leverage that arresting officers or apprehending officers could apply to criminals to get them to rat out because we did not have high mandatory sentences for crime. This is reflected by other policing forces around the world.

In the United States a criminal may face 25 years mandatory for the types of crimes about which we are talking. We are not even talking about murder. We are talking about certain other types of crime. In the interrogation process those officers are able to say to people that they will go away to prison for 25 years unless they give the officers information and “rat out”. That type of information has helped the United States break not just gangs, but significant circles of organized crimes.

As important as this is, is it not necessary that the government have a companion to the legislation which is significantly higher mandatory sentencing? Then we can get the ratting out to happen. Then we can get these people and not just take away their goods, which they can accumulate quite quickly again through illegal processes, but get them behind bars where they belong.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Madam Speaker, my colleague has raised an excellent point.

To use an analogy, I am from Surrey, British Columbia. There are between 4,000 and 8,000 grow ops in the Lower Mainland. The police estimate there are between 4,000 and 4,500 grow ops in Surrey. In Whatcom County, just across the border, there were less than a dozen convictions last year. A lot of people believe the reason is that the mandatory minimum sentences in Washington state are enormous. The consequences are huge.

I think the point that my colleague and many colleagues on this side of the House are trying to make is that mandatory minimum sentences are a necessary step if this kind of legislation is going to be effective.

[The Acting Speaker (Hon. Jean Augustine)]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker (Hon. Jean Augustine)]

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

[Some hon. members]

Agreed.

[The Acting Speaker (Hon. Jean Augustine)]

Accordingly the bill stands referred to the Standing Committee on Justice, Human Rights, Public Safety and Emergency Preparedness.

(Motion agreed to and bill referred to a committee)

Wage Earner Protection Program Act

[Joe Fontana, Liberal, for the Minister of Industry]

moved that Bill C-55, An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.

Madam Speaker, in the time that is left today, I am pleased to speak to a very important bill, Bill C-55, which is a balanced and comprehensive reform package for insolvency legislation tabled by my hon. colleague, the Minister of Industry. The proposed changes will modernize our insolvency legislation, ensuring that the system better responds to the needs of the marketplace.

Just as important, I want to talk about how the reforms will improve the protection of workers whose employers undergo restructuring or become bankrupt. I am very passionate about this topic. Under our current system, too many workers are vulnerable when their employers enter into a restructuring or file for bankruptcy. Canadian workers suffer lost wages, reduced pension benefits and uncertainty that their collective agreements may be unilaterally changed by a court.

The government has heard from Canadian workers about the need to ensure that they are more fairly treated when their employers suffer economic hardship. The reforms introduced by my colleague will do just that.

For example, we are proposing new measures, including the wage earner protection program, for the first time in our history which will provide workers with a guaranteed payment for unpaid wages up to $3,000. An estimated 10,000 to 15,000 workers in every workplace across the country in both federal and provincial jurisdictions are left with unpaid wages or reduced pensions due to employer bankruptcies in Canada. These workers did not agree to become lenders to their employers when they were hired. They cannot afford to bear the risk of coming up empty-handed after they have done their hard work each and every day. They need to have their paycheques to buy groceries, to pay their mortgages and to pay their car payments.

Let me explain what the program will really mean for these workers. Under the current system three-quarters of unpaid workers in a bankruptcy receive nothing for their work, zero. The average payout overall is only 13¢ on the dollar. In Canada, existing federal and provincial labour laws protect the workers who perform work but are not paid by their employers. However, these labour laws cease to be in effect when a bankruptcy or receivership occurs, because currently, bankruptcy law supersedes labour laws in these cases.

The situation facing unpaid workers in Canada exposes a clear gap in our system. Clearly, changes are needed. That is why the government is acting on behalf of the workers of Canada. The wage earner protection program will apply when an employer goes bankrupt, or is put into receivership under the Bankruptcy and Insolvency Act. These are the employees who are unpaid. The employees can apply to the program to have their wages paid, up to $3,000, immediately upon that occurrence.

The wage earner protection program will operate efficiently. It will be delivered seamlessly, building on the existing relationships between trustees and receivers and the employment insurance system.

This type of program is not radical or new, but it is for our country. Many countries already have a similar program to protect their workers, such as the United Kingdom and Australia. The cost of the program is only going to be $30 million a year. In the event of a dramatic increase in the number of bankruptcies, it could go as high as $50 million. That is not a big investment from the Canadian government to protect the working men and women of this country.

The government expects to recover up to half of the program payouts as a creditor to the employer. Under the wage earner protection program, the government will assume the workers' claims against their bankrupt employer's estate. This means that the government will recover a portion of its costs by making claims against the employer's estate and therefore, the employee does not have to do it.

The reforms will also amend the Bankruptcy and Insolvency Act to establish a limited superpriority for unpaid wage claims up to $2,000. Under the new limited superpriority an unpaid worker will be one of the first to be paid from the current assets of the bankrupt employer.

The limited superpriority for unpaid wages balances the risk of bankruptcy between the employees and other creditors of the bankrupt company. Right now the burden weighs too heavily on the employees. It will assist the government in recouping its costs for the wage earner protection program by making more assets of bankrupt companies available for the employees and wage claims. That is putting the employees first.

I will have more to say about this tomorrow morning.

[The Acting Speaker (Hon. Jean Augustine)]

The minister has 14 minutes and 46 seconds left for the continuation of this debate.

The House resumed from June 22 consideration of the motion that Bill C-293, An Act to amend the Criminal Code (theft of a motor vehicle), be read the second time and referred to a committee.

Criminal Code

[The Acting Speaker (Hon. Jean Augustine)]

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at second reading of Bill C-293.

Call in the members.

(The House divided on the motion, which was negatived on the following division:)

[The Deputy Speaker]

I declare the motion lost.

The House resumed from June 23 consideration of the motion that Bill C-260, an act respecting the negotiation, approval, tabling and publication of treaties, be now read a second time and referred to a committee.

Treaties Act

[The Deputy Speaker]

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-260 under private members' business.

(The House divided on the motion, which was negatived on the following division:)

[The Deputy Speaker]

I declare the motion lost.

The House resumed from June 27 consideration of the motion.

Age of Consent

[The Deputy Speaker]

The House will now proceed to the taking of the deferred recorded division on Motion No. 221.

(The House divided on the motion, which was negatived on the following division:)

[The Deputy Speaker]

I declare the motion lost.

The House resumed from June 28 consideration of the motion that Bill C-313, An Act to amend the Criminal Code (prohibited sexual acts), be read the second time and referred to a committee.

Criminal Code

[The Deputy Speaker]

The House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-313.

(The House divided on the motion, which was negatived on the following division:)

[The Deputy Speaker]

I declare the motion lost.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, I rise on a point of order. It would appear that a member was offended that just after question period I had a telephone in my hand and that I was on the phone. I took an emergency call. I regret doing that. It was not my intention to slight the House or any members therein. I will refrain from doing that in the future.